Cheetah Net Supply Chain Service Inc. Announces Third Quarter 2024 Results and Provides Corporate Update

Core Insights - Cheetah Net Supply Chain Service Inc. is undergoing a significant business transformation from a parallel-import vehicle business to a logistics and warehousing model, driven by the downturn in the Chinese economy and the need to capitalize on U.S.-China trade flows [7] Company Updates - The company relocated its headquarters from Charlotte, NC to Irvine, CA to better align with its new business model and access the Southern California market [2] - A public offering of 404,979 shares at $3.68 per share was completed, generating net proceeds of $1.1 million for working capital and corporate purposes [3] - The board approved an Amended and Restated 2024 Stock Incentive Plan, leading to stock awards totaling 150,000 shares and share-based compensation expenses of $261,666 for Q3 2024 [4] - A reverse stock split at a ratio of 1-for-16 was approved and took effect on October 21, 2024, with trading on a post-split basis starting October 24, 2024 [5][6] Financial Performance - Q3 2024 revenue was $61,208, a decrease of $9.9 million or 99.4% compared to $10.0 million in Q3 2023, primarily due to the decline in the parallel-import vehicle business [8] - Gross profit for Q3 2024 decreased by approximately $1.1 million or 97.4%, but gross margin improved from 11.6% in Q3 2023 to 48.8% in Q3 2024 [9] - General and administrative expenses increased by $0.6 million or 108.0% to $1.1 million in Q3 2024, driven by personnel-related and rental expenses for the new logistics segment [10] - A credit loss allowance of $1.1 million was recorded for accounts receivable, reflecting overdue balances from the parallel-import vehicle business [11] - The net loss for Q3 2024 was $1.8 million, compared to a net income of $0.1 million in Q3 2023 [12] Nine-Month Financial Results - Revenues for the nine months ended September 30, 2024, were $1.9 million, down 94.3% from $32.5 million in the same period in 2023, largely due to the decline in the parallel-import vehicle business [13] - Gross profit for the nine months decreased by approximately $3.5 million or 97.5%, with a gross margin of 11.0% compared to 4.7% in the prior year [14] - General and administrative expenses rose by $1.0 million or 63.2% to $2.7 million, attributed to increased personnel and operational costs [15] - The net loss for the nine months was $3.0 million, compared to a net income of $0.2 million in the same period of the previous year [19] Liquidity and Cash Flow - As of September 30, 2024, the company had cash and cash equivalents of $5.3 million and working capital of approximately $11.6 million [20] - Cash provided by operating activities was $0.6 million for the nine months ended September 30, 2024, with total stockholders' equity at $14.0 million [21] - The company is focused on improving liquidity through operational cash generation and may seek additional equity financing if necessary [22]