0001410578-24-000224 | 10-K | XBRL Viewer | Cheetah NET Supply Chain Service INC

LONG-TERM DEBT

NOTE 13 — LONG-TERM DEBT

Long-term debt consisted of the following:


	December 31,		December 31,
	2023		2022
Small Business Administration⁽¹⁾	$	479,124	$	490,130
Thread Capital Inc.⁽²⁾		198,488		219,593
Total long-term debt	$	677,612	$	709,723

Current portion of long-term debt	$	32,887	$	31,281

Non-current portion of long-term debt	$	644,725	$	678,442

(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 thirty 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 last installment to be paid in May 2050.

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

The future maturities of the loan from SBA as of December 31, 2023 are as follows:


12 months ending December 31,	Future repayment
2024	$	10,592
2025		11,024
2026		11,474
2027		11,942
2028		12,429
Thereafter		421,663
Total	$	479,124

(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, and the Company entered into a new loan agreement with Thread Capital to borrow an additional $171,300 as working capital. In aggregate, the Company’s borrowings from Thread Capital amounted to $221,300 with a maturity date of May 1, 2031. The interest was charged at a fixed annual interest rate of 0.25% between June 1, 2021 and November 30, 2022. Beginning from December 1, 2022, the loan bears a fixed annual interest rate of 5.5%, and the Company is required to make a monthly installment payment of $2,721 within the remaining term of loan, with the last installment to be paid in May 2031.

The future maturities of the loan from Thread Capital as of December 31, 2023 are as follows:


12 months ending December 31,	Future repayment
2024	$	22,295
2025		23,553
2026		24,881
2027		26,285
2028		27,768
Thereafter		73,706
Total	$	198,488

For the above-mentioned long-term borrowings, the Company recorded interest expense of $31,197 and $18,641 for the years ended December 31, 2023 and 2022, respectively.

INCOME TAXES - Components of Deferred Tax Assets (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Net operating loss carry-forwards	$ 47,905	$ 84,496
Others		2,238
Total deferred tax assets	$ 47,905	$ 86,734

RELATED PARTY TRANSACTIONS (Details) - USD ($)	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
RELATED PARTY TRANSACTIONS
Borrowing from a related party	$ 45,798	$ 313,464
Repayment made to a related party	32,375	1,449,054
Due to a related party	13,423
Related party \| Mr. Huan Liu
RELATED PARTY TRANSACTIONS
Borrowing from a related party	45,798	313,464
Repayment made to a related party	32,375	$ 1,449,054
Due to a related party	$ 13,423

ACCOUNTS RECEIVABLE

12 Months Ended

Dec. 31, 2023

Schedule of components of income tax provision

ACCOUNTS RECEIVABLE

NOTE 3 — ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:


	December 31,		December 31,
	2023		2022
Accounts receivable	$	6,494,695	$	7,086,651
Less: allowance for doubtful accounts		—		—
Total accounts receivable	$	6,494,695	$	7,086,651

The Company’s accounts receivable primarily include balances generated from selling parallel-import vehicles to both domestic and overseas parallel-import car dealers, which have not been collected as of the balance sheet dates. The Company identified two accounts with deferred payments overdue for over 150 days, totaling approximately $2.6 million of the $5.6 million total deferred payment balances as of December 31, 2023, which were backed by third-party guarantees. After a thorough assessment, these accounts were classified as fully collectible despite the delay.

As of December 31, 2023, the following table summarizes the Company’s accounts receivable aging:


	December 31,
	2023
Accounts receivable aging:
Less than 150 days	$	3,508,729
151-180 days		861,197
181-210 days		886,845
Over 210 days		1,237,924
Less: allowance for doubtful accounts		—
Total accounts receivable	$	6,494,695

The accounts receivable transactions in connection with letters of credit with book value of $1,084,775 and $7,502,291 were pledged as collateral to guarantee the Company’s borrowings from four third-party lending companies as of December 31, 2023 and December 31, 2022, respectively (see Note 9).

LEASES - Weighted average remaining lease term and discount rate (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3 years 2 months 1 day	9 months 7 days
Weighted average discount rate	17.80%	17.10%
Weighted average incremental borrowing rate per annum	17.80%
Total operating lease expenses	$ 268,801	$ 218,305

DEALERS FINANCE (Details) - USD ($)	12 Months Ended
DEALERS FINANCE (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
DEALERS FINANCE
Outstanding balance	$ 0	$ 41,747
Interest expenses	31,197	18,641
Pledged as collateral
DEALERS FINANCE
Book value of inventory	$ 0	141,557
Loans payable from dealers finance
DEALERS FINANCE
Repayment period	2 months
Interest expenses	$ 4,123	$ 2,332
Loans payable from dealers finance \| Minimum
DEALERS FINANCE
Original term	5 years
Interest rate percentage	5.09%
Loans payable from dealers finance \| Maximum
DEALERS FINANCE
Original term	6 years
Interest rate percentage	9.84%

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES


	For the Years Ended
	December 31,
	2023		2022
Current:
Federal	$	7,385	$	42,881
State		443		33,538
Total current income tax provision		7,828		76,419
Deferred:
Federal		35,561		178,279
State		3,268		(20,219)
Total deferred income tax provision		38,829		158,060
Total income tax provision	$	46,657	$	234,479

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


	For the Years Ended
	December 31,
	2023			2022
Federal statutory tax rate	$	21.0	%	$	21.0	%
State statutory tax rate		1.6	%		3.7	%
Non-deductible expenses		0.6	%		0.2	%
Deferred true-up		2.6	%		(2.6)	%
Effective tax rate	$	25.8	%	$	22.3	%

Schedule of components of deferred tax assets


	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating loss carry-forwards	$	47,905	$	84,496
Others		—		2,238
Total deferred tax assets	$	47,905	$	86,734

ORGANIZATION AND BUSINESS DESCRIPTION (Tables)

12 Months Ended

Dec. 31, 2023

ORGANIZATION AND BUSINESS DESCRIPTION

Schedule of details of the subsidiaries of the company

Details of the subsidiaries of the Company as of December 31, 2023 are set out below:


Name of Entity	Date of Incorporation	State of Incorporation	% of Ownership	Principal Activities
Cheetah Net	August 9, 2016	North Carolina	Parent, 100%	Parallel-import vehicle dealership business
Subsidiaries of the parent:
Allen-Boy	August 31, 2016	Delaware	100%	Parallel-import vehicle dealership business

Fairview	December 5, 2018	North Carolina	100%	Parallel-import vehicle dealership business

Pacific	January 17, 2019	New York	100%	Parallel-import vehicle dealership business

Limousine	February 10, 2021	South Carolina	100%	Parallel-import vehicle dealership business

Entour	April 8, 2021	New York	100%	Parallel-import vehicle dealership business

Logistics	October 12, 2022	New York	100%	Parallel-import vehicle dealership business

ACCOUNTS RECEIVABLE - Aging (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
ACCOUNTS RECEIVABLE
Accounts receivable	$ 6,494,695	$ 7,086,651
Less: allowance for doubtful accounts	0	0
Total accounts receivable	6,494,695	$ 7,086,651
Less than 150 days
ACCOUNTS RECEIVABLE
Accounts receivable	3,508,729
151-180 days
ACCOUNTS RECEIVABLE
Accounts receivable	861,197
181-210 days
ACCOUNTS RECEIVABLE
Accounts receivable	886,845
Over 210 days
ACCOUNTS RECEIVABLE
Accounts receivable	$ 1,237,924

Pay vs Performance Disclosure - USD ($)	12 Months Ended
Pay vs Performance Disclosure - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 133,870	$ 816,980

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

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COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES.

NOTE 18 — COMMITMENTS AND CONTINGENCIES

On February 8, 2023, ISY1 LLC (the “Plaintiff”) commenced a lawsuit against the Company in the Superior Court of New Jersey. The Plaintiff alleged that the Company offered to pay the Plaintiff to arrange for the transport of certain automobiles for the benefit of the Company, the Plaintiff accepted the Company’s offer and rendered its services by contracting with and paying third parties who transported these automobiles. However, after the Plaintiff submitted the invoices, the Company refused to make the payment on the grounds that the Plaintiff’s services had not met the Company’s expectations. Therefore, the Plaintiff is seeking $86,355 in monetary damages, reimbursement for all costs and attorneys’ fees, and other relief as the Court may deem just and proper. On October 2, 2023, the Company entered into a settlement agreement with the Plaintiff. The Company agreed to deliver payments totaling $55,000, half of which was delivered on December 26, 2023. Pursuant to the terms of the settlement agreement, the remaining $27,500 is scheduled for payment six months following the effective date, with a due date at the end of March 2024.

On February 23, 2023, the Company filed a complaint in the Supreme Court of the State of New York County against Stefanie A. Rehfeld (the “Defendant”), alleging breach of contract as the Defendant had misappropriated an automobile belonging to the Company. Pursuant to an independent contractor agreement dated June 30, 2022 between the Company and the Defendant, the Company hired the Defendant to locate and acquire certain new model luxury vehicles. The Company was obligated to fully fund the purchase of each vehicle, and the Defendant was required to locate and acquire the vehicle and turn over title and possession to the Company in exchange for a commission fee. In February 2023, after the Company fully funded the purchase of a 2023 Mercedes Benz GLS 450 (the “Mercedes”) for a total amount of $102,593.50, the Defendant obtained possession of the Mercedes from a Mercedes Benz dealership and signed a bill of sale with the Company, whereby she agreed to sell, transfer, and convey the title of the Mercedes to the Company. However, the Defendant failed to transfer the title of the Mercedes to the Company as scheduled. Therefore, the Company is seeking to require the Defendant to transfer title and deliver possession of the Mercedes to the Company and recover the costs incurred in retrieving the car, or alternatively, the monetary damages resulting from the Defendant’s misappropriation of the Mercedes, including court costs and attorneys’ fees and expenses. On April 25, 2023, the Supreme Court of the State of New York County granted the Company’s motion for summary judgment on its second and fourth causes of action. Subsequently, an inquest will be conducted to determine the precise amount owed to the Company. Based on the outcome of the current motion and the Company’s overall assessment of the case, the Company believes it will be successful in this litigation. As of the filing date of this report, the Mercedes has been found by the police and returned to the Company.

LOANS RECEIVABLE

12 Months Ended

Dec. 31, 2023

LOANS RECEIVABLE

NOTE 4 — LOANS RECEIVABLE

Loans receivable consisted of the following:


	December 31,		December 31,
	2023		2022
Vehicle pledge loan receivable	$	172,500	$	—
Short-term loan	$	500,000		—
Total loans receivable	$	672,500	$	—

On December 6, 2023, the Company entered into two separate vehicle pledge loan agreements with one 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’ MSRP. The initial term of each agreement is 90 days. The loans carry an interest rate of 14.4% annually for the first 90 days, and for any duration beyond that, the rate is 18% annually. As of December 31, 2023, no impairment is required as the loans have been assessed as collectible.

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. The amendment extended the maturity date to June 12, 2024, and increased the annual interest rate to 18.0% for the extension period. No impairment is required as the loan has been assessed as collectible. Interest accrued through February 12, 2024, remains at the original rate of 12.0% per annum, and any interest accruing after this date is subject to the new rate of 18.0% per annum. Interest income for the years ended December 31, 2023 and 2022 was $5,423 and nil, respectively, which was accrued and recorded as interest receivable (see Note 6).

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2023 USD ($) segment shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounts receivable, allowance for doubtful accounts	$ 0	$ 0
Impairment allowance	0
Inventory reserve	0	0	$ 92,811
Impairment for ROU lease assets	$ 0	$ 0
Number of dilutive shares \| shares	0	0
Total shipping and handling expenses	$ 498,022	$ 710,265
Number of operating segments \| segment	1

LETTER OF CREDIT FINANCING ("LC FINANCING") (Details)	12 Months Ended
LETTER OF CREDIT FINANCING ("LC FINANCING") (Details)	Dec. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) agreement	Dec. 31, 2023 USD ($) company	Dec. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) agreement	Dec. 31, 2022 USD ($) company
LETTER OF CREDIT FINANCING ("LC FINANCING")
Outstanding balance	$ 1,004,565	$ 1,004,565	$ 1,004,565	$ 7,105,873	$ 7,105,873	$ 7,105,873
Interest expenses	31,197			18,641
Book value of accounts receivable	6,494,695	6,494,695	6,494,695	7,086,651	7,086,651	7,086,651
Pledged as collateral \| LETTER OF CREDIT FINANCING
LETTER OF CREDIT FINANCING ("LC FINANCING")
Book value of accounts receivable	1,084,775	$ 1,084,775	$ 1,084,775	7,502,291	$ 7,502,291	$ 7,502,291
LETTER OF CREDIT FINANCING
LETTER OF CREDIT FINANCING ("LC FINANCING")
Number of third-party lending companies		3	4		3	4
Interest expenses	$ 925,426			$ 1,669,931
LETTER OF CREDIT FINANCING \| Minimum
LETTER OF CREDIT FINANCING ("LC FINANCING")
Interest rate percentage	15.00%	15.00%	15.00%
LETTER OF CREDIT FINANCING \| Maximum
LETTER OF CREDIT FINANCING ("LC FINANCING")
Interest rate percentage	27.60%	27.60%	27.60%

INVENTORY - Components (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INVENTORY
Vehicles	$ 1,515,270	$ 5,965,935
Less: inventory valuation allowance	0	0	$ (92,811)
Total inventories	$ 1,515,270	$ 5,965,935

INVENTORY FINANCING (Details) - USD ($)	12 Months Ended
INVENTORY FINANCING (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
INVENTORY FINANCING
Loan agreements executed during the period	$ 0	$ 24,257,900
Outstanding balance	0	4,164,100
Interest expenses	31,197	18,641
Loans payable from inventory financing
INVENTORY FINANCING
Interest expenses		747,298
Loans payable from inventory financing
INVENTORY FINANCING
Outstanding balance		4,164,100
Pledged as collateral
INVENTORY FINANCING
Book value of inventory	$ 0	141,557
Pledged as collateral \| Loans payable from inventory financing
INVENTORY FINANCING
Book value of inventory		$ 4,095,132
Loan amount outstanding for no more than 90 days \| Minimum \| Loans payable from inventory financing
INVENTORY FINANCING
Interest rate percentage	16.20%
Loan amount outstanding for no more than 90 days \| Maximum \| Loans payable from inventory financing
INVENTORY FINANCING
Interest rate percentage	21.60%
Loan amount outstanding for more than 90 days \| Minimum \| Loans payable from inventory financing
INVENTORY FINANCING
Interest rate percentage	20.70%
Loan amount outstanding for more than 90 days \| Maximum \| Loans payable from inventory financing
INVENTORY FINANCING
Interest rate percentage	27.60%

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2023

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 11, 2022, the total authorized number of common stocks is 100,000,000 with par value of $0.0001 per common stock, which consists of 91,750,000 shares of Class A common stock and 8,250,000 shares of Class B common stock. The total number of shares of common stock outstanding is 15,000,000, which consists of 6,750,000 shares of Class A common stock and 8,250,000 shares of Class B common stock. 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 1,666,000 shares of Class A common stock at a purchase price of $1.80 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 $600,000 would be paid by Rapid within six months following the Company’s 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 $600,000 to September 30, 2024.

On August 3, 2023, the Company closed its IPO of 1,250,000 shares of Class A common stock at a public offering price of $4.00 per share, for aggregate gross proceeds of $5.0 million before deducting underwriting discounts, and other offering expenses, including a grant to the underwriter of a warrant to purchase 62,500 shares of Class A common stock (the “Warrant”), with an exercise price of $5.00 per share. The Company’s Class A common stock began trading on the Nasdaq Capital Market under the ticker symbol “CTNT” on August 1, 2023. As of December 31, 2023, there were 9,666,000 shares of Class A 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 Warrant is 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 Warrant was recorded to additional paid-in capital within stockholders’ equity.


					Total Common
					Shares Issuable as of
			Exercise		December 31,
Title of Warrant	Date Issued	Expiry Date	Price		2023
Equity-classified warrants

August 2023 – underwriter warrant	8/3/2023	07/31/2026	$	5.00	62,500

The entire disclosure for equity.

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ORGANIZATION AND BUSINESS DESCRIPTION

LONG-TERM DEBT - Interest expense (Details) - USD ($)	12 Months Ended
LONG-TERM DEBT - Interest expense (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
LONG-TERM DEBT
Interest expenses	$ 31,197	$ 18,641

ORGANIZATION AND BUSINESS DESCRIPTION

12 Months Ended

Dec. 31, 2023

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;

(ii) Canaan International LLC (“Fairview”), an LLC organized on December 5, 2018 under the laws of the State of North Carolina, known as Fairview International Business Group, LLC before changing its name by filing articles of amendment on July 21, 2020, which was acquired by Cheetah Net from Yiming Wang, the previous owner of Fairview, for a total consideration of $100 on January 1, 2019. Fairview did not have any business activities until acquired by Cheetah Net;

(iii) 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;

(iv) Canaan Limousine LLC (“Limousine”), an LLC organized on February 10, 2021 under the laws of the State of South Carolina, which was acquired by Cheetah Net from Yingchang Yuan, the previous owner of Limousine who beneficially owns 1,200,000 shares of Class A common stock of Cheetah Net, for a total consideration of $100 on February 19, 2021. Limousine did not have any business activities until acquired by Cheetah Net;

(v) Entour Solutions LLC (“Entour”), an LLC organized on April 8, 2021 under the laws of the State of New York, which was acquired by Cheetah Net from Daihan Ding, the previous owner of Entour, and a current employee of Cheetah Net, for a total consideration of $100 on April 9, 2021. Entour did not have any business activities until acquired by Cheetah Net; and

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

The Company and its wholly-owned subsidiaries are primarily engaged in the parallel-import vehicle dealership business. In the People’s Republic of China (the “PRC”), parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems. The Company purchases automobiles from the U.S. market through its large team of professional purchasing agents, and resells the automobiles to parallel-import car dealers in the U.S. and the PRC.

Details of the subsidiaries of the Company as of December 31, 2023 are set out below:


Name of Entity	Date of Incorporation	State of Incorporation	% of Ownership	Principal Activities
Cheetah Net	August 9, 2016	North Carolina	Parent, 100%	Parallel-import vehicle dealership business
Subsidiaries of the parent:
Allen-Boy	August 31, 2016	Delaware	100%	Parallel-import vehicle dealership business

Fairview	December 5, 2018	North Carolina	100%	Parallel-import vehicle dealership business

Pacific	January 17, 2019	New York	100%	Parallel-import vehicle dealership business

Limousine	February 10, 2021	South Carolina	100%	Parallel-import vehicle dealership business

Entour	April 8, 2021	New York	100%	Parallel-import vehicle dealership business

Logistics	October 12, 2022	New York	100%	Parallel-import vehicle dealership business

On August 3, 2023, the Company completed its initial public offering (“IPO”) of 1,250,000 shares of Class A common stock, par value $0.0001 per share, at a price to the public of $4.00 per share. The Company’s Class A common stock began trading on the Nasdaq Capital Market under the ticker symbol “CTNT” on August 1, 2023. Total net proceeds of approximately $3.7 million were raised from the IPO after deducting the underwriting discounts and the offering expenses, in an aggregate amount of $1.3 million. (see Note 17).

LOANS RECEIVABLE - Additional information (Details)					12 Months Ended
LOANS RECEIVABLE - Additional information (Details)	Jun. 12, 2024	Feb. 12, 2024	Dec. 11, 2023 USD ($) customer	Dec. 06, 2023 USD ($) agreement customer	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Vehicle pledge loan receivable
LOANS RECEIVABLE
Number of loan agreements entered \| agreement				2
Loan to number of customers \| customer				1
Aggregate principal amount				$ 172,500
Percentage Of Each Pledged Vehicle on the Aggregate Principal Amount of Loan				90.00%
Initial term of each agreement				90 days
Vehicle pledge loan receivable \| First 90 days
LOANS RECEIVABLE
Interest rate on loan receivable				14.40%
Vehicle pledge loan receivable \| Beyond 90 days
LOANS RECEIVABLE
Interest rate on loan receivable				18.00%
Short-term loan
LOANS RECEIVABLE
Loan to number of customers \| customer			1
Aggregate principal amount			$ 500,000
Interest income					$ 5,423	$ 0
Short-term loan \| Original maturity period
LOANS RECEIVABLE
Interest rate on loan receivable		12.00%
Short-term loan \| Extended period
LOANS RECEIVABLE
Interest rate on loan receivable	18.00%

LONG-TERM DEBT - Tabular (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
LONG-TERM DEBT
Total long-term debt	$ 677,612	$ 709,723
Current portion of long-term debt	32,887	31,281
Non-current portion of long-term debt	644,725	678,442
SBA
LONG-TERM DEBT
Total long-term debt	479,124	490,130
Thread Capital
LONG-TERM DEBT
Total long-term debt	$ 198,488	$ 219,593

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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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1F
-Subparagraph (b)(2)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

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

REVOLVING LINE OF CREDIT (Details)		12 Months Ended
REVOLVING LINE OF CREDIT (Details)	Oct. 05, 2022 USD ($) agreement	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
REVOLVING LINE OF CREDIT
Proceeds from line of credit		$ 3,244,488
Repayment of revolving Line of Credit		2,555,777
Revolving line of credit balance		688,711	$ 0
Interest expenses		31,197	18,641
Revolving Line of Credit Agreements
REVOLVING LINE OF CREDIT
Number of third-party companies \| agreement	2
Maximum borrowing capacity	$ 15,000,000.0
Term of borrowings	12 months
Fixed interest rate	1.50%
Interest expenses		$ 155,245	$ 0
Revolving Line of Credit Agreement, one
REVOLVING LINE OF CREDIT
Number of agreements \| agreement	2
Maximum borrowing capacity	$ 10,000,000.0
Revolving Line of Credit Agreement, two
REVOLVING LINE OF CREDIT
Number of third-party companies \| agreement	2
Maximum borrowing capacity	$ 5,000,000.0

INVENTORY

12 Months Ended

Dec. 31, 2023

INVENTORY

INVENTORY

NOTE 5 — INVENTORY

Inventory consisted of the following:


	December 31,		December 31,
	2023		2022
Vehicles	$	1,515,270	$	5,965,935
Less: inventory valuation allowance		—		—
Total inventory	$	1,515,270	$	5,965,935

Changes in inventory valuation allowance were as follows:


	December 31,		December 31,
	2023		2022
Beginning balance	$	—	$	92,811
Sale of previously reserved inventory		—		(92,811)
Ending balance	$	—	$	—

In connection with the Company’s $4,164,100 inventory financing from loans payable as of December 31, 2022, the Company pledged its inventory with book value of $4,095,132 as collateral for these loans, respectively (see Note 8). The Company’s vehicles in inventory with book value totaling $141,557 were pledged as collateral to secure loans payable from dealers finance as of December 31, 2022 (see Note 10).

LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2023

Summary of long-term borrowings


	December 31,		December 31,
	2023		2022
Small Business Administration⁽¹⁾	$	479,124	$	490,130
Thread Capital Inc.⁽²⁾		198,488		219,593
Total long-term debt	$	677,612	$	709,723

Current portion of long-term debt	$	32,887	$	31,281

Non-current portion of long-term debt	$	644,725	$	678,442

(1)

(2)

SBA

Summary of future maturities of the loan

The future maturities of the loan from SBA as of December 31, 2023 are as follows:


12 months ending December 31,	Future repayment
2024	$	10,592
2025		11,024
2026		11,474
2027		11,942
2028		12,429
Thereafter		421,663
Total	$	479,124

Thread Capital

Summary of future maturities of the loan

The future maturities of the loan from Thread Capital as of December 31, 2023 are as follows:


12 months ending December 31,	Future repayment
2024	$	22,295
2025		23,553
2026		24,881
2027		26,285
2028		27,768
Thereafter		73,706
Total	$	198,488

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.

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.

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Schedule of components of inventories, allowance for changes in inventory valuation allowance and inventory aging

INVENTORY (Tables)

12 Months Ended

Dec. 31, 2023

INVENTORY


	December 31,		December 31,
	2023		2022
Vehicles	$	1,515,270	$	5,965,935
Less: inventory valuation allowance		—		—
Total inventory	$	1,515,270	$	5,965,935


	December 31,		December 31,
	2023		2022
Beginning balance	$	—	$	92,811
Sale of previously reserved inventory		—		(92,811)
Ending balance	$	—	$	—

INVENTORY - Allowance for changes in inventory valuation allowance (Details) (Imported)	12 Months Ended
	Dec. 31, 2022 USD ($)
INVENTORY
Beginning balance	$ 92,811
Inventory reserve recovery	(92,811)
Sale of previously reserved inventory	(92,811)
Ending balance	$ 0

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Schedule of operating lease related assets and liabilities recorded on the balance sheets and weighted average remaining lease terms and discount rates for all operating leases


	December 31, 2023		December 31, 2022
Right-of-use assets	$	190,823	$	140,145

Operating lease liabilities – current	$	39,703	$	149,458
Operating lease liabilities – non-current		151,121		—
Total operating lease liabilities	$	190,824	$	149,458


	December 31, 2023		December 31, 2022
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3.17		0.77
Weighted average discount rate *	17.8	%	17.1	%

*The Company used a weighted average incremental borrowing rate of 17.8% per annum for its lease contracts based on the Company’s current borrowing rates from various financial institutions.

Schedule by years, of maturities of lease liabilities


12 months ending December 31,	Amount
2024	$	66,391
2025		82,059
2026		84,520
2027		14,509
Total lease payments	$	247,479
Less: imputed interest		(56,655)
Present value of lease liabilities	$	190,824

REVOLVING LINE OF CREDIT

12 Months Ended

Dec. 31, 2023

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT

NOTE 11 — 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.

During the year ended December 31, 2023, the Company borrowed a total of $3,244,488, and paid back $2,555,777. As of December 31, 2023 and 2022, the revolving line of credit balance was $688,711 and nil, respectively. Interest expense for the revolving lines of credit was $155,245 and nil for the years ended December 31, 2023 and 2022, respectively.

LONG-TERM DEBT - Future maturities of the loan from SBA (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Future maturities of the loan
Total long-term debt	$ 677,612	$ 709,723
SBA
Future maturities of the loan
2024	10,592
2025	11,024
2026	11,474
2027	11,942
2028	12,429
Thereafter	421,663
Total long-term debt	$ 479,124	$ 490,130

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

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	Class A common stock	Class B common stock	Total
Beginning balance at Dec. 31, 2021	$ 675	$ 825	$ 270,684		$ (442,609)			$ (170,425)
Beginning balance (in shares) at Dec. 31, 2021	6,750,000	8,250,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issuance	$ 167		2,998,633	$ (1,800,000)				1,198,800
Stock Issuance (in shares)	1,666,000
Net Income (Loss)					816,980			816,980
Ending balance at Dec. 31, 2022	$ 842	$ 825	3,269,317	(1,800,000)	374,371			$ 1,845,355
Ending balance (in shares) at Dec. 31, 2022	8,416,000	8,250,000				8,416,000	8,250,000	16,666,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Initial public offering, net of issuance cost	$ 125		3,725,278					$ 3,725,403
Stock Issuance				1,200,000				1,200,000
Net Income (Loss)					133,870			133,870
Ending balance at Dec. 31, 2023	$ 967	$ 825	$ 6,994,595	$ (600,000)	$ 508,241			$ 6,904,628
Ending balance (in shares) at Dec. 31, 2023	9,666,000	8,250,000				9,666,000	8,250,000	17,916,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Initial public offering, net of issuance cost (in shares)	1,250,000

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

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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LONG-TERM DEBT - SBA (Details) - SBA - USD ($)	Mar. 16, 2022	May 24, 2020
LONG-TERM DEBT
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		12 months
Monthly installment payment	$ 2,485	$ 731
Maximum
LONG-TERM DEBT
Face amount of borrowings	$ 500,000

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.

ACCOUNTS RECEIVABLE - Components (Details)	12 Months Ended
ACCOUNTS RECEIVABLE - Components (Details)	Dec. 31, 2023 USD ($) agreement	Dec. 31, 2023 USD ($) company	Dec. 31, 2022 USD ($) agreement	Dec. 31, 2022 USD ($) company
ACCOUNTS RECEIVABLE
Accounts receivable	$ 6,494,695	$ 6,494,695	$ 7,086,651	$ 7,086,651
Less: allowance for doubtful accounts	0	0	0	0
Total accounts receivable	6,494,695	6,494,695	$ 7,086,651	$ 7,086,651
Third party
ACCOUNTS RECEIVABLE
Accounts receivable	5,600,000	5,600,000
Third party \| Over 150 days
ACCOUNTS RECEIVABLE
Accounts receivable	$ 2,600,000	$ 2,600,000
Letters of credit
ACCOUNTS RECEIVABLE
Number of third-party lending companies	3	4	3	4
Pledged as collateral \| Letters of credit
ACCOUNTS RECEIVABLE
Accounts receivable	$ 1,084,775	$ 1,084,775	$ 7,502,291	$ 7,502,291

LOANS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of loans receivable


	December 31,		December 31,
	2023		2022
Vehicle pledge loan receivable	$	172,500	$	—
Short-term loan	$	500,000		—
Total loans receivable	$	672,500	$	—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of the company's total revenue by geographic area


	For the Years Ended
	December 31,
	2023		2022
U.S. domestic market	$	8,160,395	$	3,821,261
Overseas market		30,155,579		51,332,073
Total revenue	$	38,315,974	$	55,153,335

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (the “U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying 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. As a U.S.-based company operating exclusively within the domestic market and transacting solely in United States Dollars (USD), both the Company’s presentation and functional currencies are the USD. This uniformity simplifies the Company’s financial reporting process and ensures clarity in its financial transactions. The Company’s financial statements, therefore, are presented in USD, in compliance with U.S. GAAP requirements, and provide transparent and straightforward financial information to the Company’s stakeholders.

Uses of estimates

In preparing the 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 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 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.

Risks and uncertainties

Risks and uncertainties related to the Company’s business include, but are not limited to, the following:

●

Changes in consumer demand in the Chinese market towards fuel-efficient vehicles and electric vehicles, or a general declining purchasing power of PRC consumers, could adversely affect the Company’s vehicle sales volumes and results of operations;

●

The PRC government policies on the purchase and ownership of automobiles and stricter emissions standards, may reduce the market demand for the automobiles the Company sells and thus negatively affect its business and growth prospects;

●

Any adverse change in political relations between the PRC and the U.S. or any other country where those brands originate, including the ongoing trade conflicts between the U.S. and the PRC, may negatively affect its business; and

●

The ongoing military conflict between Russia and Ukraine could materially and adversely affect the global economy and capital markets, including significant volatility in commodity prices, especially energy prices, credit and capital markets, as well as supply chain interruptions.

The Company’s business, financial condition, and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics, and other catastrophic incidents, which could significantly disrupt the Company’s operations.

Cash

Cash includes deposits held by banks that can be added or withdrawn without limitation.

Accounts receivable

Accounts receivable represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful accounts. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company 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 consolidated statements of income. Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payments for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt expenses. As of December 31, 2023 and December 31, 2022, there was no allowance for doubtful accounts recorded as the Company considers all of the outstanding accounts receivable fully collectible.

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 is stated at the lower of cost or net realizable value using the specific identification method. The value of inventory mainly includes the cost of auto vehicles purchased from U.S. 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 December 31, 2023 and 2022.

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

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

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 December 31, 2023 and 2022.

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 is primarily engaged in the parallel-import vehicle dealership business and generates its revenue from the sales of parallel-import vehicles to both domestic and overseas parallel-import car dealers. It purchases automobiles from the U.S. market through its large 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 car 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 as of December 31,2023 and 2022.

Contract balances and remaining performance obligations

Contract balances typically arise when a difference in timing between the transfer of control to the parallel-import car dealers and receipt of consideration occurs. The Company did not have contract assets as of December 31, 2023 and 2022. The Company did not have contact liabilities as of December 31, 2023 and 2022.

Disaggregation of Revenue

The Company disaggregates its revenue by geographic areas, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenue for the years ended December 31, 2023 and 2022 were as follows:

Geographic information

The summary of the Company’s total revenue by geographic area for the years ended December 31, 2023 and 2022 was as follows:


	For the Years Ended
	December 31,
	2023		2022
U.S. domestic market	$	8,160,395	$	3,821,261
Overseas market		30,155,579		51,332,073
Total revenue	$	38,315,974	$	55,153,335

Cost of revenue

Cost of 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.

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 in 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 consolidated statements of income. The Company does not believe that there were any uncertain tax positions as of December 31, 2023 and 2022.

The Company and its U.S. operating subsidiaries are subject to the U.S. tax law. 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, 2022. As of December 31, 2023, the Company’s consolidated income tax returns for the tax years ended December 31, 2020 through December 31, 2023, remain open for statutory examination by U.S. tax authorities.

Earnings per share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). 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 years ended December 31, 2023 and 2022, 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 to be 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. Companies 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 consolidated statements of income. Total shipping and handling expenses were $498,022 and $710,265 for the years ended December 31, 2023 and 2022, 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 one operating segment.

Recent accounting pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and ASU 2019-05, Targeted Transition Relief. In November 2019, the FASB issued ASU 2019-10, which extends the effective date for the adoption of ASU 2016-13. In November 2019, the FASB issued ASU 2019-11 to clarify its new credit impairment guidance in ASU 326. Accordingly, for public entities that are not smaller reporting entities, ASU 2016-13 and its amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company adopted this guidance on January 1, 2023 and the adoption of this ASU did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The Company adopted this guidance on January 1, 2020 and the adoption of this ASU did not have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this guidance on January 1, 2021 and the adoption of this ASU did not have a material impact on its consolidated financial statements.

LONG-TERM DEBT - Thread Capital (Details) - Thread Capital - USD ($)	Dec. 01, 2022	Nov. 30, 2022	May 18, 2021	May 15, 2020
LONG-TERM DEBT
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 DEBT
Face amount of borrowings			$ 221,300

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.

ACCOUNTS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of components of accounts receivable


	December 31,		December 31,
	2023		2022
Accounts receivable	$	6,494,695	$	7,086,651
Less: allowance for doubtful accounts		—		—
Total accounts receivable	$	6,494,695	$	7,086,651

Schedule of accounts receivable aging


	December 31,
	2023
Accounts receivable aging:
Less than 150 days	$	3,508,729
151-180 days		861,197
181-210 days		886,845
Over 210 days		1,237,924
Less: allowance for doubtful accounts		—
Total accounts receivable	$	6,494,695

INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

NOTE 15 — INCOME TAXES

The Company and its operating subsidiaries in United States are subject to the tax law of the United States. 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, 2022.

(i)

The components of the income tax provision were as follows:


	For the Years Ended
	December 31,
	2023		2022
Current:
Federal	$	7,385	$	42,881
State		443		33,538
Total current income tax provision		7,828		76,419
Deferred:
Federal		35,561		178,279
State		3,268		(20,219)
Total deferred income tax provision		38,829		158,060
Total income tax provision	$	46,657	$	234,479

(ii)

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


	For the Years Ended
	December 31,
	2023			2022
Federal statutory tax rate	$	21.0	%	$	21.0	%
State statutory tax rate		1.6	%		3.7	%
Non-deductible expenses		0.6	%		0.2	%
Deferred true-up		2.6	%		(2.6)	%
Effective tax rate	$	25.8	%	$	22.3	%

(iii)

Deferred tax assets were composed of the following:


	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating loss carry-forwards	$	47,905	$	84,496
Others		—		2,238
Total deferred tax assets	$	47,905	$	86,734

As of December 31, 2022, the Company had a cumulative U.S. federal net operating loss (“NOL”) of $327,648, which may reduce future federal taxable income. During the year ended December 31, 2023, the Company’s operations utilized NOLs of $163,295, resulting in a cumulative U.S. federal NOL of $164,353 as of December 31, 2023, which is carried forward indefinitely. As of December 31, 2023, the Company also had a cumulative state NOL of $191,759, which may reduce future state taxable income, and the NOL balance as of December 31, 2023 will expire beginning in 2041.

The Company was not previously subject to the interest expense 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 did not exceed the relevant threshold amount ($27 million for 2022). The Company no longer met the small business exception in 2023, but it met 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 therefore continued to be exempt from the §163(j) interest expenses limitation in 2023.

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.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS

NOTE 14 — RELATED PARTY TRANSACTIONS

a. 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

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 years ended December 31, 2023 and 2022, the Company borrowed an aggregate of $45,798 and $313,464, respectively, from Mr. Huan Liu directly as working capital and used such funds to purchase vehicles. The Company made repayments to Mr. Huan Liu in the amount of $32,375 and $1,449,054 during the years ended December 31, 2023 and 2022, respectively. As a result of these transactions, the balance due to Mr. Huan Liu was $13,423 as of December 31, 2023.

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.

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($)		1 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Feb. 08, 2023	Feb. 28, 2023	Oct. 02, 2023
COMMITMENTS AND CONTINGENCIES
Damages sought value	$ 86,355
Settlement amount payable			$ 55,000
Second installment due within six months after the settlement
COMMITMENTS AND CONTINGENCIES
Settlement amount payable			$ 27,500
Mercedes Benz GLS 450
COMMITMENTS AND CONTINGENCIES
Funded purchase amount		$ 102,593.50

STOCKHOLDERS' EQUITY (Details) - USD ($)				12 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($)	Aug. 03, 2023	Jul. 11, 2022	Jun. 27, 2022	Dec. 31, 2023	Dec. 31, 2022	Mar. 13, 2024
STOCKHOLDERS' EQUITY
Common stock authorized		100,000,000		100,000,000	100,000,000
Common stock par value		$ 0.0001		$ 0.0001	$ 0.0001
Common stock shares outstanding		15,000,000		17,916,000	16,666,000
Aggregate gross proceeds from public offering				$ 3,725,403
Common stock shares issued				17,916,000	16,666,000
Investor
STOCKHOLDERS' EQUITY
Shares issued during period shares other			1,666,000
Purchase price			$ 1.80
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
Rapid \| Subsequent Event
STOCKHOLDERS' EQUITY
Outstanding amount to be paid						$ 600,000
Class A common stock
STOCKHOLDERS' EQUITY
Common stock authorized		91,750,000		91,750,000	91,750,000
Common stock par value				$ 0.0001	$ 0.0001
Common stock shares outstanding		6,750,000		9,666,000	8,416,000
Voting rights		one
Common stock shares issued				9,666,000	8,416,000
Class A common stock \| IPO
STOCKHOLDERS' EQUITY
Common stock par value	$ 0.0001
Net proceeds from issuance of common stock	$ 3,700,000
Shares issued during period shares	1,250,000
Share price	$ 4.00
Aggregate gross proceeds from public offering	$ 5,000,000.0
Warrants to purchase shares of common stock	62,500
Exercise price of warrants	$ 5.00
Class A common stock \| Investor
STOCKHOLDERS' EQUITY
Common stock shares outstanding				9,666,000
Common stock shares issued				9,666,000
Class B common stock
STOCKHOLDERS' EQUITY
Common stock authorized		8,250,000		8,250,000	8,250,000
Common stock par value				$ 0.0001	$ 0.0001
Common stock shares outstanding		8,250,000		8,250,000	8,250,000
Voting rights		15
Common stock shares issued				8,250,000	8,250,000

INCOME TAXES - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2023
INCOME TAXES
Net operating loss carry-forwards	$ 84,496	$ 47,905
Foreign operating loss carryforwards		164,353
State operating loss carryforwards		191,759
Maximum income tax threshold amount	27,000,000
Domestic
INCOME TAXES
Net operating loss carry-forwards	$ 327,648	$ 163,295

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Mar. 15, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2023
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	6201 Fairview Road, Suite 225
Entity Address, City or Town	Charlotte
Entity Address State Or Province	NC
Entity Address, Postal Zip Code	28210
City Area Code	704
Local Phone Number	972-0209
Title of 12(b) Security	Class A common stock, par value $0.0001per share
Trading Symbol	CTNT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
Document Financial Statement Error Correction [Flag]	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float				$ 0
Entity Common Stock, Shares Outstanding			10,938,329
Entity Central Index Key	0001951667
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Assentsure PAC	Marcum Asia CPAs LLP
Auditor Location	Singapore	New York, New York
Auditor Firm ID	6783	5395

ORGANIZATION AND BUSINESS DESCRIPTION - Subsidiaries of the company (Details)	Dec. 31, 2023
Cheetah Net
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Allen-Boy
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Fairview
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Pacific
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Limousine
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Entour
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%
Logistics
ORGANIZATION AND BUSINESS DESCRIPTION
% of Ownership	100.00%

CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022	Jul. 11, 2022
Common stock, par value per share	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	17,916,000	16,666,000
Common stock, shares outstanding	17,916,000	16,666,000	15,000,000
Class A common stock
Common stock, par value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	91,750,000	91,750,000	91,750,000
Common stock, shares issued	9,666,000	8,416,000
Common stock, shares outstanding	9,666,000	8,416,000	6,750,000
Class B common stock
Common stock, par value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	8,250,000	8,250,000	8,250,000
Common stock, shares issued	8,250,000	8,250,000
Common stock, shares outstanding	8,250,000	8,250,000	8,250,000

LOANS RECEIVABLE (Details)	Dec. 31, 2023 USD ($)
LOANS RECEIVABLE
Total loans receivable	$ 672,500
Vehicle pledge loan receivable
LOANS RECEIVABLE
Total loans receivable	172,500
Short-term loan
LOANS RECEIVABLE
Total loans receivable	$ 500,000

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($)	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED STATEMENTS OF INCOME
REVENUE	$ 38,315,974	$ 55,153,335
COST OF REVENUE
Cost of vehicles	32,183,676	48,534,282
Fulfillment expenses	1,885,382	2,149,672
Total cost of revenue	34,069,058	50,683,954
GROSS PROFIT	4,246,916	4,469,381
OPERATING EXPENSES
Selling expenses	668,172	898,852
General and administrative expenses	2,190,513	1,430,917
Total operating expenses	2,858,685	2,329,769
INCOME FROM OPERATIONS	1,388,231	2,139,612
OTHER (EXPENSE) INCOME, NET
Interest expense, net	(1,239,297)	(2,441,443)
Other income, net	31,593	12,974
Subsidy income from Business Recovery Grant Program		1,340,316
Total other (expense) income, net	(1,207,704)	(1,088,153)
INCOME BEFORE INCOME TAX PROVISION	180,527	1,051,459
Income Tax Provision	46,657	234,479
NET INCOME	$ 133,870	$ 816,980
Earnings per common share - basic (in dollars per share)	$ 0.01	$ 0.05
Earnings per common share - diluted (in dollars per share)	$ 0.01	$ 0.05
Weighted average shares - basic (in shares)	17,183,123	15,794,203
Weighted average shares - diluted (in shares)	17,183,123	15,794,203

SUBSEQUENT EVENT (Details) - Subsequent Event - USD ($)	Mar. 04, 2024	Feb. 02, 2024	Jan. 24, 2024
Edward Transit Express Group Inc. \| Juguang Zhang
SUBSEQUENT EVENT
Percentage of agreed ownership interest to acquire			100.00%
Purchase price		$ 300,000
Number of shares issued on acquisition		1,272,329
Edward Transit Express Group Inc. \| Juguang Zhang \| Class A common stock
SUBSEQUENT EVENT
Value of shares issued on acquisition		$ 1,200,000
Maxim Group LLC
SUBSEQUENT EVENT
Cash consideration	$ 78,125
Maxim Group LLC \| Class A common stock
SUBSEQUENT EVENT
Warrants to purchase shares of common stock	62,500

LEASES - Operating lease related assets and liabilities recorded on the balance sheets (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
LEASES
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Extension term of the operating lease	3 years
Right-of-use assets	$ 190,823	$ 140,145
Operating lease liabilities - current	39,703	149,458
Operating lease liabilities - non-current	151,121
Total operating lease liabilities	$ 190,824	$ 149,458
Minimum
LEASES
Term of the operating lease	12 months
Maximum
LEASES
Term of the operating lease	38 months

STOCKHOLDERS' EQUITY - Fair Value of Warrants (Details) - August 2023 - underwriter warrants	Dec. 31, 2023 $ / shares shares
STOCKHOLDERS' EQUITY
Exercise Price \| $ / shares	$ 5.00
Total Common Shares Issuable \| shares	62,500

OTHER RECEIVABLES

12 Months Ended

Dec. 31, 2023

OTHER RECEIVABLES

OTHER RECEIVABLES

NOTE 6 — OTHER RECEIVABLES

Other receivables consisted of the following:


	December 31, 2023		December 31, 2022
Vehicle deposit⁽¹⁾	$	162,159	$	400,659
Rent deposit		22,095		41,845
Sales tax refundable⁽²⁾		217,892		419,886
Interest receivable		5,423		—
Others		3,351		38,340
Subtotal		410,920		900,730
Less: allowance for doubtful accounts		—		—
Total other receivables	$	410,920	$	900,730

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

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

LEASES - Maturities of lease liabilities (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
LEASES
2024	$ 66,391
2025	82,059
2026	84,520
2027	14,509
Total lease payments	247,479
Less: imputed interest	(56,655)
Total operating lease liabilities	$ 190,824	$ 149,458

INCOME TAXES - Reconciliations of Statutory Income Tax Rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Federal statutory tax rate	21.00%	21.00%
State statutory tax rate	1.60%	3.70%
Non-deductible expenses	0.60%	0.20%
Deferred True-up	2.60%	(2.60%)
Effective tax rate	25.80%	22.30%

DEALERS FINANCE

12 Months Ended

Dec. 31, 2023

DEALERS FINANCE

DEALERS FINANCE

NOTE 10 — DEALERS FINANCE

Loans payable from dealers finance reflect amounts borrowed from various automobile dealers to finance the purchased vehicles. The original term of these loans is between five to six years; however, the Company typically repays these loans within two months. The Company is charged an interest rate ranging between 5.09% and 9.84%, per annum.

The dealers finance amounted to nil and $41,747 as of December 31, 2023 and 2022, respectively. Interest expense for dealers finance was $4,123 and $2,332 for the years ended December 31, 2023 and 2022, respectively. The Company’s vehicles in inventory with book value of nil and $141,557 were pledged as collateral to secure the loans payable from dealers finance as of December 31, 2023 and 2022, respectively (see Note 5).

PREMIUM FINANCE (Details) - USD ($)	12 Months Ended
PREMIUM FINANCE (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Jul. 31, 2023
PREMIUM FINANCE
Loans payable from premium finance	$ 148,621
Interest expenses	31,197	$ 18,641
Loans payable from premium finance
PREMIUM FINANCE
Amount borrowed			$ 221,139
Interest rate percentage			7.75%
Loans payable from premium finance	148,621	0
Interest expenses	$ 5,974	$ 0

LONG-TERM DEBT - Future maturities of the loan from Thread Capital (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Future maturities of the loan
Total long-term debt	$ 677,612	$ 709,723
Thread Capital
Future maturities of the loan
2024	22,295
2025	23,553
2026	24,881
2027	26,285
2028	27,768
Thereafter	73,706
Total long-term debt	$ 198,488	$ 219,593

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

Basis of presentation

Uses of estimates

Risks and uncertainties

Risks and uncertainties related to the Company’s business include, but are not limited to, the following:

●

Cash

Cash includes deposits held by banks that can be added or withdrawn without limitation.

Accounts receivable

Loans receivable

Inventory

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

Revenue recognition

Contract balances and remaining performance obligations

Disaggregation of Revenue

Geographic information

The summary of the Company’s total revenue by geographic area for the years ended December 31, 2023 and 2022 was as follows:


	For the Years Ended
	December 31,
	2023		2022
U.S. domestic market	$	8,160,395	$	3,821,261
Overseas market		30,155,579		51,332,073
Total revenue	$	38,315,974	$	55,153,335

Cost of revenue

Income taxes

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

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2023

STOCKHOLDERS' EQUITY

Schedule of fair value of the warrants


					Total Common
					Shares Issuable as of
			Exercise		December 31,
Title of Warrant	Date Issued	Expiry Date	Price		2023
Equity-classified warrants

August 2023 – underwriter warrant	8/3/2023	07/31/2026	$	5.00	62,500

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

NOTE 7 — LEASES

The Company leases office space from various third parties under non-cancelable operating leases, with terms ranging from 12 to 38 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 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 table below presents the operating lease related assets and liabilities recorded on the balance sheets.


	December 31, 2023		December 31, 2022
Right-of-use assets	$	190,823	$	140,145

Operating lease liabilities – current	$	39,703	$	149,458
Operating lease liabilities – non-current		151,121		—
Total operating lease liabilities	$	190,824	$	149,458

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


	December 31, 2023		December 31, 2022
Remaining lease term and discount rate:
Weighted average remaining lease term (years)	3.17		0.77
Weighted average discount rate *	17.8	%	17.1	%

*The Company used a weighted average incremental borrowing rate of 17.8% per annum for its lease contracts based on the Company’s current borrowing rates from various financial institutions.

During the years ended December 31, 2023 and 2022, the Company incurred total operating lease expenses of $268,801 and $218,305, respectively.

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2023:


12 months ending December 31,	Amount
2024	$	66,391
2025		82,059
2026		84,520
2027		14,509
Total lease payments	$	247,479
Less: imputed interest		(56,655)
Present value of lease liabilities	$	190,824

INVENTORY FINANCING

12 Months Ended

Dec. 31, 2023

INVENTORY FINANCING

INVENTORY FINANCING

NOTE 8 — INVENTORY FINANCING

There were no inventory financing loan agreements executed during the year ended December 31, 2023. No inventory was being held as collateral, and the balance of inventory financing was nil, as of December 31, 2023.

The Company entered into a series of inventory financing loan agreements with a third party for working capital purposes during the year ended December 31, 2022, pursuant to which the Company pledged a portion of its vehicle inventory as collateral for each of the loan agreements. Interest expenses are calculated based on the actual number of days the loan was outstanding upon settlement of the loan. For the loan amount outstanding for no more than 90 days, the Company is charged an interest rate ranging between 16.2% and 21.6%, per annum, and for the amount outstanding for more than 90 days, the Company is charged an interest rate ranging between 20.7% and 27.6%, per annum. The loans are guaranteed by Huan Liu, the Company’s controlling stockholder, and another stockholder of the Company.

Inventory financing amounted to $4,164,100 as of December 31, 2022. Interest expense for inventory financing was $747,298 for the year ended December 31, 2022. The Company’s vehicles in inventory with book value of $4,095,132 were pledged as collateral to secure the Company’s borrowings from a third party as of December 31, 2022 (see Note 5).

CONCENTRATIONS

12 Months Ended

Dec. 31, 2023

CONCENTRATIONS

CONCENTRATIONS

NOTE 16 — CONCENTRATIONS

Political and economic risk

The operations of the Company are located 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 state 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 December 31, 2023 and 2022, $432,998 and $58,381 of the Company’s cash was on deposit at financial institutions in the U.S., respectively, which were insured by the Federal Deposit Insurance Corporation subject to certain limitations. The Company has not experienced any losses in such accounts.

Loans receivable may be secured by the vehicles being financed or unsecured based on the creditworthiness of the borrower, thereby exposing the Company to credit risk. This risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

Accounts receivable are typically unsecured and derived from revenue earned from parallel-import car dealers, thereby exposing the Company to credit risk. This risk is mitigated by the Company’s assessment of its parallel-import car dealers’ creditworthiness and its ongoing monitoring of outstanding balances.

Concentrations

The Company’s major customers are parallel-import automobile dealers. For the year ended December 31, 2023, three parallel-import car dealers accounted in total for 98.9% (53.2%, 25.5%, and 20.2%, respectively) of the Company’s total revenue. For the year ended December 31, 2022, three parallel-import car dealers accounted for approximately 65.0% (28.4%, 25.7%, and 10.9%, respectively) of the Company’s total revenue.

As of December 31, 2023, three parallel-import car dealers accounted for 98.0% (58.1%, 28.2%, and 11.7%, respectively) of the accounts receivable balance. As of December 31, 2022, two parallel-import car dealers accounted for approximately 88.7% (77.0% and 11.7%, respectively) of the accounts receivable balance.

For the years ended December 31, 2023 and 2022, one U.S.-based automobile dealership accounted for approximately 8.8% and 8.4%, respectively, of the Company’s total purchases.

OTHER RECEIVABLES (Details) - USD ($)

Dec. 31, 2023

Dec. 31, 2022

OTHER RECEIVABLES

Vehicle Deposit

^[1]

$ 162,159

$ 400,659

Rent Deposit

22,095

41,845

Sales Tax Refundable

^[2]

217,892

419,886

Interest receivable

5,423

Others

3,351

38,340

Subtotal

410,920

900,730

Total Other Receivables

$ 410,920

$ 900,730

[1]	Vehicle deposits represent security deposits paid to U.S. automobile dealers to reserve vehicles.
[2]	Sales tax refundable represents vehicles sales tax exempted in some states and to be refunded by the tax authorities

INCOME TAXES - Components of Income Tax Provision (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current:
Federal	$ 7,385	$ 42,881
State	443	33,538
Total current income tax provision	7,828	76,419
Deferred:
Federal	35,561	178,279
State	3,268	(20,219)
Total deferred income tax provision	38,829	158,060
Total income tax provision	$ 46,657	$ 234,479

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

SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENT

SUBSEQUENT EVENT

NOTE 19 — SUBSEQUENT EVENT

On January 24, 2024, the Company entered into a stock purchase agreement with Edward Transit Express Group Inc., a California corporation (“Edward”), and Juguang Zhang, Edward’s sole stockholder (the “Seller”). Pursuant to the Agreement, the Company agreed to acquire 100% of the equity interest in Edward from the Seller (the “Acquisition”). On February 2, 2024, the Corporation closed the Acquisition for a total purchase price that included a cash payment of $300,000 and the issuance of 1,272,329 shares of the Company’s unregistered Class A common stock, valued at $1,200,000.

On March 4, 2024, the Company entered into a warrant termination agreement (the “Agreement”) with Maxim Group LLC (“Maxim”). Pursuant to the terms of the Agreement, the Company agreed to pay Maxim a cash consideration of $78,125 in full settlement for the termination of the Warrant, previously issued to Maxim in connection with the Company’s IPO. The Warrant, originally issued on August 3, 2023, provided Maxim the right to purchase 62,500 shares of the Company’s Class A common stock. According to the Agreement, the Warrant was fully terminated and rendered null and void as of the effective date of the Agreement. This termination extinguishes all past, present, or future obligations of the parties under the Warrant, except as otherwise expressly provided for in the Agreement. The effective date of the Agreement is acknowledged as the date on which the cash consideration of $78,125 was received by Maxim.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition - Geographic information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Geographic information
REVENUE	$ 38,315,974	$ 55,153,335
U.S. domestic market
Geographic information
REVENUE	8,160,395	3,821,261
Overseas market
Geographic information
REVENUE	$ 30,155,579	$ 51,332,073

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.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
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-Paragraph 5
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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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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Paragraph 32
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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