Company: NCL
Filing Date: 2025-11-18
Form Type: 424B3
Source: 0001575872-25-000699
Chunk: 35

Company: Northann Corp.
Filing Date: 2025-11-18
Form: 424B3
Chunk 35
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% |     | $      |   (375,951 | ) |     |            |  (3.4 | )% |

Revenues. Our revenues were $8,689,360
for the nine months ended September 30, 2025, representing a decrease of $2,352,649 or 21.3% from $11,042,009 for the nine months
ended September 30, 2024. The decrease was mainly due to decrease in customer demand and our sales volume in the nine months ended September
30, 2025 as compared to the same period in 2024 as a result of the new US tariff.

Cost of revenues. Our cost of revenues
was $10,653,499 for the nine months ended September 30, 2025, compared to $6,968,809 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 $572,649 during the nine months ended September 30, 2025, and $197,060 during the nine months ended September 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 -$1,964,139
for the nine months ended September 30, 2025, compared with a gross profit of $4,073,200 for the same period in 2024. Gross margin decreased
from 36.9% for the nine months ended September 30, 2024 to -22.6% for the nine months ended September 30, 2025 due to higher purchase
price of our raw material and the higher US tariff included in the purchase price.

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 $7,337,095 to $ 7,901,900 for the nine months ended September 30, 2025, from
$564,805 for the same period in 2024, which was mainly caused by an increase of $6,745,950 in share-based compensation, an increase in
rent of $369,591 resulting from the new US warehouse, an increase in salaries and social insurance of $90