Financial Performance - The company completed its initial public offering of 1,380,000 shares at an offering price of $5.00 per share in October 2023[96]. - In the fiscal year ended December 31, 2023, the cost of raw materials accounted for 25% of total revenue, while shipping costs accounted for 5%[105]. - Two customers accounted for nearly 91% of the company's revenues in the fiscal year ended December 31, 2023, compared to nearly 30% in 2022[128]. - The company recorded $248,127 and $1,667,355 as revenue from unearned revenue during the years ended December 31, 2023 and 2022, respectively[115]. - The company’s revenue primarily consists of wholesale and retail sales of vinyl flooring products in the U.S. and Canada[97]. Cost Structure - The company raised product prices to mitigate the impact of rising costs due to inflation and supply chain disruptions[103]. - Direct material costs represent over 90% of the total cost of revenue, indicating high sensitivity to material availability and pricing[98]. - During the fiscal year ended December 31, 2023, three suppliers accounted for 32% of the Company's cost of revenues, a decrease from 68% in 2022[159]. Customer and Supplier Concentration - As of December 31, 2023, five customers accounted for 72% of the Company's accounts receivable, down from 90% in 2022[158]. - As of December 31, 2023, no supplier accounted for over 10% of the Company's accounts payable, compared to one supplier accounting for 10% in 2022[160]. Market Conditions - The company has experienced significant competition in the U.S. and Canada markets, impacting its profitability and market share[102]. - The COVID-19 pandemic has created uncertainties affecting market demand and supply chain stability, which the company continues to evaluate[104]. Financial Management - The company has slowed down investments in low profit-margin products to manage financial risks[103]. - Substantially all of the Company's cash as of December 31, 2023, and 2022, were held by major financial institutions in the PRC, which are considered to have high credit quality[161]. - The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses, which have historically been within management's expectations[162].
Northann (NCL) - 2023 Q4 - Annual Report