Company: NCL
Filing Date: 2025-11-18
Form Type: 424B3
Source: 0001575872-25-000699
Chunk: 32

Company: Northann Corp.
Filing Date: 2025-11-18
Form: 424B3
Chunk 32
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 due to increase in customer demand and our sales volume in the three months ended September
30, 2025 as compared to the same period in 2024.

Cost of revenues. Our cost of revenues
was $4,986,401 for the three months ended September 30, 2025, compared to $929,002 for the same period in 2024. Cost of revenues refers
to the cost of material and labor cost; the percentage of direct material was over 90% of the total cost of revenues. We paid tariffs
of $251,728 during the three months ended September 30, 2025, and $57,613 during the three months ended September 30, 2024. The increase
in tariff was mainly due to the new higher US tariff against goods imported from China.

Gross profit and gross margin. Our gross profit was -$1,440,989
for the three months ended September 30, 2025, compared with a gross profit of $1,628,583 for the same period in 2024. Gross margin decreased
from 63.7% for the three months ended September 30, 2024 to -40.6% for the three months ended September 30, 2025 due to the higher purchase
price of our raw material and the higher US tariff included in the purchase price.

Selling expenses. As shown below, our selling
expenses consist primarily of compensation and benefits to our selling department and other expenses incurred in connection with general
sales operations. Our selling expenses increased by $6,202,945 to $ 6,362,313 for the three months ended September 30, 2025, from $159,368
for the same period in 2024, which was mainly caused by an increase of $5,929,200 in share-based compensation, an increase in rent of
$137,195 resulting from the new US warehouse, an increase in salaries and social insurance of $89,858, an increase in advertising of $27,316,
and an increase in freight of $17,349.

| 2 |

|                               |     | Three Months Ended September 30, 
 2025                             
 Amount                           |           |     | Proportion |       |   |     | 2024   
 Amount |         |     | Proportion |       |   |     | Fluctuation 
 Amount      |           |   |     | Proportion |        |   |
|:------------------------------