# EDGAR Filing Document

**Accession Number:** 0001923780
**File Stem:** 0001575872-25-000470
**Filing Date:** 2025-7
**Character Count:** 96548
**Document Hash:** 686ac7c27af49b89e10899fc984ee02d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001575872-25-000470.hdr.sgml**: 20250718

**ACCESSION NUMBER**: 0001575872-25-000470

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 88

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250718

**DATE AS OF CHANGE**: 20250718

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Northann Corp.
- **CENTRAL INDEX KEY:** 0001923780
- **STANDARD INDUSTRIAL CLASSIFICATION:** PLASTICS PRODUCTS, NEC [3089]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 881513509
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41816
- **FILM NUMBER:** 251134814

**BUSINESS ADDRESS:**
- **STREET 1:** 2251 CATAWBA RIVER RD
- **CITY:** FORT LAWN
- **STATE:** SC
- **ZIP:** 29714
- **BUSINESS PHONE:** 916-573-3803

**MAIL ADDRESS:**
- **STREET 1:** 2251 CATAWBA RIVER RD
- **CITY:** FORT LAWN
- **STATE:** SC
- **ZIP:** 29714

?xml version='1.0' encoding='ASCII'? Northann Corp

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

**For the quarterly period ended March 31, 2025** 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from to

Commission File No. 001-41816

NORTHANN CORP. <br> (Exact name of registrant as specified in its charter)

Nevada 88-1513509 <br> (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

c/o Northann Distribution Center Inc. 9820 Dino Drive, Suite 110 Elk Grove, CA 95624 95624 <br> (Address of Principal Executive Offices) (Zip Code)

(916) 573 3803 <br> (Registrant's telephone number, including area code)

N/A <br> (Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| Title of each class | Name of each exchange on which<br>registered |
| Common Stock, $0.001 par value<br> NCL | NYSE American LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

☐

No

☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 

No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻ Accelerated filer ◻ <br> Non-accelerated filer ⌧ Smaller reporting company ⌧ <br> Emerging growth company ⌧

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes 

No 

On

July 15

, 2025, the registrant had 95,464,400 shares of common stock and 5,000,000 shares of Series A Preferred Stock outstanding.

Northann Corp.

Quarterly Report on Form 10-Q

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| [PART I – FINANCIAL INFORMATION](#part1_001_partifinanciali) | [PART I – FINANCIAL INFORMATION](#part1_001_partifinanciali) | [F-1](#part1_001_partifinanciali) |
| [Item 1.](#item1_001_item1financials) | [Financial Statements](#item1_001_item1financials) | [F-1](#item1_001_item1financials) |
|  | [Consolidated Balance Sheets](#balancesheet_001_consolidatedbal) | [F-1](#balancesheet_001_consolidatedbal) |
|  | [Consolidated Statements of Operations and Comprehensive Income (Loss)](#comprehensiveincome_001_consolidatedsta) | [F-2](#comprehensiveincome_001_consolidatedsta) |
|  | [Consolidated Statements of Shareholders' Deficit](#stocholders_001_consolidatedsta) | [F-3](#stocholders_001_consolidatedsta) |
|  | [Consolidated Statements of Cash Flows](#cashflows_001_consolidatedsta) | [F-4](#cashflows_001_consolidatedsta) |
|  | [Notes to Unaudited Condensed Financial Statements](#notes_001_notestounaudite) | [F-5](#notes_001_notestounaudite) |
| [Item 2.](#item2_001_item2management) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#item2_001_item2management) | [2](#item2_001_item2management) |
| [Item 3.](#item3_001_item3quantitati) | [Quantitative and Qualitative Disclosures about Market Risk](#item3_001_item3quantitati) | [5](#item3_001_item3quantitati) |
| [Item 4.](#item4_001_item4controlsan) | [Control and Procedures](#item4_001_item4controlsan) | [5](#item4_001_item4controlsan) |
| [PART II – OTHER INFORMATION](#partII_001_partiiotherinfo) | [PART II – OTHER INFORMATION](#partII_001_partiiotherinfo) | [6](#partII_001_partiiotherinfo) |
| [Item 1.](#item1legal_001_item1legalproce) | [Legal Proceedings](#item1legal_001_item1legalproce) | [6](#item1legal_001_item1legalproce) |
| [Item 1A.](#item1a_001_item1ariskfacto) | [Risk Factors](#item1a_001_item1ariskfacto) | [6](#item1a_001_item1ariskfacto) |
| [Item 2.](#item2unregistered_001_item2unregister) | [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](#item2unregistered_001_item2unregister) | [6](#item2unregistered_001_item2unregister) |
| [Item 3.](#item3defaults_001_item3defaultsup) | [Defaults Upon Senior Securities](#item3defaults_001_item3defaultsup) | [6](#item3defaults_001_item3defaultsup) |
| [Item 4.](#item4mine_001_item4minesafety) | [Mine Safety Disclosures](#item4mine_001_item4minesafety) | [6](#item4mine_001_item4minesafety) |
| [Item 5.](#item5other_001_item5otherinfor) | [Other Information](#item5other_001_item5otherinfor) | [6](#item5other_001_item5otherinfor) |
| [Item 6.](#item6exhibits_001_item6exhibits) | [Exhibits](#item6exhibits_001_item6exhibits) | [7](#item6exhibits_001_item6exhibits) |
| [SIGNATURES](#signature_001_signatures) | [SIGNATURES](#signature_001_signatures) | [8](#signature_001_signatures) |

---

i

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHANN CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In U.S. dollars)

---

| | | |
|:---|:---|:---|
|  | As of<br>March 31, | As of<br>December 31, |
|  | **2025** | **2024** |
|  | (Unaudited) |  |
| ASSETS |  |  |
| CURRENT ASSETS |  |  |
| Cash | $1866303 | $245164 |
| Accounts receivable, net | 3747662 | 3106561 |
| Inventory, net | 2340949 | 1995611 |
| Prepayments | 571423 | 490948 |
| Other receivables and other current assets | 29255 | 74984 |
| Total current assets | 8555592 | 5913268 |
| NON-CURRENT ASSETS |  |  |
| Property, plant and equipment, net | 3797906 | 3894434 |
| Construction in progress | <br>1407743<br>| 1258701 |
| Land use rights, net | 987975 | 977986 |
| Operating lease right-of-use assets, net | 1735972 | 1822266 |
| Security deposits | 9030 | 9030 |
| Total non-current assets | 7938626 | 7962417 |
| TOTAL ASSETS | $16494218 | $13875685<br>|
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| CURRENT LIABILITIES |  |  |
| Bank borrowings - current | <br>4778357<br>| 4699081 |
| Operating lease liabilities, current | 363230 | 355754 |
| Accounts and other payables and accruals | 4813041 | 2600469 |
| Taxes payable | (34251) | 601317 |
| Amounts due to related parties | 1153203 | 1416432 |
| Total current liabilities | 11073580 | 9673053 |
| Bank borrowings – non-current | 136947 | 136947 |
| Operating lease liabilities, – non-current | 1372742 | 1466512 |
| Total non-current liabilities | 1509689 | 1603459 |
| TOTAL LIABILITIES | $12583269 | $11276512<br>|
| COMMITMENTS AND CONTINGENCIES |  |  |
| STOCKHOLDERS' EQUITY |  |  |
| Preferred stock – Series A, $0.001 par value, 100,000,000 shares authorized, 10,000,000 shares issued and outstanding as of March 31, 202<br>5<br> and December 31, 202<br>4<br>| 5000 | 5000 |
| Common stock, $0.001 par value, 400,000,000 shares authorized, <br>95,464,000<br>shares issued and outstanding as of March 31, 202<br>5<br> and<br> 55,464,000 <br>shares issued and outstanding as of<br>December 31, 202<br>4<br>| 95464 | 55464 |
| Subscription receivable | (6175850) | (1375000) |
| Additional paid-in capital | 23580165 | 15487165 |
| Accrued compensation expense | (2110500) | (2927250) |
| Accumulated deficits | (12324547) | (9693818) |
| Accumulated other comprehensive loss | 841217 | 1047612 |
| Total stockholders' equity  | 3910949 | 2599173 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $16494218 | $13875685<br>|

---

The accompanying notes are an integral part of these consolidated financial statements.

NORTHANN CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In U.S. dollars)

---

| | | |
|:---|:---|:---|
|  | Three Months Ended<br>March 31, | Three Months Ended<br>March 31, |
|  | **2025** | **2024** |
|  | (Unaudited) | (Unaudited) |
| REVENUES | $3437727 | $4595531 |
| COST OF REVENUES | 3047069 | 3051541 |
| GROSS PROFIT | 390658 | 1543990 |
| OPERATING EXPENSES |  |  |
| Selling expenses | 1021999 | 218375 |
| General and administrative expenses | 1481255 | 485037 |
| Research and development expenses | 462062 | 512597 |
| Total operating expenses | 2965315 | 1216009 |
| (LOSS) <br>INCOME FROM OPERATIONS<br>| (2574658) | 327981 |
| OTHER INCOME (EXPENSE) |  |  |
| Interest expense | (56056) | (267948) |
| Other expenses | (15) | - |
| Total other expenses | (56070) | (267948) |
| INCOME BEFORE TAXES | (2630729) | <br>60033<br>|
| Income tax expense | - | - |
| **NET (LOSS)** <br>INCOME<br>| (2630729) | <br>60033<br>|
| **Other comprehensive (loss)** <br>income :<br>|  |  |
| Foreign currency translation adjustment | (204395) | 69702 |
| Total comprehensive income | (2835124) | <br>129735<br>|
| Basic and diluted <br>（<br>loss<br>）<br>earnings per share<br>| (0.0276) | $0.0065<br>|
| Weighted average number of shares of common stock outstanding – basic | <br>95464000<br>| <br>20000000<br>|
| Weighted average number of shares of common stock outstanding – diluted | <br>95464000<br>| <br>20000000<br>|

---

The accompanying notes are an integral part of these consolidated financial statements.

NORTHANN CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(In U.S. dollars)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Preferred Stock – <br>Series A | Preferred Stock – <br>Series A | Common Stock | Common Stock |  |  |  |  |  |
|  | Number<br>of shares | Amount | Number<br>of shares | Amount | Subscription<br>receivable | Additional<br>paid in<br>capital | Accumulated<br>deficits | Accumulated<br>other<br>comprehensive<br>loss | Total |
| **Balance, December 31, 2023** | 5000000 | $5000 | <br>21380000<br>| $21380<br>| $(25000) | $6671016 | $(5313943) | $(775841) | $582612 |
| Net income | - | - | - | - | - | - | 60035 |  | 60035 |
| Foreign currency translation adjustment |  |  |  |  |  |  |  | (56144) | $(56144) |
| **Balance, March 31, 2024** | 5000000 | $5000 | <br>21380000<br>| $21380<br>| $(25000) | $6671016 | $(5253908) | $(831985) | $586503 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Preferred Stock – <br>Series A | Preferred Stock – <br>Series A | Common Stock | Common Stock |  |  |  |  |  |
|  | Number<br>of shares | Amount | Number<br>of shares | Amount | Subscription<br>receivable | Additional <br>paid in <br>capital | Accumulated<br>deficits | Accumulated <br>other <br>comprehensive<br>loss | Total |
| **Balance, December 31, 2024** | 5000000 | $5000 | <br>55464000<br>| $55464 | $(1375000) | $12559915 | $(9693818) | $1047612 | $2599173 |
| Net <br>loss<br>| - | - | - | - | - | - | (2630729) | - | (2630729) |
| Issuance of common stock | - | - | 40000000 | 40000 | (4800850) | 8093000 | - | - | 3332150 |
| Acccured compensation expense | - | - | - | - | - | 816750 |  | - | 816750 |
| Foreign currency translation adjustment | - | - | - | - | - | - | - | (206395) | (206395) |
| **Balance, March 31, 2025** | 5000000 | $5000 | 95464000 | $95464 | $(6175850) | $21469665 | $(12324547) | $841217 | $3910949 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

The accompanying notes are an integral part of these consolidated financial statements.

NORTHANN CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In U.S. dollars)

---

| | | |
|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, |
|  | **2025** | **2024** |
|  | (Unaudited) | (Unaudited) |
| Cash flows from operating activities |  |  |
| Net <br>(loss) <br>income<br>| $(2630729) | $60035 |
| Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities: |  |  |
| Allowance for doubtful accounts | - | 13891 |
| Depreciation and amortization | 247692 | 134823 |
| Share-based compensation | 816750 | - |
| Changes in assets and liabilities |  |  |
| Accounts receivable | (641101) | 82315 |
| Other receivables | 45729 | 80056 |
| Prepayments | (80475) | (5865) |
| Inventory | (345338) | (198323) |
| Right of use assets | 86294 | 7707 |
| Accounts payable | 1081442 | (209356) |
| Accruals and other payables | 1200076 | (25608) |
| Unearned revenue | - | 489485 |
| Payroll payable | (64435) | (29909) |
| Taxes payable | (635568) | (97711) |
| Accrued interest | (4510) | 4066 |
| Operating leases | (86294) | (7707) |
| Net cash (used in)<br> provided by <br>operating activities<br>| (1010467) | 297897 |
| Cash flows from investing activities |  |  |
| Payments for construction | (149042) | (270242) |
| Net cash used in investing activities | (149042) | (270242) |
| Cash flows from financing activities |  |  |
| Proceeds from (rep<br>ayment)<br> of <br>b<br>ank Loan<br>| 79276 | (1197287) |
| Payment of secured borrowing arrangement | - | (528495) |
| Amounts<br> (paid to) <br> received from related party<br>| (263229) | 1084000 |
| Issuance of common shares | 3332150 | - |
| Net cash provided by<br> (used in)<br> financing activities<br>| 3148197 | (641782) |
| Effect of exchange rates on cash | (367548) | 102847 |
| Net change in cash and cash equivalents | 1621140 | (511280) |
| Cash at beginning of <br>period<br>| 245164 | 1105214 |
| Cash at end of <br>period<br>| $1866304 | $593934 |
| Supplemental of cash flow information |  |  |
| Cash paid for interest | $51473 | $339821 |
| Cash paid for income taxes | $- | $- |

---

The accompanying notes are an integral part of these consolidated financial statements.

**NOTES TO UNAUDITED** 

CONSOLIDATED FINANCIAL STATEMENTS

**AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2025**

(In U.S. dollars)

1. ORGANIZATION AND BUSINESS

The Company commenced operations in August 2013 with the establishment of Northann Building Solutions LLC. ("NBS") in Delaware. In December 2013, Northann (Changzhou) Construction Products Ltd ("NCP") was established in China. All of its products were manufactured through NCP.

In March 2014, Benchwich Construction Products Ltd ("Benchwick") was established in Hong Kong. All wholesales to distributors are conducted through Benchwick.

In April 2014, Changzhou Macro Merit International Trading Co., Ltd. ("MARCO") was established in China. All the import/export of our products are conducted through MARCO.

In February 2016, Northann Distribution Center Inc. ("NDC") was established in California. NDC is a distribution center in the United States and maintains a small inventory for retail sales.

In September 2017, Changzhou Ringold International Trading Co., Ltd. ("Ringold") was established in China. All of the raw material are procured from third parties through Ringold.

In September 2018, Crazy Industry (Changzhou) Industry Technology Co., Ltd. ("Crazy Industry") was established in China. Crazy Industry is the research and development hub.

In June 2020, Dotfloor Inc. ("Dotfloor") was established in California. Dotfloor operates dotfloor.com, the online store that offers our vinyl flooring products to retail customers in the United States.

In March 2022, Northann Corp. ("Northann"), the current ultimate holding company, was incorporated in Nevada as part of the restructuring transactions in contemplation of our initial public offering. In connection with its incorporation, in April 2022, we completed a share swap transaction and issued common stock and Series A Preferred Stock of Northann to the then existing shareholders of NBS, based on their then respective equity interests held in NBS. NBS then became our wholly owned subsidiary. In accordance to ASC 805-50-30-5 and ASC 805-50-45-1 through 45-5, the series of restructuring transactions have been accounted for as transactions between entities under common control; accordingly, the Company's historical capital structure has been retroactively restated to the first period presented.

On October 23, 2023, the Company consummated the initial public offering (the "IPO") of 1,200,000 shares of common stock, par value $0.001 per share at an offering price of $5.00 per share. On October 25, 2023, the underwriters of the IPO fully exercised the over-allotment option granted by the Company and purchased additional 180,000 shares of Common Stock at $5.00 per share. The closing of the Over-Allotment Option took place on October 26, 2023.

In October and November 2024, the Company acquired Cedar Modern Limited and Raleigh Industries Limited, respectively.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 202

, the Company had a working capital deficit of $

2,517,988

and net cash

used in

operating activities of $

1,010,467

for the three months ended March 31, 202

. The Company may not have adequate liquidity to remain solvent and settle its obligations when payment become due; these factors gave rise to substantial doubt that the Company would continue as a going concern. Management is closely monitoring its financial position, especially its working capital and cash position, as well as its gross profit margins where its positive results of operations will allow the Company to continue as going concern. The company's foremost plan is to boost revenue and improve profitability. These financial statements do not include any adjustments that might result from the outcome of this uncertainly.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries. All significant inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.

Use of Estimates

The preparation of these consolidation financial statements requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Identified below are the accounting policies that reflect the Company's most significant estimates and judgments, and those that the Company believes are the most critical to fully understanding and evaluating its consolidated financial statements.

Basis of Consolidation

The consolidated financial statements include the financial statements of the Company.

Revenue Recognition

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation.

Revenue for sales of products which are primarily comprised of hardwood floors and three-dimensional printed flooring are recognized at the time of delivery of the products set forth in contracts with customers. At the time of delivery, physical and legal control of the asset is passed from the Company to its customer, at which time the Company believes it has satisfied the single performance obligation to complete a sales transaction in order to recognize revenue. The Company's contracts do not allow for returns, refunds, or warranties; however, it is customary in the industry to manufacturers to ship a small portion of extra product to allow for product quality issues. Also, as matter of good business practice, under very specific situations, the Company has historically agreed to provide minor discounts to customers who made complaints on products purchased. The Company has recorded these costs as period expenses when incurred as the Company is not able to reliably estimate such future expenses.

Revenues are recognized when control of the promised goods or services is transferred to our customers, which may occur at a point in time or over time depending on the terms and conditions of the agreement, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

Practical expedients and exemption

The Company has not occurred any costs to obtain contracts and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

The Company typically enters into agreements with its customers where its set forth the product to be sold, the price, payment terms, and any antecedent terms such as shipping and delivery specifications; these terms and conditions are most typically specified in purchase order issued by its customers to the Company. The Company typically recognizes revenue at point in time, which is when physical possession and legal title are transferred to the customer, this may be a shipping port or a specified destination; at this point the Company reasonably expect to paid for the product, or in the event where it was paid advance, the Company's performance obligations have been satisfied and those funds are considered earned by the Company. If the Company sells products on account to customers, they are typically paid within 90 days. Any funds received in advance for the products yet to be transferred to its customer are contract liabilities that are recorded as unearned revenue on the Company's consolidated balance sheets. $

nil

and $

1,573,969

were recognized as revenue from unearned revenue during the three months ended March 31, 202

and 202

.

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Under ASC 740, a tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.

On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted by the U.S. government which included a wide range of tax reform affecting businesses including the corporate tax rates, international tax provisions, tax credits and deduction with majority of the tax provision effective after December 31, 2017. Certain activities conducted in foreign jurisdictions may result in the imposition of U.S. corporate income taxes on the Company when its subsidiaries, controlled foreign corporations ("CFCs"), generate income that is subject to Subpart F or GILTI under the U.S. Internal Revenue Code beginning after December 31, 2017.

The Coronavirus Aid, Relief and Economy Security (CARES) Act ("the CARES Act, H.R. 748") was signed into law on 27 March 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for NOL deductions for 2018-2020 tax years and reinstated NOL carry backs for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The Company does not anticipate a material impact on its financial statements as of March 31, 202

and December 31, 202

due to the recent enactment.

The Company accounts for an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities. The Company considers and estimates interest and penalties related to the gross unrecognized tax benefits and includes as part of its income tax provision based on the applicable income tax regulations.

The Company did not accrue any liability, interest or penalties related to uncertain tax positions in the provision for income taxes line of the consolidated statements of operations for the three months ended March 31, 202

. The Company had no uncertain tax position for the three months ended March 31, 202

and March 31, 202

.

Foreign Currency and Foreign Currency Translation

The functional currency of the Company is the Chinese Yuan ("RMB"), as their functional currencies. An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements.

Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss.

The consolidated financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders' equity accounts are translated using the historical exchange rates at the date the entry to stockholders' equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period's income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the consolidated balance sheets.

Translation of amounts from RMB and HKD into U.S. dollars has been made at the following exchange rates:

---

| | | |
|:---|:---|:---|
| Balance sheet items, except for equity accounts |  |  |
| March 31, 202<br>5<br>| RMB7.1782<br>to $1 | HKD7.7787<br>to $1 |
| December <br>31, 202<br>4<br>| RMB7.0950 to $1 | HKD7.8259 to $1 |
| Income statement and cash flows items |  |  |
| For the three months ended March 31, 202<br>5<br>| RMB7.1723<br>to $1 | HKD7.7774<br>to $1 |
| For the three months ended March 31, 202<br>4<br>| RMB7.1028 to $1 | HKD7.8199 to $1 |

---

Cash

Cash consist of cash on hand and at banks and highly liquid investments, which are unrestricted from withdrawal or use, and which have original maturities of three months or less when purchased.

Accounts Receivable, Net

Accounts receivable is stated at the historical carrying amount net of allowance for doubtful accounts. The Company determines the allowance for doubtful accounts on an individual basis taking into consideration various factors including but not limited to historical collection experience and creditworthiness of the debtors as well as the age of the individual receivables balance.

Additionally, the Company would make specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use judgment in assessing its collectability.

There was no allowance for doubtful accounts recorded as of March 31, 202

and December 31, 202

.

Long-Lived Assets

Long-lived assets consist primarily of equipment and intangible assets.

Equipment

Equipment is recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

Estimated useful lives (years) <br> Office and computer equipment 3-5 <br> Manufacturing equipment 10-20

Expenditure for maintenance and repairs is expensed as incurred.

The gain or loss on the disposal of equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the consolidated statements of comprehensive loss.

Land Use Rights, Net

Land use rights are a form of intangible assets in the PRC. They are recorded at cost less accumulated amortization with no residual value. Amortization of land use rights are computed using the straight-line method over their estimated useful lives.

The estimated useful lives of the Company's land use rights are as listed below:

Estimated useful lives (years) <br> Land use right 50

Impairment of Long-lived Assets

In accordance with ASC 360-10-35, the Company reviews the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets using the projected discounted cash flow method at the asset group level. The estimation of future cash flows requires significant management judgment based on the Company's historical results and anticipated results and is subject to many factors. The discount rate that is commensurate with the risk inherent in the Company's business model is determined by its management. An impairment loss would be recorded if the Company determined that the carrying value of long-lived assets may not be recoverable. The impairment to be recognized is measured by the amount by which the carrying values of the assets exceed the fair value of the assets. No impairment has been recorded by the Company

for the three months ended

March 31, 202

and

March 31

, 202

4. Net earnings per share of common stock

The Company has adopted ASC Topic 260, "Earnings per Share," ("EPS") which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying consolidation financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

---

| | | |
|:---|:---|:---|
|  | March 31, | March 31, |
|  | **2025** | **2024** |
|  | (Unaudited) | (Unaudited) |
| Net <br>(loss) <br>income<br>| $(2630729 | $60035 |
| Weighted average number of shares of common stock outstanding - basic | 95464000 | 21380000<br><sup>\*</sup> |
| Add: potentially dilutive effect of shares issuable upon conversion of notes |  |  |
| Add: potentially dilutive effect of shares issuable upon exercise of warrants |  |  |
| Weighted average number of shares of common stock outstanding - diluted | 95464000 | 21380000<br><sup>\*</sup> |
| Basic and diluted (loss) earnings per share | $(0.028 | $0.003<br>\* |

---

\* Retrospectively restated for the effect of 2-for-1 reverse stock split. (Note 1

6)

Segments

The Company evaluates a reporting unit by first identifying its operating segments, and then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meets the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. The Company has only one major reportable segment in the periods presented. The Company's chief operation decision maker is the Company's Chief Executive Officer.

Shipping and Handling Costs

Outbound shipping and handling costs are expenses as incurred and charged to the selling expense. Inbound shipping and freight are charged for raw material and components are accounted for as cost of revenues.

Fair Value of Financial Instruments

U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in the valuation methodologies in measuring the fair value of financial instruments. This hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three-tier fair value hierarchy is:

Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – include other inputs that are directly or indirectly observable in the market place.

Level 3 – unobservable inputs which are supported by little or no market activity.

The carrying value of the Company's financial instruments, including cash, accounts and other receivables, other current assets, accounts and other payables, and other short-term liabilities approximate their fair value due to their short maturities.

In accordance with ASC 825, for investments in financial instruments with a variable interest rate indexed to performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carried these investments at fair value. Changes in the fair value are reflected in the accompanying consolidated statements of operations and comprehensive loss as other income (expense). To estimate fair value, the Company refers to the quoted rate of return provided by banks at the end of each period using the discounted cash flow method. The Company classifies the valuation techniques that use these inputs as Level 2 of fair value measurements.

As of March 31, 202

and December 31, 202

, the Company had no investments in financial instruments.

Leases

In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases.

The Company adopted ASC Topic 842 using the modified retrospective transition method effective January 1, 2019. There was no cumulative effect of initially applying ASC Topic 842 that required an adjustment to the opening retained earnings on the adoption date nor revision of the balances in comparative periods. As a result of the adoption, the Company recognized a lease liability and right-of-use asset for each of the existing lease arrangement. The adoption of the new lease standard does not have a material impact on the consolidated income statements or the consolidated statements of cash flows.

The Company determines if an arrangement is a lease at inception. The lease payments under the lease arrangements are fixed. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease components from the lease components to which they relate.

Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate, because the interest rate implicit in the leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities.

R

ecently adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023-07. The amendments improve reportable segment disclosure requirements. Main provisions include: (1) significant segment expenses

—

public entities are required to disclose significant segment expenses by reportable segment if they are regularly provided to the CODM and included in each reported measure of segment profit or loss; (2) other segment items

—

public entities are required to disclose other segment items by reportable segment. Such a disclosure would constitute the difference between reported segment revenues less the significant segment expenses (disclosed) less reported segment profit or loss; (3) multiple measures of a segment

'

s profit or loss

—

public entities may disclose more than one measure of segment profit or loss used by the CODM, provided that at least one of the reported measures includes the segment profit or loss measure that is most consistent with GAAP measurement principles; (4) CODM-related disclosures

—

disclosure of the CODM

'

s title and position is required on an annual basis, as well as an explanation of how the CODM uses the reported measure(s) and other disclosures; (5) entities with a single reportable segment

—

public entities must apply all of the ASU

'

s disclosure requirements, as well as all existing segment disclosure and reconciliation requirements in ASC Topic 280, Segment Reporting; (6) recasting of prior-period segment information to conform to current-period segment information

—

recasting is required if segment information regularly provided to the CODM is changed in a manner that causes the identification of significant segment expenses to change. The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023. Early adoption is permitted. A public entity should apply the amendments in this update retrospectively to all prior periods presented in the financial statements. The

Company

adopted this update beginning January 1, 2024.

Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The ASU amends ASC 740-10-50-12 to require public business entities ("

PBEs

") to disclose a reconciliation between the amount of reported income tax expense (or benefit) from continuing operations and the amount computed by multiplying the income (or loss) from continuing operations before income taxes by the applicable statutory federal (national) income tax rate of the jurisdiction (country) of domicile. If PBE is not domiciled in the United States, the federal (national) income tax rate in such entity

'

s jurisdiction (country) of domicile shall normally be used in the rate reconciliation. The amendments prohibit the use of different income tax rates for subsidiaries or segments. Further, PBEs that use an income tax rate in the rate reconciliation that is other than the U.S. income tax rate must disclose the rate used and the basis for using it. The ASU also adds ASC 740-10-50-12A, which requires entities to annually disaggregate the income tax rate reconciliation between the following eight categories by both percentages and reporting currency amounts: (1) State and local income tax, net of federal (national) income tax effect; (2) Foreign tax effects; (3) Effect of changes in tax laws or rates enacted in the current period; (4) Effect of cross-border tax laws; (5) Tax credits; (6) Changes in valuation allowances; (7) Nontaxable or nondeductible items; (8) Changes in unrecognized tax benefits. PBEs must apply the ASU

'

s guidance to annual periods beginning after December 15, 2024 (2025 for calendar-year-end PBEs). Early adoption is permitted. Entities may apply the amendments prospectively or may elect retrospective application. The

Company

is currently evaluating the impact from the adoption of this ASU on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03

"

Income Statement

—

Reporting Comprehensive Income

—

Expense Disaggregation Disclosures (Subtopic 220-40)

"

. The amendments in this update intend to improve the disclosures about a public business entity

'

s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses, and research and development). ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The

Company

is currently evaluating the impact from the adoption of this ASU on its consolidated financial statements.

**3.** ACCOUNTS RECEIVABLE, NET

Accounts receivable consist of the following:

---

| | | |
|:---|:---|:---|
|  | March 31,<br>**2025** | December 31,<br>**2024** |
| Gross accounts receivable | $3747662 | $3106561 |
| Total | $3747662 | $3106561 |

---

There was no allowance for doubtful accounts recorded as of March 31, 202

and December 31, 202

.

**4.** OTHER RECEIVABLES

Other receivables consist of the following:

---

| | | |
|:---|:---|:---|
|  | March 31,<br>2025 | December 31,<br>**2024** |
| Deposit and other assets | 29255 | 74984 |
| Total | $29255 | $74984 |

---

**5.** INVENTORY, NET

Inventories, net, consist of the following:

---

| | | |
|:---|:---|:---|
|  | March 31,<br>**2025** | December 31,<br>**2024** |
| Raw materials and components | $1806220<br>| $1517698 |
| Finished goods | 534729 | 477913 |
| Total | <br>2340949<br>| 1995611 |
| Inventories, net | $2340949<br>| $1995611 |

---

**6.** EQUIPMENT, NET

Equipment, net consist of the following:

---

| | | |
|:---|:---|:---|
|  | March 31,<br>**2025** | December 31,<br>**2024** |
| Manufacturing equipment | $8,<br>456138<br>| $8,<br>315845<br>|
| Office equipment | 31<br>7438<br>| 31<br>4748<br>|
| less: Accumulated depreciation | 4,<br>975670<br>| 4,<br>736159<br>|
| Total | $3797906 | $3894434 |

---

Depreciation expenses charged to the consolidated statements of operations for the

periods

ended March 31, 202

and 202

were $

239,511

and $

127,076

respectively.

**7.** LAND USE RIGHTS, NET

---

| | | |
|:---|:---|:---|
|  | March 31,<br>**2025** | December 31,<br>**2024** |
| Land use right | $11<br>05071<br>| $1,<br>087291<br>|
| Software | 23544 | 23154 |
| less: Accumulated amortization | 1<br>40640<br>| 1<br>32459<br>|
|  | $987975 | $977986 |

---

The Company has pledged its land use rights at No. 199, Newtag, Wujin District, Changzhou, Jiangsu Province, China, 213000 to Industrial and Commercial Bank of China Limited as a collateral for securing its loans.

**8.** BANK BORROWINGS

Current

Short-term loans as of March 31, 202

and December 31, 202

represents bank borrowings of $

4,778,357

and $

4,699,080

, respectively obtained from financial institutions in the PRC. The short-term bank borrowings were secured by land use right. The weighted average interest rate for the short-term loans for the three months ended March 31, 202

and 202

was approximately

5.72 % and 4.71%, respectively.

---

| | | | | |
|:---|:---|:---|:---|:---|
| Bank | Loan period | Interest<br>rate | Balance at<br>March 31,<br>**2025** | Balance at<br>December 31,<br>**2024** |
| Industrial and Commercial Bank of China | June 4, 2024-June 12, 2025 | 4.35% | $1393107<br>| $1369994<br>|
| Industrial and Commercial Bank of China | June 4, 2024-June 10, 2025 | 4.35% | <br>1393107<br>| <br>1369994<br>|
| Jiangnan Rural Commercial Bank | February 28, 2024-February 27, 2025 | <br>4.79% | 1253796 | 1232994 |
| Agricultural Bank of China, Changzhou Zhonglou Sub-branch | July 26, 2024-July 25, 2025 | 3.25% | 738347 | 726097 |
| Total |  |  | $4778357<br>| $4699080 |

---

The loan from Bank of America is secured by the Company's inventory.

Non-current

---

| | | | | |
|:---|:---|:---|:---|:---|
| Bank | Loan period | Interest<br>rate | Balance at<br>March 31,<br>2024 | Balance at<br>December 31,<br>**2024** |
| EIDL Loan | From June 26, 2020 to June 25, 2050 | 3.75% | 136947 | 136947 |
| Total |  |  | $136947 | $136947 |

---

**9.** BALANCES WITH RELATED PARTY

1) Related party transactions

For the three months ended March 31, 202

and 202

, the Company's related party provided working capital to support the Company's operations when needed. The borrowings were unsecured, due on demand, and interest free. The following table summarizes the balances with the Company's related party.

2) Related party balances

---

| | | | | |
|:---|:---|:---|:---|:---|
| Accounts | Name of Related Party | Note | March 31, <br>**2025** | December 31,<br>**2024** |
| Amount due to related party | Lin Li, Chief Executive Officer and Chairman of the Board |  | $1153203 | $1416432 |

---

All the above balances are due on demand, interest-free and unsecured. The Company used the funds for its operations.

**10.** EQUITY

Preferred Stock

The Company is authorized to issue 500,000,000 shares of capital stock, consisting of 400,000,000 shares of common stock, par value US$0.001 per share, and 100,000,000 shares of preferred stock, par value US$0.001 per share. 20,000,000 shares were designated to be series A preferred stock (the "Series A Preferred Stock") out of the 100,000,000 shares of blank check preferred stock. Each share of common stock is entitled to one vote and each share of Series A Preferred Stock is entitled to ten votes on any matter on which action of the stockholders of the corporation is sought. The Series A Preferred Stock will vote together with the common stock. Common stock and Series A Preferred Stock are not convertible into each other. Holders of Series A Preferred Stock are not entitled to receive dividends. The Series A Preferred Stock does not have liquidation preference over the Company's Common Stock, and therefore ranks pari passu with the Common Stock in the event of liquidation.

Common Stock

The Company is authorized to issue 400,000,000 shares of common stock with par value of US$0.001 per share. Each share of common stock entitles the holder to one vote. For the sake of comparability, the share structure as of the date of this report has been carried back in the Company's statement of stockholders' equity as if they had been issued and outstanding from the beginning of the first period presented.

11. INCOME TAXES

United States of America

The Coronavirus Aid, Relief and Economy Security (CARES) Act ("the CARES Act, H.R. 748") was signed into law on March 27, 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for NOL deductions for 2018-2020 tax years and reinstated NOL carrybacks for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The Company does not anticipate a material impact on its financial statements as of March 31, 2025 and December 31, 2024 due to the recent enactment.

Hong Kong

Two-tier Profits Tax Rates

The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (the "Ordinance") of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD 2 million (approximately $257,868) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. The Ordinance only allows one entity within a group of "connected entities" is eligible for the two-tier tax rate benefit. An entity is a connected entity of another entity if (1) one of them has control over the other; (2) both of them are under the control (more than 50% of the issued share capital) of the same entity; (3) in the case of the first entity being a natural person carrying on a sole proprietorship business-the other entity is the same person carrying on another sole proprietorship business. Since Benchwick is wholly owned and under the control of Northann, it is a connected entity. Under the Ordinance, it is an entity's election to nominate the entity that will be subject to the two-tier profits tax rates on its profits tax return. The election is irrevocable. The Company elected Benchwick to be subject to the two-tier profits tax rates.

The provision for current income and deferred taxes of Benchwick has been calculated by applying the new tax rate of 8.25%.

PRC

In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of 25% for the three months ended March 31, 2025 and 2024. According to PRC tax regulations, the PRC net operating loss can generally carry forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred. Carry back of losses is not permitted. If not utilized, the PRC net operating loss will expire in 2026.

The income tax expense was $

nil

and $nil for the three months ended March 31, 2025 and 2024, respectively, related primarily to the Company's subsidiaries located outside of the U.S. The income before provision for income taxes for the three months ended March 31, 2025 and 2024 was as follows:

The income tax provision consists of the following components:

---

| | | |
|:---|:---|:---|
|  | For the three months ended<br>March 31,<br>2025 | For the three months ended<br>March 31,<br>2024 |
| Current: | - | - |
| Federal | $- | $- |
| State | - | - |
| Foreign | - | - |
| Total current | $- | $- |
| Deferred: | - | - |
| Federal | $- | $- |
| State | - | - |
| Foreign | - | - |
| Total deferred | $- | $- |
| Total income tax expense | $- | $- |

---

A reconciliation between the Company's actual provision for income taxes and the provision at the United States statutory rate is as follow:

---

| | | |
|:---|:---|:---|
|  | For the three months ended<br>March 31,<br>**2025** | For the three months ended<br>March 31,<br>**2024** |
| (Loss) i<br>ncome before income tax expense <br>| $(2630728) | $60035 |
| Computed tax benefit with statutory tax rate | 29.84% | 29.84% |
| Income tax expense computed at statutory income tax rate | (785009) | 17914 |
| Impact of different tax rates in other jurisdictions | 711098<br>| (58145) |
| Tax effect of non-deductible expenses | 73911 | 40231 |
| Total income tax expense | $- | $- |

---

The effective tax rate were nil% and nil% for the three months ended March 31, 2025 and 2024, respectively.

Uncertain tax positions

The Company did not have any uncertain tax positions during the three months ended March 31, 2025 and 2024.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the respective jurisdictions, where applicable. The statute of limitations for the tax returns varies by jurisdictions.

The amounts of uncertain tax liabilities listed above are based on the recognition and measurement criteria of ASC Topic 740, and the balance is presented as current liability in the consolidated financial statements as of December 31, 2023. The Company anticipated that the settlements with the taxing authority are remitted within one year.

Our policy is to include interest and penalty charges related to uncertain tax liabilities as necessary in the provision for income taxes. The Company has a liability for accrued interest of $nil and $nil as of March 31, 2025 and 2024, respectively.

The statute of limitations for the Internal Revenue Services to assess the income tax returns on a taxpayer expires three years from the due date of the profits tax return or the date on which it was filed, whichever is later.

In accordance with the Hong Kong profits tax regulations, a tax assessment by the IRD may be initiated within six years after the relevant year of assessment, but extendable to 10 years in the case of potential willful underpayment or evasion.

In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities' tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above.

12. CHINA CONTRIBUTION PLAN

The Company participates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond their monthly contributions. For the three months ended March 31, 2025 and 2024, the Company contributed a total of $15,005 and $15,889, respectively, to these funds.

13. OPERATING LEASE

The Company has operating leases for its office facilities. The lease is located at 9820 Dino Drive, Suite 110, Elk Grove, California, 95624, which consist of approximately 3,653 square meters. The Company's

leases have remaining terms of approximately 37 months for a lease term commencing on August 1, 2020 and ended

on August 31, 2023. The lease was renewed for additional 36 months. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes.

The following table provides a summary of leases by balance sheet location as of March 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| Assets/liabilities | March 31,<br>2025 | December 31,<br>2024 |
| Assets |  |  |
| Operating lease right-of-use assets | $1735972 | $1822266 |
| Liabilities |  |  |
| Operating lease liability - current | $363230 | $355754 |
| Operating lease liability - non-current | 1372742 | 1466512 |
| Total lease liabilities | $1735972 | $1822266 |

---

Cash flow information related to operating leases consists of the following:

---

| | | |
|:---|:---|:---|
|  | For the three months<br>ended March 31, 2025  | For the three months<br>Ended March 31, 2024 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $108714 | $8767 |
| Right-of-use assets obtained in exchange for new lease obligations: | - | - |

---

The operating lease expenses for the three months ended March 31, 2025 and 2024 were as follows:

---

| | | | |
|:---|:---|:---|:---|
| Lease Cost | Classification | For the three<br>months ended<br>March 31,<br>2025 | For the three<br>months ended<br>March 31,<br>2024 |
| Operating lease expense | General and administrative expenses | $108714 | $8767 |

---

Maturities of operating lease liabilities as of March 31, 2025 were as follows:

---

| | |
|:---|:---|
| Maturity of Lease Liabilities | Operating<br>Leases |
| Within one year  | 441853 |
| Within a period of more than one year but not more than two years  | $433599 |
| Within a period of more than two year but not more than three years  | 431557 |
| Within a period of more than three year but not more than four years | 444504 |
| Within a period of more than four years but not more than five years | 187485 |
| More than five years | - |
| Total lease commitment | $1938998 |
| Less: interest | (203026) |
| Present value of lease payments | $1735972 |

---

Lease liabilities include lease and non-lease component such as management fee.

---

| | | |
|:---|:---|:---|
| Lease Term and Discount Rate | March 31,<br>2025 | December 31,<br>2024 |
| Weighted-average remaining lease term (years) |  |  |
| Operating leases | 4.33 | 4.57 |
| Weighted-average discount rate (%) |  |  |
| Operating leases | 5% | 5% |

---

14. CONCENTRATIONS AND CREDIT RISK

(a) Concentrations

During the three months ended March 31, 2025, two customers accounted for nearly 74% of the Company's revenues. During the three months ended March 31, 2024, two customers accounted for nearly 81% of the Company's revenues. No other customer accounts for more than 10% of the Company's revenue in the three months ended March 31, 2025 and 2024.

As of March 31, 2025, five customers accounted for 41% of the Company's accounts receivable. As of December 31, 2024, five customers accounted for 84% of the Company's accounts receivable. No other customer accounts for more than 10% of the Company's accounts receivable for the three months ended March 31, 2025 and for the year ended December 31, 2024.

During the three months ended March 31, 2025, no supplier accounts for over 10% of the Company's cost of revenues. During the three months ended March 31, 2025, five suppliers accounted for a total of 73% of the Company's cost of revenues. No other supplier accounts for over 10% of the Company's cost of revenues.

As of March 31, 2025, no supplier accounted for over 10% of the Company's accounts payable. As of December 31, 2024, no supplier accounted for 10% of the Company's accounts payable.

(b) Credit risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of March 31, 2025 and December 31, 2024, substantially all of the Company's cash were held by major financial institutions located in the PRC, Hong Kong, and the United States, which management believes are of high credit quality. Deposits in the United States up to $250,000 are insured by the Federal Depository Insurance Corporation.

For the credit risk related to trade accounts receivable, the Company performs ongoing credit evaluations of its customers and, if necessary, maintains reserves for potential credit losses. Historically, such losses have been within management's expectations.

15. CAPITAL COMMITMENTS

On July 26, 2021, the Company has contracted Changzhou Wanyuan Construction Engineering Co. to build a second phase of its factory. The amount required in the contract is $10 million. Construction is expected to take approximately one and half year, and the second phase of the factory will be approximately 250,000 square feet.

16. STOCK SPLIT

Effective on July 6, 2023, the Company implemented a 2-for-1 reverse stock split of the issued and outstanding shares. Under the reverse split, every two shares of outstanding shares issued and outstanding were automatically converted into one share of ordinary share, with a par value of US$0.001 each. Except as otherwise indicated, all information in the consolidated financial statements concerning share and per share data gives retroactive effect to the 2-for-1 reverse stock split. The total number of outstanding common shares immediately before the reverse split was 40,000,000 and immediately after the reverse split was 20,000,000. The total number of outstanding preferred shares immediately before the reverse split was 10,000,000 and immediately after the reverse split was 5,000,000.

17. SECURED BORROWING ARRANGEMENT

In July 2023, the Company signed a secured borrowing agreement with a financial institution in the United States, in which the Company borrowed $1,000,000 secured by its accounts receivable amounted $1,491,000.

It is scheduled under the agreement that the Company pays $49,700 per week for thirty weeks to the financial institution to repay the loan.

On January 21, 2025, 3D PRINTING entered into an EB-5 loan agreement with 3DFLOR Chairman and controlling shareholder, Lin Li ("3DFLOR"), pursuant to which 3DFLOR agreed to provide 3D PRINTING a loan, with an initial maximum principal amount of $24,000,000 at an interest rate of 1.00% per year.

18. SUBSEQUENT EVENT

The Company has analyzed its operations subsequent to March 31, 2025 and up through July 16, 2025 which is the date these consolidation financial statements were issued, except as disclosed herein, there is no material subsequent events to disclose in these consolidated financial statements.

19. UNRESTRICTED NET ASSETS

The following presents condensed financial information of Northann Corp:

Condensed Financial Information on Financial Position

---

| | | |
|:---|:---|:---|
|  | As of<br>March 31, | As of<br>December 31, |
|  | 2025 | 2024 |
|  | (Unaudited) |  |
| Cash | - | - |
| Amounts due from subsidiaries | 6554838 | 4422688 |
| Total current assets | 6554838 | 4422688<br>|
| All other non-current assets | - | - |
| Interests in a subsidiary | 9939380 | 9452997 |
| Total Assets | 16494218 | <br>13875685<br>|
| Liabilities and Stockholders' Deficit |  |  |
| All other current liabilities | 329795 | 358626 |
| Amounts due to subsidiaries | 12253474 | 10881994 |
| Total current liabilities | 12583269 | <br>11240620<br>|
| Non-current liabilities | - | 35892 |
| Total Liabilities | 12583269 | <br>11276512<br>|
| Stockholders' Equity (Deficit) |  |  |
| Preferred stock – Series A, $0.001 par value, 100,000,000 shares authorized, 10,000,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024 | 5000 | 5000 |
| Common stock, $0.001 par value, 400,000,000 shares authorized, 95,464,000 shares issued and outstanding as of March 31, 2025 and 55,464,000 shares issued and outstanding as of December 31, 2024 | 95464 | 55464 |
| Subscription receivable | (6175850) | (1375000) |
| Additional Paid-in Capital | 23580165 | 15487165 |
|  | (2110500) | (2927250) |
| Retained earnings (accumulated deficit) | (12324547) | (9693818) |
| Accumulated other comprehensive income (loss) | 841217 | 1047612 |
| Total Stockholders' Equity (Deficit) | 3910949 | 2599173 |
| Total Liabilities and Stockholders' Deficit | 16494218 | <br>13875685<br>|

---

\* Retrospectively restated for the effect of 2-for-1 reverse stock split. (Note 16)

Condensed Financial Information on Results of Operations

---

| | | |
|:---|:---|:---|
|  | For the <br>three <br>months <br>ended <br>March 31, | For the <br>three <br>months <br>ended <br>March 31, |
|  | 2025 | 2024 |
|  | (Unaudited) | (Unaudited) |
| Revenue | - | - |
| Cost or revenues | - | - |
| Operating expenses | 708858 | 372865 |
| Income taxes | - | - |
| Income (loss) – Parent only | (708858) | (372865) |
| Income (loss) – Subsidiaries with unrestricted net assets | (1162876) | 577523 |
| (Loss) – Subsidiaries with restricted net assets | (686994) | (144623) |
| Net (loss) income – Consolidated | (2630728) | 60035 |

---

Condensed Financial Information on Cash Flows

---

| | | |
|:---|:---|:---|
|  | For the <br>three <br>months <br>ended<br>March 31, | For the <br>three <br>months <br>ended<br>March 31, |
|  | 2025 | 2024 |
|  | (Unaudited) | (Unaudited) |
| Cash (used in) provided by operating activities | (780858) | 528867 |
| Cash (used in) provided by investing activities |  |  |
| Cash (used in) provided by financing activities | 780858 | (528495) |
| Effect of exchange rates on cash | - | - |
| Net cash flows | - | 372 |
| Beginning cash balance | - | 370 |
| Ending cash balance | - | 742 |

---

(i) Basis of presentation

The condensed financial information reflects the accounts of the Company. The condensed financial information should be read in connection with the consolidated financial statements and notes thereto. The condensed financial information is presented as if the incorporation of the Company were in effect since January 1, 2020.

(ii) Restricted Net Assets

Schedule I of Rule 5-04 of Regulation S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender, regulatory agency, foreign government, etc.). The Company's only assets are its equity interests in its subsidiaries. Unrestricted net assets are held in the Company's subsidiaries located in the US and Hong Kong. The Company does maintain substantial assets and operating subsidiaries in China; therefore, the ability for operating subsidiaries to pay dividends or transfer assets to the Company may be restricted due to the foreign exchange control policies and availability of cash balances of the Chinese operating subsidiaries.

As of March 31, 2024, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company, except for those which have been separately disclosed in the Consolidated Financial Statements, if any.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

*Comparison for the Three Months Ended March 31, 2025*

and 202

The following table sets forth key components of our results of operations for the three months ended March 31, 202

and 202

, both in dollars and as a percentage of our revenues.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, |
|  | **2025** | **2025** | **2024** | **2024** |
|  | Amount | of Revenue | Amount | of Revenue |
| Revenues | 3437727 | 100.0%<br>| 4595531 | 100.0%<br>|
| Cost of revenues | 3,<br>047069<br>| 88.6%<br>| 3051541 | 6<br>6.4%<br>|
| Gross profit | 390658 | 11.4%<br>| 1543990 | 3<br>3.6%<br>|
| Operating expenses |  |  |  |  |
| Selling expenses | 1021999 | 29.7%<br>| 218375 | 4.<br>8%<br>|
| General and administrative expenses | 1481255 | 43.1%<br>| 485037 | 10.<br>6%<br>|
| Research and development expenses | 462062 | 1<br>3.4%<br>| 512597 | 11.<br>2%<br>|
| Finance Cost | - | -<br>| - | -<br>|
| (Loss) <br>Income from operations<br>| (2574658) | (74.9)%<br>| 327981 | 7.1%<br>|
| Other Income (expenses) |  |  |  |  |
| Interest expense | (56056) | (1.6)%<br>| (267948) | (5.8)%<br>|
| Other expenses | (15) | 0.<br>0%<br>| - | 0.0%<br>|
| Net <br>**(loss) income before taxes**<br>| (2630729) | (76.5)%<br>| 60033 | 1.3%<br>|
| Income tax benefit (expenses) | - | 0.0%<br>| - | 0.0%<br>|
| **Net (loss)** <br>income<br>| (2630729) | (76.5)%<br>| 60033 | 1.3%<br>|
| Other comprehensive loss |  |  |  |  |
| Foreign currency translation adjustment | (204395) | (5.9)%<br>| 69702 | 1.5%<br>|
| Total comprehensive income | (2835124) | (82.5)%<br>| 129735 | 2.8%<br>|

---

Revenues.

Our revenues were $

3,437,727

for the three months ended March 31, 202

, representing a

decrease

&nbsp;&nbsp;&nbsp;&nbsp;of $

1,157,804

or

25.2 % from $4,595,531 for the three months ended March 31, 202

. The

increase

was mainly due to

increase

in customer demand and our sales volume in the three months ended March 3

, 202

as compared to the same period in 202

.

Cost of revenues.

Our cost of revenues was $3,047,069 for the three months ended March 31, 2025, compared to $3,051,541 for the same period in 2024. Cost of revenues refers to the cost of material and labor cost; the percentage of direct material was over 90% of the total cost of revenues. We paid tariffs of $104,928 during the three months ended March 31, 2025, and $89,390 during the three months ended March 31, 2024. The decrease in tariff was mainly due to decrease in revenue.

Gross profit and gross margin.

Our gross profit was $

390,658

for the three months ended March 31, 202

, compared with a gross profit of $1,543,990 for the same period in 202

. Gross margin decreased from 33.6% for the three ended March 31, 202

to

11.4 % for the three months ended March 31, 202

due to higher purchase price of our raw material.

Selling expenses. As shown below, our selling expenses consist primarily of compensation and benefits to our selling department and other expenses incurred in connection with general operations. Our selling expenses

in

creased by $

803,624

to $

1,021,999

for the three months ended March 31, 202

, from $218,375 for the same period in 202

, which was mainly caused by increase of $

506,250

in

s

hare-based compensation, and other items with minor changes.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2025** | **March 31, 2025** | **March 31, 2024** | **March 31, 2024** | Fluctuation | Fluctuation |
|  | Amount | Proportion | Amount | Proportion | Amount | Proportion |
| Salaries and Social Insurance | 129319 | 12.7%<br>| 83131 | 38.<br>1%<br>| 46188 | 55.6%<br>|
| Share-based compensation | 506250 | 49.5%<br>| - | 0.0%<br>| 506250 | 0.0%<br>|
| Freight insurance | 43004 | 4.2%<br>| 18240 | 8.<br>4%<br>| 24764 | 135.8%<br>|
| Rent | 150981 | 14.8%<br>| 11924 | 5.<br>5%<br>| 139057 | 1166.2%<br>|
| Advertising fee | 154706 | 15.1%<br>| 77843 | 35.6%<br>| 76863 | 98.7%<br>|
| Travel fee | 37739 | 3.7%<br>| 27237 | 12.<br>5%<br>| 10502 | 38.6%<br>|
| Total selling expenses | 1021999 | 100.0%<br>| 218375 | 100.0%<br>| 803624 | 368.0%<br>|

---

General and administrative expenses.

As shown below, our general and administrative expenses consist primarily of compensation and benefits to our general management, finance and administrative staff, professional fees and other expenses incurred in connection with general operations. Our general and administrative expenses increased by $996,219 to $1,481,256 for the three months ended March 31, 2025, from $485,037 for the same period in 2024. The increase was mainly caused by the increase of service fees for legal, auditing and other professional services for $640,125

, and other items with minor changes.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2025** | **March 31, 2025** | **March 31, 2024** | **March 31, 2024** | Fluctuation | Fluctuation |
|  | Amount | Proportion | Amount | Proportion | Amount | Proportion |
| Salary and Social Insurance | 118544 | 8.0%<br>| 41583 | 8.<br>6%<br>| 76961 | 185.1%<br>|
| Service fees | 926406 | 62.5%<br>| 286281 | 59.0%<br>| 640125 | 223.6%<br>|
| Royalty fee | 5,<br>653<br>| 0.4%<br>| 5820 | 1.2%<br>| (167) | (2.9)%<br>|
| Entertainment expenses | 15424 | 1.0%<br>| 20928 | 4.3%<br>| (5504) | (26.3)%<br>|
| Taxation | 477 | 0.0%<br>| 11 | 0.0%<br>| 466 | 4236.4%<br>|
| Depreciation and amortization | 24584 | 1.7%<br>| 24633 | 5.<br>1%<br>| (49) | (0.2)%<br>|
| Rent | 52496 | 3.5%<br>| 8954 | 1.8%<br>| 43542 | 486.3%<br>|
| Travel fee | 6968 | 0.5%<br>| 19689 | 4.<br>1%<br>| (12721) | (64.6)%<br>|
| Office expenses | 140593 | 9.5%<br>| 35370 | 7.<br>3%<br>| 105223 | 297.5%<br>|
| Other | 190111 | 12.8%<br>| 41768 | 8.6%<br>| 148343 | 355.2%<br>|
| Total general and administrative expenses | 1481256 | 100.0%<br>| 485037 | 100.0%<br>| 996219 | 205.4%<br>|

---

Research and development expenses.

Our research and development expenses remained relatively stable, which were $462,062 for the three months ended March 31, 2025, compared to $512,597 for the same period in 2024.

Income tax expense.

Our Income tax expense was $nil for the three months ended March 31, 202

and $nil

for the three months ended March 31, 202

.

Net

*(loss) income.* As a result of the cumulative effect of the factors described above, our net

loss

was $

2,630,728

for the three months ended March 31, 202

and

net income was

$

60,033

for the three months ended March 31, 202

. The increase

in net loss

was primarily due to

de

crease in revenue

and increases in cost of sales and operating expenses

Liquidity and Capital Resources

As of March 31, 202

and December 31, 202

, we had cash of $

1,866,303

, and $

245,164

, respectively. To date, we have financed our operations primarily through our business operations, borrowings from our stockholders, related and unrelated parties, and proceeds from IPO.

The Company believes that its current levels of cash and cash flows from operations will be sufficient to meet its anticipated cash needs for at least the next twelve months. However, it may need additional cash resources in the future if it finds and wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it determines that its cash requirements exceed its amounts of cash on hand or if it decides to further optimize its capital structure, it may seek to issue additional debt or equity securities or obtain credit facilities or other sources of funding.

The following table set forth a summary of its cash flows for the periods indicated:

---

| | | |
|:---|:---|:---|
|  | For the Three Months Ended | For the Three Months Ended |
|  | March 31, | March 31, |
|  | **2025** | **2024** |
| Net cash (used in)<br>provided by operating activities<br>| $(1010467) | $297897 |
| Net cash (used in) investing activities | $(149042) | $- |
| Net cash provided by<br>(used in) financing activities<br>| $3146197 | $(641782) |

---

Operating Activities

Net cash

used in

operating activities was $

1,010,467

for the three months ended March 31, 202

, as compared to $297,897 net cash provided by operating activities for the three months ended March 31, 202

.

The net cash

used in

operating activities for the

three months

ended

March

31, 202

was mainly due to our net loss of $

2,630,728

adjusted for (i) a net increase of non-cash items of $

1,064,442

which consisted primarily of share-based compensation

and

depreciation and amortization, and (ii) a net

in

crease of $

555,819

in operating assets and liabilities. The net

in

crease in changes in operating assets and liabilities was attributable primarily to

an increase of $1,081,442 in accounts payable and increase of $1,200,076 in accruals and other payables, and partially offset by an increase in accounts receivable of $641,101 and a decrease in tax payable of $635,568 from December 31, 2024 to March 31, 2025

.

The net cash used in operating activities for the

three months

ended

March

31, 202

mainly included our net

income

of

$60,033

, adjusted for (i) a net increase of non-cash items of $

148,714

, which consisted primarily of depreciation and amortization and allowance for bad debt, and (ii) a net increase of $

89,150

in operating assets and liabilities. The net increase in changes in operating assets and liabilities was attributable primarily to

an in

crease in

unearned revenue

of $

489,485

, and partially offset by the increase in

inventory of $198,323

and decrease in account payables of

$209,356

.

Investing Activities

Net cash used in investing activities was $149,042 for the three months ended March 31, 2025, as compared to $270,242 net cash used in investing activities for the three months ended March 31, 2024. The net cash used in investing activities for the three months ended March 31, 2025 and 2024 mainly included the payments for construction.

Financing Activities

Net cash

provided by

financing activities for the three months ended March 31, 202

was $

3,146,197

, as compared to net cash

used in

financing activities of $641,782 for the three months ended March 31, 202

. T

he increase mainly came from proceeds from issuance of 40,000,000 common stock in

the three months ending March 31, 2025.

Contractual Obligations

The Company's subsidiary NDC has an operating lease primarily for its corporate office and equipment. The lease contract was within three years and the renewal was at landlord's discretion.

Operating lease expenses were $8,767 and $8,767 for the three months ended March 31, 202

and 202

, respectively.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable as we are a "smaller reporting company" as defined by Item 229.10(f)(1) of Regulation S-K.

Item 4. Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer (principal executive officer) and Interim Chief Financial Officer (principal financial officer and principal accounting officer), of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Chief Executive Officer and Interim Chief Financial Officer concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K) were effective at ensuring that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (1) accumulated and communicated to management, including the Company's Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding required disclosures and (2) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

There have been no changes in the Company's internal control over financial reporting during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, such internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to make disclosures under this item.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

<u>None.</u>

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

---

| | |
|:---|:---|
| Exhibit No. | Description |
| [31.1\*](ncl086_ex31-1.htm) | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules <u>13a</u><u>-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](ncl086_ex31-1.htm) |
| [31.2\*](ncl086_ex31-2.htm) | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules <u>13a</u><u>-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](ncl086_ex31-2.htm) |
| [32.1\*\*](ncl086_ex32-1.htm) | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ncl086_ex32-1.htm) |
| [32.2\*\*](ncl086_ex32-2.htm) | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ncl086_ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

  <u>\*</u> <u>Filed herewith. </u>

\*\* Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 

  <u>^</u> <u>Certain terms have been omitted pursuant to Item 601(b)(2)(ii) of Regulation S-K. The Registrant hereby undertakes to furnish copies of any of the terms upon request by the SEC.</u>

† Exhibits and schedules to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Northann Corp. | Northann Corp. |
| Date: <br>July<br> 18, 202<br>5<br>| By: | /s/ Lin Li |
|  | Name:  | Lin Li |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: <br>July<br> 18, 202<br>5<br>| By: | /s/ Sunny S. Prasad |
|  | Name: | Sunny S. Prasad |
|  | Title: | Interim Chief Financial Officer |
|  |  | (Principal Accounting and Financial <br>Officer)<br>|

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Lin Li, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 31, 202 5 of Northann Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 18, 2025

---

| | |
|:---|:---|
| By: | */s/ Lin Li* |
|  | Lin Li |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Sunny S. Prasad, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 31, 202 5 of Northann Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 18, 2025

---

| | |
|:---|:---|
| By: | */s/* Sunny S. Prasad |
|  | Sunny S. Prasad |
|  | Interim Chief Financial Officer |
|  | (Principal Accounting and Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Northann Corp. (the "Company") on Form 10-Q for the quarterly period ended March 31, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Lin Li, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 18, 2025

---

| | |
|:---|:---|
| By: | /s/ Lin Li |
|  | Lin Li |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Northann Corp. (the "Company") on Form 10-Q for the quarterly period ended March 31, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Sunny S. Prasad, Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 18, 2025

---

| | |
|:---|:---|
| By: | */s/* Sunny S. Prasad |
|  | Sunny S. Prasad |
|  | Interim Chief Financial Officer |
|  | (Principal Accounting and Financial Officer) |

---