MKDWELL Tech Inc. Reports First Half of Fiscal Year 2024 Unaudited Financial Results
MKDWELL Tech Inc. (MKDW) reported disappointing financial results for H1 2024, with significant declines across key metrics. Total revenues fell 61.3% to US$0.81 million from US$2.10 million in H1 2023. The company's gross profit dropped to US$0.07 million with an 8.2% margin, compared to US$0.32 million with 15.2% margin in H1 2023.
Net loss widened to US$1.73 million, up 77.8% from US$0.97 million in the prior year period. The increased losses were primarily due to Nasdaq listing expenses and termination of a key customer relationship. The company completed its business combination with Cetus Capital in July 2024, resulting in its Nasdaq listing and acquisition of a 62.36% indirect equity interest in MKD Technology Inc.
MKDWELL Tech Inc. (MKDW) ha riportato risultati finanziari deludenti per il primo semestre del 2024, con significativi cali in vari indicatori chiave. I ricavi totali sono diminuiti del 61,3%, scendendo a 0,81 milioni di dollari rispetto ai 2,10 milioni di dollari nel primo semestre del 2023. Il profitto lordo dell'azienda è sceso a 0,07 milioni di dollari con un margine dell'8,2%, rispetto ai 0,32 milioni di dollari e un margine del 15,2% nel primo semestre del 2023.
La perdita netta è aumentata a 1,73 milioni di dollari, con un incremento del 77,8% rispetto ai 0,97 milioni di dollari dello stesso periodo dell'anno precedente. L'aumento delle perdite è stato principalmente dovuto alle spese per la quotazione al Nasdaq e alla cessazione di un rapporto commerciale chiave. L'azienda ha completato la sua combinazione aziendale con Cetus Capital a luglio 2024, portando alla sua quotazione al Nasdaq e all'acquisizione di una partecipazione indiretta del 62,36% in MKD Technology Inc.
MKDWELL Tech Inc. (MKDW) reportó resultados financieros decepcionantes para el primer semestre de 2024, con caídas significativas en métricas clave. Los ingresos totales cayeron un 61,3% a 0,81 millones de dólares desde los 2,10 millones de dólares en el primer semestre de 2023. El beneficio bruto de la compañía se redujo a 0,07 millones de dólares con un margen del 8,2%, frente a los 0,32 millones de dólares y un margen del 15,2% en el primer semestre de 2023.
La pérdida neta se amplió a 1,73 millones de dólares, un aumento del 77,8% desde los 0,97 millones de dólares en el mismo período del año anterior. Las pérdidas crecientes se debieron principalmente a los gastos de cotización en Nasdaq y a la finalización de una relación comercial clave. La empresa completó su fusión con Cetus Capital en julio de 2024, resultando en su cotización en Nasdaq y la adquisición de un 62,36% de participación indirecta en MKD Technology Inc.
MKDWELL Tech Inc. (MKDW)는 2024년 상반기 실적이 실망스러웠으며, 주요 지표에서 상당한 감소를 보였습니다. 총 수익은 61.3% 감소하여 2023년 상반기 2.10백만 달러에서 0.81백만 달러로 줄었습니다. 회사의 총 이익은 0.07백만 달러로 8.2%의 마진을 기록했으며, 이는 2023년 상반기의 0.32백만 달러와 15.2%의 마진에 비해 감소한 수치입니다.
순손실은 1.73백만 달러로 확대되었으며, 이는 전년 동기 0.97백만 달러에서 77.8% 증가한 것입니다. 손실의 증가는 주로 나스닥 상장 비용과 주요 고객 관계의 종료 때문입니다. 회사는 2024년 7월에 Cetus Capital과의 사업 합병을 완료하여 나스닥 상장과 MKD Technology Inc.에 대한 62.36%의 간접 지분을 인수하였습니다.
MKDWELL Tech Inc. (MKDW) a publié des résultats financiers décevants pour le premier semestre 2024, avec des baisses significatives dans des indicateurs clés. Les revenus totaux ont chuté de 61,3% à 0,81 million de dollars, contre 2,10 millions de dollars au premier semestre 2023. Le bénéfice brut de l'entreprise a diminué à 0,07 million de dollars avec une marge de 8,2%, par rapport à 0,32 million de dollars avec une marge de 15,2% au premier semestre 2023.
La perte nette s'est creusée à 1,73 million de dollars, soit une augmentation de 77,8% par rapport à 0,97 million de dollars durant la même période l'année précédente. L'augmentation des pertes est principalement due aux frais de cotation au Nasdaq et à la résiliation d'une relation client clé. L'entreprise a finalisé sa combinaison d'affaires avec Cetus Capital en juillet 2024, ce qui a abouti à sa cotation au Nasdaq et à l'acquisition d'une participation indirecte de 62,36% dans MKD Technology Inc.
MKDWELL Tech Inc. (MKDW) hat enttäuschende Finanzzahlen für das erste Halbjahr 2024 veröffentlicht, mit erheblichen Rückgänge bei den wichtigsten Kennzahlen. Die Gesamterlöse sanken um 61,3% auf 0,81 Millionen US-Dollar, verglichen mit 2,10 Millionen US-Dollar im ersten Halbjahr 2023. Der Bruttogewinn des Unternehmens fiel auf 0,07 Millionen US-Dollar mit einer Marge von 8,2%, im Vergleich zu 0,32 Millionen US-Dollar und einer Marge von 15,2% im ersten Halbjahr 2023.
Der Nettoverlust weitete sich auf 1,73 Millionen US-Dollar aus, was einem Anstieg von 77,8% im Vergleich zu 0,97 Millionen US-Dollar im Vorjahreszeitraum entspricht. Die erhöhten Verluste waren hauptsächlich auf die Kosten der Nasdaq-Notierung und die Beendigung einer wichtigen Kundenbeziehung zurückzuführen. Das Unternehmen hat im Juli 2024 seine Unternehmenszusammenlegung mit Cetus Capital abgeschlossen, was zu seiner Nasdaq-Notierung und dem Erwerb einer indirekten Beteiligung von 62,36% an MKD Technology Inc. führte.
- Completed business combination with Cetus Capital and achieved Nasdaq listing
- Management team now shifting focus from listing process to business development
- Revenue declined 61.3% to US$0.81M in H1 2024
- Net loss increased 77.8% to US$1.73M
- Gross profit margin decreased from 15.2% to 8.2%
- Loss of key customer relationship
- Working capital deficit of US$4.84M raises going concern issues
- Accumulated deficits of US$12.62M as of June 2024
Insights
New York, Dec. 31, 2024 (GLOBE NEWSWIRE) -- MKDWELL Tech Inc. (the “Company”, “we”, “our”, or “us”) (Nasdaq: MKDW), a business company incorporated in the British Virgin Islands (“BVI”) with operations in Mainland China and Taiwan, today announced its unaudited financial results for the six months ended June 30, 2024.
First Half 2024 Financial Highlights
| ● | Total revenues in the first half of 2024 were US | |
| ● | Gross profit in the first half of 2024 was US | |
| ● | Loss from operations in the first half of 2024 was US | |
| ● | Net loss in the first half of 2024 was US | |
Management Commentary
We terminated a key customer relationship in 2024, due to a mismatch in price expectation. After comprehensive business evaluation, management made the determination to terminate such customer relationship, and as a result our new customers in 2024 were primarily in the trial production stage in the first half of the year, resulting in a year-on-year decrease in sales revenue. In the first half of 2024, we incurred expenses for our Nasdaq listing, resulting in an increase in loss.
Prior to the listing of the Company on Nasdaq, the focus of the management team was preoccupied with such listing and the business combination with Cetus Capital. With the Company now having completed its business combination and listing on Nasdaq, we anticipate that the management team will lead the business team to shift the focus of work to business and customer development. In addition to adding new customer groups, we will strive to improve product quality to increase customer dependence and trust in the Company.
We completed our business combination with Cetus Capital in July 2024, as a result of which we became listed on Nasdaq, and MKDWELL Tech Inc. acquired MKDWELL Limited, a BVI business company as its wholly-owned subsidiary and an approximate
The unaudited condensed consolidated financial statements presented herein are those prior to the business combination which was consummated on July 31, 2024, and represents the financial statements of MKDWELL Limited and its subsidiaries, and the financial statements of Cetus Capital Acquisition Corp.
First Half 2024 Financial Results
Revenues
Our revenues consist of (i) sales of manufactured electronic products, (ii) commissioned processing service, (iii) rental income and (iv) others. Others mainly consist of electricity and technical services revenues.
Our breakdown of revenues for the six months ended June 30, 2023 and 2024 are summarized as below:
| For the six months ended June 30, | Change | |||||||||||||||
| 2023 | 2024 | Amount | % | |||||||||||||
| US$ | US$ | US$ | ||||||||||||||
| By revenue type | ||||||||||||||||
| Sales of manufactured electronic products | $ | 1,135,324 | $ | 589,231 | $ | (546,093 | ) | (48.1 | )% | |||||||
| Commissioned processing service | 740,063 | 72,020 | (668,043 | ) | (90.3 | )% | ||||||||||
| Rental income | 158,012 | 113,952 | (44,060 | ) | (27.9 | )% | ||||||||||
| Others | 63,973 | 35,838 | (28,135 | ) | (44.0 | )% | ||||||||||
| Total | $ | 2,097,372 | $ | 811,041 | $ | (1,286,331 | ) | (61.3 | )% | |||||||
Our total revenues decreased by US
Revenues from our sales of manufactured electronic products decreased by US
Revenues from our commissioned processing service decreased by US
Rental income decreased by US
Revenues from others decreased by US
Cost of revenues
Cost of revenues consists primarily of (i) purchase of electronic materials, (ii) payroll, (iii) depreciation and other costs related to the business operation, (iv) inventories write-down.
Our cost of revenues decreased by US
Gross profit and gross profit margin
Gross profit represents our revenues less cost of revenues. Gross profit margin represents our gross profit as a percentage of our revenues.
Gross profit decreased by US
Selling expenses
Selling expenses primarily consist of: (i) salaries and benefits for sales personnel, (ii) freight expenses, (iii) rental and depreciation allocated to selling department, (iv) certain other expenses.
Our selling expenses remained relatively stable at US
General and administrative expenses
General and administrative expenses primarily consist of: (i) professional service fees; (ii) salaries and benefits for general and administrative personnel, (iii) rental and depreciation allocated to general and administrative department, and (iv) other corporate expenses.
Our general and administrative expenses increased by US
Research and development expenses
Research and development expenses primarily include (i) salaries and benefits for research and development personnel, (ii) material and supplies expenses in relation to research and development activities, (iii) rental and depreciation allocated to the research and development department, (iv) certain other expense.
Our research and development expenses slightly decreased by US
Interest expenses, net
Interest expenses, net consists of interest expenses for bank borrowings and financing through sales and lease back, and interest income earned on cash deposits in banks.
Our interest expenses, net increased by US
Other expenses, net
Other expenses, net consists of government subsidies, foreign currency exchange gain or loss, and others.
Other expense, net increased by US
Taxation
British Virgin Islands (“BVI”)
The Company is incorporated in the BVI. Under the current laws of the BVI, the Company is not subject to income or capital gains taxes. Additionally, dividend payments are not subject to withholdings tax in the BVI.
Samoa
One of our subsidiaries was incorporated in Samoa and, under the current laws of Samoa, is not subject to tax on its income or capital gains. Additionally, dividend payments are not subject to withholdings tax in Samoa.
Mainland China
Generally, our subsidiaries, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of
Taiwan
We are subject to a tax rate of
Net loss
As a result of the foregoing, our net loss increased by US
Going concern and Capital Resources
Our unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. We incurred net losses of US
We have historically depended on financing from bank, related parties and third-party investors to support our operations. Our future operations are dependent upon equity or debt financing and our ability to generate profits through operations at an indeterminate time in the future. We cannot assure that we will be successful in completing an equity or debt financing or in achieving or maintaining profitability in the near term. Our financial statements do not give effect to any adjustments relating to the carrying values and classification of assets and liabilities that would be necessary should we be unable to continue as a going concern.
Exchange Rate
This press release contains translations of certain Chinese Renminbi (“RMB”) and New Taiwan dollar (“NT$”) amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the readers. The following table outlines the currency exchange rates that were used in preparing the unaudited condensed consolidated financial statements, as set forth in the H.10 Statistical release of the Board of Governors of the Federal Reserve System:
| June 30, 2023 | December 31, 2023 | June 30, 2024 | ||||||||||
| Six months-ended spot rate | Average rate | Year-end spot rate | Average rate | Six months-ended spot rate | Average rate | |||||||
| US$ against RMB | US | US | US | US | US | US | ||||||
| US$ against NT$ | US | US | US | US | US | US | ||||||
About MKDWELL Tech Inc.
Through our operating subsidiaries, we are a manufacturer and supplier of automotive electronics for passenger cars, modified commercial vehicles, camper vans and logistics vehicles. Our business coverage extends from research and development, design, and production to sales of automotive electronic products. Our main products are intelligent camper vans control systems, LiDAR sensors, intelligent container control systems for logistics vehicles, vehicle seat control system, and we provide customers with ODM and OEM customized services. We design, manufacture and supply our products to our customers through our design center located in Hsinchu Science Park, Taiwan and our manufacturing plant in Jiaxing Science and Technology City, Jiaxing City, Zhejiang Province, China. Our customers are mainly based in Mainland China and Taiwan.
For further information, please contact:
MKDWELL Tech Inc.
Email: ir@mkdwell.com
MKDWELL TECH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. dollars, except for share and per share data, or otherwise noted)
| As of | ||||||||
| December 31, 2023 | June 30, 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 924,428 | $ | 271,609 | ||||
| Accounts receivable, net | 562,058 | 390,617 | ||||||
| Amounts due from a related party | 14,674 | 14,905 | ||||||
| Inventories, net | 362,963 | 326,860 | ||||||
| Prepaid expenses and other current assets, net | 875,119 | 1,108,305 | ||||||
| Total current assets | 2,739,242 | 2,112,296 | ||||||
| Non-current assets: | ||||||||
| Intangible assets, net | 299,797 | 409,692 | ||||||
| Property, plant and equipment, net | 3,731,403 | 4,424,895 | ||||||
| Real estate properties for lease, net | 2,238,577 | 1,099,876 | ||||||
| Operating lease right-of-use assets, net | 125,009 | 89,456 | ||||||
| Financing lease right-of-use assets, net | 8,523 | 3,330 | ||||||
| Other non-current assets | 28,453 | 27,235 | ||||||
| Total non-current assets | 6,431,762 | 6,054,484 | ||||||
| TOTAL ASSETS | 9,171,004 | 8,166,780 | ||||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Short-term bank borrowings | 2,726,197 | 2,662,649 | ||||||
| Accounts payable | 304,668 | 197,244 | ||||||
| Amounts due to related parties, current | 341,563 | 800,007 | ||||||
| Accrued expenses and other current liabilities | 2,039,329 | 2,311,377 | ||||||
| Long-term bank borrowings, current portion | 596,335 | 925,070 | ||||||
| Operating lease liabilities, current | 61,099 | 58,964 | ||||||
| Total current liabilities | 6,069,191 | 6,955,311 | ||||||
| Non-current liabilities: | ||||||||
| Long-term bank borrowings | 2,429,465 | 2,028,822 | ||||||
| Operating lease liabilities, non-current | 63,910 | 30,492 | ||||||
| Other non-current liabilities | 273,850 | 478,473 | ||||||
| Total non-current liabilities | 2,767,225 | 2,537,787 | ||||||
| TOTAL LIABILITIES | 8,836,416 | 9,493,098 | ||||||
| Commitments and Contingencies | ||||||||
| Equity (deficit) | ||||||||
| - | - | |||||||
| Additional paid-in capital | 11,464,055 | 11,464,055 | ||||||
| Accumulated deficit | (11,213,083 | ) | (12,621,494 | ) | ||||
| Accumulated other comprehensive income | 344,870 | 511,949 | ||||||
| MKDWELL Limited shareholders’ equity (deficit) | 595,842 | (645,490 | ) | |||||
| Non-controlling interests | (261,254 | ) | (680,828 | ) | ||||
| Total equity (deficit) | 334,588 | (1,326,318 | ) | |||||
| TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 9,171,004 | $ | 8,166,780 | ||||
MKDWELL TECH INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In U.S. dollars, except for share and per share data, or otherwise noted)
| For the six months ended June 30, | ||||||||
| 2023 | 2024 | |||||||
| Revenues | $ | 2,097,372 | $ | 811,041 | ||||
| Cost of revenues | (1,778,947 | ) | (744,282 | ) | ||||
| Gross profit | 318,425 | 66,759 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | (110,966 | ) | (110,054 | ) | ||||
| General and administrative expenses | (671,706 | ) | (1,153,323 | ) | ||||
| Research and development expenses | (376,617 | ) | (345,332 | ) | ||||
| Total operating expenses | (1,159,289 | ) | (1,608,709 | ) | ||||
| Loss from operations | (840,864 | ) | (1,541,950 | ) | ||||
| Other loss: | ||||||||
| Interest expenses, net | (124,374 | ) | (164,912 | ) | ||||
| Other expenses, net | (5,002 | ) | (18,348 | ) | ||||
| Total other loss | (129,376 | ) | (183,260 | ) | ||||
| Loss before income tax expense | (970,240 | ) | (1,725,210 | ) | ||||
| Income tax expense | - | - | ||||||
| Net loss | $ | (970,240 | ) | $ | (1,725,210 | ) | ||
| Net loss attributable to non-controlling interest | (180,266 | ) | (316,799 | ) | ||||
| Net loss attributable to ordinary shareholders | (789,974 | ) | (1,408,411 | ) | ||||
| Other comprehensive (loss) income | ||||||||
| Foreign currency translation adjustment attributable to non-controlling interest | (28,506 | ) | (102,775 | ) | ||||
| Foreign currency translation adjustment attributable to parent company | (9,874 | ) | 167,079 | |||||
| Total other comprehensive (loss) income | $ | (38,380 | ) | $ | 64,304 | |||
| Total comprehensive loss | $ | (1,008,620 | ) | $ | (1,660,906 | ) | ||
| Total comprehensive loss attributable to non-controlling interest | (208,772 | ) | (419,574 | ) | ||||
| Total comprehensive loss attributable to ordinary shareholders | (799,848 | ) | (1,241,332 | ) | ||||
| Weighted average shares outstanding used in calculating basic and diluted loss per share - basic and diluted | 26,042,934 | 24,443,989 | ||||||
| Loss per share - basic and diluted | $ | (0.03 | ) | $ | (0.06 | ) | ||
CETUS CAPITAL ACQUISITION CORP.
BALANCE SHEETS
| June 30, 2024 | December 31, 2023 | ||||||
| Unaudited | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash | $ | 181,795 | $ | 320,971 | |||
| Prepaid expenses | 210 | 15,140 | |||||
| Total current assets | 182,005 | 336,111 | |||||
| Non-current assets: | |||||||
| Cash and marketable securities held in the trust | 22,127,715 | 60,158,872 | |||||
| Total assets | $ | 22,309,720 | $ | 60,494,983 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Other payable | 563,254 | 293,748 | |||||
| Accrued offering costs | 70,000 | 70,000 | |||||
| Franchise tax payable | 16,313 | 179,876 | |||||
| Excise tax payable | 387,925 | - | |||||
| Income tax payable | 79,820 | 255,097 | |||||
| Amounts due to related parties | 1,099,737 | 748,509 | |||||
| Total current liabilities | 2,217,049 | 1,547,230 | |||||
| Deferred underwriting commission | 2,130,500 | 1,725,000 | |||||
| Total liabilities | $ | 4,347,549 | $ | 3,272,230 | |||
| Commitments and Contingencies | |||||||
| Class A Common stock subject to possible redemption, | 22,055,715 | 59,723,899 | |||||
| SHAREHOLDERS’ DEFECIT | |||||||
| Preferred share, | - | - | |||||
| Class A common stock, | 179 | 179 | |||||
| Class B common stock, | - | - | |||||
| Accumulated deficit | (4,093,723 | ) | (2,501,325 | ) | |||
| Total shareholders’ deficit | (4,093,544 | ) | (2,501,146 | ) | |||
| Total liabilities, Class A Common stock subject to redemption and shareholders’ deficit | $ | 22,309,720 | $ | 60,494,983 | |||
CETUS CAPITAL ACQUISITION CORP.
STATEMENTS OF OPERATIONS
| | For the Six Months Ended June 30, 2024 | For the Six Months Ended June 30, 2023 | |||||||
| (Unaudited) | (Unaudited) | ||||||||
| Formation and operating costs | | $ | (207,841 | ) | $ | (379,403 | ) | ||
| Franchise tax | | | (194,313 | ) | | (102,567 | ) | ||
| Loss from operation | | | (402,154 | ) | | (481,970 | ) | ||
| | | | |||||||
| Unrealized gain on marketable securities hold in the trust account | | | 869,184 | | 1,106,041 | ||||
| Loss of extinguishment of debt | | | (405,500 | ) | | - | |||
| Other income | | | 463,684 | | 1,106,041 | ||||
| Income before income taxes | | | 61,530 | | 624,071 | ||||
| Income tax expenses | | | (141,723 | ) | | (210,730 | ) | ||
| Net (loss) income | | | (80,193 | ) | | 413,341 | |||
| Weighted average shares outstanding, basic and diluted | | | 4,976,522 | | 6,320,746 | ||||
| Basic and diluted net income (loss) per common share | | $ | (0.02 | ) | $ | 0.06 | |||
*The condensed interim financial statements of Cetus Capital Acquisition Corp. as of June 30, 2024 and for the six months ended June 30, 2024 herein have not been audited or reviewed by Cetus Capital Acquisition Corp.’s independent registered accounting firm.
FAQ
What caused MKDW's revenue decline in H1 2024?
How much did MKDW's net loss increase in H1 2024?
What are MKDW's main financial concerns as of June 2024?
When did MKDW complete its business combination with Cetus Capital?
What was MKDW's gross profit margin in H1 2024?
