美國
證券交易委員會
華盛頓特區20549
表格
截至該季度結束
或
1934年證券交易所法案
過渡期間從 _______ 到 ___________
委員會檔案編號：
(在章程中指定的註冊人的正確名稱)
| （註冊地或其他註冊司法管轄區） | (國稅局雇主身份識別號碼) |
(主要執行辦公室地址及郵遞區號)
(
(註冊人的電話號碼，包括區號)
依據《證券法》第12(b)條登記的證券：無
| 每種類別的名稱 | 交易標的（s） | 每個交易所的名稱 註冊 |
| The |
請憑驗證標記生效，以指示申報人（1）是否在1934年的“證券交易法”第13或15(d)條所規定的12個月內全部提交了報告（或者申報人在較短的期間內必須提交這些報告），以及（2）申報人在過去90天內是否需承擔這種申報要求。
請勾選表示：在過去12個月內（或更短期間，規定提交此類檔案的情況下）是否所有互動數據文件均已根據S-T法規第405條（本章節第232.405條）以電子方式提交。
請以勾選符號指示，登記申報人是大型加速申報人、加速申報人、非加速申報人、較小的報告公司或新興成長公司。請參閱交易所法案第1202條中對「大型加速申報人」、「加速申報人」、「較小的報告公司」和「新興成長公司」的定義。
| 大型加速提交人 ☐ | 加速提交人 ☐ | |
| 較小的報告公司 | ||
| 新興成長型公司 |
如果一家新興成長型公司，請勾選此選項，表示登記人選擇不使用遵守交易所法案第13(a)條提供的任何新的或修訂的財務會計準則的延長過渡期。
請用核取方塊表示，申報人是否屬於殼公司（如《法案》第120億2條定義）。
是 ☐ 否
目前有 截至2024年11月14日，公司普通股的流通股數為每股面值0.001美元。
目錄
| 有關前瞻性陳述的警語性聲明 | 3 | |
| 第I部分 | 財務信息 | 4 |
| ITEm 1. | 未經審計的中期簡明綜合財務報表 | 4 |
| 截至2024年9月30日的未經審計中期簡明綜合資產負債表，以及截至2023年12月31日的審計資產負債表 | 4 | |
| 截至2024年9月30日的未經審計九個月期間簡明綜合損益及全面損失表，以及截至2024年9月30日的未經審計三個月期間簡明綜合損益表 | 5 | |
| 截至2024年9月30日的未經審計股東權益變動表 | 6 | |
| 2024年9月30日止九個月內部未經查核現金流量簡表 | 7 | |
| 簡明綜合財務報表註釋（未經查核） | 8 | |
| ITEm 2. | 財務狀況和業績的管理討論和分析 | 26 |
| 項目 3。 | 市場風險相關數量和質量的披露 | 43 |
| 項目 4。 | 控制和程序 | 43 |
| 第二部分 | 其他資訊 | 45 |
| ITEm 1. | 法律訴訟 | 45 |
| 項目1A. | 風險因素 | 45 |
| 項目 2 | 未註冊的股票銷售和收益使用 | 45 |
| 項目3 | 債券不履行標準 | 45 |
| 項目4 | 礦山安全披露 | 45 |
| ITEm 5 | 其他資訊 | 45 |
| 項目 6 | 附件 | 48 |
| 簽名 | 49 | |
| 2 |
對於前瞻性聲明的警示
此第十屆季度報告表單10-Q包含根據1995年《證券訴訟改革法》第27A條修訂的1933年證券法，以及根據1934年證券交易法修正案第21E條的“前瞻性陳述”。前瞻性陳述討論的是不屬於歷史事實的事項。由於它們討論未來事件或情況，前瞻性陳述可能包括“預期”、“相信”、“估計”、“打算”、“可以”、“應該”、“可能”、“尋求”、“計劃”、“可能”、“將”、“期望”、“預期”、“預測”、“項目”、“預測”、“潛力”和“持續”詞語或其否定形式或類似表達。前瞻性陳述僅於發表之日有效，基於各種基本假設和對未來的當前期望，不擔保未來表現。此類陳述涉及已知和未知風險、不確定性和可能導致我們實際結果、活動水平、表現或成就與這些前瞻性陳述的結果大不相同的其他因素。 您應當謹慎，不要過度依賴這些前瞻性陳述，這些陳述僅於其發布日期有效。
我們無法預測所有可能影響我們業務、財務控制項或營運結果的風險和不確定性。因此，本季度報告（Form 10-Q）中的前瞻性陳述不應被視為這些陳述所描述的結果或狀況將會發生的保證，或我們的目標和計劃將會實現，我們對任何這些前瞻性陳述的準確性或完整性不承擔任何責任。這些前瞻性陳述在本季度報告（Form 10-Q）的各個地方都有出現，並包括有關我們營運可能或預測的未來結果的信息，包括潛在收購或合併目標、策略或計劃；業務策略；前景；未來現金流；融資計劃；管理層的計劃和目標；以及任何有關未來收購、未來資金需求、未來營運、業務計劃和未來財務結果的陳述；以及任何其他非歷史事實的陳述。
這些前瞻性聲明表達了我們對未來事件的意圖、計劃、期望、假設和信念，並且受多種因素和風險的影響，包括，但不限於，年報中“風險因素”部分I，第1A項所列的那些風險，該年報的文件於2024年4月1日提交給證券交易委員會（“SEC”），涵蓋截至2023年12月31日的財政年度。
這些風險和因素中的許多超出了我們的控制範圍，可能會導致實際結果與這些前瞻性聲明所表達或暗示的結果有重大差異。 考慮到這些風險、不確定性和假設，前瞻性聲明中描述的事件可能不發生，或者可能以不同的程度或在不同的時間發生，與我們所描述的不同。 請您謹慎對待這些前瞻性聲明，這些聲明僅代表本季度報告（10-Q 表格）日期的情況。 所有後續書面和口頭的前瞻性聲明，涉及本季度報告（10-Q 表格）中處理的其他事項以及歸因於我們或任何代表我們行事的人，均明確受限於本季度報告（10-Q 表格）中所包含或提到的警示性說明。
除非法律要求，我們不承擔更新或修訂任何前瞻性聲明的義務，無論是由於新信息、未來事件、事件的變更、條件、情況或假設的變化，或其他情況。
| 3 |
第一部分 財務資訊
項目 1. 綜合財務報表
諾赫爾有限公司。
臨時簡明合併資產負債表
(以美元計算，除股份數量外)
9月30日， 2024 | 十二月三十一日， 2023 | |||||||
| (未經審計) | （已經接受審計） | |||||||
| 資產 | ||||||||
| 流動資產合計 | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 應收帳款，淨額 | ||||||||
| 存貨，淨額 | ||||||||
| 向供應商的預付款項 | ||||||||
| 預付費用及其他資產，淨額 | ||||||||
| 以公允價值計量並且其變動計入損益之金融資產 | ||||||||
| 流動資產總額 | ||||||||
| 投資 | ||||||||
| 不動產及設備，淨額 | ||||||||
| 無形資產 - 客戶關係 | ||||||||
| 商譽 | ||||||||
| 其他非流動資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和權益 | ||||||||
| 負債 | ||||||||
| 流動負債 | ||||||||
| 應付賬款 | $ | $ | ||||||
| 其他應付款及應計負債 | ||||||||
| 預收款項 | ||||||||
| 因為關聯方 | ||||||||
| warrants責任 | ||||||||
| 長期有抵押其他借款-流動部分 | ||||||||
| 股息應付款 | ||||||||
| 應付所得稅 | ||||||||
| 流動負債總額 | ||||||||
| 递延所得税负债，净额 | ||||||||
| 長期獲附保障的其他借款 | ||||||||
| 總負債 | ||||||||
| 承諾和條件（附註20） | ||||||||
| 權益 | ||||||||
| 普通股（$0.0001面值；授權50,000,000股，截至2023年12月31日和2024年6月30日止已發行18735946和18724596股） 股票授權數為。 股份授權數: 股份和 股份於2024年9月30日及2023年12月31日分別已發行和流通。 | ||||||||
| 优先股（$0.0001面值；3,333,333股已授权） 股票授權數為。 股份；A系列優先股。 已授權， 股份於2024年9月30日及2023年12月31日分別已發行和流通。 | ||||||||
| 額外認股資本金 (1) | ||||||||
| 法定及其他儲備 | ||||||||
| 累積虧損 | ( | ) | ( | ) | ||||
| 累積其他全面損失 | ( | ) | ||||||
| Nocera, Inc.的股東權益總額 | ||||||||
| 非控制權益 | ||||||||
| 總股東權益 | ||||||||
| 負債加股東權益總額 | $ | $ | ||||||
請參閱經濃縮合併基本報表的附註，這些附註是這些未經審核的濃縮基本報表的不可或缺的一部分。
| 4 |
諾赫爾有限公司。
綜合損益及綜合損失的臨時簡明綜合財務報表
(以美金表示，除非是股份數量)
(未經審核)
| Three months ended 九月三十日, | 截至九個月的期間 九月三十日, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (未經審計) | （已經接受審計） | (未經審計) | （已經接受審計） | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| 營業淨收入 | ||||||||||||||||
| 銷售成本 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 毛利潤 | ||||||||||||||||
| 營運費用 | ||||||||||||||||
| 一般及行政費用 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 營業費用總額 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 營運虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入（費用） | ( | ) | ( | ) | ||||||||||||
| 稅前損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得稅費用 | ( | ) | ||||||||||||||
| 淨虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 減：可歸屬於非控股權益的淨虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| attributable to the company 的淨損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 綜合(虧損)收益 | ||||||||||||||||
| 淨虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 外匯翻譯收益（損失） | ( | ) | ||||||||||||||
| 總綜合損失 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 減：歸屬於非控制性權益的綜合虧損 | ( | ) | ( | ) | ( | ) | ||||||||||
| 歸屬於公司的綜合虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 每股損失 | ||||||||||||||||
| 基本 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 攤薄 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 普通股已發行的加權平均股數 在外流通 | ||||||||||||||||
| 基本 | ||||||||||||||||
| 攤薄 | ||||||||||||||||
請參閱基本報表註記，該註記是這些未經審計基本財務報表的組成部分。
| 5 |
NOCERA公司
經中期壓縮的合併現金流量表
（以美元表示，股票數量除外）
(未經審計)
| 截至9月30日的九個月 | ||||||||
| 2024 | 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 經營活動產生的現金流： | ||||||||
| 淨損失 | ( | ) | ( | ) | ||||
| 凈利潤與用於經營活動的淨現金之間的調整： | ||||||||
| 折舊費用 | ||||||||
| 無形資產攤銷 | ||||||||
| 交易性金融資產公允價值變動收益 | ( | ) | ( | ) | ||||
| 以股票結算的諮詢服務 | ||||||||
| 基於股份的薪酬 | ||||||||
| 經營資產和負債的變動： | ||||||||
| 應收賬款 | ( | ) | ||||||
| 存貨 | ( | ) | ||||||
| 預付費用及其他資產，淨額 | ( | ) | ( | ) | ||||
| 其他非流動資產 | ( | ) | ( | ) | ||||
| 應付賬款 | ( | ) | ||||||
| 預付款 | ( | ) | ||||||
| 其他應付款和應計費用 | ||||||||
| 應付所得稅 | ( | ) | ||||||
| 淨現金流出活動 | ( | ) | ( | ) | ||||
| 投資活動的現金流： | ||||||||
| 購買房地產和設備 | ( | ) | ( | ) | ||||
| 以公平價值計入損益的金融資產購買 | ( | ) | ( | ) | ||||
| 以公允價值計量且其變動計入當期損益的金融資產處置收益 | ||||||||
| 投資活動提供的（使用的）淨現金 | ( | ) | ||||||
| 融資活動產生的現金流: | ||||||||
| 償還短期銀行貸款 | ( | ) | ( | ) | ||||
| 收購子公司獲得的現金 | ||||||||
| 融資活動產生的淨現金（使用）/提供 | ( | ) | ||||||
| 匯率變化對現金及現金等價物的影響 | ( | ) | ( | ) | ||||
| 現金及現金等價物淨減少 | ( | ) | ( | ) | ||||
| 期初的現金及現金等價物 | ||||||||
| 期末現金及現金等價物 | ||||||||
| 現金流信息的補充披露 | ||||||||
| 支付的利息費用 | ||||||||
| 支付的所得稅現金 | ||||||||
請參閱與這些未經審計的簡明基本報表密切相關的簡明合併基本報表的附註。
| 6 |
諾凱拉公司
臨時簡明合併股東權益變動表
(以美元計，除股數外)
(未經審計)
| 普通股 | 優先股 | 額外 實繳 | 法定的 和 其他 | 累計 | 累計 其他 全面 | 總計 諾塞拉公司（Nocera Inc.）的 股東的 | 非- 控制 | 總計 股東的 | |||||||||||||||||||||||||
| 股票 | 金額 | 股票 | 金額 | 資本 | 儲備 | 虧損 | Loss | 股權 | 興趣 | 股權 | |||||||||||||||||||||||
| 截至2023年1月1日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 外幣翻譯調整 | – | – | ( | ) | |||||||||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 以股權結算的諮詢服務 | – | ||||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2023年3月31日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 外幣翻譯調整 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2023年6月30日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 外幣翻譯調整 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 普通股發行 | – | ||||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2023年9月30日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 截至2024年1月1日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 外幣折算調整 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 普通股發行 | – | ||||||||||||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2024年3月31日的餘額 | ( | ) | |||||||||||||||||||||||||||||||
| 外幣翻譯調整 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 普通股發行 | – | ||||||||||||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2024年6月30日的餘額 | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 外幣換算調整 | – | – | |||||||||||||||||||||||||||||||
| 普通股發行 | – | ||||||||||||||||||||||||||||||||
| 基於股份的薪酬 | – | – | |||||||||||||||||||||||||||||||
| 淨損失 | – | – | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| 截至2024年9月30日的餘額 | ( | ) | ( | ) | |||||||||||||||||||||||||||||
請參閱與這些未經審計的簡明基本報表密切相關的簡明合併基本報表的附註。
| 7 |
諾凱拉公司
合併基本報表附註 （未經審計）
注意事項 主要活動和組織
合併基本報表包括 Nocera, Inc.（「Nocera」或「公司」）及其子公司，Grand Smooth Inc. Limited（「GSI」）和貴州大順科技有限公司（「GZ GST」或「WFOE」），以及通過合同安排控制的美心機構食品 發展有限公司（「美心」）。公司、GSI、GZ GST和美心統稱爲「公司」
Nocera於2002年2月1日在內華達州註冊成立， 總部位於臺灣新北市。自成立以來沒有進行任何經營活動， 直到2018年12月31日與GSI進行反向合併時才開始活躍。
反向合併
自2018年12月31日起，Nocera完成了反向合併交易（稱爲「交易」），根據合併協議和計劃（稱爲「協議」），與(i) GSI，(ii) GSI的股東Yin-Chieh Cheng和Bi Zhang，他們共同擁有GSI已發行和流通普通股的100%（稱爲「GSI股票」），以及(iii) GSI收購公司。根據協議條款，GSI股東將所有GSI股票轉讓給Nocera，以換取發行的10,000,000股Nocera普通股（稱爲「股票交換」）。由於反向合併，GSI成爲Nocera的全資子公司，前GSI股東Yin-Chieh Cheng和Bi Zhang成爲Nocera的控股股東。與GSI的股票交換交易被視爲反向合併，GSI作爲會計收購方，Nocera作爲被收購方。
GSI是一家根據香港法律和法規於2014年8月1日成立的有限公司，是一家沒有任何運營的控股公司。
GZ WFH於2017年10月25日在中國（"PRC"）貴州省興義市註冊成立，致力於提供魚類養殖業容器服務，集銷售、分期付款和水產養殖設備的維護於一體。GZ WFH的註冊資本爲人民幣5,000,000元（相當於733,138美元）。
2018年11月13日，GSI在中國註冊了GZ GST，註冊資本爲15,000美元。
剝離
隨後，在2020年9月21日，公司提交了一份關於Nocera與其前變量利益實體貴州萬豐護智水產科技有限公司（「GZ WFH」）及其管理方之間關係缺乏溝通的《當前報告表格8-k》 ，並解除了雙方之間關於變量利益實體的協議。
隨後在2020年10月8日，張碧與GZ WFH與Nocera簽署了一份和解協議和釋義，其中GZ WFH的債務（對Nocera或GZ GST的股份索賠）被妥協、解決，並且對任何針對Nocera的任何事項、行動或陳述的所有索賠或訴因均得到了處理，並且任何債務對Nocera或GZ GST的所有權在協議簽署之日前均被解決。該協議的對價是雙方及GZ GST相互放棄任何和所有索賠，而GZ WFH（包括張碧）放棄對Nocera股票的任何索賠，這意味着張碧所持有的4,750,000股Nocera普通股在協議中被取消。和解協議和釋義作爲附件10.8附在此處。
| 8 |
與XFC的VIE協議
截至2020年12月31日，我們進行了交易， （拆分後）
我們將我們限制性普通股的股份轉讓給了臺灣有限責任公司「欣豐施工股份有限公司」（「XFC」）的股東，
以換取XFC的100%控股權。我們還與XFC的一位股東簽訂了合同協議，使我們能夠擁有主導決定XFC經濟績效的活動的權力，並獲得對XFC的重要經濟利益。2022年11月30日，我們與漢傑．施（「買方」）簽署了一項業務購買協議，
在該協議中，我們將對XFC的控股權出售給買方，總購買現金價格爲$
與美信的VIE協議
在2022年9月7日，我們與美心機構食品開發有限公司的主要股東（「出售股東」）簽署了一系列合同協議（統稱爲「美心VIE協議」），美心是一家臺灣公司，也是食品加工和餐飲公司（「美心」），我們購買了
與新愷達的VIE協議
在2024年1月31日，我們與浙江新岐互娛文化傳媒有限公司（「新岐」），一家在中國（P.R.C）註冊的國內有限責任公司，簽訂了一個可變利益實體購買協議（「新岐購買協議」）。新岐購買協議是通過我們全資子公司和外國企業，上海諾卡文化有限公司（「WFOE」）與新岐簽署的一系列合同協議（「VIE協議」）達成的，在這些協議中，我們交換了 我們的限制性普通股
換取一個
與SY媒體的VIE協議
在2024年4月14日，我們與杭州SY文化傳媒有限公司（「SY文化」）簽訂了一份變量
利益實體購買協議（「SY文化購買協議」），這是一家在中國（中華人民共和國）註冊的國內投資有限責任公司。SY文化購買協議由我們的全資子公司及外商企業貴州大順科技有限公司（「WFOE」）通過一系列合同協議（「VIE協議」）簽署，在這些協議中，我們進行了交換 我們限制性普通股的股份，換取一個
備註 2 重要會計政策摘要
財務報表的基礎
所附的未經審計的簡明合併基本報表是根據美國普遍接受的會計原則（「GAAP」）及依據美國證券交易委員會（「SEC」）關於中期財務信息的規則和規定編制的。因此，這些基本報表並未包含完整基本報表所需的所有信息和附註，閱讀時應與公司於2023年12月31日止年度在2024年9月30日向SEC提交的10-K表格中的審計合併基本報表及附註一起進行。
根據管理層的意見，所有調整（包括正常的經常性調整）都已完成，以便公正地呈現截至2024年9月30日公司未經審計的簡明合併財務狀況、截至2024年9月30日的九個月合併經營成果、截至2024年9月30日的九個月現金流以及截至2024年9月30日的九個月股本變動。這些調整是必要的。2024年9月30日結束的九個月的經營成果並不一定代表截至2024年12月31日結束的年度或任何未來期間的預期經營成果。
| 9 |
信用風險集中
可能使公司面臨信用風險集中情況的金融工具主要包括應收賬款。公司對客戶和供應商進行信用評估，通常不要求他們提供擔保或其他安防。公司評估其收款經驗和長期未結餘額，以判斷是否需要計提壞賬準備。公司定期審查客戶的財務狀況和付款慣例，以最大限度減少應收賬款的收款風險。
有七位客戶代表
以下表格列出了佔公司總應收賬款淨額10%或以上的單一客戶的彙總情況：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未審計) | (審計過的) | |||||||
| 公司應收賬款的百分比 | ||||||||
| 客戶A | ||||||||
| 客戶B | ||||||||
| 客戶C | ||||||||
收入確認
公司按照會計標準編碼（「ASC」）606《來自客戶合同的營業收入》確認營業收入。
該指導的核心原則是，實體應當確認營業收入，以體現向客戶轉移承諾的商品或服務的過程，並以能反映實體期望因這些商品或服務而應得的對價金額來進行確認。爲實現這一核心原則，公司應用以下步驟：
| · | 步驟 1: 確定與客戶的合同 | |
| · | 步驟 2: 確定合同中的履約義務 | |
| · | 步驟 3: 判斷交易價格 | |
| · | 步驟 4: 將交易價格分配給合同中的履約義務 | |
| · | 我們認爲當我們通過交付承諾向客戶提供維護服務時解除履行義務並實現營業收入。營業收入按交付承諾和維護服務確認，按預計收到的對價計算。我們與客戶的合同由發票和書面合同組成。 |
| 10 |
公司在滿足履約義務，通過向客戶轉讓承諾的商品或服務時確認營業收入。營業收入的計量基於交易價格，即公司預計爲轉讓承諾的商品或服務而收到的對價金額。與客戶的合同包括髮票和書面合同。
公司沒有客戶退貨的安排 公司沒有銷售激勵計劃。
公司提供銷售代理授權，以及提供18至72個月不等（大部分是18個月）的產品售後服務保修，並不斷向客戶提供保修服務。與提供產品有關的履行義務，公司預計將根據產品交付來確認營業收入。關於提供售後服務保修的履行義務，公司預計將採用基於時間的產出方法，按比例分攤確認營業收入。這些履行義務通常在合同期內按直線法完成服務，大部分爲18個月售後服務保修期。關於獨家代理權的履行義務，公司將按預計授權經濟壽命平均折舊確認營業收入。
公司沒有合同資產的金額，因爲在控制權轉移時就確認了營業收入。合同負債包括客戶的預付款和遞延收入。客戶的預付款預計將在12個月內確認作爲營業收入。遞延收入預計將在12個月內確認作爲營業收入。
近期會計公告
FASB在此期間發佈了幾項更新，這些標準 都不適用於公司，也不要求在未來日期採用，預計在採納時對合並 基本報表沒有重大影響。
注意 3 應收賬款
截至2024年9月30日和2023年12月31日， 應收賬款包括以下內容：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 應收賬款 | ||||||||
| 減：壞賬準備 | ||||||||
| 總計 | ||||||||
截至2024年9月30日的九個月及截至2023年12月31日的年度，公司已記錄預備壞賬的撥備。 .
| 11 |
注意 4 存貨
截至2024年9月30日和2023年12月31日， 庫存包括以下內容：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 原材料 | ||||||||
| 總計 | ||||||||
截至2024年9月30日和2023年9月30日的庫存餘額爲$
注意 5 預付費用和其他 資產，淨值
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 來自第三方的其他應收款 | ||||||||
| 預付費用及其他資產，淨額 | ||||||||
截至2024年9月30日和2023年9月30日的其他應收款爲$
注意 6 物業及設備，淨值
截至2024年9月30日和2023年12月31日， 物業和設備包括以下內容：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 設備 | ||||||||
| 減：累計折舊 | ( | ) | ( | ) | ||||
| 物業及設備（淨額） | ||||||||
截至2024年9月30日和2023年9月30日的九個月的折舊費用爲$
| 12 |
注意7 金融資產按公允價值計入損益
每項權益工具投資的公允價值 應通過損益以公允價值計量，具體如下：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| 被強制按公允價值計量的金融資產收益表 | $ | $ | ||||||
| 基金 | ||||||||
| 總計 | ||||||||
| 當前 | ||||||||
| 非流動 | ||||||||
| 總計 | ||||||||
淨收益爲$
Note 8 商譽
截至2024年9月30日和2023年12月31日， 商譽包括以下內容：
商譽
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 商譽 - 美心 | ||||||||
| 商譽 - 辛卡 | ||||||||
| 商譽 – SY媒體 | ||||||||
| 減：減值 | ( | ) | ( | ) | ||||
| 商譽，淨額 | ||||||||
| 13 |
客戶關係
| 九月三十日 | 12月31日 | |||||||
| 2024 | 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 餘額結轉 | ||||||||
| 減：累計攤銷 | ( | ) | ( | ) | ||||
| 客戶關係，淨值 | ||||||||
注意 9 其他非流動資產
截至2024年9月30日和2023年12月31日， 其他非流動資產包括以下內容：
| 其他非流動資產的計劃 | 9月30日 2024 |
12月31日， 2023 | ||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 其他非流動資產 | ||||||||
| 預付租金費用 | ||||||||
| 遞延費用 | ||||||||
| 其他非流動資產總計 | ||||||||
預付租金費用包括租賃、租金、設備， 費用和遞延費用包括電子商務主播合同的服務費用。
注意 10 其他貸款
其他貸款包括以下內容：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 來自曉利金融有限公司的擔保貸款，全部將在一年內償還 | ||||||||
| 總擔保貸款將在一年內全部償還 | ||||||||
| 來自曉利金融有限公司的擔保貸款，全部將在一年以上償還 | ||||||||
| 總計 | ||||||||
貸款已全額還清。
注意11 認股權證
2021年4月1日，公司與部分投資者簽署了一項證券購買協議，購買總計80,000股優先股，單股購買價格爲2.50美元。
作爲交易的一部分，投資者每購買一股優先股便獲得一份C類認股權證和一份D類認股權證。C類認股權證的內容是可以購買最多
在2021年9月27日，公司與相同的投資者簽署了另一項證券購買協議，根據該協議，公司在一次註冊直接發行中，發行了48,000股普通股，每股購買價格爲2.50美元。此外，投資者還獲得了每個優先股的一個C類權證和一個D類權證。C類權證包括在創辦日期起36個月內以每股2.50美元的行使價格購買最多
| 14 |
公開發行
根據註冊聲明表格S-1的明確承諾公開發行（「公開發行」），該聲明於2022年4月1日首次提交給美國證券交易委員會（SEC），並於2022年8月10日獲得SEC的生效，公司共售出
單位（「單位」）。每個單位由一股普通股和一個購買兩股普通股的認股權證組成。
每個單位下的認股權證可以自發行之日起行使，直至發行日期的第五個週年，購買價格爲每股普通股$3.85（相當於單位公開發行價格的110%），在發生送轉、拆股並股、股本合併、重新分類、重組或影響普通股的類似事件時將進行調整。
公開發行於2022年8月15日結束，公司總共獲得了$
根據公開發行以及我們與其中指定的承銷商之間的承銷協議，我們授予承銷商一個45天的選擇權，以購買最多282,000股普通股和Warrants，等於公開發行中銷售單位的15%，按每個單位的公開發行價格扣除承銷折扣和佣金，以便於處理超額配售（如有）。在2022年9月23日，承銷商行使了他們的購買額外股份的選擇權。
2022年11月14日，Warrants的行使價格被降低至$1.925。根據Warrants的條款，行使價格應降低至以下兩者中的較大者：(i) $1.925，代表原行使價格的50%；以及(ii) 在初始發行日期後90個日歷日的前一日的最後成交量加權平均價格的100%（「重置行使價格」），如果在初始發行日期後的90個日歷日期，重置行使價格低於該日期的原行使價格$3.85。th 如果在初始發行日期後的90個日歷日的日期，重置行使價格低於該日期的原行使價格$3.85。
重置行使價格仍可能因送轉、拆股並股、合併、重新分類、重組或類似事件影響普通股而進行調整，這些事件在Warrants中有描述。
反向拆股
與公開發行相關，2022年8月11日，公司進行了一個
| 評估日期（創始日期） | C 權證 2021 | D 權證 2021 | ||||||
| (未經審計) | (未經審計) | |||||||
| $ | $ | |||||||
| 每股市場價格（美元指數/股） | ||||||||
| 行使價格（美元/價格） | ||||||||
| 無風險利率 | ||||||||
| 分紅派息收益率 | ||||||||
| 預期期限/ 合同期限（年） | ||||||||
| 預期波動率 | ||||||||
| 15 |
| 評估日期（成立日期） | C權證 9月27日， 2021 | D權證 9月27日， 2021 | ||||||
| (未經審計) | (未經審計) | |||||||
| $ | $ | |||||||
| 每股市場價格（美元/股） | ||||||||
| 行使價格（美元/價格） | ||||||||
| 無風險利率 | ||||||||
| 分紅派息收益率 | ||||||||
| 預期期限/ 合同期限（年） | ||||||||
| 預期波動率 | ||||||||
以下是以第3等級輸入持續計量公允價值的Warrants負債的期初和期末餘額的調節：
| 9月30日 2024 | 12月31日， 2023 | |||||||
| $ | $ | |||||||
| 期初餘額 | ||||||||
| 向投資者發行的認股權 | ||||||||
| 贖回的權利證書 | ||||||||
| 收益中包含的Warrants公允價值變動 | ||||||||
| 總計 | ||||||||
以下是關於按金活動的總結：
數量 認購權證 | 平均 行使價格 | 加權 平均 剩餘 合同的 期限爲 年 | ||||||||||
| 截至2024年1月1日的未到期數量 | ||||||||||||
| 截至2024年1月1日的可行使數量 | ||||||||||||
| 授予 | – | |||||||||||
| 已行使/已放棄 | – | |||||||||||
| 已到期 | – | |||||||||||
| 截至2024年9月30日的未償還金額 | ||||||||||||
| 截至2024年9月30日的可行使金額 | ||||||||||||
| 16 |
注意 12 租賃
公司有兩份不可取消的租賃協議 涉及某些辦公室和住宿以及用於研究和開發 水循環的漁業養殖容器，適用於科技，原始租期在2023到2024年之間到期。租賃條款可能包括 在合理確定公司將行使該選項時的延長或終止租賃的期權。公司在租賃期內按 直線法確認租金費用。
截至2024年9月30日和2023年9月30日的九個月內，租賃費用的元件如下：
| 收入報表位置 | 截至2024年9月30日的九個月 | 截至九個月 2023年9月30日 | ||||||||
| (未經審計) | (已審計) | |||||||||
| $ | $ | |||||||||
| 租賃成本 | ||||||||||
| 運營租賃費用 | 一般及行政費用 | |||||||||
| 總淨租賃成本 | ||||||||||
截至2023年12月31日和2024年9月30日，我們不可撤銷經營租賃的租賃負債的到期情況爲 .
注意 13 其他應付款 和應計負債
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 應付工資 | ||||||||
| 其他 | ||||||||
| 總計 | ||||||||
注意 14 所得稅
公司及其子公司，以及合併的 VIE單獨報稅。
1) 增值稅（「VAT」）
中華人民共和國
根據中華人民共和國增值稅的臨時規定及相關實施細則，所有在中國境內從事產品銷售的實體和個人（"納稅人"）一般需要支付增值稅，其稅率於
| 17 |
臺灣
根據增值稅和非增值業務稅法及相關實施規則，所有在臺灣從事銷售產品的實體和個人（「納稅人」）通常需要支付增值稅，稅率爲
2) 所得稅
美國
2017年12月22日，減稅與就業法案（「稅法」）被簽署爲法律。該法案顯著修訂了美國的企業所得稅，包括將法定企業稅率從34%降至21%，對外國子公司的累計收益徵收強制性一次性稅，推出新的稅制，並改變外國收益在美國稅收下的處理方式。
2017年12月22日，發佈了員工會計公告 第118號（「SAb 118」），以提供有關稅法稅務效果的會計指導。SAb 118規定，測量 期不應超過稅法頒佈日期起一年，公司需在ASC 740下完成會計處理。 該公司已完成對稅法收入稅效應的評估，且未對預提金額進行任何調整。
《冠狀病毒援助、救濟與經濟安全法案》（簡稱「CARES法案」）於2020年3月27日簽署成爲法律。CARES法案暫時取消了2018-2020稅年度虧損抵扣的80%應納稅收入限制（根據2017年稅收減免與就業法案所建立），並恢復了2018-2020稅年度的虧損回溯。此外，CARES法案還暫時將2019年和2020年稅年度的業務利息扣除限制從30%提高到50%的調整後應納稅收入。最後，稅法技術修正將合格改進財產分類爲15年回收期，允許以歷史追溯的方式申請該財產的獎金折舊扣除，彷彿在法案頒佈時已包含在稅法中。公司預計其基本報表不會受到重大稅務影響，並將繼續審查CARES法案對其業務可能產生的影響。
公司對超過10%的外國控制公司的按照全球無形低稅收所得額（「GILTI」）計入的當前收益和利潤進行了評估。公司已評估其外國控制公司的當前收益和利潤是否有額外的計提金額。法律還規定，公司納稅人可以從GILTI納入的金額中獲得50%的減免，這實際上將外國所得的21%的美國公司所得稅率降至
反向合併於2018年12月31日完成，截止到2018年12月31日，美國子公司的稅務虧損不在範圍之內。截止到2019年12月31日，可以用來抵消美國公司未來應納稅所得額的淨營業虧損結轉爲$
香港
香港稅制改革已引入了雙層利潤稅率 針對企業的。根據雙層利潤稅率制度，對於首個200萬港元（約合257,931美元）的應納利潤，企業的利潤稅率將降低至8.25%（爲《稅務條例》第8附表中規定的稅率的一半）。超過200萬港元（約合257,931美元）的應納利潤將繼續適用16.5%的稅率。公司評估香港實體不會盈利超過200萬港元（約合257,931美元），因此適用8.25%的企業所得稅稅率。
| 18 |
截至2022年12月31日，公司的子公司 在香港有可用於抵消未來應稅收入的淨經營損失結轉。根據香港利潤稅法規，淨經營損失將無限期結轉。由於管理層認爲這些淨經營損失在可預見的未來不太可能被利用，因此對這些損失結轉適用了全面的估值備抵。
中華人民共和國
在中國境內設立的外商獨資企業（WFOE）和合並的可變利益實體（VIE）需遵循中國法定的所得稅稅率，
根據中華人民共和國相關稅法法規，註冊於中華人民共和國的公司須按適用稅率對應納稅所得額繳納所得稅。所有大陸子公司在截至2022年12月31日的年度內都需按25%的稅率繳納所得稅。根據中國稅務法規，中華人民共和國的淨營業虧損一般自虧損發生的年度起的下一年度開始，可最多順延五年。
臺灣
公司的損失 在所得稅前主要來源於臺灣的業務，而所得稅費用主要在臺灣產生。
由於****辦公室於2018年2月7日對《臺灣所得稅法》的修訂，法定所得稅率從17%增加到20%，而未分配收益稅或附加稅則從10%降低到5%，自2018年1月1日起生效。因此，截止到2021年和2020年8月31日，臺灣的法定所得稅率爲20%。附加稅的稅率從10%降至5%，自2018年9月1日起適用於公司，對臺灣的實體進行未分配收入的評估，但僅限於該收入在下一年年底之前未被分配或留作法定準備金的部分。5%的附加稅在收入獲得的期間記錄，附加稅負債的減少在下一年最終確定分配給股東或留作法定準備金的期間確認。
所得稅費用的元件包括：
截至三個月 九月三十日 | 截至九個月 九月三十日 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| 當前 | ( | ) | ||||||||||||||
| 遞延 | ||||||||||||||||
| 所得稅總費用 | ( | ) | ||||||||||||||
按照臺灣法定稅率（2021年：按照中國法律法定稅率）計算的所得稅費用的調節如下：
截至九個月 九月三十日 | ||||||||
| 2024 | 2023 | |||||||
| 臺灣（2021-中國）法定所得稅稅率 | ||||||||
| 不可扣除費用的稅務影響 | ( | ) | ( | ) | ||||
| 基於股票的補償的稅收影響 | % | ) | % | ) | ||||
| 非應稅收入的稅收影響 | ||||||||
| 其他管轄區不同稅率的影響 | ( | ) | ( | ) | ||||
| 其他 | ||||||||
| 估值準備的變更 | ( | ) | ( | ) | ||||
| 有效稅率 | ||||||||
| 19 |
3) 遞延所得稅資產（負債），淨額
暫時性差異所造成的所得稅影響代表 遞延所得稅資產和負債，主要來源於以下幾點：
九月三十日 2024 | 12月31日， 2023 | |||||||
| $ | $ | |||||||
| 遞延稅款資產 | ||||||||
| 可結轉稅損 | ||||||||
| 壞賬準備 | ||||||||
| 遞延稅款資產總額 | ||||||||
| 遞延稅資產的迴轉 | ||||||||
| 評估準備 | ||||||||
| 總遞延稅資產，淨額 |
九月三十日 2024 | 12月31日， 2023 | |||||||
| $ | $ | |||||||
| 遞延稅項負債 | ||||||||
| 財產和設備，折舊差異 | ||||||||
| 遞延所得稅負債，淨額 |
截至2024年9月30日和2023年12月31日的評估準備金主要是針對遞延所得稅資產提供的，前提是這些項目在公司能夠實現其利益之前更可能會失效，或者未來的可扣除性存在不確定性。遞延所得稅資產的最終實現取決於在這些臨時差異可扣除或可利用的期間內產生的未來應稅收入。管理層在進行這一評估時考慮了預測的未來應稅收入和稅收規劃策略。 評估準備金的變動情況如下。
九月三十日 2024 | 12月31日 2023 | |||||||
| $ | $ | |||||||
| 年初餘額 | ||||||||
| 估值準備的增加 | ||||||||
| 估值準備的減少 | ||||||||
| 年末餘額 | ||||||||
| 20 |
分紅派息的中國大陸預提稅
目前中華人民共和國企業所得稅法對外商投資企業向其海外直接控股公司的分紅派息徵收10%的預扣所得稅。如果中華人民共和國與外商控股公司所在轄區之間有稅收協定，將適用更低的預扣稅率。例如，滿足中華人民共和國稅務機關指定的某些要求的香港控股公司，其分紅派息將適用5%的預扣稅率。
截至2022年12月31日，公司尚未對其在中國的外商投資企業的留存收益記錄任何預扣稅，因爲公司計劃將其收益再投資，以可能繼續在中國大陸開展業務，即通過GZ GSt進行RAS的製造，而且其外商投資企業不打算向其立即的外資控股公司分紅派息。
截至2024年9月30日，公司尚未 對其在中國境內的外商投資企業的留存收益記錄任何預扣稅，公司決定不對其收益進行再投資，因爲它並未在中國大陸繼續其業務，且其外商投資企業不打算向其直接的外部控股公司分紅派息。
註釋 15 關聯方餘額及交易
由於關聯方
應付關聯方的餘額如下:
| 9月30日 2024 | 12月31日， 2023 | |||||||
| (未經審計) | (已審計) | |||||||
| $ | $ | |||||||
| 鄭寅傑先生 | ||||||||
| Mountain Share Transfer, LLC（1） | ||||||||
| 總計 | ||||||||
銷售
與相關方的銷售餘額如下：
| 相關方類別 | 9月30日 2024 | 12月31日， 2023 | ||||||||
| (未經審計) | (已審計) | |||||||||
| $ | $ | |||||||||
| 大潤滑有限公司 (2) | 同一董事 | |||||||||
| 總計 | ||||||||||
| 21 |
相關方的銷售價格和付款條款與對第三方的銷售差異不大。對於其他相關方交易，價格和條款是根據雙方協議確定的。
注意：
| (1) | |
| (2) |
注意 16 普通股
公司的授權普通股數量爲 股，面值爲$ 每股。2022年8月11日，公司進行了
On August 11, 2022, the Company’s common
stock commenced trading on The Nasdaq Capital Market under the symbol “NCRA” on a post-reverse stock split basis. During the
public offering, common stocks, at par value $0.001 each, were issued at the offering price $3.5 each. The Company received
total gross proceeds of $
All number of shares, share amounts and per share data presented in the accompanying unaudited consolidated financial statements and related notes have been retroactively restated to reflect the reverse merger transaction and subsequent issuance of shares stated above, except for authorized shares of common stock, which were not affected.
On December 27, 2018, Nocera granted Mr. Yin-Chieh
Cheng quarterly option awards of Series A warrants for 20 quarters (i.e., 5 years) for a total of
On June 1, 2020, Nocera granted Mr. Shun-Chih
Chuang and Mr. Hsien-Wen Yu
On June 1, 2020, Nocera granted Mr. Michael A.
Littman
| 22 |
On December 1, 2021, Nocera granted Mr. Shun-Chih
Chuang and Mr. Hsien-Wen Yu
On December 31, 2021, the Company issued an aggregate of shares of common stock to Mr. Shun-Chih Chuang and a total of five consultants in consideration for services rendered.
On August 11, 2022, the Company effected a 2:3 reverse stock split for each share of common stock issued and outstanding. The result of reverse stock split over the common stock issuable upon exercise of the following outstanding securities as of September 30, 2022 is listed below:
Before Reverse Stock Split | After Reverse Stock Split | |||||||
| Series A Warrant | ||||||||
| Class A Warrants | ||||||||
| Class B Warrants | ||||||||
| Class C Warrants | ||||||||
| Class D Warrants | ||||||||
| 2018 Stock Option and Award Incentive Plan | ||||||||
| Total reverse stock split | ||||||||
On December 22, 2022, the Company issued and shares of common stock to Chen-Chun Chung and TraDigital respectively in consideration for services rendered.
On March 22, 2023, the Company issued shares of common stock to Hanover International, Inc. respectively in consideration for services rendered.
On July 31, 2023, Nocera granted Mr. Andy Chin-An Jin restricted shares of common stock, of which vests at the end of every three month period after July 31, 2023 in equal installments over the period of one year, subject to the employment for services as Chief Executive Officer. On December 5, 2023, the Company issued shares of our common stock to our Chief Executive Officer, Andy Chin-An Jin.
On October 11, 2023, the Company issued shares of common stock to Mr. Nick Chang in consideration of service rendered as a consultant for three years.
The estimated fair value of share-based compensation for employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. The fair value of stock option grant was estimated on the date of grant using the Black-Scholes option pricing model under the following assumptions:
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| Dividend yield | N/A | N/A | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected term (in years) | ||||||||
| Volatility | % | % | ||||||
| 23 |
The Company estimated the grant date fair value of time-based stock option awards using the Black-Scholes option valuation model, which requires assumptions involving an estimate of the fair value of the underlying common stock on the date of grant, the expected term of the options, volatility, discount rate and dividend yield. The Company calculated expected option terms based on the “simplified” method for “plain vanilla” options due to the limited exercise information. The “simplified method” calculates the expected term as the average of the vesting term and the original contractual term of the options. The Company calculated volatility using the average adjusted volatility of quick companies feature of Capital IQ for a period of time reflective of the expected option term, while the discount rate was estimated using the interest rate for a treasury note with the same contractual term as the options granted. Dividend yield is estimated at our current dividend rate, which adjusts for any known future changes in the rate.
For the nine months ended September 30, 2024 and year ended December 31, 2023, $ and $ share-based compensation expenses was recognized into additional paid-in capital of the Company, respectively.
As of September 30, 2024, total unrecognized compensation cost related to unvested share-based compensation awards was $. This amount is expected to be recognized as stock-based compensation expense in the Company’s consolidated statements of operations and comprehensive income over the remaining vesting period.
Note 18 PREFERRED STOCK
In August 2021, the Company issued shares of preferred shares of $ each at an issue price of $ per share to certain investors credited as fully paid. The preferred shares are non-voting and non-redeemable. The holder of the preferred shares will have priority over the holders of ordinary shares of the Company on the assets and funds of the Company available for distribution in a distribution of assets on liquidation, winding up or dissolution of the Company. The holder of the preferred shares shall not have the right to attend or vote at any general meeting of the Company (except a general meeting for winding up of the Company or a resolution is to be proposed which if passed would vary or abrogate the rights or privileges of such holder).
On August 11, 2022, the Company effected a
The following table sets forth the computation of basic and diluted (loss) income per common share for the three and nine months ended September 30, 2024 and 2023.
For three months ended September 30, | For nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Numerator: | ||||||||||||||||
| Net loss attributable to the Company | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| - Basic | ||||||||||||||||
| - Diluted | ||||||||||||||||
| Loss per share: | ||||||||||||||||
| - Basic | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| - Diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 24 |
Note 20 COMMITMENTS AND CONTINGENCIES
Lease Commitment
The Company has entered into operating lease agreement for warehouse and processing plant. Future minimum lease payments under non-cancellable operating leases with initial terms within one year is included in Note 12.
The total future minimum lease payments under non-cancellable short-term leases as of September 30, 2024 are payable as follows:
| Future minimum lease payments | Lease Commitment | |||
| $ | ||||
| Within 1 year | ||||
| Total | ||||
Note 21 SUBSEQUENT EVENT
The Company has evaluated subsequent events through the issuance date of the unaudited condensed consolidated financial statements. On October 21, 2024, the Company filed a Form S-3 registration statement, which has not yet become effective. This registration statement allows for the offering and sale of up to $50,000,000 in various securities, including preferred stock, common stock, debt securities, or warrants, either separately or in units. These securities may be offered in one or more transactions at prices and terms to be determined at the time of each offering. The debt securities and warrants are convertible, exercisable, or exchangeable into common stock, preferred stock, or additional debt securities, and the preferred stock may be convertible into or exchangeable for common stock. Other than this event, no additional subsequent events have been identified that would require adjustment or further disclosure in the consolidated financial statements.
| 25 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATING AND FINANCIAL RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In addition, our unaudited consolidated financial statements and the financial data included in this Quarterly Report on Form 10-Q reflect our reorganization and have been prepared as if our current corporate structure had been in place throughout the relevant periods. Actual results could differ materially from those projected in the forward-looking statements. For additional information regarding these and other risks and uncertainties, please see the items listed under the section captioned “Cautionary Statement Regarding Forward-Looking Statements” herein and the section captioned “Risk Factors” as well as any other cautionary language contained in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report on Form 10-Q.
Operations Overview
As of December 31, 2019, we provide land-based recirculation aquaculture systems for fish farming. Our primary business operations consist of the design, development and production of RASs large scale fish tank systems, for fish farms along with expert consulting, technology transfer and aquaculture project management services to new and existing aquaculture management business services. Through our branch office, we also procure and sell eel in Taiwan. In addition, as of December 2022, we sell food items, including our signature seafood porridge bowl, through our flagship bento box store located at the Ning Xia Night Market in the Datong District of Taipei City, Taiwan.
In October 2020, the government of Taiwan began supporting the Green Power and Solar Sharing Fish Farms initiative. In view of the opportunities resulting from this initiative, in October 2020, Nocera ceased all of its operations in China and moved all of its technology and back-office operations to Taiwan. We now only operate out of Taiwan.
Our current mission is to provide consulting services and solutions in aquaculture projects to reduce water pollution and decrease the disease problems of fisheries. Our goal is to become a global leader in the land-based aquaculture business. We are now poised to grow our existing operations in Taiwan and expand into the development and management of land-based fish farms in Taiwan and North and South America. We do not currently have any intentions of conducting operations in China or Hong Kong.
Effective December 31, 2020, we entered into a series of contractual agreements with Xin Feng Construction Co., Ltd., a funded limited liability company registered in Taiwan (R.O.C.), whereby we agreed to provide technical consulting and related services to XFC. On November 30, 2022, we entered into a Purchase of Business Agreement with Han-Chieh Shih, in which we sold our controlling interest of XFC, to the Purchaser for a total purchase cash price of $300,000. The closing of the XFC Sale occurred on November 30, 2022 and the XFC VIE agreements were terminated in connection with the XFC Sale. As of the filing date of this Annual Report on Form 10-K, we have no intention of providing services to construct indoor RASs and solar sharing fish farms in Taiwan.
As of September 30, 2021, we launched our first RAS demo site in Taiwan and engaged the demo site into the testing phase to raise eel. Currently, we are promoting our RASs in Taiwan and looking for opportunities to cooperate with local solar energy industry and to expand our business into the U.S. We believe the U.S. is a potentially lucrative market to penetrate.
On September 7, 2022, we entered into a series of contractual agreements with the majority stockholder of Meixin Institutional Food Development Co., Ltd., a Taiwan corporation and a food processing and catering company, and Meixin, of which we purchased 80% controlling interest of Meixin for $4,300,000. The Meixin VIE Agreements essentially confer control and management of Meixin as well as substantially all of the economic benefits of the Selling Stockholder in Meixin to us. As a result, we have been determined to be the primary beneficiary of Meixin and Meixin became our VIE.
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On June 1, 2023, Gui Zhou Grand Smooth Technology Ltd. (“GZ GST”), one of our wholly owned subsidiaries, entered into that certain Share Purchase Agreement dated as of June 1, 2023, as amended, with Zhe Jiang Xin Shui Hu Digital Information, Ltd. (“Zhe Jiang”), pursuant to which GZ GST acquired all of the issued and outstanding equity securities of Zhe Jiang from the stockholders of Zhe Jiang (the “Zhe Jiang Acquisition”) in exchange for the issuance of 1,500,000 shares of our common stock, par value $0.001 per share. During the initial transaction process and our performing due diligence for the closing, we observed that time constraints have led to certain complexities and challenges in consummating the Acquisition within the originally planned timeframe. We are actively working with Zhe Jiang to resolve such complexities and challenges and will file a Current Report on Form 8-K if and when the Zhe Jiang Acquisition is consummated.
On January 31, 2024, we entered into a Variable Interest Entity Purchase Agreement (“Xinca Purchase Agreement”) with Zhejiang Xinca Mutual Entertainment Culture Media Co., Ltd. (“Xinca”), a domestic funded limited liability company registered in China (P.R.C). The Xinca Purchase Agreement was entered into by our wholly-owned subsidiary and foreign enterprise, Shanghai Nocera Culture Co., Ltd. (“WFOE”), through a series of contractual agreements (“VIE Agreements”), in which we exchanged 1,800,000 shares of our restricted common stock for a 100% controlling interest in Xinca. As a result, the Company has been determined to be the primary beneficiary of Xinca and Xinca became a variable interest entity (“VIE”) of the Company.
On April 14, 2024, we entered into a Variable Interest Entity Purchase Agreement (“SY Media Purchase Agreement”) with Hangzhou SY Culture Media Co. Ltd. (“SY Culture”), a domestic funded limited liability company registered in China (P.R.C). The SY Culture Purchase Agreement was entered into by our wholly-owned subsidiary and foreign enterprise, Gui Zhou Grand Smooth Technology Ltd. (“WFOE”), through a series of contractual agreements (“VIE Agreements”), in which we exchanged 600,000 shares of our restricted common stock for a 100% controlling interest in SY Culture. As a result, the Company has been determined to be the primary beneficiary of SY Culture and SY Culture became a variable interest entity (“VIE”) of the Company.
We employ a sales and marketing strategy targeting Taiwan government-supported solar fish farms. We are planning on expanding our sales and marketing model through the use of online marketing, data intelligence, and the establishment of a distributor network. The online marketing and data intelligence is designed to generate sales leads internationally outside of Taiwan that can be directed to our sales department for further follow-up.
We plan to sell and develop fish farms in Taiwan, the U.S. and Brazil. We expect to sell over five thousand tanks in the next five years. Our production facility is to be established in Taiwan, and we plan to sell the systems into the Americas and European countries as well.
We also intend to expend the fish farming demo sites in Taiwan by adding 20 units of RAS eel farming equipment with outsourcing construction services and build the catfish farm in the U.S. by the end of 2024 to promote our fish farming systems to the global market. We are expecting more customers from various countries actively inquiring about our equipment. As of February 16, 2023, we completed the acquisition of 229 acres of land in Montgomery County, Alabama, of which we intend to build RASs on that land for fish farming. As of September 30, 2024, we are still ensuring all requirements and evaluations are being thoroughly addressed prior to constructing any RASs on the Alabama land. Simultaneously, the design of the RAS equipment is underway, progressing in alignment with the project’s timeline. Both aspects are being managed concurrently to maintain project efficiency and coherence. We plan to enhance market penetration through the establishment of our own fish farms and diversify revenue streams through various sales channels.
Key Factors Affecting our Performance
As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting our results of operations.
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Known Trends and Uncertainties
Inflation
Prices of certain commodity products, including raw materials, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs. Increasing prices in the component materials for our goods may impact the availability, the quality and the price of our products, as suppliers search for alternatives to existing materials and increase the prices they charge. Our suppliers may also fail to provide consistent quality of product as they may substitute lower cost materials to maintain pricing levels. Nocera’s cost base also reflects significant elements for freight, including fuel, which significantly increased due to the effects of coronavirus (COVID-19), Russia’s illegal military invasion of Ukraine and the conflicts in the Middle East. Rapid and significant changes in commodity prices such as fuel and plastic may negatively affect our profit margins if Nocera is unable to mitigate any inflationary increases through various customer pricing actions and cost reduction initiatives.
Geopolitical Conditions
Our operations could be disrupted by geopolitical conditions, trade disputes, international boycotts and sanctions, political and social instability, acts of war, terrorist activity or other similar events. From time to time, we could have a large revenue stream associated with a particular customer or a large number of customers located in a particular geographic region. Decreased demand from a discrete event impacting a specific customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations.
In February 2022, Russia initiated significant military action against Ukraine. Russia’s invasion, the responses of countries and political bodies to Russia’s actions, and the potential for wider conflict may increase financial market volatility and could have adverse effects on regional and global economic markets, including the markets for certain securities and commodities. Following Russia’s actions, various countries, including the United States, Canada, the United Kingdom, Germany and France, as well as the European Union, issued broad-ranging economic sanctions against Russia. The sanctions consist of the prohibition of trading in certain Russian securities and engaging in certain private transactions, the prohibition of doing business with certain Russian corporate entities, large financial institutions, officials and persons and the freezing of Russian assets. The sanctions include a possible commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, commonly called “SWIFT,” the electronic network that connects banks globally, and imposed restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. A number of large corporations and U.S. states have also announced plans to curtail business dealings with certain Russian businesses.
The imposition of the current sanctions (and potential imposition of further sanctions in response to continued Russian military activity) and other actions undertaken by countries and businesses may adversely impact various sectors of the Russian economy, and the military action has severe impacts on the Ukrainian economy, including its exports and food production. The duration of ongoing hostilities and corresponding sanctions and related events cannot be predicted and may result in a negative impact on the markets and thereby may negatively impact our business, financial condition and results of operation.
In addition, while we do not have any direct operations or significant sales in the Middle East, geopolitical tensions and ongoing conflicts in the region, particularly between Israel and Hamas, may lead to global economic instability and fluctuating energy prices that could materially affect our business. It is not possible to predict the broader consequences of the Israel-Hamas war, including related geopolitical tensions, and the measures and actions taken by other countries in respect thereof, which could materially adversely affect global trade, currency exchange rates, regional economies and the global economy. While it is difficult to predict the impact of any of the foregoing, the Israel-Hamas war may increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.
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Foreign Currency
Our reporting currency is the U.S. dollar and our operations in Taiwan use their local currency as their functional currencies. Substantially all of our revenue and expenses are in NT dollars. We are subject to the effects of exchange rate fluctuations with respect to any of such currency. For example, the value of the NT dollar depends to a large extent on Taiwan government policies and Taiwan’s domestic and international economic and political developments, as well as supply and demand in the local market.
The income statements of our operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars in consolidation.
Effects of COVID-19
COVID-19 has globally resulted in the loss of life, business closures, restrictions on travel and widespread cancellation of social gatherings. The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and cannot be predicted at this time, including:
| · | new information which may emerge concerning the severity of the disease; | |
| · | the duration and spread of any future COVID-19 outbreaks; | |
| · | the severity of travel restrictions imposed by geographic areas in which we operate, mandatory or voluntary business closures, if any; | |
| · | regulatory actions taken in response to any future COVID-19 outbreaks which may impact merchant operations, consumer and merchant pricing, and our product offerings; | |
| · | other business disruptions that affect our workforce; | |
| · | the impact on capital and financial markets; and | |
| · | actions taken throughout the world, including in markets in which we operate, to contain any future COVID-19 outbreak or treat its impact. |
In addition, any future outbreak of COVID-19 may result in a widespread global health crisis and adversely affected global economies and financial markets, and similar public health threats could do so in the future.
Since 2021, substantially all our revenues are concentrated in Taiwan pending expansion into other international markets. Consequently, our results of operations will likely be adversely materially affected to the extent that any COVID-19 outbreak or any epidemic harms Taiwan’s economy and society and the global economy in general. Any potential impact to our results will depend on to a large extent, future developments and new information that may emerge regarding the duration and severity of any future COVID-19 outbreak and the actions taken by government authorities and other entities to contain any future COVID-19 outbreak or treat its impact, almost all of which are beyond our control. If the disruptions posed by any future COVID-19 outbreak or other matters of global concern continue for an extensive period of time, the operations of our business may be materially adversely affected.
To the extent any future COVID-19 outbreak or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 initially filed with the SEC on April 1, 2024.
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Seasonality
Since the global growing demand for aquaculture production along with the decreasing production from wild fisheries, our fish farming systems provide a controlled and traceable environment for fish species, and therefore our business rarely suffers a seasonal impact.
Critical Accounting Policies, Estimates and Assumptions
We prepare our financial statements in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the financial reporting period. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our financial statements.
The SEC defines critical accounting policies as those that are, in management’s view, most important to the portrayal of our financial condition and results of operations and those that require significant judgments and estimates.
The accounting principles we utilized in preparing our consolidated financial statements conform in all material respects to GAAP.
Reclassification
Certain prior period amounts have been reclassified to conform with current year presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for doubtful receivables; the useful lives of property and equipment and intangible assets; impairment of long-lived assets; recoverability of the carrying amount of inventory; fair value of financial instruments; provisional amounts based on reasonable estimates for certain income tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.
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Financial Assets
The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
| a) | Category of financial assets and measurement |
Financial assets are classified into the following categories: financial assets at FVTPL, investments in debt instruments and equity instruments at FVTOCI, and financial assets at amortized cost.
| 1) | Financial asset at FVTPL | |
| For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset. | ||
| 2) | Investments in debt instruments at FVTOCI | |
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Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of collecting contractual cash flows and selling the financial assets, are measured at FVTOCI.
Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed. | ||
| 3) | Investments in equity instruments at FVTOCI | |
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On initial recognition, we may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.
Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.
Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when our right to receive the dividends is established, unless our rights clearly represent a recovery of part of the cost of the investment. |
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| 4) | Measured at amortized cost | |
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Cash and cash equivalents, commercial paper, debt instrument investments, notes and accounts receivable (including related parties), other receivables, refundable deposits and temporary payments (including those classified under other current assets and other noncurrent assets) are measured at amortized cost.
Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of holding financial assets in order to collect contractual cash flows, are measured at amortized cost.
Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss. |
| b) | Impairment of financial assets |
At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at FVTOCI.
The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost and investments in debt instruments that are measured at FVTOCI, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.
We recognize an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.
| c) | Derecognition of financial assets |
We derecognize a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.
On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.
Fair Value Measurement
We apply ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.
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ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability.
ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:
| · | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| · | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |
| · | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect our own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
Our management is responsible for determining the assets acquired, liabilities assumed and intangibles identified as of the acquisition date and considered a number of factors including valuations from an independent appraiser.
When available, we use quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, we measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
Cash and Cash Equivalents
Cash and cash equivalents include all cash on hand and cash in bank with no restrictions. The balance of cash as of September 30, 2024 and 2023 were $586,424 and $1,116,183, respectively.
Accounts Receivable, Net
Accounts receivable are stated at the original amount less an allowance for doubtful accounts, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that we will not be able to collect all amounts due according to the original terms of the receivables. We analyze the aging of the customer accounts, coverage of credit insurance, customer concentrations, customer credit-worthiness, historical and current economic trends and changes in its customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.
Prepaid Expenses and Other Assets, Net
Prepaid expense and other assets, net consist of receivable from prepaid rent, etc. Management reviews its receivable balance each reporting period to determine if an allowance for doubtful accounts is required. An allowance for doubtful account is recorded in the period in which loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging, and prevailing economic conditions. Bad debts are written off against the allowance after all collection efforts have ceased.
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Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using the weighted average method. Inventories include raw materials, work in progress and finished goods. The variable production overhead is allocated to each unit of product on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities.
Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value.
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs, and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.
Depreciation of property and equipment is provided using the straight-line method over their estimated useful lives, which are shown as follows.
| Useful life | |
| Leasehold improvements | Shorter of the remaining lease terms and estimated useful lives |
| Land | Indefinite, as per land titles |
| Furniture and fixture | 5 years |
| Equipment | 3 years |
| Machinery | 5 years |
| Vehicle | 5 years |
Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.
Business Combination
For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date and measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, that excess in earnings is recognized as a gain attributable to the acquirer.
Deferred tax liability and assets are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 740-10.
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Variable Interest Entity
A variable interest entity (“VIE”) is an entity (investee) in which the investor has obtained a controlling interest even if it has less than a majority of voting rights, according to the Financial Accounting Standards Board (FASB). A VIE is subject to consolidation if a VIE meets one of the following three criteria as elaborated in ASC Topic 810-10, Consolidation:
| (a) | equity-at-risk is not sufficient to support the entity’s activities; | |
| (b) | as a group, the equity-at-risk holders cannot control the entity; or | |
| (c) | the economics do not coincide with the voting interest. |
If a firm is the primary beneficiary of a VIE, the holdings must be disclosed on the balance sheet. The primary beneficiary is defined as the person or company with the majority of variable interests. A corporation formed, owned, and operated by two or more businesses (ventures) as a separate and discrete business or project (venture) for their mutual benefit is defined as a joint venture.
Goodwill and Intangible Assets
We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other. Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually as of October 1st of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount.
We recognize intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. Acquired intangible assets subject to amortization are stated at cost and are amortized using the straight-line method over the estimated useful lives of the assets. Intangible assets that are subject to amortization are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. Assets not subject to amortization are tested for impairment at least annually.
The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although these assets are not currently impaired, there can be no assurance that future impairments will not occur.
Share-Based Compensation
We determine our share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on the grant date fair value of the award.
Determining the appropriate fair value model and calculating the fair value of phantom award grants requires the input of subjective assumptions. We use the Black-Scholes pricing model to value our phantom awards. Share-based compensation expense is calculated using our best estimates, which involve inherent uncertainties and the application of management’s judgment. Significant estimates include our expected volatility. If different estimates and assumptions had been used, our phantom unit valuations could be significantly different and related share-based compensation expense may be materially impacted.
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The Black-Scholes pricing model requires inputs such as the risk-free interest rate, expected term, expected volatility and expected dividend yield. We base the risk-free interest rate that we use in the Black-Scholes pricing model on zero coupon U.S. Treasury instruments with maturities similar to the expected term of the award being valued. The expected term of phantom awards is estimated from the vesting period of the award and represents the weighted average period that our phantom awards are expected to be outstanding. We estimated the volatility based on the historic volatility of our guideline companies, which we feel best represent our Company. We have never paid and do not anticipate paying any cash dividends in the foreseeable future and, therefore, we use an expected dividend yield of zero in the pricing model. We account for forfeitures as they occur.
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of our unaudited condensed consolidated financial position as of September 30, 2024, consolidated results of operations for the period ended September 30, 2024, cash flows for the year period ended September 30, 2024 and change in equity for the period ended September 30, 2024, as applicable, have been made.
Critical accounting policies are those that we consider the most critical to understanding our financial condition and results of operations.
Impairment of Long-lived Assets
We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets.
Commitments and Contingencies
In the normal course of business, we are subject to contingencies, including legal proceedings and claims arising out of our business that relate to a wide range of matters, such as government investigations and tax matters. We recognize a liability for such contingency if we determine it is probable that a loss has occurred and a reasonable estimate of the loss can be made. We may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Revenue Recognition
We have early adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 on January 1, 2017.
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, we apply the following steps:
| · | Step 1: Identify the contract(s) with a customer | |
| · | Step 2: Identify the performance obligations in the contract | |
| · | Step 3: Determine the transaction price | |
| · | Step 4: Allocate the transaction price to the performance obligation in the contract | |
| · | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation |
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We considered revenue is recognized when (or as) we satisfy performance obligations by transferring a promised goods and provide maintenance service to a customer. Revenue is measured at the transaction price which is based on the amount of consideration that we expect to receive in exchange for transferring the promised goods and providing maintenance service to the customer. Contracts with customers are comprised of invoices, and written contracts.
We do not have arrangements for returns from customers. We have no sales incentive programs.
We provide goods, maintenance service warranties for the goods sold with a period varying from 18 months to 72 months, with the majority of the periods being 18 months, and exclusive sales agency license to its customers. For performance obligation related to providing products, we expect to recognize the revenue according to the delivery of products. For performance obligation related to maintenance service warranties, we expect to recognize the revenue on a ratable basis using a time-based output method. The performance obligations are typically satisfied as services are rendered on a straight-line basis over the contract term, which is generally for 18 months as a majority of the maintenance service warranties periods provided are 18 months. For performance obligation related to exclusive agency license, we recognize the revenue ratably upon the satisfaction over the estimated economic life of the license.
We do not have amounts of contract assets since revenue is recognized as control of goods is transferred. The contract liabilities consist of advance payments from customers and deferred revenue. Advance payments from customers are expected to be recognized as revenue within 12 months. Deferred revenue is expected to be recognized as revenue within 12 months.
Cost of Sales
Cost of sales consists primarily of material costs, labor costs, depreciation, and related expenses, which are directly attributable to the production of the product. Write-down of inventories to lower of cost or net realizable value is also recorded in cost of sales.
Income Taxes
We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Leases
In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the lease requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases.
We adopted ASC Topic 842 using the modified retrospective transition method effective January 1, 2019. There was no cumulative effect of initially applying ASC Topic 842 that required an adjustment to the opening retained earnings on the adoption date nor revision of the balances in comparative periods. As a result of the adoption, we recognized a lease liability and right-of-use asset for each of our existing lease arrangement. The adoption of the new lease standard does not have a material impact on our consolidated income statement or our consolidated statement of cash flow.
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Uncertain Tax Positions
We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. We record interest and penalties on uncertain tax provisions as income tax expense. There were no uncertain tax positions as of September 30, 2024 and 2023, and we have no accrued interest or penalties related to uncertain tax positions. We do not believe that the unrecognized tax benefits will change over the next twelve months.
Comprehensive (Loss) Income
Comprehensive income or loss is comprised of the our net (loss) income and other comprehensive income or loss. The component of other comprehensive income or loss consists solely of foreign currency translation adjustments, net of the income tax effect.
Foreign Currency Translation and Transactions
Our reporting currency is the United States dollar (“US$”). The functional currency of our VIE in Taiwan is the New Taiwan dollar (“NT”), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars (“HK$”). The functional currency of PRC companies is the Renminbi (“RMB”). In the consolidated financial statements, the financial information of our subsidiary and the consolidated VIE has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, except for changes in accumulated deficit during the year which is the result of income statement translation process, and revenue, expense, gains or losses are translated using the average exchange rate during the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a separate component of other comprehensive income or loss in the consolidated statements of changes in equity and comprehensive (loss) income. The exchange rates as of September 30, 2024 and 2023 are 7.1268 and 7.2258, respectively. The annual average exchange rates for the year ended December 31, 2023 and 2022 are 7.0423 and 6.7208, respectively.
(Loss) Earnings per Share
Basic (loss) earnings per share is computed by dividing net (loss) income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
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Results of Operations
The following table sets forth the consolidated statements of operations of the Company for the three and nine months ended September 30, 2024 and 2023.
Consolidated Statements of Operations
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Net sales | 1,363,101 | 7,283,281 | 13,016,093 | 16,448,325 | ||||||||||||
| Cost of sales | (1,328,970 | ) | (7,321,912 | ) | (12,852,214 | ) | (16,291,065 | ) | ||||||||
| Gross profit | 34,131 | 51,369 | 163,879 | 157,260 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | (335,202 | ) | (319,762 | ) | (1,219,608 | ) | (1,747,766 | ) | ||||||||
| Total operating expenses | (335,202 | ) | (319,762 | ) | (1,219,608 | ) | (1,747,766 | ) | ||||||||
| Loss from operations | (301,071 | ) | (268,393 | ) | (1,055,729 | ) | (1,590,506 | ) | ||||||||
| Other income (expense) | 2,180 | (4,385 | ) | 16,046 | (16,773 | ) | ||||||||||
| Loss before income taxes | (298,891 | ) | (272,778 | ) | (1,039,683 | ) | (1,607,279 | ) | ||||||||
| Income tax expense | 509 | – | (121,871 | ) | – | |||||||||||
| Net loss | (298,382 | ) | (272,778 | ) | (1,161,554 | ) | (1,607,279 | ) | ||||||||
| Less: Net loss attributable to non-controlling interests | (12,964 | ) | (8,719 | ) | (35,438 | ) | (44,198 | ) | ||||||||
| Net loss attributable to the company | (285,418 | ) | (264,059 | ) | (1,126,116 | ) | (1,563,081 | ) | ||||||||
| Comprehensive (loss) income | ||||||||||||||||
| Net loss | (298,382 | ) | (272,778 | ) | (1,161,554 | ) | (1,607,279 | ) | ||||||||
| Foreign currency translation gain (loss) | (12,144 | ) | 42,482 | 190,263 | 62,076 | |||||||||||
| Total comprehensive loss | (310,526 | ) | (230,296 | ) | (971,291 | ) | (1,545,203 | ) | ||||||||
| Less: comprehensive loss attributable to non-controlling interest | (11,755 | ) | 11,037 | (38,390 | ) | (12,376 | ) | |||||||||
| Comprehensive loss attributable to the Company | (298,771 | ) | (241,333 | ) | (932,901 | ) | (1,532,827 | ) | ||||||||
| Loss per share | ||||||||||||||||
| Basic | (0.0210 | ) | (0.0264 | ) | (0.0865 | ) | (0.1611 | ) | ||||||||
| Diluted | (0.0210 | ) | (0.0264 | ) | (0.0865 | ) | (0.1611 | ) | ||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | 13,607,097 | 10,019,125 | 13,017,717 | 9,703,101 | ||||||||||||
| Diluted | 13,607,097 | 10,019,125 | 13,017,717 | 9,703,101 | ||||||||||||
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Revenue
Revenue for the three months ended September 30, 2024 was $1,363,101, compared to $7,283,281 for the comparable period in 2023. The revenue for the three months ended September 30, 2024 was mostly decreased from the Nocera fish trading business with slow fish market in Taiwan and Meixin catering business with revenues of $0.2 million and $0.14 million, respectively.
Revenue for the nine months ended September 30, 2024 was $13,016,093, compared to $16,448,325 for the comparable period in 2023. The revenue for the nine months ended September 30, 2024 was mostly decreased from the Nocera fish trading business with slow fish market in Taiwan and Meixin catering business with revenues of $7.9 million and $4.8 million, respectively.
For the nine months ended September 30, 2024, our foreign currency translation gain was $190,263.
Gross profit
Gross profit for the three months ended September 30, 2024 was $34,131, compared to $51,369 for the comparable period in 2023. The decrease was primarily due to the decrease in sales from NTB’s fish trading business for the three months ended September 30, 2024.
Gross profit for the nine months ended September 30, 2024 was $163,879, compared to $157,260 for the comparable period in 2023. The increase was primarily because there was an increase in demands of the sales through e-commerce business for nine months ended September 30, 2024.
General and administrative expenses
General and administrative expenses were $335,202, for the three months ended September 30, 2024, compared to approximately $319,762 for the comparable period in 2023. This increase was primarily due to the increase of consulting fees and salary expenses for the three months ended September 30, 2024.
General and administrative expenses were $1,219,608, for the nine months ended September 30, 2024, compared to approximately $1,747,766 for the comparable period in 2023. This decrease was primarily due to the decrease of consulting fees, audit fees, and legal fees for the nine months ended September 30, 2024.
Other expense
Other income was $2,180, for the three months ended September 30, 2024, compared to other expense of $4,385 for the comparable period in 2023. The other income was interest revenue of bank deposits. The other expense was interest expense for a bank loan. The increase was mainly the effect of interest expense recognized for the three months ended September 30, 2024.
Other income was $16,046, for the nine months ended September 30, 2024, compared to other expense of $16,773 for the comparable period in 2023. The other income was interest revenue of bank deposits and gains from foreign currency translation. The other expense was interest expense for a bank loan.
Income tax expense
During the nine months ended September 30, 2024, we recorded an income tax expense of $121,871 compared to income tax expense of $ nil for the comparable period in 2023. The increase of income tax expense occurs by making profit of fish sales by Taiwan National Taxation Bureau for the period ended September 30, 2024.
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Net income attributable to the Company
Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the three months ended September 30, 2024 was $285,418 compared to net loss attributable to us (excluding net loss attributable to non-controlling interest) of $264,059 for the comparable period in 2023. Margins remained similar profit margin for three months ended September 30, 2024.
Net loss attributable to the Company (excluding net loss attributable to non-controlling interest) for the nine months ended September 30, 2024 was $1,126,116, compared to a net loss attributable to the Company (excluding net loss attributable to non-controlling interest) of $1,563,081 for the comparable period in 2023. The decrease was primarily due to the decrease of General and administrative expenses for the nine months ended September 30, 2024.
Liquidity and Capital Resources
The Company had net cash used by operating activities for the period ended September 30, 2024 and the cash balance was $372,270 as of September 30, 2024 with net current liabilities of $1,176,035 and stockholders’ equity of $4,636,456. The Company believes its current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet its working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements. The Company continues to control its cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date of issuance of the accompanying consolidated financial statements. Management is also focused on growing the Company’s existing product offering, as well as its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot assure that it will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that the Company has sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying consolidated financial statements.
To date, we have funded our operations through revenues, loans from our officers, and the issuance of equity securities. We obtained a financial support letter from Mr. Yin-Chieh Cheng, our former President, Chief Executive Officer, Chairman of the Board and principal stockholder.
Since the net asset balance as of September 30, 2024 was $1,213,638, there is no substantial doubt as to our ability to continue as a going concern.
The following table provides detailed information about our net cash flows for the periods indicated:
For the nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Net cash used in operating activities | (909,563 | ) | (1,052,084 | ) | ||||
| Net cash provided by (used in) investing activities | 211,801 | (1,057,870 | ) | |||||
| Net cash (used in)/provided by financing activities | (22,358 | ) | 504,480 | |||||
| Effect of the exchange rate change on cash | (137,190 | ) | (19,342 | ) | ||||
| Decrease in cash | (857,310 | ) | (1,624,816 | ) | ||||
Net cash used in operating activities
Net cash used in operating activities amounted to $909,563 for the nine months ended September 30, 2024. This reflected a net loss of $1,161,554, depreciation of $112,096 and share-based compensation of $45,498.
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Net cash used in operating activities amounted to $1,052,084 for the nine months ended September 30, 2023. This reflected a net loss of $1,607,279, consultancy services settled by equities of $521,100, depreciation of $ 109,953 and share-based compensation of $148,288.
Net cash used in investing activities
Net cash provided by investing activities was $211,801 for the year ended September 30, 2024, which were primarily attributable to the proceeds from disposal of financial assets at fair value through profit and loss.
Net cash used in investing activities was $1,057,870 for the year ended September 30, 2023, which were primarily attributable to the purchase of land and investment funds.
Net cash used in/provided by financing activities
Net cash used in financing activities amounted to $22,358 for the nine months ended September 30, 2024, which was repayment of bank loans and acquisition of subsidiaries.
Net cash provided by financing activities amounted to $504,480 for the nine months ended September 30, 2023, which was provided by the issuance of our common stock.
Since we plan to build our land-based fish farming demo sites in Taiwan, the U.S. and Brazil to promote our fish farming systems to the global market, we expect that we will require additional capital, which includes construction costs, marketing costs, operation costs, etc., to meet our long-term operating requirements. We expect to obtain financing from shareholders or raise additional capital through, among other things, the sale of equity or debt securities. The shareholders are committed to provide additional financing required when we try to raise additional capital from third party investors or banks. However, there can be no assurance that we will be successful in raising this additional capital.
Business Combinations
We account for business acquisitions in accordance with ASC 805, Business Combinations. We measure the cost of an acquisition as the aggregate of the acquisition date fair values of the assets transferred and liabilities assumed and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. We record goodwill for the excess of (i) the total costs of acquisition, fair value of any non-controlling interests and acquisition date fair value of any previously held equity interest in the acquired business over (ii) the fair value of the identifiable net assets of the acquired business.
The acquisition method of accounting requires us to exercise judgment and make estimates and assumptions based on available information regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, deferred tax asset valuation allowances, liabilities related to uncertain tax positions and contingencies. We must also refine these estimates over a one-year measurement period, to reflect any new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to retroactively adjust provisional amounts that we have recorded for the fair value of assets and liabilities in connection with an acquisition, these adjustments could materially impact our results of operations and financial position. Estimates and assumptions that we must make in estimating the fair value of future acquired technology, user lists and other identifiable intangible assets include future cash flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed, which could materially impact our results of operations.
Recently Issued Accounting Pronouncements
Please refer to the Note 2 above.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information in this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer performed an evaluation (the “Evaluation”) of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide a reasonable level of assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, due to the presence of material weaknesses described below, our disclosure controls and procedures were ineffective.
The following material weaknesses in our disclosure controls and procedures at September 30, 2024 were:
| · | we did not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act of 2002; | |
| · | there were insufficient monitoring and review controls over the financial reporting closing process, including the lack of individuals with current knowledge of GAAP that led to the restatement of our previously issued financial statements; and | |
| · | inadequate segregation of duties. |
We believe that these material weaknesses primarily relate, in part, to our lack of sufficient staff with appropriate training in GAAP and SEC rules and regulations with respect to financial reporting functions, and the lack of robust accounting systems, as well as the lack of sufficient resources to hire such staff and implement these accounting systems.
We expect to remediate these material weaknesses in the second half of 2024. However, we may discover additional material weaknesses that may require additional time and resources to remediate. Our remediation process includes, but not limited to:
| · | Investing in information technology systems to enhance our operational and financial reporting and internal controls. | |
| · | Enhancing the organizational structure to support financial reporting processes and internal controls. | |
| · | Providing guidance, education and training to employees relating to our accounting policies and procedures. | |
| · | Further developing and documenting detailed policies and procedures regarding business processes for significant accounts, critical accounting policies and critical accounting estimates. | |
| · | Establishing effective general controls over information technology systems to ensure that information produced can be relied upon by process level controls is relevant and reliable. |
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Notwithstanding the foregoing, there can be no assurance that our disclosure controls and procedures will detect or uncover all failures of persons within our Company and our consolidated subsidiaries to disclose material information otherwise required to be set forth in our periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.
Changes in Internal Control Over Financial Reporting
During the quarter ended September 30, 2024, we took several actions to correct past material weaknesses, including, but not limited to, establishing an audit committee of our Board comprised of three independent directors, adding experienced accounting and financial personnel and retaining third-party consultants to review our internal controls and recommend improvements. However, we may need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to (1) address the issues identified, (2) ensure that our internal controls are effective or (3) ensure that the identified material weakness or other material weaknesses will not result in a material misstatement of our annual or interim financial statements.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We were not subject to any legal proceedings during the nine months ended September 30, 2024 and there are currently no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
| · | On April 14, 2024, Gui Zhou Grand Smooth Technology Ltd. (“GZ GST”), one of our wholly owned subsidiaries, entered into the Equity Purchase Agreement dated as of April 14, 2024, with Hangzhou SY Culture Media Co. Ltd. (“SY Culture”), pursuant to which GZ GST acquired all of the issued and outstanding equity securities of SY Culture from the stockholders of SY Culture in exchange for the issuance of 600,000 unregistered shares of the Company’s common stock, par value $0.001 per share. |
The issuance of the capital stock listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act, as amended (the “Securities Act”) or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Changes in Accountant
On October 16, 2024, the auditor of the Company, Centurion ZD CPA & Co. (“CZD”), resigned as the Company’s independent registered public accounting firm. CZD’s audit report on the Company’s financial statements as of and for the fiscal years ended December 31, 2023 and December 31, 2022 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles except that such audit report did include an explanatory paragraph regarding the Company’s ability to continue as a going concern.
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During the Company’s two most recent fiscal years, there were no disagreements with CZD on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of CZD, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report.
We furnished a copy of this disclosure to CZD and requested CZD to furnish us with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. We have included CZD’s letter as Exhibit 16.1 below in this Form 10-Q.
On October 16, 2024, the Company’s Audit Committee approved, and the Company’s Board ratified, the engagement of Enrome LLP (the “New Auditor”), and appointed the New Auditor as the Company’s independent registered public accounting firm as of October 16, 2024. During the past two fiscal years ended December 31, 2022 and 2023, and the subsequent interim period through October 16, 2024, neither the Company nor anyone on the Company’s behalf consulted with the New Auditor with respect to either (i)(a) the application of accounting principles to a specified transaction, either completed or proposed, or (b) the type of audit opinion that might be rendered on financial statements, and no written report nor oral advice was provided to the Company that the New Auditor concluded was an important factor that the Company consider in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any other matter that was the subject of a “disagreement” or a “reportable event” (as these terms are defined in Item 304(a)(1) of Regulation S-K and the related instructions).
Nasdaq Compliance
On September 17, 2024, the Company received a deficiency letter (the “Nasdaq Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price of the Company’s shares of common stock, $0.001 par value per share (“Common Stock”), had not been maintained at the minimum required closing bid price of at least $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).
The Nasdaq Letter did not result in the immediate delisting of the Company’s Common Stock, and the Company’s Common Stock continues to trade uninterrupted on The Nasdaq Capital Market under the symbol “NCRA”.
In accordance with the listing rules of Nasdaq, the Company has been given 180 calendar days, or until March 17, 2025 (the “Compliance Date”), to regain compliance with the Bid Price Rule. If at any time before the Compliance Date, the closing bid price of the Company’s Common Stock is at least $1.00 per share for a minimum of ten consecutive business days, Nasdaq will provide written notification to the Company that it complies with the Bid Price Rule. If the Company is unable to regain compliance before the Compliance Date, the Company may be eligible for an additional 180 calendar days to satisfy the Bid Price Rule. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market with the exception of the Bid Price Rule, and will need to provide written notice of its intention to cure the deficiency during such additional compliance period, by effecting a reverse stock split, if necessary. If it appears to Nasdaq staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for the additional compliance period, and the Company does not regain compliance by the Compliance Date, Nasdaq will provide written notification to the Company that its Common Stock is subject to delisting. At that time, the Company may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the panel, such appeal would be successful.
The Company intends to actively monitor the closing bid price of its Common Stock and, as appropriate, will consider available options to regain compliance with the Bid Price Rule. There can be no assurance that the Company will be able to regain compliance with the Bid Price Rule, secure an additional 180 calendar days to satisfy the Bid Price Rule or will otherwise be in compliance with other Nasdaq listing criteria and that the Company will be able to maintain its listing with Nasdaq.
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Holding Foreign Companies Accountable Act
On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the Holding Foreign Companies Accountable Act (the “HFCAA”), pursuant to which the SEC will identify a “Commission-Identified Issuer” if an issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the Public Company Accounting Oversight Board (the “PCAOB”) has determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction, and will then impose a trading prohibition on an issuer after it is identified as and remains a Commission-Identified Issuer for three consecutive years. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by one or more authorities in such jurisdictions. Since the Company’s auditor is located in Hong Kong, the Company’s auditor is included on a list of audit firms the PCAOB determined it is unable to inspect or investigate completely because of a position taken by one or more authorities in Hong Kong, and is therefore subject to the PCAOB’s determination. In May 2022, the Company was added to the SEC’s conclusive lists of issuers identified under the HFCAA, or a Commission-Identified Issuer. Therefore, the Company will be delisted and its securities will be prohibited from being traded “over-the-counter” if it remains identified as a Commission-Identified Issuer for three consecutive years. If the Company’s securities are unable to be listed on another securities exchange by then, such a delisting or prohibition of trading would substantially impair your ability to sell or purchase the Company’s securities when you wish to do so, and the risk and uncertainty associated with a potential delisting or prohibition of trading would have a negative impact on the price of the Company’s securities. The Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), passed by the U.S. Senate and if enacted, would require Commission-Identified Issuers to comply with the PCAOB audits within two consecutive years instead of three consecutive years. In light of the PRC government’s recent expansion of authority in Hong Kong, there are risks and uncertainties which the Company cannot foresee for the time being, and rules and regulations in China can change quickly with little or no advance notice.
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ITEM 6. EXHIBITS
| (a) | The following exhibits are filed herewith or incorporated by reference herein: |
| Exhibit No. | Description | Previously Filed and Incorporated by Reference Herein | ||
| 10.1 | Equity Purchase Agreement dated as of April 14, 2024, by and between Gui Zhou Smooth Technology Ltd. And Hangzhou SY Culture Media Co. Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 16, 2024). | * | ||
| 16.1 | Letter from Centurion ZD CPA & Co. regarding change in certifying accountant (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on October 16, 2024). | |||
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of the President and Chief Executive Officer of Nocera, Inc. | * | ||
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of Nocera, Inc. | * | ||
| 32.1 | Section 1350 Certification of the President and Chief Executive Officer of Nocera, Inc. | ** | ||
| 32.2 | Section 1350 Certification of the Chief Financial Officer of Nocera, Inc. | ** | ||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | * | ||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | ||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | ||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | ||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | ||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | ||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | * |
___________________________
|
* ** |
Furnished herewith. Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise specifically stated in such filing. |
| 48 |
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 hereunto duly authorized.
| NOCERA, INC. | ||
Date: November 14, 2024 |
By: | /s/ Andy Ching-An Jin |
| Name: | Andy Ching-An Jin | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
Date: November 14, 2024 |
By: | /s/ Shun-Chih Chuang |
| Name: | Shun-Chih Chuang | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer) | ||
| (Principal Accounting Officer) |
| 49 |