Cheetah Net Supply Chain Service (CTNT) risk factors, FY2024 10-K

Other

1. 01Economic, Political, and Market Risks
2. 02Availability and demand for our products and services may be adversely impacted by economic conditions and other factors
3. 03We are in the competitive logistics and warehousing industry, and we may not be able to compete successfully against existing or new competitors, which could reduce our market share and adversely affect our competitive position and financial performance
4. 04We may be adversely affected by the effects of inflation and a potential recession in the U.S. and by a weakening economy in the PRC
5. 05Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment
6. 06If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected

Operational Risks

1. 07We are undergoing a transformation of our business model, which could have a material and adverse effect on our business, financial condition, and results of operations
2. 08As we are located in California, we may be subject to catastrophic events, which could have a material adverse impact on our business, financial condition, and results of operations
3. 09Service disruption experienced by our warehouse and office may adversely affect our business operations
4. 10If our clients are able to reduce their logistics and supply chain costs or increase utilization of their internal solutions, our business and results of operations may be materially and adversely affected
5. 11We face risks from fuel price fluctuation
6. 12We face risks associated with the freight handled through our network
7. 13Failure to renew our current Ocean Transportation Intermediary (“OTI”) License or any delay in doing so could have a material adverse impact on our operations
8. 14Our business, financial condition, and results of operations may be materially and adversely affected if our third-party transportation providers are unable to provide high-quality services to our clients
9. 15Our business relies on a few customers each accounting for more than 10% of our total purchases, and interruption in any of their operations will have an adverse effect on our business, financial condition, and results of operations
10. 16We started providing our logistics and warehousing services in February 2024; we may not be successful in this new line of business, which may adversely affect our business, financial condition, and results of operations
11. 17We have primarily funded our working capital needs from financing activities historically, and there is no assurance that we will always maintain positive cash flow in the near future or at all
12. 18Our business and results of operations may be harmed by the misconduct of authorized employees that have access to assets of our Company such as inventory, bank accounts, credit cards, and confidential information
13. 19Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage
14. 20Any negative publicity about us, our products and services, and our management may materially and adversely affect our reputation and business
15. 21Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation, and harm our business
16. 22Our business, financial condition, and reputation may be substantially harmed by security breaches, interruptions, delays, and failures in our systems and operations
17. 23Our business and financial condition may be substantially harmed by inventory losses caused by theft, vandalism, or accidents during transportation and/or warehousing
18. 24We may experience operational system failures or interruptions that could materially harm our ability to conduct our operations
19. 25If we fail to execute our strategies and future plans effectively, we may not be able to take advantage of market opportunities or meet the demand of our customers
20. 26If we fail to attract, recruit, or retain our key personnel, including our executive officers, senior management, and key employees, our ongoing operations and growth could be affected
21. 27Our ongoing operations and growth may be affected by the high percentage of foreign employees who do not have permanent work permits in the U.S., which may increase our turnover ratio
22. 28Future acquisitions may have an adverse effect on our ability to manage our business

Legal, Regulatory, and Compliance Risks

1. 29We are subject to logistics and warehousing and other laws and regulations in the U.S., which, if we are found to have violated, may adversely affect our business and results of operations
2. 30Non-compliance with laws and regulations on the part of any third parties with which we conduct business could expose us to legal expenses, compensation to third parties, penalties, and disruptions of our business, which may adversely affect our results of operations and financial performance
3. 31Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services
4. 32We may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect our business, prospects, results of operations, and financial condition
5. 33We may be the subject of allegations, harassment, or other detrimental conduct by third parties, which could harm our reputation and cause them to lose market share and customers
6. 34Any adverse change in political relations between the U.S. and other countries or regions (particularly the PRC), such as the ongoing U.S.-China trade conflicts, may negatively affect our business
7. 35A possible “short squeeze” due to a sudden increase in demand of our Class A common stock that largely exceeds supply may lead to further price volatility in our Class A common stock
8. 36Future equity offerings or other equity issuances of us could further dilute our Class A Common Stock
9. 37If we fail to maintain an effective system of internal controls, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our Class A common stock may be materially and adversely affected
10. 38We may not be able to maintain the listing of our Class A common stock on the Nasdaq Capital Market
11. 39The dual class structure of our common stock has the effect of concentrating voting control with our Chief Executive Officer, and his interests may not be aligned with the interests of our other stockholders
12. 40If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A common stock, the price of our Class A common stock and trading volume could decline
13. 41Anti-takeover provisions in our fourth amended and restated articles of incorporation and our bylaws may discourage, delay, or prevent a change in control
14. 42Since we are deemed a “controlled company” within the meaning of the Nasdaq listing rules, we are allowed to follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders
15. 43We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors
16. 44periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved