{"url_path":"/sec/ncl/10-q/2026/cover-page","section_key":"cover-page","section_title":"Cover Page","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-19","source_url":"https://www.sec.gov/Archives/edgar/data/1923780/0001575872-26-000345-index.html","accession_number":"0001575872-26-000345","cik":"0001923780","ticker":"NCL","issuer_name":"Northann Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1923780/0001575872-26-000345-index.html","primary_entity_key":"0001923780","primary_entity_name":"Northann Corp."},"word_count":10090,"has_tables":true,"body_markdown":"Northann Corp\nfalseQ10001923780SC0.50.5--12-31Retroactively reflect 1-for-8 reverse stock split effective on October 7, 2025. (Note 16)Retrospectively restated for the effect of 1-for-8 reverse stock split. 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STATES\n\nSECURITIES AND EXCHANGE COMMISSION\n\nWashington, D.C. 20549\n\n \n\nFORM 10-Q\n\n \n\n(Mark One)\n\nx\n\n \nQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE\n\nACT OF 1934\n\n \n\nFor the quarterly period ended March 31, 2026\n\n \n\n¨\n\n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE\n\nACT OF 1934\n\n \n\nFor the transition period from to\n\n \n\nCommission File No. 001-41816\n\n \n\nNORTHANN CORP.\n\n(Exact name of registrant as specified in its charter)\n\n \n\nNevada\n\n \n\n88-1513509\n\n(State or other jurisdiction of \n\nincorporation or organization)\n\n \n\n(I.R.S. Employer \n\nIdentification No.)\n\n \n\n2251 Catawba River Rd\n\nFort Lawn,\nSC\n\n \n\n29714\n\n(Address of Principal Executive Offices)\n\n \n\n(Zip Code)\n\n \n\n(916) 573 3803\n\n(Registrant’s telephone number, including area code)\n\n \n\nSecurities registered pursuant to Section 12(b) of the Act: \n\n \n\nTitle of each class\n\n \n\nTrading Symbol(s)\n\n \n\nName of each exchange on which\n\n \n\nregistered\n\nCommon Stock, $0.001 par value\n\n \n\nNCL\n\n \n\nNYSE American LLC\n\n  \n\nIndicate 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\n\nx\n\n \n\nNo \n\n¨\n\n  \n\nIndicate 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 \n\nx\n\nNo\n\n¨\n\n  \n\nIndicate 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. \n\n \n\nLarge accelerated filer\n\n¨\n\nAccelerated filer\n\n¨\n\nNon-accelerated filer\n\nx\n\nSmaller reporting company\n\nx\n\n \n\n \n\nEmerging growth company\n\nx\n\n \n\nIf 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. \n\n¨\n\n \n\n  \n\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes \n\n¨\n\n No\n\nx\n\n \n\n  \n\nOn\nMay 15\n, 2026, the registrant had\n\n53,733,083\n\nshares of common stock and\n625,000\nshares of Series A Preferred Stock outstanding.\n\n \n\n \n\nNorthann Corp.\n\n \n\nQuarterly Report on Form 10-Q\n\n \n\n  \n\nTABLE OF CONTENTS\n\n \n\n \n\n \n\n \n\nPage\n\n \n\n \n\n[PART I – FINANCIAL INFORMATION](#a_001_dd)\n\n[F-1](#a_001_dd)\n\n \n\n \n\n \n\n[Item 1.](#a_001_balance)\n\n[Financial Statements](#a_001_balance)\n\n[F-1](#a_001_balance)\n\n \n\n \n\n \n\n[Consolidated Balance Sheets](#a_001_balance)\n\n[F-1](#a_001_balance)\n\n \n\n \n\n \n\n[Consolidated Statements of Operations and Comprehensive Income Loss](#a_002_operations)\n\n[F-2](#a_002_operations)\n\n \n\n \n\n \n\n[Consolidated Statements of Shareholders’ (Deficit)](#a_003_equity)\n\n[F-3](#a_003_equity)\n\n \n\n \n\n[Consolidated Statements of Cash Flows](#a_004_cashflow)\n\n[F-4](#a_004_cashflow)\n\n \n\n \n\n \n\n[Notes to Consolidated Financial Statements](#a_005_notes)\n\n[F-5](#a_005_notes)\n\n \n\n \n\n \n\n[Item 2.](#a_006_item2management)\n\n[Management’s Discussion and Analysis of Financial Condition and Results of Operations](#a_006_item2management)\n\n[2](#a_006_item2management)\n\n \n\n \n\n \n\n[Item 3.](#a_007_item3quantitati)\n\n[Quantitative and Qualitative Disclosures about Market Risk](#a_007_item3quantitati)\n\n[9](#a_007_item3quantitati)\n\n \n\n \n\n \n\n[Item 4.](#a_008_item4controlsan)\n\n[Control and Procedures](#a_008_item4controlsan)\n\n[9](#a_008_item4controlsan)\n\n \n\n \n\n \n\n[PART II – OTHER INFORMATION](#a_009_partiiotherinfo)\n\n[9](#a_009_partiiotherinfo)\n\n \n\n \n\n \n\n[Item 1.](#a_010_item1legalproce)\n\n[Legal Proceedings](#a_010_item1legalproce)\n\n[9](#a_010_item1legalproce)\n\n \n\n \n\n \n\n[Item 1A.](#a_011_item1ariskfacto)\n\n[Risk Factors](#a_011_item1ariskfacto)\n\n[9](#a_011_item1ariskfacto)\n\n \n\n \n\n \n\n[Item 2.](#a_012_item2unregister)\n\n[Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](#a_012_item2unregister)\n\n[9](#a_012_item2unregister)\n\n \n\n \n\n \n\n[Item 3.](#a_013_item3defaultsup)\n\n[Defaults Upon Senior Securities](#a_013_item3defaultsup)\n\n[10](#a_013_item3defaultsup)\n\n \n\n \n\n \n\n[Item 4.](#a_014_item4minesafety)\n\n[Mine Safety Disclosures](#a_014_item4minesafety)\n\n[10](#a_014_item4minesafety)\n\n \n\n \n\n \n\n[Item 5.](#a_015_item5otherinfor)\n\n[Other Information](#a_015_item5otherinfor)\n\n[10](#a_015_item5otherinfor)\n\n \n\n \n\n \n\n[Item 6.](#a_016_item6exhibits)\n\n[Exhibits](#a_016_item6exhibits)\n\n[10](#a_016_item6exhibits)\n\n \n\n \n\n \n\n[SIGNATURES](#a_017_signatures)\n\n[11](#a_017_signatures)\n\ni\n\nPART I – FINANCIAL INFORMATION\n\nNORTHANN CORP.\n\nCONSOLIDATED BALANCE SHEETS\n\n(In U.S. dollars)\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n(Unaudited)\n\n \n\n \n\n \n\nASSETS\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent Assets\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n239,641\n\n \n\n \n\n$\n\n1,030,612\n\n \n\nAccounts receivable, net\n\n \n\n \n\n3,850,848\n\n \n\n \n\n \n\n3,512,715\n\n \n\nInventory\n\n \n\n \n\n6,065,681\n\n \n\n \n\n \n\n6,185,698\n\n \n\nPrepaid expense\n\n \n\n \n\n708,545\n\n \n\n \n\n \n\n573,094\n\n \n\nOther receivables and other current assets\n\n \n\n \n\n28,242\n\n \n\n \n\n \n\n50,075\n\n \n\nTax recoverable\n\n \n\n \n\n18,136\n\n \n\n \n\n \n\n-\n\n \n\nDue from related party\n\n \n\n \n\n1,643,288\n\n \n\n \n\n \n\n985,018\n\n \n\nTotal Current Assets\n\n \n\n \n\n12,554,381\n\n \n\n \n\n \n\n12,337,212\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty, plant and equipment, net\n\n \n\n \n\n3,404,651\n\n \n\n \n\n \n\n3,507,401\n\n \n\nConstruction in progress\n\n \n\n \n\n2,364,488\n\n \n\n \n\n \n\n2,127,295\n\n \n\nIntangible assets, net\n\n \n\n \n\n11,085,329\n\n \n\n \n\n \n\n994,928\n\n \n\nOperating lease right-of-use assets, net\n\n \n\n \n\n1,372,742\n\n \n\n \n\n \n\n1,466,512\n\n \n\nSecurity deposits\n\n \n\n \n\n9,030\n\n \n\n \n\n \n\n9,030\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTOTAL ASSETS\n\n \n\n$\n\n30,790,621\n\n \n\n \n\n$\n\n20,442,378\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLIABILITIES AND STOCKHOLDERS' EQUITY\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent Liabilities\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts and other payables and accruals\n\n \n\n$\n\n5,970,838\n\n \n\n \n\n$\n\n4,322,020\n\n \n\nUnearned revenue\n\n \n\n \n\n674,690\n\n \n\n \n\n \n\n1,349,672\n\n \n\nOperating lease liabilities, current\n\n \n\n \n\n373,584\n\n \n\n \n\n \n\n374,585\n\n \n\nLoan payable, current\n\n \n\n \n\n1,318,477\n\n \n\n \n\n \n\n1,302,745\n\n \n\nTax payable\n\n \n\n \n\n-\n\n \n\n \n\n \n\n22,538\n\n \n\nTotal Current Liabilities\n\n \n\n \n\n8,337,589\n\n \n\n \n\n \n\n7,371,560\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease liabilities, non-current\n\n \n\n \n\n999,157\n\n \n\n \n\n \n\n1,091,927\n\n \n\nLoan payable, non-current\n\n \n\n \n\n3,003,953\n\n \n\n \n\n \n\n2,968,709\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTOTAL LIABILITIES\n\n \n\n \n\n12,340,699\n\n \n\n \n\n \n\n11,432,196\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommitments and contingencies\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders' Equity\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock – Series A: $0.001 par value, 20,000,000 shares authorized, 625,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025\n\n \n\n \n\n625\n\n \n\n \n\n \n\n625\n\n \n\nPreferred stock – Undesignated: 80,000,000 authorized, $0.001 par value, No shares issued and outstanding\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nCommon stock: $0.001 par value, 400,000,000 shares authorized, 53,733,083 shares issued and outstanding as of March 31, 2026 and 22,933,083 shares issued and outstanding as of December 31, 2025\n\n \n\n \n\n53,733\n\n \n\n \n\n \n\n22,933\n\n \n\nSubscription receivable\n\n \n\n \n\n(11,879,902\n\n)\n\n \n\n \n\n(12,706,602\n\n)\n\nAdditional paid-in Capital\n\n \n\n \n\n53,137,586\n\n \n\n \n\n \n\n41,709,686\n\n \n\nAccumulated deficit\n\n \n\n \n\n(24,263,124\n\n)\n\n \n\n \n\n(21,367,799\n\n)\n\nAccumulated other comprehensive income\n\n \n\n \n\n1,401,004\n\n \n\n \n\n \n\n1,351,339\n\n \n\nTotal stockholders’\n\nequity\n\n \n\n \n\n18,449,922\n\n \n\n \n\n \n\n9,010,182\n\n \n\nTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY\n\n \n\n$\n\n30,790,621\n\n \n\n \n\n$\n\n20,442,378\n\n \n\n \n\n*\n\nRetroactively reflect 1-for-8 reverse stock split effective on October 7, 2025. (Note 16)\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-1\n\nNORTHANN CORP.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS\n\n(In U.S. dollars)\n\n \n\n \n\n \n\nThree Months Ended\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenue\n\n \n\n$\n\n4,961,778\n\n \n\n \n\n$\n\n3,437,727\n\n \n\nCost of revenue\n\n \n\n \n\n5,456,431\n\n \n\n \n\n \n\n3,047,069\n\n \n\nGross Profit\n\n \n\n \n\n(494,653\n\n)\n\n \n\n \n\n390,658\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating Expenses\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSelling\n\n \n\n \n\n388,664\n\n \n\n \n\n \n\n1,021,999\n\n \n\nGeneral and administrative\n\n \n\n \n\n1,734,321\n\n \n\n \n\n \n\n1,481,255\n\n \n\nResearch and development\n\n \n\n \n\n233,754\n\n \n\n \n\n \n\n462,062\n\n \n\nTotal Operating Expenses\n\n \n\n \n\n2,356,739\n\n \n\n \n\n \n\n2,965,316\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLOSS FROM OPERATIONS\n\n \n\n \n\n(2,851,392\n\n)\n\n \n\n \n\n(2,574,658\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOther Income (Expense)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest income\n\n \n\n \n\n2\n\n \n\n \n\n \n\n-\n\n \n\nInterest expense\n\n \n\n \n\n(43,935\n\n)\n\n \n\n \n\n(56,056\n\n)\n\nOther expense\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(15\n\n)\n\nTotal other income (expense)\n\n \n\n \n\n(43,933\n\n)\n\n \n\n \n\n(56,071\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLOSS BEFORE TAXES\n\n \n\n \n\n(2,895,325\n\n)\n\n \n\n \n\n(2,630,729\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIncome tax expense\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNET LOSS\n\n \n\n$\n\n(2,895,325\n\n)\n\n \n\n$\n\n(2,630,729\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOther comprehensive income\n\n \n\n \n\n \n \n \n\n \n\nForeign currency translation adjustment\n\n \n\n \n\n49,665\n\n \n\n \n\n \n\n(206,395\n\n)\n\n \n\n \n\n \n\n \n \n \n\n \n\nTotal comprehensive loss\n\n \n\n$\n\n(2,845,660\n\n)\n\n \n\n$\n\n(2,837,124\n\n)\n\n \n\n \n\n \n\n \n \n \n\n \n\nBasic and dilutive earnings per share\n\n \n\n$\n\n(0.064\n\n)\n\n \n\n$\n\n(0.028\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average common shares outstanding - basic*\n\n \n\n \n\n45,115,306\n\n \n\n \n\n \n\n95,464,000\n\n \n\nWeighted average common shares outstanding - diluted*\n\n \n\n \n\n45,115,306\n\n \n\n \n\n \n\n95,464,000\n\n \n\n \n\n*    Retroactively reflect 1-for-8 reverse stock split effective on October 7, 2025. (Note 16)\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-2\n\nNORTHANN CORP.\n\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)\n\n(In U.S. dollars)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccumulated\n\n \n\n \n\n \n\n \n\n \n\nPreferred Stock\n\n \n\n \n\nCommon Stock\n\n \n\n \n\n \n\n \n\nAdditional\n\n \n\n \n\n \n\n \n\nOther\n\n \n\n \n\nTotal\n\n \n\n \n\n \n\nNumber of\n\nShares*\n\n \n\n \n\n \n\n \n\nPar Value\n\n \n\n \n\nNumber of\n\nShares*\n\n \n\n \n\n \n\n \n\nPar Value\n\n \n\n \n\nSubscription\n\nReceivable\n\n \n\n \n\n \n\n \n\nPaid-in\n\nCapital\n\n \n\n \n\n \n\n \n\nAccumulated\n\nDeficit\n\n \n\n \n\n \n\n \n\nComprehensive\n\nIncome (Loss)\n\n \n\n \n\n \n\n \n\nStockholders'\n\nEquity\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBalance - December 31, 2024\n\n \n\n \n\n625,000\n\n \n\n \n\n$\n\n625\n\n \n\n \n\n \n\n6,933,050\n\n \n\n \n\n$\n\n6,933\n\n \n\n \n\n$\n\n(1,375,000\n\n)\n\n \n\n$\n\n12,612,821\n\n \n\n \n\n$\n\n(9,693,818\n\n)\n\n \n\n$\n\n1,047,612\n\n \n\n \n\n$\n\n2,599,173\n\n \n\nIssuance of common stock\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n5,000,000\n\n \n\n \n\n \n\n5,000\n\n \n\n \n\n \n\n(4,800,850\n\n)\n\n \n\n \n\n8,128,000\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n3,332,150\n\n \n\nNet loss\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n(2,630,729\n\n)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(2,630,729\n\n)\n\nAccrued compensation expense\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n816,750\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n816,750\n\n \n\nAccumulated other comprehensive income\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n(206,395\n\n)\n \n\n \n\n \n\n(206,395\n\n)\n\nBalance - March 31, 2025\n\n \n\n \n\n625,000\n\n \n\n \n\n$\n\n625\n\n \n\n \n\n \n\n11,933,050\n\n \n\n \n\n$\n\n11,933\n\n \n\n \n\n$\n\n(6,175,850\n\n)\n\n \n\n$\n\n21,557,571\n\n \n\n \n\n$\n\n(12,324,547\n\n)\n\n \n\n$\n\n841,217\n\n \n\n \n\n$\n\n3,910,949\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccumulated\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred Stock\n\n \n\n \n\nCommon Stock\n\n \n\n \n\n \n\n \n\n \n\nAdditional\n\n \n\n \n\n \n\n \n\n \n\nOther\n\n \n\n \n\nTotal\n\n \n\n \n\n \n\nNumber of\n\nShares*\n\n \n\n \n\n \n\n \n\nPar Value\n\n \n\n \n\nNumber of\n\nShares*\n\n \n\n \n\n \n\n \n\nPar Value\n\n \n\n \n\nSubscription\n\nReceivable\n\n \n\n \n\n \n\n \n\nPaid-in\n\nCapital\n\n \n\n \n\n \n\n \n\nAccumulated\n\nDeficit\n\n \n\n \n\n \n\n \n\nComprehensive\n\nIncome (Loss)\n\n \n\n \n\n \n\n \n\nStockholders'\n\nEquity\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBalance - December 31, 2025\n\n \n\n \n\n625,000\n\n   \n\n   \n\n$\n\n625\n\n \n\n \n\n$\n\n22,933,083\n\n \n\n \n\n$\n\n22,933\n\n \n\n \n\n$\n\n(12,706,602\n\n)\n\n \n\n$\n\n41,709,686\n\n \n\n \n\n$\n\n(21,367,799\n\n)\n\n \n\n$\n\n1,351,339\n\n \n\n \n\n$\n\n9,010,182\n\n \n\nNet loss\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n(2,895,325\n\n)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(2,895,325\n\n)\n\nIssuance of common stock for cash\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n826,700\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n826,700\n\n \n\nIssuance of common stock for services\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n3,300,000\n\n \n\n \n\n \n\n3,300\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n455,400\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n458,700\n\n \n\nIssuance of common stock for capitalized software\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n27,500,000\n\n \n\n \n\n \n\n27,500\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n10,972,500\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n11,000,000\n\n \n\nAccumulated other comprehensive income\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n49,665\n\n \n\n \n\n \n\n49,665\n\n \n\nBalance - March 31, 2026\n\n \n\n \n\n625,000\n\n \n\n \n\n$\n\n625\n\n \n\n \n\n \n\n53,733,083\n\n \n\n \n\n$\n\n53,733\n\n \n\n \n\n$\n\n(11,879,902\n\n)\n\n \n\n$\n\n53,137,586\n\n \n\n \n\n$\n\n(24,263,124\n\n)\n\n \n\n$\n\n1,401,004\n\n \n\n \n\n$\n\n18,449,922\n\n \n\n \n\n*\n\nRetroactively reflect 1-for-8 reverse stock split effective on October 7, 2025. (Note 16)\n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-3\n\n \n\nNORTHANN CORP.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In U.S. dollars)\n\n \n\n \n\nThree Months Ended\n\n \n\n \n\nMarch 31,\n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nCASH FLOWS FROM OPERATING ACTIVITIES\n\n \n\n \n\n \n \n \n\n \n\nNet loss\n\n \n\n$\n\n(2,895,325\n\n)\n\n \n\n$\n\n(2,630,729\n\n)\n\nNet income from discontinued operations\n\n \n\n \n\n \n \n \n\n \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n \n\n \n\n \n \n \n\n \n\nDepreciation and amortization\n\n \n\n \n\n1,075,036\n\n \n\n \n\n \n\n247,692\n\n \n\nShare-based Compensation\n\n \n\n \n\n458,700\n\n \n\n \n\n \n\n816,750\n\n \n\nLease expense\n\n \n\n \n\n111,712\n\n \n\n \n\n \n\n86,294\n\n \n\nChanges in operating assets and liabilities:\n\n \n\n \n\n \n \n \n\n \n\nAccounts receivable\n\n \n\n \n\n(335,528\n\n)\n\n \n\n \n\n(641,101\n\n)\n\nInventory\n\n \n\n \n\n142,449\n\n \n\n \n\n \n\n(345,338\n\n)\n\nOther receivable\n\n \n\n \n\n22,444\n\n \n\n \n\n \n\n45,729\n\n \n\nPrepayments\n\n \n\n \n\n(127,112\n\n)\n\n \n\n \n\n(80,475\n\n)\n\nAccounts payable\n\n \n\n \n\n1,598,187\n\n \n\n \n\n \n\n1,081,442\n\n \n\nAccruals and other payables\n\n \n\n \n\n34,094\n\n \n\n \n\n \n\n1,135,641\n\n \n\nUnearned revenue\n\n \n\n \n\n(674,981\n\n)\n\n \n\n \n\n-\n\n \n\nAccrued interest\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(4,510\n\n)\n\nOperating lease payment\n\n \n\n \n\n(111,712\n\n)\n\n \n\n \n\n(86,294\n\n)\n\nTax payable\n\n \n\n \n\n(40,844\n\n)\n\n \n\n \n\n(635,568\n\n)\n\nDue to related party\n\n \n\n \n\n(658,281\n\n)\n\n \n\n \n\n-\n\n \n\nNet Cash (Used in) Operating Activities\n\n \n\n \n\n(1,401,161\n\n)\n\n \n\n \n\n(1,010,467\n\n)\n\n \n \n\n \n \n \n\n \n\nCASH FLOWS FROM INVESTING ACTIVITIES\n\n \n\n \n\n \n \n \n\n \n\nPurchase of equipment\n\n \n\n \n\n(3,429\n\n)\n\n \n\n \n\n-\n\n \n\nPayments for construction\n\n \n\n \n\n(207,150\n\n)\n\n \n\n \n\n(149,042\n\n)\n\nNet Cash (Used in) Investing Activities\n\n \n\n \n\n(210,579\n\n)\n\n \n\n \n\n(149,042\n\n)\n\n \n \n\n \n \n \n\n \n\nCASH FLOWS FROM FINANCING ACTIVITIES\n\n \n\n \n\n \n \n \n\n \n\nIssuance of common stocks\n\n \n\n \n\n-\n\n \n\n \n\n \n\n3,332,150\n\n \n\nStock Subscription Receivable\n\n \n\n \n\n826,700\n\n \n\n \n\n \n\n-\n\n \n\nAmounts received from related parties\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(263,229\n\n)\n\nProceeds from bank borrowings\n\n \n\n \n\n-\n\n \n\n \n\n \n\n79,276\n\n \n\nRepayments of loan payable, current\n\n \n\n \n\n(8,406\n\n)\n\n \n\n \n\n-\n\n \n\nNet Cash Provided by (Used in) Financing Activities\n\n \n\n \n\n818,294\n\n \n\n \n\n \n\n3,148,197\n\n \n\n \n \n\n \n \n \n\n \n\nEFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS\n\n \n\n \n\n2,474\n\n \n\n \n\n \n\n(367,548\n\n)\n\n \n \n\n \n \n \n\n \n\nNet change in cash and cash equivalents\n\n \n\n \n\n(790,972\n\n)\n\n \n\n \n\n1,621,140\n\n \n\nCash and cash equivalents, beginning of period\n\n \n\n \n\n1,030,612\n\n \n\n \n\n \n\n245,164\n\n \n\nCash and cash equivalents, end of period\n\n \n\n$\n\n239,641\n\n \n\n \n\n$\n\n1,866,304\n\n \n\n \n \n\n \n \n \n\n \n\nSUPPLEMENTAL CASH FLOW INFORMATION:\n\n \n\n \n\n \n \n \n\n \n\nCash paid for income taxes\n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\nCash paid for interest\n\n \n\n$\n\n44,128\n\n \n\n \n\n$\n\n51,473\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNON-CASH INVESTING AND FINANCING ACTIVITIES:\n\n \n\n \n\n \n \n \n\n \n\nIssuance of common stock for capitalized software\n\n \n\n$\n\n11,000,000\n\n \n\n \n\n$\n\n-\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-4\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nFOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025\n\n(In U.S. dollars)\n\n \n\n1.\n\nORGANIZATION AND BUSINESS\n\n \n\nThe 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.\n\n \n\nIn March 2014, Benchwich Construction Products Ltd (“Benchwick”) was established in Hong Kong. All wholesales to distributors are conducted through Benchwick.\n\n \n\nIn 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.\n\n \n\nIn 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.\n\n \n\nIn 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.\n\n \n\nIn September 2018, Crazy Industry (Changzhou) Industry Technology Co., Ltd. (“Crazy Industry”) was established in China. Crazy Industry is the research and development hub.\n\n \n\nIn June 2020, Dotfloor Inc. (“Dotfloor”) was established in California.\nDotfloor is a U.S. distribution subsidiary of the Company\n.\n\n \n\nIn 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.\n\n \n\nOn 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.\n\n \n\nIn October and November 2024, the Company acquired Cedar Modern Limited and Raleigh Industries Limited, respectively.\n\n \n\nGoing Concern\n\n \n\nThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2026, the Company had a working capital of $4,216,792 and net cash used in operating activities of $1,401,161 for the three months ended March 31, 2026. 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. These financial statements do not include any adjustments that might result from the outcome of this uncertainly.\n\n \n\nIn February 2026, the Company received a purchase order of approximately $2.0 million from a leading Midwest home improvement retailer for Benchwick flooring products. This order, together with the Company’s existing vendor relationships with several major North American home improvement retail chains, demonstrates the growing market acceptance of the Company’s 3D-printed flooring products.\n\n \n\nDuring the three months ended March 31, 2026, the Company has received partial payments toward the subscription receivable balance. Management has obtained payment commitments from the subscription holders and expects substantially all of the remaining subscription receivable balance to be collected during the first and second quarters of fiscal year 2026. The collection of these amounts will significantly strengthen the Company’s cash position and liquidity, extending the Company’s cash runway well beyond twelve months from the date of these financial statements. Management believes the subscription receivable is fully collectible based on the following factors: (i) the subscription holders have demonstrated their intent and ability to pay through partial payments received subsequent to the balance sheet date; (ii) the subscription agreements are legally binding and enforceable; (iii) the Company has maintained active communication with all subscription holders regarding payment schedules; and (iv) management is not aware of any indicators of financial distress or inability to pay on the part of any subscription holder. Accordingly, no allowance for credit losses has been recorded against the subscription receivable as of March 31, 2026.\n\n \n\nF-5\n\n \n\n2.\n\nSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\n \n\nBasis of Presentation\n\n \n\nThe 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.\n\n \n\nSubsidiaries 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.\n\n \n\nUse of Estimates\n\n \n\nThe 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.\n\n \n\nBasis of Consolidation\n\n \n\nThe consolidated financial statements include the financial statements of the Company.\n\n \n\nRevenue Recognition\n\n \n\nThe 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.\n\n \n\nRevenue 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.\n\n \n\nRevenues 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.\n\n \n\nPractical expedients and exemption\n\n \n\nThe Company has not incurred 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.\n\n \n\nF-6\n\n \n\nThe 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\n\nsells 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. $674,690\nand $nil were recognized as revenue from unearned revenue during the three months ended March 31, 2026 and 2025.\n\n \n\nTaxation\n\n \n\nThe 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.\n\n \n\nUnder 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.\n\n \n\nOn 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.\n\n \n\nThe 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.\n\n \n\nThe 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, 2026. The Company had no uncertain tax position for the three months ended March 31, 2026 and 2025.\n\n \n\nForeign Currency and Foreign Currency Translation\n\n \n\nThe 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.\n\n \n\nF-7\n\n \n\nForeign 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.\n\n \n\nThe 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.\n\n \n\nTranslation of amounts from RMB and HKD into U.S. dollars has been made at the following exchange rates:\n\n \n\nBalance sheet items, except for equity accounts\n\n \n\n \n\n \n\n \n\n \n\nMarch 31, 2026\n\n \n\nRMB 6.8980 to $1\n\n \n\nHKD 7.8 to $1\n\n \n\nDecember 31, 2025\n\n \n\nRMB 6.9931 to $1\n\n \n\nHKD 7.8 to $1\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIncome statement and cash flows items\n\n \n\n \n\n \n\n \n\n \n\nFor the three months ended March 31, 2026\n\n \n\nRMB 6.9218 to $1\n\n \n\nHKD 7.8 to $1\n\n \n\nFor the three months ended March 31, 2025\n\n \n\nRMB \n\n7.1723\nto $1\n\n \n\nHKD 7.7774 to$1\n\n \n\n \n\nCash\n\n \n\nCash consists 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.\n\n \n\nAccounts Receivable, Net\n\n \n\nAccounts 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.\n\n \n\nAdditionally, 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.\n\n \n\nAllowance for doubtful accounts was nil and nil as of March 31, 2026 and December 31, 2025.\n\n \n\nLong-Lived Assets\n\n \n\nLong-lived assets consist primarily of equipment and intangible assets.\n\n \n\nEquipment\n\n \n\nEquipment is recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the accelerated depreciation method over the estimated useful lives of the assets.\n\n \n\nF-8\n\n \n\n \n\n \n\nEstimated\nuseful lives\n(years)\n\n \n\nOffice and computer equipment\n\n \n\n3-5\n\n \n\nManufacturing equipment\n\n \n\n10-20\n\n \n\nAutomobile\n\n \n\n5\n\n \n\n \n\nExpenditure for maintenance and repairs is expensed as incurred.\n\n \n\nThe 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.\n\n \n\nLand Use Rights, Net\n\n \n\nLand 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.\n\n \n\nThe estimated useful lives of the Company’s land use rights are as listed below:\n\n \n\n \n\n \n\nEstimated\nuseful lives\n(years)\n\n \n\nLand use right\n\n \n\n50\n\n \n\n \n\nImpairment of Long-lived Assets\n\n \n\nIn 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 loss has been recorded by the Company in the three months ended March 31, 202\n6\nand 202\n\n5\n\n.\n\n \n\nNet earnings per share of common stock\n\n \n\nThe 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.\n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet loss\n\n \n\n$\n\n(2,895,325\n\n)\n\n \n\n$\n\n(2,630,729\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average number of shares of common stock outstanding - basic*\n\n \n\n \n\n45,115,306\n\n \n\n \n\n \n\n95,464,000\n\n \n\nAdd: potentially dilutive effect of shares issuable\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average number of shares of common stock outstanding - diluted*\n\n \n\n \n\n45,115,306\n\n \n\n \n\n \n\n95,464,000\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet loss per ordinary share\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n-Basic\n\n \n\n$\n\n(0.064\n\n)\n\n \n\n$\n\n(0.028\n\n)\n\n-Diluted\n\n \n\n$\n\n(0.064\n\n)\n\n \n\n$\n\n(0.028\n\n)\n\n \n\n* Retrospectively restated for the effect of 1-for-8 reverse stock split. (Note 16)\n\n \n\nF-9\n\n \n\nSegments\n\n \n\nThe 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.\n\n \n\nShipping and Handling Costs\n\n \n\nOutbound 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.\n\n \n\nFair Value of Financial Instruments\n\n \n\nU.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:\n\n \n\nLevel 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\n \n\nLevel 2 – include other inputs that are directly or indirectly observable in the market place.\n\n \n\nLevel 3 – unobservable inputs which are supported by little or no market activity.\n\n \n\nThe 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.\n\n \n\nIn 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.\n\n \n\nAs of December 31, 2025 and 2024, the Company had no investments in financial instruments.\n\n \n\nLeases\n\n \n\nIn 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.\n\n \n\nThe 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.\n\n \n\nF-10\n\n \n\nThe 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.\n\n \n\nLease 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-cancellable, lease term when determining the lease assets and liabilities.\n\n \n\nRecent accounting pronouncements\n\n \n\nRecently adopted accounting pronouncements\n\n \n\nIn 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, \nSegment Reporting\n; (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.\n\n \n\nIn 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 adopted this update beginning January 1, 2025.\n\n \n\nRecently issued accounting pronouncements not yet adopted\n\n \n\nF-11\n\n \n\nIn 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.\n\n \n\n3.\n\nACCOUNTS RECEIVABLE, NET\n\n \n\nAccounts receivable consist of the following:\n\n \n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\nGross accounts receivable\n\n \n\n$\n\n3,850,848\n\n \n\n \n\n$\n\n3,512,715\n\n \n\nTotal\n\n \n\n$\n\n3,850,848\n\n \n\n \n\n$\n\n3,512,715\n\n \n\n \n\nThere was no allowance for doubtful accounts recorded as of March 31, 2026, and December 31, 2025.\n\n \n\n4.\n\nOTHER RECEIVABLES\n\n \n\nOther receivables consist of the following:\n\n \n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDeposit and other assets\n\n \n\n$\n\n28,242\n\n \n\n \n\n$\n\n50,075\n\n \n\nTotal\n\n \n\n$\n\n28,242\n\n \n\n \n\n$\n\n50,075\n\n \n\n \n\n5.\n\nINVENTORY, NET\n\n \n\nInventories, net, consist of the following:\n\n \n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\nRaw materials and components\n\n \n\n$\n\n1,622,802\n\n \n\n \n\n$\n\n1,636,052\n\n \n\nFinished goods\n\n \n\n \n\n4,442,879\n\n \n\n \n\n \n\n4,549,646\n\n \n\nTotal\n\n \n\n \n\n6,065,681\n\n \n\n \n\n \n\n6,185,698\n\n \n\nless: Impairment\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nInventories, net\n\n \n\n$\n\n6,065,681\n\n \n\n \n\n$\n\n6,185,698\n\n \n\n \n\n6.\n\nEQUIPMENT, NET\n\n \n\nEquipment, net consists of the following:\n\n \n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nManufacturing equipment\n\n \n\n \n\n8,819,699\n\n \n\n \n\n \n\n8,699,909\n\n \n\nOffice equipment\n\n \n\n \n\n333,943\n\n \n\n \n\n \n\n402,313\n\n \n\nMotor\nv\nehicles\n\n \n\n \n\n74,094\n\n \n\n \n\n \n\n-\n\n \n\nLess: Accumulated depreciation\n\n \n\n \n\n5,823,085\n\n \n\n \n\n \n\n5,594,821\n\n \n\nTotal\n\n \n\n$\n\n3,404,651\n\n \n\n \n\n$\n\n3,507,401\n\n \n\n \n\nF-12\n\n \n\nDepreciation expenses charged to the consolidated statements of operations for the three months ended March 31, 2026 and 2025 were $152,203 and $239,511, respectively.\n\n \n\n7.\n\nINTANGIBLE ASSETS, NET\n\n \n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLand use right\n\n \n\n$\n\n1,148,602\n\n \n\n \n\n$\n\n1,133,437\n\n \n\nSoftware\n\n \n\n \n\n11,024,501\n\n \n\n \n\n \n\n24,167\n\n \n\nless: Accumulated amortization\n\n \n\n \n\n1,087,774\n\n \n\n \n\n \n\n162,676\n\n \n\n \n\n \n\n$\n\n11,085,329\n\n \n\n \n\n$\n\n994,928\n\n \n\n \n\nThe Company has pledged its land use rights at No. 199, Newtag, Wujin District, Changzhou, Jiangsu Province, China, 213000 to Industrial and Commercial Bank of China Limited as a collateral for securing its loans.\n\n \n\n8.\n\nLOAN PAYABLE\n\n \n\nShort-term and long-term loans as of March 31, 2026 and December 31, 2025 represent mainly bank borrowings obtained from financial institutions in the PRC.\n\n \n\nThe short-term and long-term bank borrowings were secured by land use right. The weighted average interest rate for the bank borrowings for the three months ended March 31, 2026 and 2025 was approximately 4.04% and 5.72%, respectively.\n\n \n\nCurrent\n\nBank\n\n \n\nLoan period\n\n \n\nInterest\n\nrate\n\n \n\n \n\nBalance at\n\nMarch 31,\n\n2026\n\n \n\n \n\nBalance at\n\nDecember 31,\n\n2025\n\n \n\n \n\n \n\n      \n\nJiangnan Rural Commercial Bank\n\n \n\nJuly 28, 2025-March 28, 2027\n\n \n\n \n\n4.55\n\n%\n\n \n\n \n\n1,304,726\n\n \n\n \n\n \n\n1,286,983\n\n \n\nAuto Loan, current\n\n \n\nFrom June 16, 2025 to June 30, 2030\n\n \n\n \n\n1.99\n\n%\n\n \n\n \n\n13,751\n\n \n\n \n\n \n\n15,762\n\n \n\nTotal\n\n \n\n  \n \n \n\n$\n\n1,318,477\n\n \n\n \n\n$\n\n1,302,745\n\n \n\n \n\nNon-current\n\n \n\nBank\n\n \n\nLoan period\n\n \n\nInterest\n\nrate\n\n \n\n \n\nBalance at\n\nMarch 31,\n\n2026\n\n \n\n \n\nBalance at\n\nDecember 31,\n\n2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIndustrial and Commercial Bank of China\n\n \n\nJune 13, 2025-June 13, 2028\n\n \n\n \n\n3.45\n\n%\n\n \n\n$\n\n1,377,211\n\n \n\n \n\n$\n\n1,358,481\n\n \n\nIndustrial and Commercial Bank of China\n\n \n\nJune 13, 2025-June 13, 2028\n\n \n\n \n\n3.45\n\n%\n\n \n\n \n\n1,449,695\n\n \n\n \n\n \n\n1,429,981\n\n \n\nEIDL Loan\n\n \n\nFrom June 26, 2020 to June 25, 2050\n\n \n\n \n\n3.75\n\n%\n\n \n\n \n\n133,971\n\n \n\n \n\n \n\n133,971\n\n \n\nAuto Loan, non-current\n\n \n\nFrom June 16, 2025 to June 30, 2030\n\n \n\n \n\n1.99\n\n%\n\n \n\n \n\n43,076\n\n \n\n \n\n \n\n46,276\n\n \n\nTotal\n\n \n\n \n\n \n\n \n\n \n \n\n$\n\n3,003,953\n\n \n\n \n\n$\n\n2,968,709\n\n \n\n \n\nF-13\n\n \n\n9.\n\nBALANCES WITH RELATED PARTY\n\n \n\n1)\n\nRelated party transactions\n\n \n\nFor the three months ended March 31, 2026 and 2025, the Company’s related party provided working capital to support the Company’s operations when needed. The borrowings were unsecured, due on demand, and interest free. The following table summarizes borrowing transactions with the Company’s related party:\n\n \n\n2)\n\nRelated party balances\n\n \n\nAccounts\n\n \n\nName of Related Party\n\n \n\nNote\n\n \n\nMarch 31,\n2026\n\n \n\n \n\nDecember 31,\n2025\n\n \n\nAmount due (from) to related party\n\n \n\nLin Li, Chief Executive Officer and Chairman of the Board\n\n \n\n \n\n$\n\n1,643,288\n\n \n\n \n\n$\n\n985,018\n\n \n\n \n\nAll the above balances are due on demand, interest-free and unsecured. The Company used the funds for its operations.\n\n \n\n10.\n\nEQUITY\n\n \n\nPreferred Stock\n\n \n\nThe 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.\n\n \n\nCommon Stock\n\n \n\nThe 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.\n\n \n\n11.\n\nINCOME TAXES\n\n \n\nUnited States of America\n\n \n\nThe Company is subject to taxation in the United States (USA) at the tax rate of 21%.\n\n \n\nHong Kong\n\n \n\nTwo-tier Profits Tax Rates\n\n \n\nThe 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.\n\n \n\nF-14\n\n \n\nThe provision for current income and deferred taxes of Benchwick has been calculated by applying the new tax rate of 8.25%.\n\n \n\nPRC\n\n \n\nIn 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%. 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.\n\n \n\nUncertain tax positions\n\n \n\nThe Company did not have any uncertain tax positions during the three months ended March 31, 2026 and 2025.\n\n \n\nThe 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.\n\n \n\nThe 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 March 31, 2026. The Company anticipated that the settlements with the taxing authority are remitted within one year.\n\n \n\nOur 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 as of March 31, 2026 and December 31, 2025, respectively.\n\n \n\nThe 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.\n\n \n\nIn 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 underpayment or evasion.\n\n \n\nIn 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.\n\n \n\n12.\n\nCHINA CONTRIBUTION PLAN\n\n \n\nDuring \nthe three months ended March 31, 2026 and 2025, the Company contributed a total of $13,375 and $15,005, respectively, to these funds.\n\n \n\n13.\n\nOPERATING LEASE\n\n \n\nThe Company has an operating lease for its office facilities. The lease is located at 9820 Dino Drive, Suite 110, Elk Grove, California, 95624, which consist of approximately 3,653 square feet. The initial lease term commenced on August 1, 2020 and ended on August 31, 2023. The lease was renewed for additional 36 months to end on August 31, 2026.\n\n \n\nThe Company has an operating lease for its\noffice, \nwarehouse\nand factory \nfacilities. The\nfacilities are\nlocated at 2251 Catawba River Road, Fort Lawn, SC, which consist of approximately 106,610 square feet. The lease term commenced on August 20, 2024 and will end on August 31, 2029.\n\n \n\nLeases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes.\n\n \n\nF-15\n\n \n\nThe following table provides a summary of leases by balance sheet location as of March 31, 2026 and December 31, 2025:\n\n \n\nAssets/liabilities\n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\nAssets\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease right-of-use assets\n\n \n\n$\n\n1,372,742\n\n \n\n \n\n$\n\n1,466,512\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLiabilities\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating lease liability - current\n\n \n\n$\n\n373,584\n\n \n\n \n\n$\n\n374,585\n\n \n\nOperating lease liability - non-current\n\n \n\n \n\n999,158\n\n \n\n \n\n \n\n1,091,927\n\n \n\nTotal lease liabilities\n\n \n\n$\n\n1,372,742\n\n \n\n \n\n$\n\n1,466,512\n\n \n\n \n\nThe operating lease expenses for the three months ended March 31, 2026 and 2025 were as follows:\n\n \n\nLease Cost\n\n \n\nClassification\n\n \n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nMarch 31,\n\n2025\n\n \n\n \n\nOperating lease expense\n\n \n\nGeneral and administrative expenses\n\n \n\n \n\n$\n\n111,712\n\n \n\n \n\n$\n\n86,294\n\n \n\n \n\nMaturities of operating lease liabilities as of March 31, 2026 were as follows:\n\n \n\nMaturity of Lease Liabilities\n\n \n\nOperating\n\nLeases\n\n \n\n \n\nWithin one year\n\n \n\n$\n\n327,566\n\n \n\nWithin a period of more than one year but not more than two years\n\n \n\n \n\n428,376\n\n \n\nWithin a period of more than two year but not more than three years\n\n \n\n \n\n441,227\n\n \n\nWithin a period of more than three year but not more than four years\n\n \n\n \n\n299,976\n\n \n\nWithin a period of more than four years but not more than five years\n\n \n\n \n\n-\n\n \n\nMore than five years\n\n \n\n \n\n-\n\n \n\nTotal lease commitment\n\n \n\n$\n\n1,497,145\n\n \n\nLess: interest\n\n \n\n \n\n(124,403\n\n)\n\nPresent value of lease payments\n\n \n\n$\n\n1,372,742\n\n \n\n \n\nLease liabilities include lease and non-lease component such as management fee.\n\n \n\nLease Term and Discount Rate\n\n \n\nMarch 31,\n\n2026\n\n \n\n \n\n \n\n \n\nDecember 31,\n\n2025\n\n \n\n \n\nWeighted-average remaining lease term (years)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n \n\n3.39\n\n \n\n \n\n \n\n \n\n \n\n3.62\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted-average discount rate (%)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating leases\n\n \n\n \n\n5\n\n%\n\n \n\n \n\n5\n\n%\n\n \n\n \n\n14.\n\nCONCENTRATIONS AND CREDIT RISK\n\n \n\n(a)\n\nConcentrations\n\n \n\nDuring the three months ended March 31, 2026, one customer accounted for approximately 76.6% of the Company’s revenues. During the three months ended March 31, 2025, two customers accounted for nearly 74% of the Company’s revenues. No other customer accounted for more than 10% of the Company’s revenues in the three months ended March 31, 2026 and 2025.\n\n \n\nF-16\n\n \n\nAs of March 31, 2026, one customer accounted for approximately 77.1% of the Company’s accounts receivable. As of December 31, 2025, one customer accounted for 78% of the Company’s accounts receivable. No other customer accounted for more than 10% of the Company’s accounts receivable as of March 31, 2026 and December 31, 2025.\n\n \n\nDuring the three months ended March 31, 2026, one supplier accounted for approximately 10.0% of the Company’s cost of revenues. During the three months ended March 31, 2025, no supplier accounts for over 10% of the Company’s cost of revenues. No other supplier accounted for over 10% of the Company’s cost of revenues in the three months ended March 31, 2026.\n\n \n\nAs of March 31, 2026, one supplier accounted for approximately 11.2% of the Company’s accounts payable.\n\nAs of March 31, 2025, no supplier accounted for over 10% of the Company’s accounts payable. No other supplier accounted for over 10% of the Company’s accounts payable in the three months ended March 31, 2026.\n\n \n\n(b)\n\nCredit risk\n\n \n\nFinancial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of March 31, 2026 and December 31, 2025, 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.\n\n \n\nFor 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.\n\n \n\n15.\n\nCAPITAL COMMITMENTS\n\n \n\nOn 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.\n\n \n\n16.\n\nSTOCK SPLIT\n\n \n\nEffective on October 7, 2025, the Company implemented a \n1-for-8\n reverse stock split of the issued and outstanding shares. Under the reverse split, every eight issued and outstanding shares were converted into one share of the same kind, with a par value of $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 \n1-for-8\n reverse stock split. The total number of outstanding common shares immediately before the reverse split was 179,797,995 and immediately after the reverse split was 22,474,784. The total number of outstanding preferred shares immediately before the reverse split was 5,000,000 and immediately after the reverse split was 625,000.\n\n \n\n17.\n\nSECURED BORROWING ARRANGEMENT\n\n \n\nIn 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.\n\n \n\nIt is scheduled under the agreement that the Company pays $49,700 per week for thirty weeks to the financial institution to repay the loan.\n\n \n\n \n\nOn 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 $24,000,000 at an interest rate of 1.00% per year.\n\n \n\nF-17\n\n \n\n \n\n18.\n\nSUBSEQUENT EVENT\n\n \n\nThe Company has analyzed its operations subsequent to March 31, 2026 and up through May 15, 2026 which is the date these consolidation financial statements were issued, except as disclosed herein, there is no material subsequent events to disclose in these consolidated financial statements.\n\n \n\n19.\n\nUNRESTRICTED NET ASSETS\n\n \n\nThe following presents condensed financial information of Northann Corp:\n\nCondensed Financial Information on Financial Position\n\n \n\n \n\n \n\n \n\nMarch 31,\n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n(Unaudited)\n\n \n\n \n\n \n\n \n\nCash\n\n \n\n$\n\n50\n\n \n\n \n\n$\n\n200\n\n \n\nAmounts due from subsidiaries\n\n \n\n \n\n11,597,614\n\n \n\n \n\n \n\n10,907,203\n\n \n\nTotal current assets\n\n \n\n \n\n11,597,664\n\n \n\n \n\n \n\n10,907,403\n\n \n\nAll other non-current assets\n\n \n\n \n\n1,358,311\n\n \n\n \n\n \n\n1,443,566\n\n \n\nInterests in a subsidiary\n\n \n\n \n\n17,834,696\n\n \n\n \n\n \n\n8,941,175\n\n \n\nTotal Assets\n\n \n\n \n\n30,790,621\n\n \n\n \n\n \n\n21,292,144\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLiabilities and Stockholders’ \nEquit\ny\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAll other current liabilities\n\n \n\n \n\n433,791\n\n \n\n \n\n \n\n431,276\n\n \n\nAmounts due to subsidiaries\n\n \n\n \n\n11,906,908\n\n \n\n \n\n \n\n11,850,686\n\n \n\nTotal current liabilities\n\n \n\n \n\n12,340,699\n\n \n\n \n\n \n\n12,281,962\n\n \n\nNon-current liabilities\n\n \n\n \n\n-\n\n \n\n \n\n \n\n35,892\n\n \n\nTotal Liabilities\n\n \n\n \n\n12,340,699\n\n \n\n \n\n \n\n12,281,962\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders’ Equity (Deficit)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock – Series A, $0.001 par value, 625,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025\n\n \n\n \n\n625\n\n \n\n \n\n \n\n625\n\n \n\nCommon stock, $0.001 par value,\n\n400,000,000\n\nshares authorized, 53,733,083 and 22,933,083 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n \n\n \n\n53,733\n\n \n\n \n\n \n\n22,933\n\n \n\nSubscription receivable\n\n \n\n \n\n(11,879,902\n\n)\n\n \n\n \n\n(12,706,602\n\n)\n\nAdditional Paid-in Capital\n\n \n\n \n\n53,137,586\n\n \n\n \n\n \n\n41,709,686\n\n \n\n(Accumulated deficit) retained earnings\n\n \n\n \n\n(24,263,124\n\n)\n\n \n\n \n\n(21,367,799\n\n)\n\nAccumulated other comprehensive loss\n\n \n\n \n\n1,401,004\n\n \n\n \n\n \n\n1,351,339\n\n \n\nTotal Stockholders’ Equity\n\n \n\n \n\n18,449,922\n\n \n\n \n\n \n\n9,010,182\n\n \n\nTotal Liabilities and Stockholders’ \nEquity\n\n \n\n$\n\n30,790,621\n\n \n\n \n\n$\n\n21,292,144\n\n \n\nRetroactively reflects 1-for-8 reverse stock split effective October 7, 2025. (Note 16)\n\n \n\nCondensed Financial Information on Results of Operations\n\n \n\n \n\n \n\nFor the three months ended\n\nMarch 31,\n\n \n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nRevenue\n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\nCost or revenues\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nOperating expenses\n\n \n\n \n\n1,507,005\n\n \n\n \n\n \n\n708,858\n\n \n\nIncome taxes\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nLoss – Parent only\n\n \n\n \n\n(1,507,005\n\n)\n\n \n\n \n\n(708,858\n\n)\n\nIncome (loss)– Subsidiaries with unrestricted net assets\n\n \n\n \n\n(860,503\n\n)\n\n \n\n \n\n(1,162,876\n\n)\n\nLoss – Subsidiaries with restricted net assets\n\n \n\n \n\n(527,817\n\n)\n\n \n\n \n\n(686,994\n\n)\n\nNet loss – Consolidated\n\n \n\n$\n\n(2,895,325\n\n)\n\n \n\n$\n\n(2,630,728\n\n)\n\n \n\nF-18\n\n \n\nCondensed Financial Information on Cash Flows\n\n \n\n \n\n \n\nFor the three months ended\n\nMarch 31,\n\n \n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nCash used in operating activities\n\n \n\n$\n\n(1,507,005\n\n)\n\n \n\n$\n\n(780,858\n\n)\n\nCash used in investing activities\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nCash provided by financing activities\n\n \n\n \n\n1,507,055\n\n \n\n \n\n \n\n780,858\n\n \n\nNet cash flows\n\n \n\n \n\n50\n\n \n\n \n\n \n\n-\n\n \n\nBeginning cash balance\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nEnding cash balance\n\n \n\n$\n\n50\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n(i)\n\nBasis of presentation\n\n \n\nThe 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,\n\n \n\n(ii)\n\nRestricted Net Assets\n\n \n\nSchedule 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.\n\n \n\nAs of March 31, 2026 and December 31, 2025, 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.\n\n \n\nF-19"}