CTNT — Q2 2026 Financial Report Analysis

Cheetah Net Supply Chain Service reported a small net profit of $71,045 for the second quarter of 2026 (the three months to June 30), against a $512,528 loss a year earlier. That profit came from outside the business: other income of $993,766, which the company says came "primarily" from foreign exchange gains, more than covered a loss from operations of $881,797. Revenue rose 145% to $868,909, but all of it now comes from a new line, trading large industrial equipment, after the company sold one logistics subsidiary and booked no revenue at its other one. The bigger change is on the balance sheet: the company raised about $71 million from new shares in the first half and now holds most of its $82.5 million in assets as claims on three outside parties, not as cash.

At a glance

• $868,909 revenue, up 145%, at a 2.2% gross margin. Gross margin is the share of revenue left after the direct cost of what was sold. The new equipment-trading business sold $660,000 of machinery that cost $650,000, so the jump in sales added only $19,500 of gross profit.
• $993,766 of other income turned an $881,797 operating loss into a profit. Without it, and without a one-off $297,610 loss on selling a subsidiary, the quarter would have been a pre-tax loss of roughly $0.6 million.
• $71.1 million of $82.5 million in assets (86%) is money owed by three counterparties. That is $41.1 million due back from a terminated China investment fund by December 30, 2026, and $30.0 million of unsecured loans to two Hong Kong companies. Cash at June 30 was $2.1 million.

The quarter in numbers

Per-share figures reflect a 1-for-200 reverse stock split (every 200 old shares combined into one) that took effect in April 2026, applied retroactively to the prior year. The weighted share count was 1,909,536 in the quarter versus 16,096 a year earlier, because the company issued millions of new (split-adjusted) shares in 2026; that is why the year-ago loss per share looks so large and the comparison is not meaningful.

A business that has changed almost completely

Cheetah Net started out reselling "parallel-import" vehicles, US-bought cars shipped to China outside carmakers' official dealer networks. Demand collapsed (14 vehicles sold in 2024, down from 303 in 2023), and the board shut that business in March 2025. The company then moved into logistics and warehousing through two acquisitions: Edward (US-China shipping) and TWEW (warehouse labor in California).

In this quarter that logistics business produced nothing:

• Edward was sold on April 1, 2026 for $20,000, producing the $297,610 loss on disposal.
• TWEW had no revenue, down from $301,442 a year ago. Management attributes this to "tighter U.S. immigration policies, which increased labor costs and constrained labor availability, as well as unfavorable market conditions that reduced customer demand."

Revenue now comes entirely from a new international trading segment:

Super International is a Hong Kong company that buys and resells large construction equipment. Cheetah Net paid $4.98 million in cash for it, closing on May 27, so it contributed only about five weeks of results. Most of the price was booked as two intangible items, not hard assets: $2.19 million of goodwill (the premium paid above the value of identifiable assets) and a $2.78 million "contingent consideration asset", the seller's promise to pay Cheetah Net compensation if Super International's revenue falls below agreed thresholds in any of the next three years. Super International brought only $5,471 of cash, with $839,039 of receivables almost exactly offset by $838,187 of payables.

Operating costs stayed near $0.9 million a quarter. Corporate general and administrative expense rose 23% to $850,780, which the filing attributes mainly to $221,728 of extra consulting fees tied to the Edward sale and the Super International purchase, plus $46,586 more in legal and accounting fees for the reverse split, partly offset by $90,289 lower payroll.

What the headline numbers hide

• The profit is a currency gain, not an operating result. Other income of $993,766 was "primarily driven by higher foreign exchange gains resulting from currency rate fluctuations." The company's largest asset is a receivable fixed at RMB 280 million, and the filing says translation gains and losses on it go straight into earnings. The same exposure can produce a loss of similar size in a quarter when the yuan weakens against the dollar.
• Two one-offs pull in opposite directions. The $297,610 loss on selling Edward will not recur. Excluding it and the other-income line, pre-tax results would have been a loss of roughly $0.6 million, close to last year's $0.5 million.
• Cash conversion is weak. For the first half, operating cash flow was -$865,760 against a net loss of $545,220. Interest income on the loans (Q2: $261,523 from loans) is accrued, meaning recorded as earned but not yet paid, and the filing lists several loans where interest remains uncollected; for example $165,011 on one Hongkong Sanyou loan and $122,375 on an Asia Finance loan. When older loans were renewed, their unpaid interest was "excluded from the renewed principal" and left as a separate receivable.
• The balance sheet now rests on three counterparties.
  • $41.1 million fund receivable. In January the company's Chinese subsidiary put RMB 280 million into a China venture-capital fund for a 7% stake. On June 30 the deal was terminated; the fund manager, Shanghai Kesheng, agreed to return the full amount by December 30, 2026, with 5% simple interest only if it is late. No credit-loss allowance has been booked.
  • $30.0 million of unsecured loans. $25.46 million is owed by Hongkong Sanyou Petroleum, up from $3.85 million at year-end, after $22.5 million of new one-year loans at 5% made between April 1 and May 21. Another $4.49 million is owed by Asia Finance Investment. "Unsecured" means there is no collateral to claim if a borrower does not pay. Interest rates on renewed loans have been cut from 12% to 8% and then 5%. Again, no allowance for credit losses.
  • Together these are 86% of total assets. Interest income barely moved (Q2 $264,695 vs $272,228) even though the loan book roughly quadrupled, because the new loans carry lower rates and were outstanding for only part of the quarter.
• The money came from heavy share issuance. First-half financing brought in $40.14 million from a private placement (167,250 split-adjusted shares, about $240 each) and $30.95 million net from an at-the-market program (2,775,000 split-adjusted shares sold into the market; $3.6 million went to the sales agent). Shares outstanding went from 17,096 at year-end to 3,159,391. Separately, on June 15 the CEO, who is also interim CFO and chairman, bought 200,000 Class B shares at $2.00 each for $400,000. Class B holders controlled about 79% of the vote as of February.
• Controls. Management concluded its disclosure controls were "ineffective at a reasonable assurance level" as of June 30, 2026.
• No guidance was given, so there is no earlier outlook to compare against.

Takeaway: Cheetah Net is now less an operating company than a holder of $71 million in claims on a China fund manager and two Hong Kong borrowers, funded by new shares. The operating business lost about $0.9 million this quarter at a 2.2% gross margin, and the reported profit was a currency gain. What the company is worth depends mostly on whether those claims are paid in cash, starting with the RMB 280 million due by December 30.

What to watch next

The Q3 2026 report (quarter ending September 30), due by mid-November, will show the first full quarter of Super International and should show interest income rising on the larger loan book. The more important tests come later. First, whether Shanghai Kesheng returns the RMB 280 million by December 30, 2026; a missed deadline would turn half the balance sheet into a disputed claim. Second, whether the Hongkong Sanyou and Asia Finance loans are repaid in cash or renewed again at lower rates. Third, whether TWEW records any revenue. A trading business earning about 1.5% gross margin on machinery cannot cover roughly $3.6 million a year of operating costs (Q2 operating expenses were $901,297) unless sales grow many times over; the seller's revenue guarantee limits the downside on the acquisition price but does not make the segment profitable. Until those claims turn into cash, reported earnings will move mostly with the yuan exchange rate.