What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-04 · 114 added, 111 removed, 205 unchanged (52% of the section changed)

30 unchanged sentences

The Company further expanded into labor and logistics service by acquiring TWEW in December 2024.

The Company completed its test of goodwill related to acquisition of Edward as of September 30, 2025.

Due to the qualitative assessment on the market conditions on logistic and warehousing business and the quantitative analysis on the five-year discounted cash flow, the Company concluded the estimated fair value of Edward as a single reporting unit of logistics and warehousing business was smaller than its carrying amount.

As a result, impairment of $731,307 was recognized for the three-month period ended September 30, 2025.

Additionally, on December 19, 2024, we acquired 100% membership interest of NexTrade, a Delaware limited liability company for the consideration of $1.

31 unchanged sentences

Results of Operations

The following table provides a summary of our consolidated results of operations for the three and six months ended June 30, 2025 and 2024, highlighting the financial impact of both continuing and discontinued operations:

Three Months Ended June 30,

Six Months Ended June 30,

The following table provides a summary of our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024, highlighting the financial impact of both continuing and discontinued operations:

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of Revenues

General and administration expenses

Impairment loss expenses

Share-based compensation expenses

5 unchanged sentences

Loss from discontinued operations, net of tax

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

Continuing Operations-Logistics and Warehousing Services

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Revenues from Edward

1 unchanged sentence

Total revenues

For the three months ended June 30, 2025, we reported revenue of $354,126 from logistics and warehousing services segment, including $52,684, or 14.9%, of our total revenue from Edward, which we acquired in February 2024, and $301,442, or 85.1%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 43.7%, primarily due to i) a temporary suspension in U.S.-PRC ocean freight activities in April 2025 after the U.S.

government’s threat in late March 2025 to impose higher tariffs on goods imported from the PRC, partially offset by ii) stabilized trade flow in May and June 2025 following the resumption of trade negotiations between the two countries since May 2025.

The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the second quarter of 2025.

For the three months ended September 30, 2025, we reported revenue of $361,935 from logistics and warehousing services segment, including $41,935, or 11.6%, of our total revenue from Edward, which we acquired in February 2024, and $320,000, or 88.4%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 31.5% to $41,935 for the three months ended September 30, 2025, compared to $61,208 for the same period in 2024.

The decrease was primarily due to the lingering impact of trade war between China and the U.S., which resulted in reduced customer demand and shipment volume during the third quarter of 2025.

Although trade flows stabilized following the resumption of trade negotiations between the two countries, shipment volume in the third quarter of 2025 did not return to prior-year levels due to continued uncertainty surrounding U.S.-China trade policy and more conservative ordering patterns by customers.

We will continue to focus on improving operational efficiencies and expanding our market presence of the two acquired businesses in the California area.

Cost of Revenues

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Cost of Revenues

2 unchanged sentences

Total cost of revenues

For the three months ended June 30, 2025, total cost of revenues increased to $319,226 from $45,598 for the same period in 2024, representing an increase of $273,628, or 600.1%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $293,429, representing 91.9% of total cost of revenues in the second quarter of 2025.

Cost of revenues from Edward was $25,797, or 8.1% of total cost of revenues for the three months ended June 30, 2025, compared to $45,598 for the same period in 2024, representing a decrease of $19,801, or 43.4%, consistent with the corresponding decline in revenue from Edward.

Cost of revenues is mainly labor costs for TWEW and ocean freight service cost for Edward.

For the three months ended September 30, 2025, total cost of revenues increased to $317,757 from $31,339 for the same period in 2024, representing an increase of $286,418, or 467.9%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $290,000, representing 91.3% of total cost of revenues in the third quarter of 2025.

Cost of revenues from Edward was $27,757, or 8.7% of total cost of revenues for the three months ended September 30, 2025, compared to $31,339 for the same period in 2024, representing a decrease of $3,582, or 11.4%, consistent with the corresponding decline in revenue from Edward.

Cost of revenues is mainly labor costs for TWEW and ocean freight service costs for Edward.

Operating Expenses

General and Administrative Expenses

Three Months Ended June 30,

Three Months Ended September 30,

General and Administrative Expenses

7 unchanged sentences

Total General and Administrative Expenses

General and administrative expenses for the Company’s continuing operations decreased by $60,050, or 6.9%, to $805,305 for the three months ended June 30, 2025 from $865,354 for the three months ended June 30, 2024.

The decrease was mainly due to (i) a decrease of $111,188 in legal and accounting fees as we incurred additional professional fees for preparing a registration statement on Form S-1 during the quarter ended June 30, 2024, (ii) $33,786 in payroll and benefits expense due to staff optimization and cost-saving measures following the initial hiring to support the newly launched logistics and warehousing segment, (iii) a decrease of $17,662 in insurance expenses resulting from a change in our insurance provider, (iv) a decrease of $76,145 in recruiting expenses during the three months ended June 30, 2025, as the prior-year period included significant hiring efforts associated with the launch of our logistics and warehousing segment, partially offset by (iv) an increase of 126,782 in rental and leases following the acquisition of Edward and the relocation of our headquarters to California in July 2024, (v) an increase of $12,055 in travel and entertainment expenses as part of business development efforts and client engagement, (vi) an increase of $20,476 in other miscellaneous general and administration expenses during the three months ended June 30, 2025, and (vii) an increase of $19,418 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and recorded intangible assets from Edward and TWEW acquisitions.

General and administrative expenses for the Company’s continuing operations decreased by $301,191, or 27.3%, to $801,263 for the three months ended September 30, 2025 from $1,102,454 for the three months ended September 30, 2024.

The decrease was mainly due to (i) a decrease of $107,215 in payroll and benefits expense due to staff optimization and cost-saving measures, (ii) a decrease of $57,988 in recruiting expenses during the three months ended September 30, 2025, as the prior-year period included significant hiring expenses associated with the launch of our logistics and warehousing segment, (iii) a decrease of $41,887 in legal and accounting fees as we incurred additional professional fees for preparing registration statements on Form S-3 and Form S-8 during the quarter ended September 30, 2024, (iv) a decrease of $33,005 in travel and entertainment expenses related to business development efforts and client engagement, (v) a decrease of $24,322 in insurance expenses resulting from a change in our insurance provider, and (vi) a decrease of $85,512 in other miscellaneous general and administration expenses during the three months ended September 30, 2025, partially offset by (vii) an increase of 33,739 in rental and leases, which was primarily due to the relocation of our headquarters to California in July 2024, and (ⅷ) an increase of $14,999 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and recorded intangible assets from Edward and TWEW acquisitions.

Impairment loss expenses

Three Months Ended September 30,

Impairment loss expenses

Edward-Customer Relationships

Edward-Trade Names

Edward-Goodwill

Total impairment loss expenses

Management conducted an impairment assessment of goodwill and intangible assets associated with the Edward acquisition in accordance with ASC 350, Intangibles—Goodwill and Other.

The Company utilized a DCF model to estimate the fair value of the reporting unit, taking into consideration projected revenues, operating margins, terminal value assumptions, and a discount rate reflecting the risks of the underlying cash flows.

Impairment loss expenses were $731,307 and nil for the three months ended September 30, 2025 and 2024, respectively.

Share-based compensation expenses

Three Months Ended June 30,

Three Months Ended September 30,

Share-based compensation expenses

Share-based compensation expenses were $10,444 and nil for the three months ended June 30, 2025 and 2024, respectively.

On August 16, 2024, our board of directors approved the adoption of the Amended and Restated 2024 Stock Incentive Plan (the “Plan”).

Subsequently, on September 30, 2024, our stockholders approved the Plan.

The total number of shares granted by the compensation committee of our board of directors on September 30, 2024 was originally reported as 150,000, including 118,750 shares of Class A common stock and 31,250 shares of Class B common stock, in our quarterly report for the quarter ended March 31, 2025.

During the quarter ended June 30, 2025, we identified an error and noted that the correct allocation shall be 112,500 shares of Class A common stock and 31,250 shares of Class B common stock, for a total of 143,750 shares granted as of the date of this quarterly report.

The error was due to the forfeiture, on January 17, 2025, of 6,250 shares of Class A common stock that had been granted under the Plan on November 30, 2024.

Share-based compensation expenses of $10,444 were recognized during the three months ended June 30, 2025.

Share-based compensation expenses were $76,087 and $261,666 for the three months ended September 30, 2025 and 2024, respectively, representing a decrease of $185,579, or 70.9%.

For the three months ended September 30, 2025, share-based compensation expenses were $76,087, consisting of (i) $77,875 resulting from the newly issued 43,750 shares granted and vested immediately on September 30, 2025, and (ii) a decrease of $1,788 related to forfeited shares and adjustments during the quarter ended September 30, 2025.

For the three months ended September 30, 2024, share-based compensation expenses consisted of $261,666 from the 150,000 shares granted and vested immediately on September 30, 2024, which led to a higher one-time expense during the third quarter of 2024.

See Note 11 – Stock Based Compensation for more details.

Other Income (Expenses), net

Three Months Ended June 30,

Three Months Ended September 30,

Interest income

6 unchanged sentences

Total other income, net

Interest income from continuing operations was $272,228 for the three months ended June 30, 2025, compared to $28,241 for the three months ended June 30, 2024, representing an increase of $243,987, or 863.9%.

Interest income from continuing operations was $244,776 for the three months ended September 30, 2025, compared to $88,460 for the three months ended September 30, 2024, representing an increase of $156,316, or 176.7%.

The significant increase was primarily driven by interest earned on short-term loan receivables and certificates of deposit, funded by the net proceeds from the Company’s public offerings closed in May and July 2024.

Interest expense incurred from our continuing operations was $8,060 for the three months ended June 30, 2025, which slightly decreased by $242, or 2.9%, from $8,302 for the three months ended June 30, 2024, mainly due to decreased loan interest expenses.

Interest expense incurred from our continuing operations was $7,849 for the three months ended September 30, 2025, which slightly decreased by $586, or 6.9%, from $8,435 for the three months ended September 30, 2024, mainly due to decreased loan interest expenses.

Income Tax (Benefits)

Our income tax provision for continuing operations was nil for the three months ended June 30, 2025, compared with income tax benefits of approximately $247,275 for the same period in 2024.

The consolidated statement of operations reflects income tax expense of approximately $12,987 for the three months ended June 30, 2025, which were the tax payments related to prior periods and acquisition-related tax filings upon the filing 2024 tax returns in April 2025.

These additional amounts primarily consist of:

(i) $2,000 of tax obligations owed by the Company for the 2024 tax year, (ii) $1,101 of pre-acquisition tax obligations of Edward, and (iii) $9,886 of pre-acquisition tax obligations of TWEW.

These payments do not impact the Company’s estimated annual effective tax rate for 2025.

As a result of the above factors, we had a net loss of $512,528 from our continuing operations for the three months ended June 30, 2025, compared to net loss of $550,022 for the same period of 2024.

Our income tax provision for continuing operations was nil for the three months ended September 30, 2025, compared with income tax benefits of approximately $559,980 for the same period in 2024.

As a result of the above factors, we had a net loss of $1,314,650 from our continuing operations for the three months ended September 30, 2025, compared to a net loss of $694,211 for the same period of 2024.

Discontinued Operations -Parallel- Import vehicle Business

1 unchanged sentence

The Company fully exited its parallel-import vehicle business during the year ended December 31, 2024.

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the following discussion provides an overview of the operating results of discontinued operations during the second quarter of 2024.

Discontinued Operations- Parallel -Import Vehicles Business

The following table summarizes the operating results of our discontinued operations for the three months ended June 30, 2024:

Three Months Ended June 30,

domestic market

Overseas market

Total Revenue

Cost of Revenue

Cost of vehicle

Fulfilment expense

Total Cost of Revenue

During the three months ended June 30, 2024, the Company generated revenue of $200,297 from the parallel-vehicle business.

Only one vehicle was sold during this quarter following the significant downturn of parallel-import vehicle business in the PRC.

We also reported cost of revenue of $215,834, mainly cost of vehicles, and a gross loss of $15,537 of the discontinued business for the three months ended June 30, 2024.

Selling Expenses for Discontinued Operations

The following table presents selling expenses for the discontinued operations:

Three Months Ended June 30,

Selling Expenses

Payroll and benefits

Total selling expenses

Total selling expenses for the discontinued parallel-import vehicle business was $19,422 for the three months ended June 30, 2024.

For the three months ended September 30, 2025 and 2024, the Company generated no revenue, cost of revenue or selling expenses from this discontinued business.

Interest Expenses

The table below presents interest expenses for the three months ended June 30, 2024:

The table below presents interest expenses for the three months ended September 30, 2024:

September 30,

Interest Expenses

1 unchanged sentence

Total interest expenses

Total interest expenses on line of credit charges were $27,899 for the three months ended June 30, 2024.

Net loss for the discontinued operations was approximately $62,858 for the three months ended June 30, 2024.

Comparison of the Six Months Ended June 30, 2025 and 2024

For the Six Months Ended June 30,

Total interest expenses on line of credit charges were $6,430 for the three months ended September 30, 2024.

Net loss for the discontinued operations was approximately $1,121,081 for the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2025 and 2024

For the Nine Months Ended September 30,

Revenues from Edward

1 unchanged sentence

Total revenues

For the six months ended June 30, 2025, we reported revenue of $833,925 from logistics and warehousing services segment, including $115,199, or 13.8%, of our total revenue from Edward, which we acquired in February 2024, and $718,726, or 86.2%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 32.4%, primarily due to i) a temporary suspension in U.S.-China ocean freight activities in April 2025 after the U.S.

government’s threat in late March 2025 to impose higher tariffs on goods imported from China, partially offset by ii) stabilized trade flow in May and June 2025, following the resumption of trade negotiations between the two countries since May 2025.

The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the six months ended June 30, 2025.

For the nine months ended September 30, 2025, we reported revenue of $1,195,860 from logistics and warehousing services segment, including $157,134, or 13.1%, of our total revenue from Edward, which we acquired in February 2024, and $1,038,726, or 86.9%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 32.2%, primarily due to the lingering impact of trade war between China and the United State, which resulted in reduced customer demand and shipment volumes during the third quarter of 2025.

Although trade flows stabilized following the resumption of trade negotiations between the two countries, shipment volumes in the third quarter of 2025 did not return to prior-year levels due to continued uncertainty surrounding U.S.-China trade policy and more conservative ordering patterns by customers.

The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the nine months ended September 30, 2025.

We will continue to focus on improving operational efficiencies and expanding our market presence of the two acquired businesses in the California area.

Cost of Revenues

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cost of Revenues

2 unchanged sentences

Total cost of revenues

For the six months ended June 30, 2025, total cost of revenues increased to $742,769 from $88,098 for the same period in 2024, representing an increase of $654,671, or 743.1%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $675,162, representing 90.9% of total cost of revenues during the six months ended June 30, 2025.

Cost of revenues from Edward was $67,607, or 9.1 % of total cost of revenues for the six months ended June 30, 2025, compared to $88,098 for the same period in 2024, representing a decrease of $20,491, or 23.3%, consistent with the corresponding decline in revenue from Edward.

For the nine months ended September 30, 2025, total cost of revenues increased to $1,060,526 from $119,437 for the same period in 2024, representing an increase of $941,089, or 787.9%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $965,162, representing 91.0% of total cost of revenues during the nine months ended September 30, 2025.

Cost of revenues from Edward was $95,364, or 9.0% of total cost of revenues for the nine months ended September 30, 2025, compared to $119,437 for the same period in 2024, representing a decrease of $24,073, or 20.2%, consistent with the corresponding decline in revenue from Edward.

Cost of revenues is mainly labor costs for TWEW and ocean freight service cost for Edward.

1 unchanged sentence

General and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

General and Administrative Expenses

7 unchanged sentences

Total General and Administrative Expenses

General and administrative expenses for the Company’s continuing operations increased by $172,827, or 10.6%, to $1.8 million for the six months ended June 30, 2025 from $1.6 million for the six months ended June 30, 2024, primarily due to (i) an increase of $248,706 in rental and leases following the acquisition of Edward and the relocation of the Company’s headquarters to California in July 2024, (ii) an increase of $83,984 in personnel-related expenses, which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, (iii) an increase of $46,485 in depreciation and amortization expenses, primarily due to the acquisition of fixed assets and recorded intangible assets from Edward and TWEW acquisitions, (iv) an increase of $34,602 in travel and entertainment expenses as part of business development efforts and client engagement, (v) an increase of $37,658 in other miscellaneous general and administration expenses during the six months ended June 30, 2025, partially offset by (vi) a decrease of $163,099 in legal and accounting fees, primarily because the prior period included additional professional fees related to the preparation of a registration statement on Form S-1 during the first and second quarters of 2024, which did not recur in the current period, (vii) a decrease of $78,610 in the recruiting expenses during the three months ended June 30, 2025, as the prior-year period included significant hiring efforts associated with the launch of the Company’s logistics and warehousing segment, and (viii) a decrease of $36,899 in insurance expenses resulting from a change in our insurance provider.

General and administrative expenses for the Company’s continuing operations decreased by $128,363, or 4.7%, to $2.6 million for the nine months ended September 30, 2025 from $2.7 million for the nine months ended September 30, 2024, primarily due to (i) a decrease of $204,986 in legal and accounting fees, primarily because the prior period included additional professional fees related to the preparation of registration statements on Form S-1, Form S-3, and Form S-8 during the first three quarters of 2024, which did not recur in the current period, (ii) a decrease of $136,598 in the recruiting expenses during the nine months ended September 30, 2025, as the prior-year period included significant hiring efforts associated with the launch of the Company’s logistics and warehousing segment, (iii) a decrease of $61,221 in insurance expenses resulting from a change in our insurance provider, (iv) a decrease of $47,853 in other miscellaneous general and administration expenses during the nine months ended September 30, 2025, and (v) a decrease of $23,231 in personnel-related expenses due to staff optimization and cost-saving measures, partially offset by (vi) an increase of $282,445 in rental and leases following the acquisition of Edward and the relocation of the Company’s headquarters to California in July 2024, (vii) an increase of $61,484 in depreciation and amortization expenses, primarily due to the acquisition of fixed assets and recorded intangible assets from Edward and TWEW acquisitions, and (viii) an increase of $1,597 in travel and entertainment expenses as part of business development efforts and client engagement.

Impairment loss expenses

Nine Months Ended September 30,

Impairment loss expenses

Edward-Customer Relationships

Edward-Trade Names

Edward-Goodwill

Total impairment loss expenses

Management conducted an impairment assessment of goodwill and intangible assets associated with the Edward acquisition in accordance with ASC 350, Intangibles—Goodwill and Other.

Impairment loss expenses were $731,307 and nil for the nine months ended September 30, 2025 and 2024, respectively.

Share-based compensation expenses

Six Months Ended June 30,

Nine Months Ended September 30,

Share-based compensation expenses

Share-based compensation expenses were $26,629 and nil for the six months ended June 30, 2025 and 2024, respectively.

On August 16, 2024, our board of directors approved the adoption of the Amended and Restated 2024 Stock Incentive Plan (the “Plan”).

Subsequently, on September 30, 2024, our stockholders approved the Plan.

The error was due to the forfeiture, on January 17, 2025, of 6,250 shares of Class A common stock that had been granted under the Plan on November 30, 2024.

Share-based compensation expenses of $26,629 were recognized during the six months ended June 30, 2025.

Share-based compensation expenses were $102,716 and $261,666 for the nine months ended September 30, 2025 and 2024, respectively, representing a decrease of $158,950, or 60.7%.

For the nine months ended September 30, 2025, share-based compensation expenses were $102,716, consisting of (i) $77,875 resulting from the newly issued 43,750 shares granted and vested immediately on September 30, 2025, and (ii) $24,841 related to the non-vested shares granted on September 30, 2025.

For the nine months ended September 30, 2024, share-based compensation expenses consisted of $261,666 from the 150,000 shares granted and vested immediately on September 30, 2024, which led to a higher one-time expense during the third quarter of 2024.

See Note 11 – Stock Based Compensation for more details.

Other Income (Expenses), net

Six Months Ended June 30,

Nine Months Ended September 30,

Interest income

6 unchanged sentences

Total other income net

Interest income from continuing operations was $480,318 for the six months ended June 30, 2025, compared to $57,171 for the six months ended June 30, 2024, representing an increase of $423,147, or 740.1 %.

Interest income from continuing operations was $725,094 for the nine months ended September 30, 2025, compared to $145,631 for the nine months ended September 30, 2024, representing an increase of $579,463, or 397.9%.

Interest expense incurred from our continuing operations was $16,872 for the six months ended June 30, 2025, which slightly increased by $265, or 1.6%, from $16,607 for the six months ended June 30, 2024, mainly due to an increased Premium Finance interest for D&O Insurance, partially offset by the decreased interest for long-term loans.

Interest expense incurred from our continuing operations was $24,721 for the nine months ended September 30, 2025, which slightly increased by $321, or 1.3%, from $25,042 for the nine months ended September 30, 2024, mainly due to an increased Premium Finance interest for D&O Insurance, partially offset by the decreased interest for long-term loans.

Income Tax (Benefits)

Our income tax provision for continuing operations were $5,200 for the six months ended June 30, 2025, compared with income tax benefits of approximately $492,989 for the same period in 2024.

The consolidated statement of operations reflects income tax expense of approximately $18,342 for the six months ended June 30, 2025, which includes the current quarter provision of $5,200, and approximately $13,142 of tax payments related to prior periods and acquisition-related tax filings upon the filing of 2024 tax returns in April 2025.

Our income tax provision for continuing operations was $5,200 for the nine months ended September 30, 2025, compared with income tax benefits of approximately $1,052,969 for the same period in 2024.

The consolidated statement of operations reflects income tax expense of approximately $18,342 for the nine months ended September 30, 2025, which includes the current quarter provision of $5,200, and approximately $13,142 of tax payments related to prior periods and acquisition-related tax filings upon the filing of 2024 tax returns in April 2025.

These additional amounts primarily consist of:

1 unchanged sentence

These payments do not impact the Company’s estimated annual effective tax rate for 2025.

As a result of the above factors, we had a net loss of $1,266,437 from our continuing operations for the six months ended June 30, 2025, compared to net loss of $1,016,370 for the same period of 2024.

As a result of the above factors, we had a net loss of $2,581,087 from our continuing operations for the nine months ended September 30, 2025, compared to a net loss of $1,710,581 for the same period of 2024.

Discontinued Operations- Parallel -Import vehicle Business

1 unchanged sentence

The Company fully exited its parallel-import vehicle business during the year ended December 31, 2024.

Discontinued Operations- Parallel -Import Vehicles Business

The following table summarizes the operating results of our discontinued operations for the six months ended June 30, 2024:

Six Months Ended June 30,

The following table summarizes the operating results of our discontinued operations for the nine months ended September 30, 2024:

Nine Months Ended September 30,

domestic market

5 unchanged sentences

Total Cost of Revenue

During the six months ended June 30, 2024, we generated revenue of $1.6 million from the parallel-vehicle business.

During the nine months ended September 30, 2024, we generated revenue of $1.6 million from the parallel-vehicle business.

Only 14 units of vehicles were sold following the significant downturn of parallel-import vehicle business as described in “—Business Overview and Recent Developing Trends.”

We also reported cost of revenue of 1.7 million, mainly the fulfillment expenses, and a gross loss of $24,820 of the discontinued business for the six months ended June 30, 2024.

We also reported cost of revenue of 1.7 million, mainly the fulfillment expenses, and a gross loss of $24,820 of the discontinued business for the nine months ended September 30, 2024.

Selling Expenses for Discontinued Operations

The following table presents selling expenses for the discontinued operations:

Six Months Ended June 30,

Nine Months Ended September 30,

Selling Expenses

1 unchanged sentence

Ocean freight

Other selling expenses

Total selling expenses

Total selling expenses for the discontinued parallel-import vehicle business was $98,262 for the six months ended June 30, 2024.

Total selling expenses for the discontinued parallel-import vehicle business was $117,819 for the nine months ended September 30, 2024.

Allowance of credit loss of accounts receivables

Total allowance of credit loss of accounts receivable for the discontinued parallel-import vehicle business was $1,095,094 for the nine months ended September 30, 2024.

Interest Expenses

The table below presents interest expenses for the six months ended June 30, 2024:

The table below presents interest expenses for the nine months ended September 30, 2024:

September 30,

Interest Expenses

1 unchanged sentence

Total interest expenses

Total interest expenses on LC financing and line of credit charges were $82,358 for the six months ended June 30, 2024.

Net loss for the discontinued operations was approximately $205,440 for the six months ended June 30, 2024.

Total interest expenses on LC financing and line of credit charges were $88,788 for the nine months ended September 30, 2024.

Net loss for the discontinued operations was approximately $1,326,521 for the nine months ended September 30, 2024.

Liquidity and Capital Resources

6 unchanged sentences

Financing may not be available in amounts or on terms acceptable to us, or at all.

As of June 30, 2025, we had current assets of $9.9 million, consisting of cash and cash equivalents of $0.2 million, $8.7 million in loan receivables, $0.8 million of other receivables, and $0.1 million in prepaid expenses and other current assets from continuing operations.

Our current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.6 million of operating lease liabilities, $0.3 million of other payables, and 36,412 of the current portion of long-term borrowings.

As of September 30, 2025, we had current assets of $9.7 million, consisting of cash and cash equivalents of $0.2 million, $8.3 million in loan receivables, $1.0 million of other receivables, and $0.3 million in prepaid expenses and other current assets from continuing operations.

Our current liabilities, all of which related to continuing operations, totaled approximately $1.3 million, consisting of $0.6 million of operating lease liabilities, $0.5 million of other payables, $35,902 of the current portion of long-term borrowings, and $131,083 of loan payable from Premium Finance.

The Company also had $581,836 of long-term borrowings payable, and $778,642 of operating lease liabilities, long-term portion.

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024, with continuing operations and discontinued operations presented separately:

Six Months ended June 30,

The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024, with continuing operations and discontinued operations presented separately:

Nine Months ended September 30,

Net cash provided by operating activities

8 unchanged sentences

Operating Activities

Net cash used in operating activities from continuing operations was $1.2 million for the six months ended June 30, 2025.

The negative cash flow was primarily due to (i) a net loss of $1.3 million during the six months ended June 30, 2025, and (ii) an increase of $0.5 million in other receivables, partially offset by (iii) an increase of $0.2 million in amortization of operating lease right-of-use assets and intangible assets, and (iv) $0.2 million in prepaid expenses.

Net cash used in operating activities from continuing operations was $2.3 million for the six months ended June 30, 2024.

This was primarily attributable to (i) a net loss of $1.0 million, (ii) a deferred tax benefit of $0.5 million, (iii) an increase of $0.7 million in other receivables, partially offset by non-cash adjustments including, (iv) $77,801 in amortization of operating lease right-of-use assets, (v) $21,786 in amortization of intangible assets, and (vi) an increase of $30,474 in other payables.

Net cash provided by operating activities from discontinued operations was $2.5 million for the six months ended June 30, 2025, primarily due to the collection of $2.5 million in accounts receivable resulting from vehicle sales.

Net cash provided by operating activities from discontinued operations was $3.2 million for the six months ended June 30, 2024.

Net cash used in operating activities from continuing operations was $1.8 million for the nine months ended September 30, 2025.

The negative cash flow was primarily due to (i) a net loss of $2.6 million during the nine months ended September 30, 2025, and (ii) an increase of $0.6 million in other receivables, partially offset by (iii) an increase of $0.7 million in allowance of credit loss of goodwill and intangible assets, (iv) an increase of $0.2 million in other payables and other current liabilities, and (v) an increase of $0.4 million in amortization of operating lease right-of-use assets and intangible assets.

Net cash used in operating activities from continuing operations was $2.9 million for the nine months ended September 30, 2024.

This was primarily attributable to (i) a net loss of $3.0 million, (ii) a deferred tax benefit of $1.1 million, (iii) an increase of $0.1 million in other receivables, partially offset by non-cash adjustments including, (iv) $182,862 in amortization of operating lease right-of-use assets, and (v) $34,858 in amortization of intangible assets.

Net cash provided by operating activities from discontinued operations was $2.5 million for the nine months ended September 30, 2025, primarily due to the collection of $2.5 million in accounts receivable resulting from vehicle sales.

Net cash provided by operating activities from discontinued operations was $3.5 million for the nine months ended September 30, 2024.

This was primarily attributable to (i) the collection of $2.1 million in accounts receivable resulting from vehicle sales, (ii) a $1.5 million decrease in vehicle inventory, (iii) a $0.2 million decrease in other receivables from vehicle deposit and sales tax return, and (iv) a $1.1 million increase in other payables.

Investing Activities

Net cash used in investing activities from continuing operations was approximately $2.7 million for the six months ended June 30, 2025, including (i) $3.5 million in short-term loans receivable from third parties, and offset by (ii) $0.8 in proceeds of repayment from these loans.

For the six months ended June 30, 2024, net cash used in investing activities was $0.9 million, including (i) $0.2 million in cash paid in the Edward acquisition, (ii) $0.4 million in cash paid in the purchase of property and equipment, (iii) $1.0 million in cash in short-term loans receivable from third parties, offset by (iii) $0.7 million in proceeds of repayment from pledged loans and short-term loans made to third parties.

There were no investing activities related to discontinued operations for the six months ended June 30, 2025 and 2024.

Net cash used in investing activities from continuing operations was approximately $2.2 million for the nine months ended September 30, 2025, including (i) $3.5 million in short-term loans receivable from third parties, and offset by (ii) $1.2 in proceeds of repayment from these loans.

For the nine months ended September 30, 2024, net cash used in investing activities was $2.9 million, including (i) $0.2 million in cash paid in the Edward acquisition, (ii) $0.4 million in cash paid in the purchase of property and equipment, (iii) $3.0 million in cash in short-term loans receivable from third parties, offset by (iii) $0.7 million in proceeds of repayment from pledged loans and short-term loans made to third parties.

There were no investing activities related to discontinued operations for the nine months ended September 30, 2025 and 2024.

Financing Activities

Net cash used in financing activities from continuing operations was $138,294 for the six months ended June 30, 2025, which consisted of (i) net repayment of premium finance of $120,461, and (ii) net repayment of long-term borrowings of $17,833.

Net cash provided by financing activities from continuing operation of $7.1 million for the six months ended June 30, 2024, consisted of (i) cash received from public offering proceeds of $7.3 million, offset by (ii) cash paid for warrant termination of $78,125, (iii) repayments of premium finance of $148,621, (iv) repayments of long-term borrowing of $15,676, and (v) repayment of $13,423 to a related party.

There were no financing activities related to discontinued operations for the six months ended June 30, 2025.

Net cash used in financing activities from discontinued operations was $1.1 million for the six months ended June 30, 2024, which was the repayment of LC financing.

Net cash used in financing activities from continuing operations was $16,237 for the nine months ended September 30, 2025, which consisted of (i) net proceeds from premium finance of $196,300, offset by (ii) net repayment of premium finance of $185,678, and (iii) net repayment of long-term borrowings of $26,859.

Net cash provided by financing activities from continuing operation of $8.9 million for the nine months ended September 30, 2024, consisted of (i) cash received from public offering proceeds of $8.4 million, (ii) proceeds from issuance of common stock under a private placement agreement of $0.6 million, (iii) proceeds from premium finance of $252,718, offset by (iv) cash paid for warrant termination of $78,125, (ⅴ) repayments of premium finance of $222,538, (ⅵ) repayments of long-term borrowing of $24,268, and (ⅶ) repayment of $13,423 to a related party.

There were no financing activities related to discontinued operations for the nine months ended September 30, 2025.

Net cash used in financing activities from discontinued operations was $1.6 million for the nine months ended September 30, 2024, which was the repayment of LC financing.

Subsequent Events

On September 19, 2025, the compensation committee of the Company’s Board approved the grant of the Award to Mr.

Huan Liu, chief executive officer of the Company, pursuant to the Plan, which grant became effective on October 15, 2025.

The Award was vested immediately upon grant.

On October 15, 2025, the Company issued the shares to Mr.

Off-Balance Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis