As filed with the U.S. Securities and Exchange Commission on July  21,  2025.

Registration No. 333-[●]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

20955 Lycoming St, Suite 201, Diamond Bar, California 91789

661-508-8888

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Mr. Fenglong Ma

Chief Executive Officer

20955 Lycoming St, Suite 201, Diamond Bar, California 91789

661-508-8888

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a Copy to:

Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JULY 21, 2025

1,250,000 Shares of Class A Common Stock

HILLHOUSE FRONTIER HOLDINGS INC.

This is an initial public offering on a firm commitment basis of our Class A common stock, par value $0.0001 per share. Prior to this offering, there has been no public market for our Class A common stock. We expect the initial public offering price to be in the range of $4.00 to $6.00 per share.

We have reserved the symbol “HIFI” for purposes of listing our Class A common stock on the Nasdaq Capital Market and plan to apply to list our Class A common stock on the Nasdaq Capital Market. At this time, Nasdaq has not yet approved our application to list our Class A common stock. The closing of this offering is conditioned upon Nasdaq’s final approval of our listing application, and there is no guarantee or assurance that our Class A common stock will be approved for listing on Nasdaq.

As of the date of this prospectus, we have 11,400,000 shares of Class A common stock and 8,600,000 shares of Class B common stock, par value $0.0001 per share, issued and outstanding, respectively. Holders of Class A common stock and Class B common stock have the same rights except for voting and conversion rights. In respect of matters requiring the votes of stockholders, each share of Class A common stock is entitled to one vote, and each share of Class B common stock is entitled to twenty (20) votes and is convertible into Class A common stock at any time after issuance at the option of the holder on a one-to-one basis. Class A common stock is not convertible into shares of any other class.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”

Additionally, we are, and following the completion of this offering, will continue to be a “controlled company” as defined under Nasdaq Marketplace Rules 5615(c), because Mr. Fenglong Ma, our Chief Executive Officer and controlling stockholder, will be able to exercise 86.65% of the aggregate voting power of our issued and outstanding shares of Class A and Class B common stock and will be able to determine all matters requiring approval by our stockholders, immediately after the consummation of this offering, assuming the sale of 1,250,000 shares of Class A common stock we are offering and no exercise of the underwriters’ over-allotment option. For further information, see “Principal Stockholders.” However, even if we are deemed as a “controlled company,” we do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the Nasdaq Marketplace Rules. See “Risk Factors” and “Management—Controlled Company.”

We have granted the underwriters an option for a period of 45 days from the closing of this offering to purchase up to 15% of the total number of shares of Class A common stock to be offered by us pursuant to this offering, solely for the purpose of covering over-allotments, if any, at the public offering price less the underwriting discounts. If the underwriters exercise the option in full, the total underwriting discounts payable will be $[●], based on an assumed public offering price of $[●] per share of Class A common stock, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, and the total gross proceeds to us, before underwriting discounts and expenses, will be $[●].

Investing in our Class A common stock involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus. Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of our Class A common stock against payment in U.S. dollars in New York, New York on or about [●], 2025.

The date of this prospectus is [   ], 2025

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Class A common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

CONVENTIONS THAT APPLY TO THIS PROSPECTUS

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Such forward-looking statements include, among others, those statements including the words “believes”, “anticipates”, “expects”, “intends”, “estimates”, “plans” and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. You should understand that many important factors, in addition to those discussed in this prospectus, could cause our results to differ materially from those expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in local, regional, national, or global political, economic, business, competitive, market (supply and demand) and regulatory conditions identified under Risk Factors:

Other sections of this prospectus describe additional risk factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time, and it is not possible for our management to predict all risk factors and uncertainties, nor are we able to assess the impact of all of these risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks and others described under the section “Risk Factors” above are not exhaustive.

Given these uncertainties, readers of this registration statement on Form S-1 are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

MARKET DATA

We use market data throughout this prospectus. We have obtained certain market data from publicly available information and industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on industry surveys and the preparers’ experience in the industry, and there is no assurance that any of the projections or forecasts will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information.

RISK FACTORS

An investment in our Class A common stock involves a high degree of risk. Before deciding whether to invest in our Class A common stock, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations, or cash flow could be materially and adversely affected, which could cause the trading price of our Class A common stock to decline, resulting in a loss of all or part of your investment. The risks described below and discussed in other parts of this prospectus are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Class A common stock if you can bear the risk of loss of your entire investment.

Business Risks

A customer based in Hong Kong who purchases vehicles from us and resells them to customers in the PRC under the parallel import model, accounted for substantially all of our revenue in the three months ended March 31, 2025 and in the year ended December 31, 2024, and 82% of our revenue in the year ended December 31, 2023. If the PRC government suspends or restricts the parallel import policy, or if this Hong Kong-based customer ceases or materially reduces its purchases from us, our business and operating results could be materially and adversely affected.  

Our revenues have varied materially from quarter to quarter and are dependent on sales to, and collaboration with a limited number of customers with whom we collaborate in our export of U.S. manufactured vehicles to end customers in Hong Kong or the PRC. In the three months ended March 31, 2025 and 2024 and in the year ended December 31, 2024, one customer, Burlington Venture Partners Ltd. (“Burlington”), based in Hong Kong,  accounted for 100% of our revenue. Burlington accounted for 82% of our revenues in the year ended December 31 , . 2023 and Bao Deal Inc. accounted for 19% of our revenues in that year.

On January 3, 2023, we entered into a master sales framework agreement with Burlington, which set forth the general terms and conditions between Burlington and us, including that (i) Burlington will prepay the full invoice amount to us prior to our shipment of the vehicles, (ii) Burlington will assume all risks and costs associated with the shipment, including insurance and import customs clearance, starting from the point the goods are loaded onto the vessel at the U.S. port of departure (iii) we will be responsible for the cost of transporting the goods to the port of destination. On August 1, 2023, we entered into a profit sharing agreement with Burlington, which serves as a supplemental agreement to the existing master sales framework agreement and sets forth a new profit sharing business model. Under this new model, we generate revenue by earning a fixed income of USD $8,000 per vehicle regardless of the actual sales price Burlington sells cars to end customers. We are entitled to profit sharing payments once the full payment of sales price of the vehicle is received by Burlington and completion of quarterly sales reconciliation and settlement among us and Burlington. The settlement of the profit sharing payments is conducted on a quarterly basis.  Both the master sales framework agreement and the profit-sharing agreement may be terminated by either party pursuant to their respective provisions. As a result, the continuation of these arrangements is not guaranteed, and any termination could adversely impact our revenue model.

We believe our revenue concentration is primarily attributable to our limited history of commercial operations, which concentration we expect will dissipate as we enter into additional markets in Asia and the Middle East. However, until we can achieve more diversified sales, we may face risks associated with a concentrated customer base. There are risks whenever a significant percentage of revenue is concentrated with a limited number of customers. For example, revenue from these customers may fluctuate from time to time based on these customers’ business needs or financial condition, the timing of which may be affected by market conditions or other facts outside of our control. The ongoing trade conflict between the U.S. and the PRC may make it uneconomical for the sale of U.S. manufactured vehicles in the PRC. These customers could also potentially pressure us to reduce the profit share we currently receive, which could have an adverse effect on our financial position and results of operations. If Burlington terminates its relationship with us, such termination would negatively affect our revenues and results of operations.

In addition, most of our revenues to date have been derived from the sale of vehicles to a single Hong Kong-based customer, Burlington, which in turn resells those vehicles to end customers in the PRC through the parallel import model. Accordingly, our ability to continue generating revenue is highly dependent on the regulatory environment in the PRC, including the continued permissibility and practical implementation of the parallel import policy. Any suspension, restriction, or unfavorable change in the PRC’s parallel import regulations or broader import/export control policies could materially and adversely affect Burlington’s ability to resell vehicles to PRC customers, which in turn would significantly impact our ability to generate revenue. Furthermore, if Burlington ceases or significantly reduces its purchase volume from us for any reason, including shifts in strategy, unfavorable market conditions, or inability to operate effectively under PRC regulations, our business, operating results, and financial condition could be materially and adversely affected, particularly in light of our current revenue concentration.

Our practice of exporting vehicles without holding legal title is based on industry practice and to our knowledge has neither been tested in a court proceeding nor is it based on a formal legal opinion; and any change in applicable regulations or interpretation could materially and adversely affect our business.

We acquire vehicles from both independent dealers directly and from authorized dealerships through independent purchasing agents who act on our behalf. In transactions with authorized dealerships, the purchasing agent executes the purchase agreement in their own name but pursuant to a contractual arrangement under which we are recognized as the beneficial owner of the vehicle. In transactions with independent dealers, Hillhouse enters into the bill of sale directly.

Regardless of the source of the vehicle, title is not immediately transferred into Hillhouse’s name. The title issuance and transfer process can take a significant amount of time—ranging from several weeks to multiple months—due to dealership processing timelines and state registration procedures. As a result, the legal title often remains in the name of the purchasing agent or selling dealer at the time of export. The U.S. Customs and Border Protection (CBP) regulations currently do not require the exporter to be the legal titleholder. Instead, we rely on documentation, including bills of lading and title certificates that are usually under the name of the purchasing agent or selling dealer, to facilitate the export of vehicles. While this practice is consistent with current industry norms, to our knowledge it has not been tested in a court proceeding nor it is based on a formal legal opinion. There is no assurance that regulators, courts, or counterparties will not challenge our ownership claims or the validity of our export activities in the absence of title. Furthermore, if future changes to U.S. export laws or judicial interpretations require exporters to be the titleholder of record, we may be forced to restructure our procurement and export operations, which could result in increased costs, delays, or disruption to our business. Any such developments could materially and adversely affect our business, results of operations, and financial condition.

Our business may be adversely impacted by newly imposed tariffs and geopolitical tensions.

As of May 12, 2025, the United States and the People’s Republic of China (PRC) agreed to a 90-day tariff reduction arrangement. Under this agreement, the PRC reduced tariffs on U.S goods from 125% to 10%, while the U.S. lowered tariffs on Chinese goods from 145% to 30%.  While the recent tariff reduction provides temporary relief, the underlying trade tensions and the potential reimposition of elevated tariffs may continue to pose risks to global supply chains and bilateral economic relations. As our current business model involves exporting U.S.- sourced vehicles to a Hong Kong - based importer, who then resells the vehicles into the PRC market, higher tariffs imposed by the PRC government may increase the total landed cost of our vehicles and reduce their price competitiveness relative to domestic or non – U.S. manufactured alternatives.

Although we are not the importer of record in the PRC and do not directly handle customs clearance in the PRC, these tariffs will likely be passed on to PRC end consumers in the form of higher retail prices, thus dampening demand for U.S. – origin vehicles. In turn, this could lead to reduction in orders from our Hong Kong customer, who currently is our sole buyer and is responsible for distributing vehicles purchased from us in the PRC parallel-import market.

Escalating geopolitical tensions and continued uncertainty surrounding the trade relationship between the United States and the People’s Republic of China—including the imposition of increased tariffs by both governments—may materially increase the landed cost of our vehicles, diminish consumer confidence, and reduce the willingness of PRC-based importers to place large-volume orders. These developments, if prolonged or further intensified, could adversely affect our ability to maintain or expand vehicle export volumes, and may have a material and adverse impact on our business operations and, financial condition, and growth prospects.

Tariff policies in our proposed new markets may affect the commercial viability of our international expansion.

As part of our growth strategy, we have received letters of intent from prospective parallel-import vehicle dealers located in Cambodia, Germany, South Korea, and Dubai. While these markets currently present viable opportunities for expansion, any future changes to their import tariff regimes could adversely affect our ability to competitively price U.S.-origin vehicles and, as a result, impact demand.

At present, we are not aware of any recently imposed or elevated tariffs targeting U.S. vehicle exports in these jurisdictions. Germany applies the European Union’s standard 10% import duty on passenger vehicles from outside the EU. South Korea benefits from reduced or zero tariffs under the U.S.–Korea Free Trade Agreement (KORUS FTA), and Dubai applies a 5% uniform import tariff. Cambodia has not introduced any punitive tariffs on U.S. vehicles. However, because tariff policies are subject to change due to geopolitical, economic, or regulatory developments, there can be no assurance that these favorable conditions will persist. If these or other destination countries increase import tariffs on U.S.-manufactured vehicles, it could reduce the commercial viability of our export model in those markets and materially impact our growth prospects.

Availability and demand for our services may be adversely impacted by economic conditions and other factors.

Currently, we derive substantially all of our revenue through the sale of exported vehicles. In particular, we source automobiles from the U.S. market through a network of purchasing agents, who place orders with individual sales personnel at authorized dealerships based on relationship-based arrangements, rather than employed by Hillhouse. These purchasing agents are not formally retained or contracted by the dealerships and operate independently from them. Their ability to complete transactions on our behalf is based on mutual understanding and long-standing informal cooperation with specific sales representatives. We then resell these vehicles to Hong Kong vehicle importers, who instruct us to directly ship the vehicles to the PRC. The vehicle export industry is influenced by general economic conditions, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, supply conditions, and consumer transportation preferences. Uncertainty in the economy can negatively impact consumer spending. In addition, our operations are heavily influenced by the general economic conditions and consumer spending habits in the PRC market into which our vehicles are ultimately exported. Notably, we do not require the use of purchasing agents when sourcing vehicles from independent dealers, as these dealers are not subject to the same manufacturer-imposed export restrictions as authorized dealerships.

We are in the competitive parallel-import vehicle dealership 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.

The vehicle export industry in the U.S. is relatively competitive and rapidly evolving, with many new companies joining the competition in recent years. We compete directly with other companies that export vehicles to the PRC, although most of our competitors are small family businesses that obtain U.S. cars through their family members or friends in the U.S. Competition can be increasingly intense and is expected to increase significantly in the future. The increased competition may lead to price reductions for vehicle sales, which may result in reduced margins and a loss of market share for us. We compete with other competitors on the following bases:

Our competitors may operate with different business models, have different cost structures, and may ultimately prove to be more successful or more adaptable to new regulatory, technological, and other developments. They may in the future achieve greater market acceptance and recognition and gain a greater market share. It is also possible that potential competitors may emerge and acquire a significant market share. If existing or potential competitors develop or offer services that provide significant performance, price, creative optimization, or other advantages over those offered by us, our business, results of operations, and financial condition would be negatively affected. Our existing and potential competitors may enjoy competitive advantages over us, such as longer operating history, greater brand recognition, larger client base, and better value-added services such as providing financial services for customers’ vehicle purchases. We may lose clients if we fail to compete successfully, which could adversely affect our financial performance and business prospects. We cannot guarantee that our strategies will remain competitive or successful in the future. Increasing competition may result in pricing pressure and loss of our market share, either of which could have a material adverse effect on our financial condition and results of operations.

Changes in consumer demand in the PRC market towards fuel-efficient vehicles and electric vehicles, or a general declining purchasing power of PRC consumers, could adversely affect our vehicle sales volumes and our results of operations.

We currently generate all of our revenue from the sale of vehicles to one Hong Kong import car dealer, who in turn resells those vehicles to end consumers in the PRC. As such, our sales are highly dependent on the Chinese consumers’ demand. Volatile fuel prices have affected and may continue to affect the Chinese consumers’ preferences in connection with the sales of our vehicles. With rising fuel prices, consumers are less likely to purchase large, expensive vehicles, such as sport utility vehicles or luxury automobiles, and more likely to purchase smaller, less expensive, and more fuel-efficient vehicles. Lower fuel prices, on the other hand, could have the opposite effect.  As such, we could suffer a material adverse effect on our business and results of operations if fuel prices rise sharply. Fuel prices, improvements in electric vehicles, and more electric vehicle options have all contributed to increased consumer demand for fuel-efficient and electric vehicles. As the demand for electric vehicles rises, we may need to adapt by selling more fuel-efficient cars or electric vehicles. In the event that we are unable to meet the consumer demand, our vehicle sales volumes and operating results may be adversely affected. Additionally, as we currently focus on luxury vehicle brands, our operations depend largely on the purchasing power of PRC consumers. The adverse impact of the COVID-19 pandemic and the implementation of restrictive governmental measures intended to control the spread of the virus (such as lockdowns, closures, quarantines, and travel bans), have imposed significant challenges to China’s economy, which have caused, and may continue to cause, a declining purchasing power of PRC consumers. In the event that the purchasing power of the PRC consumers continue to decline, and if we are unable to find substitute demand for our services, our business, financial condition, and results of operations may be adversely affected.

The PRC government policies on the purchase and ownership of automobiles and stricter emission standards, may reduce the market demand for the automobiles we sell and thus negatively affect our business and growth prospects.

The PRC government policies on automobile purchase and ownership may negatively affect our business and growth prospects because of their influence on our end consumer’s purchasing behavior. For example, to curb urban traffic congestion, certain cities in the PRC, such as Beijing, have adopted regulations and ordinances that limit new automobile registration or restrict automobile use. Specifically, at the end of 2010, the Beijing municipal government enacted a number of measures to limit the number of new license plates to be issued each year. These and any future anti-congestion ordinances in the PRC, which is our ultimate market, may restrict the ability of our end consumers to purchase automobiles and in turn reduce customer demand for automobiles.

Furthermore, the PRC government has recently promulgated laws, regulations, and policies to reduce automobile emissions. There is no guarantee that the PRC government will not continue to issue stricter regulations and policies relating to emission standards for automobiles sold in the PRC, which may substantially reduce the market demand for our services. As a result, our financial condition, results of operations, and growth prospects may be adversely affected.

We facilitate the import of automobiles of foreign brands into the PRC market as parallel-import vehicles, and any adverse change in political relations between the PRC and the U.S. or any other country where those brands originate, including the ongoing trade conflicts between the U.S. and the PRC, may negatively affect our business.

All of our vehicles are purchased from the U.S. market and sold to a Hong Kong parallel-import vehicle dealer. In the event of any significant deterioration in the PRC’s relations with the U.S. or any other countries from which these brands originate, customers in the PRC may refrain from purchasing some of the brands we sell, or legislation may be enacted that would negatively affect our business interests in the PRC. For example, due to the increased tariffs caused by the ongoing trade conflicts between the U.S. and China, the costs of importing and exporting raw materials for automotive manufacturing and finished automobiles have increased. Consequently, we must raise the prices of our vehicles to cover the increase in costs. Given that we cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and China, our supply chain, costs, and profitability may be negatively impacted by the adoption and expansion of trade restrictions, the continuation of the trade conflicts, or other government actions related to tariffs, trade agreements, or related policies. Increasing costs or decreasing availability could slow our growth and negatively affect our financial results and operational metrics. Although the PRC government temporarily reduced tariffs on U.S. – origin vehicles to 10% for a 90-day period in May 2025, this measure may only provide short-term relief. Future changes to tariff rates remain uncertain and could have a material adverse effect on our sales volumes, pricing flexibility and overall financial condition.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine and the increasingly strained relationship between the U.S. and China. Our business, financial condition, and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to continuing market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

The military conflict in Ukraine has led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia. Additional potential sanctions and penalties have also been proposed or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds. Although our business has not been materially impacted by the ongoing military conflict between Russia and Ukraine to date, it is impossible to predict the extent to which our operations, or those of our suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this prospectus. In addition, the U.S.-China relationship has recently faced increased challenges Because our sales to the PRC market represent substantially all of our revenue, our business relies on a stable economic and political relationship between the U.S. and China. However, the tensions between the two countries have intensified as exemplified by the ongoing trade conflicts between the two countries, and there is significant uncertainty about the future relationship between the two countries with respect to trade policies, treaties, government regulations, and tariffs. A deteriorating relationship between the U.S. and China, or a prolonged stalemate between them, could materially adversely affect our business, results of operations, and financial condition.

We may be adversely affected by the effects of inflation and a potential recession.

Inflation has the potential to adversely affect our liquidity, business, financial condition, and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates, and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases. In addition, poor economic and market conditions, including a potential recession, may negatively impact market sentiment, decreasing the demand for automobiles, which would adversely affect our operating income and results of operations. If we are unable to take effective measures in a timely manner to mitigate the impact of the inflation as well as a potential recession, our business, financial condition, and results of operations could be adversely affected.

Our business, financial condition, and results of operations could be materially adversely affected if luxury car manufacturers decrease prices for vehicles sold in China’s market.

Our success largely depends on the strong demand for luxury vehicles from end consumers in the PRC, who purchase imported cars due to their cost advantage compared to those sold by local distributors authorized by the manufacturers. However, if manufacturers significantly lower their selling prices for vehicles in the PRC market, consumer preference for parallel imported vehicles may decline, which could negatively impact our business, financial condition, and results of operations.

We may be subject to penalties or procurement restrictions if we utilize purchasing agents who are found to be in violation of dealership policies.

Some automobile manufacturers monitor parallel exports from the United States to foreign markets by collecting U.S customs data and analyzing vehicle identification numbers (VINs). If a vehicle is exported shortly after its purchase, typically within six months, the manufacturer may trace it back to the originating dealership and impose penalties on that dealership. To our knowledge, manufacturers do not require all dealerships to obtain non-export agreements from retail buyers, we understand from industry sources that some dealerships may choose to do so at their own discretion. We believe that these non-export agreements are not standardized, are not uniformly applied, and are not required by the manufacturers. To date, none of the dealerships we have dealt with in the past have ever requested that our purchasing agents, when used, sign such non-export agreements. As a matter of policy, we will not source vehicles from dealerships that require purchasers to sign a non-export agreement.

We are aware, through discussions with industry participants, that in cases where such agreements were signed and vehicles were exported in breach of the agreement, authorized dealerships have pursued legal action. To our knowledge, the non-export agreements do not specify a penalty amount. Although we are not a party to these agreements, and, to our knowledge, none of our purchasing agents have signed any such agreements in the past, if a purchasing agent acting on our behalf were to do so and breach such a commitment, it could expose them to financial penalties or restrictions on purchasing certain vehicle models in the future. In practice, we may ultimately bear the cost of such penalties. Although our contractual arrangements do not explicitly require us to reimburse such penalties, we have orally agreed to assume such responsibility in order to preserve our sourcing relationships.  While we believe the risk of such outcomes is low based on our sourcing policy and historical experience, any such developments could disrupt our vehicle procurement if we were to decide to revert to the policy of using purchasing agents, increase operating costs, or potentially result in reputational or legal exposure.

If, in the future, automobile manufacturers were to implement a uniform policy requiring all U.S. retail purchasers to sign non-export agreements as a condition of sale, our ability to procure vehicles through the agent-based model could be significantly impaired. Such a policy shift would limit or eliminate access to dealerships willing to sell vehicles without export restrictions, thereby reducing our available sourcing channels.

Our business and results of operations may be adversely affected by product defects, transportation damage, warranty limitations, and vehicle recalls.

We provide a 180-day warranty for each vehicle sold, under which we reimburse repair costs for defects but do not accept returns. As an exporter, we are not directly involved in after-sales service in the PRC. Although we purchase our vehicles from reputable U.S. authorized and independent dealerships, there remains a risk that certain vehicles may be subject to manufacturing defects, damage during transit, or post-sale technical issues. In the event that a vehicle is found to be damaged upon arrival at the port—such as during container unloading—we follow a standard protocol to determine the cause and scope of the damage. Under PRC customs procedures, container inspections are conducted in the presence of customs officers equipped with body-worn law enforcement cameras, and we request the customs officers or unloading personnel to provide photographic evidence from the time of de-containerization. In addition, we engage third-party inspection agencies operating at the port to conduct independent assessments and issue formal inspection reports.

If the inspection confirms that the damage—such as engine or transmission failure—occurred during shipping or prior to delivery, we coordinate with our Hong Kong customer to arrange for immediate repairs. In such cases, the Hong Kong customer will cover the repair costs up front, and we will reimburse them based on actual expenses incurred, supported by valid invoices and inspection documentation, but we do not accept returns.

However, once the vehicle is sold by our Hong Kong customer to an end customer in the PRC, the vehicle becomes subject to the “Three Guarantees” (repair, replacement, and return) policy mandated under PRC regulations, which is required for vehicle registration. For parallel-import vehicles, warranty services are typically provided by the company that issues the final sales invoice to the end customer in China. These warranty packages are often purchased from third-party providers and may include different levels of protection:

In practice, most vehicles sold through free trade zones require the buyer to purchase at least a major components or full-vehicle warranty, ensuring that the vehicle can be registered and meets national consumer protection standards. In such cases, the responsibility for any future mechanical or quality issues is transferred to the third-party service provider offering the “Three Guarantees” coverage, and Hillhouse no longer bears any liability for those vehicles after the point of sale into the PRC market.

While we have not received any reimbursement claims related to product defects or shipping damage to date, we cannot guarantee that such incidents will not occur in the future. We provide a 180-day warranty for each vehicle sold, under which we will reimburse repair costs for defects, but we do not accept returns and do not maintain any third-party insurance coverage for such warranty obligations. To date, we have not experienced any material claims. Any future increase in warranty claims—particularly those involving high-cost repairs—would be funded entirely at our expense and could materially affect our financial performance. In addition, vehicle recalls initiated by manufacturers could negatively affect consumer confidence in the quality and safety of the affected brands. Given that parallel-import vehicles in the PRC may not be eligible for the same manufacturer-backed warranty coverage as vehicles sold through authorized dealerships, some consumers may become hesitant to purchase such vehicles. If negative publicity or increased recall activity diminishes consumer trust, it could reduce orders from our Hong Kong customer and negatively impact our business and results of operations.

Our business and results of operations may be harmed by the misconduct of authorized employees or third-party purchasing agents.

During our business operations, certain employees have access to key company assets, including automobile inventory, bank accounts, and confidential information. If these authorized employees engage in misconduct, our company may suffer substantial losses. Such misconduct could involve the misappropriation of inventory or funds, falsification of financial or inventory records, unauthorized disclosure of confidential information to competitors or the public, or non-compliance with our internal policies, industry regulations, and applicable federal or state laws, such as those governing classified information and import-export controls. Although we have established policies, procedures, and safeguards to detect and prevent such actions, these measures may not be entirely effective in stopping all intentional or negligent misconduct, leaving us exposed to potential risks or financial losses. Additionally, unethical, unprofessional, or even criminal behavior by employees or agents could harm our company’s reputation, result in legal or financial penalties, and lead to the loss of customers, all of which could negatively impact our business operations, financial condition, and overall performance.

Our management team has limited experience managing a public company.

Our management team has limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. We are subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.  Our management team may not successfully or efficiently manage our continued transition to a public company that will be subject to significant regulatory oversight and reporting obligations. In particular, these obligations will require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business, which could materially and adversely impact our business operations. 

Lack of Insurance Coverage Poses Financial and Operational Risks.

We do not directly maintain insurance coverage for vehicles during their domestic transit within the United States. Instead, transportation from dealerships to warehouses or ports is handled by licensed third-party trucking companies that carry their own commercial auto insurance policies, which provide coverage for damage or loss in transit. Upon arrival at the warehouse, vehicles are covered under the warehouse operator’s storage insurance policy until they are loaded for shipment. For ocean freight, Burlington, our Hong Kong-based client, assumes the risk of loss and all associated costs—including marine insurance and customs clearance—once the vehicles are loaded onto the vessel at the U.S. port of departure, pursuant to Cost and Freight (CFR) shipping terms. Accordingly, the risk transfer point occurs at the time of vessel loading. While we believe this arrangement mitigates key transit-related risks, any gaps in third-party coverage or denial of claims could result in financial exposure, which may adversely affect our operations and financial results.

Any negative publicity about us, our services, and our management may materially and adversely affect our reputation and business.

We may from time to time receive negative publicity about us, our management, or our business. Certain of such negative publicity may be the result of malicious harassment or unfair competitive acts by third parties. We may even be subject to government or regulatory investigations as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to defend ourselves against such third-party conduct, and we may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Harm to our reputation and confidence of our customers can also arise for other reasons, including misconduct of our employees or any third-party business partners with whom we conduct business, including purchasing agents and logistics service providers. Our reputation may be materially and adversely affected as a result of any negative publicity, which in turn may cause us to lose market share, customers, industry partners, and other business partnerships.

We are exposed to inventory-related risks, though our use of third-party supervised warehouses helps mitigate potential losses.

Our vehicle inventory represents a significant portion of our total assets. Unlike companies that maintain their own storage facilities, we do not operate our own warehouses. Instead, after purchasing vehicles from U.S. dealerships, we directly transport them to third-party supervised warehouses. If any damage, theft, vandalism, or loss occurs while vehicles are stored in these supervised warehouses, the warehouse provider is responsible for compensation. However, we may still face risks related to transportation before the vehicles arrive at the supervised warehouses or designated shipping ports. Additionally, force majeure events such as natural disasters could disrupt logistics operations, potentially delaying deliveries and impacting customer satisfaction. Any such incidents could adversely affect our business, financial condition, and results of operations.

We may experience operational system failures or interruptions that could materially harm our ability to conduct our operations.

We rely on the capacity, reliability, and security of third-party systems and software to support our operations. For example, we employ Google Drive to process, transmit, and store critical information. The systems of third-party providers may experience material interruptions or failures due to a variety of events beyond our control, including but not limited to, natural disasters, telecommunications failures, employee or customer error or misuse, targeted attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, firewall or encryption failures, and other security problems. If any of the systems do not operate properly, are compromised, or are disabled, we could suffer adverse impact on our operations.

If our purchasing agents or individual sales personnel at authorized dealerships are flagged in internal “Suspect Customer Databases” maintained by automobile manufacturers or dealership groups, our ability to procure vehicles could be materially and adversely affected.

Automobile manufacturers and dealership networks in the United States may maintain internal “Suspect Customer Databases” to track individuals or entities suspected of purchasing vehicles for the purposes of parallel export. These databases are designed to enforce manufacturer-imposed restrictions that prohibit or discourage the sale of vehicles intended for export, in an effort to protect brand integrity, regional pricing, and authorized distribution channels. In our business model, we rely on purchasing agents who often work informally with individual sales personnel at authorized dealerships to complete vehicle acquisitions on our behalf. While these sales personnel are not affiliated with us contractually, repeated export-linked transactions involving the same agents or sales representatives may lead manufacturers or dealership groups to associate such individuals with parallel export activities. If our purchasing agents or these sales personnel are identified in such databases, it could result in one or more dealerships refusing to transact with them, delaying or suspending vehicle procurement altogether.

In practice, purchasing agents or customers generally do not have direct access to these internal lists. However, dealerships often automatically conduct internal checks at the time of purchase -typically based on buyer’s first and last name. For certain export – restricted models, such as the Mercedes-Benz GLS, authorized dealerships will routinely check whether a buyer is listed on such a list. If the buyer appears on the list, the dealership will typically refuse to complete the transaction for that specific model. However, for non-restricted models, the same dealerships may still proceed with sales to that buyer, even if the buyer is on the list.

While we are not privy to the content of such databases and have not been notified of any such flagging to date, we cannot guarantee that our agents or their cooperating dealership personnel will not be added in the future. If such restrictions were to occur, we may experience increased sourcing costs, operational disruption, or the loss of access to certain vehicle models, all of which could materially and adversely affect our business, results of operations, and financial condition.

Manufacturer-imposed restrictions on exports may disrupt our vehicle sourcing strategy and adversely affect our operations.

Automobile manufacturers in the United States often impose contractual restrictions on their authorized dealerships prohibiting sales of vehicles for export or requiring dealerships to take reasonable steps to ensure that buyers do not intend to resell the vehicles internationally. These manufacturer-imposed restrictions are intended to preserve regional pricing, brand positioning, and authorized distribution networks. In addition to contractual terms, manufacturers and dealership groups may maintain internal surveillance mechanisms—commonly referred to as “Suspect Customer Databases”—to identify customers or purchasing agents suspected of participating in parallel export activities.

If dealerships determine or suspect that transactions involving our purchasing agents may violate these restrictions, they may decline to sell vehicles to those agents or terminate existing sales relationships altogether. In severe cases, manufacturers may impose penalties on dealerships that transact with suspected parallel exporters, including monetary fines, reduced vehicle allocations. While we seek to mitigate this risk by working with a broad network of purchasing agents and sales personnel, there can be no assurance that our procurement model will not be affected. Any disruption in our sourcing channels could result in increased costs, delays in fulfilling customer orders, or loss of access to specific vehicle makes or models, all of which could materially and adversely affect our business, operating results, and financial condition.

We May Face Significant Risks in Launching and Scaling Our Vehicle Subscription Business.

Our ability to execute this plan effectively depends on several factors, including market demand, pricing competitiveness, operational efficiency, customer acquisition and retention, regulatory compliance, and access to sufficient capital to support vehicle procurement and fleet management. If we fail to assess consumer demand accurately or establish a sustainable pricing model, we may not attract enough subscribers to achieve profitability. Additionally, as we have limited experience operating a subscription-based vehicle service, we may encounter unexpected logistical, financial, and technological challenges, which could delay or hinder implementation.

Our continued growth and expansion into new service offerings may also subject us to the following additional challenges and constraints:

If we are unable to successfully launch or scale our car subscription service, or if it fails to gain sufficient market acceptance, we may not realize the anticipated benefits of this expansion strategy. This could result in financial losses, inefficiencies in resource allocation, and a negative impact on our overall business performance and future growth prospects.

All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that we will be able to effectively manage our growth or to implement our strategies successfully. There is no assurance that the investment to be made by our Company as contemplated under our future plans will be successful and generate the expected return. If we are not able to manage our growth or execute our strategies effectively, or at all, our business, results of operations, and prospects may be materially and adversely affected.

Future acquisitions may have an adverse effect on our ability to manage our business.

We may acquire businesses, technologies, services, or products that complement our existing parallel-export vehicle business or support our future development of a car subscription business. Future acquisitions may expose us to potential risks, including risks associated with the integration of new operations, services, and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing business and technology, our potential inability to generate sufficient revenue to offset new costs, the expenses of acquisitions, or the potential loss of or harm to relationships with both employees and customers resulting from our integration of new businesses.

Any of the potential risks listed above could have a material adverse effect on our ability to manage our business, revenue, and net income. We may need to raise additional debt funding or sell additional equity securities to make such acquisitions. The issuance of debt by us, if required, would result in debt service obligations and operating and financing covenants, or liens on our assets, that would restrict our operations. The sale of additional equity securities could result in additional dilution to our stockholders.

Legal, Regulatory, and Compliance Risks

Non-compliance with laws and regulations on the part of any third parties with whom  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.

Third parties with whom we conduct business, including purchasing agents and logistics service providers, may be subject to regulatory penalties or engage in conduct that infringes upon other parties’ legal rights, which could disrupt our operations and expose us to financial and reputational harm. Specifically, although we enter into written contractual agreements with all purchasing agents that designate our company as the legal owner of vehicles purchased on our behalf, regardless of whose name appears on the title, there remains a risk that a purchasing agent may breach this agreement and improperly divert a vehicle to an unrelated third party for personal gain. Such actions could result in financial loss, reputational damage, or the need to initiate legal proceedings.

Additionally, logistics providers and agents are required to comply with applicable U.S. regulations, including U.S. Customs and Border Protection (CBP) export requirements under 19 CFR § 192.2. Non-compliance with such regulations—whether intentional or inadvertent—could delay our shipments, trigger increased regulatory scrutiny, or result in fines, even if the Company itself is not directly at fault. Although we make reasonable efforts to assess and monitor the compliance of our business partners, we cannot guarantee that all irregularities or violations will be identified or corrected in a timely manner. Any material non-compliance by these third parties could disrupt our supply chain and adversely affect our business, financial condition, and results of operations.

We 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.

We may from time to time become subject to or involved in various claims, controversies, lawsuits, and legal proceedings. However, claims and threats of lawsuits are subject to inherent uncertainties, and we are uncertain whether any of these claims would develop into a lawsuit. Lawsuits, or any type of legal proceeding, may cause our Company to incur defense costs, utilize a significant portion of our resources, and divert management’s attention from our day-to-day operations, any of which could harm our business. Any settlements or judgments against our Company could have a material adverse impact on our financial condition, results of operations, and cash flows. In addition, negative publicity regarding claims or judgments made against our Company may damage our reputation and may result in a material adverse impact on us.

Risks Relating to the PRC Government’s Influence and Regulatory Oversight.

Although our operations are primarily conducted in the United States, a portion of our business involves the re-exportation of vehicles into mainland China by our client, a Hong Kong-based importer. As a result, our business is subject to the political, legal, and economic environment in the People’s Republic of China (the “PRC”).

The PRC government exerts significant influence over the economy and legal system in both mainland China and, increasingly, in Hong Kong. The PRC government has implemented a broad range of laws and regulations concerning customs clearance, importation of vehicles, and mandatory consumer protection measures such as the “Three-Guarantees” warranty policy. These regulations may evolve or be more strictly enforced in the future. Although we are not directly involved in the importation or retail sales of vehicles in the PRC, changes in policy, regulatory enforcement, or political climate could indirectly impact our business by affecting the operations of our Hong Kong client or the purchasing behavior of PRC consumers. Moreover, the PRC government has, in recent years, taken steps to increase its control and oversight over Hong Kong through various legislative and administrative measures. Any further convergence of Hong Kong’s regulatory environment with that of mainland China could subject our Hong Kong-based customer to heightened regulatory scrutiny or restrictions, which in turn could impact our export volumes, revenue, and ability to scale our business.

If the PRC government were to impose additional restrictions on parallel-import vehicles, limit cross-border trade via Hong Kong, or tighten customs procedures, our business model could be adversely affected. As such, the evolving regulatory and political environment in the PRC and Hong Kong presents ongoing uncertainty and potential risk to our operations.

Common Stock and Trading Risks

There has been no public market for our Class A common stock prior to this offering, and you may not be able to resell our Class A common stock at or above the price you pay for them, or at all.

Prior to this offering, there has not been a public market for our Class A common stock. We plan to apply for the listing of our Class A common stock on the Nasdaq Capital Market. An active public market for our Class A common stock may not develop or be sustained after the offering, in which case the market price and liquidity of our Class A common stock will be materially and adversely affected.

The initial public offering price for our Class A common stock may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.

The initial public offering price for our Class A common stock will be determined by negotiations between us and the underwriters and may not bear a direct relationship to our earnings, book value, or any other indicia of value. We cannot assure you that the market price of our Class A common stock will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Class A common stock may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.

Concentration of voting power and our dual-class share structure may limit your ability to influence corporate matters and could discourage a change in control transaction. 

We have adopted a dual-class structure consisting of Class A common stock and Class B common stock. Each share of Class A common stock is entitled to one vote, while each share of Class B common stock is entitled to twenty (20) votes. As of the date of this prospectus, our founder and Chief Executive Officer, Mr. Fenglong Ma, beneficially owns all of the issued and outstanding Class B common stock. As a result, Mr. Ma holds approximately 87.24% of the total voting power of our outstanding capital stock and has substantial influence over our business and affairs.

Due to this voting concentration, Mr. Ma has the ability to unilaterally determine or significantly influence matters requiring stockholder approval, including the election and removal of directors, amendments to our articles of incorporation or bylaws, and the approval of major corporate transactions, such as mergers, consolidations, asset sales, or other change in control events. This concentration of control may delay or prevent a change in control transaction, including those that other stockholders may view as beneficial. The dual-class structure of our common stock may also limit your ability to influence corporate matters and reduce the market price of our Class A common stock due to perceived governance risks by public investors.

Furthermore, this structure may discourage investor interest and adversely affect the trading price and liquidity of our Class A common stock and may limit the ability of stockholders to influence corporate governance. As a result, investors in our Class A common stock may have limited or no influence over matters submitted to our stockholders for approval.

An active trading market may not develop for our securities.

This is the initial public offering of our securities. Prior to this offering, and there was no public market for our Class A common stock. We plan to apply to list our Class A common stock on the Nasdaq Capital Market. Even if our Class A common stock is approved for listing on the Nasdaq Capital Market, we cannot predict the extent to which investor interest in our Company will lead to the development of an active trading market in our Class A common stock or how liquid that market might become. If such a market does not develop or is not sustained, it may be difficult for you to sell your shares of Class A common stock at the time you wish to sell them, at a price that is attractive to you, or at all.

The trading market for our Class A common stock in the future could be subject to wide fluctuations in response to several factors, including, but not limited to:

Furthermore, our stock price may be impacted by factors unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rates, or international currency fluctuations, may adversely affect the market price of our Class A common stock. Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our Class A common stock.

You will experience immediate and substantial dilution in the net tangible book value of Class A common stock purchased in this offering.

The initial public offering price of our Class A common stock is substantially higher than the (as adjusted) net tangible book value per share of our Class A common stock. Consequently, when you purchase our Class A common stock in the offering, upon completion of the offering you will incur immediate dilution of $[●] per share, assuming an initial public offering price of $[●]. See “Dilution.” In addition, you may experience further dilution to the extent that additional shares of Class A common stock are issued upon exercise of outstanding options we may grant from time to time.

We have identified a material weakness and a significant deficiency in our internal control over financial reporting. If we do not adequately remediate the material weakness and the significant deficiency, or if we experience additional material weaknesses or significant deficiencies in the future or otherwise fail to maintain effective internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Class A Common Shares may be materially and adversely affected.

Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our management has not completed an assessment of the effectiveness of our internal controls over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In the course of auditing our consolidated financial statements for the years ended December 31, 2023 and 2024, we identified a material weakness and a significant deficiency in our internal control over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting. The material weakness that has been identified relates to our lack of sufficient accounting and financial reporting personnel with adequate knowledge of U.S. GAAP to properly record transactions and prepare and review our financial statements and related disclosures in accordance with U.S. GAAP and the SEC reporting requirements. The significant deficiency that has been identified relates to our lack of sufficient review procedures and internal controls, necessary to adequately prepare and review our consolidated financial statements and related disclosures in accordance with applicable financial reporting requirements, which resulted in multiple reclassification adjustments proposed.

We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these deficiencies, including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework, and (ii) appointing independent directors, establishing an audit committee and strengthening our corporate governance. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting, and we cannot conclude that they have been fully remediated. Our failure to remediate these deficiencies or our failure to discover and address any other material weaknesses could result in inaccuracies in our consolidated financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory requirements. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional material weaknesses and deficiencies may have been identified. Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our Class A Common Shares.

Upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on 10-K. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified, if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

If we fail to maintain adequate internal controls, we may not be able to effectively manage our business and may experience errors or information lapses affecting our business.

Our success depends on our ability to effectively utilize our standardized management system, information systems, resources and internal controls. As we continue to expand, we will need to modify and improve our financial and managerial controls, reporting systems and procedures and other internal controls and compliance procedures to meet our evolving business needs. If we are unable to improve or maintain our internal controls, systems and procedures, they may become ineffective and adversely affect our ability to manage our business and cause errors or information lapses that affect our business. Our efforts in improving our internal control system may not result in the elimination of all risks. If we are not successful in discovering and eliminating weaknesses in our internal controls, our ability to effectively manage our business may be affected, which may materially and adversely affect our business, financial condition and results of operation 

We will incur substantial increased costs as a result of being a public company.

Upon consummation of this offering, we will incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. These additional costs could negatively affect our financial results. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these laws, rules, and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. These laws, regulations, and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an emerging growth company within the meaning of the Securities Act and have elected to take advantage of certain reduced reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which the fifth anniversary of the completion of this offering occurs; (b) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (c) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which means the market value of our Class A common stock  that are held by non-affiliates is $700.00 million or more as of the last business day of our most recently completed second fiscal quarter; and (d) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting, We have also elected to take advantage of the extended transition period for complying with the new or revised accounting standards. As a result, our financial statements may not be comparable to companies that comply with public company effective dates.

After we are no longer an “emerging growth company”, or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures.

We may not be able to maintain the listing of our Class A common stock on the Nasdaq Capital Market.

Even if our Class A common stock is approved for listing on the Nasdaq Capital Market, there can be no assurance that we will be able to maintain the listing standards of that exchange, which includes requirements that we maintain our stockholders’ equity, total value of shares held by unaffiliated stockholders, and market capitalization above certain specified levels. If we fail to conform to the Nasdaq listing requirements on an ongoing basis, our Class A common stock might cease to trade on the Nasdaq Capital Market exchange, and may move to the OTCQB or OTC Pink Markets operated by OTC Markets Group, Inc. These quotation services are generally considered to be markets that are less efficient and that provide less liquidity in the shares than the Nasdaq Capital Market.

Substantial future sales of our Class A common stock or the anticipation of future sales of our Class A common stock in the public market could cause the price of our Class A common stock to decline.

Sales of substantial amounts of our Class A common stock in the public market after this offering, or the perception that these sales could occur, could cause the market price of our Class A common stock to decline. An aggregate of 11,400,000 shares of Class A common stock are outstanding before the consummation of this offering. An aggregate of 12,650,000 shares of Class A common stock will be outstanding immediately after the consummation of this offering, assuming no exercise of the over-allotment option, and 12,837,500 shares of Class A common stock will be outstanding immediately after the consummation of this offering, assuming the full exercise of the over-allotment option. Sales of these shares into the market could cause the market price of our Class A common stock to decline.

The 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.

We have a dual-class voting structure consisting of Class A and Class B common stock. Under this structure, holders of Class A common stock are entitled to one vote per share of Class A common stock, and holders of Class B common stock are entitled to 20 votes per share of Class B common stock, which may cause the holders of Class B common stock to have an unbalanced, higher concentration of voting power. Immediately prior to completion of this offering, Mr. Ma our Chief Executive Officer and the sole stockholder of Class B common stock, beneficially owns 8,000,000 shares, or 93.02%, of our issued Class B common stock, representing approximately 87.24% of the voting rights in our Company. After this offering, Mr. Ma will beneficially own 8,000,000 shares of Class B common stock, representing approximately 86.65% of the voting rights in our Company, assuming the sales of all shares of the Class A common stock we are offering and no exercise of the underwriters’ over-allotment option. As a result, until such time as his voting power is below 50%, Mr. Ma as the controlling stockholder has substantial influence over our business, including the election of directors, amendment of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, sale of assets, and other significant corporate actions. He may take actions that are not in the best interests of us or our other stockholders. These corporate actions may be taken even if they are opposed by our other stockholders. For instance, this concentration of control may delay or prevent a change in control transaction, including those that other stockholders may view as beneficial. Such concentration of voting power may discourage, prevent, or delay the consummation of transactions that stockholders may consider favorable, including ones in which stockholders might otherwise receive a premium for their shares. Future issuances of shares of Class B common stock may also be dilutive to the holders of Class A common stock. As a result, the market price of our Class A common stock could be adversely affected.

If 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.

Any trading market for our Class A common stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A common stock would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A common stock and the trading volume to decline.

Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A common stock.

We anticipate that we will use the net proceeds from this offering to explore and develop new business opportunities, such as expanding into additional high-demand international markets, diversifying our vehicle offerings, or entering complementary segments within the automotive trade. We also plan to invest in technology systems to support operational scalability and customer engagement, and to allocate a portion of the proceeds for working capital and general corporate purposes. Our management will have significant discretion in determining how to allocate the net proceeds and could use the funds in a manner that does not improve our operating results or enhance the market price of our Class A common stock.

Anti-takeover provisions in our amended and restated articles of incorporation and bylaws may discourage, delay, or prevent a change in control.

Some provisions of our amended and restated articles of incorporation and bylaws, which will become effective on or before the completion of this offering, may discourage, delay, or prevent a change in control of our Company or management that stockholders may consider favorable, including, among other things, the following:

Enforceability of Civil Liabilities Against Our Officers and Directors Located in the PRC.

Mr. Ma, and our independent director nominees reside in the PRC, and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult or impossible for investors to effect service of process within the United States upon these individuals, or to enforce judgments obtained in U.S. courts against them based on civil liability provisions of the U.S. federal securities laws.

The PRC does not have a treaty with the United States providing for the reciprocal recognition and enforcement of court judgments. Therefore, the recognition and enforcement in China of judgments of a U.S. court based on civil liability, including those arising under the U.S. federal securities laws, may be difficult. Even if you are successful in bringing an action in a U.S. court, there is no guarantee that a PRC court will enforce a judgment rendered by a U.S. court. Furthermore, uncertainties in PRC legal procedures and the broader political and judicial system could impede our investors’ ability to protect their rights through legal actions against our officers or directors residing in the PRC. These factors may limit investors’ legal remedies and their ability to obtain recovery in the event of future claims against our management or directors.

We will be a “controlled company” within the meaning of the Nasdaq listing rules and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.

Following this offering, Mr. Ma, our largest stockholder, will continue to indirectly own more than a majority of the voting power of our outstanding shares of common stock and will be able to determine all matters requiring approval by our stockholders. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the “controlled company” exemptions under the Nasdaq listing rules even if we are deemed a “controlled company,” we could elect to rely on these exemptions in the future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Nasdaq may apply additional and more stringent criteria for our initial and continued listing since we plan to have a relatively small public offering and insiders will hold a large portion of our listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities on Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including: (i) where the company engaged an auditor that has not been subject to an inspection by the PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. stockholders, operations, or members of the board of directors or management. Since we plan to have a relatively small public offering and our insiders will hold a large portion of our listed securities, Nasdaq may apply additional and more stringent criteria for our initial and continued listing, which may cause delay or even denial of our listing application.

USE OF PROCEEDS

Based upon an assumed initial public offering price of $[●] per share of our Class A common stock, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, of approximately $[●] if the underwriters do not exercise their over-allotment option, and $[●] if the underwriters exercise their over-allotment option in full.

We plan to use the net proceeds we receive from this offering for the following purposes:

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

DIVIDEND POLICY

As of the date of this prospectus, we have not paid any cash dividends on our Class A or Class B common stock. We are organized under the Nevada Business Corporation Act, which prohibits the payment of a dividend if, after giving it effect, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved, to satisfy the preferential rights upon dissolution of any preferred stockholders. Our board of directors may decide to pay dividends in the future. Any determination by our board of directors to pay dividends in the future to stockholders will be dependent upon our operational results, financial condition, capital requirements, business projections, general business conditions, statutory and regulatory restrictions, and any other factors deemed appropriate by our board of directors.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2025:

You should read this capitalization table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

DILUTION

If you invest in our Class A common stock, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock in this offering and the net tangible book value per share of Class A common stock upon completion of this offering. Dilution results from the fact that the initial public offering price per share is substantially in excess of the net tangible book value per share attributable to the existing stockholders for our presently outstanding shares of Class A common stock.

Holders of Class A common stock and Class B common stock have the same rights except for voting and conversion rights. In respect of matters requiring a stockholder vote, each holder of Class A common stock will be entitled to one vote per share of Class A common stock and each holder of Class B common stock will be entitled to 20 votes per share of Class B common stock. Shares of Class B common stock are convertible into shares of Class A common stock at any time after issuance at the option of the holder on a one-to-one basis. Shares of Class A common stock are not convertible into shares of any other class. Shares of Class B common stock are not being converted as part of this offering.

Our net tangible book value as of [ ] was $[●], or $[●] per share of Class A or Class B common stock. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per share of Class A common stock (as adjusted for the offering) from the initial public offering price per share and after deducting the estimated underwriting discounts and the estimated offering expenses payable by us. Because the shares of Class A common stock and Class B common stock have the same dividend and other rights, except for voting and conversion rights, the dilution is presented based on all issued and outstanding shares of common stock, including Class A and Class B common stock.

After giving effect to our sale of [●] shares of Class A common stock offered in this offering based on the initial public offering price of $[●] per share after deduction of the estimated underwriting discounts and the estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2024, would have been $[●], or $[●] per outstanding share of Class A common stock. This represents an immediate increase in net tangible book value of $[●] per share of Class A common stock to the existing stockholders, and an immediate dilution in net tangible book value of $[●] per share to investors purchasing the Class A common stock in this offering. The as adjusted information discussed above is illustrative only.

The following table illustrates such dilution:

The following tables summarize, on an as adjusted basis as of [ ], the differences between existing stockholders and the new investors with respect to the number of shares of our Class A common stock purchased from us, the total consideration paid and the average price per share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

The as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Class A common stock and other terms of this offering determined at the pricing.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Business Overview and Recent Developing Trends

We operate a vehicle export business, specializing in sourcing premium vehicles in the U.S. and facilitating their shipment to a client in Hong Kong, who distributes the vehicles to their clients in the PRC. Prior to 2024, we primarily purchased automobiles, chiefly luxury brands such as Mercedes, Lexus, Range Rover, and Toyota, through purchasing agents who purchased the cars from brand name authorized dealers. These purchasing agents place purchase orders on our behalf with the authorized dealerships. We make payment directly to the authorized dealerships and arrange for third party intermodal trucking companies, which specialize in freight transportation between ports, rail terminals and inland logistics hubs, to pick up the purchased vehicles from the authorized dealerships. We primarily purchased vehicles from authorized dealerships in 2023. Beginning in 2024, we expanded our sourcing channels and purchased a greater portion of vehicles from independent dealers. Approximately 49.2% of our total vehicle purchases in 2024 were made from independent dealers compared to 37.2% in 2023. All of our vehicle purchases during the first quarter of 2025 were made from independent dealers compared to 30.1% of our purchases during the first quarter of 2024,  because vehicle prices from independent dealers were more favorable to those of the authorized dealerships. Going forward, we intend to continue to maintain both sourcing models through independent dealers and authorized dealerships and select the most cost effective option based on prevailing market conditions.  

The primary driver for our industry is the continuing growth of high-net-worth individuals in the PRC. We focus on the most popular luxury vehicles that provide us with the best profit opportunity. We derive profits from our profit- sharing arrangement with one dealer in Hong Kong, who is able to capitalize on the price difference between the purchase and sales price of parallel imported vehicles in the PRC. Our expertise lies in our ability to procure vehicles that are in demand in the PRC in a timely manner.

We believe the following key factors may affect our financial condition and results of operations:

Major Components of Results of Operations

Revenue

We generate our revenue by selling vehicles to parallel-import vehicle dealers. Starting in August 2023, we have focused on sales to one Hong Kong based parallel-import vehicle dealer as a result of an attractive profit sharing business collaboration model provided by them. The following table indicates the number of vehicles sold, the average selling price, and total revenue for the first quarter of 2025 and 2024, and each quarter during the years ended December 31, 2024 and 2023. The selling price of each vehicle vary based on the market demand and supply at the time of sale.

Profit Sharing Revenue

On August 1, 2023, we entered a new profit sharing agreement with our parallel-import car dealer in Hong Kong. We generate revenue under this model by earning a fixed income of $8,000 per vehicle regardless of the actual sales price the parallel-import car dealer sells the cars to end customers. We are entitled to profit sharing payments once the full payment of sales price of the vehicle is received by the parallel-import car dealer and completion of quarterly sales reconciliation and settlement with the parallel-import car dealer. We recognize the revenue from profit sharing when we receive the profit sharing amount from the parallel-import car dealer. Our profit sharing revenue was $72,000 and $552,000 for the three months ended March 31, 2025 and 2024, respectively. Our profit sharing revenue was $1,128,000 and $nil for the years ended December 31, 2024 and 2023, respectively.

Cost of Revenue

Cost of revenue mainly includes the cost of vehicles purchased from U.S. automobile dealers, freight cost, and vehicles storage and towing expenses.

Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024

*Fulfillment expenses mainly represent freight cost and vehicles storage and towing expenses.

Revenue

For the three months ended March 31, 2025, our revenue decreased by $1.09 million, or 27.24%, from $3.98 million to $2.90 million in the three months ended March 31, 2024. For the three months ended March 31, 2025 and 2024, our revenue from vehicles sales decreased by $0.61 million, or 17.63%, to $2.83 million from $3.43 million in the 2024 period. The decrease in revenue was due to a decrease in the number of vehicles sold Hong Kong customer which resulted from the of decreased demand for luxury cars due to a slowdown in the overall economy in China as well as the shifting consumer preference from gasoline vehicles to electric vehicles. For the three months ended March 31, 2025 and 2024, we sold 29 and 36 cars, with an average selling price of $97,462 and $95,321, respectively.

For the three months ended March 31, 2025 and 2024, we recorded profit sharing revenue of $72,000 and $552,000, respectively. We recognize the revenue from profit sharing when we receive the profit sharing amount from the parallel-import car dealer. Due to decreased demand for luxury cars, the parallel-import car dealer also had decreased sales to end customers, which resulted in decreased profit sharing revenue. Our profit sharing revenue in the first quarter of 2025 does not reflect the sale by the parallel-import car dealer of 14 vehicles that were purchased from us in the end of March, for which we received  profit sharing revenue in the second quarter of 2025.

Beginning in the second half of 2024, the market for new luxury vehicles in the PRC was negatively impacted by weak macroeconomic conditions and a shift in consumer demand toward electric vehicles, particularly those manufactured domestically by PRC manufacturers. In response, many luxury import brand manufacturers began discounting vehicle prices through their authorized dealership networks, which made it increasingly difficult for Burlington to generate a profit from the sale of parallel-import vehicles. This trend continued into 2025 and was further exacerbated by the PRC government’s decisions in April 2025 to raise tariffs on U.S.-origin vehicles to 125%. However, in May 2025, the PRC temporarily reduced these tariffs to 10% for a 90-day period as part of a bilateral easing arrangement, providing short-term relief but leaving future tariff levels uncertain. These tariffs have raised the overall cost of the imported vehicles and reduced Burlington’s pricing flexibility, further compressing margins in an already competitive environment. At present, we are unable to predict when the luxury vehicle market in the PRC will stabilize or when the historical price spread between vehicles sold through official distribution channels and those sold through the parallel-import market will return. We are responding to these conditions by reducing our operating costs and evaluating potential opportunities to diversify our customer base markets outside of the PRC.

Cost of Revenue

Our total cost of revenue decreased by $0.63 million, or 18.61%, to $2.74 million for the three months ended March 31, 2025 from $3.36 million for the same period of 2024. The change was mainly due to the decrease in car sales as explained above. For the three months ended March 31, 2025 and 2024, our cost of revenue as a percentage of our total revenue was 94.47% and 84.45%, respectively. The increase in total cost of revenue as a percentage of total revenue was mainly due to decreased profit-sharing revenue.

The cost of vehicles sold decreased by $0.59 million, or 17.70 %, to 2.74 million for the three months ended March 31, 2025 from $3.33 million for the same period of 2024. The cost of vehicles sold (excluding fulfillment expenses) was 96.87% and 96.95% of revenue from the sale of vehicles for the three months ended March 31, 2025 and 2024, respectively. The ratio decreased primarily because the vehicle purchase costs increased more slowly than the increase in selling prices. Our average procurement cost per vehicle increased by 2.16% whereas our average selling price per vehicle increased by 2.25%. We did not purchase any cars from authorized dealers during the three months ended March 31, 2025 as we were able to obtain better terms from the independent dealers.

Fulfillment expenses mainly represent the freight  costs, and vehicles storage and towing expenses. Starting in January 2025, in order to be more efficient and to minimize the shipping risk, we reached an agreement with our vendors who agreed to bear the costs of delivering the vehicles to a warehouse designated by us. As a result, we did not incur any fulfilment expenses in 2025.

Gross Profit

Gross Profit for Vehicles Sales without Profit Sharing 

Our gross profit decreased by $0.46 million, or 74.10%, to $0.16 million for the three months ended March 31, 2025 from $0.62 million for the three months ended March 31, 2024. Our blended gross margin decreased to 5.53% for the three months ended March 31, 2025 from 15.55% for the three months ended March 31, 2024. The decrease in our gross profit and gross profit margin in 2025 was mainly due to the decrease in vehicles sales and profit sharing revenue.

Operating Expenses

Selling Expenses

Selling expenses decreased by $2,566, or 10.22%, to $22,543 for the three months ended March 31, 2025, from $25,109 for the three months ended March 31, 2024, primarily due to the reduction in the number of vehicles sold.

General and Administrative Expenses

General and administrative expenses increased by $91,404 to $91,906 for the three months ended March 31, 2025, from $502 for the three months ended March 31, 2024, primarily due to (a) an increase in payroll expense and employee benefits of $30,304 or 100.00%, as a result of having salaried one director and three employees during the three months ended March 31, 2025 compared with no employees for the three months ended March 31, 2024. The three employees are our COO, CFO, and an accountant. We outsourced accounting job for the three months ended March 31, 2024; (b) an increase in legal and accounting fees of $43,000 or 100.00%, as a result of the Company’s IPO process; (c) an increase in consulting fees of $11,500, or 100.00%, which was also mainly for the Company’s IPO process consultation and preparation, and (d) an increase in rent expenses of $6,000 or 100.00%, as a result of our rental of office space for our newly-hired employees.

Other Income (Expenses)

Our other income was $19 for the three months ended March 31, 2025, while we had no such income in 2024.

Income Tax Expense

We had income tax expense of $12,864 and $0.17 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in income tax expense was primarily attributable to decreased taxable income in the three months ended March 31, 2025.

Net Income

As a result of the foregoing, net income decreased by $0.39 million, or 92.26%, from $0.43 million for the three months ended March 31, 2024 to $33,104 for the three months ended March 31, 2025.

Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023