Company: NCL
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001575872-25-000540
Chunk: 36

Company: Northann Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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 cost of revenues was $5,667,098 for the six months ended June 30, 2025, compared to $6,039,807 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 $320,921 during the six months ended June 30, 2025, and $139,447 during the six 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 -$523,150 for the six months ended June 30, 2025, compared with a gross profit of $2,444,617 for the same period in 2024. Gross margin decreased from 28.8% for the six months ended June 30, 2024 to -10.2% for the six months ended June 30, 2025 due to higher purchase price of our raw material and the higher US tariff included in the purchase price.

4

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 sales operations. Our selling expenses increased by $1,134,150 to $ 1,539,587 for the six months ended June 30, 2025, from $405,437 for the same period in 2024, which was mainly caused by an increase of $816,750 in share-based compensation, an increase in rent of 232,396 resulting from the new US warehouse, an increase in advertising of 51,717, and an increase in freight of 35,853, partly offset by minor decrease in travel.

  Six Months Ended June 30,   2025  2024  Fluctuation   Amount  Proportion  Amount  Proportion  Amount  Proportion Salaries and Social Insurance  160,927   10.45%  160,113   39.49%  814   0.5%Share-based compensation  816,750   53.05%  -   0.00%  816,750   -Freight  77,043   5.00%  41,190   10.16