MKDWW MKDWELL Tech Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of December 2024

 

 

Commission File Number: 001-42197

 

 

MKDWELL Tech Inc.

 

1F, No. 6-2, Duxing Road,

Hsinchu Science Park,

Hsinchu City 300, Taiwan
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒ Form 40-F ☐

 

 

 

Exhibit Index

 

99.1	Press Release — MKDWELL Tech Inc. Reports First Half of Fiscal Year 2024 Unaudited Financial Results

 

 

SIGNATURES

 

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

 

MKDWELL Tech Inc.
By:	/s/ Ming-Chia Huang
Name:	Ming-Chia Huang
Title:	Chief Executive Officer
By:	/s/ Min-Jie Cui
Name:	Min-Jie Cui
Title:	Chief Financial Officer

 

Date: December 31, 2024

 

 

Exhibit 99.1

 

MKDWELL Tech Inc. Reports First Half of Fiscal Year 2024 Unaudited Financial Results

 

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$0.81 million, representing a decrease of 61.3% from US$2.10 million in the same period of 2023.
	●	Gross profit in the first half of 2024 was US$0.07 million with a gross profit margin of 8.2%, compared to US$0.32 million with a gross profit margin of 15.2% in the same period of 2023.
	●	Loss from operations in the first half of 2024 was US$1.54 million, representing an increase of 83.4% from US$0.84 million in the same period of 2023.
	●	Net loss in the first half of 2024 was US$1.73 million, representing an increase of 77.8% from US$0.97 million in the same period of 2023.

 

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 62.36% indirect equity interest in MKD Technology Inc., a Taiwan corporation and our operating subsidiary.

 

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$1.29 million, or 61.3% from US$2.10 million for the six months ended June 30, 2023 to US$0.81 million for the six months ended June 30, 2024, primarily attributable to the decrease of sales of manufactured electronic products and commissioned processing service.

 

Revenues from our sales of manufactured electronic products decreased by US$0.55 million, or 48.1%, from US$1.14 million for the six months ended June 30, 2023 to US$0.59 million for the six months ended June 30, 2024, which was mainly contributed to the decrease of orders and customers.

 

Revenues from our commissioned processing service decreased by US$0.67 million, or 90.3%, from US$0.74 million for the six months ended June 30, 2023 to US$0.07 million for the six months ended June 30, 2024, which was mainly contributed to the termination of cooperation with several major customers. The company is actively seeking new customers and has established cooperation with new customers in the second half of 2024.

 

Rental income decreased by US$0.05 million, or 27.9%, from US$0.16 million for the six months ended June 30, 2023 to US$0.11 million for the six months ended June 30, 2024, which was mainly due to the decrease in leasehold area resulting from the expiration of several lease contracts in the first half of 2024.

 

Revenues from others decreased by US$0.03 million, or 44.0%, from US$0.06 million for the six months ended June 30, 2023 to US$0.03 million for the six months ended June 30, 2024, which was mainly due to reduced electricity demand from lessees, which is in related to the reduction in leasehold area in the first half of 2024.

 

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$1.04 million, or 58.2% from US$1.78 million for the six months ended June 30, 2023 to US$0.74 million for the six months ended June 30, 2024, which was primarily attributable to a decrease in labor costs with respect to commission processing service and sales of manufactured electronic products.

 

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$0.25 million, or 79.0% from US$0.32 million for the six months ended June 30, 2023 to US$0.07 million for the six months ended June 30, 2024, and gross profit margin decrease from 15.2% in the first half of 2023 to 8.2% in the first half of 2024, primarily attributed to the elevated fixed costs associated with labor costs. The company is actively optimizing its workforce to mitigate labor costs.

 

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$0.11 million for the six months ended June 30, 2023 and 2024. Selling expenses did not decrease in line with revenue because our selling expenses composed of fixed expenses, such as salaries.

 

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$0.48 million, or 71.7% from US$0.67 million for the six months ended June 30, 2023 to US$1.15 million for the six months ended June 30, 2024, which was primarily attributable to the increase of US$0.40 million in professional service fees for the purpose of effecting our business combination with Cetus Capital.

 

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$0.03 million, or 8.3% from US$0.38 million for the six months ended June 30, 2023 to US$0.35 million for the six months ended June 30, 2024, which remained relatively steady. We continued to focus on software development to support our previously developed hardware projects.

 

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$0.04 million, or 32.6% from US$0.12 million for the six months ended June 30, 2023 to US$0.16 million for the six months ended June 30, 2024, which was primarily attributable to the increase of US$0.07 million in interest expense due to the newly borrowed loans from related parties, and offset by the increase of US$0.03 in interest income due to the newly lent loans to Cetus Sponsor LLC.

 

Other expenses, net

 

Other expenses, net consists of government subsidies, foreign currency exchange gain or loss, and others.

 

Other expense, net increased by US$0.01 million, or 266.8% from US$0.01 million for the six months ended June 30, 2023 to US$0.02 million for the six months ended June 30, 2024, which was primarily attributable to the decrease of the government subsidies.

 

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 25%.

 

Taiwan

 

We are subject to a tax rate of 20% for entities under R.O.C. Income Tax Law.

 

 

Net loss

 

As a result of the foregoing, our net loss increased by US$0.76 million, or 77.8% from US$0.97 million for the six months ended June 30, 2023 to US$1.73 million for the six months ended June 30, 2024.

 

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$0.97 million and US$1.73 million for the six months ended June 30, 2023 and 2024, respectively. Net cash used in operating activities were US$0.34 million and US$1.53 million for the six months ended June 30, 2023 and 2024, respectively. As of June 30, 2024, our accumulated deficits were US$12.62 million, with a working capital deficit of US$4.84 million. Our operating results for future periods are subject to numerous uncertainties and it is uncertain if we will be able to reduce or eliminate our net losses for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern.

 

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$1=RMB 7.2513

US$1=RMB 6.9283

US$1=RMB7.0978

US$1=RMB7.0803

US$1=RMB 7.2672

US$1=RMB 7.2150

US$ against NT$

US$1=NT$31.1400

US$1=NT$ 30.5542

US$1=NT$30.6200

US$1=NT$31.1525

US$1=NT$ 32.4500

US$1=NT$ 31.8992

 

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, $0.0001 par value; 50,000,000 shares authorized; 2,058,934 shares and 5,750,000 shares issued and outstanding, respectively as of June 30, 2024 and December 31, 2023			22,055,715				59,723,899
SHAREHOLDERS’ DEFECIT
Preferred share, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding			-				-
Class A common stock, $0.0001 par value; 50,000,000 shares authorized; 1,781,875 issued and outstanding (excluding 2,058,934 share subject to possible redemption), 1,781,875 shares issued and outstanding (excluding 2,058,934 share subject to possible redemption) as of June 30, 2024 and December 31, 2023, respectively			179				179
Class B common stock, $0.0001 par value; 4,000,000 shares authorized; none issued and outstanding			-				-
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.

 

 

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