Company: NCL
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001575872-25-000540
Chunk: 32

Company: Northann Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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988,266 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 $215,933 during the three months ended June 30, 2025, and $50,057during the three months ended June 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 -$913,808 for the three months ended June 30, 2025, compared with a gross profit of $900,627 for the same period in 2024. Gross margin decreased from 23.2% for the three months ended June 30, 2024 to -53.6% for the three months ended June 30, 2025 due to the higher purchase price of our raw material and the higher US tariff included in the purchase price.

2

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 $330,526 to $ 517,588 for the three months ended June 30, 2025, from $187,062 for the same period in 2024, which was mainly caused by an increase of $310,500 in share-based compensation, an increase in rent of 93,339 resulting from the new US warehouse, and an increase in freight of 11,089, partly offset by decreases in salaries and social insurance, advertising and travel.

  Three Months Ended June 30,    2025   2024   Fluctuation   Amount  Proportion  Amount  Proportion  Amount  Proportion Salaries and Social Insurance  31,608   6.1%  76,982   41.1%  (45,374)  -58.9%Share-based compensation  310,500   59.9%  -   -  310,500   -Freight  34,039   6.6%  22,950   12.3%  11,089   48.3%Rent  109,109   21.1%  15,770   8.