Company: MKDWW
Filing Date: 2025-04-15
Form Type: 424B3
Source: 0001641172-25-004780
Chunk: 181

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-15
Form: 424B3
Chunk 181
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 | 1,998,971 |

Advance from customers consists of payments received related to unsatisfied performance obligations at the end of the period. The advance from customers amounted to US$189,193, US$304,489 and US$262,216 as of December 31, 2022, 2023 and 2024, respectively, which was included in the caption “Accrued expenses and other current liabilities”. The amount of revenue recognized during the years ended December 31, 2022, 2023 and 2024 that was previously included in the contract liabilities balance as of December 31, 2021, 2022 and 2023 were US$91,467, US$44,169 and US$46,813, respectively.

| F-17 |

<div align='center'>MKDWELL TECH INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In U.S. dollars, except share and per share data)</div>

| 3. | SUMMARY                                        
 OF SIGNIFICANT ACCOUNTING POLICIES - Continued |

(r) Cost of revenues

Cost of revenues consists primarily of (i)
direct materials, labor costs and manufacturing overheads associated with manufactured electronic products, (ii) direct labor costs and
manufacturing overheads associated with commissioned processing service, (iii) depreciation of leased property, (iv) inventories write-down
and (v) other cost related to the business operation.

(s) Selling expenses

Selling expenses primarily consist of: (i) salaries and benefits for sales personnel, (ii) freight expenses, (iii) rental and depreciation allocated to selling department, (iv) certain other expenses.

(t) General and administrative expenses

General and administrative expenses primarily consist of: (i) professional service fees, (ii) salaries and benefits for general and administrative personnel, (iii) rental and depreciation allocated to general and administrative department, (iv) idle capacity, and (v) other corporate expenses.

(u) Research and development expenses

Research and development expenses primarily
include (i) salaries and benefits for research and development personnel, (ii) material and supplies expenses in relation to research
and development activities, (iii) rental and depreciation allocated to the research and development department, (iv) certain other expense.

(v) Other income, net

Other income primarily consists of government
subsidies, building repair income, foreign currency exchange gain or loss, and others. Government grants represent cash subsidies received
from the PRC government. Government