Company: NCL
Filing Date: 2025-11-18
Form Type: 424B3
Source: 0001575872-25-000699
Chunk: 10

Company: Northann Corp.
Filing Date: 2025-11-18
Form: 424B3
Chunk 10
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 fully understanding and evaluating
its consolidated financial statements.

Basis of Consolidation

The consolidated financial statements include
the financial statements of the Company.

Revenue Recognition

The Company recognizes revenues when its customer
obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange
for those goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify
contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate
the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the
performance obligation.

Revenue for sales of products which are primarily
comprised of hardwood floors and three-dimensional printed flooring are recognized at the time of delivery of the products set forth in
contracts with customers. At the time of delivery, physical and legal control of the asset is passed from the Company to its customer,
at which time the Company believes it has satisfied the single performance obligation to complete a sales transaction in order to recognize
revenue. The Company’s contracts do not allow for returns, refunds, or warranties; however, it is customary in the industry to manufacturers
to ship a small portion of extra product to allow for product quality issues. Also, as matter of good business practice, under very specific
situations, the Company has historically agreed to provide minor discounts to customers who made complaints on products purchased. The
Company has recorded these costs as period expenses when incurred as the Company is not able to reliably estimate such future expenses.

Revenues are recognized when control of the promised
goods or services is transferred to our customers, which may occur at a point in time or over time depending on the terms and conditions
of the agreement, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

| F-6 |

The Company has not incurred any costs to obtain
contracts and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one
year or less.

The Company typically enters into agreements with
its customers where it’s set forth the product to be sold, the price, payment terms, and any antecedent terms such as shipping and
delivery specifications; these terms and conditions are most typically specified in purchase order issued by its customers to the Company.
The Company typically