What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-13 compared with 2023-11-09 · 274 added, 195 removed, 376 unchanged (56% of the section changed)

1 unchanged sentence

CHEETAH NET SUPPLY CHAIN SERVICE INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

September 30,

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS:

Accounts receivable

Loans receivable

Other receivables

1 unchanged sentence

TOTAL CURRENT ASSETS

OTHER NONCURRENT ASSETS:

Property, net

Operating lease right-of-use assets

Deferred tax assets

Intangibles, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

1 unchanged sentence

Accounts payable

Current portion of long-term borrowings

Loans payable from inventory financing

Current portion of long-term debt

Loans payable from letter of credit financing

Loans payable from dealers finance

Loans payable from line of credit

2 unchanged sentences

Operating lease liabilities, current

Accrued expenses

Other payables and other current liabilities

Accrued liabilities and other current liabilities

TOTAL CURRENT LIABILITIES

Long-term borrowings

Operating lease liabilities, non-current

NONCURRENT LIABILITIES:

Long-term debt, net of current portion

Operating lease liabilities, net of current portion

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES (Note 17)

STOCKHOLDERS’ EQUITY

Common stock, $ 0.0001 par value, 100,000,000 shares authorized;

17,916,000 shares issued and outstanding, including:

19,188,329 and 17,916,000 shares issued and outstanding , including:

Class A common stock, $ 0.0001 par value, 91,750,000 shares authorized, 10,938,329 and 9,666,000 shares issued and outstanding

2 unchanged sentences

Subscription receivable

( 1,800,000 )

Retained earnings

Retained earnings (Accumulated deficit)

TOTAL STOCKHOLDERS’ EQUITY

3 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

COST OF REVENUE

For the Three Months Ended March 31,

Parallel-import Vehicle

Logistics and Warehousing

Total Revenues

COST OF REVENUES

Cost of vehicles

Fulfillment expenses

Total cost of revenue

Ocean freight service cost

Total cost of revenues

OPERATING EXPENSES

2 unchanged sentences

Total operating expenses

INCOME FROM OPERATIONS

OTHER (EXPENSE) INCOME, NET

Interest expense, net

( 1,058,111 )

( 2,141,206 )

INCOME (LOSS) FROM OPERATIONS

OTHER INCOME (EXPENSE)

Interest expenses, net

Other income, net

Subsidy income from Business Recovery Grant Program

Total other (expense) income, net

( 1,054,102 )

INCOME BEFORE INCOME TAX PROVISION

Income Tax Provision

Earnings per common share - basic and diluted

Total other expense, net

LOSS BEFORE PROVISION FOR INCOME TAXES

Income tax benefit

Loss per share - basic and diluted

Weighted average shares - basic and diluted

2 unchanged sentences

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock*

Retained Earnings

Stockholders’

Balance, December 31, 2023

( 1,800,000 )

Stock issuance

Termination of equity-classified warrant

Issuance of common stock for acquisition

Net loss for the period

Balance, June 30, 2023

( 1,100,000 )

Initial public offering, net of issuance cost

Stock Issuance

Net income for the period

Balance, September 30, 2023

Common Stock*

Retained Earnings

Balance, March 31, 2024

Stockholders’

Equity (Deficit)

Balance, December 31, 2022

Net loss for the period

Balance, June 30, 2022

Stock Issuance

( 1,800,000 )

Net income for the period

Balance, September 30, 2022

Stock issuance

Net loss for the period

Balance, March 31, 2023

( 1,100,000 )

Retrospectively restated for effect of the Company’s amended and restated articles of incorporation and bylaws and share issuances on July 11, 2022.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CHEETAH NET SUPPLY CHAIN SERVICE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of operating lease right-of-use assets

Inventory reserve recovery

Amortization of Intangible Assets

Deferred tax provision

3 unchanged sentences

Other receivables

Due from a related party

Prepaid expenses and other current assets

( 1,683,696 )

Deferred revenue

( 1,805,073 )

Other payables and other current liabilities

1 unchanged sentence

Net cash provided by operating activities

Cash flows from investing activities:

Acquisition of business, net of cash acquired

Loans made to third parties

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from initial public offering, net

Cash paid for warrant termination

Proceeds from issuance of common stock under private placement transaction

Proceeds from inventory financing

Repayments of inventory financing

( 3,229,800 )

( 20,885,700 )

Proceeds from letter of credit financing

2 unchanged sentences

( 8,016,326 )

Proceeds from loans from dealer finance

Repayments of loans from dealers finance

Proceeds from line of credit

Repayment of line of credit

( 2,375,197 )

Proceeds from premium finance

Proceeds from long-term borrowings

Repayments of premium finance

Repayments of long-term borrowings

Borrowing from a related party

Repayments made to a related party

( 1,140,584 )

Net cash used in financing activities

2 unchanged sentences

Net increase in cash

Cash, beginning of year

Cash, end of year

Cash, beginning of period

Cash, end of period

Supplemental cash flow information

Cash paid for income taxes

Cash paid for interest

Noncash Financing and investing activities:

Fair value of common stock issued for acquisition

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

14 unchanged sentences

Limousine did not have any business activities until acquired by Cheetah Net;

(v) Entour Solutions LLC (“Entour”), an LLC 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, and a current employee of Cheetah Net, for a total consideration of $ 100 on April 9, 2021.

● (v) Entour Solutions LLC (“Entour”), an LLC 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;

● (vi) Cheetah Net Logistics LLC (“Logistics”), an LLC organized on October 12, 2022 under the laws of the State of New York, whose previous sole member and owner, Hanzhang Li, the previous owner of Logistics, and a current employee of Cheetah Net, for a total consideration of $ 100 , assigned all his membership interests in Logistics to Cheetah Net on October 19, 2022;

The Company and its wholly owned subsidiaries are primarily engaged in the parallel-import vehicle dealership business.

In the People’s Republic of China (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.

● (vii) Edward Transit Express Group Inc.

(“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 shares of Edward to Cheetah Net for a total consideration of $ 1,500,000 in cash and Cheetah Net’s Class A common stock through a stock purchase agreement dated January 24, 2024, as amended.

Currently, Edward is engaged in ocean and air transportation services.

The Company and its wholly owned subsidiaries are engaged in two sectors:

the parallel-import vehicle dealership business and comprehensive logistics and warehousing business.

The parallel-import vehicle

In the People’s Republic of China (the “PRC”), parallel-import vehicles refer to vehicles purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems.

The Company purchases automobiles from the U.S.

market through its large team of professional purchasing agents and resells the automobiles to parallel-import car dealers in the U.S.

Details of the subsidiaries of the Company as of September 30, 2023 are set out below:

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

Logistics and Warehousing

The Company’s subsidiary, Edward, operates as a licensed Non-Vessel Operating Common Carrier.

It manages freight forwarding, including shipment consolidation and carrier selection, aimed at optimizing shipping operations.

Edward also provides warehousing services encompassing fulfillment, storage, and inventory management, crucial for supporting both the Company’s operations and its clients’ logistics needs.

Details of the subsidiaries of the Company as of March 31, 2024 are set out below:

Name of Entity

28 unchanged sentences

vehicle dealership

On August 3, 2023, the Company completed its initial public offering (“IPO”) of 1,250,000 shares of Class A common stock, par value $ 0.0001 per share, at a price to the public of $ 4.00 per share.

The Company’s Class A common stock began trading on the Nasdaq Capital Market under the ticker symbol “CTNT” on August 1, 2023.

Total net proceeds of approximately $ 3.7 million were raised from the IPO after deducting the underwriting discounts and the offering expenses, in an aggregate amount of $ 1.3 million.

(see Note 16)

July 14, 2010

Logistics and warehousing

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 unchanged sentences

GAAP for complete financial statements.

These statements should be read in conjunction with the Company’s consolidated financial statements and noted thereto for the year ended December 31, 2022, included in the Company’s Registration Statement on Form S-1 (File No.

These statements should be read in conjunction with the Company’s audited consolidated financial statements and noted thereto for the year ended December 31, 2023, included in the Company’s annual report on Form 10-K (File No.

001-41761), filed with the SEC on March 18, 2024 (the “Annual Report”).

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the unaudited condensed consolidated financial statements not misleading have been included.

Operating results for the interim period ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023.

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries.

Operating results for the interim period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries.

All inter-company balances and transactions are eliminated upon consolidation.

15 unchanged sentences

In circumstances in which the Company receives payments for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt expenses.

As of September 30, 2023 and December 31, 2022, there was no allowance for doubtful accounts recorded as the Company considers all of the outstanding accounts receivable fully collectible.

Inventories consist of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method.

As of March 31, 2024 and December 31, 2023, there was no allowance for doubtful accounts recorded as the Company considers all of the outstanding accounts receivable fully collectible.

Loans receivable

The Company’s loans receivable 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.

Subsequently, these receivables are measured at amortized cost using the effective interest method, which ensures the accurate recognition of interest income over the loan period.

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 these loans receivable.

Inventory consists of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method.

The value of inventory mainly includes the cost of auto vehicles purchased from U.S.

1 unchanged sentence

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

The Company recorded no inventory reserve as of September 30, 2023 and December 31, 2022.

The Company recorded no inventory reserve as of March 31, 2024 and December 31, 2023.

Depreciation on property, plant, and equipment is recognized on a straight-line basis, based on the respective estimated useful life of the assets.

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, inventories, prepaid expenses and other current assets, loans payable, deferred revenue and other payables and other current liabilities, approximated the fair value of the respective assets and liabilities as of September 30, 2023 and December 31, 2022 based upon the short-term nature of the assets and liabilities.

The Company believes that the carrying amount of long-term loans approximated fair value as of September 30, 2023 and December 31, 2022 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates.

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

The Company believes that the carrying amount of long-term loans approximated fair value as of March 31, 2024 and December 31, 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 follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No.

7 unchanged sentences

All ROU assets are reviewed for impairment annually.

There was no impairment for ROU lease assets as of September 30, 2023 and December 31, 2022.

There was no impairment for ROU lease assets as of March 31, 2024 and December 31, 2023.

Goodwill and Intangible Assets

The Company records goodwill as the excess of the consideration transferred over the fair value of net assets acquired in business combinations.

Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below.

The Company has one reporting unit.

The Company measures goodwill impairment, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill.

The review of goodwill impairment consists of either using a qualitative approach to determine whether it is more likely than not that the fair value of the assets is less than their respective carrying values or a one-step quantitative impairment test.

In performing the qualitative assessment, the Company considers many factors in evaluating whether the carrying value of goodwill may not be recoverable, including declines in the Company’s stock price and market capitalization of the Company and macroeconomic conditions.

If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, additional quantitative impairment testing is performed.

The quantitative test requires that the carrying value of each reporting unit be compared with its estimated fair value.

If the carrying value of a reporting unit is greater than its fair value, a goodwill impairment charge will be recorded for the difference (up to the carrying value of goodwill).

The Company uses the income approach and/or a market-based approach to determine the reporting units’ fair values, which are based on discounted cash

The determination of discounted cash flows of the reporting units and assets and liabilities within the reporting units requires significant estimates and assumptions.

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

The Company’s intangible assets consist of developed technology, customer relationships, and trade name, which are amortized on a straight-line basis or over their respective useful life using patterns that reflect the economic benefits of the assets are expected to be realized.

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.

Impairment of Long-lived assets

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group.

If the assets are impaired, an impairment loss is measured as the amount by which the carrying amount of the asset group exceeds the fair value of the asset.

The Company estimates fair value using the expected future cash flows discounted at a rate consistent with the risks associated with the recovery of the asset.

Revenue recognition

6 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.

The Company is primarily engaged in the parallel-import vehicle dealership business and generates its revenue from the sales of parallel-import vehicles to both domestic and overseas parallel-import car dealers.

The Company operates in two business segments:

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.

It purchases automobiles from the U.S.

5 unchanged sentences

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

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 three and nine months ended September 30, 2023 and 2022.

Therefore, the Company did not provide any sales return allowances for the three months ended March 31, 2024 and 2023.

In the logistics and warehousing services segment, revenue from freight forwarding services, both export and import, is recognized when the services are provided, based on the relative transit time.

The Company’s role as the principal in these services involves managing the entire shipping process from origin to destination, allowing revenue recognition on a gross basis throughout the transit period.

For warehousing services, revenue is primarily derived from storage fees, which are recognized based on the actual number of

days the goods are stored in the warehouse while awaiting further transportation.

Across all operations, the Company maintains a principal position, controlling the goods and services, bearing inventory and pricing risks, and fulfilling performance obligations directly.

Each contract is typically structured with a single performance obligation without allowances for returns or sales incentives, ensuring straightforward revenue recognition with no provisions for sales return allowances based on historical experiences of no returns.

Contract balances and remaining performance obligations

Contract balances typically arise when a difference in timing between the transfer of control to the parallel-import car dealers and receipt of consideration occurs.

The Company did not have contract assets as of September 30, 2023 and December 31, 2022.

The Company did not have contract liabilities as of September 30, 2023 and December 31, 2022.

The Company did not have any contract assets or liabilities as of March 31, 2024 and December 31, 2023.

Disaggregation of Revenue

The Company disaggregates its revenue by geographic areas, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors.

The Company’s disaggregation of revenue for the three and nine months ended September 30, 2023 and 2022 were as follows:

The Company disaggregates its revenue by type and geographic areas, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors.

The Company’s disaggregation of revenue for the three months ended March 31, 2024 and 2023 were as follows:

Three Months Ended

Revenue from Parallel-Import Vehicles

domestic market

Overseas market

Revenue from Logistics and Warehousing

domestic market

Overseas market

Total revenue

Geographic information

The summary of the Company’s total revenue by geographic area for the three and nine months ended September 30, 2023 and 2022 was as follows:

The summary of the Company’s total revenue by geographic area for the three months ended March 31, 2024 and 2023 was as follows:

Three Months Ended

Nine Months Ended

September 30,

domestic market

1 unchanged sentence

Total revenue

Cost of revenue

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

Cost of revenues

Parallel-import Vehicle 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.

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

6 unchanged sentences

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

The Company does not believe that there were any uncertain tax positions as of September 30, 2023 and December 31, 2022.

The Company does not believe that there were any uncertain tax positions as of March 31, 2024 and December 31, 2023.

The Company and its U.S.

1 unchanged sentence

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 September 30, 2023, the Company’s consolidated income tax returns for the tax years ended December 31, 2020 through December 31, 2022, remained open for statutory examination by U.S.

As of March 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.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”).

Earnings (Loss) per share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”).

ASC 260 requires companies with complex capital structures to present basic and diluted EPS.

2 unchanged sentences

Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

For the nine months ended September 30, 2023 and 2022, there were no dilutive shares outstanding.

For the three months ended March 31, 2024 and 2023, there were no dilutive shares outstanding.

Related parties and transactions

6 unchanged sentences

Shipping and handling costs, which are associated with shipping and delivery of vehicles to automobile dealers, are expensed as incurred and are included in selling expenses in the unaudited condensed consolidated statements of operations.

Total shipping and handling expenses were $ 113,470 and $ 405,182 for the three and nine months ended September 30, 2023, respectively, and $ 266,160 and $ 466,926 for the three and nine months ended September 30, 2022, respectively.

Total shipping and handling expenses were $ 20,610 and $ 213,460 for the three months ended March 31, 2024 and 2023, respectively.

Segment reporting

1 unchanged sentence

The management approach considers the internal reporting used by the Company’s chief operating decision maker for making operating decisions about the allocation of resources of the segment and the assessment of its performance in determining the Company’s reportable operating segments.

Management has determined that the Company has one operating segment.

Management has determined that the Company has two operating segments—the parallel-import vehicle segment and the logistics and warehousing segment.

NOTE 3 — ACCOUNTS RECEIVABLE

The Company’s accounts receivable primarily include balances generated from selling parallel-import vehicles to both domestic and overseas parallel-import car dealers, which have not been collected as of the balance sheet dates.

The accounts receivable transactions in connection with letters of credit with book values $ 3,229,854 and $ 7,502,291 were pledged as collateral to guarantee the Company’s borrowings from four third-party lending companies as of September 30, 2023 and December 31, 2022, respectively (see Note 8).

Accounts receivable consisted of the following:

Accounts receivable

Parallel-import Vehicles

Logistics and Warehousing

allowance for doubtful accounts

Total accounts receivable

The Company’s accounts receivable primarily include balances generated from (i) selling parallel-import vehicles to both domestic and overseas parallel-import car dealers and (ii) providing logistics and warehousing services to both domestic and overseas customers, which have not been collected as of the balance sheet dates.

Parallel-import Vehicle Segment

The Company identified four accounts with deferred payments overdue for over 150 days, totaling approximately $ 3.2 million of the $ 4.1 million total deferred payment balances as of March 31, 2024, which were backed by third-party guarantees.

During the first quarter of 2024, the Company successfully collected approximately $ 1.8 million of the December 31, 2023, overdue balance.

After a thorough assessment, these accounts were classified as fully collectible despite the delay.

As of March 31, 2024, the following table summarizes the Company’s accounts receivable aging:

Accounts receivable aging:

Less than 150 days

Over 210 days

allowance for doubtful accounts

Total accounts receivable

The accounts receivable transactions in connection with letters of credit with book value of $ 1,084,775 were pledged as collateral to guarantee the Company’s borrowings from two third-party lending companies as of December 31, 2023 (see Note 9).

There were none pledged as collateral as of March 31, 2024.

Logistics and Warehousing Segment

All accounts receivable were aged 90 days or less.

NOTE 4 — INVENTORIES

Inventories consist of new vehicles held for sale and are stated at the lower of cost or net realizable value using the specific identification method.

No inventory reserve was recorded as of September 30, 2023 and December 31, 2022.

In connection with the Company’s inventory financing from loans payable as of September 30, 2023 and December 31, 2022, the Company pledged its inventory with book values of nil and $ 4,095,132 as collateral for these loans, respectively (see Note 7).

The Company’s vehicles in inventory with book values of nil and $ 141,557 were pledged as collateral to guarantee the loans payable from dealers finance as of September 30, 2023 and December 31, 2022, respectively (see Note 9).

Inventories consist of new vehicles and are stated at the lower of cost or net realizable value using the specific identification method.

No inventory reserve was recorded as of March 31, 2024 and December 31, 2023.

NOTE 5 — OTHER RECEIVABLES

Other receivables consisted of the following:

September 30, 2023

March 31, 2024

December 31, 2023

Parallel-import Vehicles:

Vehicle Deposit (1)

Sales Tax Refundable (2)

Interest Receivable

Logistics and Warehousing

Custom Duties Receivable (4)

Allowance for doubtful accounts

2 unchanged sentences

automobile dealers to reserve vehicles.

Sales tax refundable represents vehicles sales tax exempted in some states and to be refunded by the tax authorities.

(2) Sales tax refundable represents vehicle sales tax exempted in some states and to be refunded by the tax authorities.

(3) Includes $ 672,984 in accounts receivable collected through a third party on behalf of the Company.

(4) Custom Duties receivable represent fees paid to U.S.

customs on behalf of customers.

NOTE 6- PROPERTY, NET

Property consisted of the following:

Estimated Useful Life

March 31, 2024

December 31, 2023

Leasehold improvements

Total property

Less accumulated depreciation

Property, net

NOTE 7 — LEASES

11 unchanged sentences

The Company was also granted the option to extend the lease term for another three years starting from March 1, 2027 and ending February 28, 2030.

The Company’s subsidiary, Edward, entered into a Second Amendment to Lease Agreement with its landlord on May 22, 2023, which amended a previous lease agreement and the first amendment between the parties, whereby Edward leases a warehouse from the landlord with an initial lease term from June 1, 2013 to July 31, 2018.

The lease term was extended to July 31, 2023 by the first amendment.

The second amendment further extended the lease to August 31, 2028.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets.

September 30, 2023

March 31, 2024

December 31, 2023

3 unchanged sentences

Total operating lease liabilities

The weighted average remaining lease terms and discount rates for all operating leases were as follows as of September 30, 2023 and December 31, 2022:

September 30, 2023

The weighted average remaining lease terms and discount rates for all operating leases were as follows as of March 31, 2024 and December 31, 2023:

March 31, 2024

December 31, 2023

3 unchanged sentences

* The Company used weighted average incremental borrowing rate of 14.5 % per annum for its lease contracts based on the Company’s current borrowings from various financial institutions.

During the three months ended September 30, 2023 and 2022, the Company incurred total operating lease expenses of $ 85,369 and $ 53,462 , respectively.

During the nine months ended September 30, 2023 and 2022, the Company incurred total operating lease expenses of $ 215,649 and $ 161,115 , respectively.

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2023:

Twelve months ending September 30,

During the three months ended March 31, 2024 and 2023, the Company incurred total operating lease expenses of $ 86,205 and $ 55,605 , respectively.

As of March 31, 2024, future maturities of lease liabilities are as follows:

2024 (excluding the three months ended March 31, 2024)

Total lease payments

1 unchanged sentence

Present value of lease liabilities

NOTE 7 — INVENTORY FINANCING

There were no inventory financing loan agreements executed during the three and nine months ended September 30, 2023.

No inventory was being held as collateral, and the balance of inventory financing was nil as of September 30, 2023.

The Company entered into a series of inventory financing loan agreements with a third party for working capital purposes during the three and nine months ended September 30, 2022, pursuant to which the Company pledged a portion of its vehicle inventory as collateral for each of the loan agreements.

Interest expenses are calculated based on the actual number of days the loan was outstanding upon settlement of the loan.

For the loan amount outstanding for no more than 90 days, the Company is charged an interest rate ranging between 16.2 % and 21.6 %, per annum, and for the amount outstanding for more than 90 days, the Company is charged an interest rate ranging between 20.7 % and 27.6 %, per annum.

The loans are guaranteed by Huan Liu, the Company’s controlling stockholder, and another stockholder of the Company.

The inventory financing amounted to nil and $ 4,164,100 as of September 30, 2023 and December 31, 2022, respectively.

The interest expenses for inventory financing were nil and $ 112,769 for the three and nine months ended September 30, 2023, respectively, and $ 222,750 and $ 768,055 for the three and nine months ended September 30, 2022, respectively.

The Company’s vehicles inventory with book values of nil and $ 4,095,132 were pledged as collateral to guarantee the Company’s borrowings from this third party as of September 30, 2023 and December 31, 2022, respectively (see Note 4).

NOTE 8 — ACQUISITION

On January 24, 2024, Cheetah Net entered into a Stock Purchase Agreement to acquire 100 % of Edward.

The transaction closed on February 2, 2024.

The gross purchase price was $ 1.5 million.

Consideration transferred consisted of $ 0.3 million of cash and the issuance of 1,272,329 shares of Cheetah Net’s Class A common stock with a fair value of $ 1.2 million.

In accordance with ASC 805, Business Combinations (“ASC 805”), it was determined that the fair value of the stock consideration was $ 9 million at the time of the transaction, reflecting a comprehensive evaluation of the stock’s market conditions and liquidity impacted by lock-up period restrictions.

The purchase price was on a preliminary basis as of February 2, 2024.

Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable.

Certain estimated values for the acquisition, including goodwill and deferred taxes, are not yet finalized, and the preliminary purchase price allocations are subject to change as the Company completes its analysis.

The final valuation of assets acquired and liabilities assumed may be different from the estimated values shown below.

Acquired assets acquired and (liabilities) assumed:

Accounts Receivable

Other Current Assets

Right-of-use Lease Asset

Developed Technology

Customer Relationships

Other Noncurrent Assets

Accounts Payable

Accrued Expenses Payable

Operating Lease Liability, Current

Operating Lease Liability, Long Term

Total Purchase Consideration

The fair value of the accounts receivable, other assets, and liabilities assumed approximates their gross contractual amounts.

The fair value of the fixed assets approximates its net carrying value as of the acquisition date.

The fair values of intangible assets, including developed technology, customer relationships, and trade names were determined using assumptions that are representative of those a market participant would use in estimating fair value.

NOTE 9 — LETTER OF CREDIT FINANCING (“LC FINANCING”)

The Company entered into a series of loan agreements with three third-party companies for working capital funding purposes during the three and nine months ended September 30, 2023 and 2022.

The Company entered into a series of loan agreements with three third-party companies for working capital funding purposes during the three months ended March 31, 2024 and 2023.

Pursuant to the agreements, loans payable from LC financing were collateralized by letters of credit from overseas sales of parallel-import vehicles.

Interest expenses are calculated based on the actual number of days the loan was outstanding and payable upon settlement, and the Company is charged an interest rate ranging between 15.0 % and 27.6 % per annum.

The LC financing amounted to $ 3,077,861 and $ 7,105,873 as of September 30, 2023 and December 31, 2022, respectively.

The interest expenses for LC financing were $ 207,648 and $ 789,104 for the three and nine months ended September 30, 2023, respectively, and $ 379,336 and $ 1,356,135 for the three and nine months ended September 30,2022, respectively.

The accounts receivable transactions in connection with letters of credit with book values $ 3,229,854 and $ 7,502,291 were pledged as collateral to guarantee the Company’s borrowings from these three third-party lending companies as of September 30, 2023 and December 31, 2022, respectively (see Note 3).

NOTE 9 — DEALERS FINANCE

Loans payable from dealers finance reflect amounts borrowed from various automobile dealers to finance the purchased vehicles.

The original term of these loans is between five to six years ;

however, the Company repaid these loans within two months .

The Company is charged an interest rate ranging between 5.09 % and 9.84 %, per annum.

The dealers finance amounted to nil and $ 41,747 as of September 30, 2023 and December 31, 2022, respectively.

The interest expenses for dealers finance were $ 959 and $ 3,975 for the three and nine months ended September 30, 2023, respectively, and $ 1,013 and $ 1,122 for the three and nine months ended September 30, 2022, respectively.

Interest expense is calculated based on the actual number of days the loan was outstanding and payable upon settlement, and the Company is charged an interest rate of 18.0 % per annum.

The LC financing amounted to $ 1,004,565 as of December 31, 2023.

There was no balance as of March 31, 2024.

The interest expense for LC financing was $ 23,123 and $ 330,424 for the three months ended March 31, 2024 and 2023, respectively.

The accounts receivable transactions in connection with letters of credit having book values of $ 1,084,775 were pledged as collateral to guarantee the Company’s borrowings from these two third-party lending companies as of December 31, 2023.

There were none pledged as collateral as of March 31, 2024.

(see Note 3).

NOTE 10 — REVOLVING LINE OF CREDIT

2 unchanged sentences

On December 12, 2022, the Company amended the Revolving Line of Credit Agreements to extend the maturity date to April 2024.

During the three and nine months ended September 30, 2023, the Company borrowed a total of $ 708,334 and $ 3,244,488 , respectively, and repaid $ 1,710,197 and $ 2,375,197 , respectively.

As of September 30, 2023 and December 31, 2022, the revolving line of credit balance was $ 869,291 and nil , respectively.

Interest expenses for revolving lines of credit were $ 63,277 and $ 120,675 for the three and nine months ended September 30, 2023 and nil for the three and nine months ended September 30, 2022.

The Company has not entered into any new agreements to modify the terms or extend the duration of these facilities.

During the three months ended March 31, 2024 and 2023, the Company did not borrow or repay any amounts under the revolving lines of credit.

As of March 31, 2024 and December 31, 2023, the revolving line of credit balance was $ 688,711 .

Interest expense incurred under the revolving lines of credit was $ 31,336 and nil for the three months ended March 31, 2024 and 2023, respectively.

NOTE 11 — PREMIUM FINANCE

On July 31, 2023, the Company entered into a Premium Finance Agreement (the "Premium Finance Agreement") with National Partners PFco, LLC.

On July 31, 2023, the Company entered into a Premium Finance Agreement (the “Premium Finance Agreement”) with National Partners PFco, LLC.

Pursuant to the Premium Finance Agreement, the Company borrowed $ 221,139 for the purchase of its directors and officers insurance, at an annual interest rate of 7.75 %.

The premium finance amounted to $ 221,139 and nil as of September 30, 2023 and December 31, 2022, respectively.

The interest expenses for premium finance were $ 3,584 for the three and nine months ended September 30, 2023, and nil for the three and nine months ended September 30, 2022.

The premium finance amounted to $ 74,908 and $ 148,621 as of March 31, 2024 and December 31, 2023, respectively.

Interest expense incurred related to the Premium Finance Agreement was $ 996 for the three months ended March 31, 2024.

No interest expense was incurred related to the Premium Finance Agreement during the three months ended March 31, 2023.

NOTE 12 — LONG-TERM BORROWINGS

Long-term borrowings consisted of the following:

September 30,

Small Business Administration (1)

8 unchanged sentences

The loan bears a fixed interest rate of 3.75 % per annum.

Beginning 12 months from the date of this loan agreement, the Company is required to make a monthly installment payment of $ 731 within the term of loan, with last installment to be paid in May 2050.

Beginning 12 months from the date of this loan agreement, the Company is required to make a monthly installment payment of $ 731 within the term of loan, with the last installment to be paid in May 2050.

On March 16, 2022, the Company entered into an amended agreement with SBA to borrow an additional $ 350,000 for 30 years as working capital to alleviate economic injury caused by the COVID-19 pandemic.

In aggregate, the Company’s borrowings amounted to $ 500,000 with a maturity date of May 23, 2050.

In the aggregate, the Company’s borrowings amounted to $ 500,000 with a maturity date of May 23, 2050.

The amended loan bears a fixed interest rate of 3.75 % per annum.

Beginning from March 2022, 24 months from the date of the original loan agreement, the Company is required to make a new monthly installment payment of $ 2,485 within the remaining term of loan, with the last installment to be paid in May 2050.

The future maturities of the loan from SBA as of September 30, 2023 were as follows:

12 months ending September 30,

The future maturities of the loan from SBA as of March 31, 2024 were as follows:

Future repayment

2024 (excluding the three months ended March 31, 2024)

On May 15, 2020, the Company entered into a loan agreement with Thread Capital Inc.

2 unchanged sentences

This loan agreement was subsequently terminated on May 17, 2021, and the Company entered into a new loan agreement with Thread Capital to borrow an additional $ 171,300 as working capital.

In aggregate, the Company’s borrowings from Thread Capital amounted to $ 221,300 with a maturity date of May 1, 2031.

In the aggregate, the Company’s borrowings from Thread Capital amounted to $ 221,300 with a maturity date of May 1, 2031.

The interest was charged at a fixed annual interest rate of 0.25 % between June 1, 2021 and November 30, 2022.

Beginning from December 1, 2022, the loan bears a fixed annual interest rate of 5.5 %, and the Company is required to make a monthly installment payment of $ 2,721 within the remaining term of loan, with the last installment to be paid in May 2031.

The future maturities of the loan from Thread Capital as of September 30, 2023 were as follows:

12 months ending September 30,

The future maturities of the loan from Thread Capital as of March 31, 2024 were as follows:

Future repayment

For the above-mentioned long-term borrowings, the Company recorded interest expenses of $ 7,751 and $ 23,545 for the three and nine months ended September 30, 2023, respectively, and $ 4,998 and $ 12,652 for the three and nine months ended September 30, 2022, respectively.

2024 (excluding the three months ended March 31, 2024)

For the above-mentioned long-term borrowings, the Company recorded interest expenses of $ 7,552 and $ 7,945 for the three months ended March 31, 2024 and 2023, respectively.

NOTE 13 — RELATED PARTY TRANSACTIONS

6 unchanged sentences

These payables are unsecured, non-interest bearing, and due on demand.

During the three months ended September 30, 2023 and 2022, the Company borrowed a total of $ 16,923 and $ 6,000 , respectively, from Mr.

Huan Liu directly for working capital purposes, and used these funds to purchase vehicles.

During the nine months ended September 30, 2023 and 2022, the Company borrowed an aggregate of $ 45,798 and$ 319,913 , respectively, from Mr.

Huan Liu, applying such funds similarly as working capital for purchasing vehicles.

During the three months ended March 31, 2024 and 2023, the Company did not engage in any borrowing activities with Mr.

The Company made repayments to Mr.

Huan Liu in the amounts of $ 28,875 and $ 1,110,000 during the three months ended September 30, 2023 and 2022, respectively, and in the amounts of $ 28,875 and $ 1,130,584 during the nine months ended September 30, 2023 and 2022, respectively.

Huan Liu in the amounts of $ 13,423 during the three months ended March 31, 2024.

No payments were made to Mr.

Huan Liu during the three months ended March 31, 2023.

There was no balance due to Mr.

Huan Liu as of March 31, 2024.

NOTE 14 — INCOME TAXES

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Total current income tax provision

3 unchanged sentences

For the Three Months Ended

For the Nine Months Ended

September 30,

Federal statutory tax rate

4 unchanged sentences

Deferred tax assets were composed of the following:

September 30,

Deferred tax assets:

3 unchanged sentences

federal net operating loss (“NOL”) of $ 47,905 , which may reduce future federal taxable income.

During the nine months ended September 30, 2023, the Company’s operations utilized NOLs of $ 202,101 , resulting in a cumulative U.S.

federal NOL of $ 125,547 as of September 30, 2023, which is carried forward indefinitely.

As of September 30, 2023, the Company also had a cumulative state NOL of $ 175,252 , which may reduce future state taxable income, and the NOL balance as of September 30, 2023 will expire beginning in 2041.

The Company was not previously subject to the interest expense limitation under §163(j) of the U.S.

During the three months ended March 31, 2024, the Company’s operations accumulated a NOL of $ 819,468 , resulting in a cumulative U.S.

federal NOL of $ 1,008,541 , as of March 31, 2024, which is carried forward indefinitely.

As of March 31, 2024, the Company also had a cumulative State NOL of $ 1,138,074 , which may reduce future State taxable income, and the State NOL balance as of March 31, 2024 will expire beginning in 2041.

The Company was not previously subject to the interest expenses limitation under §163(j) of the U.S.

Internal Revenue Code, due to the small business exemption.

13 unchanged sentences

Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, including its organization and structure disclosed in Note 1, such experience may not be indicative of future results.

As of September 30, 2023 and December 31, 2022, $ 704,869 and $ 58,381 of the Company’s cash was on deposit at financial institutions in the U.S., respectively, which were insured by the Federal Deposit Insurance Corporation subject to certain limitations.

As of March 31, 2024 and December 31, 2023, $ 903,204 and $ 432,998 , respectively, of the Company’s cash was on deposit at financial institutions in the U.S., which are insured by the Federal Deposit Insurance Corporation subject to certain limitations.

The Company has not experienced any losses in such accounts.

Accounts receivable are typically unsecured and derived from revenue earned from parallel-import car dealers, thereby exposing the Company to a credit risk.

Accounts receivable are typically unsecured and derived from revenue earned from parallel-import car dealers, thereby exposing the Company to credit risk.

This risk is mitigated by the Company’s assessment of its parallel-import car dealers’ creditworthiness and its ongoing monitoring of outstanding balances.

1 unchanged sentence

The Company’s major customers are parallel-import automobile dealers.

For the nine months ended September 30, 2023, three parallel-import car dealers accounted in total for 98.7 % ( 45.2 %, 29.7 %, and 23.8 %, respectively) of the Company’s total revenue.

For the nine months ended September 30, 2022, three parallel-import car dealers accounted for approximately 59.5 % ( 29.1 %, 18.7 %, and 11.7 %, respectively) of the Company’s total revenue.

As of September 30, 2023, three parallel-import car dealers accounted for 97.7 % ( 50.9 %, 32.2 %, and 14.6 %, respectively) of the accounts receivable balance.

As of December 31, 2022, two parallel-import car dealers accounted for approximately 88.7 % ( 77.0 % and 11.7 %, respectively) of the accounts receivable balance.

For the three and nine months ended September 30, 2023, one U.S.-based automobile dealership accounted for approximately 7.2 % and 8.3 %, respectively, of the Company’s total purchases.

For the three and nine months ended September 30, 2022, one U.S.-based automobile dealership accounted for approximately 6.2 % and 10.3 %, respectively, of the Company’s total purchases.

For the three months ended March 31, 2024, one parallel-import car dealer accounted for 100 % of the Company’s revenue from parallel-import vehicles.

For the three months ended March 31, 2023, three parallel-import car dealers accounted for 100 % ( 55.2 %, 28.6 %, and 16.2 %, respectively) of the Company’s total revenue.

As of March 31, 2024, three parallel-import car dealers in our parallel-import vehicle segment accounted for 97.4 % ( 54.5 %, 27.3 %, and 15.6 %, respectively) of the accounts receivable balance.

As of December 31, 2023, three parallel-import car dealers accounted for approximately 98.0 % ( 58.1 %, 28.2 %, and 11.7 %, respectively) of the accounts receivable balance.

During the three months ended March 31, 2024, the Company did not purchase any vehicles.

During the three months ended March 31, 2023, one U.S.-based automobile dealership accounted for approximately 10.2 % of the Company’s total purchases.

NOTE 16 — STOCKHOLDERS’ EQUITY

Cheetah Net was established under the laws of the State of North Carolina on August 9, 2016.

Under the Company’s amended and restated articles of incorporation on July 11, 2022, the total authorized number of common stocks is 100,000,000 with par value of $ 0.0001 per common stock, which consists of 91,750,000 shares of Class A common stock and 8,250,000 shares of Class B common stock.

The total number of shares of common stock outstanding is 15,000,000 , which consists of 6,750,000 shares of Class A common stock and 8,250,000 shares of Class B common stock.

Under the Company’s amended and restated articles of incorporation on July 11, 2022, the total authorized number of shares of common stock is 100,000,000 with par value of $ 0.0001 , which consists of 91,750,000 shares of Class A common stock and 8,250,000 shares of Class B common stock.

Holders of Class A common stock and Class B common stock have the same rights except for voting and conversion rights.

In respect of matters requiring the votes of stockholders, each share of Class A common

stock is entitled to one vote, and each share of Class B common stock is entitled to 15 votes.

In respect of matters requiring the votes of stockholders, each share of Class A common stock is entitled to one vote, and each share of Class B common stock is entitled to 15 votes.

Class B common stock is convertible into Class A common stock at any time after issuance at the option of the holder on a one-to-one basis.

5 unchanged sentences

The net proceeds were approximately $ 2.7 million, of which approximately $ 1.2 million was received in 2022 and $ 1.2 million in 2023, for a total receipt of approximately $ 2.4 million.

After negotiations between the Investors and the Company regarding the fund’s release terms, an agreement was reached on November 2, 2023, stipulating that the outstanding $ 600,000 would be paid by the Investors within six months following the Company’s IPO.

On August 3, 2023, the Company closed its IPO of 1,250,000 shares of Class A common stock at a public offering price of $ 4.00 per share, for aggregate gross proceeds of $ 5.0 million before deducting underwriting discounts and other offering expenses, including a grant to the underwriter of warrants to purchase 62,500 shares of common stock (the “Warrants”), with an exercise price of $ 5.00 per share.

After negotiations between Rapid Proceed Limited (“Rapid”), one of the Investors, and the Company regarding the fund’s release terms, an agreement was reached on November 2, 2023, stipulating that the outstanding $ 0.6 million would be paid by Rapid within six months following the Company’s initial public offering (“IPO”).

On March 13, 2024, considering the impact of market volatility and the long-term benefits of continued cooperation, Rapid requested and the Company agreed to extend the payment due date of the outstanding $ 0.6 million to September 30, 2024.

On August 3, 2023, the Company closed its IPO of 1,250,000 shares of Class A common stock at a public offering price of $ 4.00 per share, for aggregate gross proceeds of $ 5.0 million before deducting underwriting discounts and other offering expenses, including the issuance to the underwriter of warrants to purchase 62,500 shares of common stock (the “Warrants”), with an exercise price of $ 5.00 per share.

The Company’s Class A common stock began trading on the Nasdaq Capital Market under the ticker symbol “CTNT” on August 1, 2023.

As of September 30, 2023, there were 9,666,000 shares of Class A common stock issued and outstanding.

On January 24, 2024, the Company entered into a stock purchase agreement with Edward and Juguang Zhang, Edward’s sole stockholder (the “Seller”).

Pursuant to the Agreement, the Company agreed to acquire 100 % of the shares in Edward from the Seller (the “Acquisition”).

On February 2, 2024, the Company closed the Acquisition for a total purchase price that included a cash payment of $ 300,000 and the issuance of 1,272,329 shares of the Company’s unregistered Class A common stock, initially valued at $ 1,200,000 .

Subsequent valuation determined the fair value of these shares to be $ 9 million.

Please see Note 8 for further details.

As of March 31, 2024, there were 10,938,329 shares of Class A common stock issued and outstanding .

As of March 31, 2024, there were 10,938,329 shares of Class A common stock and 8,250,000 shares of Class B common stock issued and outstanding .

The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement.

2 unchanged sentences

Shares Issuable as of

September 30,

Title of Warrant

1 unchanged sentence

August 2023 – underwriter warrants

Termination of Warrants

On March 4, 2024, the Company and Maxim Group LLC signed an agreement to terminate 62,500 outstanding warrants that had previously been granted to Maxim Group LLC.

On March 27, 2024, the Company completed the payment of termination fees totaling $ 78,125 , which was recorded as an offset to additional paid in capital within stockholders’ equity.

NOTE 17 — COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

Therefore, the Plaintiff is seeking $ 86,355 in monetary damages, reimbursement for all costs and attorney fees, and any other relief the Court may deem just and proper.

The Company accrued a payable total of $ 86,285 , which was recorded in accounts payable on the unaudited condensed consolidated balance sheet as of September 30, 2023.

On October 2, 2023, the Company entered into a settlement agreement with the Plaintiff, pursuant to which the Company committed to a total payment of $ 55,000 .

An initial payment of $ 27,500 was made on December 26, 2023, followed by the final payment of $ 27,500 on March 15, 2024.

On February 23, 2023, the Company filed a complaint in the Supreme Court of the State of New York County against Stefanie A.

7 unchanged sentences

Subsequently, an inquest will be conducted to determine the precise amount owed to the Company.

Based on the outcome of the current motion and the Company’s overall assessment of the case, the Company is optimistic about its chances of success in this litigation.

As of the date of this quarterly report, the Mercedes has been found by the police and turned over to the Company.

Based on the outcome of the current motion and the Company’s overall assessment of the case, the Company believes it will be successful in this litigation.

As of the date of this quarterly report, the Mercedes has been found by the police and returned to the Company.

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-Q

Item 1. Financial Statements