Company: MKDWW
Filing Date: 2025-01-23
Form Type: F-1
Source: 0001493152-25-003296
Chunk: 198

Company: MKDWELL Tech Inc.
Filing Date: 2025-01-23
Form: F-1
Chunk 198
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 with customers are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services, reduced by value added tax (“VAT”). To achieve the core principle of this standard, the Company applies the following five steps:

| (i)   | Identification                                                          
 of the contract, or contracts, with the customer                        |
| (ii)  | Identification                                                          
 of the performance obligations in the contract                          |
| (iii) | Determination                                                           
 of the transaction price                                                |
| (iv)  | Allocation                                                              
 of the transaction price to the performance obligations in the contract |
| (v)   | Recognition                                                             
 of the revenue when, or as, a performance obligation is satisfied.      |

The Company’s revenues are generated through (i) sales of manufactured electronic products, (ii) commissioned processing service, (iii) rental income and (iv) others. Each of our significant performance obligations and our application of ASC 606 to our significant revenue arrangements are discussed in further detail below.

Sales of manufactured electronic products

The Company designs and manufactures industrial embedded systems and automotive electronics. The Company enters framework sales contract with customers usually for one year. The framework sales contracts provide the general payment and delivery terms, and specific orders shall be placed to the Company with determined unit price and purchase volume. Payment terms for sales of manufactured electronic products are generally set at one month after the consideration becomes due and payable.

Under the specific order, the Company identifies only one performance obligation of transferring the agreed-upon products. Shipping and handling activities are considered to be fulfillment activities rather than promised services and are not, therefore, considered to be separate performance obligations. The Company provides standard manufacturer’s warranty within the general requirement of industry and PRC law to protect customers from the risk of purchasing defective products. The warranty is not an incremental service to customers as it cannot be purchased separately. Therefore, it is an assurance-type warranty, not a separate performance obligation. The Company’s sales terms provide no right of return outside of a standard quality policy and returns are generally not significant. There was no variable consideration nor financing component. The revenue from sales of manufactured electronic products is recognized at a point in time upon the customer’s acceptance of products at the amount of the determined purchase price on the orders.

Commissioned processing service

The Company provides commissioned processing services to customers and enters into framework contracts with them usually for one year. Customers provide the material and entr