Company: MKDWW
Filing Date: 2025-03-13
Form Type: 424B4
Source: 0001493152-25-010187
Chunk: 112

Company: MKDWELL Tech Inc.
Filing Date: 2025-03-13
Form: 424B4
Chunk 112
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 to the business operation, (iv) inventories write-down.

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Our cost of revenues decreased by US$1.04 million, or 58.2% from US$1.78 million for the six months ended June 30, 2023 to US$0.74 million for the six months ended June 30, 2024, which was primarily attributable to a decrease in labor costs with respect to commission processing service.

Gross profit and gross profit margin

Gross profit represents our revenues less cost of revenues. Gross profit margin represents our gross profit as a percentage of our revenues.

Gross profit decreased by US$0.25 million, or 79.0% from US$0.32 million for the six months ended June 30, 2023 to US$0.07 million for the six months ended June 30, 2024, and gross profit margin decrease from 15.2% in the first half of 2023 to 8.2% in the first half of 2024, primarily attributed to the elevated fixed costs associated with labor costs, the company is actively optimizing its workforce to mitigate labor costs.

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.

Our selling expenses remained relatively stable at US$0.11 million for the six months ended June 30, 2023 and 2024. Selling expenses did not decreased in line with revenue because our selling expenses composed of fixed expenses, such as salaries.

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, and (iv) other corporate expenses.

Our general and administrative expenses increased by US$0.48 million, or 71.7% from US$0.67 million for the six months ended June 30, 2023 to US$1.15 million for the six months ended June 30, 2024, which was primarily attributable to the increase of US$0.40 million in professional service fees for the purpose of effecting our business combination with Cetus Capital.

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