0001410578-24-001939 | 10-Q | XBRL Viewer | Cheetah NET Supply Chain Service INC

September 30,

December 31,

(Unaudited)

LETTER OF CREDIT FINANCING ("LC FINANCING")	9 Months Ended
Sep. 30, 2024
LETTER OF CREDIT FINANCING ("LC FINANCING")
LETTER OF CREDIT FINANCING ("LC FINANCING")	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 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 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 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 September 30, 2024. (see Note 3).

LETTER OF CREDIT FINANCING ("LC FINANCING")

9 Months Ended

Sep. 30, 2024

LETTER OF CREDIT FINANCING ("LC FINANCING")

LETTER OF CREDIT FINANCING ("LC FINANCING")

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 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 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 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 September 30, 2024. (see Note 3).

COMMITMENTS AND CONTINGENCIES	9 Months Ended
Sep. 30, 2024
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 18 — COMMITMENTS AND CONTINGENCIES 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.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 18 — COMMITMENTS AND CONTINGENCIES

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.

LEASES - Components of lease expense (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases expenses
Operating lease expenses	$ 251,302	$ 133,277
Short-term lease expenses	84,989	82,372
Total leases expenses	$ 336,291	$ 215,649

Intangible Asset and Goodwill - Amortization of intangible assets with finite lives (Details)	9 Months Ended
	Sep. 30, 2024
Developed Technology
Intangible Asset
Estimated Useful Lives (month)	84 months
Customer Relationships
Intangible Asset
Estimated Useful Lives (month)	144 months
Trade Names
Intangible Asset
Estimated Useful Lives (month)	84 months

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

STOCKHOLDERS' EQUITY (Details) - USD ($)									3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($)	Jul. 26, 2024	Jul. 25, 2024	Jul. 02, 2024	May 14, 2024	Feb. 02, 2024	Jan. 24, 2024	Aug. 03, 2023	Jun. 27, 2022	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2022	Nov. 07, 2024	Mar. 14, 2024
STOCKHOLDERS' EQUITY
Common stock authorized			1,000,000,000						1,000,000,000			1,000,000,000	1,000,000,000
Issuance of preferred stock			500,000
Common stock par value			$ 0.0001						$ 0.0001			$ 0.0001	$ 0.0001
Common stock, shares issued									2,507,093			2,507,093	1,119,750
Common stock shares outstanding									2,507,093			2,507,093	1,119,750
Gross proceeds from issuance of common stock												$ 8,402,676
Aggregate gross proceeds from public offering									$ 1,093,556	$ 3,725,403	$ 7,309,120
Stock Issued During Period, Value, Acquisitions											$ 900,000
Institutional Investors
STOCKHOLDERS' EQUITY
Underwriting discounts and the offering expenses		$ 90,000
Edward Transit Express Group Inc.
STOCKHOLDERS' EQUITY
Business Acquisition, Percentage of Voting Interests Acquired						100.00%
Purchase price						$ 300,000
Juguang Zhang \| Edward Transit Express Group Inc.
STOCKHOLDERS' EQUITY
Business Acquisition, Percentage of Voting Interests Acquired						100.00%
Purchase price					$ 300,000
Number of shares issued on acquisition					79,521
Investor
STOCKHOLDERS' EQUITY
Shares issued during period shares other								104,125
Purchase price								$ 28.8
Gross proceeds from issuance of common stock								$ 3,000,000.0
Offering expenses								300,000
Net proceeds from issuance of common stock								2,700,000					$ 1,200,000	$ 1,200,000
Total proceeds from issuance of common stock								$ 2,400,000
Period for outstanding amount to be paid following the Company's IPO								6 months
Rapid
STOCKHOLDERS' EQUITY
Outstanding amount to be paid								$ 600,000								$ 600,000
Class A common stock
STOCKHOLDERS' EQUITY
Common stock authorized			891,750,000						891,750,000			891,750,000	891,750,000
Common stock par value		$ 0.0001							$ 0.0001			$ 0.0001	$ 0.0001
Common stock, shares issued									1,960,218			1,960,218	604,125
Common stock shares outstanding									1,960,218			1,960,218	604,125
Voting rights			one
Purchase price issued		$ 3.68
Net proceeds to the company	$ 1,100,000
Shares issued during period shares		404,979
Exercise price of warrants							$ 80.00
Class A common stock \| Institutional Investors
STOCKHOLDERS' EQUITY
Percentage of fee		7.25%
Class A common stock \| Juguang Zhang \| Edward Transit Express Group Inc.
STOCKHOLDERS' EQUITY
Stock Issued During Period, Value, Acquisitions					$ 1,200,000
Class A common stock \| Subsequent Event
STOCKHOLDERS' EQUITY
Purchase price															$ 1.00
Class A common stock \| IPO
STOCKHOLDERS' EQUITY
Shares issued during period shares							78,125
Share price							$ 64.00
Aggregate gross proceeds from public offering							$ 5,000,000.0
Warrants to purchase shares of common stock							3,906
Exercise price of warrants							$ 80.00
Class A common stock \| May offering
STOCKHOLDERS' EQUITY
Purchase price				$ 9.92
Gross proceeds from issuance of common stock				$ 8,190,000
Shares issued during period shares				825,625
Class B common stock
STOCKHOLDERS' EQUITY
Common stock authorized			108,250,000						108,250,000			108,250,000	108,250,000
Common stock par value									$ 0.0001			$ 0.0001	$ 0.0001
Common stock, shares issued									546,875			546,875	515,625
Common stock shares outstanding									546,875			546,875	515,625
Voting rights			15

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net (loss) income	$ (3,037,102)	$ 170,715
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of operating lease right-of-use assets	182,862	123,288
Amortization of Intangible Assets	34,858	0
Allowance of credit loss of accounts receivable	1,095,094
Share-based compensation expenses	261,666
Depreciation	17,518
Deferred income tax expenses (benefits)	(1,057,853)	48,137
Changes in operating assets and liabilities:
Accounts receivable	2,155,505	1,482,732
Inventory	1,515,269	630,572
Other receivables	100,030	331,336
Prepaid expenses and other current assets	(107,030)	42,510
Other payables and other current liabilities	(239,625)	172,880
Operating lease liabilities	(319,666)	(130,436)
Net cash provided by operating activities	601,526	2,871,734
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(220,117)
Purchase of property, plant, and equipment	(365,000)
Loans made to third parties	(2,385,795)
Net cash used in investing activities	(2,970,912)
Cash flows from financing activities:
Proceeds from follow-on public offering, net of expenses	8,402,676
Proceeds from initial public offering, net of expenses		3,725,403
Cash paid for warrant termination	(78,125)
Proceeds from issuance of common stock under private placement transaction	600,000	1,200,000
Repayments of inventory financing		(4,164,100)
Proceeds from letter of credit financing	25,971	16,659,243
Repayments of letter of credit financing	(1,030,536)	(20,687,255)
Proceeds from loans from dealer finance		389,296
Repayments of loans from dealer finance		(431,043)
Proceeds from Line of Credit		3,244,488
Repayment of Line of Credit	(688,711)	(2,375,197)
Proceeds from premium finance	252,718	221,139
Repayments of premium finance	(222,538)
Repayments of long-term borrowings	(24,268)	(24,143)
Borrowing from a related party		42,923
Repayments made to a related party	(13,423)	(26,000)
Net cash provided by (used in) financing activities	7,223,764	(2,225,246)
Net increase in cash	4,854,378	646,488
Cash, beginning of period	432,998	58,381
Cash, end of period	5,287,376	704,869
Supplemental cash flow information
Cash paid for interests	37,169	$ 252,118
Noncash Financing and investing activities:
Fair value of common stock issued for acquisition	$ 900,000

INCOME TAXES

9 Months Ended

Sep. 30, 2024

INCOME TAXES

INCOME TAXES

NOTE 15 — INCOME TAXES

The Company and its operating subsidiaries in the United States are subject to federal and various state income taxes. 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, 2023.

(i)

The components of the income tax provision were as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Current:
Federal	$	—	$	7,022	$	(128)	$	9,422
State		—		447		4,456		667
Total current income tax provision		—		7,469		4,328		10,089
Deferred:
Federal		(424,263)		26,361		(761,498)		42,827
State		(135,717)		10,387		(295,800)		5,310
Total deferred income tax expenses (benefits)		(559,980)		36,748		(1,057,297)		48,137
Total income tax benefits	$	(559,980)	$	44,217	$	(1,052,969)	$	58,226

(ii)

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


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Federal statutory tax rate	$	21.0	%	$	21.0	%	$	21.0	%	$	21.0	%
State statutory tax rate		4.3	%		5.1	%		5.6	%		2.1	%
Non-deductible expenses		(0.1)	%		0.3	%		(0.1)	%		0.3	%
Non-taxable income		(1.6)	%		0.0	%		(0.8)	%		2.1	%
Effective tax rate	$	23.6	%	$	26.4	%	$	25.7	%	$	25.5	%

(iii)

Deferred tax assets, net were composed of the following:


	September 30,	December 31,
	2024	2023
	(Unaudited)
Deferred tax assets:
Net operating loss carry forwards	873,312	47,905
Lease Liability	419,441	—
Others	255,837	—
Total deferred tax assets	1,548,590	47,905

Deferred tax liabilities:
Intangible assets	(111,772)	—
Fixed assets	(407)	—
Right of use assets	(461,802)	—
Total deferred tax liabilities	(573,981)	—

Total deferred tax assets, net	974,609	47,905

As of December 31, 2023, the Company had a cumulative U.S. federal net operating loss (“NOL”) of $47,905, which may reduce future federal taxable income. 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. Its average annual gross receipts for the three tax years preceding 2022 do not exceed the relevant threshold amount ($27 million for 2022). The Company will no longer meet the small business exception in 2024, but it meets one of the other exceptions to the §163(j) limitation, “floor plan financing indebtedness” (indebtedness used to finance the acquisition of motor vehicles held for sale or lease or secured by such inventory) and will therefore continue to be exempt from the §163(j) interest expenses limitation in 2024.

The Company periodically evaluates the likelihood of the realization of deferred tax assets and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company believes that it is more likely than not that its deferred tax assets will be realized before expiration.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

LEASES - Operating lease related assets and liabilities recorded on the balance sheets (Details)		9 Months Ended
	Jul. 19, 2024 USD ($) ft²	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
LEASES
Lessee, Operating Lease, Existence of Option to Extend [true false]		true
Extension term of the operating lease		3 years
Right-of-use assets		$ 1,976,714	$ 190,823
Operating lease liabilities - current		376,062	39,703
Operating lease liabilities - non-current		1,419,329	151,121
Total operating lease liabilities		$ 1,795,391	$ 190,824
Zina Development, LLC
LEASES
Office space \| ft²	15,000
West Buy Media Inc \| Chief Executive Officer \| Zina Development, LLC
LEASES
% of Ownership	100.00%
Minimum
LEASES
Term of the operating lease		12 months
Minimum \| Zina Development, LLC
LEASES
Monthly base rent	$ 42,000
Maximum
LEASES
Term of the operating lease		55 months
Maximum \| Zina Development, LLC
LEASES
Monthly base rent	$ 45,000

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

LEASES

Schedule of components of lease expense


	For the Nine Months Ended
	September 30,
	2024		2023
	(Unaudited)		(Unaudited)
Leases expenses
Operating lease expenses	$	251,302	$	133,277
Short-term lease expenses		84,989		82,372
Total leases expenses	$	336,291	$	215,649

Schedule of Right-of-use assets and weighted average remaining lease terms and discount rates for all operating leases


	September 30, 2024		December 31, 2023
Right-of-use assets	$	1,976,714	$	190,823

Operating lease liabilities – current	$	376,062	$	39,703
Operating lease liabilities – non-current		1,419,329		151,121
Total operating lease liabilities	$	1,795,391	$	190,824


	September 30, 2024		December 31, 2023
	(Unaudited)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3.11		3.17
Weighted average discount rate *	11.4	%	17.8	%

*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.

Schedule by years, of maturities of lease liabilities


Fiscal Years	Amount
	(Unaudited)
2024 (excluding the nine months ended September 30, 2024)	$	146,037
2025		639,749
2026		795,559
2027		517,765
Thereafter		126,976
Total lease payments		2,226,086
Less: imputed interest		(430,695)
Present value of lease liabilities	$	1,795,391

LONG-TERM BORROWINGS - Future maturities of the loan from Thread Capital (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Future maturities of the loan
Total	$ 653,344	$ 677,612
Thread Capital
Future maturities of the loan
2024 (excluding the nine months ended September 30, 2024)	5,553
2025	23,553
2026	24,881
2027	26,285
2028	27,768
Thereafter	73,706
Total	$ 181,746	$ 198,488

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

LONG-TERM BORROWINGS - Tabular (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
LONG-TERM BORROWINGS
Total	$ 653,344	$ 677,612
Current portion of long-term debt	34,146	32,887
Long-term debt, net of current portion	619,198	644,725
SBA
LONG-TERM BORROWINGS
Total	471,598	479,124
Thread Capital
LONG-TERM BORROWINGS
Total	$ 181,746	$ 198,488

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

LONG-TERM BORROWINGS

9 Months Ended

Sep. 30, 2024

LONG-TERM BORROWINGS

LONG-TERM BORROWINGS

NOTE 12 — LONG-TERM BORROWINGS

Long-term borrowings consisted of the following:


	September 30,		December 31,
	2024		2023
	(Unaudited)
Small Business Administration⁽¹⁾	$	471,598	$	479,124
Thread Capital Inc.⁽²⁾		181,746		198,488
Total long-term borrowings	$	653,344	$	677,612

Current portion of long-term borrowings	$	34,146	$	32,887

Non-current portion of long-term borrowings	$	619,198	$	644,725

(1)

On May 24, 2020, the Company entered into a loan agreement with the U.S. Small Business Administration (the “SBA”), an agency of the U.S. Government, to borrow $150,000 for 30 years, with a maturity date of May 23, 2050. 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. Beginning 12 months from the date of this loan agreement, the Company is required to make a monthly installment payment of $731 within the term of loan, with the last installment to be paid in May 2050.

On March 16, 2022, the Company entered into an amended agreement with SBA to borrow an additional $350,000 for 30 years as working capital to alleviate economic injury caused by the COVID-19 pandemic. In the aggregate, the Company’s borrowings amounted to $500,000 with a maturity date of May 23, 2050. The amended loan bears a fixed interest rate of 3.75% per annum. Beginning from March 2022, 24 months from the date of the original loan agreement, the Company is required to make a new monthly installment payment of $2,485 within the remaining term of loan, with the last installment to be paid in May 2050.

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


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	3,066
2025		11,024
2026		11,474
2027		11,942
2028		12,429
Thereafter		421,663
Total	$	471,598

(2)

On May 15, 2020, the Company entered into a loan agreement with Thread Capital Inc. (“Thread Capital”) to borrow $50,000 as working capital with a maturity date of November 1, 2024. The loan bore a fixed interest rate of 5.50% per annum. This loan agreement was subsequently terminated on May 17, 2021, at which time the Company entered into a new loan agreement with Thread Capital to borrow an additional $171,300 as working capital. 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 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 September 30, 2024 were as follows:


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	5,553
2025		23,553
2026		24,881
2027		26,285
2028		27,768
Thereafter		73,706
Total	$	181,746

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.

ORGANIZATION AND BUSINESS DESCRIPTION (Details)						9 Months Ended
ORGANIZATION AND BUSINESS DESCRIPTION (Details)	Jan. 24, 2024 USD ($)	Oct. 19, 2022 USD ($)	Apr. 09, 2021 USD ($)	Feb. 15, 2019 USD ($)	Jan. 01, 2017 USD ($)	Sep. 30, 2024 segment	Jan. 17, 2019 shares	Aug. 31, 2016 shares
ORGANIZATION AND BUSINESS DESCRIPTION
Number of operating segments \| segment						2
Cheetah Net
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership						100.00%
Allen-Boy
ORGANIZATION AND BUSINESS DESCRIPTION
Total consideration					$ 100
Pacific
ORGANIZATION AND BUSINESS DESCRIPTION
Total consideration				$ 100
Pacific \| Class A common stock
ORGANIZATION AND BUSINESS DESCRIPTION
Number of shares beneficially owned in the company \| shares							1,200,000
Entour
ORGANIZATION AND BUSINESS DESCRIPTION
Total consideration			$ 100
Logistics
ORGANIZATION AND BUSINESS DESCRIPTION
Total consideration		$ 100
Edward
ORGANIZATION AND BUSINESS DESCRIPTION
Total consideration	$ 1,500,000
Yingchang Yuan \| Class A common stock
ORGANIZATION AND BUSINESS DESCRIPTION
Number of shares beneficially owned in the company \| shares								1,200,000

LONG-TERM BORROWINGS - SBA (Details) - SBA - USD ($)	Mar. 16, 2022	May 24, 2020
LONG-TERM BORROWINGS
Face amount of borrowings	$ 350,000	$ 150,000
Term of borrowings	30 years	30 years
Fixed interest rate	3.75%	3.75%
Term from date of the original loan agreement, the company is required to make a new monthly installment payment	24 months	12 months
Monthly installment payment	$ 2,485	$ 731
Maximum
LONG-TERM BORROWINGS
Face amount of borrowings	$ 500,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Intangible Asset and Goodwill

9 Months Ended

Sep. 30, 2024

Intangible Asset and Goodwill

Intangible Asset and Goodwill

NOTE 8 — Intangible Asset and Goodwill

On January 24, 2024, Cheetah Net entered into a Stock Purchase Agreement to acquire 100% of Edward. The transaction closed on February 2, 2024. The gross purchase price was $1.5 million. Consideration 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. The assets acquired and liabilities assumed were estimated based on management’s estimates, available information, and supportable assumptions that management considered reasonable. During the second quarter, the Company finalized the purchase price allocation. 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 September 30, 2024 and shown below.


	As of June 30, 2024		As of March 31, 2024		Change
	Finalized value		Preliminary value		Amount
Acquired assets acquired and (liabilities):
Cash	$	79,883	$	79,883	$	—
Accounts Receivable		47,354		47,354		—
Other Current Assets		42,685		42,685		—
Right-of-use Lease Asset		645,625		645,625		—
Fixed Assets		60,795		60,795		—
Developed Technology		120,000		120,000		—
Customer Relationships		360,000		360,000		—
Trade Names		36,000		36,000		—
Goodwill		568,532		437,382		131,150
Other Noncurrent Assets		27,000		27,000		—
Accounts Payable		(34,686)		(34,686)		—
Accrued Expenses Payable		(20,933)		(20,933)		—
Deferred Tax Liability		(131,150)		—		(131,150)
Operating Lease Liability, Current		(94,548)		(94,548)		—
Operating Lease Liability, Long Term		(506,557)		(506,557)		—
Total Purchase Consideration	$	1,200,000	$	1,200,000	$	—

The fair value of the accounts receivable, other assets, and liabilities assumed approximates their gross contractual amounts. The fair value of the fixed assets approximates its net carrying value as of the acquisition date. The fair values of intangible assets, including developed technology, customer relationships, and trade names were determined using assumptions that are representative of those a market participant would use in estimating fair value.

Amortization of intangible assets with finite lives are computed using the straight-line method over the estimated useful lives as below:


Intangible Assets		Estimated Useful Lives (month)
Developed Technology		84
Customer Relationships		144
Trade Names		84

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.

PROPERTY, PLANT, AND EQUIPMENT, NET (Details)	Sep. 30, 2024 USD ($)
PROPERTY, PLANT, AND EQUIPMENT, NET
Subtotal	$ 425,795
Less accumulated depreciation	(17,518)
Property, plant, and equipment, net	$ 408,277
Motor Vehicles
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated Useful Life in Years	10 years
Subtotal	$ 365,000
Leasehold improvements
PROPERTY, PLANT, AND EQUIPMENT, NET
Subtotal	$ 60,795
Leasehold improvements \| Minimum
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated Useful Life in Years	3 years
Leasehold improvements \| Maximum
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated Useful Life in Years	6 years

ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

ACCOUNTS RECEIVABLE

Schedule of components of accounts receivable


	September 30,		December 31,
	2024		2023
	(Unaudited)
Accounts receivable
Parallel-import Vehicles	$	4,349,841	$	6,494,695
Logistics and Warehousing		36,703		—
Less: allowance of credit loss		(1,095,094)		—
Total accounts receivable	$	3,291,450	$	6,494,695

Schedule of accounts receivable aging


	September 30,
	2024
	(Unaudited)
Accounts receivable aging:
Less than 150 days	$	200,297
151-180 days		—
181-210 days		32,165
210-365 days		1,241,231
Over 365 days		2,876,148
Less: allowance for credit loss		(1,095,094)
Total accounts receivable	$	3,254,747

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2024

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

NOTE 3 — ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


	September 30,		December 31,
	2024		2023
	(Unaudited)
Accounts receivable
Parallel-import Vehicles	$	4,349,841	$	6,494,695
Logistics and Warehousing		36,703		—
Less: allowance of credit loss		(1,095,094)		—
Total accounts receivable	$	3,291,450	$	6,494,695

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

Parallel-import Vehicles Segment

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,
	2024
	(Unaudited)
Accounts receivable aging:
Less than 150 days	$	200,297
151-180 days		—
181-210 days		32,165
210-365 days		1,241,231
Over 365 days		2,876,148
Less: allowance for credit loss		(1,095,094)
Total accounts receivable	$	3,254,747

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 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.

COMMITMENTS AND CONTINGENCIES (Details)	Aug. 07, 2024 USD ($)
COMMITMENTS AND CONTINGENCIES.
Amount awarded form another party	$ 64,359.22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets, net (Details)	Sep. 30, 2024
Developed Technology
Intangible Asset
Estimated useful life	7 years
Customer Relationships
Intangible Asset
Estimated useful life	12 years
Trade Names
Intangible Asset
Estimated useful life	7 years

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

LETTER OF CREDIT FINANCING ("LC FINANCING") (Details)	3 Months Ended		9 Months Ended		12 Months Ended
LETTER OF CREDIT FINANCING ("LC FINANCING") (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($) company	Dec. 31, 2023 USD ($) company
LETTER OF CREDIT FINANCING ("LC FINANCING")
Outstanding balance	$ 0		$ 0		$ 1,004,565
Interest expenses	7,027	$ 7,751	22,590	$ 23,545
Book value of accounts receivable	3,254,747		3,254,747
Pledged as collateral \| LETTER OF CREDIT FINANCING
LETTER OF CREDIT FINANCING ("LC FINANCING")
Book value of accounts receivable	0		0		$ 1,084,775
LETTER OF CREDIT FINANCING
LETTER OF CREDIT FINANCING ("LC FINANCING")
Number of third-party lending companies \| company				3	2
Interest expenses	$ 0	$ 207,648	$ 23,123	$ 789,104
LETTER OF CREDIT FINANCING \| Minimum
LETTER OF CREDIT FINANCING ("LC FINANCING")
Interest rate percentage		18.00%		18.00%

Intangible Asset and Goodwill (Tables)

9 Months Ended

Sep. 30, 2024

Intangible Asset and Goodwill

Schedule of final valuation of assets acquired and liabilities assumed


	As of June 30, 2024		As of March 31, 2024		Change
	Finalized value		Preliminary value		Amount
Acquired assets acquired and (liabilities):
Cash	$	79,883	$	79,883	$	—
Accounts Receivable		47,354		47,354		—
Other Current Assets		42,685		42,685		—
Right-of-use Lease Asset		645,625		645,625		—
Fixed Assets		60,795		60,795		—
Developed Technology		120,000		120,000		—
Customer Relationships		360,000		360,000		—
Trade Names		36,000		36,000		—
Goodwill		568,532		437,382		131,150
Other Noncurrent Assets		27,000		27,000		—
Accounts Payable		(34,686)		(34,686)		—
Accrued Expenses Payable		(20,933)		(20,933)		—
Deferred Tax Liability		(131,150)		—		(131,150)
Operating Lease Liability, Current		(94,548)		(94,548)		—
Operating Lease Liability, Long Term		(506,557)		(506,557)		—
Total Purchase Consideration	$	1,200,000	$	1,200,000	$	—

Schedule of amortization of intangible assets using straight-line method


Intangible Assets		Estimated Useful Lives (month)
Developed Technology		84
Customer Relationships		144
Trade Names		84

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and cash equivalents (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Cash and cash equivalents
Cash held in Current Accounts	$ 4,275,271	$ 432,998
Certificate of Deposit	1,012,105
Total cash and cash equivalents shown in the statements of cash flows	$ 5,287,376	$ 432,998

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These statements should be read in conjunction with the Company’s audited consolidated financial statements and noted thereto for the year ended December 31, 2023, included in the Company’s annual report on Form 10-K (File No. 001-41761), filed with the SEC on March 18, 2024 (the “Annual Report”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the unaudited condensed consolidated financial statements not misleading have been included. Operating results for the interim period ended September 30, 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. All inter-company balances and transactions are eliminated upon consolidation.

Uses of estimates

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivables, the valuation of inventory, the revenue recognition, and the realization of deferred tax assets. Actual results could differ from those estimates.

Cash and cash equivalents

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,		December 31,
	2024		2023
	(Unaudited)
Cash held in Current Accounts	$	4,275,271	$	432,998
Certificate of Deposit		1,012,105		—
Total cash and cash equivalents shown in the statements of cash flows	$	5,287,376	$	432,998

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 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 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. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. 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 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

The Company’s loans receivable are recognized at the point of loan disbursement, initially measured at fair value, primarily reflecting the disbursed amount and associated transaction costs. Both secured and unsecured lending are encompassed in these receivables, with terms including varying interest rates and maturity dates. Subsequently, these receivables are measured at amortized cost using the effective interest method, which ensures the accurate recognition of interest income over the loan period. The interest rates for these loans may be subject to change based on the terms of loan agreements. Periodic reviews of the loan portfolio are conducted to assess for impairment, utilizing the expected credit loss model. This approach considers historical credit loss experience, current conditions, and reasonable forecasts in estimating potential credit losses. As of the end of the reporting periods, no impairment allowance was recorded for these loans receivable.

Inventory

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 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 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

Property, plant, and equipment are stated at cost less accumulated depreciation and impairment charges. Depreciation is calculated primarily based on the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the assets:


Property, plant, and equipment		Estimated useful life
Motor vehicles		10 years
Leasehold improvements		3-6 years

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.

Intangible assets, net

The Company’s intangible assets consist of developed technology, customer relationships, and trade names, which are amortized on a straight-line basis or over their respective useful lives using patterns that reflect the economic benefits the assets are expected to realize. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

Amortization of intangible assets is computed using the straight-line method over the estimated useful lives as below:


Intangible assets		Estimated useful life
Developed Technology		7 years
Customer relationships		12 years
Trade names		7 years

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 not recognize any indefinite-lived intangible assets for the nine months ended September 30, 2024.

Fair value of financial instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

●

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 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.

Leases

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 842, Leases (“Topic 842”). The Company leases office space, which is classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with an initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of September 30, 2024 and December 31, 2023.

Goodwill

The Company records goodwill as the excess of the consideration transferred over the fair value of net assets acquired in business combinations. Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below. The Company has one reporting unit. The Company measures goodwill impairment, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill.

The review of goodwill impairment consists of either using a qualitative approach to determine whether it is more likely than not that the fair value of the assets is less than their respective carrying values or a one-step quantitative impairment test. In performing the qualitative assessment, the Company considers many factors in evaluating whether the carrying value of goodwill may not be recoverable, including declines in the Company’s stock price and market capitalization of the Company and macroeconomic conditions. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, additional quantitative impairment testing is performed. The quantitative test requires that the carrying value of each reporting unit be compared with its estimated fair value. If the carrying value of a reporting unit is greater than its fair value, a goodwill impairment charge will be recorded for the difference (up to the carrying value of goodwill). The Company uses the income approach and/or a market-based approach to determine the reporting units’ fair values, which are based on discounted cash flows. 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.

Impairment of Long-lived assets

Impairment of long-lived assets

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group. If the assets are impaired, an impairment loss is measured as the amount by which the carrying amount of the asset group exceeds the fair value of the asset. The Company estimates fair value using the expected future cash flows discounted at a rate consistent with the risks associated with the recovery of the asset.

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

ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The Company operates in two business segments: parallel-import vehicle dealership and logistics and warehousing services. Revenue from the parallel-import vehicle dealership business is generated from the sales of parallel-import vehicles to both domestic and overseas parallel-import car dealers. It purchases automobiles from the U.S. market through its team of professional purchasing agents, and mainly resells them to parallel-import car dealers in the U.S. and the PRC. In accordance with ASC 606, the Company recognizes revenue at the point in time when the performance obligation has been satisfied and control of the vehicles has been transferred to the dealers. For sales to U.S. domestic parallel-import car dealers, revenue is recognized when a vehicle is delivered, and its title has been transferred to the dealers. For overseas sales, the Company sells vehicles under Cost and Freight (“CFR”) shipping point terms, and revenue is recognized when a vehicle is loaded on a cargo ship and its title has been transferred to the dealers. The Company accounts for the revenue generated from sales of vehicles on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual vehicle to parallel-import vehicle dealers, and there is no separately identifiable other promise in the contracts. The Company’s vehicles are sold with no right of return and the Company does not provide other credits or sales incentives to parallel-import car dealers. Historically, no customer returns have occurred. 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. The Company’s role as the principal in these services involves managing the entire shipping process from origin to destination, allowing revenue recognition on a gross basis throughout the transit period. For warehousing services, revenue is primarily derived from storage fees, which are recognized based on the actual number of days the goods are stored in the warehouse while awaiting further transportation. Across all operations, the Company maintains a principal position, controlling the goods and services, bearing inventory and pricing risks, and fulfilling performance obligations directly. Each contract is typically structured with a single performance obligation without allowances for returns or sales incentives, ensuring straightforward revenue recognition with no provisions for sales return allowances based on historical experiences of no returns.

Contract balances and remaining performance obligations

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 nine months ended September 30, 2024 and 2023 was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue from Parallel-Import Vehicles
U.S. domestic market	$	—	$	1,244,615	$	200,297	$	8,160,395
Overseas market		—		8,793,631		1,430,951		24,315,319
Revenue from Logistics and Warehousing
U.S. domestic market		36,860		—		136,575		—
Overseas market		24,348		—		95,030		—
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

Geographic information

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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
U.S. domestic market	$	36,860	$	1,244,615	$	336,872	$	8,160,395
Overseas market		24,348		8,793,631		1,525,981		24,315,319
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

Cost of revenues

Parallel-import Vehicles Segment

Cost of parallel import vehicle revenue mainly includes the cost of vehicles purchased from U.S. automobile dealers, non-refundable sales tax, dealership service fees, and other expenses. It also includes fulfillment expenses, which consist primarily of (i) vehicle warehousing and towing fees, (ii) vehicle insurance expenses, (iii) commissions paid to purchasing agents incurred in vehicle pick-up and the vehicle title transfer process, (iv) broker consulting fees incurred to acquire new vehicles, and (v) purchase department labor costs.

Logistics and Warehousing Segment

Cost of logistics and warehousing service revenue mainly includes the cost of freight and fulfillment expenses.

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company has not assessed a valuation allowance as it determines it is more likely than not that all deferred tax assets will be realized before expiration.

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties related to an uncertain tax position, is and when required, as part of income tax expenses in the unaudited condensed consolidated statements of operations. 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. operating subsidiaries are subject to the U.S. tax laws. The Company elected to file income taxes as a corporation instead of an LLC for the tax years ended December 31, 2020 through December 31, 2021. As of September 30, 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.

(Loss) Earnings per share

The Company computes (loss) earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. 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 three and nine months ended September 30, 2024 and 2023, there were no dilutive shares outstanding.

Related parties and transactions

The Company identifies related parties, and accounts for and discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.

Parties, which can be a corporation or individual, are considered related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence.

Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition.

Shipping and handling costs

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 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

The Company uses the management approach in determining reportable operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker for making operating decisions about the allocation of resources of the segment and the assessment of its performance in determining the Company’s reportable operating segments. Management has determined that the Company has two operating segments—the parallel-import vehicle segment and the logistics and warehousing segment.

Recent accounting pronouncements

In November 2023, the FASB issued Accounting Standards Update No. 2023-07 (the “Update”), which applies to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the chief operating decision maker uses to assess segment performance and make decisions about allocating resources. Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. 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.

PROPERTY, PLANT, AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2024

PROPERTY, PLANT, AND EQUIPMENT, NET

PROPERTY, PLANT, AND EQUIPMENT, NET

NOTE 6 — PROPERTY, PLANT, AND EQUIPMENT, NET

Property consisted of the following:


	Estimated Useful Life
	in Years	September 30, 2024		December 31, 2023
		(Unaudited)
Motor Vehicles	10	$	365,000		—
Leasehold improvements	3-6		60,795		—
Subtotal			425,795		—
Less accumulated depreciation			(17,518)		—
Property, plant, and equipment, net		$	408,277	$	—

LOANS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

LOANS RECEIVABLE

Schedule of loans receivable


	September 30,		December 31,
	2024		2023
	(Unaudited)
Vehicle pledge loan receivable	$	—	$	172,500
Short-term loan receivable		3,058,295		500,000
Total loans receivable	$	3,058,295	$	672,500

ACCOUNTS RECEIVABLE - Additional (Details)	9 Months Ended		12 Months Ended
ACCOUNTS RECEIVABLE - Additional (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 company	Dec. 31, 2023 USD ($) company
ACCOUNTS RECEIVABLE
Accounts receivable, gross	$ 3,254,747
Accounts receivable	100,000
Over 365 days
ACCOUNTS RECEIVABLE
Accounts receivable, gross	$ 2,876,148
Accounts receivable, allowance for credit loss, percentage	30.00%
Over 210 days
ACCOUNTS RECEIVABLE
Accounts receivable, allowance for credit loss, percentage	25.00%
Third party \| Over 150 days
ACCOUNTS RECEIVABLE
Accounts receivable with deferred payments overdue for over 150 days	$ 3,300,000
Accounts receivable, gross	4,100,000
Overdue balance collected	2,500,000
Letters of credit
ACCOUNTS RECEIVABLE
Number of third-party lending companies \| company		3	2
Pledged as collateral \| Letters of credit
ACCOUNTS RECEIVABLE
Accounts receivable, gross	$ 0		$ 1,084,775

Intangible Asset and Goodwill - Final valuation of assets acquired and liabilities assumed (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024
Acquired assets acquired and (liabilities):
Goodwill	$ 568,532
Edward Transit Express Group Inc.
Acquired assets acquired and (liabilities):
Cash		$ 79,883	$ 79,883
Accounts Receivable		47,354	47,354
Other Current Assets		42,685	42,685
Right-of-use Lease Asset		645,625	645,625
Fixed Assets		60,795	60,795
Goodwill		568,532	437,382
Goodwill	131,150
Other Noncurrent Assets		27,000	27,000
Accounts Payable		(34,686)	(34,686)
Accrued Expenses Payable		(20,933)	(20,933)
Deferred Tax Liability	$ (131,150)	(131,150)
Operating Lease Liability, Current		(94,548)	(94,548)
Operating Lease Liability, Long Term		(506,557)	(506,557)
Total Purchase Consideration		1,200,000	1,200,000
Edward Transit Express Group Inc. \| Developed Technology
Acquired assets acquired and (liabilities):
Finite lived intangible assets		120,000	120,000
Edward Transit Express Group Inc. \| Customer Relationships
Acquired assets acquired and (liabilities):
Finite lived intangible assets		360,000	360,000
Edward Transit Express Group Inc. \| Trade Names
Acquired assets acquired and (liabilities):
Finite lived intangible assets		$ 36,000	$ 36,000

CONCENTRATIONS

9 Months Ended

Sep. 30, 2024

CONCENTRATIONS

CONCENTRATIONS

NOTE 16 — CONCENTRATIONS

Political and economic risk

The operations of the Company are in the U.S. and the Company’s primary market is in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the U.S. and the PRC, as well as by the general states of the U.S. and the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in the U.S. and the PRC. 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.

Credit risk

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 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

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 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.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2024	Jul. 25, 2024	Jul. 02, 2024	Dec. 31, 2023
Common stock, par value per share	$ 0.0001		$ 0.0001	$ 0.0001
Common stock, shares authorized	1,000,000,000		1,000,000,000	1,000,000,000
Common stock, shares issued	2,507,093			1,119,750
Common stock, shares outstanding	2,507,093			1,119,750
Class A common stock
Common stock, par value per share	$ 0.0001	$ 0.0001		$ 0.0001
Common stock, shares authorized	891,750,000		891,750,000	891,750,000
Common stock, shares issued	1,960,218			604,125
Common stock, shares outstanding	1,960,218			604,125
Class B common stock
Common stock, par value per share	$ 0.0001			$ 0.0001
Common stock, shares authorized	108,250,000		108,250,000	108,250,000
Common stock, shares issued	546,875			515,625
Common stock, shares outstanding	546,875			515,625

LOANS RECEIVABLES - Additional Information (Details)				3 Months Ended	9 Months Ended
LOANS RECEIVABLES - Additional Information (Details)	Jun. 20, 2024 USD ($)	Dec. 11, 2023 USD ($) item	Dec. 06, 2023 USD ($) item	Sep. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)	Aug. 16, 2024 USD ($)	Jul. 23, 2024 USD ($)	Feb. 12, 2024
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income				$ 73,541	$ 113,958
Short-term loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of vehicle pledge loan agreement \| item			2
Loan to number of customers \| item		1
Face amount of borrowing	$ 1,000,000	$ 500,000	$ 172,500			$ 649,250	$ 1,500,000
Maximum percentage of retail price on pledge vehicles			90.00%
Initial term of agreement	12 months		90 days
Interest rate	12.00%	12.00%						18.00%
Monthly interest rate						1.00%
Adjusted principal balance						$ 558,295
Overdue interest rate						18.00%
Short-term loan \| For the first 90 days
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest rate			14.40%
Short-term loan \| Beyond 90 days
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest rate			18.00%

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)

3 Months Ended

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Sep. 30, 2024

Sep. 30, 2023

Total Revenues

$ 61,208

$ 10,038,246

$ 1,862,853

$ 32,475,714

COST OF REVENUES

Cost of vehicles

8,365,730

1,515,270

27,190,224

Fulfillment expenses

505,156

140,798

1,722,704

Ocean freight service cost

31,339

119,437

Total cost of revenues

31,339

8,870,886

1,775,505

28,912,928

GROSS PROFIT

29,869

1,167,360

87,348

3,562,786

OPERATING EXPENSES

Selling expenses

19,557

184,061

117,819

603,184

General and administrative expenses

1,102,454

530,089

2,735,450

1,676,559

Allowance of credit loss of accounts receivable

1,095,094

Share-based compensation expenses

261,666

Total operating expenses

2,478,771

714,150

4,210,029

2,279,743

(LOSS) INCOME FROM OPERATIONS

(2,448,902)

453,210

(4,122,681)

1,283,043

OTHER INCOME (EXPENSES)

Interest income

88,459

107

145,631

4,009

Interest expenses

(14,865)

(286,197)

(113,830)

(1,058,111)

Other income

809

OTHER INCOME (EXPENSES), NET

73,630

(286,090)

32,610

(1,054,102)

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES

(2,375,272)

167,120

(4,090,071)

228,941

Income tax (benefits) provision

(559,980)

44,217

(1,052,969)

58,226

NET (LOSS) INCOME

$ (1,815,292)

$ 122,903

$ (3,037,102)

$ 170,715

(Loss) Earnings per share - basic (in dollars per share)

^[1]

$ (1.06)

$ 0.11

$ (1.78)

$ 0.16

(Loss) Earnings per share - diluted (in dollars per share)

^[1]

$ (1.06)

$ 0.11

$ (1.78)

$ 0.16

Weighted average shares - basic (in shares)

^[1]

1,709,610

1,091,727

1,709,610

1,058,509

Weighted average shares - diluted (in shares)

^[1]

1,709,610

1,091,727

1,709,610

1,058,509

Parallel-import Vehicles

Total Revenues

$ 10,038,246

$ 1,631,248

$ 32,475,714

Logistics and Warehousing

Total Revenues

$ 61,208

$ 231,605

[1]	Retrospectively adjusted for the Reverse Stock Split. See also Note 17.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition - Geographic information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Geographic information
Total Revenues	$ 61,208	$ 10,038,246	$ 1,862,853	$ 32,475,714
U.S. domestic market
Geographic information
Total Revenues	36,860	1,244,615	336,872	8,160,395
Overseas market
Geographic information
Total Revenues	$ 24,348	$ 8,793,631	$ 1,525,981	$ 24,315,319

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

OTHER RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2024

OTHER RECEIVABLES

Schedule of components of other receivables


	September 30, 2024		December 31, 2023
	(Unaudited)
Parallel-import Vehicles:
Vehicle Deposit⁽¹⁾	$	100,800	$	162,159
Rent Deposit		117,975		22,095
Sales Tax Refundable⁽²⁾		34,886		217,892
Interest Receivable		81,747		5,423
Others		13,746		3,351
Logistics and Warehousing
Others		4,422		—
Subtotal		353,576		410,920
Less: Allowance for credit loss		—		—
Total Other Receivables	$	353,576	$	410,920

(1)	Vehicle deposits represent security deposits paid to U.S. automobile dealers to reserve vehicles.

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

PREMIUM FINANCE (Details)	3 Months Ended		9 Months Ended
PREMIUM FINANCE (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Aug. 01, 2024 USD ($) installment	Dec. 31, 2023 USD ($)	Jul. 31, 2023 USD ($)
PREMIUM FINANCE
Loans payable from premium finance	$ 178,801		$ 178,801			$ 148,621
Interest expenses	7,027	$ 7,751	22,590	$ 23,545
Premium Finance Agreement
PREMIUM FINANCE
Amount borrowed					$ 205,774.80
Interest rate percentage					8.51%
Number of monthly installments \| installment					10
Loans payable from premium finance
PREMIUM FINANCE
Amount borrowed							$ 221,139
Interest rate percentage							7.75%
Loans payable from premium finance	178,801		178,801			$ 148,621
Interest expenses	$ 1,404	$ 3,584	$ 2,400	$ 3,584

STOCK BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2024

STOCK BASED COMPENSATION

Summary of the nonvested shares activity


		Weighted
	Number of	Average Grant
	non-vested	Date Fair Value
	Shares	Per Share (US$)
Outstanding as of December 31, 2023	—	—
Grant	150,000	3.39
Vested	(77,188)	3.39
Forfeited	—	—
Outstanding as of September 30, 2024	72,812	3.39

STOCK BASED COMPENSATION (Details)	9 Months Ended
STOCK BASED COMPENSATION (Details)	Sep. 30, 2024 employee item director shares
STOCK BASED COMPENSATION
Number of shares granted	150,000
Number of directors \| director	1
Number of officer \| item	1
Number of employees \| employee	5
Vesting period	3 years
Class A common stock \| CEO
STOCK BASED COMPENSATION
Number of shares granted	45,938
Class A common stock \| Director
STOCK BASED COMPENSATION
Number of shares granted	18,750
Class A common stock \| Officer and employees
STOCK BASED COMPENSATION
Number of shares granted	54,062
Class B common stock \| CEO
STOCK BASED COMPENSATION
Number of shares granted	31,250

INCOME TAXES - Components of Income Tax Provision (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Current:
Federal		$ 7,022	$ (128)	$ 9,422
State		447	4,456	667
Total current income tax provision		7,469	4,328	10,089
Deferred:
Federal	$ (424,263)	26,361	(761,498)	42,827
State	(135,717)	10,387	(295,800)	5,310
Total deferred income tax provision (benefits)	(559,980)	36,748	(1,057,297)	48,137
Total income tax benefits	$ (559,980)	$ 44,217	$ (1,052,969)	$ 58,226

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

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+ Details

LOANS RECEIVABLES (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	$ 3,058,295	$ 672,500
Vehicle pledge loan receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable		172,500
Short-term loan receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	$ 3,058,295	$ 500,000

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 13, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Entity File Number	001-41761
Entity Registrant Name	Cheetah Net Supply Chain Service Inc.
Entity Incorporation, State or Country Code	NC
Entity Tax Identification Number	81-3509120
Entity Address, Address Line One	8707 Research Drive,
Entity Address, City or Town	Irvine
Entity Address State Or Province	CA
Entity Address, Postal Zip Code	92618
City Area Code	949
Local Phone Number	418-7804
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	CTNT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,960,218
Entity Central Index Key	0001951667
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 14 — RELATED PARTY TRANSACTIONS

Nature of relationship with a related party

Name		Relationship with Our Company
Mr. Huan Liu		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).

b. Due to a related party

Amount due to a related party represents amounts due to the Company’s CEO and Chairman of the Board of Directors, Mr. Huan Liu, for funds borrowed for working capital purposes during the Company’s normal course of business. These payables are unsecured, non-interest bearing, and due on demand.

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

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

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+ Details

STOCK BASED COMPENSATION - Summary of the nonvested shares activity (Details)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
STOCK BASED COMPENSATION
Number of shares granted \| shares	150,000
Vested \| shares	(77,188)
Outstanding as of September 30, 2024 \| shares	72,812
Weighted Average Grant Date Fair Value Per Share
Grant \| $ / shares	$ 3.39
Vested \| $ / shares	3.39
Outstanding as of September 30, 2024 \| $ / shares	$ 3.39

REVOLVING LINE OF CREDIT

9 Months Ended

Sep. 30, 2024

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT

NOTE 10 — REVOLVING LINE OF CREDIT

On October 5, 2022, the Company entered into two Revolving Line of Credit Agreements (the “Revolving Line of Credit Agreements”) with two third-party companies that have been providing financial support to the Company since 2021. Pursuant to the Revolving Line of Credit Agreements, the Company can borrow under revolving lines of credit of up to $10.0 million and $5.0 million, respectively, from these two third-party companies with a total of $15.0 million for a period of 12 months at a fixed interest rate of 1.5% per month. On December 12, 2022, the Company amended the Revolving Line of Credit Agreements to extend the maturity date to April 2024. The Company has not entered into any new agreements to modify the terms or extend the duration of these facilities.

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.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2024

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE 17 — STOCKHOLDERS’ EQUITY

Common Stock

Cheetah Net was established under the laws of the State of North Carolina on August 9, 2016. Under the Company’s amended and restated articles of incorporation on July 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. In respect of matters requiring the votes of stockholders, each share of Class A common stock is entitled to one vote, and each share of Class B common stock is entitled to 15 votes. Class B common stock is convertible into Class A common stock at any time after issuance at the option of the holder on a one-to-one basis. Class A common stock is not convertible into shares of any other class. The numbers of authorized and outstanding common stock were retroactively applied as if the transaction occurred at the beginning of the period presented.

On June 27, 2022, the Company entered into a subscription agreement with a group of investors (the “Investors”) whereby the Company agreed to sell, and the Investors agreed to purchase, up to 104,125 shares of Class A common stock at a purchase price of $28.8 per share. These Investors are unrelated parties to the Company. The gross proceeds were approximately $3.0 million, before deducting offering expenses of approximately $0.3 million. The net proceeds were approximately $2.7 million, of which approximately $1.2 million was received in 2022 and $1.2 million in 2023, for a total receipt of approximately $2.4 million. After negotiations between Rapid Proceed Limited (“Rapid”), one of the Investors, and the Company regarding the fund’s release terms, an agreement was reached on November 2, 2023, stipulating that the outstanding $0.6 million would be paid by Rapid within six months following the Company’s initial public offering (“IPO”). On March 13, 2024, considering the impact of market volatility and the long-term benefits of continued cooperation, Rapid requested and the Company agreed to extend the payment due date of the outstanding $0.6 million to September 30, 2024. 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. The Company’s Class A common stock began trading on the Nasdaq Capital Market under the ticker symbol “CTNT” on August 1, 2023.

On January 24, 2024, the Company entered into a stock purchase agreement with Edward and Juguang Zhang, Edward’s sole stockholder (the “Seller”). Pursuant to the Agreement, the Company agreed to acquire 100% of the shares in Edward from the Seller (the “Acquisition”). On February 2, 2024, the Company closed the Acquisition for a total purchase price that included a cash payment of $300,000 and the issuance of 79,521 shares of the Company’s unregistered Class A common stock, initially valued at $1,200,000. Subsequent valuation determined the fair value of these shares to be $9 million. Please see Note 8 for further details.

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. On the same day, the Company entered into a securities purchase agreement with purchasers identified therein. On May 15, 2024, the Company closed the May Offering pursuant to the prospectus included in its registration statement on Form S – 1, as amended (File No. 333 – 276300), which was initially filed with the SEC on December 28, 2023, and declared effective by the SEC on April 26, 2024, and a registration statement on Form S – 1 (File No. 333 – 279388) filed on May 13, 2024, pursuant to Rule 462 (b) of the Securities Act of 1933, as amended. 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.

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.

Warrants

The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. The Warrants are equity-classified as a result of being indexed to the Company’s Class A common stock and meeting certain equity classification criteria, and the instruments will not be remeasured in subsequent periods as long as the instruments continue to meet these accounting criteria. The fair value of the Warrants was recorded to additional paid-in capital within stockholders’ equity.


					Total Common
					Shares Issuable as of
			Exercise		March 31,
Title of Warrant	Date Issued	Expiry Date	Price		2024
Equity-classified warrants

August 2023 – underwriter warrants	8/3/2023	07/31/2026	$	80.00	3,906

Termination of Warrants

On March 4, 2024, the Company and Maxim Group LLC signed an agreement to terminate 3,906 outstanding warrants that had previously been granted to Maxim Group LLC. On March 27, 2024, the Company completed the payment of termination fees totaling $78,125, which was recorded as an offset to additional paid in capital within stockholders’ equity.

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.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONCENTRATIONS (Details) - USD ($)	3 Months Ended	9 Months Ended		12 Months Ended
CONCENTRATIONS (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
CONCENTRATIONS
Cash deposits on financial institutions		$ 5,287,376		$ 432,998
Customer \| Revenue \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		100.00%	98.70%
Customer \| Revenue \| Supplier concentration risk
CONCENTRATIONS
Concentration risk, percentage	7.20%		8.30%
Customer \| Accounts receivable \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		92.40%		98.00%
Customer One \| Revenue \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		87.70%	45.20%
Customer One \| Accounts receivable \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		57.50%		58.10%
Customer Two \| Revenue \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		12.30%	29.70%
Customer Two \| Accounts receivable \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		17.50%		28.20%
Customer Three \| Revenue \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage			23.80%
Customer Three \| Accounts receivable \| Customer concentration risk
CONCENTRATIONS
Concentration risk, percentage		17.40%		11.70%

LEASES - Weighted average remaining lease term and discount rate (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3 years 1 month 9 days		3 years 1 month 9 days		3 years 2 months 1 day
Weighted average discount rate	11.40%		11.40%		17.80%
Weighted average incremental borrowing rate per annum			13.50%
Total operating lease expenses	$ 139,555	$ 28,962	$ 251,302	$ 133,277

LONG-TERM BORROWINGS - Future maturities of the loan from SBA (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Future maturities of the loan
Total	$ 653,344	$ 677,612
SBA
Future maturities of the loan
2024 (excluding the nine months ended September 30, 2024)	3,066
2025	11,024
2026	11,474
2027	11,942
2028	12,429
Thereafter	421,663
Total	$ 471,598	$ 479,124

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

ORGANIZATION AND BUSINESS DESCRIPTION

9 Months Ended

Sep. 30, 2024

ORGANIZATION AND BUSINESS DESCRIPTION

ORGANIZATION AND BUSINESS DESCRIPTION

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Cheetah Net Supply Chain Service Inc. (“Cheetah Net” or the “Company”), formerly known as Yuan Qiu Business Group LLC, was established under the laws of the State of North Carolina on August 9, 2016 as a limited liability company (“LLC”). On March 1, 2022, the Company filed articles of incorporation including articles of conversion with the Secretary of State of the State of North Carolina to convert from an LLC to a corporation, and changed its name to Cheetah Net Supply Chain Service Inc. The Company holds 100% of the equity interests in the following entities:

●

(i) Allen-Boy International LLC (“Allen-Boy”), an LLC organized on August 31, 2016 under the laws of the State of Delaware, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Allen-Boy who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on January 1, 2017. Allen-Boy did not have any business activities until acquired by Cheetah Net. Currently, Allen-Boy is engaged in parallel-import vehicle dealership business.

●

(ii) Pacific Consulting LLC (“Pacific”), an LLC organized on January 17, 2019 under the laws of the State of New York, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Pacific who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on February 15, 2019. Pacific did not have any business activities until acquired by Cheetah Net. Currently, Pacific is engaged in parallel-import vehicle dealership business.

●

(iii) Entour Solutions LLC (“Entour”), an LLC organized on April 8, 2021 under the laws of the State of New York, which was acquired by Cheetah Net from Daihan Ding, the previous owner of Entour, for a total consideration of $100 on April 9, 2021. Entour did not have any business activities until acquired by Cheetah Net. Currently, Entour is engaged in parallel-import vehicle dealership business.

●

(iv) Cheetah Net Logistics LLC (“Logistics”), an LLC organized on October 12, 2022 under the laws of the State of New York, whose previous sole member and owner, Hanzhang Li, the previous owner of Logistics, for a total consideration of $100, assigned all his membership interests in Logistics to Cheetah Net on October 19, 2022 . Currently, Logistics is engaged in parallel-import vehicle dealership business.

●

(v) Edward Transit Express Group Inc. (“Edward”), a corporation incorporated on July 14, 2010 under the laws of the State of California, whose previous sole shareholder and owner, Juguang Zhang, transferred all his right, title, and interest in and to all of the issued and outstanding shares of Edward to Cheetah Net for a total consideration of $1,500,000 in cash and Cheetah Net’s Class A common stock through a stock purchase agreement dated January 24, 2024, as amended. Currently, Edward is engaged in ocean and air transportation services.

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 primarily engaged in the comprehensive logistics and warehousing business.

Logistics and Warehousing

The Company’s subsidiary, Edward, operates as a licensed Non-Vessel Operating Common Carrier. It manages freight forwarding, including shipment consolidation and carrier selection, aimed at optimizing shipping operations. Edward also provides warehousing services encompassing fulfillment, storage, and inventory management, crucial for supporting both the Company’s operations and its clients’ logistics needs.

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. and the PRC.

INCOME TAXES - Components of Deferred Tax Assets (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Deferred tax assets:
Net operating loss carry-forwards	$ 873,312	$ 47,905
Lease Liability	419,441
Others	255,837
Total deferred tax assets	1,548,590	47,905
Deferred tax liabilities:
Intangible assets	(111,772)
Fixed assets	(407)
Right of use assets	(461,802)
Total deferred tax liabilities	(573,981)
Total deferred tax assets, net	$ 974,609	$ 47,905

ACCOUNTS RECEIVABLE - Schedules of accounts receivable (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
ACCOUNTS RECEIVABLE
Accounts receivable, gross	$ 3,254,747
Less: allowance for credit loss	(1,095,094)	$ 0
Total accounts receivable	3,291,450	6,494,695
Parallel-import Vehicles
ACCOUNTS RECEIVABLE
Accounts receivable, gross	4,349,841	$ 6,494,695
Logistics and Warehousing
ACCOUNTS RECEIVABLE
Accounts receivable, gross	36,703
Less than 150 days
ACCOUNTS RECEIVABLE
Accounts receivable, gross	200,297
181-210 days
ACCOUNTS RECEIVABLE
Accounts receivable, gross	32,165
210-365 days
ACCOUNTS RECEIVABLE
Accounts receivable, gross	1,241,231
Over 365 days
ACCOUNTS RECEIVABLE
Accounts receivable, gross	$ 2,876,148

LEASES - Maturities of lease liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
LEASES
2024 (excluding the nine months ended September 30, 2024)	$ 146,037
2025	639,749
2026	795,559
2027	517,765
Thereafter	126,976
Total lease payments	2,226,086
Less: imputed interest	(430,695)
Present value of lease liabilities	$ 1,795,391	$ 190,824

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		9 Months Ended		12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2024 USD ($) segment item shares	Sep. 30, 2023 USD ($) shares	Dec. 31, 2023 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounts receivable, allowance for doubtful accounts	$ 1,095,094		$ 1,095,094		$ 0
Impairment allowance	0		0
Inventory reserve	0		0		0
Indefinite-lived intangible assets	$ 0		0
Impairment for ROU lease assets			$ 0		$ 0
Number of reporting units \| item			1
Number of operating segments \| segment			2
Number of dilutive shares \| shares	0	0	0	0
Total shipping and handling expenses	$ 0	$ 113,470	$ 20,610	$ 405,182

LONG-TERM BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2024

LONG-TERM BORROWINGS

Summary of long-term borrowings


	September 30,		December 31,
	2024		2023
	(Unaudited)
Small Business Administration⁽¹⁾	$	471,598	$	479,124
Thread Capital Inc.⁽²⁾		181,746		198,488
Total long-term borrowings	$	653,344	$	677,612

Current portion of long-term borrowings	$	34,146	$	32,887

Non-current portion of long-term borrowings	$	619,198	$	644,725

(1)

(2)

SBA

LONG-TERM BORROWINGS

Summary of future maturities of the loan

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


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	3,066
2025		11,024
2026		11,474
2027		11,942
2028		12,429
Thereafter		421,663
Total	$	471,598

Thread Capital

LONG-TERM BORROWINGS

Summary of future maturities of the loan

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


Fiscal Years	Future repayment
2024 (excluding the nine months ended September 30, 2024)	$	5,553
2025		23,553
2026		24,881
2027		26,285
2028		27,768
Thereafter		73,706
Total	$	181,746

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
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+ Details

PROPERTY, PLANT, AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2024

PROPERTY, PLANT, AND EQUIPMENT, NET

Schedule of property


	Estimated Useful Life
	in Years	September 30, 2024		December 31, 2023
		(Unaudited)
Motor Vehicles	10	$	365,000		—
Leasehold improvements	3-6		60,795		—
Subtotal			425,795		—
Less accumulated depreciation			(17,518)		—
Property, plant, and equipment, net		$	408,277	$	—

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 5,287,376	$ 432,998
Accounts receivable, net	3,291,450	6,494,695
Loans receivable	3,058,295	672,500
Inventory		1,515,270
Other receivables	353,576	410,920
Prepaid expenses and other current assets	428,184	294,154
TOTAL CURRENT ASSETS	12,418,881	9,820,537
OTHER NONCURRENT ASSETS:
Property, plant, and equipment, net	408,277
Operating lease right-of-use assets	1,976,714	190,823
Deferred tax assets, net	974,609	47,905
Intangibles, net	481,142
Goodwill	568,532
TOTAL ASSETS	16,828,155	10,059,265
CURRENT LIABILITIES:
Accounts payable	7,515	40,430
Current portion of long-term debt	34,146	32,887
Loans payable from letter of credit financing	0	1,004,565
Loans payable from line of credit		688,711
Loans payable from premium finance	178,801	148,621
Due to a related party		13,423
Operating lease liabilities, current	376,062	39,703
Accrued liabilities and other current liabilities	239,361	390,451
TOTAL CURRENT LIABILITIES	835,885	2,358,791
NONCURRENT LIABILITIES:
Long-term debt, net of current portion	619,198	644,725
Operating lease liabilities, net of current portion	1,419,329	151,121
TOTAL LIABILITIES	2,874,412	3,154,637
COMMITMENTS AND CONTINGENCIES (Note 18)
STOCKHOLDERS' EQUITY
Additional paid-in capital	16,482,353	6,996,275
Subscription receivable		(600,000)
Retained earnings (Accumulated deficit)	(2,528,861)	508,241
TOTAL STOCKHOLDERS' EQUITY	13,953,743	6,904,628
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	16,828,155	10,059,265
Class A common stock
STOCKHOLDERS' EQUITY
Common stock	196	60
Class B common stock
STOCKHOLDERS' EQUITY
Common stock	$ 55	$ 52

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant, and equipment, net (Details)	Sep. 30, 2024
Motor vehicles
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated useful life (in years)	10 years
Leasehold improvements \| Minimum
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated useful life (in years)	3 years
Leasehold improvements \| Maximum
PROPERTY, PLANT, AND EQUIPMENT, NET
Estimated useful life (in years)	6 years

RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2024

RELATED PARTY TRANSACTIONS

Schedule of related party transaction

Name		Relationship with Our Company
Mr. Huan Liu		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

STOCKHOLDERS' EQUITY - Fair Value of Warrants (Details) - USD ($)		6 Months Ended
	Mar. 27, 2024	Jun. 30, 2024	Sep. 30, 2024	Mar. 04, 2024	Feb. 02, 2024	Aug. 03, 2023
STOCKHOLDERS' EQUITY
Termination of equity-classified warrant		$ 78,125
Class A common stock
STOCKHOLDERS' EQUITY
Fair value of stock consideration					$ 9,000,000
Exercise price of warrants						$ 80.00
August 2023 - underwriter warrants
STOCKHOLDERS' EQUITY
Total Common Shares Issuable			3,906
Exercise price of warrants			$ 80.00
March 2024 - Terminated warrants \| Maxim Group LLC
STOCKHOLDERS' EQUITY
Number of outstanding warrants or rights terminated				3,906
Termination of equity-classified warrant	$ 78,125

LONG-TERM BORROWINGS - Thread Capital (Details) - Thread Capital - USD ($)	Dec. 01, 2022	Nov. 30, 2022	May 18, 2021	May 15, 2020
LONG-TERM BORROWINGS
Face amount of borrowings			$ 171,300	$ 50,000
Fixed interest rate	5.50%	0.25%		5.50%
Monthly installment payment	$ 2,721
Maximum
LONG-TERM BORROWINGS
Face amount of borrowings			$ 221,300

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of revenue
Total revenue	$ 61,208	$ 10,038,246	$ 1,862,853	$ 32,475,714
U.S. domestic market
Disaggregation of revenue
Total revenue	36,860	1,244,615	336,872	8,160,395
Overseas market
Disaggregation of revenue
Total revenue	24,348	8,793,631	1,525,981	24,315,319
Parallel-Import Vehicles
Disaggregation of revenue
Total revenue		10,038,246	1,631,248	32,475,714
Parallel-Import Vehicles \| U.S. domestic market
Disaggregation of revenue
Total revenue		1,244,615	200,297	8,160,395
Parallel-Import Vehicles \| Overseas market
Disaggregation of revenue
Total revenue		$ 8,793,631	1,430,951	$ 24,315,319
Logistics and Warehousing
Disaggregation of revenue
Total revenue	61,208		231,605
Logistics and Warehousing \| U.S. domestic market
Disaggregation of revenue
Total revenue	36,860		136,575
Logistics and Warehousing \| Overseas market
Disaggregation of revenue
Total revenue	$ 24,348		$ 95,030

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

LEASES

9 Months Ended

Sep. 30, 2024

LEASES

LEASES

NOTE 7 — LEASES

The Company leases office spaces from various third parties under non-cancelable operating leases, with terms ranging from 12 to 55 months. The Company considers the renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Lease expenses are recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

The Company determines whether a contract is or contains a lease at the inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

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. Pursuant to the Amended Lease, the initial lease term was extended for a period commencing January 1, 2024 and expiring February 28, 2027, unless sooner terminated as provided in the Amended Lease. The Company was also granted the option to extend the lease term for another three years starting from March 1, 2027 and ending February 28, 2030.

The Company’s subsidiary, Edward, entered into a Second Amendment to Lease Agreement with its landlord on May 22, 2023, which amended a previous lease agreement and the first amendment between the parties, whereby Edward leases a warehouse from the landlord with an initial lease term from June 1, 2013 to July 31, 2018. The lease term was extended to July 31, 2023 by the first amendment. The second amendment further extended the lease to August 31, 2028.

The short-term lease runs month-to-month from January 1, 2024 to August 31, 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,
	2024		2023
	(Unaudited)		(Unaudited)
Leases expenses
Operating lease expenses	$	251,302	$	133,277
Short-term lease expenses		84,989		82,372
Total leases expenses	$	336,291	$	215,649


	September 30, 2024		December 31, 2023
Right-of-use assets	$	1,976,714	$	190,823

Operating lease liabilities – current	$	376,062	$	39,703
Operating lease liabilities – non-current		1,419,329		151,121
Total operating lease liabilities	$	1,795,391	$	190,824

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
	(Unaudited)
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3.11		3.17
Weighted average discount rate *	11.4	%	17.8	%

*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 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:


Fiscal Years	Amount
	(Unaudited)
2024 (excluding the nine months ended September 30, 2024)	$	146,037
2025		639,749
2026		795,559
2027		517,765
Thereafter		126,976
Total lease payments		2,226,086
Less: imputed interest		(430,695)
Present value of lease liabilities	$	1,795,391

OTHER RECEIVABLES (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Subtotal	$ 353,576	$ 410,920
Total Other Receivables	353,576	410,920
Parallel-import Vehicles
Vehicle Deposit	100,800	162,159
Rent Deposit	117,975	22,095
Sales Tax Refundable	34,886	217,892
Interest Receivable	81,747	5,423
Others	13,746	$ 3,351
Logistics and Warehousing
Others	$ 4,422

Intangible Asset and Goodwill (Details) - USD ($)		3 Months Ended		9 Months Ended
Intangible Asset and Goodwill (Details) - USD ($)	Jan. 24, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Feb. 02, 2024
Intangible Asset and Goodwill
Accumulated amortization expenses		$ 13,071	$ 0	$ 34,858	$ 0
Class A common stock
Intangible Asset and Goodwill
Fair value of stock consideration						$ 9,000,000
Edward Transit Express Group Inc.
Intangible Asset and Goodwill
Percentage of agreed ownership interest to acquire	100.00%
Cash consideration	$ 1,500,000
Purchase price	300,000
Edward Transit Express Group Inc. \| Class A common stock
Intangible Asset and Goodwill
Common stock	1,200,000
Fair value of stock consideration	$ 900,000
Shares issued	79,521

Pay vs Performance Disclosure - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (1,815,292)	$ 122,903	$ (1,221,810)	$ 47,812	$ (3,037,102)	$ 170,715

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
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-URI https://asc.fasb.org/1943274/2147483443/250-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (g)(3)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2024

INCOME TAXES

Schedule of components of income tax provision


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Current:
Federal	$	—	$	7,022	$	(128)	$	9,422
State		—		447		4,456		667
Total current income tax provision		—		7,469		4,328		10,089
Deferred:
Federal		(424,263)		26,361		(761,498)		42,827
State		(135,717)		10,387		(295,800)		5,310
Total deferred income tax expenses (benefits)		(559,980)		36,748		(1,057,297)		48,137
Total income tax benefits	$	(559,980)	$	44,217	$	(1,052,969)	$	58,226

Schedule of reconciliations of statutory income tax rate to effective income tax rate


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Federal statutory tax rate	$	21.0	%	$	21.0	%	$	21.0	%	$	21.0	%
State statutory tax rate		4.3	%		5.1	%		5.6	%		2.1	%
Non-deductible expenses		(0.1)	%		0.3	%		(0.1)	%		0.3	%
Non-taxable income		(1.6)	%		0.0	%		(0.8)	%		2.1	%
Effective tax rate	$	23.6	%	$	26.4	%	$	25.7	%	$	25.5	%

Schedule of components of deferred tax assets


	September 30,	December 31,
	2024	2023
	(Unaudited)
Deferred tax assets:
Net operating loss carry forwards	873,312	47,905
Lease Liability	419,441	—
Others	255,837	—
Total deferred tax assets	1,548,590	47,905

Deferred tax liabilities:
Intangible assets	(111,772)	—
Fixed assets	(407)	—
Right of use assets	(461,802)	—
Total deferred tax liabilities	(573,981)	—

Total deferred tax assets, net	974,609	47,905

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

STOCKHOLDERS' EQUITY

Schedule of fair value of the warrants


					Total Common
					Shares Issuable as of
			Exercise		March 31,
Title of Warrant	Date Issued	Expiry Date	Price		2024
Equity-classified warrants

August 2023 – underwriter warrants	8/3/2023	07/31/2026	$	80.00	3,906

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

Uses of estimates

Cash and cash equivalents

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,		December 31,
	2024		2023
	(Unaudited)
Cash held in Current Accounts	$	4,275,271	$	432,998
Certificate of Deposit		1,012,105		—
Total cash and cash equivalents shown in the statements of cash flows	$	5,287,376	$	432,998

Accounts receivable

Loans receivable

Inventory

Property, plant, and equipment, net


Property, plant, and equipment		Estimated useful life
Motor vehicles		10 years
Leasehold improvements		3-6 years

Intangible assets, net

Amortization of intangible assets is computed using the straight-line method over the estimated useful lives as below:


Intangible assets		Estimated useful life
Developed Technology		7 years
Customer relationships		12 years
Trade names		7 years

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 not recognize any indefinite-lived intangible assets for the nine months ended September 30, 2024.

Fair value of financial instruments

●

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 3 — inputs to the valuation methodology are unobservable.

Leases

Goodwill

Impairment of long-lived assets

Share-based compensation

Revenue recognition

Contract balances and remaining performance obligations

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

Disaggregation of Revenue


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue from Parallel-Import Vehicles
U.S. domestic market	$	—	$	1,244,615	$	200,297	$	8,160,395
Overseas market		—		8,793,631		1,430,951		24,315,319
Revenue from Logistics and Warehousing
U.S. domestic market		36,860		—		136,575		—
Overseas market		24,348		—		95,030		—
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

Geographic information

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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
U.S. domestic market	$	36,860	$	1,244,615	$	336,872	$	8,160,395
Overseas market		24,348		8,793,631		1,525,981		24,315,319
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

Cost of revenues

Parallel-import Vehicles Segment

Logistics and Warehousing Segment

Cost of logistics and warehousing service revenue mainly includes the cost of freight and fulfillment expenses.

Income taxes

(Loss) Earnings per share

Related parties and transactions

The Company identifies related parties, and accounts for and discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.

Shipping and handling costs

Segment reporting

Recent accounting pronouncements

STOCK BASED COMPENSATION - Compensation expenses (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2024 USD ($)
STOCK BASED COMPENSATION
Share-based compensation expenses	$ 261,666	$ 261,666
Total unrecognized compensation cost	$ 233,002	$ 233,002
Weighted average period		3 years

REVOLVING LINE OF CREDIT (Details)		3 Months Ended		9 Months Ended
REVOLVING LINE OF CREDIT (Details)	Oct. 05, 2022 USD ($) agreement company	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
REVOLVING LINE OF CREDIT
Repayment of revolving Line of Credit		$ 584,541		$ 688,711	$ 2,375,197
Revolving line of credit balance		0		0		$ 688,711
Interest expenses		7,027	$ 7,751	22,590	23,545
Revolving Line of Credit Agreements
REVOLVING LINE OF CREDIT
Number of agreements \| agreement	2
Number of third-party companies \| company	2
Maximum borrowing capacity	$ 15,000,000.0
Term of borrowings	12 months
Fixed interest rate	1.50%
Interest expenses		$ 6,430	$ 63,277	$ 65,665	$ 120,675
Revolving Line of Credit Agreement, one
REVOLVING LINE OF CREDIT
Maximum borrowing capacity	$ 10,000,000.0
Revolving Line of Credit Agreement, two
REVOLVING LINE OF CREDIT
Maximum borrowing capacity	$ 5,000,000.0

INCOME TAXES - Reconciliations of Statutory Income Tax Rate (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
INCOME TAXES
Federal statutory tax rate	21.00%	21.00%	21.00%	21.00%
State statutory tax rate	4.30%	5.10%	5.60%	2.10%
Non-deductible expenses	(0.10%)	0.30%	(0.10%)	0.30%
Non-taxable income	(1.60%)	0.00%	(0.80%)	2.10%
Effective tax rate	23.60%	26.40%	25.70%	25.50%

LONG-TERM BORROWINGS - Interest expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
LONG-TERM BORROWINGS
Interest expenses	$ 7,027	$ 7,751	$ 22,590	$ 23,545

SUBSEQUENT EVENTS (Details) - USD ($)	Oct. 28, 2024	Oct. 24, 2024	Oct. 02, 2024	Jun. 20, 2024	Dec. 06, 2023	Nov. 07, 2024	Aug. 16, 2024	Jul. 23, 2024	Dec. 11, 2023
Short-term loan
SUBSEQUENT EVENTS
Initial term of agreement				12 months	90 days
Face amount of borrowing				$ 1,000,000	$ 172,500		$ 649,250	$ 1,500,000	$ 500,000
Subsequent Event \| Hongkong Sanyou Petroleum Co Limited \| Short-term loan
SUBSEQUENT EVENTS
Initial term of agreement	12 months		12 months
Face amount of borrowing	$ 1,000,000		$ 1,000,000
Investment Interest Rate	12.00%		12.00%
Subsequent Event \| Asia Finance Investment Limited \| Short-term loan
SUBSEQUENT EVENTS
Initial term of agreement		12 months
Face amount of borrowing		$ 530,000
Investment Interest Rate		12.00%
Subsequent Event \| Class A common stock
SUBSEQUENT EVENTS
Share Price						$ 1.00

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 19 — SUBSEQUENT EVENTS

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.

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended	9 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
RELATED PARTY TRANSACTIONS
Due to a related party				$ 13,423
Other Liability, Current, Related Party [Extensible Enumeration]	Related party	Related party
Borrowing from a related party			$ 42,923
Repayment made to a related party		$ 13,423	26,000
Related party \| Huan Liu
RELATED PARTY TRANSACTIONS
Due to a related party	$ 0	0
Repayment made to a related party	$ 0	$ 13,423	$ 28,875
Related party \| West Buy Media Inc \| Huan Liu
RELATED PARTY TRANSACTIONS
Ownership percentage	100.00%	100.00%

INCOME TAXES - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2024	Dec. 31, 2023
INCOME TAXES
Net operating loss carry-forwards		$ 873,312	$ 47,905
Operating Loss Carryforwards		3,201,298
State operating loss carryforwards		3,201,298
Maximum income tax threshold amount	$ 27,000,000
Domestic
INCOME TAXES
Net operating loss carry-forwards		$ 2,882,692	$ 47,905

STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

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:


		Weighted
	Number of	Average Grant
	non-vested	Date Fair Value
	Shares	Per Share (US$)
Outstanding as of December 31, 2023	—	—
Grant	150,000	3.39
Vested	(77,188)	3.39
Forfeited	—	—
Outstanding as of September 30, 2024	72,812	3.39

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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of cash and cash equivalents consist of cash in bank and interest-bearing certificates of deposit with an initial term


	September 30,		December 31,
	2024		2023
	(Unaudited)
Cash held in Current Accounts	$	4,275,271	$	432,998
Certificate of Deposit		1,012,105		—
Total cash and cash equivalents shown in the statements of cash flows	$	5,287,376	$	432,998

Schedule of property, plant, and equipment estimated useful lives of the assets


Property, plant, and equipment		Estimated useful life
Motor vehicles		10 years
Leasehold improvements		3-6 years

Schedule of amortization of intangible assets using straight-line method


Intangible assets		Estimated useful life
Developed Technology		7 years
Customer relationships		12 years
Trade names		7 years

Schedule of disaggregation of revenue


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue from Parallel-Import Vehicles
U.S. domestic market	$	—	$	1,244,615	$	200,297	$	8,160,395
Overseas market		—		8,793,631		1,430,951		24,315,319
Revenue from Logistics and Warehousing
U.S. domestic market		36,860		—		136,575		—
Overseas market		24,348		—		95,030		—
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

Summary of the company's total revenue by geographic area


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
U.S. domestic market	$	36,860	$	1,244,615	$	336,872	$	8,160,395
Overseas market		24,348		8,793,631		1,525,981		24,315,319
Total revenue	$	61,208	$	10,038,246	$	1,862,853	$	32,475,714

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)

Common Stock

Class A common stock

Common Stock

Class B common stock

Additional paid-in capital

Subscription Receivable

Retained Earnings (Accumulated Deficit)

Class A common stock

Class B common stock

Total

Beginning balance at Dec. 31, 2022

$ 53

^[1]

$ 52

^[1]

$ 3,270,880

$ (1,800,000)

$ 374,371

$ 1,845,355

Beginning balance (in shares) at Dec. 31, 2022

^[1]

526,000

515,625

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Stock issuance

700,000

Net loss (income) for the period

47,812

Ending balance at Jun. 30, 2023

$ 53

^[1]

$ 52

^[1]

3,270,880

(1,100,000)

422,183

2,593,167

Ending balance (in shares) at Jun. 30, 2023

^[1]

526,000

515,625

Beginning balance at Dec. 31, 2022

$ 53

^[1]

$ 52

^[1]

3,270,880

(1,800,000)

374,371

1,845,355

Beginning balance (in shares) at Dec. 31, 2022

^[1]

526,000

515,625

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net loss (income) for the period

170,715

Ending balance at Sep. 30, 2023

$ 60

^[1]

$ 52

^[1]

6,996,275

(600,000)

545,086

6,941,473

Ending balance (in shares) at Sep. 30, 2023

^[1]

604,125

515,625

Beginning balance at Jun. 30, 2023

$ 53

^[1]

$ 52

^[1]

3,270,880

(1,100,000)

422,183

2,593,167

Beginning balance (in shares) at Jun. 30, 2023

^[1]

526,000

515,625

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Stock issuance

500,000

Issuance of follow-on public offering

$ 8

^[1]

3,725,395

3,725,403

Issuance of follow-on public offering (in shares)

^[1]

78,125

Net loss (income) for the period

122,903

Ending balance at Sep. 30, 2023

$ 60

^[1]

$ 52

^[1]

6,996,275

(600,000)

545,086

6,941,473

Ending balance (in shares) at Sep. 30, 2023

^[1]

604,125

515,625

Beginning balance at Dec. 31, 2023

$ 60

^[1]

$ 52

^[1]

6,996,275

(600,000)

508,241

$ 6,904,628

Beginning balance (in shares) at Dec. 31, 2023

604,125

^[1]

515,625

^[1]

604,125

515,625

1,119,750

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Termination of equity-classified warrant

(78,125)

$ (78,125)

Issuance of common stock for acquisition

$ 8

^[1]

899,992

900,000

Issuance of common stock for acquisition (in shares)

^[1]

79,521

Issuance of follow-on public offering

$ 83

^[1]

7,309,037

7,309,120

Issuance of follow-on public offering (in shares)

^[1]

825,625

Net loss (income) for the period

(1,221,810)

Ending balance at Jun. 30, 2024

$ 151

^[1]

$ 52

^[1]

15,127,180

(600,000)

(713,569)

13,813,813

Ending balance (in shares) at Jun. 30, 2024

^[1]

1,509,271

515,625

Beginning balance at Dec. 31, 2023

$ 60

^[1]

$ 52

^[1]

6,996,275

(600,000)

508,241

$ 6,904,628

Beginning balance (in shares) at Dec. 31, 2023

604,125

^[1]

515,625

^[1]

604,125

515,625

1,119,750

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net loss (income) for the period

$ (3,037,102)

Ending balance at Sep. 30, 2024

$ 196

^[1]

$ 55

^[1]

16,482,353

(2,528,861)

$ 13,953,743

Ending balance (in shares) at Sep. 30, 2024

1,960,218

^[1]

546,875

^[1]

1,960,218

546,875

2,507,093

Beginning balance at Jun. 30, 2024

$ 151

^[1]

$ 52

^[1]

15,127,180

(600,000)

(713,569)

$ 13,813,813

Beginning balance (in shares) at Jun. 30, 2024

^[1]

1,509,271

515,625

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Stock issuance

$ 600,000

600,000

Issuance of follow-on public offering

$ 41

^[1]

1,093,516

1,093,556

Issuance of follow-on public offering (in shares)

^[1]

404,979

Issuance of common stock in connection with vesting of share-based award (in shares)

$ 5

^[1]

$ 3

^[1]

Issuance of common stock in connection with vesting of share-based award (in shares)

^[1]

45,938

31,250

Share-based compensation expenses

261,658

Fraction shares issued due to reverse stock split

$ 0

^[1]

Fraction shares issued due to reverse stock split (in shares)

^[1]

Net loss (income) for the period

(1,815,292)

Ending balance at Sep. 30, 2024

$ 196

^[1]

$ 55

^[1]

$ 16,482,353

$ (2,528,861)

$ 13,953,743

Ending balance (in shares) at Sep. 30, 2024

1,960,218

^[1]

546,875

^[1]

1,960,218

546,875

2,507,093

[1]	Retrospectively adjusted for the Reverse Stock Split. See also Note 17.

LOANS RECEIVABLE

9 Months Ended

Sep. 30, 2024

LOANS RECEIVABLE

LOANS RECEIVABLE

NOTE 4 — LOANS RECEIVABLE

Loans receivable consisted of the following:


	September 30,		December 31,
	2024		2023
	(Unaudited)
Vehicle pledge loan receivable	$	—	$	172,500
Short-term loan receivable		3,058,295		500,000
Total loans receivable	$	3,058,295	$	672,500

On December 6, 2023, the Company entered into two vehicle pledge loan agreements with a customer, securing the loans with the customer’s vehicle inventory. The aggregate principal for these loans was set at $172,500, determined as 90% of each pledged vehicles’ manufacturer’s suggested retail price. The initial term of each agreement was 90 days. 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 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. The principal amount of the loan was $500,000. This loan carried an annual interest rate of 12.0% and was originally set to mature on February 12, 2024. 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 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 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. The principal amount of the loan was $1,000,000. This loan carried an annual interest rate of 12.0% and was set to mature in 12 months. 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.

PREMIUM FINANCE

9 Months Ended

Sep. 30, 2024

PREMIUM FINANCE

PREMIUM FINANCE

NOTE 11 — PREMIUM FINANCE

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

OTHER RECEIVABLES

9 Months Ended

Sep. 30, 2024

OTHER RECEIVABLES

OTHER RECEIVABLES

NOTE 5 — OTHER RECEIVABLES

Other receivables consisted of the following:


	September 30, 2024		December 31, 2023
	(Unaudited)
Parallel-import Vehicles:
Vehicle Deposit⁽¹⁾	$	100,800	$	162,159
Rent Deposit		117,975		22,095
Sales Tax Refundable⁽²⁾		34,886		217,892
Interest Receivable		81,747		5,423
Others		13,746		3,351
Logistics and Warehousing
Others		4,422		—
Subtotal		353,576		410,920
Less: Allowance for credit loss		—		—
Total Other Receivables	$	353,576	$	410,920

(1)	Vehicle deposits represent security deposits paid to U.S. automobile dealers to reserve vehicles.

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