Company: NCL
Filing Date: 2025-01-29
Form Type: S-1/A
Source: 0001575872-25-000097
Chunk: 32

Company: Northann Corp.
Filing Date: 2025-01-29
Form: S-1/A
Chunk 32
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 ability of its subsidiaries to make dividend payments to the Company, or any tax implications of making dividend payments to the Company, could limit the Company’s ability to pay its expenses or pay dividends to holders of its common stock.

Because Northann Corp. is a holding company, we conduct
substantially all of our business through our subsidiaries in the United States, Hong Kong and China. Northann Corp. may rely on dividends
to be paid by its subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash
distributions to our stockholders, to service any debt we may incur and to pay its operating expenses. If any of the subsidiaries incurs
debt on its behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions
to the Company.

There are no restrictions in our Articles of Incorporation
or Bylaws that prevent the Company from declaring dividends. The Nevada Revised Statutes, however, prohibit the Company
from declaring dividends where, after giving effect to the distribution of the dividend:

| ● | the Company would not be able to pay its debts as they become due in the usual course of business; or |

| ● | the total assets of the Company would be less than the sum of the total liabilities of the Company plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our Articles of Incorporation. |

According to the Limited Liability Company Act of
Delaware, in general, NBS may make a distribution to the Company to the extent, after giving effect to the distribution, all liabilities
of NBS, other than liabilities to the Company on account of the Company’s membership interests in NBS, do not exceed the fair value
of the assets of NBS.

According to the California General Corporation
Law, Dotfloor and NDC may make a distribution to their stockholders if the retained earnings of each of Dotfloor and NDC equal at least
the amount of the proposed distribution. The California General Corporation Law also provides that, in the event that sufficient
retained earnings are not available for the proposed distribution, a corporation may nevertheless make a distribution to its stockholders
if it meets two conditions, which generally stated are as follows: (i) the corporation’s assets equal at least 1 and 1/4 times its
liabilities, and (ii) the corporation’s current assets equal at least its current liabilities