v3.26.1
INTANGIBLE ASSET, CONTINGENT CONSIDERATION ASSET AND GOODWILL
6 Months Ended
Jun. 30, 2026
INTANGIBLE ASSET, CONTINGENT CONSIDERATION ASSET AND GOODWILL  
INTANGIBLE ASSET, CONTINGENT CONSIDERATION ASSET AND GOODWILL

NOTE 9 — INTANGIBLE ASSET, CONTINGENT CONSIDERATION ASSET AND GOODWILL

1)Acquisition of Edward

On January 24, 2024, Cheetah Net entered into a Stock Purchase Agreement to acquire 100% of Edward. The transaction closed on February 2, 2024. The gross purchase price was $1.5 million. Consideration paid consisted of $0.3 million of cash and the issuance of 398 shares of Cheetah Net’s Class A common stock with a fair value of $1.2 million. In accordance with ASC 805, Business Combinations (“ASC 805”), it was determined that the fair value of the stock consideration was $0.9 million at the time of the transaction, reflecting a comprehensive evaluation of the stock’s market conditions and liquidity impacted by lock-up period restrictions.

The purchase price was initially recorded on a preliminary basis as of February 2, 2024. The assets acquired and liabilities assumed were estimated based on management’s estimates, available information, and supportable assumptions that management considered reasonable. During the second quarter of 2024, the Company finalized the purchase price allocation. As a result, adjustments were made, particularly concerning the deferred tax liability related to intangible assets, which led to a corresponding adjustment in the value of goodwill. The final valuation of assets acquired and liabilities assumed was reflected in the financial statements as of December 31, 2024 and shown below.

As of June 30, 2024

As of March 31, 2024

Change

Finalized value

  ​ ​ ​

Preliminary value

  ​ ​ ​

Amount

Acquired assets acquired and (liabilities):

  ​ ​ ​

  ​ ​ ​

Cash

$

79,883

$

79,883

$

Accounts Receivable

47,354

47,354

Other Current Assets

42,685

42,685

Right-of-use Lease Asset

645,625

645,625

Fixed Assets

60,795

60,795

Developed Technology

120,000

120,000

Customer Relationships

360,000

360,000

Trade Names

36,000

36,000

Goodwill

568,532

437,382

131,150

Other Noncurrent Assets

27,000

27,000

Accounts Payable

(34,686)

(34,686)

Accrued Expenses Payable

(20,933)

(20,933)

Deferred Tax Liability

(131,150)

(131,150)

Operating Lease Liability, Current

(94,548)

(94,548)

Operating Lease Liability, Long Term

(506,557)

(506,557)

Total Purchase Consideration

$

1,200,000

$

1,200,000

$

The fair value of the accounts receivable, other assets, and liabilities assumed approximates their gross contractual amounts. The fair value of the fixed assets approximates its net carrying value as of the acquisition date. The fair values of intangible assets, including $120,000 of developed technology, $360,000 of customer relationships, and $36,000 of trade names, were determined using assumptions that are representative of those market participants would use in estimating fair value.

On April 1, 2026, the Company completed the disposition of Edward, a wholly owned subsidiary of the Company, pursuant to the Stock Purchase Agreement dated March 25, 2026. Upon completion of the disposition, the Company derecognized the assets and liabilities associated with Edward, including the remaining carrying amounts of the related intangible assets.

2)Acquisition of TWEW

On November 27, 2024, the Company entered into a Stock Purchase Agreement to acquire 100% of the equity interests in TWEW. The transaction closed on December 19, 2024. The gross purchase price was $1 million, which consisted of $0.2 million of cash and the issuance of 2,348 shares of the Company’s Class A common stock with a fair value of $0.8 million. Following ASC 805, it was determined that the fair value of the stock consideration was $1 million at the time of the transaction, reflecting a comprehensive evaluation of the stock’s market conditions and liquidity impacted by lock-up period restrictions.

Acquired assets acquired and (liabilities):

  ​ ​ ​

  ​

Cash

$

69,980

Accounts Receivable

 

43,120

Other Current Assets

 

1,210

Customer Relationships

 

600,000

Goodwill

 

475,861

Deferred Tax Liability

 

(140,171)

Short term loan payable

 

(50,000)

Total Purchase Consideration

$

1,000,000

3) Acquisition of Super International

On April 16, 2026, the Company entered into a Share Transfer Agreement with Leyan Yang, a non-U.S. individual, pursuant to which the Company agreed to acquire from the Transferor 100% of the issued and outstanding shares of Super International, a limited liability company incorporated under the laws of Hong Kong and primarily engaged in the trading of large-scale industrial equipment (the “Super Transaction”).

Acquired assets acquired and (liabilities):

  ​ ​ ​

 

  ​ ​ ​

Cash

 

$

5,471

Accounts Receivable

839,039

Contingent Consideration Asset

2,783,884

Goodwill

2,189,792

Accounts Payable

(838,187)

Total Purchase Consideration

 

$

4,980,000

In the May 27, 2026 acquisition of Super International Trading Limited, the Company holds a contractual right to receive cash compensation from the Seller under the Performance Commitment (“PCP”) if the Target’s revenue falls below the contractual threshold in any of the three annual periods following the closing date. The Company is the recipient under this arrangement, and the right is recognized as a contingent consideration asset.

The contingent consideration asset is measured initially at its acquisition-date fair value of $2,783,884. The fair value is determined using a Level 3 measurement within the fair value hierarchy. Key unobservable inputs include projected cash flows of the acquired business over the contingency period, the contractual cap of $4,980,000 (cumulative across the three PCP periods), the probability-weighted distribution of revenue outcomes, and a discount rate that incorporates both the time value of money and counterparty credit risk. Because the counterparty to the PCP is an individual (the Seller), the credit-risk component of the discount rate reflects the Company’s assessment of the risk of recovery.

The Company remeasures the contingent consideration asset to fair value at each subsequent reporting period, with changes in fair value recognized in earnings in the period of change (ASC 805-30-35-1). No change in fair value has been recognized during the three or six months ended June 30, 2026, as the measurement assumptions have not changed materially since the acquisition date. The Company will continue to monitor the credit risk associated with this receivable each reporting period.

The acquisition-date fair value of the contingent consideration asset has been finalized at $2,783,884 on May 27, 2026. The amount is therefore no longer provisional as of June 30, 2026. The one-year measurement period under ASC 805-10-25-13 (which expires May 27, 2027) remains open for retrospective adjustments to other provisional items in the business combination, including working capital and any refinements to the fair value of identifiable tangible assets acquired. Any such adjustments will be recorded with a corresponding adjustment to goodwill (ASC 805-10-25-17).

The Company recorded amortization of intangible assets with finite lives are computed using the straight-line method over the estimated useful lives as below:

Intangible Assets

  ​ ​ ​

Estimated Useful Lives (month)

Edward-Developed Technology

84

Edward-Customer Relationships

144

Edward-Trade Names

84

TWEW-Customer Relationships

120

During the six months ended June 30, 2026 and 2025, the Company incurred accumulated amortization expenses of $38,511 and $56,144, respectively.

On April 1, 2026, the Company completed the disposition of Edward, a wholly owned subsidiary of the Company, pursuant to the Stock Purchase Agreement dated March 25, 2026. Upon completion of the disposition, the Company derecognized the assets and liabilities associated with Edward, including the remaining carrying amounts of the related intangible assets.

Total future amortization expenses for finite-lived intangible assets were estimated as follows:

2026 (from July 1, 2026 to December 31, 2026)

  ​ ​ ​

30,000

2027

 

60,000

2028

 

60,000

2029

 

60,000

Thereafter

 

295,000

Total

$

505,000