What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-08-13 · 267 added, 172 removed, 574 unchanged (43% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS:

Cash and cash equivalents

Accounts receivable

Accounts receivable, net

Loans receivable

25 unchanged sentences

Common stock, $ 0.0001 par value, 1,000,000,000 shares authorized;

32,398,329 and 17,916,000 shares issued and outstanding , including:

Class A common stock, $ 0.0001 par value, 91,750,000 shares authorized, 24,148,329 and 9,666,000 shares issued and outstanding

Class B common stock, $ 0.0001 par value, 8,250,000 shares authorized, 8,250,000 shares issued and outstanding

2,507,093 and 1,119,750 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively, including*:

Class A common stock, $ 0.0001 par value, 891,750,000 shares authorized, 1,960,218 and 604,125 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Class B common stock, $ 0.0001 par value, 108,250,000 shares authorized, 546,875 and 515,625 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Retained earnings (Accumulated deficit)

( 2,528,861 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

* Retrospectively adjusted for the reverse split of the Company’s common stock at a ratio of 1-for-16, which took effect on October 21, 2024 (the “Reverse Stock Split”).

See also Note 17.

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

1 unchanged sentence

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

For the Nine Months Ended

September 30,

Cash flows from operating activities:

4 unchanged sentences

Amortization of Intangible Assets

Deferred tax provision

Allowance of credit loss of accounts receivable

Share-based compensation expenses

Deferred income tax expenses (benefits)

( 1,057,853 )

Changes in operating assets and liabilities:

2 unchanged sentences

Prepaid expenses and other current assets

Deferred revenue

Other payables and other current liabilities

6 unchanged sentences

( 2,385,795 )

Loans repayments from third parties

Net cash used in investing activities

( 2,970,912 )

Cash flows from financing activities:

Proceeds from follow-on public offering, net of expenses

Proceeds from initial public offering, net of expenses

Cash paid for warrant termination

7 unchanged sentences

Proceeds from loans from dealer finance

Repayments of loans from dealers finance

Repayments of loans from dealer finance

Proceeds from Line of Credit

Repayment of Line of Credit

( 2,375,197 )

Proceeds from premium finance

Repayments of premium finance

8 unchanged sentences

Supplemental cash flow information

Cash paid for interest

Cash paid for interests

Noncash Financing and investing activities:

23 unchanged sentences

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

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

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

Parallel-import Vehicles

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

The Company and its wholly owned subsidiaries are primarily engaged in the comprehensive logistics and warehousing business.

Logistics and Warehousing

2 unchanged sentences

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

Parallel-import Vehicles

The Company purchases automobiles from the U.S.

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

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8 unchanged sentences

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 June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the interim period ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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

8 unchanged sentences

Cash and cash equivalents consist of cash in bank and interest-bearing certificates of deposit with an initial term of three months when purchased.

September 30,

Cash held in Current Accounts

2 unchanged sentences

Accounts receivable

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful accounts.

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.

The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances.

The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends.

The Company usually determines the adequacy of reserves for credit loss based on individual account analysis and historical collection trends.

The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due.

1 unchanged sentence

The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the unaudited condensed consolidated statements of operations.

Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote.

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 June 30, 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.

Delinquent account balances are written off against the allowance of credit loss after management has determined that the likelihood of collection is remote.

In circumstances in which the Company receives payments for accounts receivable that have previously been written off, the Company reverses the allowance of credit loss.

As of September 30, 2024 and December 31, 2023, there were $ 1,095,094 and nil for allowance of credit loss of accounts receivable recorded.

See Note 3-Accounts receivable for details.

Loans receivable

7 unchanged sentences

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.

The value of inventory mainly 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 shrinkage.

The Company recorded no inventory reserve as of June 30, 2024 and December 31, 2023.

Additionally, the Company did not hold any inventory within the logistics and warehousing business segment as of June 30, 2024.

The Company recorded no inventory reserve as of September 30, 2024 and December 31, 2023.

Additionally, the Company did not hold any inventory within the logistics and warehousing business segment as of September 30, 2024.

Property, plant, and equipment, net

5 unchanged sentences

Leasehold improvements

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expenses as incurred.

Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized.

8 unchanged sentences

The estimated useful lives of intangible assets with finite lives are reassessed if circumstances occur that indicate the original estimated useful lives have changed.

The Company did no t recognize any indefinite-lived intangible assets for the six months ended June 30, 2024.

The Company did no t recognize any indefinite-lived intangible assets for the nine months ended September 30, 2024.

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, deferred revenue, and other payables and other current liabilities, approximated the fair value of the respective assets and liabilities as of June 30, 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 June 30, 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.

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 September 30, 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 September 30, 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 June 30, 2024 and December 31, 2023.

There was no impairment for ROU lease assets as of September 30, 2024 and December 31, 2023.

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

8 unchanged sentences

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 flows.

The determination of discounted cash flows of the reporting units and assets and liabilities within the reporting units requires

significant estimates and assumptions.

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.

4 unchanged sentences

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.

Share-based compensation

The Company has adopted its Amended and Restated 2024 Stock Incentive Plan (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.

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.

The amount of cost recognized is adjusted to reflect any expected forfeitures prior to vesting.

The fair value of stock award is measured at grant date’s per share closing price of the Company’s common stock, and the fair value of option is measured at grant date using the Black-Scholes pricing model, taking into account the terms and conditions upon which the share-based awards are granted.

Where the employees have to meet vesting conditions before becoming unconditionally entitled to the share-based awards, the total estimated fair value of the share-based awards is spread over the vesting period, taking into account the probability that the share-based awards will vest, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date.

Revenue recognition

19 unchanged sentences

Historically, no customer returns have occurred.

Therefore, the Company did not provide any sales return allowances for the three months ended June 30, 2024 and 2023.

Therefore, the Company did not provide any sales return allowances for the three months ended September 30, 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.

4 unchanged sentences

Contract balances and remaining performance obligations

The Company did not have any contract assets or liabilities as of June 30, 2024 and December 31, 2023.

The Company did not have any contract assets or liabilities as of September 30, 2024 and December 31, 2023.

Disaggregation of Revenue

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 and six months ended June 30, 2024 and 2023 was as follows:

The Company’s disaggregation of revenue for the three and nine months ended September 30, 2024 and 2023 was as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenue from Parallel-Import Vehicles

6 unchanged sentences

Geographic information

The Company’s total revenue by geographic area for the three and six months ended June 30, 2024 and 2023 was as follows:

The Company’s total revenue by geographic area for the three and nine months ended September 30, 2024 and 2023 was as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

domestic market

16 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 June 30, 2024 and December 31, 2023.

The Company does not believe that there were any uncertain tax positions as of September 30, 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 June 30, 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.

As of September 30, 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.

5 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 six months ended June 30, 2024 and 2023, there were no dilutive shares outstanding.

For the three and nine months ended September 30, 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 nil and $ 20,610 for the three and six months ended June 30, 2024, respectively, and $ 78,252 and $ 291,712 for the three and six months ended June 30, 2023, respectively.

Total shipping and handling expenses were nil and $ 20,610 for the three and nine months ended September 30, 2024, respectively, and $ 113,470 and $ 405,182 for the three and nine months ended September 30, 2023, respectively.

Segment reporting

11 unchanged sentences

The Company will adopt this Update within its annual reporting period beginning on January 1, 2024 and is evaluating the impact of the adoption on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 intends to improve the transparency of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively.

The Company is currently assessing the impact of this guidance.

However, the Company does not expect a material impact to the consolidated financial statements.

NOTE 3 — ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

September 30,

Accounts receivable

1 unchanged sentence

Logistics and Warehousing

allowance for doubtful accounts

allowance of credit loss

( 1,095,094 )

Total accounts receivable

1 unchanged sentence

Parallel-import Vehicles Segment

The Company identified four accounts with deferred payments overdue for over 150 days, totaling approximately $ 3.9 million of the $ 4.8 million total deferred payment balances as of June 30, 2024, which were backed by third-party guarantees.

During the first half 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 June 30, 2024, the following table summarizes the Company’s accounts receivable aging:

The Company identified four accounts with deferred payments overdue for over 150 days, totaling approximately $ 3.3 million of the $ 4.1 million total deferred payment balances as of September 30, 2024, which were backed by third-party guarantees.

During the nine months ended September 30, 2024, the Company successfully collected approximately $ 2.5 million of the December 31, 2023 overdue balance.

The Company conducted an updated assessment, considering recent collection experience, changes in economic conditions, and the specific risk profiles of each overdue account.

As a result, allowances for credit loss have been recorded for these balances, consistent with the Company’s policy of applying higher allowance percentages to accounts with extended aging to reflect the increased risk of uncollectible.

Specifically, a 30 % allowance has been recorded for one account with a balance overdue by more than 365 days, and a 25 % allowance has been recorded for accounts overdue by more than 210 days.

The following table presents the Company’s accounts receivable aging as of September 30, 2024:

September 30,

Accounts receivable aging:

1 unchanged sentence

Over 365 days

allowance for doubtful accounts

allowance for credit loss

( 1,095,094 )

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 June 30, 2024.

As of the date of this report, the Company has collected approximately $ 0.5 million in accounts receivable.

There were none pledged as collateral as of September 30, 2024.

As of the date of this quarterly report, the Company has collected approximately $ 0.1 million in accounts receivable.

The Company continuously monitors the collection of accounts receivable and will make adjustments as necessary based on the ongoing assessment of credit risk and payment performance.

1 unchanged sentence

Loans receivable consisted of the following:

September 30,

Vehicle pledge loan receivable

Short-term loan

Short-term loan receivable

Total loans receivable

3 unchanged sentences

The loans had an annual interest rate of 14.4 % for the first 90 days and 18.0 % for any duration beyond that.

As of June 30, 2024, both vehicle pledge loans were repaid.

As of September 30, 2024, both vehicle pledge loans were repaid.

On December 11, 2023, the Company provided an unsecured short-term loan to one of its customers.

2 unchanged sentences

However, on the maturity date, the Company and the borrower agreed to amend the terms of the loan to extend the maturity date to June 12, 2024, and increase the annual interest rate to 18.0 % for the extension period.

No impairment is required as the loan had been assessed as collectible.

No impairment was required as the loan had been assessed as collectible.

Interest accrued through February 12, 2024, remained at the original rate of 12.0 % per annum, and any interest accruing after this date was subject to the new rate of 18.0 % per annum.

As of June 30, 2024, the customer had fully repaid the principal of the loan.

As of September 30, 2024, the customer had fully repaid the principal and related interests of the loan.

On June 20, 2024, the Company entered into an unsecured short-term loan agreement with Hongkong Sanyou Petroleum Co Limited.

1 unchanged sentence

This loan carried an annual interest rate of 12.0 % and was set to mature in 12 months .

Interest income for the three and six months ended June 30, 2024 was $ 22,326 and $ 49,072 , respectively.

On July 23, 2024, the Company extended an additional unsecured short-term loan of $ 1,500,000 to Hongkong Sanyou Petroleum Co.

Limited under the same terms.

On August 16, 2024, the Company entered into an unsecured short-term loan agreement with Asia Finance Investment Limited for a principal amount of $ 649,250 .

After mutual debt adjustments, the adjusted principal balance of this loan is $ 558,295 .

This loan accrues interest at a monthly rate of 1.0 %, with a single lump-sum repayment due 12 months from the disbursement date.

The agreement includes a mutual debt adjustment provision, where the balance after offsetting mutual debts is applied to reduce interest charges.

Any overdue payments under this agreement bear an annual interest rate of 18 %.

Interest income for the three and nine months ended September 30, 2024 was $ 73,541 and $ 113,958 , respectively.

These amounts were accrued and recognized as interest receivable.

The balance as of June 30, 2024 has been fully collected as of the date of this quarterly report.

NOTE 5 — OTHER RECEIVABLES

Other receivables consisted of the following:

June 30, 2024

September 30, 2024

December 31, 2023

4 unchanged sentences

Logistics and Warehousing

Custom Duties Receivable (4)

Allowance for doubtful accounts

Allowance for credit loss

Total Other Receivables

2 unchanged sentences

(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, PLANT, AND EQUIPMENT, NET

1 unchanged sentence

Estimated Useful Life

June 30, 2024

September 30, 2024

December 31, 2023

13 unchanged sentences

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

On July 19, 2024, the Company entered into a non-cancellable operating lease with an independent third party, Zina Development, LLC, for office space in Irvine, California, comprising approximately 15,000 square feet.

The lease term commenced on July 23, 2024, and expires on July 31, 2027.

The lease is guaranteed by West Buy Media Inc., a North Carolina Corporation 100 % owned by the Company’s chief executive officer, Huan Liu, ensuring the Company’s full payment and performance of all obligations under the lease.

Monthly base rent payments under this lease range from $ 42,000 to $ 45,000 , with scheduled increases over the lease term.

The office space is designated for general business operations.

In accordance with ASC 842, the Company has recognized a right-of-use asset and a lease liability on its balance sheet related to this operating lease.

On April 28, 2023, the Company entered a First Amendment to Lease Agreement (the “ Amended Lease ”) with one of its landlords, which amended a previous lease agreement between the two parties, whereby the Company leases office space from the landlord with an initial lease term from December 1, 2020 to December 31, 2023.

5 unchanged sentences

The short-term lease runs month-to-month from January 1, 2024 to August 31, 2024.

Both operating lease expense and short-term lease expense are recognized in general and administrative expenses.

The components of lease expense for the six months ended June 30, 2024 and 2023 were as follows:

For the Six Months Ended

Leases expense

Operating lease expense

Short-term lease expense

Total leases expense

June 30, 2024

Both operating lease expenses and short-term lease expenses are recognized in general and administrative expenses.

The components of lease expenses for the nine months ended September 30, 2024 and 2023 were as follows:

For the Nine Months Ended

September 30,

Leases expenses

Operating lease expenses

Short-term lease expenses

Total leases expenses

September 30, 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 June 30, 2024 and December 31, 2023:

June 30, 2024

The weighted average remaining lease terms and discount rates for all operating leases were as follows as of September 30, 2024 and December 31, 2023:

September 30, 2024

December 31, 2023

3 unchanged sentences

* The Company used weighted average incremental borrowing rate of 13.5 % per annum for its lease contracts based on the Company’s current borrowings from various financial institutions.

During the three months ended June 30, 2024 and 2023, the Company incurred total operating lease expenses of $ 81,347 and $ 74,675 , respectively.

During the six months ended June 30, 2024 and 2023, the Company incurred total operating lease expenses of $ 167,552 and $ 130,280 , respectively.

As of June 30, 2024, future maturities of lease liabilities were as follows:

2024 (excluding the six months ended June 30, 2024)

During the three months ended September 30, 2024 and 2023, the Company incurred total operating lease expenses of $ 139,555 and $ 28,962 , respectively.

During the nine months ended September 30, 2024 and 2023, the Company incurred total operating lease expenses of $ 251,302 and $ 133,277 , respectively.

As of September 30, 2024, future maturities of lease liabilities were as follows:

2024 (excluding the nine months ended September 30, 2024)

Total lease payments

5 unchanged sentences

The gross purchase price was $ 1.5 million.

Consideration paid 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 market value of $ 1.2 million.

In accordance with ASC 805, Business Combinations (“ASC 805”), the fair value of the stock consideration was $ 0.9 million at the time of the transaction, reflecting a 25 % discount to the market value as determined by a third-party appraisal firm after performing a comprehensive evaluation of the impact of the lock up period on the stock’s market ability and liquidity.

Consideration paid consisted of $ 0.3 million of cash and the issuance of 79,521 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 $ 0.9 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 initially recorded on a preliminary basis as of February 2, 2024.

2 unchanged sentences

As a result, adjustments were made, particularly concerning the deferred tax liability related to intangible assets, which led to a corresponding adjustment in the value of goodwill.

The final valuation of assets acquired and liabilities assumed was reflected in the financial statements as of June 30, 2024 and shown below.

The final valuation of assets acquired and liabilities assumed was reflected in the financial statements as of September 30, 2024 and shown below.

As of June 30, 2024

23 unchanged sentences

Customer Relationships

During the three months ended June 30, 2024 and 2023, the Company incurred accumulated amortization expenses of $ 13,071 and nil , respectively.

During the six months ended June 30, 2024 and 2023, the Company incurred accumulated amortization expenses of $ 21,786 and nil , respectively.

During the three months ended September 30, 2024 and 2023, the Company incurred accumulated amortization expenses of $ 13,071 and nil , respectively.

During the nine months ended September 30, 2024 and 2023, the Company incurred accumulated amortization expenses of $ 34,858 and nil , respectively.

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 six months ended June 30, 2024 and 2023.

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

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

Interest expense is calculated based on the actual number of days elapsed at an interest rate of 18.0 % per annum.

Interest expenses are calculated based on the actual number of days elapsed at 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 June 30, 2024.

Interest expense for LC financing was nil and $ 23,123 for the three and six months ended June 30, 2024, respectively, and $ 251,031 and $ 581,456 for the three and six months ended June 30, 2023, respectively.

There was no balance as of September 30, 2024.

Interest expenses for LC financing were nil and $ 23,123 for the three and nine months ended September 30, 2024, respectively, and $ 207,648 and $ 789,104 for the three and nine months ended September 30, 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 no accounts receivable pledged as collateral as of June 30, 2024.

There were no accounts receivable pledged as collateral as of September 30, 2024.

(see Note 3).

4 unchanged sentences

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

During the three and six months ended June 30, 2024, the Company did not borrow under the revolving lines of credit.

The Company repaid $ 104,170 during the three months ended June 30, 2024.

As of June 30, 2024 and December 31, 2023, the revolving lines of credit balance was $ 584,541 and $ 688,711 .

Interest expense incurred under the revolving lines of credit was $ 27,899 and $ 59,235 for the three and six months ended June 30, 2024, respectively, and $ 57,398 for the three and six months ended June 30, 2023, respectively.

During the three and nine months ended September 30, 2024, the Company did not borrow under the revolving lines of credit.

The Company repaid $ 584,541 during the three months ended September 30, 2024.

As of September 30, 2024 and December 31, 2023, the revolving lines of credit balance was $ nil and $ 688,711 .

Interest expenses incurred under the revolving lines of credit were $ 6,430 and $ 65,665 for the three and nine months ended September 30, 2024, respectively, and $ 63,277 and $ 120,675 for the three and nine months ended September 30, 2023, respectively.

NOTE 11 — PREMIUM FINANCE

1 unchanged sentence

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 nil and $ 148,621 as of June 30, 2024 and December 31, 2023, respectively.

Interest expense incurred related to the Premium Finance Agreement was $ 996 for the three and six months ended June 30, 2024, respectively.

No interest expense was incurred related to the Premium Finance Agreement during the three and six months ended June 30, 2023.

As of September 30, 2024, the outstanding balance for this Premium Finance Agreement has been fully repaid.

On August 1, 2024, the Company entered into a premium finance agreement (the “Premium Finance Agreement”) with ETI Financial Corporation to finance the purchase of its directors and officers’ insurance.

Pursuant to the Premium Finance Agreement, the Company borrowed $ 205,774.80 at an annual interest rate of 8.51 %.

The loan is structured to be repaid in 10 monthly installments, starting with the first payment on September 1, 2024.

The premium finance amounted to $ 178,801 and $ 148,621 as of September 30, 2024 and December 31, 2023, respectively.

Interest expenses incurred related to the Premium Finance Agreement were $ 1,404 and $ 2,400 for the three and nine months ended September 30, 2024, respectively.

Interest expenses incurred related to the Premium Finance Agreement during the three and nine months ended September 30, 2023 were both $ 3,584 .

NOTE 12 — LONG-TERM BORROWINGS

Long-term borrowings consisted of the following:

September 30,

Small Business Administration (1)

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Under the terms of the SBA loan, the loan proceeds are used as working capital to alleviate economic injury caused by the COVID-19 pandemic.

The loan bears a

fixed interest rate of 3.75 % per annum.

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 the last installment to be paid in May 2050.

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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 SBA loan as of June 30, 2024 were as follows:

The future maturities of the SBA loan as of September 30, 2024 were as follows:

Future repayment

2024 (excluding the six months ended June 30, 2024)

2024 (excluding the nine months ended September 30, 2024)

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

3 unchanged sentences

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

Interest is payable at a fixed annual interest rate of 0.25 % between June 1, 2021 and November 30, 2022.

Interest is payable at a fixed annual interest rate of 0.25 % between September 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 June 30, 2024 were as follows:

The future maturities of the loan from Thread Capital as of September 30, 2024 were as follows:

Future repayment

2024 (excluding the six months ended June 30, 2024)

For the above-mentioned long-term borrowings, the Company recorded interest expense of $ 8,011 and $ 15,563 for the three and six months ended June 30, 2024, respectively, and $ 7,849 and $ 15,794 for the three and six months ended June 30, 2023, respectively.

2024 (excluding the nine months ended September 30, 2024)

For the above-mentioned long-term borrowings, the Company recorded interest expenses of $ 7,027 and $ 22,590 for the three and nine months ended September 30, 2024, respectively, and $ 7,751 and $ 23,545 for the three and nine months ended September 30, 2023, respectively.

NOTE 13 — STOCK BASED COMPENSATION

On August 16, 2024, the Company’s board of directors approved the adoption of the Plan.

Subsequently, on September 30, 2024, the Company’s stockholders approved the Plan.

The Plan provides for the granting of share-based awards, including options, restricted stock, restricted stock units, dividend equivalents, and other awards to directors, employees, and consultants of the Company.

Vested shares

On September 30, 2024, the compensation committee of the Company’s board of directors approved the grant of 45,938 shares of Class A common stock and 31,250 shares of Class B common stock (the “Award”) to Mr.

Huan Liu, CEO of the Company.

The Award vested immediately upon grant.

Nonvested shares

On September 30, 2024, the compensation committee of the Company’s board of directors approved the grant of 18,750 and 54,062 nonvested shares of Class A common stock to one director, one officer and five employees, respectively, vesting ratably on each of the first three anniversaries of the grant date.

A summary of the nonvested shares activity for the nine months ended September 30, 2024 is as follows:

Average Grant

Date Fair Value

Per Share (US$)

Outstanding as of December 31, 2023

Outstanding as of September 30, 2024

The fair value of vested and nonvested shares is determined by the market closing price of Class A common stock at the grant date.

Accordingly, the Company recorded share-based compensation expenses of $ 261,666 for the nine months ended September 30, 2024.

As of September 30, 2024, total unrecognized compensation cost relating to nonvested shares was $ 233,002 , which is to be recognized over a weighted average period of 3 years.

NOTE 14 — RELATED PARTY TRANSACTIONS

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Chief Executive Officer (“CEO”) and Chairman of the Board of Directors

West Buy Media Inc.

(“West Buy Media”)

100 % owned by Mr.

Huan Liu, CEO and Chairman of the Board of Directors

West Buy Media Inc., a North Carolina Corporation, served as the guarantor in connection with the Company’s operating lease signed on July 19, 2024 with an independent third party, Zina Development, LLC..

West Buy Media provides guarantees to the Company’s full payment and performance of all obligations in connection with this Lease.

(also see NOTE 7 — LEASES).

Due to a related party

September 30,

Amount due to a related party represents amounts due to the Company’s CEO and Chairman of the Board of Directors, Mr.

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

During the three and six months ended June 30, 2024, the Company did not borrow any amounts from Mr.

During the three and nine months ended September 30, 2024, the Company did not borrow any amounts from Mr.

Repayments made to Mr.

Huan Liu totaled $ 13,423 for the six months ended June 30, 2024, all of which occurred in the first quarter.

No payments were made to Mr.

Huan Liu during the three and six months ended June 30, 2023.

Huan Liu totaled $ 13,423 for the nine months ended September 30, 2024, with no repayments made during the three-month period.

During the three and nine months ended September 30, 2023, repayments made to Mr.

Huan Liu were $ 28,875 .

There was no balance due to Mr.

Huan Liu as of June 30, 2024.

Huan Liu as of September 30, 2024.

NOTE 15 — INCOME TAXES

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total current income tax provision

Total deferred income tax expenses (benefits)

Total income tax benefit

( 1,057,297 )

Total income tax benefits

( 1,052,969 )

Reconciliations of the statutory income tax rate to the effective income tax rate were as follows:

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Federal statutory tax rate

4 unchanged sentences

Deferred tax assets, net were composed of the following:

September 30,

Deferred tax assets:

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

During the six months ended June 30, 2024, the Company’s operations accumulated a NOL of $ 1,666,246 , resulting in a cumulative U.S.

federal NOL of $ 1,877,582 , as of June 30, 2024, which is carried forward indefinitely.

As of June 30, 2024, the Company also had a cumulative State NOL of $ 1,984,852 , which may reduce future State taxable income, and the State NOL balance as of June 30, 2024 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 nine months ended September 30, 2024, the Company’s operations accumulated a NOL of $ 2,882,692 , resulting in a cumulative U.S.

federal NOL of $ 3,201,298 , as of September 30, 2024, which is carried forward indefinitely.

As of September 30, 2024, the Company also had a cumulative State NOL of $ 3,201,298 , which may reduce future State taxable income, and the State NOL balance as of September 30, 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.

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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 June 30, 2024 and December 31, 2023, all 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.

As of September 30, 2024 and December 31, 2023, all 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 in our parallel - import vehicle business are typically unsecured and derived from revenue earned from parallel-import car dealers, thereby exposing the Company to credit risk.

Accounts receivable in the Company’s parallel-import vehicle business are typically unsecured and derived from revenues 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.

Concentrations

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

For the six months ended June 30, 2024, two parallel-import car dealer accounted for 100 % ( 87.7 % and 12.3 %, respectively) of the Company’s revenue from parallel-import vehicles.

For the six months ended June 30, 2023, three parallel-import car dealers accounted for 100 % ( 41.5 %, 30.8 %, and 27.7 %, respectively) of the Company’s total revenue.

As of June 30, 2024, three parallel-import car dealers in our parallel-import vehicles segment accounted for 93.5 % ( 52.4 %, 26.2 %, and 14.9 %, respectively) of the accounts receivable balance.

Parallel-import automobile dealers were our major customers during the year ended December 31, 2023.

The Company has undergone a business transformation since the acquisition of Edward, which happened in February 2024 (see also NOTE 8 — Intangible Asset and Goodwill).

As of the date of this quarterly report, the Company’s logistic and warehousing business is still in its early stage.

For the nine months ended September 30, 2024, two parallel-import car dealers accounted for 100 % ( 87.7 % and 12.3 %, respectively) of the Company’s revenue from parallel-import vehicles.

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

As of September 30, 2024, three parallel-import car dealers in our parallel-import vehicles segment accounted for 92.4 % ( 57.5 %, 17.5 %, and 17.4 %, 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 and six months ended June 30, 2024, the Company did not purchase any vehicles.

During the three and six months ended June 30, 2023, one U.S.-based automobile dealership accounted for approximately 5.5 % and 9.9 %, respectively, of the Company’s total purchases.

During the three and nine months ended September 30, 2024, the Company did not purchase any vehicles.

During 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.

NOTE 17 — STOCKHOLDERS’ EQUITY

1 unchanged sentence

Under the Company’s amended and restated articles of incorporation on July 2, 2024, the total authorized number of shares of common stock is 1,000,000,000 with par value of $ 0.0001 , which consists of 891,750,000 shares of Class A common stock and 108,250,000 shares of Class B common stock.

The Company also has the authority to issue 500,000 shares of preferred stock as deemed necessary with a par value per share equal to the par value per share of the Class A common stock.

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

9 unchanged sentences

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.

As of September 30, 2024, the outstanding balance of subscription payments had been collected.

On August 3, 2023, the Company closed its IPO of 78,125 shares of Class A common stock at a public offering price of $ 64.00 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 3,906 shares of common stock (the “Warrants”), with an exercise price of $ 80.00 per share.

5 unchanged sentences

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 .

On May 14, 2024, the Company entered into a placement agency agreement with AC Sunshine Securities LLC on a best efforts basis, relating to the Company’s public offering (the “May Offering”) of 825,625 shares of Class A common stock for a price of $ 9.92 per share, less certain placement agent fees.

4 unchanged sentences

The May Offering resulted in gross proceeds to the Company of approximately $ 8.19 million, before deducting placement agent fees and other offering expenses and fees.

As of June 30, 2024, there were 24,148,329 shares of Class A common stock and 8,250,000 shares of Class B common stock issued and outstanding .

On July 25, 2024, the Company entered into a securities purchase agreement with certain institutional investors for a follow-on offering of 404,979 shares of its Class A common stock, par value $ 0.0001 per share, at a price of $ 3.68 per share.

On the same day, the Company entered into a placement agency with FT Global Capital, Inc., who acted as the exclusive placement agent on a best efforts basis in connection with such offering.

Pursuant to the placement agency agreement, the Company paid FT Global Capital, Inc.

a fee of 7.25 % of the aggregate purchase price for the shares of Class A common stock sold in the offering, and reimbursed FT Global Capital, Inc.

for its expenses up to $ 90,000 in the aggregate.

On July 26, 2024, the Company closed the offering, with net proceeds to the Company of approximately $ 1.1 million for the Company’s working capital and general corporate purposes.

As of September 30, 2024, there were 1,960,218 shares of Class A common stock and 546,875 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.

8 unchanged sentences

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.

Reverse Stock Split

At a special stockholders’ meeting held on September 30, 2024, the Company’s stockholders approved the Company’s Fourth Amended and Restated Articles of Incorporation to authorize a reverse stock split.

Subsequently, on October 7, 2024, the Company’s board of directors approved the Reverse Stock Split and filed its Fourth Amended and Restated Articles of Incorporation with the State of North Carolina pursuant to North Carolina Revised Statutes 55-8-21 on October 8, 2024.

The Reverse Stock Split took effect on October 21, 2024.

Starting on October 24, 2024, the Company’s Class A common stock began trading on the Nasdaq Capital Market on a post-split basis.

All share information included in this quarterly report on Form 10-Q has been retrospectively adjusted to reflect the Reverse Stock Split as if it had occurred as of the earliest period presented.

NOTE 18 — COMMITMENTS AND CONTINGENCIES

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

Rehfeld (the “Defendant”), alleging breach of contract as the Defendant had misappropriated an automobile belonging to the assets of the Company.

Pursuant to an independent contractor agreement dated June 30, 2022 between the Company and the Defendant, the Company hired the Defendant to locate and acquire certain new model luxury vehicles.

The Company was obligated to fully fund the purchase of each vehicle, and the Defendant was required to locate and acquire the vehicle and turn over title and possession to the Company in exchange for a commission fee.

In February 2023, after the Company fully funded the purchase of a 2023 Mercedes Benz GLS 450 (the “Mercedes”) for a total amount of $ 102,593.50 , the Defendant obtained the possession of the Mercedes from a Mercedes Benz dealership and signed a bill of sale with the Company, whereby she agreed to sell, transfer, and convey the title of the Mercedes to the Company.

However, the Defendant drove the Mercedes away and failed to transfer the title of the Mercedes to the Company as scheduled.

Therefore, the Company is seeking to require the Defendant to transfer title and deliver possession of the Mercedes to the Company and recover the costs incurred in retrieving the car, or alternatively, the monetary damages resulting from the Defendant’s misappropriation of the Mercedes, including the court costs and attorneys’ fees and expenses reasonably incurred.

On April 25, 2023, the Supreme Court of the State of New York County granted the Company’s motion for summary judgment on its second and fourth causes of action, ruling in favor of the Company.

On August 7, 2024, an inquest was 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 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.

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

Rehfeld (the “Defendant”), alleging that she breached an independent contractor agreement with the Company by misappropriating a vehicle that she had acquired and was contractually obliged to deliver to the Company in exchange for a commission.

On April 25, 2023, the court granted the Company’s motion for summary judgment on its causes of action seeking specific performance and contractual indemnification.

The Company has successfully recovered the vehicle and received its title.

On August 7, 2024, the court conducted an inquest and awarded the Company $ 64,359.22 in fees and costs.

As of the date of this quarterly report, a proposed judgment concerning those monetary damages is pending.

NOTE 19 — SUBSEQUENT EVENTS

On July 2, 2024, the Company’s stockholders approved its third amended and restated articles of incorporation, which specifies that the Company is authorized to issue 891,750,000 shares of Class A common stock, par value $ 0.0001 per share, and 108,250,000 shares of Class B common stock, par value $ 0.0001 per share.

The Company also has the authority to issue 500,000 shares of preferred stock as deemed necessary with a par value per share equal to the par value per share of the Class A common stock.

On July 11, 2024, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s Class A common stock was below $ 1.00 per share, which is the minimum closing bid price required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).

The letter also specifies that the Company is provided a compliance period of 180 calendar days (under certain circumstances, an additional 180 calendar days period may be provided) to regain compliance with the minimum closing bid price requirement.

If the Company fails to regain compliance during the specified compliance period(s), the Class A common stock will be subject to delisting.

On July 19, 2024, the Company entered into a lease agreement (the “Lease”) with Zina Development, LLC, a California LLC (the “Lessor”), for office space of approximately 15,000 square feet located at 8707 Research Drive, Irvine, CA 92618 (the “Property”).

The Company plans to use the Property for general office purposes.

The Lease commenced on July 23, 2024 and will expire on July 31, 2027.

The monthly base rent ranges from $ 42,000 to $ 45,427 , adjusted gradually over the Lease’s term.

The Company posted a security deposit of $ 100,000 , which is subject to use by the Lessor under certain circumstances, per the terms of the Lease.

The Lease also contains customary termination, renewal, and expense arrangement provisions.

On July 22, 2024, the Company entered into a short-term loan agreement with Hongkong Sanyou Petroleum Co Limited.

The principal amount of the loan was $ 1,500,000 .

This loan carried an annual interest rate of 12.0 % and was set to mature in 12 months.

On July 25, 2024, the Company entered into a securities purchase agreement with certain institutional investors for a follow-on offering of 6,479,663 shares of its Class A common stock, par value $ 0.0001 per share, at a price of $ 0.23 per share.

On the same day, the Company entered into a placement agency with FT Global Capital, Inc., who acted as the exclusive placement agent on a best efforts basis in connection with such offering.

Pursuant to the placement agency agreement, the Company agreed to pay the FT Global Capital, Inc.

a cash fee of 7.25 % of the aggregate purchase price for the shares of Class A common stock sold in the offering, and to reimburse FT Global Capital, Inc.

for its expenses up to $ 90,000 in the aggregate.

The Company closed the offering on July 26, 2024.

The Company intends to use the net proceeds received from the offering for working capital and general corporate purposes.

Pursuant to the Premium Finance Agreement, the Company borrowed $ 205,774.80 at an annual interest rate of 8.51 %.

The loan is structured to be repaid in 10 monthly installments, starting with the first payment on September 1, 2024.

On October 2, 2024 and October 28, 2024, the Company entered into two one-year short-term agreements with Hongkong Sanyou Petroleum Co Limited, with principal amount of the loan $ 1,000,000 , respectively, bearing an annual interest rate of 12.0 % and set to mature in 12 months .

On October 24, 2024, the Company entered into a short-term loan agreement with Asia Finance Investment Limited.

The principal amount of the loan was $ 530,000 , bearing an annual interest rate of 12.0 % and was set to mature in 12 months .

On November 7, 2024, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, notifying the Company that it had regained compliance with the minimum closing bid price requirement for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).

The letter confirmed that, for the 10 consecutive business days from October 24, 2024 to November 6, 2024, the closing bid price of the Company’s Class A common stock had been at $ 1.00 or greater and that, accordingly, the matter concerning the Company’s failure to comply with the Minimum Bid Price Requirement was closed.

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