UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) For the quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41816 NORTHANN CORP. (Exact name of registrant as specified in its charter) Nevada 88-1513509 (State or other jurisdiction of incorpora ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Northann Corp.'s unaudited consolidated financial statements, including balance sheets, statements of operations, shareholders' deficit, cash flows, and detailed notes on organization and accounting policies [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets as of March 31, 2025, and December 31, 2024, show increased total assets, liabilities, and stockholders' equity despite an accumulated deficit | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $16,494,218 | $13,875,685 | | Total Liabilities | $12,583,269 | $11,276,512 | | Total Stockholders' Equity | $3,910,949 | $2,599,173 | | Cash | $1,866,303 | $245,164 | | Accounts receivable, net | $3,747,662 | $3,106,561 | | Inventory, net | $2,340,949 | $1,995,611 | | Bank borrowings - current | $4,778,357 | $4,699,081 | | Accounts and other payables and accruals | $4,813,041 | $2,600,469 | | Accumulated deficits | $(12,324,547) | $(9,693,818) | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The consolidated statements of operations reveal a significant shift from net income to a substantial net loss for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to decreased revenues and increased operating expenses | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenues | $3,437,727 | $4,595,531 | | Cost of Revenues | $3,047,069 | $3,051,541 | | Gross Profit | $390,658 | $1,543,990 | | Operating Expenses | $2,965,315 | $1,216,009 | | (Loss) Income from Operations | $(2,574,658) | $327,981 | | Net (Loss) Income | $(2,630,729) | $60,033 | | Basic and diluted (loss) earnings per share | $(0.0276) | $0.0065 | - Revenues decreased by **25.2%** year-over-year[13](index=13&type=chunk) - Gross margin declined from **33.6%** in Q1 2024 to **11.4%** in Q1 2025[13](index=13&type=chunk) [Consolidated Statements of Shareholders' Deficit](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Deficit) This statement outlines the changes in stockholders' equity for the periods ended March 31, 2025, and 2024, reflecting the impact of net loss, common stock issuance, and accrued compensation expense on the overall equity balance | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $3,910,949 | $2,599,173 | | Net loss | $(2,630,729) | - | | Issuance of common stock | $3,332,150 | - | | Accrued compensation expense | $816,750 | - | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows detail the cash inflows and outflows from operating, investing, and financing activities, showing a significant increase in cash from financing activities in Q1 2025, which offset the cash used in operating activities | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(1,010,467) | $297,897 | | Net cash used in investing activities | $(149,042) | $(270,242) | | Net cash provided by (used in) financing activities | $3,148,197 | $(641,782) | | Cash at end of period | $1,866,304 | $593,934 | [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited condensed financial statements, covering the company's organizational structure, significant accounting policies, specific balance sheet and income statement items, and other relevant financial information [1. ORGANIZATION AND BUSINESS](index=9&type=section&id=1.%20ORGANIZATION%20AND%20BUSINESS) This note outlines Northann Corp.'s corporate history, including the establishment of various subsidiaries, its initial public offering in October 2023, and recent acquisitions, also highlighting a 'going concern' uncertainty due to a working capital deficit and net cash used in operations - The Company consummated its initial public offering (IPO) on **October 23, 2023**, selling **1,200,000 shares** of common stock at **$5.00 per share**, with underwriters fully exercising an over-allotment option for an additional **180,000 shares**[25](index=25&type=chunk) - In **October and November 2024**, the Company acquired Cedar Modern Limited and Raleigh Industries Limited[26](index=26&type=chunk) - As of **March 31, 2025**, the Company had a working capital deficit of **$2,517,988** and net cash used in operating activities of **$1,010,467**, raising substantial doubt about its ability to continue as a going concern, with management focused on boosting revenue and improving profitability[27](index=27&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the significant accounting policies applied in the preparation of the consolidated financial statements, including the basis of presentation, revenue recognition, income tax accounting, foreign currency translation, and the impact of recently adopted and issued accounting pronouncements - The consolidated financial statements are prepared in accordance with U.S. GAAP and include all subsidiaries, with significant inter-company transactions eliminated[28](index=28&type=chunk) - Revenue for sales of products (hardwood and 3D printed flooring) is recognized at the time of delivery when physical and legal control passes to the customer, with no returns, refunds, or warranties allowed, but minor discounts for complaints are provided as period expenses[33](index=33&type=chunk) - The functional currency of the Company and its subsidiaries is the Chinese Yuan (RMB), with consolidated financial statements presented in U.S. dollars[43](index=43&type=chunk)[45](index=45&type=chunk) - The Company adopted ASU 2023-07, which improves reportable segment disclosure requirements, effective **January 1, 2024**[70](index=70&type=chunk) - The Company is evaluating the impact of ASU 2023-09 (new income tax disclosures, effective after **December 15, 2024**) and ASU 2024-03 (expense disaggregation disclosures, effective after **December 15, 2026**)[71](index=71&type=chunk)[72](index=72&type=chunk) [3. ACCOUNTS RECEIVABLE, NET](index=17&type=section&id=3.%20ACCOUNTS%20RECEIVABLE,%20NET) This note details the gross accounts receivable balance, noting an increase from December 31, 2024, to March 31, 2025, and that no allowance for doubtful accounts was recorded for either period | Metric | March 31, 2025 | December 31, 2024 | | :---------------------- | :------------- | :---------------- | | Gross accounts receivable | $3,747,662 | $3,106,561 | | Total | $3,747,662 | $3,106,561 | | Allowance for doubtful accounts | $0 | $0 | [4. OTHER RECEIVABLES](index=17&type=section&id=4.%20OTHER%20RECEIVABLES) This note presents the balance of other receivables, which primarily consist of deposits and other assets, showing a decrease from December 31, 2024, to March 31, 2025 | Metric | March 31, 2025 | December 31, 2024 | | :------------------ | :------------- | :---------------- | | Deposit and other assets | $29,255 | $74,984 | | Total | $29,255 | $74,984 | [5. INVENTORY, NET](index=17&type=section&id=5.%20INVENTORY,%20NET) This note provides a breakdown of the company's inventory, net, into raw materials and finished goods, indicating an increase in both categories from December 31, 2024, to March 31, 2025 | Metric | March 31, 2025 | December 31, 2024 | | :---------------------- | :------------- | :---------------- | | Raw materials and components | $1,806,220 | $1,517,698 | | Finished goods | $534,729 | $477,913 | | Total Inventories, net | $2,340,949 | $1,995,611 | [6. EQUIPMENT, NET](index=18&type=section&id=6.%20EQUIPMENT,%20NET) This note details the company's equipment, net, including manufacturing and office equipment, and accumulated depreciation, showing a slight decrease in net value due to depreciation | Metric | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Manufacturing equipment | $8,456,138 | $8,315,845 | | Office equipment | $317,438 | $314,748 | | Less: Accumulated depreciation | $4,975,670 | $4,736,159 | | Total Equipment, net | $3,797,906 | $3,894,434 | | Depreciation expenses (3M) | $239,511 | $127,076 | [7. LAND USE RIGHTS, NET](index=18&type=section&id=7.%20LAND%20USE%20RIGHTS,%20NET) This note reports the net value of land use rights and software, after accumulated amortization, and discloses that the land use rights are pledged as collateral for bank loans | Metric | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Land use right | $1,105,071 | $1,087,291 | | Software | $23,544 | $23,154 | | Less: Accumulated amortization | $140,640 | $132,459 | | Total Land use rights, net | $987,975 | $977,986 | - Land use rights at No. 199, Newtag, Wujin District, Changzhou, Jiangsu Province, China, are pledged as collateral for loans from Industrial and Commercial Bank of China Limited[78](index=78&type=chunk) [8. BANK BORROWINGS](index=18&type=section&id=8.%20BANK%20BORROWINGS) This note provides details on the company's current and non-current bank borrowings, including the financial institutions, loan periods, and interest rates, with current borrowings increasing slightly and secured by land use rights | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total current bank borrowings | $4,778,357 | $4,699,080 | | Weighted average interest rate (3M) | 5.72% | 4.71% | | Non-current EIDL Loan | $136,947 | $136,947 | - Short-term bank borrowings are secured by land use rights[79](index=79&type=chunk) [9. BALANCES WITH RELATED PARTY](index=19&type=section&id=9.%20BALANCES%20WITH%20RELATED%20PARTY) This note discloses the balances due to related parties, specifically Lin Li, the Chief Executive Officer and Chairman, for working capital support, noting these borrowings are unsecured, due on demand, and interest-free | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Amount due to related party (Lin Li) | $1,153,203 | $1,416,432 | - Related party borrowings are unsecured, due on demand, and interest-free, used to support the Company's operations[82](index=82&type=chunk)[83](index=83&type=chunk) [10. EQUITY](index=19&type=section&id=10.%20EQUITY) This note describes the company's authorized and outstanding preferred and common stock, including their par values, voting rights, and the impact of a 2-for-1 reverse stock split implemented in July 2023 - The Company is authorized to issue **400,000,000 shares** of common stock (**$0.001 par value**) and **100,000,000 shares** of preferred stock (**$0.001 par value**)[84](index=84&type=chunk)[85](index=85&type=chunk) - Series A Preferred Stock (**10,000,000 shares outstanding**) carries **ten votes per share**, while common stock (**95,464,000 shares outstanding** as of March 31, 2025) carries **one vote per share**, with neither being convertible and Series A Preferred Stock having no dividend rights or liquidation preference over common stock[10](index=10&type=chunk)[84](index=84&type=chunk) [11. INCOME TAXES](index=20&type=section&id=11.%20INCOME%20TAXES) This note details the income tax regulations and rates applicable to the company's operations in the U.S., Hong Kong, and PRC, and provides a reconciliation of the actual tax provision to the U.S. statutory rate, showing no income tax expense for the periods presented - The Company anticipates no material impact on its financial statements from the U.S. Tax Cuts and Jobs Act or the CARES Act[86](index=86&type=chunk) - Hong Kong subsidiaries are subject to a two-tier profits tax system (**8.25%** for the first HKD **2 million**, **16.5%** thereafter), with Benchwick elected for this benefit[87](index=87&type=chunk)[88](index=88&type=chunk) - PRC subsidiaries are subject to a **25%** income tax rate, with net operating losses generally carrying forward for five years[89](index=89&type=chunk) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Total income tax expense | $0 | $0 | | Effective tax rate | 0% | 0% | [12. CHINA CONTRIBUTION PLAN](index=22&type=section&id=12.%20CHINA%20CONTRIBUTION%20PLAN) This note reports the company's contributions to a government-mandated multi-employer defined contribution plan in China, which provides retirement, medical, and other welfare benefits to employees | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------ | :-------------------------------- | :-------------------------------- | | Total contributions | $15,005 | $15,889 | - The Company participates in a government-mandated multi-employer defined contribution plan in China for employee retirement, medical, and welfare benefits[98](index=98&type=chunk) [13. OPERATING LEASE](index=22&type=section&id=13.%20OPERATING%20LEASE) This note provides information on the company's operating leases for office facilities, including right-of-use assets, lease liabilities, and lease expenses, noting the renewal of the California office lease for an additional 36 months | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets | $1,735,972 | $1,822,266 | | Total lease liabilities | $1,735,972 | $1,822,266 | | Operating lease expense (3M) | $108,714 | $8,767 | | Weighted-average remaining lease term | 4.33 years | 4.57 years | | Weighted-average discount rate | 5% | 5% | - The lease for the office facilities at 9820 Dino Drive, Suite 110, Elk Grove, California, was renewed for an additional **36 months**[99](index=99&type=chunk) [14. CONCENTRATIONS AND CREDIT RISK](index=23&type=section&id=14.%20CONCENTRATIONS%20AND%20CREDIT%20RISK) This note discusses the company's concentrations of revenue and accounts receivable among a few key customers, as well as concentrations of cost of revenues among suppliers, and addresses credit risk related to cash holdings and accounts receivable - Two customers accounted for approximately **74%** of revenues for the three months ended March 31, 2025, and **81%** for the same period in 2024[103](index=103&type=chunk) - Five customers accounted for **41%** of accounts receivable as of March 31, 2025, and **84%** as of December 31, 2024[104](index=104&type=chunk) - Five suppliers accounted for a total of **73%** of the Company's cost of revenues for the three months ended March 31, 2025[106](index=106&type=chunk) - Substantially all of the Company's cash is held by major financial institutions in the PRC, Hong Kong, and the United States, which management believes are of high credit quality[107](index=107&type=chunk) [15. CAPITAL COMMITMENTS](index=24&type=section&id=15.%20CAPITAL%20COMMITMENTS) This note discloses a significant capital commitment for the construction of a second phase of the company's factory in China - The Company has contracted Changzhou Wanyuan Construction Engineering Co. to build a second phase of its factory for **$10 million**, expected to be approximately **250,000 square feet** and take about one and a half years to complete[109](index=109&type=chunk) [16. STOCK SPLIT](index=24&type=section&id=16.%20STOCK%20SPLIT) This note informs about a 2-for-1 reverse stock split implemented on July 6, 2023, which retroactively adjusted all share and per share data presented in the financial statements - Effective **July 6, 2023**, the Company implemented a **2-for-1 reverse stock split**, converting every two outstanding shares into one ordinary share, with all share and per share data in the consolidated financial statements retroactively restated[110](index=110&type=chunk) [17. SECURED BORROWING ARRANGEMENT](index=24&type=section&id=17.%20SECURED%20BORROWING%20ARRANGEMENT) This note details a secured borrowing agreement from July 2023 and a new EB-5 loan agreement entered into in January 2025 with the controlling shareholder - In **July 2023**, the Company borrowed **$1,000,000** under a secured borrowing agreement, collateralized by **$1,491,000** in accounts receivable, with weekly repayments of **$49,700** over thirty weeks[111](index=111&type=chunk) - On **January 21, 2025**, 3D PRINTING entered into an EB-5 loan agreement with Lin Li, the Chairman and controlling shareholder, for an initial maximum principal amount of **$24,000,000** at an interest rate of **1.00%** per year[112](index=112&type=chunk) [18. SUBSEQUENT EVENT](index=24&type=section&id=18.%20SUBSEQUENT%20EVENT) This note states that no material subsequent events occurred between March 31, 2025, and the report issuance date of July 16, 2025, other than those already disclosed within the financial statements - No material subsequent events to disclose between **March 31, 2025**, and **July 16, 2025**, other than those already presented[113](index=113&type=chunk) [19. UNRESTRICTED NET ASSETS](index=25&type=section&id=19.%20UNRESTRICTED%20NET%20ASSETS) This note provides condensed financial information for Northann Corp. (parent only) and discusses the concept of restricted net assets, highlighting potential restrictions on the transfer of assets from Chinese operating subsidiaries due to foreign exchange control policies | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Assets (Parent only) | $16,494,218 | $13,875,685 | | Total Liabilities (Parent only) | $12,583,269 | $11,276,512 | | Total Stockholders' Equity (Deficit) (Parent only) | $3,910,949 | $2,599,173 | | Net (loss) income – Consolidated | $(2,630,728) | $60,035 | - The ability of Chinese operating subsidiaries to pay dividends or transfer assets to the parent company may be restricted due to foreign exchange control policies and the availability of cash balances[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and results of operations for the three months ended March 31, 2025, compared to the same period in 2024, focusing on revenue, gross profit, operating expenses, and liquidity [Results of Operations](index=27&type=section&id=Results%20of%20Operations) The results of operations show a significant decline in revenue and gross profit for the three months ended March 31, 2025, compared to 2024, coupled with a substantial increase in operating expenses, leading to a net loss | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Revenues | $3,437,727 | $4,595,531 | -25.2% | | Cost of revenues | $3,047,069 | $3,051,541 | -0.1% | | Gross profit | $390,658 | $1,543,990 | -74.7% | | Gross margin | 11.4% | 33.6% | -22.2 pp | | Selling expenses | $1,021,999 | $218,375 | +368.0% | | General and administrative expenses | $1,481,255 | $485,037 | +205.4% | | Research and development expenses | $462,062 | $512,597 | -9.9% | | Net (loss) income | $(2,630,729) | $60,033 | N/A (shift to loss) | - The decrease in gross margin was primarily due to higher purchase prices of raw materials[123](index=123&type=chunk) - The increase in selling expenses was mainly caused by a **$506,250** increase in share-based compensation[124](index=124&type=chunk) - The increase in general and administrative expenses was mainly caused by a **$640,125** increase in service fees for legal, auditing, and other professional services[125](index=125&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position and sources of funding, noting a significant increase in cash at period-end primarily due to financing activities, with management believing current liquidity is sufficient for the next twelve months but acknowledging potential needs for additional capital | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash at period end | $1,866,303 | $593,934 | | Net cash (used in) provided by operating activities | $(1,010,467) | $297,897 | | Net cash used in investing activities | $(149,042) | $(270,242) | | Net cash provided by (used in) financing activities | $3,146,197 | $(641,782) | - The net cash provided by financing activities for the three months ended March 31, 2025, was primarily due to the issuance of **40,000,000 common stock**[135](index=135&type=chunk) - Management believes current cash and cash flows from operations will be sufficient for at least the next twelve months, but may seek additional debt or equity for future investment or acquisition opportunities[129](index=129&type=chunk) [Contractual Obligations](index=29&type=section&id=Contractual%20Obligations) This section briefly outlines the company's contractual obligations, primarily consisting of an operating lease for its corporate office and equipment - The Company's subsidiary NDC has an operating lease for its corporate office and equipment, with lease expenses of **$8,767** for both the three months ended March 31, 2025, and 2024[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a 'smaller reporting company,' Northann Corp. is not required to provide quantitative and qualitative disclosures about market risk under Item 229.10(f)(1) of Regulation S-K - The Company is a 'smaller reporting company' and is therefore not required to make disclosures under this item[138](index=138&type=chunk) [Item 4. Control and Procedures](index=30&type=section&id=Item%204.%20Control%20and%20Procedures) The company's management, including the Chief Executive Officer and Interim Chief Financial Officer, concluded that its disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting occurring during the fiscal quarter - The Company's disclosure controls and procedures were evaluated and deemed effective as of **March 31, 2025**[139](index=139&type=chunk) - No material changes in the Company's internal control over financial reporting occurred during the fiscal quarter covered by this report[140](index=140&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no legal proceedings to report for the company - No legal proceedings to report[143](index=143&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Northann Corp. is not required to provide disclosures regarding risk factors under this item - Not applicable as the company is a 'smaller reporting company'[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section indicates that there are no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities to report - None to report[145](index=145&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no defaults upon senior securities to report for the company - None to report[146](index=146&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that the disclosure requirements for mine safety are not applicable to the company - Not applicable[147](index=147&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - None to report[148](index=148&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report, including various certifications and XBRL documents - Includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[150](index=150&type=chunk) - Includes Inline XBRL Instance Document and Taxonomy Extension Documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[150](index=150&type=chunk) - Includes Cover Page Interactive Data File (Exhibit 104)[150](index=150&type=chunk) SIGNATURES [SIGNATURES](index=33&type=section&id=SIGNATURES) This section confirms the official signing of the Quarterly Report on Form 10-Q by the company's Chief Executive Officer and Interim Chief Financial Officer on July 18, 2025 - The report was duly signed on **July 18, 2025**, by Lin Li, Chief Executive Officer, and Sunny S. Prasad, Interim Chief Financial Officer[152](index=152&type=chunk)[153](index=153&type=chunk)

Company Overview - Northann Corp. is a leader in additive manufacturing and 3D printing technologies for the building materials industry, founded in 2022 and headquartered in Fort Lawn, South Carolina [2] - The company offers innovative flooring, decking, and other construction products through its flagship brand, Benchwick [2] - Northann holds a robust portfolio of over 60 granted or pending patents, highlighting its commitment to innovation and sustainability [2] Financial Disclosure - Northann Corp. disclosed in its annual report on Form 10-K for the fiscal year ended December 31, 2024, that the audit opinion contained a going concern qualification from its independent registered public accounting firm [1] - This announcement was made to comply with NYSE American Company Guide Sections 401(h) and 610(b), requiring separate disclosure of such audit opinions [1] - The announcement does not represent any change or amendment to the company's 2024 audited financial statements or its 2024 annual report on Form 10-K [1]

PART I [ITEM 1. BUSINESS](index=6&type=section&id=ITEM%201.%20BUSINESS) Northann Corp. aims to be a global one-stop decorating solutions provider, leveraging 3D printing for innovative, eco-friendly vinyl flooring and decorative products under the 'Benchwick' brand - Northann Corp.'s vision is to become a world-class one-stop decorating solutions provider, focusing on additive manufacturing (3D printing) for innovative building solutions[19](index=19&type=chunk)[20](index=20&type=chunk) Revenue Breakdown by Product Type (FY2024 vs. FY2023) | Product Type | FY2024 Revenue Share | FY2023 Revenue Share | | :------------- | :------------------- | :------------------- | | Vinyl Flooring Products & Other Decorative Panels | 94.8% | 86.2% | Revenue Breakdown by Geographic Region (FY2024 vs. FY2023) | Region | FY2024 Revenue Share | FY2023 Revenue Share | | :------- | :------------------- | :------------------- | | United States | 100% | 98.2% | | Canada | 0% | 1.3% | | Europe | 1.3% | 0.5% | - The company's subsidiaries (NBS, NCP, Crazy Industry) own a portfolio of over **80 granted, pending, or published patents** on 3D printing technology for decorative products[20](index=20&type=chunk)[77](index=77&type=chunk)[90](index=90&type=chunk) - Northann is establishing a new 3D printing manufacturing facility in Fort Lawn, South Carolina, with an expected cost of **$24 million**, financed partly by a **$24 million EB-5 loan** from a related party (3DFLOR OPPORTUNITY, LP), aiming to reduce logistics costs, tariffs, and improve brand recognition, with manufacturing expected to start in June 2025[34](index=34&type=chunk)[36](index=36&type=chunk)[100](index=100&type=chunk) - The company acquired Cedar Modern Limited and Raleigh Industries Limited in October and November 2024, respectively, through the issuance of common stock, to expand sales[41](index=41&type=chunk)[43](index=43&type=chunk) - The Oneflow Private Placement, closed on March 31, 2025, involved the issuance of **40,000,000 shares of common stock**, reducing CEO Lin Li's voting power from a majority to **44.3%**, causing the company to cease qualifying as a 'controlled company' under NYSE American rules[59](index=59&type=chunk)[60](index=60&type=chunk) - The company dismissed WWC, P.C. as its independent registered public accounting firm on May 24, 2025, and appointed LAO Professionals on May 29, 2025[68](index=68&type=chunk)[71](index=71&type=chunk) - NBS has developed 'Envision,' a patent-approved AI learning system capable of generating decorative patterns for floor, wall, and ceiling panels, aiming to save design time and cost while offering more customization options[88](index=88&type=chunk)[101](index=101&type=chunk)[124](index=124&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks, including reliance on subsidiary dividends, exchange rate fluctuations, and potential adverse impacts from U.S. trade policies on imports from China - The company is a holding company and relies on dividends from its subsidiaries, which could be limited by debt restrictions or tax implications, affecting its ability to pay expenses or dividends to stockholders[134](index=134&type=chunk)[135](index=135&type=chunk) - The company's financial statements contain an explanatory paragraph regarding substantial doubt about its ability to continue as a going concern due to a working capital deficit and limited net cash from operating activities[140](index=140&type=chunk)[207](index=207&type=chunk) - Recent U.S. trade policies, including reciprocal tariffs (e.g., **65% on imports from China** as of April 9, 2025), are likely to significantly reduce imported goods volume and could materially reduce sales in primary markets, impacting the company's business and results of operations[183](index=183&type=chunk)[184](index=184&type=chunk) Major Customer Concentration (FY2024 vs. FY2023) | Fiscal Year | Number of Major Customers | Total Revenue Accounted For | | :------------ | :------------------------ | :-------------------------- | | 2024 | 2 | 76.61% | | 2023 | 2 | 91% | Major Supplier Concentration (FY2024 vs. FY2023) | Fiscal Year | Number of Major Suppliers | Total Cost of Revenues Accounted For | | :------------ | :------------------------ | :----------------------------------- | | 2024 | 3 | 38.58% | | 2023 | 3 | 32% | - The company's common stock may be delisted or prohibited from trading on a national exchange under the HFCA Act if the PCAOB is unable to inspect its auditors for two consecutive years, although its current auditor is U.S.-based and subject to PCAOB inspection[218](index=218&type=chunk)[221](index=221&type=chunk)[226](index=226&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=53&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) This section states that there are no unresolved staff comments applicable to the company - Not applicable[248](index=248&type=chunk) [ITEM 1C. CYBERSECURITY](index=53&type=section&id=ITEM%201C.%20CYBERSECURITY) Northann Corp. manages cybersecurity risks through continuous monitoring, security assessments, and enhancements to protect its systems and data - The company continuously monitors its information systems to assess, identify, and manage cybersecurity risks, utilizing routine security assessments and security measure enhancements[249](index=249&type=chunk) - Cybersecurity risks associated with third-party service providers are managed through vendor management processes and cybersecurity risk evaluation during vendor selection[250](index=250&type=chunk) - Management, led by the CEO, is responsible for identifying and assessing cybersecurity risks, with the Board of Directors providing overall risk management oversight[252](index=252&type=chunk)[253](index=253&type=chunk) - The company has not experienced any cyber incidents that have materially affected its business or financial condition[251](index=251&type=chunk) [ITEM 2. PROPERTIES](index=53&type=section&id=ITEM%202.%20PROPERTIES) Northann Corp. operates manufacturing facilities in Changzhou, China, with land use rights until 2064/2065, and a new U.S. headquarters and manufacturing facility in South Carolina - NCP's manufacturing facilities in Changzhou, China, cover **47,500 square meters**, with land use rights until 2064 and 2065[254](index=254&type=chunk) - The China facilities house **88 units of 3D printing equipment**, with a production capacity exceeding **18,000 square meters of vinyl flooring per day**[104](index=104&type=chunk)[254](index=254&type=chunk) - A second phase of the factory in China, costing **$5.39 million**, is under construction and expected to complete in June 2025, adding approximately **250,000 square feet**[255](index=255&type=chunk) - The company leased a **106,610 square foot facility** in Fort Lawn, South Carolina, starting November 1, 2024, which includes office and industrial space, and relocated its headquarters there in December 2024[256](index=256&type=chunk)[257](index=257&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=54&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Northann Corp. has faced minor legal issues, including environmental penalties in China and an ongoing breach of contract claim by its subsidiary NDC - In May 2022, NCP received administrative penalties of approximately **$36,782** from the Changzhou Bureau of Ecology and Environment for environmental violations related to exhaust gas and wastewater discharge, which were paid in full[259](index=259&type=chunk) - In November 2024, NDC commenced legal proceedings against Ocean Networking and International Trading, LLC for breach of contract, with the claim currently ongoing[260](index=260&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=54&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that mine safety disclosures are not applicable to the company - Not applicable[261](index=261&type=chunk) PART II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=55&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Northann Corp.'s common stock trades on the NYSE American under 'NCL', with 14 record shareholders as of June 30, 2025, and no dividends planned - Northann Corp.'s common stock is quoted on the NYSE American under the symbol **'NCL'**[263](index=263&type=chunk) Common Stock Information | Metric | Value | | :-------------------- | :------------------- | | Closing Price (June 27, 2025) | $0.1732 | | Shareholders of Record (June 30, 2025) | 14 | | Common Stock Outstanding (June 30, 2025) | 95,464,400 shares | | Series A Preferred Stock Outstanding (June 30, 2025) | 5,000,000 shares | - The company does not intend to pay dividends for the foreseeable future, planning to retain earnings for business operations and expansion[264](index=264&type=chunk)[232](index=232&type=chunk) - The IPO in October 2023 generated **$6,000,000 in gross proceeds**, which have been used for general corporate and working capital purposes[265](index=265&type=chunk)[266](index=266&type=chunk) - There were no repurchases of the company's securities during the year ended December 31, 2024[267](index=267&type=chunk) [ITEM 6. [RESERVED]](index=55&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information - This item is reserved[268](index=268&type=chunk) [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=56&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Northann Corp.'s FY2024 financial performance showed increased revenues and gross profit but a net loss, with ongoing 'going concern' uncertainty due to working capital deficit - The company's revenue mainly consists of wholesale and retail of vinyl flooring products, primarily marketed and sold in the United States and Canada[277](index=277&type=chunk) - Key factors affecting results include innovation, client payment default risks, growth management, brand recognition, labor/raw material costs, competition, and rising inflation[279](index=279&type=chunk) - Revenue is recognized when customers obtain control of promised goods, typically at the time of delivery, with no provisions for returns, refunds, or warranties in contracts[281](index=281&type=chunk)[282](index=282&type=chunk) Key Financial Highlights (FY2024 vs. FY2023) | Metric | FY2024 (USD) | FY2023 (USD) | Change (USD) | Change (%) | | :-------------------------------- | :----------- | :----------- | :----------- | :--------- | | Revenues | 15,349,854 | 13,971,729 | 1,378,125 | 10.0% | | Cost of Revenues | 11,351,170 | 12,744,474 | (1,393,304) | (10.9%) | | Gross Profit | 3,979,826 | 1,214,364 | 2,765,462 | 227.7% | | Gross Margin | 25.9% | 8.7% | 17.2% | - | | Selling Expenses | 1,071,633 | 1,158,467 | (86,834) | (7.5%) | | General & Administrative Expenses | 3,798,777 | 2,920,303 | 878,474 | 30.1% | | Research & Development Expenses | 783,356 | 1,899,299 | (1,115,943) | (58.8%) | | Loss from Operations | (1,673,940) | (4,763,705) | 3,089,765 | (64.9%) | | Impairment Loss on Goodwill | 2,507,455 | - | 2,507,455 | - | | Net Loss | (4,379,875) | (7,132,573) | 2,752,698 | (38.6%) | | Total Comprehensive Loss | (2,556,422) | (7,138,523) | 4,582,101 | (64.2%) | - The company recognized an impairment charge of **$2,507,455** on goodwill in FY2024, resulting from the acquisitions of Cedar Modern Limited and Raleigh Industries Limited[303](index=303&type=chunk) Cash Flow Summary (FY2024 vs. FY2023) | Cash Flow Type | FY2024 (USD) | FY2023 (USD) | | :-------------------------------- | :----------- | :----------- | | Net cash provided by (used in) operating activities | (1,233,491) | (4,678,716) | | Net cash used in investing activities | (296,363) | - | | Net cash (used in) provided by financing activities | (1,186,585) | 5,376,489 | - As of December 31, 2024, the company had a working capital deficit of **$5,781,202** and net cash provided by operating activities of **$243,506**, raising substantial doubt about its ability to continue as a going concern[207](index=207&type=chunk)[445](index=445&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=65&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a 'smaller reporting company,' Northann Corp. is not required to provide extensive market risk disclosures but highlights significant credit risk concentrations in cash, accounts receivable, and supplier relationships - The company is a 'smaller reporting company' and is not required to provide extensive market risk disclosures[321](index=321&type=chunk) Customer Concentration of Revenues and Accounts Receivable (FY2024) | Metric | Percentage | | :-------------------- | :----------- | | Two major customers accounted for | ~72% of revenues | | Five customers accounted for | 94% of accounts receivable | Supplier Concentration of Cost of Revenues and Accounts Payable (FY2024) | Metric | Percentage | | :-------------------- | :----------- | | Five suppliers accounted for | 48% of cost of revenues | | One supplier accounted for | >10% of accounts payable | - Credit risk is concentrated in cash held by major financial institutions in the PRC, Hong Kong, and the United States, and in accounts receivable, for which the company performs ongoing credit evaluations[319](index=319&type=chunk)[320](index=320&type=chunk)[541](index=541&type=chunk)[542](index=542&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=65&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section refers to the company's financial statements and supplementary data, which are provided in pages F-1 through F-26 of the Annual Report on Form 10-K - Financial statements and supplementary data are located in pages F-1 through F-26 of the Annual Report[322](index=322&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=65&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) This section states that there were no changes in or disagreements with accountants on accounting and financial disclosure - None[323](index=323&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=65&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Northann Corp.'s management concluded that its disclosure controls and procedures were not effective as of December 31, 2024, due to a material weakness in internal control over financial reporting - As of December 31, 2024, the company's disclosure controls and procedures were deemed **not effective** at the reasonable assurance level[325](index=325&type=chunk) - A material weakness in internal control over financial reporting was identified, stemming from insufficient staffing and a lack of formalized policies and procedures for accounting and financial reporting, which hindered timely management review and approval of financial information[328](index=328&type=chunk) - The company, as a smaller reporting company, is not subject to attestation by its registered public accounting firm regarding the effectiveness of its internal control over financial reporting[330](index=330&type=chunk) - There were no changes in internal control over financial reporting during the year ended December 31, 2024, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[331](index=331&type=chunk) [ITEM 9B. OTHER INFORMATION](index=66&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) This section reports that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during 2024[332](index=332&type=chunk) [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](index=66&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This section states that there are no disclosures regarding foreign jurisdictions that prevent inspections - None[333](index=333&type=chunk) PART III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=67&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Northann Corp.'s executive team includes Lin Li (Chairman, CEO), Sunny S. Prasad (Interim CFO), and Kurtis W. Winn (COO), with a five-member Board of Directors Executive Officers and Directors | Name | Age | Position | | :------------------ | :-- | :--------------------------------------------------- | | Lin Li | 45 | Chairman of the Board, Chief Executive Officer, President, Secretary, Treasurer | | Sunny S. Prasad | 51 | Interim Chief Financial Officer | | Kurtis W. Winn | 59 | Chief Operating Officer and Director | | Bradley C. Lalonde | 71 | Independent Director; Chair of Audit Committee | | Umesh Patel | 68 | Independent Director; Chair of Compensation Committee | | Jing Zhang | 45 | Independent Director; Chair of Nominating and Corporate Governance Committee | - The Audit Committee consists of Bradley C. Lalonde (Chair), Umesh Patel, and Jing Zhang, all of whom are independent directors, with Bradley C. Lalonde qualified as an audit committee financial expert[344](index=344&type=chunk) - The Compensation Committee consists of Umesh Patel (Chair), Bradley C. Lalonde, and Jing Zhang; the Nomination Committee consists of Jing Zhang (Chair), Bradley C. Lalonde, and Umesh Patel[345](index=345&type=chunk)[346](index=346&type=chunk) - The company has adopted a Code of Ethics and an Insider Trading Policy to promote ethical conduct and compliance[346](index=346&type=chunk)[355](index=355&type=chunk) - Directors did not comply with Section 16(a) beneficial ownership reporting requirements in 2024 due to late filings[357](index=357&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=70&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation for FY2024 included base salaries for Lin Li and Kurtis W. Winn, with no bonuses or stock awards reported for named executive officers Summary Compensation Table (FY2024 vs. FY2023) | Name and Principal Position | Fiscal Year | Salary (US$) | Bonus (US$) | Stock Awards (US$) | All Other Compensation (US$) | Total (US$) | | :-------------------------- | :---------- | :----------- | :---------- | :----------------- | :--------------------------- | :---------- | | Lin Li | 2024 | 120,000 | - | - | - | 120,000 | | | 2023 | 120,000 | - | - | - | 120,000 | | Sunny S. Prasad | 2024 | - | - | - | - | - | | | 2023 | - | - | - | - | - | | David M. Kratochvil | 2024 | 20,000 | - | - | - | 20,000 | | | 2023 | 20,000 | - | - | - | 20,000 | | Kurtis W. Winn | 2024 | 100,000 | - | - | - | 100,000 | | | 2023 | 100,000 | - | - | - | 100,000 | Non-Employee Director Compensation (2024) | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | | :-------------------- | :------------------------------ | :--------------- | :-------- | | Bradley C. Lalonde | 20,000 | 30,000 | 50,000 | | Umesh Patel | 9,058 | 18,750 | 27,808 | | Jing Zhang | - | - | - | | Charles James Schaefer IV | 12,500 | 18,750 | 31,250 | | Scott Powell | 20,000 | 30,000 | 50,000 | - The 2023 Equity Incentive Plan was amended on December 31, 2024, to increase the maximum aggregate number of shares of common stock available for awards from **4,000,000 to 12,000,000**[26](index=26&type=chunk)[27](index=27&type=chunk)[371](index=371&type=chunk)[377](index=377&type=chunk) - As of December 31, 2024, no outstanding equity awards (options or restricted stock units) were reported for the named executive officers[373](index=373&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=76&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) As of June 30, 2025, CEO Lin Li beneficially owned **15.1% of common stock** and **100% of Series A Preferred Stock**, giving him **44.3% of total voting power** Beneficial Ownership as of June 30, 2025 | Name | Common Stock Beneficially Owned (%) | Series A Preferred Stock Beneficially Owned (%) | Percentage of Voting Power (%) | | :------------------------------------ | :-------------------------------- | :------------------------------------------ | :----------------------------- | | Lin Li | 15.1% | 100% | 44.3% | | All Directors and Executive Officers as a Group | 15.1% | 100% | 44.3% | | GAGEONE LLC | 8.4% | - | 5.5% | | LIZAQUEEN ACQUISITION INC. | 8.4% | - | 5.5% | | ONEFLOW LLC | 8.4% | - | 5.5% | | WENJUE WANG | 8.4% | - | 5.5% | | YE MO | 8.4% | - | 5.5% | - Each share of common stock entitles the holder to **one vote**, and each share of Series A Preferred Stock entitles the holder to **ten votes**[393](index=393&type=chunk) Equity Compensation Plan Information (as of December 31, 2024) | Plan Category | Number of securities to be issued upon exercise of outstanding options and restricted stock units | Weighted-average exercise price of outstanding options and restricted stock units | Number of securities remaining available for future issuance under equity compensation plans | | :------------------------------------------ | :----------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | :---------------------------------------------------------------------------------------- | | Equity compensation plans approved by security holders | - | - | 8,000,000 | | Equity compensation plans not approved by security holders | - | - | - | | Total | - | - | 8,000,000 | [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=78&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Northann Corp. engaged in related party transactions, including unsecured, interest-free loans from CEO Lin Li and a **$24 million EB-5 loan** from a related party for a new manufacturing facility - Lin Li, CEO and Chairman, provided unsecured, interest-free loans to the company's subsidiaries for working capital, totaling **$1,062,551 in FY2024** and **$118,883 in FY2023**. The amount due to Lin Li as of December 31, 2024, was **$2,565,494**[402](index=402&type=chunk)[518](index=518&type=chunk) - On January 21, 2025, 3D PRINTING, a subsidiary, entered into an EB-5 loan agreement with 3DFLOR OPPORTUNITY, LP, a related party controlled by Lin Li, for an initial maximum principal amount of **$24,000,000** at **1.00% interest per year**. The loan is intended to finance a new 3D printing manufacturing facility in South Carolina[36](index=36&type=chunk)[403](index=403&type=chunk)[547](index=547&type=chunk)[548](index=548&type=chunk) - The EB-5 loan is secured by a pledge of all **49 million Class A Units** of 3D PRINTING owned by Benchwick LLC, a fully-owned subsidiary of the company, in favor of 3DFLOR[38](index=38&type=chunk)[405](index=405&type=chunk)[550](index=550&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=79&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Northann Corp. changed its independent registered public accounting firm in May 2025, with WWC, P.C. rendering services for FY2024 and FY2023 - WWC, P.C. was dismissed as the independent registered public accounting firm on May 24, 2025, and LAO Professionals was appointed on May 29, 2025[68](index=68&type=chunk)[71](index=71&type=chunk)[407](index=407&type=chunk) Principal Accountant Fees (FY2024 vs. FY2023) | Fee Type | 2024 (USD) | 2023 (USD) | | :--------------- | :--------- | :--------- | | Audit Fees | 135,000 | 165,000 | | Audit-Related Fees | 50,000 | 80,000 | | Tax Fees | - | - | | All Other Fees | - | - | | Total | 145,000 | 245,000 | - The Audit Committee has implemented pre-approval procedures for all audit and permitted non-audit services, with delegation authority to the chairman for interim approvals[407](index=407&type=chunk) PART IV [ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES](index=80&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENTS%2C%20SCHEDULES) This section provides a comprehensive list of exhibits, financial statements, and schedules filed as part of the Annual Report on Form 10-K - The section lists various exhibits, including corporate governance documents (Articles of Incorporation, Bylaws), employment agreements, loan agreements (e.g., EB-5 Loan Agreement), share purchase agreements (e.g., Cedar Modern, Raleigh, Oneflow, X29, Caitlin), and certifications[410](index=410&type=chunk)[411](index=411&type=chunk) [ITEM 16. FORM 10-K SUMMARY](index=81&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This section indicates that no Form 10-K summary is provided - None[412](index=412&type=chunk)

Core Viewpoint - Northann Corp. has stated that it is not aware of any new material developments or pending announcements that may be influencing the recent volatility in its stock trading [1] Group 1: Company Overview - Northann Corp. specializes in 3D printing and manufacturing solutions, positioning itself at the forefront of 3D printing technology [2] - The company focuses on innovation, aiming to push the boundaries of manufacturing and design while delivering high-quality products to a global customer base [2] Group 2: Market Activity - The company has acknowledged recent volatile market activity in the trading of its common stock but has not identified any specific factors contributing to this volatility [1]

Core Viewpoint - Northann Corp. is currently not in compliance with NYSE American's continued listing standards due to delayed filings of its Form 10-K for the year ended December 31, 2024, which was due by April 15, 2025 [1][2] Group 1: Compliance and Filing Status - The company received a Filing Delinquency Notification from NYSE Regulation on April 16, 2025, indicating non-compliance with listing standards [1] - Northann filed a Notification of Late Filing on Form 12b-25 on March 31, 2025, explaining the reasons for the delay in filing the Delinquent Report [2] - The company has a six-month Initial Cure Period to file the Delinquent Report with the SEC, during which it can regain compliance [3] Group 2: Potential Consequences - If Northann fails to file the Delinquent Report within the Initial Cure Period, the NYSE may grant an additional six-month period or commence suspension and delisting procedures [3][4] - The Exchange has the discretion to not provide any cure periods or to truncate them if it deems continued listing inadvisable [4] Group 3: Company Overview - Northann Corp. specializes in 3D-printed flooring solutions, operating under the brand "Benchwick" and utilizing recycled ocean plastics in its manufacturing processes [6] - The company offers a range of proprietary solutions, including Infinite Glass, DSE, TruBevel, and MattMaster, primarily in North America and Europe [6]

Core Viewpoint - Norwegian Cruise Line Holdings Ltd. and its subsidiary NCL Corporation Ltd. have entered into note exchange agreements to exchange existing 5.375% Exchangeable Senior Notes due 2025 for newly issued 0.875% Exchangeable Senior Notes due 2030, along with a cash payment [1][2]. Group 1: Transactions Overview - NCL Corporation Ltd. will exchange $285,425,000 in aggregate principal amount of 2025 Notes for $285,425,000 in newly issued 2030 Notes and a cash payment of $51,624,820 [1]. - The cash payment will be funded by proceeds from a concurrent Equity Offering of 2,708,533 ordinary shares at a price of $19.06 per share [2]. - The closing of these transactions is expected around April 7, 2025, with approximately $164,565,000 of the 2025 Notes remaining outstanding post-transaction [3]. Group 2: Notes Details - The 2030 Notes will be general senior unsecured obligations of NCL Corporation Ltd. and guaranteed by Norwegian Cruise Line Holdings Ltd. [4]. - Holders of the 2030 Notes can exchange them at any time before October 15, 2029, and thereafter until the maturity date, with an initial exchange rate of 38.1570 ordinary shares per $1,000 principal amount [4]. - The initial exchange price of approximately $26.21 per ordinary share represents a premium of about 37.5% over the offering price in the Equity Offering [4]. Group 3: Offering and Placement - Barclays Capital Inc. is acting as the exclusive placement agent for the Equity Offering, which is made under an automatic shelf registration statement filed with the SEC [5]. - The 2030 Notes are issued in a private placement relying on the exemption from registration under the Securities Act of 1933 [6].

Core Insights - Northann Corp. has received effective approval for its S-1 registration statement from the U.S. Securities and Exchange Commission, marking a significant milestone in enhancing shareholder value and expanding its presence in the sustainable building materials industry [1][2][3] Company Updates - The S-1 registration statement allows for the resale of up to 30,084,400 shares of common stock, linked to various strategic agreements, including acquisitions and private placements [2] - The effectiveness of the registration is expected to increase the company's float significantly, leading to greater trading volume and more investment opportunities [3] - Northann is focused on driving growth and innovation in the 3D printing sector while providing sustainable, high-quality solutions [3] - The company relocated its headquarters to Fort Lawn, South Carolina, in December 2024, to enhance the integration of innovation, manufacturing, and distribution operations [4] - Northann Corp. specializes in additive manufacturing and 3D printing technologies for the building materials industry, with a portfolio of over 60 granted or pending patents [6]

Financial Performance - Revenues for the three months ended September 30, 2024, were $2,557,585, a 18.4% increase compared to $2,160,258 for the same period in 2023[5] - Gross profit for the nine months ended September 30, 2024, was $4,073,200, significantly up from $889,668 in the same period of 2023, indicating a substantial improvement in profitability[5] - Net income for the three months ended September 30, 2024, was $496,565, compared to a net loss of $2,921,613 for the same period in 2023, marking a turnaround in financial performance[5] - The company reported a net loss of $440,897 for the nine months ended September 30, 2024, compared to a net loss of $3,433,234 for the same period in 2023, indicating a significant improvement[8] - Net loss decreased to $572,851 for the nine months ended September 30, 2024, from $3,433,234 for the same period in 2023, primarily due to increased revenue and decreased expenses[63] Assets and Liabilities - Total assets increased to $14,559,321 as of September 30, 2024, up from $13,618,710 as of December 31, 2023, representing a growth of approximately 6.9%[4] - Total current liabilities decreased to $11,490,524 as of September 30, 2024, down from $12,855,226 as of December 31, 2023, reflecting improved financial management[4] - Total non-current assets increased to $8,524,687 as of September 30, 2024, from $6,813,835 as of December 31, 2023, reflecting ongoing investments in long-term assets[4] - Total liabilities as of September 30, 2024, were $13,170,164, slightly decreased from $13,210,172 as of December 31, 2023[52] - As of September 30, 2024, the company had a working capital deficit of $5,272,085, raising concerns about its liquidity and ability to meet obligations[10] Equity and Capital - Total stockholders' equity rose to $1,389,157 as of September 30, 2024, up from $582,612 as of December 31, 2023, indicating a strengthening balance sheet[4] - The total additional paid-in capital as of September 30, 2024, was $7,850,526, reflecting the capital raised through the IPO[7] - The company completed its initial public offering (IPO) on October 23, 2023, issuing 1,200,000 shares at an offering price of $5.00 per share, with an additional 180,000 shares sold under the over-allotment option[10] Cash Flow - The company generated net cash provided by operating activities of $345,402 for the nine months ended September 30, 2024, compared to a cash outflow of $1,447,563 for the same period in 2023[8] - Cash from operating activities for the nine months ended September 30, 2024, was $217,000, compared to $333,000 in 2023[54] - Ending cash balance as of September 30, 2024, was $587,000, up from $557,000 in the previous year[54] - Net cash used in investing activities was $348,795 for the nine months ended September 30, 2024, compared to $7,642 for the same period in 2023[64] - Net cash used in financing activities was $1,076,360 for the nine months ended September 30, 2024, compared to net cash provided of $1,291,788 for the same period in 2023[64] Expenses - Research and development expenses increased to $1,272,257 for the nine months ended September 30, 2024, compared to $609,476 in the same period of 2023, highlighting a focus on innovation[5] - Operating expenses for the nine months ended September 30, 2024, were $1,709,858, up from $819,446 in the same period of 2023[53] - General and administrative expenses rose by 130% or $1,427,712 to $2,521,940 for the nine months ended September 30, 2024, largely due to share-based compensation and higher professional service fees[61] - Operating lease expenses for the nine months ended September 30, 2024, were $59,617, significantly higher than $21,506 for the same period in 2023[44] Revenue Recognition - Revenue recognized from unearned revenue during the nine months ended September 30, 2024, was $966,158, compared to $1,178,805 for the same period in 2023[15] - Two customers accounted for 66% of the Company's revenues during the nine months ended September 30, 2024, compared to one customer accounting for 54% in 2023[45] - Revenues increased by 17% or $1,605,128 to $11,042,009 for the nine months ended September 30, 2024, compared to $9,436,881 for the same period in 2023[60] Tax and Compliance - The income tax expense for the nine months ended September 30, 2024, was $2,797, a decrease from $5,769 for the same period in 2023[39] - The effective tax rates were (0.64)% for the nine months ended September 30, 2024, compared to (0.20)% for the same period in 2023[39] - The Company did not accrue any liability, interest, or penalties related to uncertain tax positions for the nine months ended September 30, 2024[16] Other Financial Information - The company has only one major reportable segment in the periods presented[21] - The Company has no investments in financial instruments as of September 30, 2024, and December 31, 2023[23] - The Company is currently assessing the impact of new accounting standards issued by the FASB, including ASU 2023-07 and ASU 2023-09, but does not expect a material impact on consolidated financial statements[25]

Core Viewpoint - Sona Nanotech Inc. is advancing its Targeted Hyperthermia Therapy (THT) for cancer treatment, showcasing its research at the NCL's 20th anniversary symposium and providing updates on its operational activities and preclinical studies [2][3][4]. Company Updates - The Chief Scientific Officer of Sona Nanotech, Dr. Len Pagliaro, is presenting THT at the NCL symposium, highlighting the company's collaboration with leading organizations in nanomedicine [3]. - Sona has successfully closed an over-subscribed equity financing of $3.1 million in September, which will support its ongoing research and development efforts [5]. - Initial preclinical studies have confirmed that Sona's biocompatible gold nanorods (GNRs) are non-toxic and safe, leading to the commissioning of a full dose-escalation study to support a first-in-human early feasibility study planned for 2025 [5][7]. Research and Development - The company is conducting a preclinical study on THT for colorectal cancer at Dalhousie University, with results expected later in November [6]. - Sona's preclinical efficacy data indicates that THT can significantly reduce treated tumors and untreated metastases, prompting the company to pursue regulatory approvals for late-stage solid cancer treatments [7]. - The mechanism of action for THT involves using therapeutic heat delivered by infrared light absorbed by gold nanorods, which stimulates the immune system and enhances drug delivery to tumors [8]. Technology and Innovation - Sona Nanotech's gold nanorods are designed to be free of cetyltrimethylammonium (CTAB), mitigating toxicity risks associated with other gold nanorod technologies [9]. - The company is developing proprietary methods for manufacturing gold nanoparticles, which may be adapted for various medical applications pending regulatory approvals [9].