What changed in this filing

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Item 1A. Risk Factors

2026-03-20 compared with 2025-03-12 · 33 added, 67 removed, 318 unchanged (24% of the section changed)

61 unchanged sentences

In 2021, RMB depreciated approximately 2.6% against the U.S.

During the year ended December 31, 2022, RMB rapidly depreciated against the U.S.

During the year ended December 31, 2022, RMB

rapidly depreciated against the U.S.

dollar by approximately 9.0%.

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If that occurs, or if the exchange rate between the RMB and USD fluctuates in an unanticipated manner, our business, financial condition, and results of operations could be materially adversely affected.

If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.

The PRC government has imposed controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC.

For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or “SAFE Circular 3,” issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than $50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principle of genuine transaction.

There is no guarantee that the PRC government will not further intervene or impose other restrictions on our PRC customers’ ability to transfer or distribute cash outside the PRC.

In the event that the foreign exchange control system prevents our PRC customers from remitting their payments to the U.S., we may not be able to receive a substantial portion of our revenue.

As a result, our business, financial condition, and results of operations may be adversely affected.

Operational Risks

We are undergoing a transformation of our business model, which could have a material and adverse effect on our business, financial condition, and results of operations.

We are shifting our business focus from parallel-import vehicle sales to logistics and warehousing services.

We have discontinued our parallel-import vehicle sales business and are transforming our operations to focus on logistics and warehousing services, which could have a material and adverse effect on our business, financial condition, and results of operations.

We have shifted our business focus from parallel-import vehicle sales to logistics and warehousing services.

Since the second half of 2022, our parallel-import vehicle business has been negatively impacted by the COVID-19 pandemic, lockdowns in the PRC, and weaker customer demand in the PRC due to deteriorating macroeconomic conditions.

During the year ended December 31, 2024, we sold 14 vehicles, generating revenue of $1.6 million.

During the year ended December 31, 2023, we sold 303 vehicles, generating revenue of $38.3 million.

In February 2024, we acquired Edward to expand our logistics and warehousing service operations.

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

As a result of the discontinuation of this business line, we will no longer generate revenue from vehicle sales and will rely primarily on our logistics and warehousing services for future revenue In February 2024, we acquired Edward to expand our logistics and warehousing service operations.

Beginning in the second quarter of 2024, we increased our marketing staff to pursue new business opportunities and to focus on international trades between the PRC and the U.S.

In December 2024, we acquired TWEW to further expand our logistics services.

These strategic actions are expected to significantly alter our revenue structure and could, if unsuccessful, materially and adversely affect our business, financial condition, and results of operations.

Our transformation has significantly altered, and will continue to alter, our revenue composition, cost structure, operational focus, and risk profile.

If we are unable to successfully execute our business transformation, integrate acquired businesses, or achieve anticipated operational efficiencies and synergies, our business, financial condition, and results of operations could be materially and adversely affected.

As we are located in California, we may be subject to catastrophic events, which could have a material adverse impact on our business, financial condition, and results of operations.

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If these partners fail to meet the expected standards of service, such as causing damage to goods during transit, introducing significant delivery delays, or handling goods improperly, both their reputation and ours could be adversely affected.

Such incidents may undermine our customers’ confidence in our ability to provide reliable logistics services, which in turn could have a material and adverse effect on our business and financial condition, and results of operations.

Such incidents may undermine our customers’ confidence in our

ability to provide reliable logistics services, which in turn could have a material and adverse effect on our business and financial condition, and results of operations.

Our business relies on a few customers each accounting for more than 10% of our total purchases, and interruption in any of their operations will have an adverse effect on our business, financial condition, and results of operations.

During the years ended December 31, 2024 and 2023, we derived most of our revenue from a few customers.

During the year ended December 31, 2024, we derived most of our revenue from a few customers.

For the year ended December 31, 2024, our two largest clients accounted 87.7% and 12.3% of our total revenue, respectively.

For the year ended

December 31, 2023, our three largest clients accounted for 53.2%, 25.5%, and 20.2% of our total revenue, respectively.

We can lose a major customer due to a variety of factors, including our inability to provide satisfying logistics and warehousing services.

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In certain instances, our insurance may not fully cover an insured loss depending on the magnitude and nature of the claim.

Additionally, changes in the cost of insurance or the availability of insurance in the future could substantially

increase our costs to maintain our current level of coverage or could cause us to reduce our insurance coverage and increase the portion of our risks that we self-insure.

Additionally, changes in the cost of insurance or the availability of insurance in the future could substantially increase our costs to maintain our current level of coverage or could cause us to reduce our insurance coverage and increase the portion of our risks that we self-insure.

Any negative publicity about us, our products and services, and our management may materially and adversely affect our reputation and business.

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From time to time, there may be a shortage of skilled labor in the logistics and warehousing industry in which we operate.

As of December 31, 2024, we had 13 full-time employees, including six foreign employees who currently do not have permanent work permits in the U.S.

As of December 31, 2025, we had 12 full-time employees, including four foreign employees who currently do not have permanent work permits in the U.S.

In the event that some of our employees’ temporary work permits expire, we may face increased turnover rates and labor shortages, which could result in higher labor costs.

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The regulatory bodies that regulate our business include the Federal Maritime Commission, the Consumer Financial Protection Bureau, the Federal Trade Commission, the United States Department of Transportation, the Occupational Safety and Health Administration, the Department of Justice, the Federal Communications Commission, various state consumer protection agencies, and various state financial regulatory agencies.

For example, the exportation aspect of our business is subject to the Code of Federal Regulation’s requirements for exportation under 19 CFR § 192.2 and the inspection of Customs.

For example, the exportation

aspect of our business is subject to the Code of Federal Regulation’s requirements for exportation under 19 CFR § 192.2 and the inspection of Customs.

Moreover, the Federal Maritime Commission issues licenses to qualified OTIs in the U.S.

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As we develop our logistics and warehousing services, Edward is required to renew this license every three years.

Moreover, we may also be subject to laws and regulations involving taxes, tariffs, pricing, content protection, electronic contracts and communications, mobile communications, consumer protection, and information-reporting requirements, as well as privacy laws, anti-money laundering laws,

and federal and state wage-hour, anti-discrimination, and other employment practices laws.

For example, under the Immigration and Nationality Act, a foreign national is eligible for employment authorization in the U.S.

only with an employment-related green card (permanent residency), an exchange visitor work and study visa, or a temporary (non-immigrant) worker visa, such as an H-1B visa.

In particular, the H-1B visa is a nonimmigrant work visa that allows U.S.

employers to hire foreign workers for specialty jobs that require a bachelor’s degree or equivalent.

H-1B status can be granted initially for up to three years and can be extended for another three years.

H-1B holders who reach that six-year maximum must leave the U.S.

and remain outside for at least one year before being eligible for a new six years of H-1B.

As of December 31, 2024, we had 13 full-time employees, including six foreign employees who do not have permanent work permits in the U.S.

and currently work under H-1B visas or student visas.

In the event that some of our employees’ temporary work permits expire, we may face increased turnover rates and labor shortages, which could result in higher labor costs.

See “—Operational Risks—Our ongoing operations and growth may be affected by the high percentage of foreign employees who do not have permanent work permits in the U.S., which may increase our turnover ratio.” We are also subject to laws and regulations affecting public companies, including securities laws and exchange listing rules.

We are also subject to laws and regulations affecting public companies, including securities laws and exchange listing rules.

Any failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations.

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Additionally, any potential executive actions or legislation related to international trade that may be enacted could adversely affect the profitability and feasibility of Sino-American trade, which, in turn, could negatively impact our business.

Recently, U.S.

President Donald J.

Trump announced that the U.S.

would impose an additional 20% tariff on Chinese imports starting March 4, 2025.

This announcement has undermined confidence in trade relations between China and the U.S.

Beginning in March 2025, following increases in U.S.

tariffs on certain Chinese imports, the PRC government announced and implemented retaliatory measures against U.S.-origin goods.

Effective March 10, 2025, the PRC imposed additional tariffs on a range of U.S.

products, including agricultural commodities and other merchandise.

In April 2025, China further escalated its response by increasing certain retaliatory tariff rates and implementing additional non-tariff measures, such as export controls, trade restrictions, and regulatory actions affecting U.S.

companies and products.

In October 2025, the U.S.

and the PRC announced a temporary trade understanding under which certain retaliatory tariffs and non-tariff measures were suspended or paused.

However, these measures remain subject to change, and there can be no assurance that previously suspended tariffs will not be reinstated or that additional trade restrictions will not be imposed in the future.

We are currently evaluating the overall impact of the recently imposed additional tariffs, including whether these regulations could materially and negatively affect our business.

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Speculation on the price of our Class A common stock may involve long and short exposures.

extent aggregate short exposure exceeds the number of shares of our Class A common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our Class A common stock for delivery to lenders of our Class A common stock.

To the extent aggregate short exposure exceeds the number of shares of our Class A common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our Class A common stock for delivery to lenders of our Class A common stock.

Those repurchases may, in turn, dramatically increase the price of our Class A common stock until investors with short exposure are able to purchase additional Class A common stock to cover their short position.

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These quotation services are generally considered to be markets that are less efficient and that provide less liquidity in the shares than the Nasdaq Capital Market.

The dual class structure of our common stock has the effect of concentrating voting control with our Chief Executive Officer, and his interests may not be aligned with the interests of our other stockholders.

We have a dual-class voting structure consisting of Class A and Class B common stock.

Under this structure, holders of Class A common stock are entitled to one vote per share of Class A common stock, and holders of Class B common stock are entitled to 15 votes per share of Class B common stock, which may cause the holders of Class B common stock to have an unbalanced, higher concentration of voting power.

As of the date of this annual report, Mr.

Huan Liu, our Chief Executive Officer and the sole stockholder of Class B common stock, beneficially owns 546,875 shares, or 100%, of our issued Class B common stock, representing approximately 75.4% of

the voting rights in our Company.

As a result, until such time as his voting power is below 50%, Mr.

Huan Liu as the controlling stockholder has substantial influence over our business, including decisions regarding mergers, consolidations, and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions.

He may take actions that are not in the best interests of us or our other stockholders.

These corporate actions may be taken even if they are opposed by our other stockholders.

Further, such concentration of voting power may discourage, prevent, or delay the consummation of transactions that stockholders may consider favorable, including ones in which stockholders might otherwise receive a premium for their shares.

Future issuances of shares of Class B common stock may also be dilutive to the holders of Class A common stock.

As a result, the market price of our Class A common stock could be adversely affected.

If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A common stock, the price of our Class A common stock and trading volume could decline.

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If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A common stock and the trading volume to decline.

Anti-takeover provisions in our fourth amended and restated articles of incorporation and our bylaws may discourage, delay, or prevent a change in control.

Some provisions of our fourth amended and restated articles of incorporation, which became effective on September 30, 2024, and our bylaws, which became effective on July 28, 2022, may discourage, delay, or prevent a change in control of our Company or management that stockholders may consider favorable, including, among other things, the following:

● provisions that authorize our board of directors to issue shares with preferred, deferred, or other special rights or restrictions without any further vote or action by our stockholders;

● provisions that restrict the ability of our stockholders to call meetings and to propose special matters for consideration at stockholder meetings.

Since we are deemed a “controlled company” within the meaning of the Nasdaq listing rules, we are allowed to follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.

As of the date of this annual report, our largest stockholder, Mr.

Huan Liu, holds more than a majority of the voting power of our outstanding common stock shares and is able to determine all matters requiring approval by our stockholders.

Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements.

Although we do not intend to rely on the “controlled company” exemptions under the Nasdaq listing rules even though we are deemed a “controlled company,” we could elect to rely on these exemptions in the future.

If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors.

Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Anti-takeover provisions in our certificate of incorporation and our bylaws may discourage, delay, or prevent a change in control.

Some provisions of our certificate of incorporation and our bylaws, which became effective on February 2, 2026, may discourage, delay, or prevent a change in control of our Company or management that stockholders may consider favorable, including, among other things, the following:

● provisions that authorize our board of directors to issue shares with preferred stock in one or more series and to fix the designation, voting powers, preferences, or other special rights or restrictions without any further vote or action by our stockholders;

● provisions that restrict the ability of our stockholders to call special meetings and that limit the business that may be conducted at special meetings to the matters described in the meeting notice.

We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an “emerging growth company” and a “smaller reporting company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” and “smaller reporting companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our

periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors