Cheetah Net Supply Chain Service Inc. Reports Significant Financial Challenges in Latest 10-Q Filing

Cheetah Net Supply Chain Service Inc. reported significant financial challenges in its latest 10-Q filing for the period ending September 30, 2024. The company experienced a dramatic decline in revenue, with total revenues for the three months amounting to $61,208, a staggering 99.4% decrease from $10.0 million in the same quarter of 2023. For the nine months ended September 30, 2024, revenues were $1.9 million, down 94.3% from $32.5 million in the prior year. This decline is primarily attributed to a 95% drop in sales from the parallel-import vehicle segment, which has been significantly impacted by market conditions and a strategic shift towards logistics and warehousing services following the acquisition of Edward Transit Express Group Inc. in February 2024.

The company's gross profit also reflected this downturn, with a gross profit of $29,869 for Q3 2024, down 97.4% from $1.17 million in Q3 2023. For the nine-month period, gross profit fell to $87,348, a decrease of 97.5% year-over-year. Operating expenses surged to $2.48 million for Q3 2024, up 108% from $714,150 in Q3 2023, driven by increased payroll, benefits, and recruiting costs as the company expanded its marketing staff to pursue new business opportunities.

Cheetah reported a loss from operations of $(2.45) million for Q3 2024, compared to an income of $453,210 in the same quarter of the previous year. The net loss for the three months was $(1.82) million, contrasting sharply with a net income of $122,903 in Q3 2023. For the nine months, the net loss totaled $(3.04) million, compared to a net income of $170,715 in the prior year.

Despite these challenges, the company improved its cash position significantly, reporting cash and cash equivalents of $5.29 million as of September 30, 2024, compared to $432,998 at the end of 2023. This increase was bolstered by net cash provided by financing activities of $7.22 million during the nine months, primarily from follow-on public offerings.

Strategically, Cheetah has shifted its focus from parallel-import vehicles to logistics and warehousing services, with the acquisition of Edward expected to enhance its operational capabilities in this area. The company has also relocated its headquarters to Irvine, California, to better position itself near major ports, reflecting its commitment to this strategic pivot.

Overall, Cheetah's financial performance in the latest quarter underscores the significant transition the company is undergoing, marked by a sharp decline in traditional revenue streams and a strategic realignment towards logistics services.