What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-03-20 compared with 2025-03-12 · 110 added, 182 removed, 144 unchanged (67% of the section changed)

For the year ended December 31, 2024, we generated revenues from two sources:

parallel-import vehicles sales and logistics and warehousing services, while parallel-import vehicles segment was our only source of revenue in 2023.

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.

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.

In addition, some overseas models can only be obtained through this channel rather than through the brand manufacturers’ authorized distribution systems as a result of certain regulations that prohibit their production and sale in the PRC due to environmental protection and emission standards.

For the years ended December 31, 2024 and 2023, parallel-import vehicles contributed 78.2% and 100.0% of our total revenue, respectively.

However, due to the COVID-19 pandemic, lockdowns in the PRC, and weaker customer demand in the PRC caused by deteriorating macroeconomic conditions and a growing preference for domestically produced electric vehicles (“EVs”), our parallel-import vehicle sales volume has been significantly reduced.

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.

To offset the negative impact brought by the decline in the parallel-import vehicle market and to diversify our revenue sources, in February 2024, we acquired Edward Transit Express Group Inc.

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.

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.

Between 2016 and the first half of 2022, we experienced growth in sales volume and gross profit in the parallel-import vehicle business due to favorable market conditions.

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 electric vehicles (“EVs”).

These market challenges led to a decline in parallel-import vehicle sales by 30.5% in 2023, and 95.7% in 2024, with vehicle sales declining to 14 units in 2024 from 303 units in 2023.

In addition, we recorded a credit loss of $1.6 million for the year ended December 31, 2024, due to the increasing difficulty in collecting outstanding receivables.

On March 3, 2025, our board of directors approved the discontinuation of the Company’s parallel-import vehicle business.

We shifted its business focus since February 2024 by acquiring Edward Transit Express Group Inc.

(“Edward”), a California-based common carrier specializing in ocean transportation services, to start our logistics and warehousing operations.

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Through TWEW, we provide general labor services including loading, unloading, and other labor-related activities.

TWEW’s expertise in labor management and logistical support enables the Company to streamline operations, expand service offering, and enhance market position.

As of the date of this annual report, we are undergoing a business transformation of our business model, shifting our business focus from parallel-import vehicle sales to logistics and warehousing services.

On December 19, 2024, we acquired 100% membership interest of NexTrade International LLC (“NexTrade”), a Delaware limited liability company for the consideration of $1.

As of the date of this annual report, NexTrade has not been engaged in any business operations.

Organizational Structure

Cheetah Net Supply Chain Service Inc.

(“Cheetah Net”) was originally formed on August 9, 2016 under the laws of the State of North Carolina as a limited liability company known as Yuan Qiu Business Group LLC.

On March 1, 2022, we filed Articles of Incorporation including Articles of Conversion with the Secretary of State of the State of North Carolina to convert from an LLC to a corporation, and changed our name to Cheetah Net Supply Chain Service Inc.

On February 2, 2026, we effected a change in our state of incorporation from the State of North Carolina to the State of Delaware by filing with the Secretary of State of the State of North Carolina the applicable Article of Conversion and by filing with the Secretary of State of the State of Delaware the Delaware Certificate of Conversion and the Delaware Certificate of Incorporation.

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:

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Allen-Boy did not have any business activities until acquired by Cheetah Net.

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.

Pacific did not have any business activities until acquired by Cheetah Net.

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.

Allen-Boy previously engaged in the parallel-import vehicle dealership business, which the Company discontinued in March 2025.

● (ii) 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.

Entour did not have any business activities until acquired by Cheetah Net.

Currently, Entour is engaged in the parallel-import vehicle business.

● (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.

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.

Entour previously engaged in the parallel-import vehicle dealership business, which the Company discontinued in March 2025.

● (iii) 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.

The fair value of the stock consideration was determined to be $900,000.

(See NOTE 8 of our audited financial statements as of December 31, 2025.) Currently, Edward is engaged in ocean transportation services.

● (vi) TWEW, a corporation incorporated on February 27, 2020 under the laws of the State of California, whose previous shareholders and owners transferred all their rights, titles, and interests in and to all of the issued and outstanding equity interests of TWEW to Cheetah Net for a total consideration of $1.0 million, consisting of a $200,000 cash payment and Cheetah Net’s Class A common stock valued at $800,000 through a stock purchase agreement dated November 27, 2024.

● (iv) TWEW, a corporation incorporated on February 27, 2020 under the laws of the State of California, whose previous shareholders and owners transferred all their rights, titles, and interests in and to all of the issued and outstanding equity interests of TWEW to Cheetah Net for a total consideration of $1.0 million, consisting of a $200,000 cash payment and Cheetah Net’s Class A common stock valued at $800,000 through a stock purchase agreement dated November 27, 2024.

The TWEW acquisition was closed on December 19, 2024.

Currently, TWEW is engaged in logistics and labor services to strengthen Cheetah Net’s position in the logistics sector.

● (vii) NexTrade International LLC (“NexTrade”), a limited liability company organized on September 13, 2024 under the laws of the State of Delaware.

● (v) NexTrade, a limited liability company organized on September 13, 2024 under the laws of the State of Delaware.

On December 19, 2024, the sole member of NexTrade transferred all his membership interests in NexTrade to Cheetah Net for a total consideration of $1 in cash.

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As of the date of this annual report, NexTrade is not engaged in any business operations.

● (vi) Cheetah Net Supply Chain Service Ltd (“Cheetah BVI”), a corporation incorporated on March 28, 2025 under the laws of the British Virgin Islands.

As of the date of this annual report, Cheetah BVI is not engaged in any business operations.

On August 3, 2023, we closed our IPO of 78,125 shares of Class A common stock at a price of $64.00 per share.

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On May 15, 2024, we closed a public offering of 825,625 shares of our Class A common stock at a price of $9.92 per share, for gross proceeds of approximately $8.19 million, before deducting placement agent fees and other offering fees and expenses.

On May 23, 2024, the Company dissolved two wholly owned subsidiaries, Canaan International LLC, an LLC organized on December 5, 2018 under the laws of the State of North Carolina, and Canaan Limousine LLC, an LLC organized on February 10, 2021 under the laws of the State of South Carolina.

On May 23, 2024, we dissolved two wholly owned subsidiaries, Canaan International LLC, an LLC organized on December 5, 2018 under the laws of the State of North Carolina, and Canaan Limousine LLC, an LLC organized on February 10, 2021 under the laws of the State of South Carolina.

On June 24, 2025, we dissolved two wholly owned subsidiaries, Pacific Consulting LLC, a limited liability company organized on January 17, 2019, under the laws of the State of New York, and Cheetah Net Logistics LLC, a limited liability company organized on October 12, 2022 under the laws of the State of New York.

On July 26, 2024, we closed a public offering of 404,979 shares of our Class A common stock at a price of $3.68 per share, for gross proceeds of approximately $1.49 million, before deducting placement agent fees and other offering fees and expenses.

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Unless otherwise indicated, all share and per share amounts presented in this document have been retrospectively adjusted to reflect the reverse stock split as if it had occurred as of the earliest period presented.

On November 7, 2025, our stockholders approved our Fifth Amended and Restated Articles of Incorporation, which authorized a reverse stock split of the issued shares of our common stock, par value $0.0001 per share, at a ration ranging from 1-for-5 to 1-for-20, as determined at the discretion of our board of directors.

Our stockholders also approved the Company’s potential issuance in excess of 20% of our outstanding common stock upon the conversion of certain convertible notes at a conversion price per share that is less than the “minimum price” under Nasdaq Listing Rule 5635, if required pursuant to the terms of any such convertible note.

On January 27, 2026, we entered into certain stock purchase agreements with certain investors, pursuant to which we sold and the investors purchased, severally and not jointly, on February 12, 2026, an aggregate of 33,450,000 shares of Class A common stock, par value $0.0001 per share, of the Company in an aggregate amount of $40.14 million.

On January 30, 2026, our stockholders approved an amendment to our Articles of Incorporation, to increase the number of Class A common stock authorized to be issued to 2,000,000,000 shares and the number of Class B common stock authorized to be issued to 200,000,000 shares.

Our stockholders also approved the change of the Company’s state of incorporation from the State of North Carolina to the State of Delaware.

Subsequently, on February 2, 2026, we effected the reincorporation from the State of North Carolina to the State of Delaware.

On February 3, 2026, our board of directors approved and FAIRVIEW EASTERN INTERNATIONAL HOLDINGS LIMITED and Huan Liu, collectively holding shares of Class B common stock, representing approximated 79.16% ‎of the voting power of the issued and outstanding capital stock of the Company on that date, approved through a written consent in lieu of a special meeting of stockholders the following corporate action:

The adoption and approval of one or more potential amendments to the Certificate of Incorporation of the Company to effect one or more reverse stock splits of the Company’s issued and outstanding shares of common stock, to be effected at such time or times within 12 months following the stockholders’ approval at such ratio or ratios as shall be determined by the board of directors in its sole discretion, provided that the aggregate ratio of all such reverse stock splits shall not exceed 1-for-500.

On February 13, 2026, we filed a definitive information statement on Schedule 14C to notify our stockholders as of February 3, 2026 of such corporate action.

On March 10, 2026, 20 calendar days after we mailed the definitive information statement, such corporate action became effective.

Our Industry and Business Model

(I) Parallel-Import Vehicles

For the years ended December 31, 2024 and 2023, we generated revenue primarily from the sales of parallel-import vehicles.

(I) Logistics and Warehousing Services

Logistics and warehousing services is a business line we launched in February 2024.

Following the downturn in the parallel-import vehicle market, our management decided to pivot toward logistics and warehousing, drawing on the extensive experience we had developed in transporting parallel-import vehicles.

In February 2024 and December 2024, we acquired Edward and TWEW, respectively, and have since generated revenue from their existing logistics and warehousing operations.

For the years ended December 31, 2025 and 2024, our logistics and warehousing business contributed 100% and 21.8% of our total revenue, respectively.

As of December 31, 2025 and 2024, we had an active customer base of 18 and 24 customers for our logistics and warehousing business, respectively.

Our logistics and warehousing business focuses on providing freight forwarding services for clients shipping goods from the U.S.

to mainland China or Hong Kong.

We operate as a Non-Vessel-Operating Common Carrier (“NVOCC”), bridging the gap between shippers and ocean carriers to facilitate the movement of cargo.

Generally, our customers lack either the industry knowledge or direct relationships with ocean carriers necessary to secure reliable, cost-effective transportation.

By acting as our customers’ U.S.

point of contact, we coordinate shipments on their behalf, leveraging our expertise and carrier network to streamline logistics.

Our primary responsibilities include:

(i) cargo storage, (ii) freight forwarding, (iii) U.S.

customs clearance, and (iv) labor services and cargo loading and unloading.

Customers may engage us for any combination of these services.

For the years ended December 31, 2025 and 2024, we conducted the first three services exclusively through Edward and handled labor services and cargo loading and unloading solely through TWEW.

Cargo Storage

The workflow of cargo storage begins when a customer submits a shipping request.

Our customers are typically U.S.-based merchants needing to ship goods to Asia.

They cover the cost of transporting their cargo from their locations to our California warehouse.

Once the cargo arrives at our warehouse, our staff inspects it and records details such as contents and final destination in our system.

the date of this annual report, we lease one warehouse located in Gardena, California, covering approximately 8,800 square feet.

Properties.” Our warehouse is equipped with handling equipment (such as forklifts and pallet jacks) and security measures (such as surveillance cameras and fire sprinkler systems) to protect stored cargo.

Freight Forwarding

After the cargo is received, customers may choose to either have us ship it or engage another service provider to do so.

If a customer opts for our ocean freight service, we will secure space for the cargo through our established network of ocean carriers.

As of the date of this annual report, we work with three ocean carriers, each of which had a longstanding partnership with Edward prior to its acquisition and continues to work with us after the acquisition.

We enter into master service agreements with ocean carriers, typically lasting for 12 months.

These service agreements generally contain a minimum quantity commitment (“MQC”), which is the minimum volume of cargo (often measured in 20 and 40-foot equivalent units), that we, as the shipper, must tender to the carrier within the contractual period.

This arrangement allows us to secure favorable rates and enough space while enabling the carrier to allocate its capacity efficiently.

Under these agreements, we must submit individual booking requests within the timeframe specified by the agreement.

In return for our MQC commitment, the carrier reserves space for our shipments at the agreed-upon rates.

Ocean freight fees are generally paid at the estimated time of departure.

However, we have credit arrangements with certain ocean carriers and, in some cases, settle multiple transactions together on a periodic basis.

If we fail to meet the MQC, we may be subject to a “Dead Freight” penalty, meaning we must pay the contracted rate for any shortfall in the MQC.

If the carrier cannot provide sufficient space, the contract permits a reduction of our MQC obligation by the undelivered volume.

Because these agreements include a “Dead Freight” penalty, they typically do not offer early termination clauses.

Once cargo leaves our warehouse, we coordinate with trucking companies to transport it to the port.

According to industry practices, we and the trucking companies typically reach agreements for each service engagement, primarily through email communications, rather than executing formal written service agreements.

As of the date of this annual report, we work with four trucking companies.

The ocean carriers and trucking companies serve as our suppliers.

Customs Clearance

Before cargo departs the United States, we handle U.S.

customs clearance on behalf of the client if engaged to do so.

Specifically, the customer signs a power of attorney designating us as its legal agent at the U.S.

custom, authorizing us to endorse, sign, declare, or certify any entry, withdrawal, declaration, certificate, bill of lading, or other document required by law or regulation in connection with the shipment of the goods.

Labor Services and Cargo Loading and Unloading

We provide general labor and container loading and unloading workforce services to clients through TWEW.

We enter into cooperation agreements with customers, which stipulates our obligations such as to supply workers to customers and handle payroll, taxes, and insurances.

These workers typically work on terminal loading and unloading operations.

We hire workers from independent third parties.

Customers payments are generally calculated based on the hours worked by the assigned workers.

These agreements can typically be early terminated by either party with prior written notice.

(II) Discontinued Operations – Parallel-Import Vehicles

We previously engaged in the business of sourcing and reselling parallel-import vehicles, primarily from the U.S.

market to dealers in the U.S.

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.

In the past, this business contributed significantly to our revenue.

Between 2016 and the first half of 2022, we experienced growth in sales volume and gross profit due to favorable market conditions.

However, beginning in the second half of 2022, the business was negatively affected by the impact of the COVID-19 pandemic and related lockdowns in the PRC, 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.

These market challenges led to a decline in parallel-import vehicle sales by 30.5% in 2023 and a reduction in net income by 83.6% compared to 2022.

The decline accelerated in 2024, and our vehicle sales decreased 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 strains on our customers made it increasingly difficult to collect outstanding receivables.

While we 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 for 2024, 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.

As the parallel-import vehicle market conditions continued to deteriorate and sales activity in this segment ceased, management determined that the business no longer had a sustainable path forward.

On March 3, 2025, our board of directors formally approved the discontinuation of the parallel-import vehicle business.

Following the Board’s approval of the discontinuation, no vehicles were sold and no revenue was generated from this segment during the year ended December 31, 2025.

For the year ended December 31, 2024, we generated 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.

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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.

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.

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.

Due to the unfavorable market conditions, our board of directors approved the discontinuation of our parallel-import vehicle business on March 3, 2025.

To offset the negative impact brought by the decline in the parallel-import vehicle market and to diversify our revenue sources, in February 2024, we acquired Edward, a California-based common carrier specializing in ocean transportation services, to start our logistics and warehousing operations.

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.

Additionally, in July 2024, we relocated our headquarters from Charlotte, North Carolina, to Irvine, California, which we believe will enable stronger management focus on our logistics and warehousing business due to Irvine’s proximity to the key ports of Los Angeles and Long Beach.

Also, in December 2024, we acquired TWEW, a California-based provider of labor and logistics services.

Through TWEW, we provide general labor services including loading, unloading, and other labor-related activities.

Logistics and Warehousing Services.”

Our Parallel-Import Vehicles Customers

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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.

We had a total of two and four customers for the years ended December 31, 2024 and 2023, respectively.

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.

For the year ended December 31, 2024, our two largest customers accounted for approximately 100% of our total revenue from parallel import vehicles.

For the year ended December 31, 2023, our three largest customers accounted for approximately 98.9% of our total revenue from parallel-import vehicles.

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.

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.

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.

Similarly, our U.S.

customers entered into sales agreements for each automobile sold by us.

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.

and (iii) provide the automobile title within three weeks of the completion of the transaction.

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.

Our Parallel-Import Vehicles Suppliers

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See “—Overview.”

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.

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.

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.

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.

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.

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.

The agents were trained continuously after each deal was completed to improve their skills and knowledge.

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.

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.

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.

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.

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.

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.

Parallel-Import Vehicles Brands We Supplied

The brands of automobiles we have procured include Mercedes, BMW, Land Rover, Lexus, Ram, and Toyota.

The following table sets forth a breakdown of brands purchased during the years ended December 31, 2024 and 2023.

The following table sets forth a breakdown of brands purchased during the year ended December 31, 2024.

Brands/Models:

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Toyota Sequoia

Parallel-Import Vehicles Services and Operational Flow

We made procurement decisions based on our extensive experience and insights into the PRC parallel-import vehicle industry.

In order to avoid overstocking or understocking inventory, we would forecast inventory needs and expenses through meticulous market analysis and weekly sales department meetings.

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.

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.

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.

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.

Walter Folker, our previous Vice President of Procurement, oversaw a full-time procurement manager, who in turn supervised our full-time procurement specialists.

Those full-time procurement specialists were responsible for training our purchasing agents and providing them with timely phone coaching and on-site support.

Our purchasing agents negotiated the best price for our designated automobile models using the knowledge and negotiating skills they received from our training.

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.

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.

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.

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.

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.

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.

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:

The following chart demonstrates the number of vehicles we acquired each year since 2016.

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.

We discontinued to acquire vehicles since the second quarter of 2024, and discontinued parallel-import vehicle business following the approval of Company’s Board of Director on March 3, 2025 due to unfavorable market conditions.

Year 2020 was affected by the COVID-19 pandemic and China’s Implementation of National VI Standards.

Sales and Services

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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.

The following table sets forth the breakdown of our sales revenue by brands and models during the years ended December 31, 2024 and 2023.

Revenue Share

The following table sets forth the breakdown of our sales revenue by brands and models during the year ended December 31, 2024.

Revenue Share

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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.

In February 2024 and December 2024, we acquired Edward and TWEW, respectively, and have since generated revenue from their existing logistics and warehousing operations.

For the year ended December 31, 2024, our logistics and warehousing business contributed 21.8% of our total revenue.

As of December 31, 2024, we had an active customer base of 24 customers for our logistics and warehousing business, as compared with seven when we initially launched the business in February 2024.

Although, as of the date of this annual report, logistics and warehousing accounts for a relatively small portion of our total revenue, we have taken actions to streamline operations, expand service offering, and enhance market position.

Therefore, we anticipate the logistics and warehousing business will become our primary focus in the foreseeable future.

Our logistics and warehousing business focuses on providing freight forwarding services for clients shipping goods from the U.S.

to mainland China or Hong Kong.

We operate as a Non-Vessel-Operating Common Carrier (“NVOCC”), bridging the gap between shippers and ocean carriers to facilitate the movement of cargo.

Generally, our customers lack either the industry knowledge or direct relationships with ocean carriers necessary to secure reliable, cost-effective transportation.

By acting as our customers’ U.S.

point of contact, we coordinate shipments on their behalf, leveraging our expertise and carrier network to streamline logistics.

Our primary responsibilities include:

(i) cargo storage, (ii) freight forwarding, (iii) U.S.

customs clearance, and (iv) labor services and cargo loading and unloading.

Customers may engage us for any combination of these services.

For the year ended December 31, 2024, we conducted the first three services exclusively through Edward and handled labor services and cargo loading and unloading solely through TWEW.

Cargo Storage

The workflow of cargo storage begins when a customer submits a shipping request.

Our customers are typically U.S.-based merchants needing to ship goods to Asia.

They cover the cost of transporting their cargo from their locations to our California warehouse.

Once the cargo arrives at our warehouse, our staff inspects it and records details such as contents and final destination in our system.

As of the date of this annual report, we lease one warehouse located in Gardena, California, covering approximately 8,800 square feet.