Northann Corp 2025年季度报告

of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position thatmeets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A taxposition is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest 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 majority of the tax provision effective after December 31, 2017. Certain activities conducted in foreign jurisdictions may result in theimposition of U.S. corporate income taxes on the Company when its subsidiaries, controlled foreign corporations (“CFCs”), generateincome 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 27March2020. The CARES Act temporarily eliminates the80% 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, theCARES Act also temporarily increases the business interest deduction limitations from30% to50% of adjusted taxable income for the2019 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 atthe time of enactment. The Company does not anticipate a material impact on its financial statements as of March 31, 2025andDecember31, 2024due to the recent enactment. F-7 The Company accounts for an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the taxposition 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 didnot accrue any liability, interest or penalties related to uncertain tax positions in the provision for income taxes lineof the consolidated statements of operations for the three months ended March 31, 2025. The Company hadnouncertain tax positionfor the three months ended March 31, 2025and March 31, 2024. the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessingvarious indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. currency re-measurement are included in the statements of comprehensive loss. exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effectduring 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 historicalexchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to thereporting currency are recorded in accumulated other comprehensive income in the consolidated balance sheets. Cash consist of cash on hand and at banks and highly liquid investments, which are unrestricted from withdrawal or use, and which Net(loss)income Weighted average number of shares of common stock outstanding - basic95,464,000*21,380,000Add: potentially dilutive effect of shares issuable upon conversion of notes Weighted average number of shares of common stock outstanding - diluted95,464,000*21,380,000Basic and diluted (loss) earnings per share$(0.028)*$ *Retrospectively restated for the effect of2-for-1reverse stock split. (Note 16) The Company evaluates a reporting unit by first identifying its operating segments, and then evaluates each operating segment todetermine if it includes one or more components that constitute a business. If there are components within an operating segment thatmeets the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or morereporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines Shipping and Handling Costs charged for raw material and components are accounted for as cos