Cheetah Net Supply Chain Service Inc 10-Q for FY2024 Q3

Cheetah Net Supply Chain Service Inc. (CTNT)

10-Q 2024-11-13 For: 2024-09-30

Added on April 06, 2026

About this 10-Q

Cheetah Net Supply Chain Service Inc filed this 10-Q on November 13, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $61.21K; down 99.4% from $10.04M a year earlier
Net loss: $1.82M; compared with net income of $122.9K a year earlier
Diluted EPS: -$1.06; compared with $0.11 a year earlier

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North Carolina		81-3509120
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	CTNT	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

Part I	Financial Information	1

Item 1	Financial Statements	1

	Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	1

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4	Controls and Procedures	39

Part II	Other Information	40

Item 1	Legal Proceedings	40

Item 1A	Risk Factors	40

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3	Defaults Upon Senior Securities	41

Item 4	Mine Safety Disclosures	41

Item 5	Other Information	41

Item 6	Exhibits	42

Signatures		44


	September 30,		December 31,
	2024		2023
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	5,287,376	$	432,998
Accounts receivable, net		3,291,450		6,494,695
Loans receivable		3,058,295		672,500
Inventory		—		1,515,270
Other receivables		353,576		410,920
Prepaid expenses and other current assets		428,184		294,154
TOTAL CURRENT ASSETS		12,418,881		9,820,537


OTHER NONCURRENT ASSETS:
Property, plant, and equipment, net		408,277		—
Operating lease right-of-use assets		1,976,714		190,823
Deferred tax assets, net		974,609		47,905
Intangibles, net		481,142		—
Goodwill		568,532		—
TOTAL ASSETS	$	16,828,155	$	10,059,265

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	7,515	$	40,430
Current portion of long-term debt		34,146		32,887
Loans payable from letter of credit financing		—		1,004,565
Loans payable from line of credit		—		688,711
Loans payable from premium finance		178,801		148,621
Due to a related party		—		13,423
Operating lease liabilities, current		376,062		39,703
Accrued liabilities and other current liabilities		239,361		390,451
TOTAL CURRENT LIABILITIES		835,885		2,358,791
NONCURRENT LIABILITIES:
Long-term debt, net of current portion		619,198		644,725
Operating lease liabilities, net of current portion		1,419,329		151,121
TOTAL LIABILITIES		2,874,412		3,154,637

COMMITMENTS AND CONTINGENCIES (Note 18)		—		—

STOCKHOLDERS’ EQUITY
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 2,507,093 and 1,119,750 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively, including*:
Class A common stock, $0.0001 par value, 891,750,000 shares authorized, 1,960,218 and 604,125 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		196		60
Class B common stock, $0.0001 par value, 108,250,000 shares authorized, 546,875 and 515,625 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		55		52
Additional paid-in capital		16,482,353		6,996,275
Subscription receivable		—		(600,000)
Retained earnings (Accumulated deficit)		(2,528,861)		508,241
TOTAL STOCKHOLDERS’ EQUITY		13,953,743		6,904,628

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	16,828,155	$	10,059,265


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
REVENUES
Parallel-import Vehicles	$	—	$	10,038,246	$	1,631,248	$	32,475,714
Logistics and Warehousing		61,208		—		231,605		—
Total Revenues		61,208		10,038,246		1,862,853		32,475,714

COST OF REVENUES
Cost of vehicles		—		8,365,730		1,515,270		27,190,224
Fulfillment expenses		—		505,156		140,798		1,722,704
Ocean freight service cost		31,339		—		119,437		—
Total cost of revenues		31,339		8,870,886		1,775,505		28,912,928

GROSS PROFIT		29,869		1,167,360		87,348		3,562,786

OPERATING EXPENSES
Selling expenses		19,557		184,061		117,819		603,184
General and administrative expenses		1,102,454		530,089		2,735,450		1,676,559
Allowance of credit loss of accounts receivable		1,095,094		—		1,095,094		—
Share-based compensation expenses		261,666		—		261,666		—
Total operating expenses		2,478,771		714,150		4,210,029		2,279,743

(LOSS) INCOME FROM OPERATIONS		(2,448,902)		453,210		(4,122,681)		1,283,043

OTHER INCOME (EXPENSES)
Interest income		88,459		107		145,631		4,009
Interest expenses		(14,865)		(286,197)		(113,830)		(1,058,111)
Other income		36		—		809		—
OTHER INCOME (EXPENSES), NET		73,630		(286,090)		32,610		(1,054,102)

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES		(2,375,272)		167,120		(4,090,071)		228,941

Income tax (benefits) provision		(559,980)		44,217		(1,052,969)		58,226

NET (LOSS) INCOME	$	(1,815,292)	$	122,903	$	(3,037,102)	$	170,715

(Loss) Earnings per share - basic and diluted*	$	(1.06)	$	0.11	$	(1.78)	$	0.16
Weighted average shares - basic and diluted*		1,709,610		1,091,727		1,709,610		1,058,509


	Common Stock*
	Class A			Class B			Additional				Retained Earnings		Total
	Common			Common			paid-in		Subscription		(Accumulated		Stockholders’
	stock	Amount		stock	Amount		capital		Receivable		Deficit)		Equity
Balance, December 31, 2023	604,125	$	60	515,625	$	52	$	6,996,275	$	(600,000)	$	508,241	$	6,904,628

Termination of equity-classified warrant	—		—	—		—		(78,125)		—		—		(78,125)
Issuance of common stock for acquisition	79,521		8	—		—		899,992		—		—		900,000
Issuance of follow-on public offering	825,625		83	—		—		7,309,037		—				7,309,120
Net loss for the period	—		—	—		—		—		—		(1,221,810)		(1,221,810)

Balance, June 30, 2024	1,509,271	$	151	515,625	$	52	$	15,127,180	$	(600,000)	$	(713,569)	$	13,813,813

Issuance of follow-on public offering	404,979		41	—		—		1,093,516		—		—		1,093,556
Stock issuance	—		—	—		—		—		600,000		—		600,000
Issuance of common stock in connection with vesting of share-based award (in shares)	45,938		5	31,250		3		—		—		—		8
Share-based compensation expenses	—		—	—		—		261,658		—		—		261,658
Fraction shares issued due to reverse stock split	30		0	—		—		0		—		—		0
Net loss for the period	—		—	—		—		—		—		(1,815,292)		(1,815,292)

Balance, September 30, 2024	1,960,218	$	196	546,875	$	55	$	16,482,353	$	—	$	(2,528,861)	$	13,953,743


	For the Nine Months Ended
	September 30,
	2024		2023
Cash flows from operating activities:
Net (loss) income	$	(3,037,102)	$	170,715
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of operating lease right-of-use assets		182,862		123,288
Amortization of Intangible Assets		34,858		—
Allowance of credit loss of accounts receivable		1,095,094		—
Share-based compensation expenses		261,666		—
Depreciation		17,518		—
Deferred income tax expenses (benefits)		(1,057,853)		48,137
Changes in operating assets and liabilities:
Accounts receivable		2,155,505		1,482,732
Inventory		1,515,269		630,572
Other receivables		100,030		331,336
Prepaid expenses and other current assets		(107,030)		42,510
Other payables and other current liabilities		(239,625)		172,880
Operating lease liabilities		(319,666)		(130,436)
Net cash provided by operating activities		601,526		2,871,734

Cash flows from investing activities:
Acquisition of business, net of cash acquired		(220,117)		—
Purchase of property, plant, and equipment		(365,000)		—
Loans made to third parties		(2,385,795)		—
Net cash used in investing activities		(2,970,912)		—

Cash flows from financing activities:
Proceeds from follow-on public offering, net of expenses		8,402,676		—
Proceeds from initial public offering, net of expenses		—		3,725,403
Cash paid for warrant termination		(78,125)		—
Proceeds from issuance of common stock under private placement transaction		600,000		1,200,000
Repayments of inventory financing		—		(4,164,100)
Proceeds from letter of credit financing		25,971		16,659,243
Repayments of letter of credit financing		(1,030,536)		(20,687,255)
Proceeds from loans from dealer finance		—		389,296
Repayments of loans from dealer finance		—		(431,043)
Proceeds from Line of Credit		—		3,244,488
Repayment of Line of Credit		(688,711)		(2,375,197)
Proceeds from premium finance		252,718		221,139
Repayments of premium finance		(222,538)		—
Repayments of long-term borrowings		(24,268)		(24,143)
Borrowing from a related party		—		42,923
Repayments made to a related party		(13,423)		(26,000)
Net cash provided by (used in) financing activities		7,223,764		(2,225,246)

Net increase in cash		4,854,378		646,488
Cash, beginning of period		432,998		58,381
Cash, end of period	$	5,287,376	$	704,869

Supplemental cash flow information
Cash paid for interests	$	37,169	$	252,118

Noncash Financing and investing activities:
Fair value of common stock issued for acquisition	$	900,000	$	—


Property, plant, and equipment		Estimated useful life
Motor vehicles		10 years
Leasehold improvements		3-6 years


Intangible assets		Estimated useful life
Developed Technology		7 years
Customer relationships		12 years
Trade names		7 years


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue from Parallel-Import Vehicles
U.S. domestic market	$	—	$	1,244,615	$	200,297	$	8,160,395
Overseas market		—		8,793,631		1,430,951		24,315,319
Revenue from Logistics and Warehousing
U.S. domestic market		36,860		—		136,575		—
Overseas market		24,348		—		95,030		—
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714


	September 30, 2024		December 31, 2023
	(Unaudited)
Parallel-import Vehicles:
Vehicle Deposit⁽¹⁾	$	100,800	$	162,159
Rent Deposit		117,975		22,095
Sales Tax Refundable⁽²⁾		34,886		217,892
Interest Receivable		81,747		5,423
Others		13,746		3,351
Logistics and Warehousing
Others		4,422		—
Subtotal		353,576		410,920
Less: Allowance for credit loss		—		—
Total Other Receivables	$	353,576	$	410,920


	Estimated Useful Life
	in Years	September 30, 2024		December 31, 2023
		(Unaudited)
Motor Vehicles	10	$	365,000		—
Leasehold improvements	3-6		60,795		—
Subtotal			425,795		—
Less accumulated depreciation			(17,518)		—
Property, plant, and equipment, net		$	408,277	$	—


	September 30, 2024		December 31, 2023
Right-of-use assets	$	1,976,714	$	190,823

Operating lease liabilities – current	$	376,062	$	39,703
Operating lease liabilities – non-current		1,419,329		151,121
Total operating lease liabilities	$	1,795,391	$	190,824


Fiscal Years	Amount
	(Unaudited)
2024 (excluding the nine months ended September 30, 2024)	$	146,037
2025		639,749
2026		795,559
2027		517,765
Thereafter		126,976
Total lease payments		2,226,086
Less: imputed interest		(430,695)
Present value of lease liabilities	$	1,795,391


	September 30,
	2024
	(Unaudited)
Accounts receivable aging:
Less than 150 days	$	200,297
151-180 days		—
181-210 days		32,165
210-365 days		1,241,231
Over 365 days		2,876,148
Less: allowance for credit loss		(1,095,094)
Total accounts receivable	$	3,254,747


	As of June 30, 2024		As of March 31, 2024		Change
	Finalized value		Preliminary value		Amount
Acquired assets acquired and (liabilities):
Cash	$	79,883	$	79,883	$	—
Accounts Receivable		47,354		47,354		—
Other Current Assets		42,685		42,685		—
Right-of-use Lease Asset		645,625		645,625		—
Fixed Assets		60,795		60,795		—
Developed Technology		120,000		120,000		—
Customer Relationships		360,000		360,000		—
Trade Names		36,000		36,000		—
Goodwill		568,532		437,382		131,150
Other Noncurrent Assets		27,000		27,000		—
Accounts Payable		(34,686)		(34,686)		—
Accrued Expenses Payable		(20,933)		(20,933)		—
Deferred Tax Liability		(131,150)		—		(131,150)
Operating Lease Liability, Current		(94,548)		(94,548)		—
Operating Lease Liability, Long Term		(506,557)		(506,557)		—
Total Purchase Consideration	$	1,200,000	$	1,200,000	$	—


Intangible Assets		Estimated Useful Lives (month)
Developed Technology		84
Customer Relationships		144
Trade Names		84


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	3,066
2025		11,024
2026		11,474
2027		11,942
2028		12,429
Thereafter		421,663
Total	$	471,598


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	5,553
2025		23,553
2026		24,881
2027		26,285
2028		27,768
Thereafter		73,706
Total	$	181,746


		Weighted
	Number of	Average Grant
	non-vested	Date Fair Value
	Shares	Per Share (US$)
Outstanding as of December 31, 2023	—	—
Grant	150,000	3.39
Vested	(77,188)	3.39
Forfeited	—	—
Outstanding as of September 30, 2024	72,812	3.39

Name		Relationship with Our Company
Mr. Huan Liu		Chief Executive Officer (“CEO”) and Chairman of the Board of Directors
West Buy Media Inc. (“West Buy Media”)		100% owned by Mr. Huan Liu, CEO and Chairman of the Board of Directors


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Federal statutory tax rate	$	21.0	%	$	21.0	%	$	21.0	%	$	21.0	%
State statutory tax rate		4.3	%		5.1	%		5.6	%		2.1	%
Non-deductible expenses		(0.1)	%		0.3	%		(0.1)	%		0.3	%
Non-taxable income		(1.6)	%		0.0	%		(0.8)	%		2.1	%
Effective tax rate	$	23.6	%	$	26.4	%	$	25.7	%	$	25.5	%


					Total Common
					Shares Issuable as of
			Exercise		March 31,
Title of Warrant	Date Issued	Expiry Date	Price		2024
Equity-classified warrants

August 2023 – underwriter warrants	8/3/2023	07/31/2026	$	80.00	3,906


	For the Three Months Ended September 30,
	2024		2023		Amount		%
Allowance of credit loss of accounts receivable	$	1,095,094	$	—	$	1,095,094	N/A


	Nine Months Ended September 30, 2024					Nine Months Ended September 30, 2023					Average Selling Price Changes
	No.	Sales Amount		Ave Selling Price		No.	Sales Amount		Ave Selling Price		Amount		%
BMW X7	—	$	—	$	—	5	$	480,210	$	96,042	$	(96,042)	—	%
Mercedes G63	1		200,297	$	200,297	—		—		—		—	—	%
Mercedes GLS 450	11		1,175,116		106,829	125		14,033,750		112,270		(5,441)	(4.8)	%
Mercedes Benz GLS600	—		—		—	12		2,877,516		239,793		(239,793)	—	%
RAM Trucks	—		—		—	14		1,698,061		121,290		(121,290)	—	%
Land Rover Range Rover	—		—		—	15		2,359,979		157,332		(157,332)	—	%
Toyota Sequoia	—		—		—	31		3,144,186		101,425		(101,425)	—	%
LEXUS LX600	2		255,834		127,917	52		7,882,011		151,577		(23,660)	(15.6)	%
Total	14	$	1,631,247	$	116,518	254	$	32,475,714	$	127,857	$	(11,339)	(8.9)	%


	For the Nine Months Ended September 30,
	2024		2023		Amount		%
Allowance of credit loss of accounts receivable	$	1,095,094	$	—	$	1,095,094	N/A

Exhibit		Incorporated by Reference (Unless Otherwise Indicated)
Number	Exhibit Title	Form	File	Exhibit	Filing Date

3.1	Fourth Amended and Restated Article of Incorporation	8-K	0001-41761	3.1	October 21, 2024

3.2	Bylaws	S-1	001- 271185	3.2	April 7, 2023

4.1	Specimen Stock Certificate	S-1	333-280743	4.1	July 10, 2024

10.1	Director Offer Letter dated July 2, 2024 between Huibo Deng and the Company	8-K	0001- 41761	10.1	July 8, 2024

10.2	Indemnification Agreement dated July 2, 2024 between Huibo Deng and the Company	8-K	0001- 41761	10.2	July 8, 2024

10.3	Placement Agency Agreement dated July 25, 2024 by and between the Company and FT Global Capital, Inc., as the Company’s placement agent	8-K	0001- 41761	10.1	July 26, 2024

10.4	Form of the Securities Purchase Agreement dated July 25, 2024 by and between the Company and the Purchasers identified therein	8-K	0001- 41761	10.2	July 26, 2024

10.5	Lease Agreement dated July 19, 2024 between the Company and Zina Development, LLC, as amended	10-Q	0001- 41761	10.7	August 13, 2024

10.6	Loan Agreement dated June 20, 2024 between the Company and Hongkong Sanyou Petroleum Co Limited	10-Q	0001- 41761	10.8	August 13, 2024

10.7	Loan Agreement dated July 22, 2024 between the Company and Hongkong Sanyou Petroleum Co Limited	10-Q	0001- 41761	10.9	August 13, 2024

10.8	Premium Finance Agreement dated August 1, 2024 between the Company and ETI Financial Corporation	10-Q	0001- 41761	10.10	August 13, 2024

10.9	Loan Agreement dated August 16, 2024 between the Company and Asia Finance Investment Limited	—	—	—	Filed herewith

10.10	Letter Agreement and General Release dated August 27, 2024 by and between the Company and Robert Cook, the Company’s former chief financial officer	8-K	0001- 41761	10.1	August 25, 2024

10.11	Loan Agreement dated October 2, 2024 between the Company and Hongkong Sanyou Petroleum Co Limited	—	—	—	Filed herewith

10.12	Loan Agreement dated October 24, 2024 between the Company and Asia Finance Investment Limited	—	—	—	Filed herewith

10.13	Loan Agreement dated October 28, 2024 between the Company and Hongkong Sanyou Petroleum Co Limited	—	—	—	Filed herewith

10.14	Letter Agreement and General Release dated October 30, 2024 by and between the Company and Walter Folker, the Company’s former vice president of procurement	8-K	0001- 41761	10.1	October 31, 2024

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith


31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith

32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

101.INS	Inline XBRL Instance Document	—	—	—	Filed herewith

101.SCH	Inline XBRL Taxonomy Extension Schema Document	—	—	—	Filed herewith

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	—	—	—	Filed herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	—	—	—	Filed herewith

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	—	—	—	Filed herewith

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	—	—	—	Filed herewith

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	—	—	—	Filed herewith

		Cheetah Net Supply Chain Service Inc.

		By:	/s/ Huan Liu
			Huan Liu
			Chief Executive Officer, Interim Chief Financial Officer, Director, and Chairman of the Board of Directors


/s/ Huan Liu
Huan Liu
Chief Executive Officer, Director, and Chairman of the Board of Directors
(Principal Executive Officer)


/s/ Huan Liu
Huan Liu
Interim Chief Financial Officer
(Principal Accounting and Financial Officer)