Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 142

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 19
Chunk 142
---
ative”).

Pursuant
to the Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated
by the Business Combination Agreement (the “ Closing”), (i) MKD incorporated MKDMerger1 Inc. on August 1, 2023, a BVI business
company and wholly-owned subsidiary of MKD (“ Merger Sub 1”), for the sole purpose of merging with and into MKD BVI (the “ Acquisition
Merger”) with MKD BVI being the surviving entity and a wholly-owned subsidiary of MKD; (ii) MKD incorporated MKDMerger2 Inc. on
August 1, 2023, a BVI business company and wholly-owned subsidiary of MKD (“ Merger Sub 2”), for the sole purpose of merging
with and into Cetus Capital (the “ SPAC Merger”, and together with the Acquisition Merger, the “ Mergers”; and
the transactions contemplated by the Business Combination Agreement being collectively referred to as the “ Business Combination”),
in which Cetus Capital would be the surviving entity.

On
July 31, 2024 (the “ Closing Date”), MKD BVI consummated the Business Combination pursuant to the Business Combination Agreement
(the “ Reverse Recapitalization”). As a result, Cetus Capital became a wholly owned subsidiary of, and MKD Taiwan became a 62.36

MKDWELL
TECH INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(In
U. S. dollars, except share and per share data)

  ORGANIZATION                          
  AND PRINCIPAL ACTIVITIES - Continued  
 ────────────────────────────────────────

Reverse
Recapitalization - Continued

MKD
was determined to be the accounting acquirer given that MKD effectively controlled the combined entity after the transaction. The transaction
is not a business combination because Cetus Capital was not a business. The transaction is accounted for as a reverse recapitalization,
which is equivalent to the issuance of shares by MKD for the net monetary assets of Cetus Capital, accompanied by a recapitalization.
MKD was determined as the accounting acquirer and the historical financial statements of MKD BVI became MKD’s historical financial
statements, with retrospective adjustments to give effect of the reverse recapitalization. All of the ordinary shares of MKD BVI that
were issued and outstanding immediately prior to the mergers were