Cheetah Net (CTNT) Sells Unregistered Equity, Dilution Risk

TL;DR

**CTNT just sold new shares privately, watch out for dilution!**

AI Summary

Cheetah Net Supply Chain Service Inc. (CTNT) entered into a material definitive agreement on January 24, 2024, involving the unregistered sale of equity securities. This means the company issued new shares without a public offering, which could dilute the value of existing shares. For current or prospective shareholders, this matters because an increase in the total number of shares outstanding typically reduces the earnings per share and ownership percentage for each existing share, potentially impacting the stock price negatively.

Why It Matters

The unregistered sale of equity securities by Cheetah Net Supply Chain Service Inc. could dilute existing shareholders' ownership and earnings per share, potentially leading to a decrease in stock value.

Risk Assessment

Risk Level: medium — The unregistered sale of equity securities introduces dilution risk for existing shareholders, which can negatively impact stock price.

Analyst Insight

A smart investor would closely monitor CTNT's stock performance and look for further details on the terms of the unregistered equity sale to assess the full extent of dilution and its impact on future earnings per share before making any investment decisions.

Key Players & Entities

• Cheetah Net Supply Chain Service Inc. (company) — the registrant filing the 8-K
• CTNT (company) — the trading symbol for Cheetah Net Supply Chain Service Inc.
• January 24, 2024 (date) — date of the earliest event reported in the 8-K
• North Carolina (company) — state of incorporation for Cheetah Net Supply Chain Service Inc.
• 001-41761 (dollar_amount) — Commission File Number
• 81-3509120 (dollar_amount) — I.R.S. Employer Identification No.
• 6201 Fairview Road, Suite 225 Charlotte, North Carolina 28210 (company) — address of Principal Executive Offices
• (704) 972-0209 (dollar_amount) — Registrant’s telephone number
• The Nasdaq Stock Market LLC (company) — exchange where Class A Common Stock is registered

Forward-Looking Statements

• The stock price of CTNT may experience downward pressure due to potential dilution from the unregistered sale of equity securities. (CTNT) — medium confidence, target: Q1 2024

FAQ

Key Financial Figures

• $300,000 — Acquisition includes a cash payment of $300,000 and the issuance of Corporation's Class
• $1,200,000 — ation's Class A common stock, valued at $1,200,000 (the "Shares"), with the per Share pric

Filing Documents

• tm244383d1_8k.htm (8-K) — 28KB
• tm244383d1_ex10-1.htm (EX-10.1) — 299KB
• tm244383d1_ex10-2.htm (EX-10.2) — 25KB
• tm244383d1_ex99-1.htm (EX-99.1) — 7KB
• tm244383d1_ex99-1img001.jpg (GRAPHIC) — 25KB
• 0001104659-24-007990.txt ( ) — 632KB
• ctnt-20240124.xsd (EX-101.SCH) — 3KB
• ctnt-20240124_lab.xml (EX-101.LAB) — 33KB
• ctnt-20240124_pre.xml (EX-101.PRE) — 22KB
• tm244383d1_8k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On January 24, 2024, Cheetah Net Supply Chain Service Inc., a North Carolina corporation (the "Corporation"), entered into a stock purchase agreement (the "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 Corporation agreed to acquire 100% of the equity interests in Edward from the Seller (the "Acquisition"). The consideration for the Acquisition includes a cash payment of $300,000 and the issuance of Corporation's Class A common stock, valued at $1,200,000 (the "Shares"), with the per Share price determined at 80% of the average closing price over the last ten business days prior to the Closing Date (as defined in the Agreement). The cash payment and the Shares will be paid and issued to the Seller on or prior to the Closing Date. The Shares are offered in a private transaction and are not registered under the Securities Act of 1933 (the "Act"), relying on the exemption provided by Regulation S under the Act, which pertains to offerings made outside the United States. Upon the closing of the Acquisition, Edward will become a wholly-owned subsidiary of the Corporation. The Agreement contains customary covenants, customary closing conditions, and other obligations and rights of the parties. On January 29, 2024, the Corporation entered into an amendment (the "Amendment") of the Agreement with Edward and the Seller, modifying the per share price of the Share Consideration from the average closing price over the last ten business days prior to the Closing Date to the average closing price over the last ten business days prior to the execution date of the Agreement. The foregoing description of the Agreement and Amendment do not purport to be complete and is qualified in its entirety be reference to the full text of the Agreement and the Amendment, which are filed herewith as Exhibit

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02.

01 Other Events

Item 8.01 Other Events. On January 30, 2024, the Company issued a press release to announce the entry into the Agreement and the Amendement. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Exhibit 10.1 Stock Purchase Agreement dated January 24, 2024 by and among the Company, Edward, and the Seller 10.2 Amendment No.1 to Stock Purchase Agreement dated January 29, 2024 by and among the Company, Edward, and the Seller 99.1 Press Release dated January 30, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 30, 2024 Cheetah Net Supply Chain Service Inc. By: /s/ Huan Liu Huan Liu Chief Executive Officer, Director, and Chairman of the Board of Directors

View Full Filing

View this 8-K filing on SEC EDGAR