Company: MKDWW
Filing Date: 2025-02-21
Form Type: F-1/A
Source: 0001493152-25-007784
Chunk: 32

Company: MKDWELL Tech Inc.
Filing Date: 2025-02-21
Form: F-1/A
Chunk 32
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 such proceedings and claims will not have a material adverse effect on MKD’s profitability and consolidated financial position.

Downturns or volatility in general economic conditions could have a material adverse effect on MKD’s business and results of operations.

In recent years, worldwide semiconductor industry sales have tracked the impact of the financial crisis, subsequent recovery and persistent economic uncertainty. Volatile and/or uncertain economic conditions, including inflation and interest rate fluctuations, can adversely impact sales and profitability and make it difficult to plan MKD’s future business activities. The rapid spread of COVID-19 in China dampened growth in 2022, but the gradual recovery from the pandemic and China’s reopening may pave the way for a gradual recovery. China’s annual GDP in 2023 is projected to grow at 5.2% at the beginning of 2023, according to the World Economic Outlook (January 2023)published by International Monetary Fund, However, China’s recovery is slow, in part as a result of unresolved real estate problems, with negative cross-border spillovers. The actual GDP growth rate in the first quarter of 2023 was approximately 4.5%, according to the National Bureau of Statistics of China. The U.S. Federal Reserve’s interest rate hiking from 4.65% to 5.33% between March 2023 and September 2023, the slowdown in the Chinese economy, and youth unemployment rate increasing from 17.3% in January 2023 to 21.3% in June 2023 have all contributed to negatively affect the macroeconomic environment in which MKD operates. MKD’s management believes that such macro-economic trends have contributed to the slowdown in demand for its products and the financial underperformance of MKD in 2023.

To the extent MKD incorrectly plans for favorable economic conditions that do not materialize or take longer to materialize than expected, MKD may face oversupply of its products relative to customer demand. Reduced customer spending may in the future drive MKD and MKD’s competitors, to reduce product pricing, which will result in a negative effect on gross profit. Moreover, volatility in revenue as a result of unpredictable economic conditions may alter MKD’s anticipated working capital needs and interfere with MKD’s short-term and long-term strategies. To the extent that MKD’s sales, profitability and strategies are negatively affected by downturns or volatility in general economic conditions, MKD’s business and results of operations may be materially adversely affected.

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