Northann's auditor says it never authorised the audit report that appeared in the company's 2025 annual report, and the shares have been halted since June

The letter reached Northann's chief executive on 8 June.

It came from LAO Professionals, the company's independent registered public accounting firm, and it did two things in one page. The firm resigned. It also said, in the company's own account of it, that Northann's annual report for 2025 had been filed without its "knowledge, authorization or consent", and that it did not "issue, sign, authorize or consent to the inclusion" of the audit report dated 25 April 2026 that appeared inside it. As of the date of that report, the firm said, it had not completed its audit or formed an opinion on the financial statements.

Seventeen days later the shares stopped trading.

What the exchange asked

NYSE American halted Northann's common stock on 25 June. The company says it learned through discussions with the exchange that the halt was initiated over concerns that the 2025 annual report had been filed without the auditor's approval, and without the auditor's consent to the audit report being included as an exhibit.

The halt is still in force. Northann says it cannot predict the timing or the outcome of the exchange's review, or whether the exchange will start any further listing proceedings.

Two years of accounts, set aside

On Monday the company told investors not to rely on its financial statements for the years ended 31 December 2024 and 31 December 2025.

The reasoning is unusual and worth reading closely. The auditor did not identify to the company any specific item in those statements as being incorrect. Northann says so plainly. What the company concluded instead was that, given the auditor's statements about the state of its own procedures and about the audit report, the numbers should not be relied on pending a new audit by a new firm covering both years.

A departing accountant is required to send the SEC a letter saying whether it agrees with what the company has just written about it. Northann has asked for that letter, had not received it when it filed, and says it will try to file it within ten business days.

The board, in four moves

Lin Li resigned from every position he held on 30 June, including chief executive, president and chairman. The board met the next day, asked him to take back the chief executive and president resignations, and he did. It also created an Oversight Committee, which on 15 July retained Lewis Brisbois Bisgaard & Smith as its counsel and which now holds the board level responsibility for financial reporting and compliance that would otherwise sit with the chief executive.

On 10 August the board accepted the chairman half of the resignation. Bradley C. Lalonde, an independent director who chairs both the audit committee and the Oversight Committee, becomes chairman. Li stays as chief executive, president and a director, with the day to day commercial operations.

The oldest date in the document

The earliest event this filing reports is 14 April, when Umesh Patel resigned as an independent director. That is nearly four months before it was disclosed.

His letter is attached, and it names two reasons in six lines. Agreed board compensation, he wrote, had not been paid in accordance with the terms discussed and accepted. The company had also not secured or maintained directors and officers liability insurance coverage as committed. Both, he wrote, are fundamental to the governance framework and the risk management expectations that come with board service, and he recommended the company address them promptly.

Northann says it gave Patel a copy of the filing and the chance to say whether he agrees with it. It had not heard back when the document went in.