10-K: Cheetah Net Pivots to Logistics, Reports 2025 Net Loss

Cheetah Net Supply Chain Service Inc. has fully transitioned from its struggling parallel-import vehicle business to focus on logistics and warehousing, reporting a net loss of $3.6 million for 2025.

Summary

• The company formally discontinued its parallel-import vehicle business on March 3, 2025, due to declining customer demand, price competition, and a shift towards domestic electric vehicles in the PRC market.
• Parallel-import vehicle sales plummeted by 95.7% in 2024, from 303 units in 2023 to just 14 units, leading to a revenue drop from $38.3 million to $1.6 million in that segment.
• A credit loss of $1.6 million was recorded for the year ended December 31, 2024, due to increasing difficulty in collecting outstanding receivables from the discontinued vehicle business.
• The company shifted its business focus to logistics and warehousing services, acquiring Edward Transit Express Group Inc. in February 2024 and TW & EW Services Inc. in December 2024.
• Logistics and warehousing services accounted for 100% of total revenue in 2025, a significant increase from 21.8% in 2024.
• Total revenue from continuing operations (logistics and warehousing) increased by 182.7% to $1,288,536 in 2025 from $455,805 in 2024.
• The net loss from continuing operations was $3.6 million for the year ended December 31, 2025, compared to a net loss of $3.2 million for the same period in 2024.
• Impairment loss expenses of $731,307 were recorded in 2025 for goodwill and intangible assets related to the Edward acquisition.
• Net cash used in operating activities from continuing operations was $2.5 million in 2025, partially offset by $2.5 million net cash provided by operating activities from discontinued operations.
• The company completed its reincorporation from North Carolina to Delaware on February 2, 2026.
• Stockholders approved an increase in authorized Class A common stock to 2,000,000,000 shares and Class B common stock to 200,000,000 shares on January 30, 2026.
• Stockholders approved a potential reverse stock split with an aggregate ratio not exceeding 1-for-500 on February 3, 2026.
• A private placement of 33,450,000 shares of Class A common stock for $40.14 million closed on February 12, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period for Cheetah Net, marked by increasing net losses from continuing operations, a decline in revenue from one of its key acquired logistics businesses, and identified material weaknesses in internal controls, despite a successful pivot away from a failing segment and recent capital infusion.

Positives

• Successfully transitioned its business focus from the declining parallel-import vehicle sales to the logistics and warehousing sector, which now constitutes 100% of its revenue.
• Logistics and warehousing revenue from continuing operations increased significantly by 182.7% to $1,288,536 in 2025.
• Acquisitions of Edward Transit Express Group Inc. and TW & EW Services Inc. have expanded service offerings and enhanced market position in the logistics sector.
• Relocated headquarters to Irvine, California, to leverage proximity to key ports of Los Angeles and Long Beach, aiming for stronger management focus on logistics.
• Reported a substantial increase in interest income by 188.4% to $924,224 in 2025, primarily from short-term loan receivables and certificates of deposit.
• Successfully collected an additional $2.5 million in outstanding accounts receivable from the discontinued parallel-import vehicle business in 2025.
• Completed reincorporation to Delaware, which may offer a more favorable corporate governance framework.
• Raised approximately $40.14 million in gross proceeds from a private placement of Class A common stock in February 2026, significantly bolstering liquidity.

Negatives

• The parallel-import vehicle business, now discontinued, experienced a drastic 95.7% decline in sales volume in 2024 and a $1.6 million credit loss due to uncollectible receivables.
• Net loss from continuing operations increased to $3.6 million in 2025 from $3.2 million in 2024.
• Gross profit from continuing operations decreased by 6.6% to $166,775 in 2025.
• Edward's revenue, a key acquired logistics business, decreased by 32.2% in 2025 due to the lingering impact of the U.S.-China trade war and reduced customer demand.
• Recorded significant impairment loss expenses of $731,307 in 2025 related to goodwill and intangible assets from the Edward acquisition.
• Net cash used in operating activities from continuing operations was $2.5 million in 2025.
• Management concluded that internal control over financial reporting was not effective as of December 31, 2025, citing material weaknesses including inadequate segregation of duties in newly acquired entities, lack of formal policies for TWEW, and insufficient risk assessment procedures.
• The company has generated a three-year cumulative pretax book loss and forecasts a loss for 2026, leading to a full valuation allowance against deferred tax assets.
• A high percentage of foreign employees without permanent U.S. work permits may lead to increased turnover rates and higher labor costs.
• Stockholders approved a potential reverse stock split with an aggregate ratio up to 1-for-500, which can be perceived negatively by investors and may indicate underlying issues with stock price or Nasdaq listing compliance.

Risks

• Operating in a period of economic uncertainty and capital markets disruption, significantly impacted by geopolitical instability from ongoing military conflicts and strained U.S.-China relations.
• A deteriorating relationship between the U.S. and the PRC, or a prolonged stalemate, could materially adversely affect international logistics and demand for services.
• Availability and demand for logistics and warehousing services may be adversely impacted by economic conditions, reduced consumer spending, fuel price volatility, political policies, currency exchange rates, and regulatory requirements.
• The logistics and warehousing industry in the U.S. is highly competitive, and the company may not be able to compete successfully against existing or new competitors.
• Limited experience in expanding non-vehicle logistics and warehousing revenue, with success dependent on developing and scaling an effective salesforce.
• Adverse effects from inflation and a potential recession in the U.S. and a weakening economy in the PRC could impact liquidity, cost structure, and demand.
• Fluctuations in exchange rates, particularly between RMB and USD, could materially and adversely affect results of operations and the value of investments.
• Inability to successfully execute the business transformation, integrate acquired businesses, or achieve anticipated operational efficiencies and synergies.
• Exposure to catastrophic events in California, such as natural disasters, terrorist attacks, or pandemics, could disrupt operations.
• Service disruptions at the Gardena warehouse or Irvine office could adversely affect business operations.
• Clients reducing logistics and supply chain costs or increasing utilization of internal solutions could materially and adversely affect the business.
• Risks from fuel price fluctuations, which could lead to increased service fees from shipping partners.
• Risks associated with freight handled through the network, including theft, damage, loss, and failure to detect unsafe or prohibited items, potentially leading to liabilities and reputational harm.
• Failure to renew the Ocean Transportation Intermediary (OTI) License or any delays in doing so could compel a temporary suspension of logistics business.
• Reliance on a few major customers and third-party transportation/labor providers, with interruption in any of their operations having an adverse effect.
• Limited operating history and experience in the new logistics and warehousing services, potentially leading to difficulties in marketing, selling, and system maintenance.
• Misconduct by authorized employees with access to company assets could lead to significant losses, damage to reputation, and legal claims.
• Insurance may not fully cover all operational risks, or changes in insurance costs/availability could increase expenses or reduce coverage.
• Negative publicity about the company, its products, services, or management could materially and adversely affect its reputation and business.
• Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and harm the company's reputation.
• Operational system failures or interruptions, particularly with third-party systems and software like GoFreight and Google Drive, could materially harm operations.
• Inventory losses caused by theft, vandalism, or accidents during transportation and/or warehousing could result in substantial losses and reduced customer satisfaction.
• Failure to attract, recruit, or retain key personnel, including executive officers, senior management, and key employees, could affect ongoing operations and growth.
• The high percentage of foreign employees who do not have permanent work permits in the U.S. may increase turnover ratio and labor costs.
• Future acquisitions may expose the company to potential risks, including integration challenges, unforeseen liabilities, and diversion of resources.
• Subject to logistics and warehousing and other laws and regulations in the U.S., with potential for administrative, civil, or criminal penalties for violations.
• Non-compliance with laws and regulations by third parties with which the company conducts business could expose it to legal expenses, compensation, and business disruptions.
• Third parties may claim infringement of their proprietary intellectual property rights, leading to significant legal expenses and restrictions on promoting services.
• Subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect business, prospects, results of operations, and financial condition.
• Allegations, harassment, or other detrimental conduct by third parties could harm the company's reputation and cause loss of market share and customers.
• A possible short squeeze due to a sudden increase in demand for Class A common stock that largely exceeds supply may lead to further price volatility.
• Future equity offerings or other equity issuances could further dilute Class A common stock.
• Failure to maintain an effective system of internal controls could lead to reporting failures or fraud, adversely affecting investor confidence and stock price.
• May not be able to maintain the listing of Class A common stock on the Nasdaq Capital Market.
• If securities or industry analysts do not publish research or publish negative reports, the price of Class A common stock and trading volume could decline.
• Anti-takeover provisions in the certificate of incorporation and bylaws may discourage, delay, or prevent a change in control.
• Reduced disclosure requirements as an emerging growth company and smaller reporting company may make common stock less attractive to investors.

Future Outlook

The company is undergoing a business transformation, shifting its focus from parallel-import vehicle sales to logistics and warehousing services. It plans to continue improving operational efficiencies and expanding its market presence in the California area for the two acquired businesses, Edward and TWEW. The company may also develop an online platform to automate and digitalize key steps of the supply chain for customers. Management forecasts a loss for 2026 and acknowledges that the success of this new business line and market expansion depends on various factors, including the business environment, operational management, market expansion, government policies on ocean freight and tariffs, and U.S.-China trade relations.

Management Comments

• "We shifted its business focus since February 2024 by acquiring Edward Transit Express Group Inc. (Edward), a California-based common carrier specializing in ocean transportation services, to start our logistics and warehousing operations."
• "We believe that the offices and warehouses we currently lease are adequate to meet our needs for the foreseeable future."
• "Management has concluded that there are no conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these consolidated financial statements."
• "Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively."
• "Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow."

Industry Context

StockSavvy.ai notes that Cheetah Net's strategic pivot to logistics and warehousing aligns with broader industry trends emphasizing supply chain resilience and efficiency, particularly in the dynamic U.S.-China trade corridor. However, the industry is characterized by intense competition and susceptibility to macroeconomic and geopolitical shifts, as evidenced by the revenue decline in Edward due to trade tensions. The company's reliance on a concentrated customer base and third-party providers reflects common operational structures in the logistics sector, but also highlights potential vulnerabilities in a highly fragmented market.

Comparison to Industry Standards

• The logistics and warehousing industry in the U.S. is highly competitive and rapidly evolving, with many new entrants and only a few leading companies.
• Cheetah Net believes its niche focus on international trade flows between the PRC and U.S., combined with integrated services, provides a differentiated value proposition.
• The company acknowledges that some current or future competitors may have longer operating histories, greater brand recognition, or more extensive financial, technical, or marketing resources.
• No specific comparable companies, projects, or numerical benchmarks are provided in the filing for a direct quantitative assessment against industry standards.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently involved in any material legal proceedings.
• Anticipates involvement in legal proceedings, claims, and litigation arising in the ordinary course of business, which could incur defense costs, utilize resources, and divert management's attention.

Related Party Transactions

• Engaged in transactions with Weishu Guo, legal representative of NexTrade, consisting of advances for corporate and administrative expenses. As of December 31, 2025, the outstanding balance due to Weishu Guo was approximately $5,204, which is unsecured, non-interest bearing, and repayable on demand.
• The lease for the Irvine, California office space is guaranteed by West Buy Media Inc., a North Carolina Corporation 100% owned by the company's Chief Executive Officer, Huan Liu.

Stakeholder Impact

• Shareholders face potential dilution from recent and future equity offerings and reverse stock splits. The company's ongoing net losses and internal control weaknesses could negatively impact investor confidence, though the recent capital raise provides liquidity.
• Employees, particularly foreign employees without permanent U.S. work permits, may experience increased turnover rates and labor cost impacts. New hires are being made to support the logistics and warehousing segments.
• Customers of the logistics and warehousing services may benefit from the company's focused strategy, but the revenue decline in Edward due to trade war impacts could affect service reliability perceptions.
• Suppliers, including ocean carriers and trucking companies, are critical to the company's operations, and reliance on a few key partners creates dependency.
• Creditors holding loan receivables from third parties benefit from interest income, but also bear credit risk. The recent capital raise improves the company's overall financial position to meet obligations.

Next Steps

• Continue to improve operational efficiencies and expand market presence of the acquired logistics and warehousing businesses (Edward and TWEW) in the California area.
• Increase marketing staff to pursue new business opportunities and focus on international trade flows between the PRC and the U.S.
• Potentially develop an online platform to automate and digitalize key steps of the supply chain for customers.
• Remediate identified material weaknesses in internal control over financial reporting, including addressing segregation of duties, formalizing policies for TWEW, and enhancing risk assessment procedures.
• The board of directors will determine the specific ratio and timing for the approved reverse stock split (up to 1-for-500).
• Renew the Ocean Transportation Intermediary (OTI) License before its expiration on May 31, 2027.

Key Dates

Recommendation

Cheetah Net is undergoing a significant business transformation, exiting a failing segment and investing in a new, competitive logistics sector. While the recent capital raise provides necessary liquidity and the pivot is strategic, the company faces substantial challenges including increasing net losses from continuing operations, a decline in revenue from one of its key acquired logistics businesses, and identified material weaknesses in internal controls. The potential for further reverse stock splits and ongoing geopolitical risks add uncertainty. A 'Hold' recommendation is appropriate as the company navigates this transition, with investors needing to monitor execution of the new strategy and remediation of internal control issues before considering further investment.

Keywords

Logistics, Warehousing, Supply Chain, Freight Forwarding, NVOCC, International Trade, U.S.-China Trade, SEC Filing, 10-K, Business Transformation, Discontinued Operations, Financial Performance, Nasdaq, CTNT, Edward Transit Express Group, TW & EW Services, Reverse Stock Split, Internal Controls, Geopolitical Risk, Capital Raise