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CHEETAH NET SUPPLY CHAIN SERVICE INC. (CTNT)

Business Summary

Cheetah Net Supply Chain Service Inc. is undergoing a significant business transformation, shifting its focus from parallel-import vehicle sales to logistics and warehousing services, primarily for international trade flows between the U.S. and the PRC. The parallel-import vehicle business, which historically contributed significantly to revenue, experienced a severe downturn due to weakening macroeconomic conditions, price competition from luxury automakers in the PRC, and a shift in consumer preference toward domestic electric vehicles (EVs) . This led to a 30.5% decline in sales in 2023 and a 95.7% decline in 2024, with vehicle sales dropping from 303 units in 2023 to 14 units in 2024 . Consequently, the board of directors approved the discontinuation of the parallel-import vehicle business on March 3, 2025 .

The company's core business model is now centered on logistics and warehousing services, which it launched in February 2024 . This pivot leverages the company's prior experience in transporting parallel-import vehicles. Revenue is generated from freight forwarding, cargo storage, U.S. customs clearance, and labor services including cargo loading and unloading . The company operates as a Non-Vessel-Operating Common Carrier (NVOCC), coordinating shipments for customers who typically lack the industry knowledge or direct relationships with ocean carriers . Customers can engage the company for any combination of these services .

The logistics and warehousing segment is primarily driven by two acquired businesses: Edward Transit Express Group Inc. ("Edward") and TW & EW Services Inc ("TWEW"). Edward, acquired in February 2024 for a total consideration of $1.5 million , specializes in ocean transportation services, freight forwarding, and warehousing . TWEW, acquired in December 2024 for $1.0 million , provides general labor and logistics services, including loading, unloading, and other labor-related activities . For the year ended December 31, 2025, the logistics and warehousing business contributed 100% of total revenue, compared to 21.8% in 2024 .

For the fiscal year ended December 31, 2025, total revenue from continuing operations was $1,288,536 , an increase of 182.7% from $455,805 in 2024 . Cost of revenue increased by 304.5% to $1,121,761 in 2025 from $277,293 in 2024 . Gross profit for continuing operations decreased by 6.6% to $166,775 in 2025 from $178,512 in 2024 . Operating expenses totaled $4,746,351 in 2025, up from $3,919,058 in 2024 . The company reported a net loss from continuing operations of $3,649,703 in 2025, compared to a net loss of $3,232,194 in 2024 . Diluted EPS from continuing operations was $(1.12) in 2025, versus $(1.65) in 2024 . As of December 31, 2025, cash and cash equivalents were $233,217 , and total current assets were $9,065,646 . Total liabilities were $2,502,877 , with current liabilities of $1,345,618 . The company had loan receivables of $7,430,111 and long-term debt of $608,555 .

Revenue from Edward decreased by 32.2% to $214,810 in 2025 from $316,852 in 2024, primarily due to reduced customer demand and shipment volume from the U.S.-China trade war . Conversely, revenue from TWEW increased substantially to $1,073,726 in 2025 from $138,953 in 2024, reflecting a full year of operations post-acquisition . General and administrative expenses decreased by $14,287, or 0.4%, to $3,627,426 in 2025 , driven by lower recruiting expenses, insurance costs, and legal and accounting fees, partially offset by increased rental and lease expenses due to the headquarters relocation to Irvine, California, and higher payroll and benefits . Impairment loss expenses of $731,307 were recorded in 2025, related to customer relationships ($135,346), trade names ($27,429), and goodwill ($568,532) from the Edward acquisition .

Significant operational developments during the period include the acquisition of Edward in February 2024 and TWEW in December 2024, marking the strategic shift to logistics and warehousing . The company also acquired NexTrade International LLC in December 2024 for $1, which holds 100% ownership in Naiside (Shenzhen) International Trading Co., Ltd., though NexTrade has not commenced operations . The company relocated its headquarters to Irvine, California, in July 2024 to be closer to the ports of Los Angeles and Long Beach . On March 3, 2025, the board approved the discontinuation of the parallel-import vehicle business . The company also dissolved two wholly-owned subsidiaries, Pacific Consulting LLC and Cheetah Net Logistics LLC, on June 24, 2025, as part of an internal corporate restructuring .

Business Outlook & Financial Sufficiency

Management explicitly states that the company is undergoing a business transformation, shifting its business focus from parallel-import vehicle sales to logistics and warehousing services . The company intends to continue focusing on improving operational efficiencies and expanding its market presence of the two acquired businesses, Edward and TWEW, in the California area .

A major growth area is the logistics and warehousing services segment, which was launched in February 2024 . This segment focuses on providing freight forwarding services for clients shipping goods from the U.S. to mainland China or Hong Kong, operating as a Non-Vessel-Operating Common Carrier (NVOCC) . The company aims to streamline logistics for customers by leveraging its expertise and carrier network, offering services such as cargo storage, freight forwarding, U.S. customs clearance, and labor services . The company has established partnerships with three ocean carriers and four trucking companies .

Another growth vector involves the integration and expansion of the acquired businesses. Edward Transit Express Group Inc. is engaged in ocean transportation services , while TW & EW Services Inc. provides general labor and logistics services . The acquisition of TWEW in December 2024 is specifically noted to strengthen the company's position in the logistics sector . The incorporation of Cheetah Net Supply Chain Service Ltd (Cheetah BVI) in the British Virgin Islands on March 28, 2025, is intended to support future international business development and facilitate potential global partnerships, though it has not commenced operations as of the annual report date .

Regarding the operational outlook, the company plans to continue improving operational efficiencies and expanding the market presence of its acquired logistics and warehousing businesses in California . The company is also considering developing an online platform to automate and digitalize key steps of the supply chain for customers, although these efforts are acknowledged as costly and time-consuming . As of December 31, 2025, the company had 13 employees, with 12 full-time, and worked with one independent contractor for general labor support . The company's headquarters relocated to Irvine, California, in July 2024, which is expected to enable stronger management focus on the logistics and warehousing business due to its proximity to the ports of Los Angeles and Long Beach .

For capital allocation, the company has historically funded working capital needs from financing activities . As of December 31, 2025, the company had cash and cash equivalents of $233,217 and a working capital balance of $7.7 million . It also had loan receivables from third parties of approximately $7.4 million, which management believes can support ongoing business operations and meet future obligations . The company may require additional cash resources and may seek to sell additional equity or debt securities or obtain a credit facility if current sources are insufficient . Share-based compensation expenses were $387,618 in 2025 , and total unrecognized compensation cost relating to nonvested shares was $107,380 as of December 31, 2025, to be recognized over a weighted average period of two years .

The company explicitly flags several structural headwinds and execution risks. The business shift from parallel-import vehicle sales to logistics and warehousing services may depend on various factors, from the business environment to operation management and market expansion . Government policies on ocean freight and tariff policy may reduce market demand for freight, logistics, and warehousing, negatively affecting business and growth prospects . The logistics and warehousing business depends highly on a limited number of customers and third-party transportation and labor providers . Any adverse change in political relations between the PRC and the U.S., including ongoing trade conflicts, may negatively affect the business . Competition in the logistics and warehousing industry, dependent on factors such as service quality, speed reliability, and pricing, may limit the expansion of non-vehicle logistics warehousing revenue . The company's success in these areas will depend on its ability to develop and scale an effective salesforce to market these services to international trading companies in the U.S. and the PRC .

Management Sentiments & Priorities

Management's message to shareholders conveys a tone of strategic pivot and transformation, acknowledging the challenges faced by the discontinued parallel-import vehicle business and emphasizing the shift towards logistics and warehousing services. The company's Chief Executive Officer, Huan Liu, has been instrumental in this strategic redirection, overseeing the acquisition of Edward and TWEW to expand logistics capabilities. Management explicitly states that the company is "undergoing a business transformation of our business model, shifting our business focus from parallel-import vehicle sales to logistics and warehousing services" . A key strategic priority is to "continue to focus on improving operational efficiencies and expanding our market presence of the two acquired businesses in the California area" . Another priority is to "develop and scale an effective salesforce to market these services to international trading companies in the U.S. and the PRC" . Management also highlights the intention to "develop an online platform to facilitate our logistics and warehousing services, enabling us to automate and digitalize key steps of supply chain for our customers" , while acknowledging the associated costs and time. The company's financial condition as of December 31, 2025, with cash and cash equivalents of $233,217 and a working capital balance of $7.7 million, along with loan receivables of approximately $7.4 million, is presented as sufficient to support ongoing operations for at least the next 12 months .

Risk Factors

The company faces material risks including economic uncertainty and capital markets disruption due to geopolitical instability from ongoing military conflicts between Russia and Ukraine and in the Middle East, which could lead to market disruptions, volatility in commodity prices, and supply chain interruptions . The increasingly strained relationship between the U.S. and China is a significant concern, as the company's business relies on stable economic and political relations between the two countries, with a deteriorating relationship potentially adversely affecting international logistics and the company's operations . The logistics and warehousing industry is highly competitive, with many new entrants, and the company may struggle to compete against existing or new competitors with longer operating histories, greater brand recognition, or more extensive resources, potentially reducing market share and financial performance . Inflation and a potential recession in the U.S., along with a weakening economy in the PRC, could increase the company's cost structure and diminish demand for its services . Fluctuations in RMB-USD exchange rates could materially and adversely affect results, especially if clients choose not to engage the company due to exchange rate considerations . Operationally, the discontinuation of the parallel-import vehicle business and the transformation to logistics and warehousing services pose risks if the company cannot successfully execute the shift, integrate acquired businesses, or achieve anticipated efficiencies . The company's California location makes it susceptible to catastrophic events like natural disasters, which could disrupt operations . Reliance on third-party systems like Google Drive and freight forwarding software GoFreight exposes the company to cybersecurity incidents, potentially leading to data loss, business disruption, reputational harm, and significant remediation costs . The company's dependence on a few major customers, with the two largest accounting for 100% of parallel-import vehicle revenue in 2024, presents a risk if these relationships are terminated or not replaced . Failure to renew its Ocean Transportation Intermediary (OTI) License, which expires on May 31, 2027, could compel a temporary suspension of logistics business .

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Overview
  4. [4] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  5. [5] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  6. [6] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  7. [7] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  8. [8] Item 1, Business — Organizational Structure
  9. [9] Item 1, Business — Organizational Structure
  10. [10] Item 1, Business — Organizational Structure
  11. [11] Item 1, Business — Organizational Structure
  12. [12] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Results of Operations
  19. [19] Item 7, MD&A — Results of Operations
  20. [20] Item 7, MD&A — Liquidity and Capital Resources
  21. [21] Item 7, MD&A — Liquidity and Capital Resources
  22. [22] Item 8, Consolidated Balance Sheets
  23. [23] Item 7, MD&A — Liquidity and Capital Resources
  24. [24] Item 7, MD&A — Liquidity and Capital Resources
  25. [25] Item 8, Consolidated Balance Sheets
  26. [26] Item 7, MD&A — Logistics and Warehousing Services Revenues
  27. [27] Item 7, MD&A — Logistics and Warehousing Services Revenues
  28. [28] Item 7, MD&A — General and Administrative Expenses
  29. [29] Item 7, MD&A — General and Administrative Expenses
  30. [30] Item 7, MD&A — Impairment loss expenses
  31. [31] Item 7, MD&A — Business Overview and Recent Developing Trends
  32. [32] Item 1, Business — Organizational Structure
  33. [33] Item 1, Business — Overview
  34. [34] Item 1, Business — Overview
  35. [35] Item 7, MD&A — Dissolution of Subsidiaries
  36. [36] Item 7, MD&A — Business Overview and Recent Developing Trends
  37. [37] Item 7, MD&A — Logistics and Warehousing Services Revenues
  38. [38] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  39. [39] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  40. [40] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  41. [41] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  42. [42] Item 1, Business — Organizational Structure
  43. [43] Item 1, Business — Organizational Structure
  44. [44] Item 1, Business — Organizational Structure
  45. [45] Item 7, MD&A — Business Overview and Recent Developing Trends
  46. [46] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  47. [47] Item 1A, Risk Factors — Operational Risks
  48. [48] Item 1, Business — Employees
  49. [49] Item 1, Business — Overview
  50. [50] Item 7, MD&A — Liquidity and Capital Resources
  51. [51] Item 7, MD&A — Liquidity and Capital Resources
  52. [52] Item 7, MD&A — Liquidity and Capital Resources
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 7, MD&A — Share-based compensation expenses
  55. [55] Item 7, MD&A — Share-based compensation expenses
  56. [56] Item 7, MD&A — Risks and Uncertainties
  57. [57] Item 7, MD&A — Risks and Uncertainties
  58. [58] Item 7, MD&A — Risks and Uncertainties
  59. [59] Item 7, MD&A — Risks and Uncertainties
  60. [60] Item 7, MD&A — Risks and Uncertainties
  61. [61] Item 7, MD&A — Risks and Uncertainties
  62. [62] Item 1A, Risk Factors — Economic, Political, and Market Risks
  63. [63] Item 1A, Risk Factors — Economic, Political, and Market Risks
  64. [64] Item 1A, Risk Factors — Economic, Political, and Market Risks
  65. [65] Item 1A, Risk Factors — Economic, Political, and Market Risks
  66. [66] Item 1A, Risk Factors — Economic, Political, and Market Risks
  67. [67] Item 1A, Risk Factors — Operational Risks
  68. [68] Item 1A, Risk Factors — Operational Risks
  69. [69] Item 1A, Risk Factors — Operational Risks
  70. [70] Item 1A, Risk Factors — Operational Risks
  71. [71] Item 1A, Risk Factors — Operational Risks
  72. [72] Item 7, MD&A — Business Overview and Recent Developing Trends
  73. [73] Item 1, Business — Our Industry and Business Model (I) Logistics and Warehousing Services
  74. [74] Item 1A, Risk Factors — Economic, Political, and Market Risks
  75. [75] Item 1A, Risk Factors — Operational Risks
  76. [76] Item 7, MD&A — Liquidity and Capital Resources

Analysis on 5/22/2026