*All share numbers are retrospectively adjusted for the Reverse Stock Split.

Tony Liu, Cheetah’s Chairman and CEO commented, “It was a very tough year for Cheetah in 2024. The unexpected deteriorating market conditions in China resulted in weaker customer demands and a significant drop in sales for our parallel-import vehicle business, as luxury vehicle manufacturers discounted the prices of their vehicles below MSRP. As a result, our ability to profit from the sale of parallel-vehicle exports has been significantly challenged and we had to wind-down this segment after trying hard to collect aged accounts receivable.

“At the same time, we moved quickly to expand beyond the parallel-import vehicle business with the goal of becoming an integrated logistics and warehousing provider of international trade services for small- and medium-sized businesses. We will continue to focus on improving operational efficiencies, streamline operations, expand service offering, and enhance market position. Management will continue to take initiatives to seek out new business opportunities. We expect longer than expected to generate ideal profits and have confidence that we are positioning the Company for substantial future growth in this business.”

2024 Financial Results

During the year ended December 31, 2024, the Company’s financial performance reflected the consequences of its business strategic shift to logistics and warehousing business and discontinued operations of parallel-import business under the challenging market conditions.

Continuing operations- logistics and warehousing business

During the year ended December 31, 2024, the Company had total revenues of $455,805 for the continuing operations, following the acquisition of Edward in February 2024 and TWEW in December 2024, with cost of revenues of $277,293 and gross profit of $178,512 reported. The Company will continue to expand its market presence in 2025.

General & administration expenses for the continuing operations were $3.6 million for the year ended December 31, 2024, an increase of $1.4 million, or 66.3%, from $2.2 million for the year ended December 31, 2023, primarily due to (i) an increase of $0.5 million in personnel-related expenses, which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, and labor services segment, (ii) an increase of $0.3 million in rental and leases following the acquisition of Edward with the addition of a new office workspace in California, (iii) an increase of $0.1 million in recruiting expenses associated with the development of new business lines, aligning with the Company’s strategic shift towards logistics and warehousing, (iv) an increase of $0.2 million in insurance expenses due to higher costs associated with directors and officers insurance, (v) an increase of $0.1 million in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and additional intangible assets, and (vi) an increase of $0.2 million in other miscellaneous general and administration expenses during the year ended December 31, 2024.

Share-based compensation expenses for the continuing operations were $0.3 million for the year ended December 31, 2024, as compared to nil in 2023.

Interest income for the continuing operations was $320,472 for the year ended December 31, 2024, compared to $9,938 for the year ended December 31, 2023, representing an increase of $310,534, or 3,124.7%. The significant increase was primarily driven by interest earned on short-term loan receivables and certificates of deposit, funded by the net proceeds from our initial offering and public offerings closed in May and July 2024.

Interest expense for the continuing operations was $35,951 for the year ended December 31, 2024, which decreased by $5,932, or 14.2%, from $41,883 in 2023, mainly due to decreased credit card interest.

The Company’s income tax benefits for the continuing operations were $0.2 million for the year ended December 31, 2024, compared with income tax benefits of approximately $0.5 for the same period in 2023.

Net loss from the continuing operations for the years ended December 31, 2024 and 2023 was $3.2 million and $1.7 million, respectively.

Discontinued Operations- parallel-import vehicle business

The Company’s sales from the discontinued operations declined by 95.7% from $38.3 million in 2023 to $1.6 million in 2024 due to the significant deteriorating market on parallel-import vehicles in China.

Cost of revenues from the discontinued operation declined by 95.0% from $34.1 million in 2023 to $1.7 million in 2024, which was aligned with the sales downturn from parallel-import vehicles.

In 2024, the Company reported a gross loss of $24,820 from the discontinued operations, compared to a gross profit of $4.2 million in 2023, reflecting a decrease of $4.3 million, or 100.6%. The decrease was primarily attributable to the cessation of the parallel-import vehicle business and the significant drop in revenue.

Total selling, general & administration expenses for the discontinued operation increased by approximately $1.2 million, or 175.8%, to $1.8 million in 2024, compared to $0.7 million in 2023. The increase was primarily driven by a credit loss of $1.6 million for the aged uncollectible accounts receivable, and $0.1 million of forfeited vehicle deposits and sales tax returns, reflecting the financial impact of the business exit.

Total interest expenses for the discontinued operations decreased significantly to $88,788 for the year ended December 31, 2024, compared to $1.2 million in 2023. This decrease was primarily due to the cessation of vehicle purchases and the associated financing activities. The absence of inventory financing and a substantial decrease in LC financing charges were the main causes of this decline.

Net loss for the discontinued operations was approximately $2.0 million in 2024, compared to net income of $1.8 in 2023, reflecting the financial impact of the discontinued parallel-import vehicle business, including associated costs and adjustments.

As a result of the above factors, the Company reported an overall net loss of $5.2 million for the year ended December 31, 2024, as compared to a net income of $0.1 million in 2023.

Liquidity and Cash Flow

As of December 31, 2024, the Company had current assets of $11.0 million, consisting of cash and cash equivalents of $1.7 million, $6.1 million in short-term loan receivable, $0.4 million of other receivables, $0.3 million in prepaid expenses and other current assets from continuing operations, as well as $2.5 million in current assets from discontinued operations, primarily accounts receivable, which has been fully collected as of the date of our 2024 annual report. As of December 31, 2024, the Company’s current liabilities, all of which related to continuing operations, totaled approximately $0.9 million, consisting of $0.4 million of operating lease liabilities, $0.2 million of other payables, and $0.2 million of loan payable, including the current portion of long-term borrowings.

During the year ended December 31, 2024, the Company also reported cash flow of $0.2 million provided by operating activities, $6.1 million used in investing activities, and $7.1 million provided by financing activities. As of December 31, 2024, the Company had total stockholders’ equity of $12.6 million, compared to $6.9 million as of December 31, 2023.

The Company’s working capital cushion is supported by its financing activities and its ability to borrow under its existing credit facilities.

The Company is working to further improve its liquidity and capital sources primarily by generating cash from operations, debt financing, and, if needed, financial support from its principal stockholder. If necessary to fully implement its business plan and sustain continuing growth, the Company may seek additional equity financing from outside investors. Based on the current operating plan, management believes that the aforementioned measures collectively will provide sufficient liquidity to meet the Company’s future liquidity and capital requirements for at least 12 months from the issuance date of its consolidated financial statements.

Forward-Looking Statements

This press release contains certain forward-looking statements, including statements that are predictive in nature. Forward-looking statements are based on the Company’s current expectations and assumptions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These statements may be identified by the use of forward-looking expressions, including, but not limited to, “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including its registration statement on Form S-1, as amended, under the caption “Risk Factors.”

For more information, please contact:

Cheetah Net Supply Chain Service Inc. 
Investor Relations
(949) 418 7804
ir@cheetah-net.com