Elk Grove, Calif.-based Northann Corp. has raised $6 million with an initial public offering aimed at taking advantage of market opportunities related to its 3D printed flooring products, which include cores made from recycled ocean plastics.
The IPO closed on Oct. 23 with 1.2 million shares of common stock priced at $5 per share for Northann, which trades as NCL on the New York Stock Exchange.
The company will use the proceeds for acquiring facilities and equipment in the United States, product development, sales and marketing activities, and general working capital purposes, according to a news release.
Northann plans to set up manufacturing capabilities in the U.S. at a cost of about $20 million, according to a prospectus filed Oct. 20.
Flooring products currently are manufactured by Northann Construction Products Co. Ltd. in Changzhou, China, where the company's factories have the capacity to produce more than 18,000 square meters of vinyl flooring per day.
Northann is the only manufacturer in the industry that uses 3D printing technology to manufacture vinyl flooring, the prospectus says. The technology also can be applied to other flooring materials, including solid wood flooring and laminate flooring, as well as furniture, cabinets and other products.
In the U.S., Northann plans to finance the purchase of a facility by mortgage and operating profits.
"We expect to start manufacturing products in the United States in three to six months after this offering is completed. If the plan is successfully executed, we plan to maintain manufacturing in the United States and China in the short term. We plan to gradually shift manufacturing from China to the United States in the long term and eventually close the manufacturing sites in China," the prospectus says.
Northann's 3D printed vinyl flooring panels consist of three layers: a substrate, which is the main body of the plank; a decorative layer, which shows the color and patterns; and a surface layer, which can provide different textures and benefits.
"We manufacture the substrate and use 3D printing technologies to add the decorative layer and the surface layer," the prospectus says. "We have a 'digital inventory' of part designs and printing instructions and a physical inventory of raw materials. Our production is on demand. We manufacture products in small batches and do not keep large physical inventory of the products."
Earlier this year, Northann and its subsidiary brand Benchwick introduced a new processing technology and product at The International Surface Event in Las Vegas. The patent-pending technology — called Envision.Style — uses artificial intelligence to learn about wood species and grains to create "believable" pattern variations for digital printing.
The new product, called Blue11, is a lightweight sustainable core for flooring that is produced from harvested ocean plastic waste. Eighty percent of the core comes from marine debris.
The core material is used to produce Blue11 planks with locking profiles and a recyclable foam underlayment that doesn't need adhesives to install. The floors are fully recyclable and carbon neutral, according to the Northann website.
Northann sales were down 49 percent to $7.3 million for the six months ending June 30, compared with the prior year because many customers had overstocked in 2021 and 2022 and they continue to work through the inventory.
Still, company officials are optimistic about what a U.S. presence will bring.
"Our production is automated and has low labor cost. We believe having our products made in the United States will improve our overall cost structure and our brand recognition," the prospectus says.