Company: NCL
Filing Date: 2025-07-01
Form Type: 10-K
Source: 0001575872-25-000433
Chunk: 89

Company: Northann Corp.
Filing Date: 2025-07-01
Form: 10-K
Item: Item 13
Chunk 89
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MENTS AND CONTINGENCIES

 Capital commitments On July 26, 2021, the Company has contracted Changzhou Wanyuan Construction Engineering Co. to build a second phase of its factory. The amount required in the contract is $5.05 million. Construction is expected to complete in June 2025. As of December 31, 2024, the Group had a commitment for the construction amounted to $4.3 million. Legal proceedings From time to time, the Company may become involved in litigation, claims, and proceedings. The Company evaluates the status of each legal matter and assesses the potential financial exposure. If the potential loss from any legal proceedings or litigation is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimated. As of December 31, 2023 and 2024, based on the information currently available, the Company believes that the loss contingencies that may arise as a result of currently pending legal proceedings are not reasonably possible to have a material adverse effect on the Company’s business, results of operations, financial condition, and cash flows.

18.STOCK SPLIT

 Effective on July 6, 2023, the Company implemented a 2-for-1 reverse stock split of the issued and outstanding shares. Under the reverse split, every two shares of outstanding shares issued and outstanding were automatically converted into one share of ordinary share, with a par value of US$ 0.001 each. Except as otherwise indicated, all information in the consolidated financial statements concerning share and per share data gives retroactive effect to the 2-for-1 reverse stock split. The total number of outstanding common shares immediately before the reverse split was 40,000,000 and immediately after the reverse split was 20,000,000. The total number of outstanding preferred shares immediately before the reverse split was 10,000,000  and immediately after the reverse split was 5,000,000.

19.SECURED BORROWING ARRANGEMENT

 In July 2023, the Company signed a secured borrowing agreement with a financial institution in the United States, in which the Company borrowed $1,000,000 secured by its accounts receivable amounted $1,491,000.  It is scheduled under the agreement that the Company pays $49,700 per week for thirty weeks