Company: NCL
Filing Date: 2025-10-24
Form Type: S-1/A
Source: 0001575872-25-000638
Chunk: 27

Company: Northann Corp.
Filing Date: 2025-10-24
Form: S-1/A
Chunk 27
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 in the usual course of business; or |

| 8 |

| ● | the total assets of the Company would be less than the sum of the total liabilities of the Company plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our Articles of Incorporation. |

According to the Limited Liability Company Act of Delaware, in general, each of NBS, Benchwick LLC, and 3D PRINTING may make a distribution to its stockholders to the extent, after giving effect to the distribution, all liabilities of such entity, other than liabilities to its stockholders on account of its stockholder’s membership interests in such entity, do not exceed the fair value of the assets such entity. According to the California General Corporation Law, Dotfloor and NDC may make a distribution to their stockholders if the retained earnings of each of Dotfloor and NDC equal at least the amount of the proposed distribution. The California General Corporation Law also provides that, in the event that sufficient retained earnings are not available for the proposed distribution, a corporation may nevertheless make a distribution to its stockholders if it meets two conditions, which generally stated are as follows: (i) the corporation’s assets equal at least 1 and 1/4 times its liabilities, and (ii) the corporation’s current assets equal at least its current liabilities or, if the average of the corporation’s earnings before taxes on income and before interest expenses for the two preceding fiscal years was less than the average of the corporation’s interest expenses for such fiscal years, then the corporation’s current assets must equal at least 1 and 1/4 times its current liabilities. Benchwick, Cedar Modern Limited, and Raleigh Industries Limited, our Hong Kong subsidiaries, are permitted, under the laws of Hong Kong, to provide funding to the Company through dividends distribution out of its profits. Under the current practices of the Hong Kong Inland Revenue Department, no tax is payable in Hong Kong in respect of dividends paid to the Company as a Nevada corporation. According to the PRC Company Law and Foreign Investment Law, each of Crazy Industry, Marco, Ringold and NCP, as a foreign invested enterprise, or FIE, is required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common reserve has already accounted for over 50% of its registered capital. These reserves are not