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What changed in CHEETAH NET SUPPLY CHAIN SERVICE INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CHEETAH NET SUPPLY CHAIN SERVICE INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+318 added−382 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-18)

Top changes in CHEETAH NET SUPPLY CHAIN SERVICE INC.'s 2024 10-K

318 paragraphs added · 382 removed · 131 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

79 edited+58 added−136 removed6 unchanged
Biggest changeThe following table sets forth the breakdown of our sales revenue by brands and models during the years ended December 31, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales Revenue Share Sales Revenue Share ​ ​ Revenue ​ of Total ​ Revenue ​ of Total ​ ​ ​ During the ​ Sales for ​ During the ​ Sales for ​ ​ ​ Year ​ the Year ​ Year ​ the Year ​ ​ ​ Ended ​ Ended ​ Ended ​ Ended ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ Brands/Models: ​ 2023 ​ 2023 ​ 2022 ​ 2022 ​ Luxury Brands ​ ​ ​ ​ ​ ​ ​ Mercedes Benz GLS450 ​ $ 17,634,255 ​ 46.0 % $ 21,690,333 ​ ​ 39.3 % Mercedes Benz S500 ​ $ — ​ — ​ $ 6,976,494 ​ ​ 12.6 % Mercedes Benz G63 ​ $ — ​ — ​ $ 1,917,066 ​ ​ 3.5 % Mercedes Benz G550 ​ $ — ​ — ​ $ 1,538,944 ​ ​ 2.8 % Mercedes Benz GLS600 ​ $ 2,877,516 ​ 7.5 % $ 273,603 ​ ​ 0.5 % BMW X7 ​ $ 480,210 ​ 1.2 % $ 6,426,881 ​ ​ 11.6 % Porsche Cayenne ​ $ — — ​ $ 2,405,244 ​ 4.4 % Bentley ​ $ — — ​ $ 537,448 ​ 1.0 % Lexus LX570 ​ $ — — ​ $ 318,503 ​ 0.6 % Lexus LX 600 ​ $ 10,023,386 26.2 % $ 10,962,014 ​ 19.9 % Land Rover Range Rover ​ $ 2,359,979 6.2 % $ 800,931 ​ 1.4 % Ram 1500 RTX ​ $ 1,698,061 4.4 % $ 864,644 ​ 1.6 % Toyota Sequoia ​ $ 3,242,567 8.5 % $ 202,383 ​ 0.4 % Subtotal ​ $ 38,315,974 100 % $ 54,914,488 ​ 99.6 % Mid- to High-End Brands ​ ​ ​ ​ Sprinter ​ $ — — ​ $ 238,847 ​ 0.4 % Subtotal ​ $ — — ​ $ 238,847 ​ $ 0.4 % Total ​ $ 38,315,974 100 % $ 55,153,335 ​ 100 % ​ 12 Table of Contents Typically, we enter into sales contracts with our PRC and U.S. customers.
Biggest changeThe following table sets forth the breakdown of our sales revenue by brands and models during the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales Revenue Share Sales Revenue Share ​ ​ Revenue ​ of Total ​ Revenue ​ of Total ​ ​ ​ During the ​ Sales for ​ During the ​ Sales for ​ ​ ​ Year ​ the Year ​ Year ​ the Year ​ ​ ​ Ended ​ Ended ​ Ended ​ Ended ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ Brands/Models: ​ 2024 ​ 2024 ​ 2023 ​ 2023 ​ Luxury Brands ​ ​ ​ ​ ​ ​ ​ Mercedes Benz GLS450 ​ $ 1,175,116 ​ 72.0 % $ 17,634,255 ​ 46.0 % Mercedes Benz G63 ​ $ 200,297 ​ 12.3 % $ — ​ — % Mercedes Benz GLS600 ​ $ — ​ — % $ 2,877,516 ​ 7.5 % BMW X7 ​ $ — ​ — % $ 480,210 ​ 1.2 % Lexus LX 600 ​ $ 255,835 15.7 % $ 10,023,386 26.2 % Land Rover Range Rover ​ $ — — % $ 2,359,979 6.2 % Ram 1500 RTX ​ $ — — % $ 1,698,061 4.4 % Toyota Sequoia ​ $ — — % $ 3,242,567 8.5 % Total ​ $ 1,631,248 100.0 % $ 38,315,974 ​ 100.0 % ​ Typically, we would enter into sales contracts with our PRC and U.S. customers.
According to a typical sales agreement entered into between our U.S. customers and our Company, we will (i) sell the designated automobile to the U.S. customer for the amount specified in the agreement and certify that all of the information provided therein is true and accurate to the best of our knowledge; (ii) deliver the automobile to the warehouse requested by the U.S. customer; and (iii) provide the automobile title within three weeks of the completion of the transaction.
According to a typical sales agreement entered into between our U.S. customers and our Company, we would (i) sell the designated automobile to the U.S. customer for the amount specified in the agreement and certify that all of the information provided therein is true and accurate to the best of our knowledge; (ii) deliver the automobile to the warehouse requested by the U.S. customer; and (iii) provide the automobile title within three weeks of the completion of the transaction.
A specific vehicle model’s pricing and profitability vary based on the market demand and supply for that model. We set our selling prices based on multiple factors, including the price of the same model sold by authorized dealers in China, normal commercial terms, market pricing adjustments, customer payment methods, operational efficiency of our Company, and anticipated workload for trading activities.
A specific vehicle model’s pricing and profitability varied based on the market demand and supply for that model. We set our selling prices based on multiple factors, including the price of the same model sold by authorized dealers in China, normal commercial terms, market pricing adjustments, customer payment methods, operational efficiency of our Company, and anticipated workload for trading activities.
In the event of any dispute, controversy, or claim arising out of or relating to such sales contracts, both parties agree (i) they will first try to resolve such disputes through friendly consultation; and that (ii) the validity, interpretation, and implementation of such contracts shall be governed by the laws of the State of North Carolina in the U.S.
In the event of any dispute, controversy, or claim arising out of or relating to such sales contracts, both parties agreed (i) they will first try to resolve such disputes through friendly consultation; and that (ii) the validity, interpretation, and implementation of such contracts shall be governed by the laws of the State of North Carolina in the U.S.
Suppliers of the U.S. version of parallel-import cars are typically unable to purchase large quantities of vehicles, so most of the industry’s participants are small family businesses who purchase cars from local dealers and resell them to local dealers/exporters in the U.S. or to dealers/importers in China. For U.S. dealers of parallel-import vehicles, vehicle sourcing capabilities are critical.
Suppliers of U.S. versions of parallel-import cars are typically unable to purchase large quantities of vehicles, so most of the industry’s participants are small family businesses who purchase cars from local dealers and resell them to local dealers/exporters in the U.S. or to dealers/importers in China. For U.S. dealers of parallel-import vehicles, vehicle sourcing capabilities are critical.
Pursuant to the sales contract, the PRC customer (i) is responsible for import customs clearance and other relevant import issues; (ii) is required to bear all costs and risks once the designated automobiles arrive at the designated port of destination in the PRC; and (iii) is responsible for arranging payment as specified in the contract.
Pursuant to the sales contract, the PRC customer (i) was responsible for import customs clearance and other relevant import issues; (ii) was required to bear all costs and risks once the designated automobiles arrive at the designated port of destination in the PRC; and (iii) was responsible for arranging payment as specified in the contract.
Once the purchases are completed, the purchasing agents sell automobiles to our Company at their purchase prices and charge us a service fee per automobile based on the model of the vehicle and the discount they obtained from the automobile dealers.
Once the purchases were completed, the purchasing agents sell automobiles to our Company at their purchase prices and charge us a service fee per automobile based on the model of the vehicle and the discount they obtained from the automobile dealers.
Depending on the agent’s schedule, the procurement specialists in charge are in direct communication with their agents on a weekly basis for updates on active deals, leads for new potential deals, and scheduling vehicle pick-ups.
Depending on the agent’s schedule, the procurement specialists in charge were in direct communication with their agents on a weekly basis for updates on active deals, leads for new potential deals, and scheduling vehicle pick-ups.
As an example of a typical transaction, under a sales contract entered into by and between our Company and a PRC customers, we are required to (i) load the designated automobiles on a vessel by the time of shipment specified in the contract at a U.S. port of loading; (ii) facilitate export customs clearance; (iii) provide the PRC customer with information about the designated automobiles, quantity, invoice amount, vessel name, and departure date, and provide a bill of lading, packaging list, commercial invoice, and other necessary documents; and (iv) ensure that the sold automobiles are brand new.
As an example of a typical transaction, under a sales contract entered into by and between our Company and a PRC parallel-import vehicle customer, we were required to (i) load the designated automobiles on a vessel by the time of shipment specified in the contract at a U.S. port of loading; (ii) facilitate export customs clearance; (iii) provide the PRC customer with information about the designated automobiles, quantity, invoice amount, vessel name, and departure date, and provide a bill of lading, packaging list, commercial invoice, and other necessary documents; and (iv) ensure that the sold automobiles are brand new.
Cheetah Net also conducts business under the marketing name of “Elite Motor Group.” As of the date of this annual report, Cheetah Net holds 100% of the equity interests in the following entities: ● (i) Allen-Boy International LLC (“Allen-Boy”), a limited liability company organized on August 31, 2016 under the laws of the State of Delaware, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Allen-Boy who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on January 1, 4 Table of Contents 2017.
Cheetah Net also conducts business under the trade name of “Elite Motor Group.” As of the date of this annual report, Cheetah Net holds 100% of the equity interests in the following entities: ● (i) Allen-Boy International LLC (“Allen-Boy”), a limited liability company organized on August 31, 2016 under the laws of the State of Delaware, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Allen-Boy who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on January 1, 2017.
The designated brands and models are usually luxury or mid- to high-end vehicles that are in high demand in the PRC market, such as Mercedes GLS450, Mercedes G63, BMW X7, and Lexus 600.
The designated brands and models were usually luxury or mid- to high-end vehicles that were in high demand in the PRC market, such as Mercedes GLS450, Mercedes G63, BMW X7, and Lexus 600.
Specifically, because parallel-import vehicles do not have to pass through multiple levels of distributors, such as China general distributors, regional distributors, and 4S stores, to reach their end consumers, they can generally be priced at least 10% to 15% lower than regular imported cars.
Specifically, because parallel-import vehicles do not have to pass through multiple levels of distributors, such as China general distributors, regional distributors, and 4S stores, to reach their end consumers, they could generally be priced at least 10% to 15% lower than regular-imported vehicles.
In accordance with a typical independent contractor agreement entered between a professional purchasing agent and our Company, the purchasing agent agrees to (i) acquire the automobile identified by our Company and promptly transfer possession of the automobile to us; (ii) diligently execute all documents related to the transfer of title and delivery of the automobile; (iii) deliver the automobile without any physical damage, including all purchasing documents, user manuals, window sticker, keys, spare tires, and interior carpets; and (iv) acknowledge that the automobile is at all times the sole property of our Company insofar as we fulfill our obligation to fund all related costs of purchasing the automobile and to pay/reimburse all fees owed pursuant to the independent contractor agreement.
In accordance with a typical independent contractor agreement entered between a professional purchasing agent and our Company, the purchasing agent agreed to (i) acquire the automobile identified by our Company and promptly transfer possession of the automobile to us; (ii) diligently execute all documents related to the transfer of title and delivery of the automobile; (iii) deliver the automobile without any physical damage, including all purchasing documents, user manuals, window sticker, keys, spare tires, and interior carpets; and (iv) acknowledge that the automobile was at all times the sole property of our Company insofar as we fulfilled our obligation to fund all related costs of purchasing the automobile and to pay/reimburse all fees owed pursuant to the independent contractor agreement.
In order to avoid overstocking or understocking inventory, we must forecast inventory needs and expenses through meticulous market analysis and weekly sales department meetings.
In order to avoid overstocking or understocking inventory, we would forecast inventory needs and expenses through meticulous market analysis and weekly sales department meetings.
In this case, we bear the risk of damage and loss before delivering the automobile to the warehouse designated by the U.S. customer. For our PRC customers, it is our responsibility to arrange for the ocean freight forwarder to load the automobile to be shipped and provide them with the ocean bill of lading and related documents.
In this case, we bore the risk of damage and loss before delivering the automobile to the warehouse designated by the U.S. customer. For our PRC customers, it was our responsibility to arrange for the ocean freight forwarder to load the automobile to be shipped and provide them with the ocean bill of lading and related documents.
As manufacturers frequently arbitrage markets, setting the price according to local market conditions so the same vehicle will have different retail prices in different territories, this enables parallel-import vehicle dealers to utilize a profit 5 Table of Contents maximization strategy to drive profit from the industry.
As manufacturers frequently arbitrage markets, setting the price according to local market conditions so the same vehicle will have different retail prices in different territories, this enables parallel-import vehicle dealers to utilize a profit maximization strategy to drive profit from the industry.
Pursuant to the independent contractor agreement, we are required to pay the purchasing agent a service fee calculated according to an agreed-upon payment structure specified in the agreement, which includes (i) a base fee ranging from $500 to $2,000, depending on the model of the purchased automobile, and (ii) an incentive bonus that amounts to 25% of any further discount achieved by the purchasing agent beyond the pre-determined benchmark discount required for the purchased automobile.
Pursuant to the independent contractor agreement, we were required to pay the purchasing agent a service fee calculated according to an agreed-upon payment structure specified in the agreement, which included (i) a base fee ranging from $500 to $2,000, depending on the model of the purchased automobile, and (ii) an incentive bonus that amounted to 25% of any further discount achieved by the purchasing agent beyond the pre-determined benchmark discount required for the purchased automobile.
See “—Our Customers.” Our U.S. customers usually pay the full amount to us within two days before or after the automobile is delivered to the appointed warehouse.
See “—Our Parallel-Import Vehicles Customers.” Our U.S. customers usually pay the full amount to us within two days before or after the automobile is delivered to the appointed warehouse.
Our 6 Table of Contents U.S. domestic customers are parallel-import car dealers/exporters based in the U.S., which are typically the branches or upstream suppliers of Chinese parallel-import vehicle car dealers, who often lack purchasing capabilities in the U.S. market and need to purchase vehicles from us to transport to their PRC branches or sell to their PRC customers.
Our U.S. domestic customers were parallel-import car dealers/exporters based in the U.S., which were typically the branches or upstream suppliers of Chinese parallel-import vehicle car dealers, who often lack purchasing capabilities in the U.S. market and need to purchase vehicles from us to transport to their PRC branches or sell to their PRC customers.
Currently, Entour is engaged in the parallel-import vehicle business. ● (vi) Cheetah Net Logistics LLC (“Logistics”), a limited liability company organized on October 12, 2022 under the laws of the State of New York, whose previous sole member and owner, Hanzhang Li, a current employee of Cheetah Net, assigned all his membership interests in Logistics to Cheetah Net for a total consideration of $100 through a membership interest assignment agreement dated October 19, 2022.
Currently, Entour is engaged in the parallel-import vehicle business. 1 Table of Contents ● (iv) Cheetah Net Logistics LLC (“Logistics”), a limited liability company organized on October 12, 2022 under the laws of the State of New York, whose previous sole member and owner, Hanzhang Li, assigned all his membership interests in Logistics to Cheetah Net for a total consideration of $100 through a membership interest assignment agreement dated October 19, 2022.
Our customers are willing to work with us because we are able to provide them with a large number of vehicles having a wide variety of models, thus greatly reducing the difficulty of collecting and managing vehicles for them.
Our parallel-import vehicles customers were willing to work with us because we were able to provide them with a large number of vehicles having a wide variety of models, thus greatly reducing the difficulty of collecting and managing vehicles for them.
In most cases, our PRC customers make their payments one or two weeks after we arrange for a freight forwarding company to load the automobile and provide them with the ocean bill of lading and other related documents. Fulfillment and U.S.
In most cases, our PRC customers would make their payments one or two weeks after we arranged for a freight forwarding company to load the automobile and provided them with the ocean bill of lading and other related documents. Fulfillment and U.S.
Similarly, our U.S. customers enter into sales agreements for each automobile sold by us.
Similarly, our U.S. customers entered into sales agreements for each automobile sold by us.
Specifically, we post job listings on various job platforms to attract qualified potential candidates, and assign received resumes to our full-time procurement specialists, who will schedule interviews by telephone or in person. A second interview will be conducted by a procurement manager and/or human resources manager to further review the candidate’s background and qualifications.
Specifically, we posted job listings on various job platforms to attract qualified potential candidates and assigned received resumes to our full-time procurement specialists, who would schedule interviews by telephone or in person. A second interview would be conducted by a procurement manager and/or human resources manager to further review the candidate’s background and qualifications.
Currently, Pacific is engaged in the parallel-import vehicle business and financial services. ● (v) Entour Solutions LLC (“Entour”), a limited liability company organized on April 8, 2021 under the laws of the State of New York, which was acquired by Cheetah Net from Daihan Ding, the previous owner of Entour, and a current employee of Cheetah Net, for a total consideration of $100 on April 9, 2021.
Currently, Pacific is engaged in the parallel-import vehicle business. ● (iii) Entour Solutions LLC (“Entour”), a limited liability company organized on April 8, 2021 under the laws of the State of New York, which was acquired by Cheetah Net from Daihan Ding, the previous owner of Entour, for a total consideration of $100 on April 9, 2021.
They provide us with timely information on the PRC market and often offer us more favorable terms of settlement. To develop our sales strategy and support our procurement department’s purchasing plans, the sales department meets weekly with our procurement department to discuss the latest market needs and dynamics, including sales prices, brand composition, and inventory changes.
They provided us with timely information on the PRC market and often offered us more favorable terms of settlement. To develop our sales strategy and support our procurement department’s purchasing plans, the sales department met weekly with our procurement department to discuss the latest market needs and dynamics, including sales prices, brand composition, and inventory changes.
Customs Clearance For our domestic sales, we deliver the purchased vehicles to U.S. customers at their designated warehouses and provide the original copy of the title to them within the agreed timeframe. Our U.S. customers are responsible for export and cross-border transportation matters on their own after purchasing automobiles.
Customs Clearance For our domestic sales, we delivered the purchased vehicles to U.S. customers at their designated warehouses and provided the original copy of the title to them within the agreed timeframe. Our U.S. customers were responsible for export and cross-border transportation matters on their own after purchasing automobiles.
Once we confirm receipt of the letter of credit, we will settle the loan (if any) and arrange for customs clearance and shipping by third-party logistics service providers. In the event that all customs clearance procedures have been completed with all forms filled out and accepted by U.S.
Once we confirmed receipt of the letter of credit, we would settle the loan (if any) and arrange for customs clearance and shipping by third-party logistics service providers. In the event that all customs clearance procedures had been completed with all forms filled out and accepted by U.S.
Meanwhile, the U.S. customer acknowledges that the automobile described therein is sold “as is” and that there is no guarantee or warranty either expressed or implied with respect to the automobile.
Meanwhile, the U.S. customer acknowledged that the automobile described therein was sold “as is” and that there was no guarantee or warranty either expressed or implied with respect to the automobile.
The selling price is finalized as the MSRP plus service fees, which are determined upon comprehensive consideration of the overall market adjustments for vehicles as well as the customer’s payment method.
The selling price was finalized as the MSRP plus service fees, which were determined upon comprehensive consideration of the overall market adjustments for vehicles as well as the customer’s payment method.
Our founding team understands the factors driving the growth of the luxury-car segment in China and the desires of the Chinese consumer. In addition, we have some close business partners in China who are parallel-import car traders or dealers, including some of our PRC customers and some third parties or potential customers.
Our founding team understood the factors driving the growth of the luxury-car segment in China and the desires of the Chinese consumer. In addition, we had some close business partners in China who were parallel-import car traders or dealers, including some of our PRC customers and some third parties or potential customers.
Automobiles purchased from U.S. automobile dealers are picked up by our purchasing agents and delivered to us at a designated warehouse or other agreed delivery location. Below is a diagram showing the procurement process: The following chart demonstrates the number of vehicles we acquired each year since 2016.
Automobiles purchased from U.S. automobile dealers would be picked up by our purchasing agents and delivered to us at a designated warehouse or other agreed delivery locations. Below is a diagram showing the procurement process: 7 Table of Contents The following chart demonstrates the number of vehicles we acquired each year since 2016.
Parallel-import vehicles in China are generally divided into three categories based on the original country of procurement, including the U.S. version, the Middle East version, and the European version. All of the cars we sell are of the U.S. version with MSRPs typically not less than $80,000.
Parallel-import vehicles in China are generally divided into three categories based on the original country of procurement, including the U.S. version, the Middle East version, and the European version. All of the cars we sold in the past two fiscal years were of the U.S. version with MSRPs typically not less than $80,000.
Specifically, our management estimates, based on the data from the General Administration of Customs of China, that approximately 20,000 parallel-import cars have been exported annually from the U.S. to China in recent years, most of which are of low-end and mid-range brands.
Specifically, our management would estimate, based on the data from the General Administration of Customs of China, that approximately 20,000 parallel-import cars had been exported annually from the U.S. to China in recent years, most of which were of low-end and mid-range brands.
Currently, Logistics is engaged in the parallel-import vehicle business. ● (vii) Edward, a corporation incorporated on July 14, 2010 under the laws of the State of California, whose previous sole shareholder and owner, Juguang Zhang, transferred all his right, title, and interest in and to all of the issued and outstanding equity interests of Edward to Cheetah Net for a total consideration of $1,200,000 in cash and Cheetah Net’s Class A common stock through a stock purchase agreement dated January 24, 2024, as amended.
Currently, Logistics is engaged in the parallel-import vehicle business. ● (v) Edward, a corporation incorporated on July 14, 2010 under the laws of the State of California, whose previous sole shareholder and owner, Juguang Zhang, transferred all his right, title, and interest in and to all of the issued and outstanding equity interests of Edward to Cheetah Net for a total consideration of $1,500,000, consisting of a $300,000 cash payment and Cheetah Net’s Class A common stock initially valued at $1.2 million through a stock purchase agreement dated January 24, 2024, as amended.
Upon reviewing the applicant’s experience in the industry, knowledge of our Company, and other qualifications, we will determine whether a candidate is a good fit. In addition, we have designed and developed our own referral program that incentivizes our existing agents to utilize their network to attract additional qualified agents and thus further expand our purchasing agent base.
Upon reviewing the applicant’s experience in the industry, knowledge of our Company, and other qualifications, we would determine whether a candidate is a good fit. In addition, we designed and developed our own referral program that incentivized our agents to utilize their network to attract additional qualified agents and thus further expanded our purchasing agent base.
Our Professional Purchasing Agents As of December 31, 2023, we worked with 389 independent contractors as our professional purchasing agents, responsible for purchasing designated models of vehicles using the knowledge and negotiating skills they have acquired from our training. We have developed a standardized system of recruiting, training, and managing professional purchasing agents.
See “—Overview.” 4 Table of Contents As of December 31, 2023, we worked with 389 independent contractors as our professional purchasing agents, responsible for purchasing designated models of vehicles using the knowledge and negotiating skills they acquired from our training. We developed a standardized system of recruiting, training, and managing professional purchasing agents.
In particular, we encourage our purchasing agents to introduce such positions to their connections and forward their resumes or contact information to our Company if consent is granted. The candidates so referred, if retained, will receive our training and start working as purchasing agents, and the referral agent will earn a $200 commission for each deal the referred agents close.
In particular, we encouraged our purchasing agents to introduce such positions to their connections and forward their resumes or contact information to our Company if consent was granted. The candidates so referred, if retained, would receive our training and start working as purchasing agents, and the referral agent would earn a $200 commission for each deal the referred agents closed.
To determine whether a new purchasing agent has been fully trained and understands well his or her responsibilities, workflow, and company procedures and policies, a procurement manager will schedule an assessment test or call with the new agent before the agent places his or her first order with a dealership.
To determine whether a new purchasing agent had been fully trained and understood well his or her responsibilities, workflow, and company procedures and policies, a procurement manager would schedule an assessment test or call with the new agent before the agent placed his or her first order with a dealership.
Parallel-import cars are popular also because some overseas models cannot be produced and sold in China due to certain regulations concerning environmental protection and emission standards and can only be introduced into the PRC market through parallel imports.
Parallel-import vehicles were popular also because some overseas models could not be produced and sold in China due to certain regulations concerning environmental protection and emission standards and could only be introduced into the PRC market through parallel imports.
In addition, we will fund any other costs, fees, and taxes incurred by purchasing agents related to the purchase and transfer of automobiles. Once the purchasing agents receive the titles of the purchased automobiles from the Department of Motor Vehicles, they immediately sign the titles over to Cheetah Net.
In addition, we would fund other costs, fees, and taxes incurred by purchasing agents related to the purchase and transfer of automobiles. Once the purchasing agents received the titles of the purchased automobiles from the Department of Motor Vehicles, they would immediately sign the titles over to us.
Specifically, our PRC customers refer to those Chinese automobile dealers/importers who intend to import automobiles into the PRC market as parallel-import vehicles.
Specifically, our PRC customers were Chinese automobile dealers/importers who intended to import automobiles into the PRC market as parallel-import vehicles.
See “—Our Professional Purchasing Agents.” A purchasing agent usually pays the deposit to automobile dealers using a Company-issued credit and pays the remaining balance via bank cashier check from our Company’s bank account. The purchasing agents may occasionally advance funds to the automobile dealers, which will be reimbursed once they provide a receipt and other required documents.
See “—Our Professional Purchasing Agents.” A purchasing agent would usually pay the deposit to automobile dealers using a Company-issued credit and would pay the remaining balance via bank cashier check from our Company’s bank account. The purchasing agents would occasionally advance funds to the automobile dealers, which we would reimburse once they provided a receipt and other required documents.
We manage our purchasing agents through a variety of communication tools including texts, phone calls, emails, and zoom meetings. Each purchasing agent is assigned to a procurement specialist in charge, who leads and trains a group of agents.
We managed our purchasing agents through a variety of communication tools, including texts, phone calls, emails, and Zoom meetings. Each purchasing agent would be assigned to a procurement specialist in charge, who led and trained a group of agents.
Nonetheless, in the event that we overstock or understock our inventory, our business, financial condition, and results of operations may be adversely harmed. We primarily procure automobiles through our team of professional purchasing agents, who serve as independent contractors, from U.S. automobile dealers that have the designated automobile model in stock.
Nonetheless, in the event that we overstocked or understocked our inventory, our business, financial condition, and results of operations could be adversely harmed. We primarily procured automobiles through our team of professional purchasing agents, who served as independent contractors, from U.S. automobile dealers that had the designated automobile model in stock. Mr.
For the year ended December 31, 2023, our three largest customers accounted for approximately 98.9% of our total revenue, while for the year ended December 31, 2022, our three largest customers accounted for 65% of our total revenue.
For the year ended December 31, 2023, our three largest customers accounted for approximately 98.9% of our total revenue from parallel-import vehicles.
Currently, Limousine is engaged in the parallel-import vehicle business. ● (iv) Pacific Consulting LLC (“Pacific”), a limited liability company organized on January 17, 2019 under the laws of the State of New York, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Pacific who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on February 15, 2019.
Currently, Allen-Boy is engaged in the parallel-import vehicle business. ● (ii) Pacific Consulting LLC (“Pacific”), a limited liability company organized on January 17, 2019 under the laws of the State of New York, which was acquired by Cheetah Net from Yingchang Yuan for a total consideration of $100 on February 15, 2019.
We derive profits primarily from the price difference between our buying and selling prices for parallel-import vehicles. Our operating principle is to maximize sales margins rather than volume, so we mainly focus on luxury vehicle brands in large demand because of the strong purchasing power of the end consumers in the PRC and higher markups for pricing.
Our parallel-import vehicle operating principle was to maximize sales margins rather than volume, so we mainly focused on luxury vehicle brands in large demand because of the strong purchasing power of the end consumers in the PRC and higher markups for pricing.
Such agreement also includes liability exemption clauses providing that the purchasing agent shall not be liable for any fines or lawsuits imposed by dealerships or manufacturers due to export infractions or infringements and we agree to indemnify, defend, and hold harmless the purchasing agent from and against any liability, losses, claims, costs, interests, penalties, expenses, and damages arising from any non-negligent execution of the role as purchasing agents on behalf of our Company.
Such an agreement also included liability exemption clauses providing that the purchasing agent shall not be liable for any fines or lawsuits imposed by dealerships or manufacturers due to export infractions or infringements, and we agreed to indemnify, defend, and hold harmless the purchasing agent from and against any liability, losses, claims, costs, interests, penalties, expenses, and damages arising from any non-negligent execution of the role as purchasing agents on behalf of our Company. 5 Table of Contents Parallel-Import Vehicles Brands We Supplied The brands of automobiles we have procured include Mercedes, BMW, Land Rover, Lexus, Ram, and Toyota.
Prior to shipping the automobiles, we generally require PRC customers to make the majority of the amount owed (typically the MSRP amount) upfront via a letter of credit, where the release of payment is contingent upon our submission of a bill of lading and other required documents to the issuing bank underlying the letter of credit for its review.
Our PRC customers, namely, Chinese parallel-import car dealers, were responsible for after-sale services for the end consumers of those parallel-import vehicles. 9 Table of Contents Prior to shipping the automobiles, we would generally require PRC customers to make the majority of the amount owed (typically the MSRP amount) upfront via a letter of credit, where the release of payment was contingent upon our submission of a bill of lading and other required documents to the issuing bank underlying the letter of credit for its review.
Item 1. Business. Overview We are a supplier of parallel-import vehicles sourced in the U.S. to be sold in the PRC market. In the PRC, parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems.
We began our operations in 2016 as a seller of parallel-import vehicles, sourcing vehicles in the U.S. and selling them in the PRC market. In the PRC, parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems.
Brands We Supply The brands of automobiles we have procured include Mercedes, BMW, Porsche, Land Rover, Lexus, Bentley, Ram, and Toyota. 8 Table of Contents The following table sets forth a breakdown of brands purchased during the years ended December 31, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentages ​ Percentages ​ ​ Number of ​ of ​ Number of ​ of ​ ​ ​ Automobiles ​ Total ​ Automobiles ​ Total ​ ​ ​ Purchased ​ Purchase ​ Purchased ​ Purchase ​ ​ ​ During the ​ During the ​ During the ​ During the ​ ​ ​ Year ​ Year Year Year ​ ​ ​ Ended Ended ​ Ended ​ Ended ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ Brands/Models: ​ 2023 ​ 2023 ​ 2022 ​ 2022 ​ Luxury Brands ​ ​ ​ ​ Mercedes Benz GLS450 ​ 156 ​ 60.5 % 153 ​ 43.0 % Mercedes Benz S500 ​ — ​ — ​ 16 ​ 4.5 % Mercedes Benz G63 ​ 1 ​ 0.4 % 4 ​ 1.1 % Mercedes Benz G550 ​ — ​ — ​ 7 ​ 2.0 % Mercedes Benz GLS600 ​ 12 ​ 4.6 % 1 ​ 0.3 % BMW X7 — — 28 7.9 % Porsche Cayenne — — 15 4.2 % Lexus LX600 58 22.5 % 83 23.3 % Bentley — — 2 0.6 % Land Rover Range Rover 10 3.9 % 10 2.8 % Ram 1500 TRX 1 0.4 % 20 5.6 % Toyota Sequoia 20 7.8 % 14 3.9 % Subtotal 258 100 % 353 99.2 % Mid- to High-End Brands ​ Sprinter — — 3 0.8 % Subtotal — — 3 0.8 % Total 258 100 % 356 100 % ​ Services and Operational Flow Procurement We make procurement decisions based on our extensive experience and insight into the PRC parallel-import vehicle industry.
The following table sets forth a breakdown of brands purchased during the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentages ​ Percentages ​ ​ Number of ​ of ​ Number of ​ of ​ ​ ​ Automobiles ​ Total ​ Automobiles ​ Total ​ ​ ​ Purchased ​ Purchase ​ Purchased ​ Purchase ​ ​ ​ During the ​ During the ​ During the ​ During the ​ ​ ​ Year ​ Year Year Year ​ ​ ​ Ended Ended ​ Ended ​ Ended ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ Brands/Models: ​ 2024 ​ 2024 ​ 2023 ​ 2023 ​ Luxury Brands ​ ​ ​ ​ Mercedes Benz GLS450 ​ 11 ​ 78.6 % 157 ​ 51.8 % Mercedes Benz G63 ​ 1 ​ 7.1 % — ​ — % Mercedes Benz GLS600 ​ — ​ — % 12 ​ 4.0 % BMW X7 — — % 5 1.7 % Lexus LX600 2 14.3 % 68 22.4 % Land Rover Range Rover — — % 15 4.9 % Ram 1500 TRX — — % 14 4.6 % Toyota Sequoia — — % 32 10.6 % Total 14 100.0 % 303 100.0 % ​ Parallel-Import Vehicles Services and Operational Flow Procurement We made procurement decisions based on our extensive experience and insights into the PRC parallel-import vehicle industry.
Our Suppliers We do not have typical suppliers, because we purchase all of our automobiles via our team of professional purchasing agents from U.S. automobile dealers that have the designated automobile model in stock.
Our Parallel-Import Vehicles Suppliers We did not have regular suppliers for our parallel-import vehicles business in the past two fiscal years, because we purchased all of our automobiles via our team of professional purchasing agents from U.S. automobile dealers that had the designated automobile model in stock.
We cooperate with third-party logistics service providers whose primary responsibility is to provide cross-border logistics services, typically by sea, for the delivery of our automobiles to our PRC customers. Technology and Intellectual Property The success of our business depends on our proprietary technologies.
We cooperated with third-party logistics service providers whose primary responsibility was to provide cross-border logistics services, typically by sea, for the delivery of our automobiles to our PRC customers. (II) Logistics and Warehousing Services Logistics and warehousing services is a business line we launched in February 2024.
As such, we bear the risk of damage and loss prior to arranging for the shipping of automobiles by third-party logistics service providers, but these risks pass to our PRC customers once the automobile is dispatched on board. Our PRC customers, namely, Chinese parallel-import car dealers, will be responsible for after-sale services for the end consumers of those parallel-import vehicles.
As such, we bore the risk of damage and loss prior to arranging for the shipping of automobiles by third-party logistics service providers, but these risks passed to our PRC customers once the automobile was dispatched on board.
Parallel-import cars have been popular in the PRC because they are generally priced 10% to 15% cheaper than vehicles sold through distribution systems authorized by brand manufacturers and generally offer a wider variety of models and versions with more customization.
Parallel-import vehicles used to be popular in the PRC because they were generally priced 10% to 15% cheaper than vehicles sold through distribution systems authorized by brand manufacturers.
After the vehicle has been successfully picked up, its relevant information is moved to the next module, Logistics, which is currently under construction. 13 Table of Contents As of the date of this annual report, we have registered three domain names in the U.S., including (i) Cheetah-net.com, a domain name registered on August 17, 2022 and associated with the Cheetah Net website; (ii) Pacificconsultingusa.com, a domain name registered on January 7, 2019 and associated with the Pacific Consulting LLC website; and (iii) Allen-boy.com, a domain name registered on December 5, 2018 and currently not in use.
As of the date of this annual report, we own four domain names in the U.S., including (i) Cheetah-net.com, a domain name registered on August 17, 2022 and associated with the Cheetah Net website; (ii) Pacificconsultingusa.com, a domain name registered on January 7, 2019 and associated with the Pacific Consulting LLC website; (iii) Allen-boy.com, a domain name registered on December 5, 2018 and currently not in use; and (iv) edwardtransitusa.com, a domain name associated with the Edward website, which was registered by Edward prior to our acquisition and subsequently transferred to our domain provider on April 17, 2024.
Employees As of December 31, 2023, we had a total of 20 employees, 18 of whom worked as full-time employees, as set forth in the following table: ​ ​ ​ ​ ​ ​ Number of Number of ​ ​ total ​ full-time Function: ​ employees ​ employees Procurement ​ 6 ​ 6 Customer Services and Operations ​ 5 ​ 4 Sales and Marketing 3 3 General and Administration 6 5 Total 20 18 ​ Our employment contracts with full-time employees include a confidentiality clause.
Employees As of December 31, 2024, we had a total of 15 employees, 13 of whom worked as full-time employees, as set forth in the following table: ​ ​ ​ ​ ​ ​ Number of Number of ​ ​ total ​ full-time Function: ​ employees ​ employees 11 Table of Contents Warehousing Management ​ 3 ​ 3 Marketing ​ 2 ​ 2 Accounting ​ 4 ​ 4 Legal ​ 3 ​ 3 Administration ​ 2 ​ — Executive officer ​ 1 ​ 1 Total 15 13 ​ Our employment contracts with full-time employees include a confidentiality clause.
Customs and Border Protection (“Customs”), we will ship the automobiles and provide the issuing bank with the bill of landing and related documents for its review. Upon completion of the review, the issuing bank releases payment to us, and the bill of landing and related documents to PRC customers, which are necessary to obtain the automobiles from the freight forwarder.
Upon completion of the review, the issuing bank would release payment to us and the bill of lading and related documents to PRC customers, which were necessary to obtain the automobiles from the freight forwarder.
Sales and Services We sell our automobile inventories to our U.S. customers (parallel-import vehicle exporters based in the U.S.) or PRC customers (Chinese parallel-import car dealers who purchase cars from us and import them into the PRC to resell them to other dealers or end consumers).
Note: Year 2020 was affected by the COVID-19 pandemic and China’s Implementation of National VI Standards. ​ 8 Table of Contents Sales and Services In the past two fiscal years, we sold our automobile inventories to both U.S. customers (parallel-import vehicle exporters based in the U.S.) and PRC customers (Chinese parallel-import car dealers who purchased cars from us and imported them into the PRC to resell them to other dealers or end consumers).
See “Note 4—Loans Receivable” in the notes to our consolidated financial statements for more details. Beginning in the second half of 2023, the market for new luxury vehicles in the PRC has been negatively impacted by weak economic conditions and a shift in consumer demand towards electric vehicles (“EVs”), mainly those produced domestically by PRC manufacturers.
However, the parallel-import vehicle market has faced significant challenges in recent years. Since the second half of 2023, the market for new luxury vehicles in the PRC has been negatively impacted by weak economic conditions and a shift in consumer demand towards EVs, mainly those produced domestically by PRC manufacturers.
We have developed our Office Automation System (the “OA System”), an information technology system we use to track our order status and monitor our business workflow. The OA system facilitates the storage, exchange, and management of order data, thereby increasing our productivity and efficiency. Currently, the OA System has four main modules: Dashboard, Resume, Orders, and Pick-Up. ● Dashboard .
We previously relied on our Office Automation System (the “OA System”), an information technology system used to track order status and monitor business workflow, to conduct our parallel-import vehicles business. The OA System facilitated the storage, exchange, and management of order data, thereby enhancing our productivity and efficiency.
For the years ended December 31, 2023 and 2022, we had total revenue of $38.3 million and $55.2 million, respectively, representing a decrease of 30.5% from 2022 to 2023.
We sold 14 and 303 vehicles during the years ended December 31, 2024 and 2023, respectively, generating total revenue of $1.6 million and $38.3 million, respectively, representing a decrease of 95.7% from 2023 to 2024.
Our Industry and Business Model We generate revenue primarily from the sales of parallel-import vehicles. In the PRC, parallel-import vehicles refer to those purchased directly by dealers from overseas markets and imported into the PRC market for sale through channels other than brand manufacturers’ official distribution systems.
In the PRC, parallel-import vehicles refer to those purchased directly by dealers from overseas markets and imported into the PRC market for sale through channels other than brand manufacturers’ official distribution systems. Models and prices of parallel-import vehicles vary from mid-range to high-end brands, with a manufacturer’s suggested retail price (“MSRP”) typically not less than $40,000.
We believe that we maintain a good working relationship with our employees and our independent contractors, and we have not experienced material labor disputes in the past. None of our employees is represented by labor unions. Competition The automobile dealership industry in the U.S. is highly competitive and rapidly evolving, with many new companies constantly entering the market.
These independent contractors served as our professional purchasing agents, primarily responsible for visiting the U.S. automobile dealers and negotiating the best vehicle purchase price. We believe that we maintain a good working relationship with our employees and our independent contractors, and we have not experienced material labor disputes in the past. None of our employees is represented by labor unions.
Currently, Edward is engaged in ocean and air transportation services. On August 3, 2023, we closed our IPO of 1,250,000 shares of Class A common stock at a price of $4.00 per share. In connection with the IPO, the shares of Class A common stock began trading on the Nasdaq Capital Market under the symbol “CTNT” on August 1, 2023.
In connection with the IPO, the shares of Class A common stock began trading on the Nasdaq Capital Market under the symbol “CTNT” on August 1, 2023.
We then select the lowest prices for models in demand and assist those purchasing agents who provide such quotes in completing the purchases.
Professional purchasing agents could visit dealerships across the U.S. for quotes based on their schedules and convenience and provide us with the price information they obtained. We would then select the lowest prices for models in demand and assist those purchasing agents who provided such quotes in completing the purchases.
Models and prices of parallel-import vehicles vary from mid-range to high-end brands, with the manufacturer’s suggested retail price (“MSRP”) typically not less than $40,000. Parallel-import cars are popular in China because they are relatively cheaper and offer a wider variety of models and versions with more customization possibilities than regular imported cars.
Parallel-import vehicles used to be popular in China because they were relatively cheaper and offered a wider variety of models and versions with more customization possibilities than regular imported cars.
We purchase automobiles, primarily luxury brands, such as Mercedes, BMW, Land Rover, Lexus, and Bentley, from the U.S. market and resell them to our customers, including both U.S. and PRC parallel-import car dealers, for sale to the ultimate users. We derive profits primarily from the price difference between our buying and selling prices for parallel-import vehicles.
We purchased automobiles from the U.S. market through our team of professional purchasing agents, and resold them to our customers, including both U.S.- and PRC-based parallel-import vehicle dealers. We derived profits primarily from the price difference between our buying and selling prices for parallel-import vehicles.
We experienced significant growth in sales volume, revenue, and gross profit from 2016, when we commenced our operations, to the first half of 2022 due to our core strengths and a favorable economic climate. Our financial results in 2022 were impacted by the COVID-19 pandemic and our financial results continue to be impacted by weak economic conditions in the PRC.
This strategy allowed us to maintain efficient operations and effective management by keeping the size and scope of our Company within reasonable limits. From 2016 to the first half of 2022, we experienced significant growth in sales volume, revenue, and gross profit due to our core strengths and a favorable economic climate.
Our PRC and U.S. customers generated approximately 78.7% and 21.3% of our revenue, respectively, during the year ended December 31, 2023, and 93.1% and 6.9% of our revenue, respectively, during the year ended December 31, 2022. We had a total of four and 17 customers for the years ended December 31, 2023 and 2022, respectively.
Our PRC and U.S. parallel-import vehicles customers generated approximately 87.7% and 12.3% of our revenue from parallel-import vehicles, respectively, during the year ended December 31, 2024, and 78.2% and 21.8% of our revenue from parallel-import vehicles, respectively, during the year ended December 31, 2023.
Luxury import brand manufacturers have responded to these threats by discounting the sale price of their vehicles, which has resulted in a significant challenge to our ability to generate a profit from the sale of parallel-import vehicles generally.
Luxury import brand dealers have responded to these threats by discounting the sale price of their vehicles, which has lately prevented us from generating a profit from the sale of parallel import vehicles. These factors, compounded by the lingering effects of the COVID-19 pandemic and lockdowns in the PRC, have significantly impacted our parallel-import vehicle business.
In a training session, our procurement specialists outline the details, such as models with specifications, buying procedures, commission structure, and agent conduct when visiting a dealership. The agents are trained continuously after each deal is completed to improve their skills and knowledge.
Since most of the purchasing agents had other part-time employment, training sessions were provided to accommodate their schedules. In a training session, our procurement specialists would outline the details, such as models with specifications, purchasing procedures, commission structures, and agent conduct when visiting a dealership.
We regularly issue 9 Table of Contents instructions about the brands and models of vehicles to be purchased, as well as the maximum acceptable prices and pick-up time limits. Professional purchasing agents can visit dealerships across the U.S. for quotes based on their schedules and convenience, and provide us with the price information they obtain.
We decided which automobiles to purchase primarily based on the demand and selling price for specific automobile models in the PRC market and their availability in the U.S. market. We regularly issued instructions about the brands and models of vehicles to be purchased, as well as the maximum acceptable prices and pick-up time limits.
We are able to support an annual purchase volume of 500 to 600 cars with our current team size and working capital reserves. In the future, if our client base expands, we may 10 Table of Contents adjust the brands of luxury cars we offer.
We were able to support an annual purchase volume of 500 to 600 cars with our team size and working capital reserves before our business focus shift to logistics and warehousing services.
Those full-time procurement specialists are responsible for training our purchasing agents and providing them with timely phone coaching and on-site support. Due to our standardized recruitment, training, and management of professional purchasing agents, we believe our efficient procurement management and organizational skills set us apart from other competitors in the industry.
Those full-time procurement specialists were responsible for training our purchasing agents and providing them with timely phone coaching and on-site support. 6 Table of Contents Our purchasing agents negotiated the best price for our designated automobile models using the knowledge and negotiating skills they received from our training.
In the referral program, existing agents act as mentors to new agents by providing them with initial training and helping them become familiar with our Company. 7 Table of Contents Since most of the purchasing agents have other part-time employment, training sessions are provided to accommodate their schedules.
There were no limit or cap on how many referrals could be made in our referral program. In the referral program, existing agents acted as mentors to new agents by providing them with initial training and helping them become familiar with our Company.
During the years ended December 31, 2023 and 2022, sales to the China market accounted for approximately 78.7% and 93.1% of our revenue, respectively.
For the years ended December 31, 2024 and 2023, parallel-import vehicles contributed 78.2% and 100.0% of our total revenue, respectively.
As of December 31, 2023 and 2022, we worked with approximately 389 and 342 professional purchasing agents, respectively. Mr. Walter Folker, who currently serves as our Vice President of Procurement, oversees a full-time procurement manager, who in turn supervise five full-time procurement specialists, as of December 31, 2023.
Walter Folker, our previous Vice President of Procurement, oversaw a full-time procurement manager, who in turn supervised our full-time procurement specialists.
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Customers demand our parallel-import vehicles largely because our selling prices are lower than those offered by other suppliers of parallel-import vehicles to the PRC market, driven by our scalable operations and a systematic approach to procurement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also have a process to review certain third-party information technology service providers and vendors, including through contractual requirements and proactive threat intelligence monitoring, as appropriate. However, cybersecurity incidents, if they occur, depending on their nature, could lead to the loss, destruction, or unavailability of critical and confidential data, impacting our operations and potentially harming our reputation.
Biggest changeThese efforts include a wide range of activities, assessments, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. We also have a process to review certain third-party information technology service providers and vendors, including through contractual requirements and proactive threat intelligence monitoring, as appropriate.
Our operations involve collecting and storing customer information in cloud systems, such as Google Drive, and we rely on third-party providers, such as Google, whose systems may encounter interruptions and/or cybersecurity incidents. Our business depends on the continuous functioning of our OA System, which tracks order status and monitors business workflows.
Our operations involve collecting and storing customer information in cloud systems, such as Google Drive, and we rely on third-party providers, such as Google, whose systems may encounter interruptions and/or cybersecurity incidents. Our parallel import vehicle business depended on the continuous functioning of our OA System, which tracked order status and monitored business workflows.
The secure handling of information is crucial, particularly for tracking automobile orders. We have implemented various measures, such as access controls, data encryption, and vulnerability assessments, to prevent and mitigate cybersecurity risks and incidents.
Similarly, our logistics and warehousing business relies on the functioning of our freight forwarding software, GoFreight. The secure handling of information is crucial, particularly for tracking automobile orders. We have implemented various measures, such as access controls, data encryption, and vulnerability assessments, to prevent and mitigate cybersecurity risks and incidents.
Our cybersecurity risk management program is supported by third-party information technologies and vendors, including Squarespace and Google Workspace, which assist us with information technology system monitoring, detection, and response support services. We also leverage third-party information technology service providers to monitor and evaluate our cybersecurity posture through vulnerability scans, penetration tests, and cybersecurity risk reviews and assessments.
Our cybersecurity risk management program is supported by third-party information technologies and vendors, including Squarespace and Google Workspace, which assist us with information technology system monitoring, detection, and response support services.
This could result in customer distrust, termination of partnerships, significant remediation costs, and legal liabilities. 16 Table of Contents As of the date of this annual report, we are not aware of any cybersecurity incidents, that have had a materially adverse effect on our operations, business, results of operations, or financial condition.
As of the date of this annual report, we are not aware of any cybersecurity incidents, that have had a materially adverse effect on our operations, business, results of operations, or financial condition.
We engage in the assessment and testing of our cybersecurity risk management program, policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, assessments, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
We also leverage third-party information technology service providers to monitor and evaluate our cybersecurity posture through vulnerability scans, penetration 25 Table of Contents tests, and cybersecurity risk reviews and assessments. We engage in the assessment and testing of our cybersecurity risk management program, policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents.
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However, cybersecurity incidents, if they occur, depending on their nature, could lead to the loss, destruction, or unavailability of critical and confidential data, impacting our operations and potentially harming our reputation. This could result in customer distrust, termination of partnerships, significant remediation costs, and legal liabilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOn April 28, 2023, we entered into an amendment to our current lease, extending its term to February 28, 2027, with a monthly rent of approximately $6,639. On July 25, 2023, GT Real Estate USA, LLC transferred all of its lease rights to two Delaware LLCs, WILVI 6201 SPE LLC and BILA 6201 SPE LLC.
Biggest changeOn July 25, 2023, GT Real Estate USA, LLC transferred all of its lease rights to two Delaware LLCs, WILVI 6201 SPE LLC and BILA 6201 SPE LLC. On January 10, 2025 and January 31, 2025, we sent two letters to the lessor requesting to terminate the lease, as we had vacated the property.
Pacific, one of our subsidiaries, leases an office in New York City, New York, from an independent third party, Executive Workspace LLC, with an area of approximately 1,692 square feet, a lease term from August 1, 2021 to September 30, 2023, and a monthly rent of approximately $11,174.
The current lease term is from October 1, 2024, to September 30, 2025, with a monthly rent of $535. This office is the address for our dealer license. Pacific, one of our subsidiaries, leased an office in New York City, New York, from an independent third party, Executive Workspace LLC, with an area of approximately 1,692 square feet.
The current lease is set to expire on August 31, 2028, with a monthly rent of approximately $13,500. The leased warehousing facility enhances our logistics capabilities and operational efficiency. We believe that the offices and warehouses we currently lease are adequate to meet our needs for the foreseeable future.
The leased warehousing facility enhances our logistics capabilities and operational efficiency. We believe that the offices and warehouses we currently lease are adequate to meet our needs for the foreseeable future. 26 Table of Contents
This office is used to support business operations for employees based in New York. Edward, which became one of our subsidiaries on February 2, 2024, had previously been in a collaborative partnership with us as providers for vehicle storage and logistics services throughout the year ended December 31, 2023.
On September 26, 2023, we amended the lease to include an additional office space of approximately 1,591 square. The lease expired on August 31, 2024. Edward, which became one of our subsidiaries on February 2, 2024, had previously been in a collaborative partnership with us as providers for vehicle storage and logistics services throughout the year ended December 31, 2023.
Item 2. Properties . Our principal executive offices are located at 6201 Fairview Road, Suite 225, Charlotte, North Carolina, where we lease office space from an independent third party, GT Real Estate USA, LLC, with an area of approximately 2,514 square feet, a lease term from December 1, 2020 to December 31, 2023 and a monthly rent of approximately $6,354.
We also lease an office located at 6201 Fairview Road, Suite 225, Charlotte, North Carolina, from an independent third party, GT Real Estate USA, LLC, with an area of approximately 2,514 square feet. On April 28, 2023, we entered into an amendment to our current lease, extending its term to February 28, 2027, with a monthly rent of approximately $6,639.
Allen-Boy, one of our subsidiaries, leases office space for business operations in Charlotte, North Carolina, from an independent third party, Sounder Properties Inc., with an area of approximately 225 square feet, a lease term from October 1, 2022 to September 30, 2023, and a monthly rent of $465.
As of the date of this annual report, we have ceased to pay rent per the Company’s legal counsel advice. Allen-Boy, one of our subsidiaries, leases office space for its business operations in Charlotte, North Carolina, from an independent third party, Sounder Properties Inc., with an area of approximately 225 square feet.
Following our acquisition of Edward in 2024, we assumed responsibility for a lease agreement for its warehousing facility located in Gardena, California, covering approximately 8,800 square feet. This lease agreement, now under our management, has been entered into with an independent third party, SCI Ventures, Inc.
Following our acquisition of Edward in 2024, we assumed responsibility for a lease agreement for its warehousing facility located in Gardena, California, covering approximately 8,800 square feet. The current lease is set to expire on August 31, 2028, with a monthly rent ranging from $13,500 to $16,425, increasing gradually over the lease term.
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This office is used as our corporate headquarter for general business operations and administrative functions.
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Item 2. Properties . Our principal executive offices are located at 8707 Research Drive, Irvine, California. We lease this office from an independent third party, Zina Development, LLC. The office space is approximately 15,000 square feet, with the lease spanning from July 23, 2024, to July 31, 2027.
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In September 2023, we renewed the lease with a monthly rent of $505, for a term commencing on October 1, 2023 and ending on September 30, 2024. This office is the address for our dealer license.
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The monthly base rent ranges from $42,000 to $45,427, increasing gradually over the lease term. We have posted a security deposit of $100,000, which the lessor may use under certain circumstances as specified in the lease. The lease also includes customary provisions regarding termination, renewal, and expense arrangements.
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On September 26, 2023, we amended the lease to include an additional office space of approximately 1,591 square feet and extended its term to February 29, 2024. On February 2, 2024, we further renewed the lease, extending its term to May 31, 2024. This lease currently carries a monthly rent of $9,944.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed. Item 4. Mine Safety Disclosures Not applicable. 17 Table of Contents PART II
Biggest changeWe could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed. Item 4. Mine Safety Disclosures Not applicable. ​ 27 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNo underwriters were involved in these issuances of securities. ​ ​ ​ ​ ​ ​ ​ ​ ​ Date of Number of ​ ​ Securities/Purchaser ​ Issuance ​ Securities ​ Consideration Class A Common Stock ​ ​ ​ ​ ​ Rapid Proceed Limited ​ July 12, 2022 1,000,000 ​ $ 1,800,000 Yan Bai ​ July 12, 2022 666,000 ​ $ 1,198,800 ​ Use of Proceeds The following “Use of Proceeds” information relates to the registration statement on Form S-1, as amended (File Number 333-271185) for our initial public offering (“IPO”), which was declared effective by the SEC on July 31, 2023.
Biggest changeUse of Proceeds Our public offering on best efforts basis closed on July 26, 2024 (the “July Offering”) The following “Use of Proceeds” information relates to the registration statement on Form S-1 (File Number 333-280743) for the July Offering, which was declared effective by the SEC on July 15, 2024.
Equity Compensation Plans For information on securities authorized for issuance under our existing equity compensation plan, see Item 12 under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Recent Sales of Unregistered Securities Other than previously disclosed in our quarterly reports on Form 10-Q or current reports on Form 8-K, during the period covered by this annual report, we issued the following securities which were not registered under the Securities Act.
Equity Compensation Plans For information on securities authorized for issuance under our existing equity compensation plan, see Item 12 under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Recent Sales of Unregistered Securities Other than previously disclosed in our quarterly reports on Form 10-Q or current reports on Form 8-K, during the period covered by this annual report, we have not issued any securities which were not registered under the Securities Act.
Holders of Record As of March 15, 2024, we had 10,938,329 shares of Class A common stock issued and outstanding held by seven stockholders of record, not including beneficial holders whose shares are held in names other than their own.
Holders of Record As of March 11, 2025, we had 2,672,011 shares of Class A common stock issued and outstanding held by seven stockholders of record, not including beneficial holders whose shares are held in names other than their own.
As of the date of this annual report, we have used approximately $3,530,000 for working capital and other general corporate purposes in support of our current business. We intend to use the remaining proceeds from our IPO in the manner disclosed in our registration statement on Form S-1, as amended (File Number 333-271185). Recent Purchases of Equity Securities None.
As of the date of this annual report, we have used approximately $7.2 million for working capital and other general corporate purposes in support of our current business. We intend to use the remaining proceeds from the May Offering in the manner disclosed in our registration statement on Form S-1, as amended (File Number 333-276300).
None of the net proceeds we received from the IPO were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. 18 Table of Contents The net proceeds raised from the IPO were $4,230,000 after deducting underwriting discounts and the offering expenses payable by us.
None of the net proceeds we received from the May Offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. The net proceeds raised from the May Offering were approximately $7.4 million after offering expenses.
We incurred approximately $870,000 in expenses in connection with our IPO, which included approximately $350,000 in underwriting discounts, approximately $100,000 in expenses paid to or for underwriters, and approximately $320,000 in other expenses.
We incurred approximately $395,000 in expenses in connection with the July Offering, which included approximately $110,000 in placement agent fees, approximately $35,000 in expenses paid to or for the placement agent, and approximately $250,000 in other expenses.
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We believe that each of the following issuance was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions.
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We issued and sold an aggregate of 404,979 shares of Class A common stock, at a price of $3.68 per share for gross proceeds of $1.49 million before deducting offering related expenses. FT Global Capital, Inc. was the exclusive placement agent of such offering.
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In August 2023, we completed our IPO, in which we issued and sold an aggregate of 1,250,000 shares of Class A common stock, at a price of $4.00 per share for $5,000,000. Maxim Group LLC was the representative of the underwriters of our IPO.
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None of the net proceeds we received from the July Offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates. The net proceeds raised from the July Offering were approximately $1.1 million after offering expenses.
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As of the date of this annual report, we have used $200,000 from the proceeds raised from the July Offering as the cash consideration for the acquisition of TWEW.
Added
We intend to use the remaining proceeds raised from the July Offering in the manner disclosed in our registration statement on Form S-1 (File Number 333-280743). 28 Table of Contents Our public offering on best efforts basis closed on May 15 , 2024 (the “ May Offering”) The following “Use of Proceeds” information relates to the registration statement on Form S-1, as amended (File Number 333-276300) for the May Offering, which was declared effective by the SEC on April 26, 2024 and a registration statement on Form S-1 (File No. 333-279388) filed on May 13, 2024, pursuant to Rule 462(b) of the Securities Act of 1933, as amended.
Added
We issued and sold an aggregate of 825,625 shares of Class A common stock, at a price of $9.92 per share for gross proceeds of $8.19 million before deducting offering related expenses. AC Sunshine Securities LLC was the exclusive placement agent of such offering.
Added
We incurred approximately $876,000 in expenses in connection with the May Offering, which included approximately $290,000 in placement agent fees, approximately $66,000 in expenses paid to or for the placement agent, and approximately $520,000 in other expenses.
Added
None of the transaction expenses included payments to directors or officers of our Company or their associates, persons owning more than 10% or more of our equity securities or our affiliates.
Added
Recent Purchases of Equity Securities None. Item 6. [Reserved]. ​ 29 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

32 edited+118 added−110 removed8 unchanged
Biggest changeCash Flows for the Years Ended December 31, 2023 and 2022 The following table summarizes our cash flow for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 2022 Net cash provided by operating activities ​ $ 5,610,225 ​ $ 2,189,605 Net cash (used in) investing activities ​ (672,500) ​ — Net cash (used in) financing activities ​ (4,563,108) ​ (2,632,201) Net increase (decrease) in cash ​ $ 374,617 ​ $ (442,596) ​ Operating Activities Net cash provided by operating activities was $5.6 million for the year ended December 31, 2023.
Biggest changeAs of December 31, 2024, our current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.4 million of operating lease liabilities, $0.2 million of other payables, and $0.2 million of loan payable, including the current portion of long-term borrowings. 36 Table of Contents The following table summarizes our cash flows for the years ended December 31, 2024 and 2023, with continuing operations and discontinued operations presented separately: ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 Net cash provided by operating activities ​ $ 242,220 ​ $ 5,610,225 Cash outflows from operations-continuing operations ​ (3,455,918) ​ (1,646,921) Cash inflows from operations-discontinued operations ​ 3,698,138 ​ 7,257,146 Net cash used in investing activities ​ (6,130,932) ​ (672,500) Cash outflows from operations-continuing operations ​ (6,130,932) ​ (672,500) Net cash provided by (used in) financing activities ​ 7,106,676 ​ (4,563,108) Cash inflows from operations-continuing operations ​ 8,799,952 ​ 5,055,336 Cash outflows from operations-discontinued operations ​ (1,693,276) ​ (9,618,444) Net increase in cash ​ $ 1,217,964 ​ $ 374,617 ​ Operating Activities Net cash used in operating activities from continuing operations was $3.5 million for the year ended December 31, 2024.
The five-step model requires that our Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) our Company satisfies the performance obligation.
The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
Our Company accounts for the revenue generated from sales of vehicles on a gross basis as our Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which our Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits.
The Company accounts for the revenue generated from sales of vehicles on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits.
Under this method, our Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
Under this method, the Company determines deferred tax assets and liabilities on the basis of differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
Income taxes Our Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
Income taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way our Company records its revenue.
The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Our Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.
We purchase automobiles from the U.S. market through our large team of professional purchasing agents, and mainly resell them to parallel-import car dealers in the U.S. and PRC. In accordance with ASC 606, our Company recognizes revenue at the point in time when the performance obligation has been satisfied and control of the vehicles has been transferred to the dealers.
We purchase automobiles from the U.S. market through our team of professional purchasing agents, and mainly resells them to parallel-import car dealers in the U.S. and the PRC. In accordance with ASC 606, the Company recognizes revenue at the point in time when the performance obligation has been satisfied and control of the vehicles has been transferred to the dealers.
Revenue Recognition ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.
Revenues ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.
Off-Balance Sheet Arrangements We did not have during the period presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Off-Balance Sheet Arrangements We do not currently have any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
For overseas sales, our Company sells vehicles under Cost and Freight (“CFR”) shipping point term, and revenue is recognized when a vehicle is loaded on a cargo ship and its title has been transferred to the dealers.
For overseas sales, the Company sells vehicles under Cost and Freight (“CFR”) shipping point terms, and revenue is recognized when a vehicle is loaded on a cargo ship and its title has been transferred to the dealers.
Our results may be adversely affected by changes in the political, regulatory, and social conditions in the U.S. and the PRC.
The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in the U.S. and the PRC.
Our 31 Table of Contents Company’s vehicles are sold with no right of return and our Company does not provide other credits or sales incentives to parallel-import car dealers. Historically, no customer returns have occurred. Therefore, our Company did not provide any sales return allowances for the years ended December 31, 2023 and 2022.
The Company’s vehicles are sold with no right of return and the Company does not provide other credits or sales incentives to parallel-import car dealers. Historically, no customer returns have occurred. Therefore, the Company did not provide any sales return allowances for the years ended December 31, 2024 and 2023.
All of our Company’s contracts have one single performance obligation as the promise is to transfer the individual vehicle to parallel-import car dealers, and there is no separately identifiable other promises in the contracts.
All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual vehicle to parallel-import vehicle dealers, 38 Table of Contents and there is no separately identifiable other promise in the contracts.
Our business, financial condition, and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics, and other catastrophic incidents, which could significantly disrupt our operations. Our operations in 2022 were affected by the COVID-19 pandemic.
The Company’s business, financial condition, and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics, and other catastrophic incidents, which could significantly disrupt the Company’s operations.
This was primarily attributable to a collection of $0.6 million in accounts receivable, a $4.5 million decrease in inventory, $0.5 million decrease in other receivables, and other less significant factors. Net cash provided by operating activities was $2.2 million for the year ended December 31, 2022.
Net cash provided by operating activities from discontinued operations was $7.2 million for the year ended December 31, 2023. This was primarily attributable to (i) a net income of $1.8 million; (ii) a collection of $0.6 million in accounts receivable, a $4.5 million decrease in inventory, $0.5 million decrease in other receivables, and other less significant factors.
We have not assessed a valuation allowance as we determine it is more likely than not that all deferred tax assets will be realized before expiration. 32 Table of Contents Our Company records uncertain tax positions in accordance with ASC 740 (“ASC 740”), Income Taxes, on the basis of a two-step process in which (1) our Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, our Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
In making such a determination, our Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.
In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assesses deferred tax assets to determine whether they are realizable.
In addition, the new guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Our Company is primarily engaged in the parallel-import vehicle dealership business and generates revenue from the sales of parallel-import vehicles to both domestic and oversea parallel-import car dealers.
In addition, the new guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We generated revenues from the parallel-import vehicle dealership and logistics and warehousing services. Revenue from the parallel-import vehicle dealership business is generated from the sales of parallel-import vehicles to both domestic and overseas parallel-import car dealers.
Accordingly, our business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the U.S. and the PRC, as well as by the general state of 21 Table of Contents the U.S. and the PRC economies.
As a company located in the U.S. and doing business with the PRC, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the U.S. and the PRC, as well as by the general state of the U.S. and the PRC economies.
Financing Activities Net cash used in financing activities of $4.6 million for the year ended December 31, 2023, consisted of (i) net repayments of LC financing of $25.5 million; (ii) net repayments of inventory financing of $4.2 million; (iii) net repayments of revolving lines of credit of $2.6 million; and (iv) repayments of dealers financing of $0.4 million; partially offset by (v) proceeds from LC financing of $19.4 million; (vi) proceeds from revolving lines of credit of $3.2 million; (vi) proceeds from dealers financing of $0.4 million; (vii) proceeds from premium finance of $0.2 million; (viii) a reduction in subscriptions receivable of $1.2 million; and (ix) net proceeds from our IPO of $3.7 million.
Net cash used in financing activities from discontinued operations was $1.7 million for the year ended December 31, 2024, primarily reflecting (i) net repayments of LC financing of $1.0 million; and (ii) net repayments of revolving lines of credit of $0.7 million; Net cash used in financing activities from discontinued operations was $9.6 million for the year ended December 31, 2023, consisted of (i) net repayments of LC financing of $6.1 million; (ii) repayments of inventory financing of $4.2 million; (iii) repayments of dealers financing of $0.4 million; and partially offset by (iv) net proceeds from revolving lines of credit of $0.7 million.
As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Business Overview and Recent Developing Trends We are a supplier of parallel-import vehicles sourced in the U.S. to be sold in the PRC market.
As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Our Company elected to file income taxes as a corporation instead of an LLC for the tax years ended December 31, 2020 through December 31, 2023. As of December 31, 2023, the tax years ended December 31, 2020 through December 31, 2022 for our consolidated income tax returns remain open for statutory examination by U.S. tax authorities.
The Company and its U.S. operating subsidiaries are subject to the U.S. tax laws. The Company elected to file income taxes as a corporation instead of an LLC for the tax years ended December 31, 2020 through December 31, 2021.
As of December 31, 2023 and 2022, there was no allowance for doubtful accounts recorded as we consider all of the outstanding accounts receivable fully collectible. Loans receivable, net The Company’s loans receivable are recognized at the point of loan disbursement, initially measured at fair value, primarily reflecting the disbursed amount and associated transaction costs.
(See Note 5 – Discontinued Operations for further details.) Loan receivable The Company’s loans receivable, which consist of loans to third parties, are recognized at the point of loan disbursement, initially measured at fair value, primarily reflecting the disbursed amount and associated transaction costs.
Our Company does not believe that there were any uncertain tax positions as of December 31, 2023 and 2022. Our Company and its operating subsidiaries in the United States are subject to the tax law of the United States.
The Company records interest and penalties related to an uncertain tax position, is and when required, as part of income tax expenses in the consolidated statements of operations. The Company does not believe that there were any uncertain tax positions as of December 31, 2024 and 2023.
Accounts receivable, net Accounts receivable represent the amounts that our Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful accounts. Our Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.
Accounts receivable, net Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance of credit loss, in accordance with the Current Expected Credit Loss (“CECL”) model under ASC 326.
Critical Accounting Estimates We prepare our financial statements in conformity with the accounting principles generally accepted in the U.S. (“U.S. GAAP”), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures.
Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.
As of the date of this annual report, no significant impairment allowance has been recorded for these loans receivable. Inventories, net Inventories consist of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method.
As of the end of the reporting periods, no impairment allowance was recorded for the loan receivables. 41 Table of Contents Inventory Inventory primarily consists of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method, which includes the cost of vehicles purchased from U.S. automobile dealers, non-refundable sales tax, and dealership service fees.
Net cash used in financing activities of $2.6 million for the year ended December 31, 2022, consisted of (i) net repayment of LC financing of $34.3 million; (ii) net repayment of inventory financing of $26.1 million; (iii) repayment to a founder of $1.4 million; and (iv) repayment of dealers financing of $0.2 million; partially offset by (v) net proceeds from LC financing of $33.3 million, (vi) net proceeds from inventory financing of $24.3 million; (vii)issuance of common stock of $1.2 million; (viii) net financing support from long-term borrowing of $0.4 million; and (ix) financial support of $0.3 million from our founder.
Investing Activities Net cash used in investing activities from continuing operations was approximately $6.1 million for the year ended December 31, 2024, including (i) approximately $0.3 million in cash paid for the Edward and TWEW acquisitions, net of cash acquired, (ii) purchase of fixed assets of $0.4 million, (iii) $6.3 million in short-term loans lent to third parties, and offset by (iv) $0.9 million proceeds of repayment from short-term loans lent to third parties.
The cost of inventory mainly includes the cost of auto vehicles purchased from U.S. automobile dealers, non-refundable sales tax, and dealership service fees. Our Company reviews its inventory periodically if any reserves are necessary for potential shrinkage. We recorded no inventory reserve as of December 31, 2023 and 2022.
No provisions for returns or sales incentives are included, as historical experience indicates no material rights of return or refunds. Cost of Revenue Parallel-import Vehicles Segment Cost of parallel import vehicle revenue mainly includes the cost of vehicles purchased from U.S. automobile dealers, non-refundable sales tax, dealership service fees, and other expenses.
This was primarily attributable to a net profit of $0.8 million, adjusted by a $10.5 million reduction in inventory and offset by (i) a $1.8 million decrease in deferred revenue (because customer prepayment and deposit was recognized as revenue during 2022 when revenue recognition criteria were met), (ii) a $7.1 million increase in accounts receivable, and (iii) other factors of less significance. 29 Table of Contents Investing Activities Net cash used in investing activities was $0.7 million and nil for the years ended December 31, 2023 and 2022, respectively.
Net cash used in operating activities from continuing operations was $1.6 million for the year ended December 31, 2023. This was primarily attributable to (i)a net loss of $1.7 million; (ii) an increase in amortization of operating lease right-of-use assets of $0.1 million; offset by (iii) a decrease in operating lease liabilities of $0.2 million.
Beginning in the second half of 2023, the market for new luxury vehicles in the PRC has been negatively impacted by weak economic conditions and a shift in consumer demand towards EVs, mainly those produced domestically by PRC manufacturers.
Since, beginning in the second half of 2023, the business was negatively affected by a decline in customer demand due to weakening macroeconomic conditions, price competition from luxury automakers in the PRC, and a shift in consumer preference toward domestic EVs.
Removed
We purchase automobiles, primarily luxury brands such as Mercedes, Lexus, Range Rover, RAM and Toyota, from authorized dealers in the U.S. market and resell them to our customers, including both U.S. and PRC based parallel-import car dealers. We derive profits primarily from the price difference between our buying and selling prices for parallel-import vehicles.
Added
Business Overview and Recent Developing Trends We are a provider of logistics and warehousing services, historically in connection with the sale of parallel-import vehicles sourced in the U.S. to be sold in the PRC market, and more recently for the transportation of other goods between the U.S. and the PRC.
Removed
Our expertise lies in our ability to identify the type of parallel-import vehicles that are in high demand and to procure them in a timely manner. The primary driver for our industry is the continuing growth of high-net-worth individuals in the PRC.
Added
Parallel-import vehicles in the PRC refer to automobiles purchased directly from overseas markets and imported for sale outside of the brand manufacturers’ official distribution networks. This business contributed significantly to our revenue since our inception. Between 2016 and the first half of 2022, the Company experienced growth in sales volume and gross profit due to favorable market conditions.
Removed
We are focusing our attention on the most popular of the luxury vehicles that provide us with the best profit opportunity. We provide or utilize third parties in the U.S. to provide logistics and warehousing services and to truck transport our vehicles from an authorized dealer in the U.S. to the ultimate point of sale.
Added
These market challenges led to a decline in parallel-import vehicle sales by 30.5% in 2023 and a reduction in net income by 87.5% compared to 2022.
Removed
Luxury import brand manufacturers have responded to these threats by discounting the sale price of their vehicles, which has resulted in a significant challenge to our ability to generate a profit from the sale of parallel import vehicles generally.
Added
The decline accelerated in 2024, with vehicle sales decreasing from 303 units in 2023 to 14 units in 2024, resulting in a 95.7% drop in revenue from $38.3 million in 2023 to $1.6 million in 2024. In addition, the financial strain on the Company’s customers made it increasingly difficult to collect outstanding receivables.
Removed
Consistent with our strategy to focus only on profitable parallel-import vehicle transactions, our unit sales during the fourth quarter of 2023 fell to 49 vehicles, a 36.4% decrease from the fourth quarter of 2022 and a 38.0% drop from unit sales in the third quarter of 2023, which resulted in our recognition of a net loss during the fourth quarter of 2023.
Added
While the Company successfully recovered $4.0 million in 2024 and collected additional $2.5 million from the five aged accounts as of the date of the annual report, the remaining $1.6 million from two customers was determined to be uncollectible, as a result, the management recorded as a credit loss of $1.6 million for the year ended December 31, 2024.
Removed
This market dynamic has continued into 2024 and we are unable at this time to predict the point at which the market for luxury vehicles will firm and the positive spread between the price of vehicles sourced from brand manufacturers’ official distribution systems compared with those sourced via the parallel-import market will return.
Added
As market conditions continued to deteriorate and sales activity in the parallel-import vehicle segment ceased, on March 3, 2025, our board of directors approved the discontinuation of our parallel-import vehicle business. In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, we determined that the parallel-import vehicle segment met the conditions for reporting as a discontinued operation.
Removed
We are responding to the current softness in luxury vehicle sales in China by reducing our operating costs, maintaining a very low level of inventory, and using our cashflow to strengthen our logistics and warehouse capabilities as well as cover overhead.
Added
As a result, all financial results associated with this business have been reclassified as discontinued operations in the accompanying consolidated financial statements for all periods presented. For additional financial details regarding discontinued operations, refer to Note 5 – Discontinued Operations. Logistics and Warehousing In February 2024, we acquired Edward to expand our logistics and warehousing service operations.
Removed
We have significant flexibility to reduce expenses due to our scalable operations; for example, our procurement agents are paid on a commission basis only so these agents are paid only to the extent they purchase vehicles on our behalf.
Added
Beginning in the second quarter of 2024, we increased our marketing staff to pursue new business opportunities and focus on international trade flows between the PRC and the U.S.
Removed
We are proceeding with our plans to integrate the acquisition of Edward and to acquire additional U.S.-based logistics and warehousing service providers to reduce our reliance on the purchase and sale of luxury vehicles and augment our core operations with service revenue, which we believe will provide the opportunity to generate revenue by selling these services to third-party parallel importers as well as to importers of other goods.
Added
In July 2024, we relocated our headquarters from Charlotte, NC, to Irvine, CA, which we believe will enable a stronger management focus on our logistics and warehousing business due to Irvine’s proximity to the important ports of Los Angeles and Long Beach.
Removed
We believe we can overlay these services with the financial services plans we launched in October 2022 for inventory financing (see “Item 1.
Added
In December 2024, we acquired TWEW, a California-based labor and logistics service provider which specializes in general labor support services and logistics coordination to further expand our logistics services. As of the date of this annual report, we are actively integrating TWEW’s operations to strengthen our position in the logistics sector.
Removed
Business—Overview—Recent Development” for more details), such that we can essentially become a one-stop shop for small- and medium-sized traders within the global supply chain sector. 19 Table of Contents Key Factors Affecting our Results of Operations We believe the following key factors may affect our financial condition and results of operations: ● Changes in consumer demand and consumption power in the PRC market .
Added
Additionally, on December 19, 2024, we entered into a membership interest purchase agreement with Pingzheng Li, the then 100% owner of NexTrade, pursuant to which we purchased the 100% membership interests in NexTrade for the consideration of $1. The transaction closed on the same day.
Removed
We primarily generate revenue from the sale of vehicles to parallel-import vehicle dealers in China, directly or through U.S. based exporters. We currently focus on luxury brands and gasoline-powered vehicles. Our industry is primarily driven by the increased number of wealthy consumers in the PRC market.
Added
As of the date of this annual report, NexTrade is not engaged in any business operations.
Removed
If the consumption and purchasing power of Chinese customers declines, or if they are less inclined to purchase large, expensive vehicles, such as sport utility vehicles or luxury automobiles, and more inclined to purchase smaller, less expensive, and more fuel-efficient vehicles, our business and results of operations could be adversely affected. ● Fluctuations in the average selling price per vehicle and the number of vehicles available for sale caused by competition.
Added
Reverse Stock Split On September 30, 2024, our stockholders approved our fourth amended and restated articles of incorporation, which authorizes a reverse stock split of the issued shares of our common stock, par value $0.0001 per share, at a ratio ranging from 1-for-10 to 1-for-30, as 30 Table of Contents determined at the discretion of our board of directors.
Removed
The parallel-import vehicle dealership industry in the U.S. is relatively competitive and rapidly evolving, with many new companies joining the competition in recent years. We compete directly with other U.S. companies that sell parallel-import vehicles to the PRC, although most of our competitors are small family businesses that obtain U.S. cars through their family members or friends in the U.S.
Added
On October 7, 2024, our board of directors approved a reverse stock split of our common stock at a ratio of 1-for-16. On October 21, 2024, we effectuated a reverse stock split of our common stock at a ratio of 1-for-16.
Removed
It is expected that competition will intensify in the future, and the increased competition may lead to price reductions for vehicle sales, which may result in reduced margins and a loss of market share.
Added
Following such reverse split, each 16 shares of our common stock outstanding were automatically combined into one new share of common stock. No fractional shares were issued in connection with the reverse split; any fractional shares resulting from the reverse split were rounded up to the nearest whole share. The par value per share of our common stock remained unchanged.
Removed
We purchase our inventory of vehicles from U.S. automobile dealers via third-party professional purchasing agents, and each of them can purchase a limited number of vehicles before being placed on the “exporters list.” If these purchasing agents are unable or unwilling to continue in their present positions, or if we fail to recruit new purchasing agents or maintain a sufficient number of purchasing agents to meet our purchasing demand, our business may be severely disrupted.
Added
Our Class A common stock started trading on a post-split basis on October 24, 2024, at which time the Class A common stock was assigned a new CUSIP number (16307X202). Risks and Uncertainties The Company is undergoing a business transformation of our business model.
Removed
If our procurement capabilities are impacted and we are unable to purchase popular vehicle models at reasonable procurement costs, our business and results of operations could be adversely affected. We may lose customers if we cannot successfully compete, which could adversely affect our financial performance and business prospects. ● Our ability to expand markets.
Added
Risks and uncertainties related to the Company’s business include, but are not limited to, the following: ● The business shift from parallel-import vehicle sales to logistics and warehousing services may depend on factors from the business environment to operation management and market expansion; ● The government policies on ocean freight business and tariff policy may reduce the market demand for the freight, logistics and warehousing business, and thus negatively affect our business and growth prospects; ● Our logistics and warehousing business depend highly on the limited customers and third-party transportation and labor providers; ● Any adverse change in political relations between the PRC and the U.S., including the ongoing trade conflicts between the U.S. and the PRC, may negatively affect its business; and ● The competition of logistics and warehousing industry dependent on factors such as service quality, speed reliability, and pricing may limit our expanding non-vehicle logistics warehousing revenue, and our success in these areas will depend on our ability to develop and scale an effective salesforce to market these services to international trading companies in the U.S. and the PRC.
Removed
During the year ended December 31, 2023, our three largest customers accounted for 53.2%, 25.5%, and 20.2% of our total revenue, respectively. For the year ended December 31, 2022, our three largest customers accounted for approximately 65% of our total revenue, while for the year ended December 31, 2021, our four largest customers accounted for 81.9% of our total revenue.
Added
Results of Operations The following discussion analyzes our results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Removed
While we have a strong record of performance, we cannot guarantee that we will continue to maintain our business relationships with these major customers at the same level, or at all.
Added
In 2024, as we fully exited our parallel-import vehicle business, all financial results related to this segment have been reclassified as discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements — Discontinued Operations. For further details, please refer to Note 5 — Discontinued Operations.
Removed
In the event that a significant customer terminates its relationship with us, we cannot assure that we will be able to secure an alternative arrangement with another comparable customer in a timely manner, or at all. Losing one or more of these major customers could adversely affect our revenue and profitability. ● China’s industrial Policies.
Added
Logistics and warehousing services business now represents our sole operating segment reported under continuing operations.
Removed
Changes in consumer demand in the PRC market for fuel-efficient vehicles and electric vehicles could adversely affect our vehicle sales volumes and results of operations.
Added
The following table provides a summary of our consolidated results of operations for the years ended December 31, 2024 and 2023, highlighting the financial impact of both continuing and discontinued operations: 31 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, Change ​ 2024 2023 Amount Revenue ​ $ 455,805 ​ $ — ​ $ 455,805 Cost of Revenue ​ 277,293 ​ — ​ 277,293 Gross Profit ​ 178,512 ​ — ​ 178,512 Total operation expenses ​ 3,919,058 ​ 2,190,513 ​ 1,728,545 Total other income (expense) ​ 292,530 ​ (10,290) ​ 302,820 (Loss) from continuing operations before tax provision ​ (3,448,016) ​ (2,200,803) ​ (1,247,213) Income tax (benefits) ​ (215,822) ​ (488,918) ​ (273,096) (Loss) from continuing operations ​ (3,232,194) ​ (1,711,885) ​ (1,520,309) (Loss) income from discontinued operations, net of tax ​ (1,956,658) ​ 1,845,755 ​ (3,802,413) Net (Loss) income ​ $ (5,188,852) ​ $ 133,870 ​ $ (5,322,722) ​ Our total revenue from continuing operations was $455,805 in 2024, reflecting our transition into the logistics and warehousing business.
Removed
Furthermore, government policies on the purchase and ownership of automobiles in the PRC, as well as stricter emission standards, may reduce the market demand for the automobiles we sell and thus negatively affect our business and growth prospects. ● Macroeconomic conditions.
Added
Meanwhile, the parallel-import vehicle business was discontinued during the year ended December 31, 2024, and its financial results are presented separately as discontinued operations in accordance with ASC 205-20. For further details, please refer to Note 5 – Discontinued Operations. We reported a $5.2 million net loss for the year ended December 31, 2024.
Removed
We facilitate the import of automobiles of foreign brands into the PRC market as parallel-import vehicles, and any adverse change in political relations between the PRC and the U.S. or any other country where those brands originate, including the ongoing trade conflicts between the U.S. and the PRC, may negatively affect our business.
Added
The loss was primarily driven by the wind-down of the discontinued parallel-import vehicle operations, increased operating expenses associated with our transition to logistics and warehousing services, and tax provisions related to deferred tax adjustments. Loss from continuing operations for the years ended December 31, 2024 and 2023 were $3.2 million and $1.7 million, respectively.
Removed
We are currently operating in a period of economic uncertainty and capital market disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflicts between Russia and Ukraine and in the Middle East.
Added
Loss from discontinued operations, net of tax, was approximately $2.0 million in 2024, compared to income of $1.8 million in 2023, reflecting the financial impact of ceasing the parallel-import vehicle business, including associated costs and adjustments.

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