Company: MKDWW
Filing Date: 2025-04-03
Form Type: F-1
Source: 0001641172-25-002610
Chunk: 183

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: F-1
Chunk 183
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) Selling expenses

Selling expenses primarily consist of: (i) salaries and benefits for sales personnel, (ii) freight expenses, (iii) rental and depreciation allocated to selling department, (iv) certain other expenses.

(t) General and administrative expenses

General and administrative expenses primarily consist of: (i) professional service fees, (ii) salaries and benefits for general and administrative personnel, (iii) rental and depreciation allocated to general and administrative department, (iv) idle capacity, and (v) other corporate expenses.

(u) Research and development expenses

Research and development expenses primarily
include (i) salaries and benefits for research and development personnel, (ii) material and supplies expenses in relation to research
and development activities, (iii) rental and depreciation allocated to the research and development department, (iv) certain other expense.

(v) Other income, net

Other income primarily consists of government
subsidies, building repair income, foreign currency exchange gain or loss, and others. Government grants represent cash subsidies received
from the PRC government. Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions
attach to it and the grant will be received. Government grants for the purpose of giving immediate financial support to the Company with
no future related costs or obligation is recognized in the Company’s consolidated statements of operations and comprehensive loss
when the grant becomes receivable.

| F-18 |

MKDWELL TECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In U.S. dollars, except share and per share data)

| 3. | SUMMARY                                        
 OF SIGNIFICANT ACCOUNTING POLICIES - Continued |

(w) Employee benefits

The Company’s subsidiaries in PRC participate in a government mandated, multiemployer, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. PRC labor laws require the entities incorporated in the PRC to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate on the monthly basic compensation of qualified employees. The Company has no further commitments beyond its monthly contribution. Employee social benefits included as expenses in the accompanying consolidated statements of comprehensive loss amounted to US$ 81,888, US$ 153,741 and US$ 149,426for the years ended December 31, 2022, 2023 and 2024, respectively.

(x) Income taxes

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for