GigaCloud Technology Inc

Current report

Trade restrictions could materially and adversely affect our business, financial condition and results of operations.

Current report

We are focused on facilitating B2B ecommerce transactions for large parcel merchandise. Our cross-border logistics services may be affected by trade restrictions implemented by countries or territories in which our customers are located or in which our customers’ products are manufactured or sold. For example, we are subject to risks relating to changes in trade policies, tariff regulations, embargoes or other trade restrictions adverse to our customers’ business. Actions by governments that result in restrictions on movement of parcels or otherwise could also impede our ability to carry out our cross-border ecommerce solutions and logistics services.

Current report

In particular, in 2025, the U.S. government utilized the International Emergency Economic Powers Act, or IEEPA, to impose additional tariffs on a broad range of imports, including home furnishings products. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the IEEPA. During April 2026, the

Current report

U.S. Customs and Border Protection, or CBP, launched the Consolidated Administration and Processing of Entries process, or CAPE, which allows entities to submit refund claims for paid IEEPA tariffs. We have submitted claims seeking refunds of previously paid IEEPA tariffs through CAPE and received a portion of the refunds that we have submitted. The timing of any remaining refunds and the total amount ultimately received or recorded remains uncertain, and we cannot provide any assurance that we will receive the full amount expected.

Current report

Following this Supreme Court decision, the U.S. administration invoked Section 122 of the Trade Act of 1974 to impose new tariffs on imports, effective February 24, 2026, which a U.S. court later found unlawful in May 2026. The ruling is currently stayed pending appeal. If the Section 122 proclamation is ultimately held invalid, we may be eligible to recover some or all of the Section 122 duties paid. However, the outcome of the appeal and the availability, timing and amount of any potential refunds remain uncertain and are subject to further judicial and administrative proceedings. Furthermore, on July 23, 2026, following a Section 301 investigation, the U.S. administration announced new tariffs ranging from 10% to 12.5% on imports from 60 trading partners. The evolving legal status and expiration of the Section 122 tariffs creates additional uncertainty regarding our tariff exposure and any potential recovery of Section 122 duties paid during the quarter. The ultimate impact of these newly enacted and potential future tariffs or other restrictions on international trade will depend on various factors, including the ultimate level of tariffs, the duration such tariffs remain in place, and how other countries respond to U.S. tariffs. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the U.S. or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations.

Current report

In addition, during the second quarter, we noticed a generally heightened enforcement environment in customs clearance, in which we and our suppliers have experienced longer customs clearance times and other disruptions at certain U.S. ports and associated incremental costs, which have not been material to date. Furthermore, on June 3, 2026, the U.S. administration issued Executive Order 14411, “Strengthening Customs Enforcement,” directing CBP and the Department of Homeland Security to implement a series of enhanced customs enforcement measures. Due to the uncertainty surrounding any new and future changes in customs compliance requirements and enforcement under, our logistics costs, product availability, compliance costs and results of operations could be adversely affected.

Current report

Trade disputes, trade restrictions, tariffs and other geopolitical tensions as a result of trade policies could reduce trade volume, cross-border investment, technological exchange, and other economic activities between major economies, resulting in a material adverse effect on global economic conditions and the stability of global financial and stock markets, which may also negatively impact end consumers demand, delay purchases by retailers, limit expansion opportunities, limit our access to capital, or otherwise negatively impact our business, financial condition and results of operations.

Current report

We may be subject to product liability claims and related governmental investigations if people or property are harmed by the products we sell or sold through our platform.

Current report

Some of the products we sell may expose us to product liability and other claims and litigation (including class actions) or governmental investigations and regulatory actions relating to safety, personal injury, death or environmental or property damage. If any of our products prove to be defective or otherwise in violation of applicable law, we may be required to recall such products and be subject to legal action. We have in the past voluntarily or involuntarily recalled certain products, none of which has been material to our business, financial condition or results of operations, and we may be required to conduct similar or more significant recalls in the future. Some of our agreements with members of our supply chain may not indemnify us from product liability for a particular product, and some members of our supply chain may not have sufficient resources or insurance to satisfy their indemnity and defense obligations. Although we maintain product liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Any product liability claims asserted against us could, among other things, harm our reputation, damage our platform and brand, cause us to incur significant costs, and have a material adverse effect on our business, financial condition and results of operations.

Previous report

We recorded net cash outflows from operating activities in the three months ended March 31, 2026 and may experience significant cash outflows in the future.

Previous report

We recorded net cash outflows from operating activities in the three months ended March 31, 2026. We recorded net cash used in operating activities of $21.7 million in the three months ended March 31, 2026, compared to net cash provided by operating activities of $9.4 million in the three months ended March 31, 2025. The net cash outflows in the three months ended March 31, 2026 were primarily due to timing difference in the recording of our operating assets and liabilities. In particular, we increased inventory purchases to support anticipated future sales and changes in working capital, including a reduction in accounts payable, accrued expenses, and other current liabilities. These changes were driven in part by shorter payment terms and reduced utilization of supplier credit arrangements following the New Classic acquisition. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”.

Previous report

We expect to continue to procure inventories and invest in additional warehouses and logistics infrastructure to further expand our business which may increase our cash outflows, and there can be no assurance that we will successfully execute our business strategies. If our anticipated sales do not materialize or if we are unable to efficiently manage our inventory and supplier payment terms, we may experience further operating cash outflows from operating activities in the future.

Previous report

Our ability to generate sufficient cash from operations depends on a number of factors, many of which are beyond our control, including the demand for our products and services, transportation and fuel costs, inflationary pressures, competitive conditions, and overall macroeconomic trends as well as other risks discussed herein. If revenues do not grow as expected or if we are unable to adequately control the costs associated with our operations, we may experience losses and negative cash flows.

Previous report

We believe that taking into account cash on hand and our operating cash flows, we have sufficient working capital for our present requirements and for at least the next 12 months from the date of this report. However, we may need additional capital resources in the future if we experience changes in business condition or other unanticipated developments, or if we wish to pursue opportunities for investments, acquisitions, capital expenditures or similar actions.