What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-20 compared with 2025-03-12 · 142 added, 157 removed, 251 unchanged (54% of the section changed)

7 unchanged sentences

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.

This business contributed significantly to our revenue since our inception.

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

Since, 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 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 87.5% compared to 2022.

The decline accelerated in 2024, with vehicle sales decreasing 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 strain on the Company’s customers made it increasingly difficult to collect outstanding receivables.

While the Company 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, 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 market conditions continued to deteriorate and sales activity in the parallel-import vehicle segment ceased, on March 3, 2025, our board of directors approved the discontinuation of our parallel-import vehicle business.

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, we determined that the parallel-import vehicle segment met the conditions for reporting as a discontinued operation.

As a result, all financial results associated with this business have been reclassified as discontinued operations in the accompanying consolidated financial statements for all periods presented.

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 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, the Company 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, the Company’s board of directors approved the discontinuation of the Company’s parallel-import vehicle business.

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, all financial results associated with this business have been reclassified as discontinued operations in the accompanying consolidated financial statements for all periods presented.

For additional financial details regarding discontinued operations, refer to NOTE 5 – Discontinued Operations.

Logistics and Warehousing

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 focus on international trade flows between the PRC and the U.S.

In July 2024, we relocated our headquarters from Charlotte, NC, to Irvine, CA, which we believe will enable a stronger management focus on our logistics and warehousing business due to Irvine’s proximity to the important ports of Los Angeles and Long Beach.

In December 2024, we acquired TWEW, a California-based labor and logistics service provider which specializes in general labor support services and logistics coordination to further expand our logistics services.

As of the date of this annual report, we are actively integrating TWEW’s operations to strengthen our position in the logistics sector.

Additionally, on December 19, 2024, we entered into a membership interest purchase agreement with Pingzheng Li, the then 100% owner of NexTrade, pursuant to which we purchased the 100% membership interests in NexTrade for the consideration of $1.

The transaction closed on the same day.

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

The Company shifted its business focus since February 2024 by acquiring Edward to provide services related to international trades between the PRC and the U.S., and relocating its headquarter in July 2024 to Irvine, California, to utilize the ports of Los Angeles and Long Beach.

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

Additionally, on December 19, 2024, we acquired 100% membership interest of 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.

Further, on March 28, 2025, we incorporated a wholly owned subsidiary, Cheetah BVI, in the British Virgin Islands.

The incorporation of Cheetah BVI is intended to support our future international business development and facilitate potential global partnerships.

As of the date of this annual report, Cheetah BVI has not commenced operations.

Reverse Stock Split

On September 30, 2024, our stockholders approved our fourth amended and restated articles of incorporation, which authorizes a reverse stock split of the issued shares of our common stock, par value $0.0001 per share, at a ratio ranging from 1-for-10 to 1-for-30, as

determined at the discretion of our board of directors.

On October 7, 2024, our board of directors approved a reverse stock split of our common stock at a ratio of 1-for-16.

5 unchanged sentences

Our Class A common stock started trading on a post-split basis on October 24, 2024, at which time the Class A common stock was assigned a new CUSIP number (16307X202).

On November 7, 2025, the Company’s stockholders approved the Company’s Fifth Amended and Restated Articles of Incorporation to affect a reverse stock split of the issued shares of the Company’s common stock at a ratio within a range from 1-for-5 to 1-for-20, as determined by the board of directors in its sole discretion.

As of the date of this report, the board of directors has not yet determined the specific ratio or the timing of the implementation of such reverse stock split.

Dissolution of Subsidiaries

During the quarter ended June 30, 2025, the Company dissolved two wholly owned subsidiaries, Cheetah Net Logistics LLC and Pacific Consulting LLC, as part of an internal corporate restructuring.

Both entities were previously organized under the laws of the State of New York and were formally dissolved on June 24, 2025.

Recent Development

On February 2, 2026, the Company completed its reincorporation from the State of North Carolina to the State of Delaware, and the rights of the Company’s stockholders became governed by Delaware law and the Company’s Delaware Certificate of Incorporation and Bylaws.

Risks and Uncertainties

21 unchanged sentences

Cost of Revenue

Total operation expenses

Total other income (expense)

General and administration expenses

Impairment loss expenses

Share-based compensation expenses

Interest income, net

Other income, net

(Loss) from continuing operations before tax provision

6 unchanged sentences

For further details, please refer to NOTE 5 – Discontinued Operations.

We reported a $5.2 million net loss for the year ended December 31, 2024.

The loss was primarily driven by the wind-down of the discontinued parallel-import vehicle operations, increased operating expenses associated with our transition to logistics and warehousing services, and tax provisions related to deferred tax adjustments.

Loss from continuing operations for the years ended December 31, 2024 and 2023 were $3.2 million and $1.7 million, respectively.

Loss from discontinued operations, net of tax, was approximately $2.0 million in 2024, compared to income of $1.8 million in 2023, reflecting the financial impact of ceasing the parallel-import vehicle business, including associated costs and adjustments.

Logistics and Warehousing Services

In 2024, our logistics and warehousing revenue came from the two newly acquired businesses, Edward and TWEW, with revenue recognition beginning after their respective acquisition dates.

The following table provides a breakdown of revenues from each entities:

In 2025, our logistics and warehousing revenue came from the two acquired businesses, Edward and TWEW.

The following table provides a breakdown of revenues from each entity:

For the Years Ended December 31,

2 unchanged sentences

Total revenues

For the year ended December 31, 2024, we reported revenue of $455,805 from logistics and warehousing services segment, including $316,852, or 69.5% of our total revenue following the acquisition of Edward in February 2024, and $138,953, or 30.5 % of our total revenue, following the acquisition of TWEW in November 2024 (See also Note 8).

For the year ended December 31, 2025, we reported revenue of $1,288,536 from logistics and warehousing services segment, including $214,810, or 16.7% of our total revenue from Edward, which we acquired in February 2024, and $1,073,726, or 83.3% of our total revenue, from TWEW, which we acquired in November 2024 (See also NOTE 8).

Revenue from Edward decreased by 32.2% to $214,810 for the year ended December 31, 2025, compared to $316,852 for the year 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 second half of 2025.

Although trade flows stabilized following the resumption of trade negotiations between the two countries, shipment volume in 2025 did not return to the prior-year level 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 year 2025.

Revenue from TWEW increased substantially to $1,073,726 for the year ended December 31, 2025, compared to $138,953 for the year ended December 31, 2024.

The increase was primarily attributable to a full year of logistics and warehousing services provided by TWEW in 2025.

As TWEW was acquired in November 2024, only a limited amount of revenue was recognized in 2024 following the acquisition date.

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 Year Ended December 31,

Cost of Revenues

Cost of Revenues from Edward

Cost of Revenues from TWEW

Total cost of revenues

For the year ended December 31, 2025, total cost of revenues increased to $1,121,761 from $277,293 for the year ended December 31, 2024, representing an increase of $844,468, or 304.5%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $996,662, representing 88.8% of total cost of revenues in year 2025.

Cost of revenues from Edward was $125,099, or 11.2% of total cost of revenues for the year ended December 31, 2025, compared to $148,588 for the same period in 2024, representing a decrease of $23,489, or 15.8%, 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

11 unchanged sentences

Total General and Administrative Expenses

General and administrative expenses for our continuing operations increased by $1.4 million, or 66.3%, to $3.6 million for the year ended December 31, 2024 from $2.2 million for the year ended December 31, 2023, primarily due to (i) an increase of $0.5 million in personnel-related expenses which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, and labor services segment, (ii) an increase of $0.3 million in rental and leases following the acquisition of Edward with the addition of a new office workspace in California, (iii) an increase of $0.1 million in recruiting expenses associated with the development of new business lines, aligning with the Company’s strategic shift towards logistics and warehousing, (iv) an increase of $0.2 million in insurance expenses due to higher costs associated with directors and officers insurance, (v) an increase of $0.1 million in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and additional intangible assets, as detailed in Notes 6 & 8, and (vi) an increase of $0.2 million in other miscellaneous general and administration expenses during the year ended December 31, 2024.

General and administrative expenses for our continuing operations decreased by $14,287, or 0.4%, for the year ended December 31, 2025, primarily due to (i) a decrease of $138,319 in recruiting expenses as the prior-year period included significant hiring expenses associated with the launch of our logistics and warehousing segment, (ii) a decrease of $78,351 in insurance expenses resulting from a less expensive insurance provider, (iii) a decrease of $66,290 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 year ended December 31, 2024, (iv) a decrease of $14,657 in travel and entertainment expenses related to business development efforts and client engagement, and (v) a decrease of $10,776 in other miscellaneous general and administration expenses during the year ended December 31, 2025, partially offset by (vi) an increase of $201,375 in rental and leases, which was primarily due to the relocation of our headquarters to California in July 2024, (vii) an increase of $66,926 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and additional intangible assets, as detailed in NOTES 6 & 8, and (ⅷ) an increase of $30,938 in payroll and benefits expense, which was reflecting the full-year impact in 2025 of personnel hired during mid-2024 to support the Company’s newly launched logistics and warehousing and labor services segments.

Impairment loss expenses

The Year Ended December 31,

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.

For the year ended December 31, 2025, impairment loss expenses related to customer relationships, trade names, and goodwill amounted to $135,346, $27,429, and $568,532, respectively, resulting in total impairment losses of $731,307.

No impairment losses were recorded for the year ended December 31, 2024.

See NOTE 8 – Intangible Asset and Goodwill for more details.

Share-based compensation expenses

1 unchanged sentence

Share-based compensation expenses

Share-based compensation expenses were $0.3 million and nil for the years ended December 31, 2024 and 2023, 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 were 150,000, including 118,750 shares of Class A common stock and 31,250 shares of Class B common stock.

Share-based compensation expenses of $277,345 were recognized during the year ended December 31, 2024.

See Note 11 for more details.

Share-based compensation expenses were $387,618 and $277,345 for the years ended December 31, 2025 and 2024, respectively, representing an increase of $110,273, or 39.8%.

Share-based compensation expenses of $387,618 were recognized during the year ended December 31, 2025, consisting of (i) $77,875 resulting from 43,750 shares granted and vested immediately on September 30, 2025, (ii) $39,023 related to the employee incentive plan shares granted on September 30, 2024, and (iii) $270,720 resulting from the newly issued 144,000 shares granted and vested immediately on October 15, 2025.

For the year ended December 31, 2024, share-based compensation expenses were $277,345, consisting of $261,666 from (i) the 150,000 shares granted and vested immediately on September 30, 2024, and (ii) $15,679 related to the employee incentive plan shares granted on September 30, 2024.

See NOTE 11 – Stock Based Compensation for more details.

Other Income (Expenses), net

7 unchanged sentences

Total Interest expenses

Other income, net

Total other income(expense), net

Interest income from continuing operations was $924,224 for the year ended December 31, 2025, compared to $320,472 for the year ended December 31, 2024, representing an increase of $603,752, or 188.4%.

The significant increase was primarily driven by interest earned on short-term loan receivables and certificates of deposit, funded by the net proceeds from our IPO, the May Offering, and the July Offering.

Interest expense incurred from our continuing operations was $35,951 for the year ended December 31,2024, decreased $5,932 or 14.2%, from $41,883 in 2023, mainly due to decreased credit card interest.

The significant increase was primarily driven by interest earned on short-term loan receivable 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 $33,198 for the year ended December 31, 2025, a decrease of $2,753, or 7.7%, from $35,951 in 2024, mainly due to decreased loan interest expense.

Other income, net was $54,763 for the year ended December 31, 2025, compared to $8,009 for the year ended December 31, 2024, representing an increase of $46,754, or 583.8%.

The increase was primarily attributable to higher rental income recognized during the year ended December 31, 2025.

Income Tax (Benefits)

Our income tax benefits for continuing operations were $0.2 million for the year ended December 31, 2024, compared with income tax benefits of approximately $0.5 for the same period in 2023.

As a result of the above factors, we had a net loss of $3.2 million from our continuing operations for the year ended December 31, 2024, compared to net loss of $1.7 million for the same period of 2023.

Our income tax provision for continuing operations was $15,916 for the year ended December 31, 2025, compared with income tax benefits of $215,822 for the same period in 2024.

As a result of the above factors, we had a net loss of $3.6 million from our continuing operations for the year ended December 31, 2025, compared to a net loss of $3.2 million for the same period of 2024.

Parallel- Import vehicle Business (Discontinued Operations)

2 unchanged sentences

Financial Impact of Discontinued Operations

The following table summarizes the financial results of our discontinued operations for the years ended December 31, 2024 and 2023:

Years Ended December 31,

The following table summarizes the financial results of our discontinued operations for the year ended December 31, 2024:

For the Year Ended December 31,

domestic market

6 unchanged sentences

Gross (loss) profit

Revenue from discontinued operations was $1.6 million for the year ended December 31, 2024, compared to $38.3 million for the year ended December 31, 2023, representing a decrease of $36.7 million, or 95.7%.

The significant decline was primarily due to the termination of parallel-import vehicle sales and the phase-out of operations.

Revenue from the U.S.

domestic market declined by 97.5% to $0.2 million, while revenue from the overseas market decreased by 95.3% to $1.4 million in 2024.

Cost of revenue decreased by $32.4 million, or 95.0%, to $1.7 million in 2024, compared to $34.1 million in 2023, primarily due to the substantial reduction in vehicle purchases and fulfillment expenses following the discontinuation of the business.

The cost of vehicles decreased by $30.7 million, or 95.3%, while fulfillment expenses declined by $1.7 million, or 92.5%, in line with lower sales volumes.

As a result, we reported a gross loss of $24,820 for the year ended December 31, 2024, compared to a gross profit of $4.2 million in 2023, reflecting a decline of $4.3 million, or 100.6%.

The decrease was primarily attributable to the cessation of the parallel-import vehicle business and the significant drop in revenue.

Revenue from discontinued operations was $1.6 million for the year ended December 31, 2024 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 year ended December 31, 2024.

Selling, General, and Administrative Expenses for Discontinued Operations

The following table presents selling, general, and administrative (“SGA”) expenses for the discontinued operations:

Years Ended December 31,

The following table presents selling, general, and administrative expenses (“SGA Expenses”) for the discontinued operations:

For the Year Ended December 31,

Selling expenses

3 unchanged sentences

Total SGA Expenses

Total SGA Expenses for the discontinued parallel-import vehicle business increased by approximately $1.2 million, or 175.8%, to $1.8 million in 2024, compared to $0.7 million in 2023.

The increase was primarily driven by credit losses of $1.6 million for aged uncollectible accounts receivable, and $0.1 million of forfeited vehicle deposits and sales tax receivables, reflecting the financial impact of the business exit.

However, in the second half of 2024, certain customers were impacted by broader economic pressures, resulting in slower payment cycles and delays in remittances.

These challenges were reflected in our financial performance, as we recorded a credit loss of $1.6 million on accounts receivable and a credit loss of $34,885 on vehicle-related sales tax receivables.

Additionally, we recognized a forfeited vehicle deposit expense of $100,800, primarily due to supplier-related contract terminations following the cessation of vehicle purchases.

We remain focused on optimizing collections and has implemented a structured approach to manage outstanding receivables.

Through ongoing efforts, we have recovered $2.5 million as of the date of this annual report.

We continue to monitor and evaluate outstanding balances to maximize recoverability and ensure a disciplined financial transition from the vehicle import business.

For further details on credit losses, refer to Note 5 – Discontinued Operations.

Total SGA Expenses for the discontinued parallel-import vehicle business were approximately $1.8 million for the year ended December 31, 2024.

Allowance of credit loss of accounts receivables

Total allowance of credit loss of accounts receivable for the discontinued parallel-import vehicle business was $1,589,546 for the year ended December 31, 2024.

Interest Expenses

The table below presents interest expenses for the years ended December 31, 2024 and 2023:

The table below presents interest expenses for the year ended December 31, 2024:

Interest Expenses

Inventory Financing

Finance Deal charges

Line of Credit

Total interest expenses

Total interest expenses for the discontinued operations decreased significantly to $ 88,788 for the year ended December 31, 2024, compared to $1.2 million in 2023.

This decrease was primarily due to the cessation of vehicle purchases and the associated financing activities.

The absence of inventory financing and a substantial decrease in LC financing charges were the main causes of this decline.

Total interest expenses for the discontinued operations were $88,788 for the year ended December 31, 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 December 31, 2024, we had current assets of $11.0 million, consisting of cash and cash equivalents of $1.7 million, $6.1 million in loan receivables, $0.4 million of other receivables, $0.3 million in prepaid expenses other current assets from continuing operations, as well as $2.5 million in current assets from discontinued operations, primarily accounts receivable, which had been fully collected as of the date of this report.

As of December 31, 2024, our current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.4 million of operating lease liabilities, $0.2 million of other payables, and $0.2 million of loan payable, including the current portion of long-term borrowings.

As of December 31, 2025, we had current assets of $9.1 million, consisting of cash and cash equivalents of $0.2 million, $7.4 million in loan receivable, $1.2 million of other receivables, $0.2 million in prepaid expenses and other current assets from continuing operations.

As of December 31, 2025, our current liabilities, all of which related to continuing operations, totaled approximately $1.3 million, consisting of $0.6 million of operating lease liabilities, $0.6 million of other payables, and $0.1 million of loans payable, including the current portion of long-term borrowings.

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024, with continuing operations and discontinued operations presented separately:

Years ended December 31,

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash outflows from operations-continuing operations

3 unchanged sentences

Net cash provided by (used in) financing activities

Cash inflows from operations-continuing operations

Cash inflows (outflows) from operations-continuing operations

Cash outflows from operations-discontinued operations

Net increase in cash

Net increase (decrease) in cash

Operating Activities

Net cash used in operating activities from continuing operations was $2.5 million for the year ended December 31, 2025.

The negative cash flow was primarily due to (i) a net loss of $3.6 million during the year ended December 31, 2025, (ii) an increase of $0.8 million in other receivables, and (iii) a decrease of $0.3 million in operating lease liabilities, partially offset by (iv) an increase of $0.7 million in allowance of impairment loss of goodwill and intangible assets, (v) an increase of $0.5 million in amortization of operating lease right-of-use assets, (vi) $0.4 million in share-based compensation expenses;

and (vii) an increase of $0.4 million in other payables and other current liabilities.

Net cash used in operating activities from continuing operations was $3.5 million for the year ended December 31, 2024.

The negative cash flow was primarily due to (i) a net loss of $3.2 million during the year ended December 31, 2024;

(ii) an increase of $0.3 million in deferred income tax benefits;

and (iii) an increase of $0.3 million in other receivables and a decrease of $0.2 million in operating lease liabilities, partially offset by (iv) an increase of $0.3 million in amortization of operating lease right-of-use assets, and $0.3 million in share-based compensation expenses, respectively.

Net cash used in operating activities from continuing operations was $1.6 million for the year ended December 31, 2023.

This was primarily attributable to (i)a net loss of $1.7 million;

(ii) an increase in amortization of operating lease right-of-use assets of $0.1 million;

offset by (iii) a decrease in operating lease liabilities of $0.2 million.

Net cash provided by operating activities from discontinued operations was $2.5 million in 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 $3.7 million in 2024.

1 unchanged sentence

(ii) a decrease of $3.9 million in accounts receivable;

offset by $1.7 million decrease in loans payable.

Net cash provided by operating activities from discontinued operations was $7.2 million for the year ended December 31, 2023.

This was primarily attributable to (i) a net income of $1.8 million;

(ii) a collection of $0.6 million in accounts receivable, a $4.5 million decrease in inventory, $0.5 million decrease in other receivables, and other less significant factors.

offset by a decrease of $1.7 million in loans payable.

Investing Activities

Net cash used in investing activities from continuing operations was approximately $1.3 million for the year ended December 31, 2025, including (i) $3.4 million in short-term loans lent to third parties, and offset by (ii) $2.1 million proceeds of repayment from short-term loans lent to third parties.

Net cash used in investing activities from continuing operations was approximately $6.1 million for the year ended December 31, 2024, including (i) approximately $0.3 million in cash paid for the Edward and TWEW acquisitions, net of cash acquired, (ii) purchase of fixed assets of $0.4 million, (iii) $6.3 million in short-term loans lent to third parties, and offset by (iv) $0.9 million proceeds of repayment from short-term loans lent to third parties.

For the year ended December 31, 2023, net cash used in investing activities was $0.7 million in short-term loans lent to third parties.

There were no investing activities related to discontinued operations for the years ended December 31, 2025 and 2024.

Financing Activities

Net cash provided by financing activities from continuing operations was $8.8 million for the year ended December 31, 2024, which consisted of (i) net proceeds from July Offering of approximately $1.1 million, (ii) net proceeds from the May Offering of approximately $7.3 million, (iii) proceeds of $0.6 million from the issuance of shares of common stock in private placements;

Net cash used in financing activities from continuing operations was $73,854 for the year ended December 31, 2025, which consisted of (i) net proceeds from premium finance of $196,300, partially offset by (ii) net repayments of premium finance of approximately $234,111, and (iii) repayments of long-term borrowings of $36,043.

Net cash provided by financing activities from continuing operations was $8.8 million for the year ended December 31, 2024, which consisted of (i) net proceeds from the July Offering of approximately $1.1 million, (ii) net proceeds from the May Offering of approximately $7.3 million, (iii) proceeds of $0.6 million from the issuance of shares of common stock in private placements;

partially offset by (iv) net repayments of premium finance of approximately $0.3 million.

Net cash provided by financing activities from continuing operation of $5.0 million for the year ended December 31, 2023, consisted of (i) proceeds from initial public offering of approximately $3.7 million;

(ii) a reduction in subscriptions receivable of $1.2 million;

(iii) proceeds from premium finance of $0.2 million and other less significant factors.

There were no financing activities related to discontinued operations for the years ended December 31, 2025.

Net cash used in financing activities from discontinued operations was $1.7 million for the year ended December 31, 2024, primarily reflecting (i) net repayments of LC financing of $1.0 million;

and (ii) net repayments of revolving lines of credit of $0.7 million.

Net cash used in financing activities from discontinued operations was $9.6 million for the year ended December 31, 2023, consisted of (i) net repayments of LC financing of $6.1 million;

(ii) repayments of inventory financing of $4.2 million;

(iii) repayments of dealers financing of $0.4 million;

and partially offset by (iv) net proceeds from revolving lines of credit of $0.7 million.

As of December 31, 2025, the Company had cash and cash equivalents of approximately $0.2 million and a working capital balance of $7.7 million.

In addition, the Company had loan receivable from third parties of approximately $7.4 million, which can be sufficient for the Company to support its ongoing business operations and meet the obligations in the future.

Management has evaluated the Company’s ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements – Going Concern.

This evaluation considered the Company’s current financial condition, expected cash flows, obligations due within the next 12 months, and available sources of liquidity.

While management understands that the ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations, management has concluded that there are no conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these consolidated financial statements.

Accordingly, the Company’s consolidated financial statements as of December 31, 2025 have been prepared on a going concern basis.

Off-Balance Sheet Arrangements

2 unchanged sentences

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.

Note 2, “Summary of Significant Accounting Policies” of the Notes to in Part II, Item 8 of the 2024 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements.

NOTE 2, “Summary of Significant Accounting Policies” of the Notes to in Part II, Item 8 of this annual report on Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements.

ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

5 unchanged sentences

In addition, the new guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

We generated revenues from the parallel-import vehicle dealership and logistics and warehousing services.

In 2024, the Company generated revenue from the parallel-import vehicle dealership and logistics and warehousing services.

Revenue from the parallel-import vehicle dealership business is generated from the sales of parallel-import vehicles to both domestic and overseas parallel-import car dealers.

We purchase automobiles from the U.S.

market through our team of professional purchasing agents, and mainly resells them to parallel-import car dealers in the U.S.

It purchases automobiles from the U.S.

market through its team of professional purchasing agents, and mainly resells them to parallel-import vehicle dealers in the U.S.

In accordance with ASC 606, the Company recognizes revenue at the point in time when the performance obligation has been satisfied and control of the vehicles has been transferred to the dealers.

For sales to U.S.

domestic parallel-import car dealers, revenue is recognized when a vehicle is delivered, and its title has been transferred to the dealers.

For overseas sales, the Company sells vehicles under Cost and Freight (“CFR”) shipping point terms, and revenue is recognized when a vehicle is loaded on a cargo ship and its title has been transferred to the dealers.

domestic parallel-import vehicle dealers, revenue is recognized when a vehicle is delivered, and its title has been transferred to the dealers.

For overseas sales, the Company sells vehicles under Cost and Freight shipping point terms, and revenue is recognized when a vehicle is loaded on a cargo ship and its title has been transferred to the dealers.

The Company accounts for the revenue generated from sales of vehicles on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits.

All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual vehicle to parallel-import vehicle dealers,

and there is no separately identifiable other promise in the contracts.

The Company’s vehicles are sold with no right of return and the Company does not provide other credits or sales incentives to parallel-import car dealers.

All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual vehicle to parallel-import vehicle dealers, and there is no separately identifiable other promise in the contracts.

The Company’s vehicles are sold with no right of

return and the Company does not provide other credits or sales incentives to parallel-import car dealers.

Historically, no customer returns have occurred.

Therefore, the Company did not provide any sales return allowances for the years ended December 31, 2025 and 2024.

In 2024, the Company generated revenue from freight forwarding services provided by Edward and general labor and logistics provided by TWEW to corporate and retail clients, including transportation, cargo warehousing, freight forwarding, labor service, and cargo loading and unloading.

In 2025, the Company generates revenues from freight forwarding services provided by Edward and general labor and logistics provided by TWEW to corporate and retail clients, including transportation, cargo warehousing, freight forwarding, labor service, and cargo loading and unloading.

Revenue for freight forwarding services, both export and import, is recognized when the services are provided.

8 unchanged sentences

No provisions for returns or sales incentives are included, as historical experience indicates no material rights of return or refunds.

Cost of Revenue

Parallel-import Vehicles Segment

Cost of parallel import vehicle revenue mainly includes the cost of vehicles purchased from U.S.

automobile dealers, non-refundable sales tax, dealership service fees, and other expenses.

It also includes fulfillment expenses, which consist primarily of (i) vehicle warehousing and towing fees, (ii) vehicle insurance expenses, (iii) commissions paid to purchasing agents incurred in vehicle pick-up and the vehicle title transfer process, (iv) broker consulting fees incurred to acquire new vehicles, and (v) purchase department labor costs.

Logistics and Warehousing Segment

Cost of logistics and warehousing service revenue mainly includes the cost of freight and fulfillment expenses for freight forwarding services, while cost of labor services comprises payments to third parties for outsourced workforce provisioning, including bundled recruitment, training, and payroll processing.

Cost recognition aligns with service delivery progress, validated through subcontractor utilization reports and client acceptance documentation.

Selling, General and Administration Expenses

Selling expenses was related to the discontinued parallel-import vehicles business and include salaries and benefits for the Company’s sales personnel, and ocean freight expenses, which are associated with shipping and delivery of vehicles to automobile dealers, are expensed as incurred.

Total selling expenses for the discontinued parallel-import vehicle business were $117,819 and $668,172 for years ended December 31, 2024 and 2023, respectively.

General and Administration Expenses

The Company’s general and administrative expenses primarily include employee salaries and benefits, depreciation, office lease expenses, travelling and entertainment expenses, legal and consulting fees, insurance and other miscellaneous administrative expenses.

For the years ended December 31, 2024 and 2023, general and administration expenses for the continuing expenses of $3,641,713 and $2,190,513, respectively, were attributable to continuing operations, with no allocation to discontinued operations.

For the years ended December 31, 2025 and 2024, general and administration expenses for the continuing expenses of $3,627,426 and $3,641,713, respectively.

Share-based compensation

The Company has adopted the Plan for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Company’s operations.

Shareholders, directors, and employees of the Company receive remuneration in the form of share-

based awards including option, restricted stock, restricted stock unit, dividend equivalent, or other awards that are permitted under the Plan, whereby the recipients render services as consideration for such share-based compensation.

Shareholders, directors, and employees of the Company receive remuneration in the form of share-based awards including option, restricted stock, restricted stock unit, dividend equivalent, or other awards that are permitted under the Plan, whereby the recipients render services as consideration for such share-based compensation.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the period during which the employee is required to provide service in exchange for the award, which generally is the vesting period.

11 unchanged sentences

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company records interest and penalties related to an uncertain tax position, is and when required, as part of income tax expenses in the consolidated statements of operations.

The Company records interest and penalties related to an uncertain tax position, if and when required, as part of income tax expenses in the consolidated statements of operations.

The Company does not believe that there were any uncertain tax positions as of December 31, 2025 and 2024.

The Company and its U.S.

operating subsidiaries are subject to the U.S.

The Company elected to file income taxes as a corporation instead of an LLC for the tax years ended December 31, 2020 through December 31, 2021.

As of December 31, 2024, the Company’s consolidated income tax returns for the tax years ended December 31, 2020 through December 31, 2023 remained open for statutory examination by U.S.

tax authorities.

operating subsidiaries are subject to U.S.

federal and state income tax laws.

Prior to the corporate conversion in 2022, the Company was organized as a limited liability company (“LLC”) and elected to be treated as a corporation for U.S.

federal income tax purposes for the tax years ended December 31, 2020 and 2021.

As of December 31, 2025, the Company’s consolidated U.S.

federal income tax returns for the tax years ended December 31, 2021 through December 31, 2024 remained open to examination by the Internal Revenue Service and applicable state tax authorities.

(Loss) Earnings per share

17 unchanged sentences

However, following the discontinuation of the parallel-import vehicles business, as of December 31, 2025, the Company transitioned back to a single reportable segment, now focused exclusively on logistics and warehousing services.

Accounts receivable, net

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance of credit loss, in accordance with the Current Expected Credit Loss (“CECL”) model under ASC 326.

The Company estimates expected credit losses based on a combination of historical loss experience, customer creditworthiness, current economic conditions, and reasonable and supportable forward-looking information.

The allowance for credit losses is updated at each reporting period to reflect changes in credit risk.

The allowance for credit losses is recorded against accounts receivable balances, with a corresponding charge to the consolidated statements of operations.

Delinquent account balances are written off against the allowance when management determines that collection is remote.

If previously written-off receivables are subsequently recovered, the Company records a reversal of the allowance for credit losses.

As of December 31, 2024, all accounts receivable related to the discontinued parallel-import vehicle business, including the associated allowance for credit losses, have been reclassified to “Current Assets of Discontinued Operations” in the consolidated balance sheets.

Accordingly, the remaining accounts receivable presented in continuing operations are solely related to the Company’s logistics and warehousing business.

As of December 31, 2024 and 2023, there no allowance for credit losses on accounts receivable from continuing operations were recorded.

(See Note 5 – Discontinued Operations for further details.)

Loan receivable

The Company’s loans receivable, which consist of loans to third parties, are recognized at the point of loan disbursement, initially measured at fair value, primarily reflecting the disbursed amount and associated transaction costs.

The Company’s loan receivable, which consist of loans to third parties, are recognized at the point of loan disbursement, initially measured at fair value, primarily reflecting the disbursed amount and associated transaction costs.

Both secured and unsecured lending are encompassed in these receivables, with terms including varying interest rates and maturity dates.

1 unchanged sentence

The interest rates for these loans may be subject to change based on the terms of loan agreements.

Periodic reviews of the loan portfolio are conducted to assess for impairment, utilizing the expected credit loss model.

This approach considers historical credit loss experience, current conditions, and reasonable forecasts in estimating potential credit losses.

As of the end of the reporting periods, no impairment allowance was recorded for the loan receivables.

Inventory primarily consists of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method, which includes the cost of vehicles purchased from U.S.

automobile dealers, non-refundable sales tax, and dealership service fees.

The Company reviews its inventory periodically if any reserves are necessary for potential impairment.

The Company depleted its inventory on vehicles by the first quarter of 2024.

The Company does not hold any inventory related to its continuing logistics and warehousing business.

As a result of the Company’s decision to discontinue the parallel-import vehicles business, the entire inventory balance of $1,515,270 as of December 31, 2023, was reclassified to “Current Assets of Discontinued Operations” in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations.

Periodic reviews of the loan portfolio are conducted to assess impairment, utilizing the expected credit loss model.

The Company estimates expected credit losses on its loan receivable based on an evaluation of the borrower’s financial condition and operating performance, the contractual terms and remaining maturity of the loan, historical credit loss experience, current economic conditions, and reasonable and supportable forward-looking information.

As of December 31, 2025, no allowance for credit losses were recorded related to its loan receivable.

Intangible assets, net

2 unchanged sentences

The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

The Company did not recognize any impairment to intangible assets for the year ended December 31, 2024.

The Company recognized impairment to intangible assets of $162,775 and nil for the years ended December 31, 2025 and 2024, respectively.

Fair value of financial instruments

6 unchanged sentences

● Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, loans receivable, loans payable, and other payables and other current liabilities, approximated the fair value of the respective assets and liabilities as of December 31, 2024 and 2023 based upon the short-term nature of the assets and liabilities.

Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, loan receivable, loans payable, and other payables and other current liabilities, approximated the fair value of the respective assets and liabilities as of December 31, 2025 and 2024 based upon the short-term nature of the assets and liabilities.

The Company applied level 3 to obtain the fair value of intangible assets and goodwill.

See NOTE 8 — Intangible Asset and Goodwill.

The Company believes that the carrying amount of long-term loans approximated fair value as of December 31, 2024 and 2023 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates.

The Company applied level 3 to obtain the fair value of loan receivable.

The Company believes that the carrying amount of long-term loans approximated fair value as of December 31, 2025 and 2024 reflected amortized cost net of an allowance for credit losses, based on expected credit loss analyses that consider borrower-specific risks, current conditions, and reasonable and supportable forward-looking information.

See NOTE 4 — Loan Receivable.

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No.

2 unchanged sentences

Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with an initial term of 12 months or less) on the commencement date:

(i) lease liability, which is a lessee’s obligation to make lease payments arising from a

lease, measured on a discounted basis;

(i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;

and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

15 unchanged sentences

Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates.

For the year ended December 31, 2025, the Company recorded a goodwill impairment charge of $568,532.

See NOTE 8 – Intangible assets and Goodwill.

Impairment of long-lived assets

5 unchanged sentences

Recent accounting pronouncements

ASU 2023-07, Segment Reporting (Topic 280):

Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , requires disclosures about significant segment expenses and additional interim disclosure requirements.

2 unchanged sentences

The amendments should be applied retrospectively for all prior periods presented in the consolidated financial statements.

We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2025.

We are currently evaluating the potential impact of adopting this standard on our disclosures.

Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

We adopted this standard in our Annual Report on Form 10-K for the year ended December 31, 2025.

The adoption did not have a material impact on the Company’s consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid.

This standard is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it

retrospectively.

We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2025.

We are currently evaluating the potential impact of adopting this standard on our disclosures.

This standard is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it retrospectively.

The Company adopted ASU 2023-09 beginning January 1, 2025.

The adoption did not have a material impact on the Company’s consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk.

As a smaller report company, we are not required to provide the information required by this item.

Financial Statements and Supplementary Data.

Please see the financial statements beginning on page F-1 following the signature pages in this Annual Report on Form 10-K and incorporated herein by reference.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

As a smaller reporting company, we are not required to provide the information required by this item.

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 7. Management’s Discussion and Analysis