Market Conditions and Economic Impact - MKD's sales and profitability are directly affected by automotive vehicle production and demand, which have been challenged globally [60]. - Recent economic conditions, including inflation and interest rate fluctuations, have negatively impacted MKD's sales and financial performance in 2023 and 2024 [74]. - Economic uncertainties, including job loss and higher consumer debt, may lead to a decline in consumer spending, adversely affecting MKD's financial condition [92]. - China's slow recovery from the Covid pandemic and associated economic issues have negatively impacted demand for MKD's products in 2023 and 2024 [93]. - A prolonged period of depressed consumer spending could materially affect MKD's business and increase operating expenses [94]. - The cyclical nature of the RV and camper van industry may result in operating losses during economic downturns, influenced by factors such as financing availability and consumer confidence [95]. Operational Challenges - MKD's manufacturing efficiency is crucial for future profitability, and any delays or technical issues could lead to significant revenue loss [76]. - A shortage of materials, particularly microprocessors, could disrupt MKD's production schedule and adversely affect financial results [67]. - Disruptions in the supply of raw materials could materially increase operating costs and decrease profit margins for MKD [87]. - The ongoing global semiconductor supply shortage has had limited impact on MKD's operations due to the availability of substitute components [91]. - The company may face challenges in attracting and retaining qualified personnel, which is essential for its operational success [83]. - MKD's business may be adversely affected by obsolete inventories due to changes in demand and product life cycles, which could lead to excess inventory and operational impacts [84]. Competitive Landscape - The automotive market is highly competitive, with MKD facing pressure from both electric vehicle manufacturers and traditional automotive companies [65]. - The company is under continuous pressure to reduce product prices, which could impact growth and profit margins [78]. - MKD's ability to innovate and develop new products is critical, as failure to do so may result in decreased sales and loss of market share [79]. Regulatory and Compliance Risks - Legal proceedings and disputes could have a material adverse effect on MKD's profitability and financial position [73]. - The PRC government's oversight may influence MKD's operations, potentially resulting in material adverse changes and affecting the value of the company's securities [102]. - MKD's operations are significantly impacted by PRC laws and regulations, which may evolve and affect the company's ability to offer securities and its overall business prospects [110]. - The company submitted the required filing with the CSRC on September 21, 2023, in connection with its business combination, but future regulatory changes may impose additional requirements [122]. - If identified as a Commission-Identified Issuer under the HFCAA, MKD's securities could be prohibited from trading in the U.S. for two consecutive years, significantly impacting capital raising efforts [114]. - The PRC government has indicated an intent to exert more oversight over overseas listings, which may materially change MKD's operations and limit its ability to offer securities to foreign investors [113]. - MKD may face significant penalties if it fails to obtain necessary licenses or if its compliance status is misjudged, potentially affecting its business operations and financial condition [119]. - Regulatory restrictions on loans and capital contributions to PRC subsidiaries may hinder MKD's liquidity and ability to fund business expansion [127]. - Future changes in PRC regulations could impose additional requirements on MKD, affecting its ability to conduct business operations and impacting the trading price of its securities [124]. - SAFE Circular 19 restricts the use of RMB capital converted from foreign currency for certain financial activities, potentially impacting liquidity and business expansion in China [129]. - The ability to provide financial support to PRC subsidiaries is uncertain due to regulatory requirements for government registrations and approvals [130]. - PRC regulations require approvals for converting RMB to foreign currency for capital expenses, affecting the company's ability to pay debts in foreign currencies [132]. - The company may face penalties for failing to make adequate contributions to employee benefit plans as mandated by PRC regulations [134]. - Regulatory compliance is critical for MKD's operations in the PRC, with potential penalties for non-compliance impacting business operations [139]. - Taiwan regulations restrict dividend payments to accumulated profits, which may affect the company's liquidity requirements [144]. - Foreign exchange controls in Taiwan may impact the ability to repatriate dividends or make payments to the company [145]. - Approval from Taiwan authorities is required if shareholding thresholds are met, with penalties for non-compliance [147]. - MKD's products are subject to consumer protection regulations in Taiwan, with potential liabilities for non-compliance affecting business results [148]. Financial and Market Risks - The Company received a deficiency notice from Nasdaq on November 14, 2024, indicating that its Market Value of Publicly Held Shares (MVPHS) was below the required minimum of $15 million for continued listing [153]. - The Company has until May 13, 2025, to regain compliance with the MVPHS Requirement by closing at $15 million or more for a minimum of ten consecutive business days [153]. - On February 10, 2025, the Company received a deficiency letter for not maintaining a minimum bid price of $1.00 per share for its Ordinary Shares, with a compliance period until August 11, 2025 [154]. - The Company was notified on September 19, 2024, that it was no longer in compliance with the minimum Market Value of Listed Securities (MVLS) of $50 million, leading to an application for transfer to the Nasdaq Capital Market [155]. - The transfer of the Company's Ordinary Shares to the Nasdaq Capital Market was approved and took effect on March 25, 2025 [155]. - The Company may need to raise additional funding through dilutive equity investments or conduct reverse stock splits to meet Nasdaq's listing standards [157]. - The Company faces uncertainty regarding the development of an active trading market for its Ordinary Shares, which may affect liquidity and market price [158]. - The Company's share price may be volatile due to actual or perceived changes in financial results and market conditions [160]. - The Company may issue additional ordinary shares or convertible securities without shareholder approval, potentially diluting existing ownership interests [164]. - The Company does not expect to pay any cash dividends in the near future, as it plans to retain most of its available funds for business development and growth [174]. - The Company's Board has complete discretion regarding dividend distribution, which will depend on future operational results, cash flow, and other relevant factors [175]. - The Company is a foreign private issuer and is exempt from certain U.S. securities regulations, which may result in less timely and extensive information being available to shareholders compared to U.S. domestic companies [177][178]. - If the Company loses its foreign private issuer status, it will incur substantial costs to comply with additional regulatory requirements [179]. - The Company may face difficulties for shareholders in protecting their interests due to its incorporation under BVI law, which offers less protection compared to U.S. laws [191][195]. - Shareholders have limited rights under BVI law to inspect corporate documents, which may hinder their ability to obtain necessary information for shareholder actions [194]. - The Company may not have standing to initiate derivative actions in U.S. federal courts, limiting shareholders' ability to seek legal recourse [196]. - The trading market for the Company's securities could be affected by recent market volatility, including high short interest and retail investor interest [171]. - A potential "short squeeze" could lead to price volatility in the Company's Ordinary Shares, which may not correlate with its operating performance [172]. - The Company may publish its results through press releases, but the information provided will be less extensive than that required for U.S. domestic issuers [178]. - The Company is classified as an "emerging growth company" and will remain so until it has total annual gross revenue of at least $1.235 billion or the market value of its shares held by non-affiliates exceeds $700 million [199]. - The Company may take advantage of exemptions from various reporting requirements, which could make its securities less attractive to investors and lead to a less active trading market [203]. - The Company is not subject to regulatory supervision by the Financial Services Commission of the British Virgin Islands, which means shareholders are not protected by regulatory inspections [207]. - The Company anticipates significant legal, accounting, and compliance costs associated with being a public company, which may materially increase its general and administrative expenses [210]. - The Company's ability to service its debt obligations will depend on future operating performance and may require it to take actions that could adversely affect its business [215]. - The market price of the Ordinary Shares is expected to be highly volatile following the business combination with Cetus Capital, influenced by earnings compared to market expectations [217]. - The Company may incur substantial costs from stockholder litigation and regulatory inquiries, which could divert management's attention and adversely affect its operations [209]. - The Company has provisions in its memorandum and articles of association that could impair takeover attempts, potentially depriving shareholders of opportunities to sell shares at a premium [216]. - The Company is required to establish and maintain effective internal control over financial reporting, which may strain its financial and management systems [213]. - The Company may face challenges in attracting and retaining qualified individuals for its board of directors and executive positions due to increased costs of liability insurance [212]. - The company's stock price has experienced extreme fluctuations, which may not correlate with its actual operating performance [218]. - Future sales of shares by shareholders could adversely affect the market price of the company's Ordinary Shares [220]. - The company faces risks related to the inability to maintain its listing on Nasdaq and to recognize anticipated benefits from business combinations [221]. Currency and Interest Rate Risks - The company's revenues and costs are primarily denominated in Renminbi and New Taiwan Dollars, limiting direct foreign exchange risk [496]. - The value of the Renminbi against the U.S. dollar is subject to government policies and international developments, which could lead to significant fluctuations [497]. - Appreciation of the Renminbi against the U.S. dollar could adversely affect the amount received from conversions for operational needs [498]. - The company has not been exposed to material risks from changes in market interest rates but may face such risks in the future [499]. - Investments in fixed and floating rate interest-earning instruments carry interest rate risk, affecting the fair market value and income generation [500].

Financial Performance - Total revenues for the first half of 2024 were US$0.81 million, a decrease of 61.3% from US$2.10 million in the same period of 2023 [2][9] - Gross profit decreased to US$0.07 million with a gross profit margin of 8.2%, down from US$0.32 million and 15.2% respectively in the first half of 2023 [2][16] - Loss from operations increased to US$1.54 million, an increase of 83.4% from US$0.84 million in the same period of 2023 [2][29] - Net loss for the first half of 2024 was US$1.73 million, representing a 77.8% increase from US$0.97 million in the same period of 2023 [2][29] Revenue Breakdown - Sales of manufactured electronic products decreased by US$0.55 million, or 48.1%, from US$1.14 million in the first half of 2023 to US$0.59 million in 2024 [9][10] - Revenues from commissioned processing services fell by US$0.67 million, or 90.3%, from US$0.74 million in 2023 to US$0.07 million in 2024 [10] - Rental income decreased by US$0.05 million, or 27.9%, from US$0.16 million in 2023 to US$0.11 million in 2024 [11] - Other revenues decreased by US$0.03 million, or 44.0%, from US$0.06 million in 2023 to US$0.03 million in 2024 [12] Cost and Expenses - Cost of revenues decreased by US$1.04 million, or 58.2%, from US$1.78 million in the first half of 2023 to US$0.74 million in 2024 [14] - General and administrative expenses increased by US$0.48 million, or 71.7%, from US$0.67 million in 2023 to US$1.15 million in 2024, primarily due to increased professional service fees related to the business combination with Cetus Capital [19] - Research and development expenses slightly decreased by US$0.03 million, or 8.3%, from US$0.38 million in 2023 to US$0.35 million in 2024 [21] Business Developments - The company terminated a key customer relationship in 2024 due to a mismatch in price expectations, leading to a decrease in sales revenue [3] - Following the completion of the business combination with Cetus Capital in July 2024, the management team plans to focus on business and customer development [4][5] - The company is actively seeking new customers and has established cooperation with new clients in the second half of 2024 [10] Financial Position - As of June 30, 2024, the company had accumulated deficits of US$12.62 million and a working capital deficit of US$4.84 million [30] - Total assets decreased from US$9.17 million as of December 31, 2023, to US$8.17 million as of June 30, 2024 [36][37] - Total liabilities increased from US$8.84 million as of December 31, 2023, to US$9.49 million as of June 30, 2024 [37]

Business Combination and Corporate Structure - The Company completed its Business Combination on July 31, 2024, and is now a holding company for MKD and Cetus Capital[20]. - The Company has a 62.36% ownership in MKD Taiwan following the Business Combination[24]. - The Company is authorized to issue a maximum of 100,000,000 shares with a par value of US$0.0001 each[10]. - The Company’s ordinary shares and warrants are listed on Nasdaq under the symbols "MKDW" and "MKDWW," respectively[41]. - The Company has a corporate headquarters in Hsinchu Science Park, Taiwan, and a manufacturing facility in Jiaxing City, Zhejiang Province, PRC[25]. - The Company’s executive officers and directors collectively own 32.40% of the ordinary shares[39]. - The company has a business combination agreement in place, indicating strategic moves towards expansion and potential market growth[66]. Financial Instruments and Shareholder Information - The Company issued a convertible promissory note with a principal amount of RMB35,000,000 (approximately $4.8 million) at an interest rate of 10% per annum, which can be converted into ordinary shares at a price not lower than $2.00[21]. - The convertible note financing closed on August 12, 2024, with additional shares to be issued upon regulatory approval[21]. - As of August 1, 2024, there are 16,788,342 ordinary shares outstanding, including 6,036,875 warrants exercisable at $11.50 per share[35][10]. - As of August 1, 2024, the company had 16,788,342 ordinary shares and 6,036,875 warrants outstanding, with warrants expiring on July 31, 2029[62]. - The Company has not paid any dividends to shareholders and will consider a dividend policy in the future based on financial conditions[51]. Financial Performance and Projections - MKDWELL TECH INC. reported a significant increase in revenue, achieving $150 million for Q2 2024, representing a 25% year-over-year growth[69]. - MKDWELL TECH INC. anticipates a revenue guidance of $180 million for Q3 2024, indicating a projected growth of 20%[69]. - MKDWELL TECH INC. reported a net profit margin of 12% for Q2 2024, an increase from 10% in Q2 2023[69]. - Customer retention rate improved to 85%, up from 80% in the previous quarter, reflecting enhanced user satisfaction[69]. Market Expansion and Investment - The company is investing $10 million in R&D for new product development, focusing on AI-driven technologies[69]. - MKDWELL TECH INC. plans to enter two new international markets by the end of 2024, aiming for a 15% increase in global market share[69]. - The company has completed a strategic acquisition of a smaller tech firm for $25 million, expected to enhance its product offerings[69]. - The company is implementing a new marketing strategy with a budget of $5 million to boost brand awareness and customer engagement[69]. Risk Management and Financial Oversight - The company has not hedged against foreign exchange risks, as its revenues and costs are primarily in Renminbi and New Taiwan Dollars, limiting direct foreign exchange exposure[57]. - The value of the Renminbi against the U.S. dollar is subject to fluctuations due to government policies and international developments, which may impact the company's financial performance[58]. - The company has not been exposed to material risks from changes in market interest rates and has not used derivative financial instruments for interest rate risk management[60]. - The audited consolidated financial statements of MKDWELL Limited and MKDWELL Tech Inc. for the years ended December 31, 2023, and 2022 are incorporated by reference, indicating ongoing financial oversight[65]. - The company is exempt from certain SEC reporting requirements as a foreign private issuer, which may affect the frequency and promptness of its financial disclosures[55]. - The company is subject to the informational requirements of the Exchange Act, necessitating the filing of reports with the SEC[55]. - The company has not disclosed any significant subsidiary information, indicating a focus on its primary operations[56].