What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-05 · 175 added, 74 removed, 141 unchanged (64% of the section changed)

21 unchanged sentences

Parallel-import vehicles in the PRC refer to automobiles purchased directly from overseas markets and imported for sale outside of the brand manufacturers’ official distribution networks.

This business contributed significantly to our revenue since our inception.

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

Beginning in the second half of 2023, the business was negatively affected by a decline in customer demand due to weakening macroeconomic conditions, price competition from luxury automakers in the PRC, and a shift in consumer preference toward domestic EVs.

These market challenges led to a decline in parallel-import vehicle sales by 30.5% in 2023 and a reduction in net income by 87.5% compared to 2022.

The decline accelerated further in 2024.

Vehicle sales dropped sharply from 82 units in the first quarter of 2023 to 13 units in the first quarter of 2024.

For year ended December 31, 2024, vehicle sales decreased from 303 units in 2023 to 14 units in 2024, resulting in a 95.7% drop in revenue from $38.3 million in 2023 to $1.6 million in 2024.

In addition, the financial strain on the Company’s customers made it increasingly difficult to collect outstanding receivables.

While the Company successfully recovered $4.0 million in 2024 and collected additional $2.5 million from the five aged accounts as of March 31, 2025, the remaining $1.6 million from two customers was determined to be uncollectible.

As a result, the management recorded a credit loss of $1.6 million for the year ended December 31, 2024.

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

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

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

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

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

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

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

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

Logistics and Warehousing

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

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

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

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

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

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

Additionally, on December 19, 2024, we acquired 100% membership interest of NexTrade, a Delaware limited liability company for the consideration of $1.

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

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

The incorporation of Cheetah BVI is intended to support the Company’s future international business development and facilitate potential global partnerships.

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

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

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

8 unchanged sentences

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

Dissolution of Subsidiaries

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

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

Risks and Uncertainties

14 unchanged sentences

Results of Operations

The following table provides a summary of our consolidated results of operations for the three months ended March 31, 2025 and 2024, highlighting the financial impact of both continuing and discontinued operations:

For the Three Months Ended March 31,

Cost of Revenue

The following table provides a summary of our consolidated results of operations for the three and six months ended June 30, 2025 and 2024, highlighting the financial impact of both continuing and discontinued operations:

Three Months Ended June 30,

Six Months Ended June 30,

Cost of Revenues

General and administration expenses

6 unchanged sentences

Loss from discontinued operations, net of tax

Comparison of the Three Months Ended June 30, 2025 and 2024

Continuing Operations-Logistics and Warehousing Services

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Revenues from Edward

1 unchanged sentence

Total revenues

For the three months ended March 31, 2025, we reported revenue of $479,799 from logistics and warehousing services segment, including $62,515, or 13.0%, of our total revenue from Edward, and $417,284, or 87.0%, of our total revenue from TWEW (See also Note 8- Intangible Asset and Goodwill).

Revenue from Edward decreased by 18.6% primarily due to the decreased international trade flow resulting from the trade tensions between China and the U.S.

For the three months ended June 30, 2025, we reported revenue of $354,126 from logistics and warehousing services segment, including $52,684, or 14.9%, of our total revenue from Edward, which we acquired in February 2024, and $301,442, or 85.1%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 43.7%, primarily due to i) a temporary suspension in U.S.-PRC ocean freight activities in April 2025 after the U.S.

government’s threat in late March 2025 to impose higher tariffs on goods imported from the PRC, partially offset by ii) stabilized trade flow in May and June 2025 following the resumption of trade negotiations between the two countries since May 2025.

The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the second quarter of 2025.

We will continue to focus on improving operational efficiencies and expanding our market presence of the two acquired businesses in the California area.

Cost of Revenues

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Cost of Revenues

2 unchanged sentences

Total cost of revenues

For the three months ended March 31, 2025, total cost of revenues increased to $423,543 from $42,500 for the same period in 2024, representing an increase of $381,043, or 896.6%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $381,733, representing 90.1% of total cost of revenues in the first quarter of 2025.

Cost of revenues from Edward was $41,810, or 9.9% of total cost of revenues for the three months ended March 31, 2025, compared to $42,500 for the same period in 2024, representing a slight decrease of $690, or 1.6%, consistent with the corresponding decline in revenue from Edward.

For the three months ended June 30, 2025, total cost of revenues increased to $319,226 from $45,598 for the same period in 2024, representing an increase of $273,628, or 600.1%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $293,429, representing 91.9% of total cost of revenues in the second quarter of 2025.

Cost of revenues from Edward was $25,797, or 8.1% of total cost of revenues for the three months ended June 30, 2025, compared to $45,598 for the same period in 2024, representing a decrease of $19,801, or 43.4%, consistent with the corresponding decline in revenue from Edward.

Cost of revenues is mainly labor costs for TWEW and ocean freight service cost for Edward.

1 unchanged sentence

General and Administrative Expenses

Three Months Ended March 31,

Three Months Ended June 30,

General and Administrative Expenses

5 unchanged sentences

Depreciation and Amortization Expenses

Recruiting Expenses

Total General and Administrative Expenses

General and administrative expenses for our continuing operations increased by $0.2 million, or 30.3%, to $1.0 million for the three months ended March 31, 2025 from $0.8 million for the three months ended March 31, 2024, primarily due to (i) an increase of $0.1 million in personnel-related expenses, which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, (ii) an increase of $0.1 million in rental and leases following the acquisition of Edward and a new office workspace in California in July 2024, (iii) an increase of $22,547 in travel and entertainment expenses as part of business development efforts and client engagement, (iv) an increase of $27,067 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and recorded intangible assets from Edward and TWEW acquisitions, as detailed in Notes 6 – Property, Plant, and Equipment, Net, and Note 8 - Intangible Asset and Goodwill, (v) an increase of 14,716 in other miscellaneous general and administration expenses during the three months ended March 31, 2025, partially offset by a decrease of $51,911 in legal and accounting fees due to additional professional fees for preparing a registration statement on Form S-1 during the first quarter of 2024 and a decrease of $19,237 in insurance expenses resulting from a change in our insurance provider.

General and administrative expenses for the Company’s continuing operations decreased by $60,050, or 6.9%, to $805,305 for the three months ended June 30, 2025 from $865,354 for the three months ended June 30, 2024.

The decrease was mainly due to (i) a decrease of $111,188 in legal and accounting fees as we incurred additional professional fees for preparing a registration statement on Form S-1 during the quarter ended June 30, 2024, (ii) $33,786 in payroll and benefits expense due to staff optimization and cost-saving measures following the initial hiring to support the newly launched logistics and warehousing segment, (iii) a decrease of $17,662 in insurance expenses resulting from a change in our insurance provider, (iv) a decrease of $76,145 in recruiting expenses during the three months ended June 30, 2025, as the prior-year period included significant hiring efforts associated with the launch of our logistics and warehousing segment, partially offset by (iv) an increase of 126,782 in rental and leases following the acquisition of Edward and the relocation of our headquarters to California in July 2024, (v) an increase of $12,055 in travel and entertainment expenses as part of business development efforts and client engagement, (vi) an increase of $20,476 in other miscellaneous general and administration expenses during the three months ended June 30, 2025, and (vii) an increase of $19,418 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and recorded intangible assets from Edward and TWEW acquisitions.

Share-based compensation expenses

Three Months Ended March 31,

Three Months Ended June 30,

Share-based compensation expenses

Share-based compensation expenses were $16,185 and nil for the three months ended March 31, 2025 and 2024, respectively.

Share-based compensation expenses were $10,444 and nil for the three months ended June 30, 2025 and 2024, respectively.

On August 16, 2024, our board of directors approved the adoption of the Amended and Restated 2024 Stock Incentive Plan (the “Plan”).

Subsequently, on September 30, 2024, our stockholders approved the Plan.

The total number of shares granted by the compensation committee of our board of directors on September 30, 2024 were 150,000, including 118,750 shares of Class A common stock and 31,250 shares of Class B common stock.

Share-based compensation expenses of $16,185 were recognized during the three months ended March 31, 2025.

The total number of shares granted by the compensation committee of our board of directors on September 30, 2024 was originally reported as 150,000, including 118,750 shares of Class A common stock and 31,250 shares of Class B common stock, in our quarterly report for the quarter ended March 31, 2025.

During the quarter ended June 30, 2025, we identified an error and noted that the correct allocation shall be 112,500 shares of Class A common stock and 31,250 shares of Class B common stock, for a total of 143,750 shares granted as of the date of this quarterly report.

The error was due to the forfeiture, on January 17, 2025, of 6,250 shares of Class A common stock that had been granted under the Plan on November 30, 2024.

Share-based compensation expenses of $10,444 were recognized during the three months ended June 30, 2025.

See Note 11 – Stock Based Compensation for more details.

Other Income (Expenses), net

Three Months Ended March 31,

Three Months Ended June 30,

Interest income

6 unchanged sentences

Total other income, net

Interest income from continuing operations was $208,090 for the three months ended March 31, 2025, compared to $28,930 for the three months ended March 31, 2024, representing an increase of $179,160, or 619.3%.

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

Interest expense incurred from our continuing operations was $8,812 for the three months ended March 31, 2025, which increased by $507, or 6.1%, from $8,305 for the three months ended March 31, 2024, mainly due to increased Premium Finance interest for D&O Insurance.

Interest income from continuing operations was $272,228 for the three months ended June 30, 2025, compared to $28,241 for the three months ended June 30, 2024, representing an increase of $243,987, or 863.9%.

The significant increase was primarily driven by interest earned on short-term loan receivables and certificates of deposit, funded by the net proceeds from the Company’s public offerings closed in May and July 2024.

Interest expense incurred from our continuing operations was $8,060 for the three months ended June 30, 2025, which slightly decreased by $242, or 2.9%, from $8,302 for the three months ended June 30, 2024, mainly due to decreased loan interest expenses.

Income Tax (Benefits)

Our income tax provision for continuing operations were $5,355 for the three months ended March 31, 2025, compared with income tax benefits of approximately $245,714 for the same period in 2024.

As a result of the above factors, we had a net loss of $753,909 from our continuing operations for the three months ended March 31, 2025, compared to net loss of $608,930 for the same period of 2024.

Our income tax provision for continuing operations was nil for the three months ended June 30, 2025, compared with income tax benefits of approximately $247,275 for the same period in 2024.

The consolidated statement of operations reflects income tax expense of approximately $12,987 for the three months ended June 30, 2025, which were the tax payments related to prior periods and acquisition-related tax filings upon the filing 2024 tax returns in April 2025.

These additional amounts primarily consist of:

(i) $2,000 of tax obligations owed by the Company for the 2024 tax year, (ii) $1,101 of pre-acquisition tax obligations of Edward, and (iii) $9,886 of pre-acquisition tax obligations of TWEW.

These payments do not impact the Company’s estimated annual effective tax rate for 2025.

As a result of the above factors, we had a net loss of $512,528 from our continuing operations for the three months ended June 30, 2025, compared to net loss of $550,022 for the same period of 2024.

Discontinued Operations -Parallel- Import vehicle Business

1 unchanged sentence

The Company fully exited its parallel-import vehicle business during the year ended December 31, 2024.

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the following discussion provides an overview of the operating results of discontinued operations during the first quarter of 2024.

Discontinued Operations- Parallel -Import Vehicles Business

The following table summarizes the operating results of our discontinued operations for the three months ended 2024:

Three Months Ended March 31,

The following table summarizes the operating results of our discontinued operations for the three months ended June 30, 2024:

Three Months Ended June 30,

domestic market

5 unchanged sentences

Total Cost of Revenue

During the three months ended March 31, 2024, we generated revenue of $1.4 million from the parallel-vehicle business.

Only 13 units of vehicles were sold following the significant downturn of parallel-import vehicle business as stated in “—Business Overview and Recent Developing Trends.”

We also reported cost of revenue of $1.4 million, mainly the fulfillment expenses, and a gross loss of $9,283 of the discontinued business for the three months ended March 31, 2024.

During the three months ended June 30, 2024, the Company generated revenue of $200,297 from the parallel-vehicle business.

Only one vehicle was sold during this quarter following the significant downturn of parallel-import vehicle business in the PRC.

We also reported cost of revenue of $215,834, mainly cost of vehicles, and a gross loss of $15,537 of the discontinued business for the three months ended June 30, 2024.

Selling Expenses for Discontinued Operations

The following table presents selling expenses for the discontinued operations:

Three Months Ended March 31,

Three Months Ended June 30,

Selling Expenses

Payroll and benefits

Total selling expenses

Total selling expenses for the discontinued parallel-import vehicle business was $19,422 for the three months ended June 30, 2024.

Interest Expenses

The table below presents interest expenses for the three months ended June 30, 2024:

Interest Expenses

Line of Credit

Total interest expenses

Total interest expenses on line of credit charges were $27,899 for the three months ended June 30, 2024.

Net loss for the discontinued operations was approximately $62,858 for the three months ended June 30, 2024.

Comparison of the Six Months Ended June 30, 2025 and 2024

For the Six Months Ended June 30,

Revenues from Edward

Revenues from TWEW

Total revenues

For the six months ended June 30, 2025, we reported revenue of $833,925 from logistics and warehousing services segment, including $115,199, or 13.8%, of our total revenue from Edward, which we acquired in February 2024, and $718,726, or 86.2%, of our total revenue from TWEW, which we acquired in December 2024.

Revenue from Edward decreased by 32.4%, primarily due to i) a temporary suspension in U.S.-China ocean freight activities in April 2025 after the U.S.

government’s threat in late March 2025 to impose higher tariffs on goods imported from China, partially offset by ii) stabilized trade flow in May and June 2025, following the resumption of trade negotiations between the two countries since May 2025.

The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the six months ended June 30, 2025.

We will continue to focus on improving operational efficiencies and expanding our market presence of the two acquired businesses in the California area.

Cost of Revenues

For the Six Months Ended June 30,

Cost of Revenues

Cost of Revenues from Edward

Cost of Revenues from TWEW

Total cost of revenues

For the six months ended June 30, 2025, total cost of revenues increased to $742,769 from $88,098 for the same period in 2024, representing an increase of $654,671, or 743.1%, primarily due to the contribution from TWEW.

Cost of revenues attributable to TWEW was $675,162, representing 90.9% of total cost of revenues during the six months ended June 30, 2025.

Cost of revenues from Edward was $67,607, or 9.1 % of total cost of revenues for the six months ended June 30, 2025, compared to $88,098 for the same period in 2024, representing a decrease of $20,491, or 23.3%, consistent with the corresponding decline in revenue from Edward.

Cost of revenues is mainly labor costs for TWEW and ocean freight service cost for Edward.

Operating Expenses

General and Administrative Expenses

Six Months Ended June 30,

General and Administrative Expenses

Payroll and Benefits

Rental and Leases

Travel and Entertainment

Legal and Accounting Fees

Insurance Expenses

Depreciation and Amortization Expenses

Recruiting Expenses

Total General and Administrative Expenses

General and administrative expenses for the Company’s continuing operations increased by $172,827, or 10.6%, to $1.8 million for the six months ended June 30, 2025 from $1.6 million for the six months ended June 30, 2024, primarily due to (i) an increase of $248,706 in rental and leases following the acquisition of Edward and the relocation of the Company’s headquarters to California in July 2024, (ii) an increase of $83,984 in personnel-related expenses, which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, (iii) an increase of $46,485 in depreciation and amortization expenses, primarily due to the acquisition of fixed assets and recorded intangible assets from Edward and TWEW acquisitions, (iv) an increase of $34,602 in travel and entertainment expenses as part of business development efforts and client engagement, (v) an increase of $37,658 in other miscellaneous general and administration expenses during the six months ended June 30, 2025, partially offset by (vi) a decrease of $163,099 in legal and accounting fees, primarily because the prior period included additional professional fees related to the preparation of a registration statement on Form S-1 during the first and second quarters of 2024, which did not recur in the current period, (vii) a decrease of $78,610 in the recruiting expenses during the three months ended June 30, 2025, as the prior-year period included significant hiring efforts associated with the launch of the Company’s logistics and warehousing segment, and (viii) a decrease of $36,899 in insurance expenses resulting from a change in our insurance provider.

Share-based compensation expenses

Six Months Ended June 30,

Share-based compensation expenses

Share-based compensation expenses were $26,629 and nil for the six months ended June 30, 2025 and 2024, respectively.

On August 16, 2024, our board of directors approved the adoption of the Amended and Restated 2024 Stock Incentive Plan (the “Plan”).

Subsequently, on September 30, 2024, our stockholders approved the Plan.

The error was due to the forfeiture, on January 17, 2025, of 6,250 shares of Class A common stock that had been granted under the Plan on November 30, 2024.

Share-based compensation expenses of $26,629 were recognized during the six months ended June 30, 2025.

See Note 11 – Stock Based Compensation for more details.

Other Income (Expenses), net

Six Months Ended June 30,

Interest income

Interest expenses:

Loan Interest expense

Credit Card Interest

Premium Finance Interest

Total Interest expenses

Other income, net

Total other income net

Interest income from continuing operations was $480,318 for the six months ended June 30, 2025, compared to $57,171 for the six months ended June 30, 2024, representing an increase of $423,147, or 740.1 %.

Interest expense incurred from our continuing operations was $16,872 for the six months ended June 30, 2025, which slightly increased by $265, or 1.6%, from $16,607 for the six months ended June 30, 2024, mainly due to an increased Premium Finance interest for D&O Insurance, partially offset by the decreased interest for long-term loans.

Income Tax (Benefits)

Our income tax provision for continuing operations were $5,200 for the six months ended June 30, 2025, compared with income tax benefits of approximately $492,989 for the same period in 2024.

The consolidated statement of operations reflects income tax expense of approximately $18,342 for the six months ended June 30, 2025, which includes the current quarter provision of $5,200, and approximately $13,142 of tax payments related to prior periods and acquisition-related tax filings upon the filing of 2024 tax returns in April 2025.

These additional amounts primarily consist of:

(i) $2,155 of tax obligations owed by the Company for the 2024 tax year, (ii) $1,101 of pre-acquisition tax obligations of Edward, and (iii) $9,886 of pre-acquisition tax obligations of TWEW.

These payments do not impact the Company’s estimated annual effective tax rate for 2025.

As a result of the above factors, we had a net loss of $1,266,437 from our continuing operations for the six months ended June 30, 2025, compared to net loss of $1,016,370 for the same period of 2024.

Discontinued Operations -Parallel- Import vehicle Business

As disclosed in Note 5 – Discontinued Operations, our Board approved the discontinuation of our parallel-import vehicle business on March 3, 2025.

The Company fully exited its parallel-import vehicle business during the year ended December 31, 2024.

Discontinued Operations- Parallel -Import Vehicles Business

The following table summarizes the operating results of our discontinued operations for the six months ended June 30, 2024:

Six Months Ended June 30,

domestic market

Overseas market

Total Revenue

Cost of Revenue

Cost of vehicle

Fulfilment expense

Total Cost of Revenue

During the six months ended June 30, 2024, we generated revenue of $1.6 million from the parallel-vehicle business.

Only 14 units of vehicles were sold following the significant downturn of parallel-import vehicle business as described in “—Business Overview and Recent Developing Trends.”

We also reported cost of revenue of 1.7 million, mainly the fulfillment expenses, and a gross loss of $24,820 of the discontinued business for the six months ended June 30, 2024.

Selling Expenses for Discontinued Operations

The following table presents selling expenses for the discontinued operations:

Six Months Ended June 30,

Selling Expenses

Payroll and benefits

Ocean freight

Total selling expenses

Total selling expenses for the discontinued parallel-import vehicle business was $78,840 for the three months ended March 31, 2024.

Total selling expenses for the discontinued parallel-import vehicle business was $98,262 for the six months ended June 30, 2024.

Interest Expenses

The table below presents interest expenses for the three months ended March 31, 2024:

The table below presents interest expenses for the six months ended June 30, 2024:

Interest Expenses

1 unchanged sentence

Total interest expenses

Total interest expenses on LC financing and Line of Credit charges was $54,459 for the three months ended March 31, 2024.

Net loss for the discontinued operations was approximately $142,582 for the three months ended March 31, 2024.

Total interest expenses on LC financing and line of credit charges were $82,358 for the six months ended June 30, 2024.

Net loss for the discontinued operations was approximately $205,440 for the six months ended June 30, 2024.

Liquidity and Capital Resources

6 unchanged sentences

Financing may not be available in amounts or on terms acceptable to us, or at all.

As of March 31, 2025, we had current assets of $10.2 million, consisting of cash and cash equivalents of $0.3 million, $9.1 million in loan receivables, $0.5 million of other receivables, $0.1 million of accounts receivable, and $0.2 million in prepaid expenses other current assets from continuing operations.

Our current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.5 million of operating lease liabilities, $0.3 million of other payables, and $0.1 million of loan payable, including the current portion of long-term borrowings.

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

Three Months ended March 31,

As of June 30, 2025, we had current assets of $9.9 million, consisting of cash and cash equivalents of $0.2 million, $8.7 million in loan receivables, $0.8 million of other receivables, and $0.1 million in prepaid expenses and other current assets from continuing operations.

Our current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.6 million of operating lease liabilities, $0.3 million of other payables, and 36,412 of the current portion of long-term borrowings.

The Company also had $590,352 of long-term borrowings payable, and $950,372 of operating lease liabilities, long-term portion.

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024, with continuing operations and discontinued operations presented separately:

Six Months ended June 30,

Net cash provided by operating activities

Cash outflows from operations-continuing operations

Cash inflows from operations-discontinued operations

Cash used in operations-continuing operations

Cash provided by operations-discontinued operations

Net cash used in investing activities

Cash outflows from operations-continuing operations

Net cash used in financing activities

Cash outflows from operations-continuing operations

Cash outflows from operations-discontinued operations

Cash used in operations-continuing operations

Net cash (used in) provided by financing activities

Cash (used in) provided by operations-continuing operations

Cash used in operations-discontinued operations

Net (decrease) increase in cash

Operating Activities

Net cash used in operating activities from continuing operations was $0.8 million for the three months ended March 31, 2025.

The negative cash flow was primarily due to (i) a net loss of $0.8 million during the three months ended March 31, 2025, and (ii) an increase of $0.2 million in other receivables, partially offset by (iii) an increase of $0.1 million in amortization of operating lease right-of-use assets and intangible assets, and (iv) $0.1 million in prepaid expenses.

Net cash used in operating activities from continuing operations was $1.5 million for the three months ended March 31, 2024.

This was primarily attributable to (i) a net loss of $0.6 million, (ii) a deferred tax benefit of $0.2 million, (iii) an increase of $0.7 million in other receivables, partially offset by non-cash adjustments including, (iv) $38,560 in amortization of operating lease right-of-use assets, (v) $8,714 in amortization of intangible assets, and (vi) $41,152 increase in other payables.

Net cash provided by operating activities from discontinued operations was $2.5 million for the three months ended March 31, 2025, primarily due to the collection of $2.5 million in accounts receivable resulting from vehicle sales.

Net cash provided by operating activities from discontinued operations was $3.2 million for the three months ended March 31, 2024.

Net cash used in operating activities from continuing operations was $1.2 million for the six months ended June 30, 2025.

The negative cash flow was primarily due to (i) a net loss of $1.3 million during the six months ended June 30, 2025, and (ii) an increase of $0.5 million in other receivables, partially offset by (iii) an increase of $0.2 million in amortization of operating lease right-of-use assets and intangible assets, and (iv) $0.2 million in prepaid expenses.

Net cash used in operating activities from continuing operations was $2.3 million for the six months ended June 30, 2024.

This was primarily attributable to (i) a net loss of $1.0 million, (ii) a deferred tax benefit of $0.5 million, (iii) an increase of $0.7 million in other receivables, partially offset by non-cash adjustments including, (iv) $77,801 in amortization of operating lease right-of-use assets, (v) $21,786 in amortization of intangible assets, and (vi) an increase of $30,474 in other payables.

Net cash provided by operating activities from discontinued operations was $2.5 million for the six months ended June 30, 2025, primarily due to the collection of $2.5 million in accounts receivable resulting from vehicle sales.

Net cash provided by operating activities from discontinued operations was $3.2 million for the six months ended June 30, 2024.

This was primarily attributable to (i) the collection of $1.4 million in accounts receivable resulting from vehicle sales, (ii) a $1.5 million decrease in vehicle inventory, (iii) a $0.2 million decrease in other receivables from vehicle deposit and sales tax return, and (iv) a $0.1 million increase in other payables.

Investing Activities

Net cash used in investing activities from continuing operations was approximately $3.0 million for the three months ended March 31, 2025, including (i) $3.0 million in short-term loans receivable from third parties, and offset by (ii) $49,000 proceeds of repayment from these loans.

For the three months ended March 31, 2024, net cash used in investing activities was $47,617, including (i) $220,117 cash paid in the Edward acquisition, offset by (ii) $172,500 proceeds of repayment from pledged loan made to third parties.

There were no investing activities related to discontinued operations for the three months ended March 31, 2025 and 2024.

Net cash used in investing activities from continuing operations was approximately $2.7 million for the six months ended June 30, 2025, including (i) $3.5 million in short-term loans receivable from third parties, and offset by (ii) $0.8 in proceeds of repayment from these loans.

For the six months ended June 30, 2024, net cash used in investing activities was $0.9 million, including (i) $0.2 million in cash paid in the Edward acquisition, (ii) $0.4 million in cash paid in the purchase of property and equipment, (iii) $1.0 million in cash in short-term loans receivable from third parties, offset by (iii) $0.7 million in proceeds of repayment from pledged loans and short-term loans made to third parties.

There were no investing activities related to discontinued operations for the six months ended June 30, 2025 and 2024.

Financing Activities

Net cash used in financing activities from continuing operations was $68,539 for the three months ended March 31, 2025, which consisted of (i) net repayment of premium finance of $59,590, and (ii) net repayment of long-term borrowings of $8,949.

Net cash used in financing activities from continuing operation of $173,329 for the three months ended March 31, 2024, consisted of (i) cash paid for warrant termination of $78,125, (ii) repayments of premium finance of $73,713, (iii) repayments of long-term borrowing of $8,068, and (iv) repayment of $13,423 to a related party.

There were no financing activities related to discontinued operations for the three months ended March 31, 2025.

Net cash used in financing activities from discontinued operations was $1.0 million for the three months ended March 31, 2024, which was the repayment of LC financing.

Net cash used in financing activities from continuing operations was $138,294 for the six months ended June 30, 2025, which consisted of (i) net repayment of premium finance of $120,461, and (ii) net repayment of long-term borrowings of $17,833.

Net cash provided by financing activities from continuing operation of $7.1 million for the six months ended June 30, 2024, consisted of (i) cash received from public offering proceeds of $7.3 million, offset by (ii) cash paid for warrant termination of $78,125, (iii) repayments of premium finance of $148,621, (iv) repayments of long-term borrowing of $15,676, and (v) repayment of $13,423 to a related party.

There were no financing activities related to discontinued operations for the six months ended June 30, 2025.

Net cash used in financing activities from discontinued operations was $1.1 million for the six months ended June 30, 2024, which was the repayment of LC financing.

Off-Balance Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis