[10-Q] Nocera, Inc. Quarterly Earnings Report
Nocera, Inc. reported interim condensed results showing substantial operating losses and corporate transactions in first half 2025. Total current assets included amounts such as $109,951 and $144,509 (various line items), with property and equipment of approximately $1,010,919 and goodwill largely related to acquisitions totaling $1,351,703 for Xinca. The company recognized significant segment and consolidated losses, including a net loss of $(502,645) for a reported period and larger year-to-date losses such as $(760,262) and $(816,157) in comparative tables. Capital activity included issuance of shares (14,367,539 common shares outstanding as of June 30, 2025), warrant exercises, and a public offering that generated gross proceeds of $6.58 million (net proceeds ~ $5.3 million). Corporate transactions: the company obtained 100% control of Xinca via issuance of 1,800,000 restricted common shares, acquired Meixin with an 80% interest for $4,300,000 (via VIE agreements), and sold SY Culture on June 5, 2025 for $550,000 ($500,000 collected by June 30, 2025 with $50,000 received in July). Management disclosed internal control weaknesses and remediation plans to strengthen financial reporting, IT controls and policies.
Nocera, Inc. ha comunicato risultati interinali condensati che evidenziano perdite operative rilevanti e operazioni societarie nella prima metà del 2025. Le attività correnti totali comprendono voci quali $109.951 e $144.509 (diversi elementi di bilancio), mentre gli immobili, impianti e macchinari sono pari a circa $1.010.919 e l'avviamento, principalmente riconducibile ad acquisizioni, ammonta a $1.351.703 per Xinca. La società ha registrato perdite significative a livello di segmento e consolidato, inclusa una perdita netta di $(502.645) per il periodo riportato e perdite maggiori nell’anno sino alla data, quali $(760.262) e $(816.157) nelle tabelle comparative. Le operazioni di capitale hanno incluso l’emissione di azioni (14.367.539 azioni ordinarie in circolazione al 30 giugno 2025), esercizi di warrant e un'offerta pubblica che ha generato proventi lordi di $6,58 milioni (proventi netti ~ $5,3 milioni). Operazioni societarie: la società ha acquisito il 100% del controllo di Xinca tramite l’emissione di 1.800.000 azioni ordinarie vincolate, ha rilevato Meixin con una partecipazione dell’80% per $4.300.000 (tramite accordi VIE) e ha venduto SY Culture il 5 giugno 2025 per $550.000 ($500.000 incassati al 30 giugno 2025 e $50.000 ricevuti a luglio). La direzione ha segnalato carenze nei controlli interni e piani di rimedio per rafforzare il reporting finanziario, i controlli IT e le politiche interne.
Nocera, Inc. informó resultados interinos condensados que muestran pérdidas operativas sustanciales y transacciones corporativas en la primera mitad de 2025. Los activos corrientes totales incluyen partidas como $109.951 y $144.509 (varías partidas), con propiedades y equipos por aproximadamente $1.010.919 y plusvalía relacionada principalmente con adquisiciones por un total de $1.351.703 para Xinca. La empresa reconoció pérdidas importantes a nivel de segmento y consolidado, incluida una pérdida neta de $(502.645) en el periodo informado y pérdidas acumuladas mayores en el año, como $(760.262) y $(816.157) en las tablas comparativas. La actividad de capital incluyó la emisión de acciones (14.367.539 acciones ordinarias en circulación al 30 de junio de 2025), ejercicios de warrants y una oferta pública que generó ingresos brutos de $6,58 millones (ingresos netos ~ $5,3 millones). Transacciones corporativas: la compañía obtuvo el 100% del control de Xinca mediante la emisión de 1.800.000 acciones ordinarias restringidas, adquirió Meixin con un 80% de participación por $4.300.000 (a través de acuerdos VIE) y vendió SY Culture el 5 de junio de 2025 por $550.000 ($500.000 cobrados hasta el 30 de junio de 2025 y $50.000 recibidos en julio). La dirección informó debilidades en el control interno y planes de remediación para fortalecer la presentación de informes financieros, los controles de TI y las políticas.
Nocera, Inc.는 2025년 상반기에 상당한 영업손실과 기업 거래를 반영한 중간 요약 실적을 발표했습니다. 총 유동자산에는 $109,951 및 $144,509(여러 항목) 등의 금액이 포함되었고, 유형자산은 약 $1,010,919이며 영업권은 주로 인수와 관련되어 Xinca에 대해 $1,351,703입니다. 회사는 세그먼트 및 연결 기준에서 상당한 손실을 인식했으며, 보고 기간 순손실은 $(502,645)이고 비교표상 연초 이후 손실은 $(760,262) 및 $(816,157) 등으로 더 컸습니다. 자본 활동으로는 주식 발행(2025년 6월 30일 기준 발행 보통주 14,367,539주), 워런트 행사 및 총수익 $6.58백만(순수익 약 $5.3백만)을 창출한 공모가 있었습니다. 기업 거래: 회사는 1,800,000주의 제한 보통주 발행을 통해 Xinca의 100% 지배권을 취득했고, VIE 계약을 통해 $4,300,000에 Meixin의 80% 지분을 취득했으며, 2025년 6월 5일 SY Culture를 $550,000에 매각했습니다(2025년 6월 30일까지 $500,000 수령, $50,000은 7월에 수령). 경영진은 내부 통제상의 취약점을 공시했으며 재무보고, IT 통제 및 정책을 강화하기 위한 시정 계획을 제시했습니다.
Nocera, Inc. a publié des résultats intermédiaires condensés montrant des pertes d’exploitation substantielles et des opérations corporatives au premier semestre 2025. Les actifs courants totaux comprennent des montants tels que $109 951 et $144 509 (divers postes), les immobilisations corporelles s’élèvent à environ $1 010 919 et le goodwill, en grande partie lié à des acquisitions, totalise $1 351 703 pour Xinca. La société a enregistré des pertes importantes au niveau des segments et au niveau consolidé, y compris une perte nette de $(502 645) pour la période rapportée et des pertes cumulées supérieures sur l’année, telles que $(760 262) et $(816 157) dans les tableaux comparatifs. Les opérations de capital ont inclus l’émission d’actions (14 367 539 actions ordinaires en circulation au 30 juin 2025), l’exercice de bons de souscription et une offre publique ayant généré des produits bruts de $6,58 M (produits nets ~ $5,3 M). Transactions corporatives : la société a obtenu le contrôle à 100 % de Xinca via l’émission de 1 800 000 actions ordinaires restreintes, a acquis 80 % de Meixin pour $4 300 000 (via des accords VIE) et a vendu SY Culture le 5 juin 2025 pour $550 000 ($500 000 encaissés au 30 juin 2025 et $50 000 reçus en juillet). La direction a signalé des faiblesses de contrôle interne et des plans de remédiation pour renforcer le reporting financier, les contrôles informatiques et les politiques.
Nocera, Inc. meldete vorläufige verkürzte Ergebnisse, die erhebliche Betriebsverluste und Unternehmensgeschäfte in der ersten Hälfte 2025 aufzeigen. Zu den gesamten kurzfristigen Vermögenswerten gehören Beträge wie $109.951 und $144.509 (verschiedene Bilanzposten), das Sachanlagevermögen beläuft sich auf rund $1.010.919 und der Firmenwert, größtenteils auf Akquisitionen zurückzuführen, beträgt für Xinca $1.351.703. Das Unternehmen verzeichnete bedeutende Segment- und Konzernverluste, darunter einen Nettoverlust von $(502.645) für den berichteten Zeitraum sowie größere Jahresverluste wie $(760.262) und $(816.157) in den Vergleichstabellen. Kapitalmaßnahmen umfassten die Ausgabe von Aktien (14.367.539 Stammaktien ausstehend zum 30. Juni 2025), Ausübung von Warrants und ein öffentlicher Verkauf, der Bruttoerlöse von $6,58 Mio. (Nettoerlöse ~ $5,3 Mio.) erzielte. Unternehmensgeschäfte: Das Unternehmen erlangte 100% Kontrolle über Xinca durch die Ausgabe von 1.800.000 eingeschränkten Stammaktien, erwarb Meixin zu 80% für $4.300.000 (über VIE-Vereinbarungen) und verkaufte SY Culture am 5. Juni 2025 für $550.000 ($500.000 bis zum 30. Juni 2025 eingegangen, $50.000 im Juli erhalten). Das Management legte interne Kontrollschwächen offen und Sanierungspläne vor, um das Finanzreporting, IT-Kontrollen und Richtlinien zu stärken.
- Completed financing via a public offering that generated gross proceeds of $6.58 million (net approximately $5.3 million), strengthening liquidity
- Monetized an asset through the sale of SY Culture for $550,000 (with $500,000 collected by June 30, 2025)
- Active corporate restructuring including acquisitions (Xinca, Meixin) to expand operations and consolidate control via VIE arrangements
- Recurring operating losses with reported net loss figures such as $(502,645) and larger year-to-date losses (e.g., $(760,262)), indicating continued unprofitability
- Significant goodwill tied to acquisitions (Goodwill - Xinca $1,351,703) which could be at risk of impairment if operations fail to improve
- Internal control weaknesses disclosed (insufficient monitoring of financial close, inadequate segregation of duties) that previously led to restatements
- Reliance on financing and disposals (warrant exercises, public offering, asset sale) to support cash rather than operating cash flow
Insights
TL;DR Large acquisition-related goodwill and recurring operating losses strain balance sheet and cash flows; financing events partly mitigate liquidity pressure.
The company shows heavy operating losses across reporting periods (examples: $(502,645) and $(760,262)), while completing acquisition and disposition transactions that materially affect goodwill and working capital. Xinca became a VIE with 1,800,000 shares issued and goodwill of $1,351,703; Meixin control was obtained for $4.3 million. The SY Culture sale produced $550,000 in proceeds (partial collection by period end). A $6.58 million offering (net ~$5.3M) and warrant exercises provided cash inflows, but net cash movements show large decreases (e.g., net decrease in cash $(334,031)). The combination of recurring losses, sizeable goodwill, and reliance on financing and nonrecurring disposals raises sustainability questions for operations absent profitable turnaround or further financing.
TL;DR Internal control deficiencies were identified and remediation steps are underway; governance attention required given complex related-party and VIE arrangements.
Management disclosed insufficient monitoring and review controls over the financial close and inadequate segregation of duties, which previously led to restatements. The company outlines remediation including IT investments, enhanced organizational structure, employee training, and documented policies. Several related-party balances and transfers are disclosed (examples: amounts involving Mountain Share Transfer, estate of a former director, executive payables). Given the material acquisitions via share issuances, VIE arrangements and related-party activity, robust governance and transparent controls are critical to ensure reliable reporting and to protect minority shareholders.
Nocera, Inc. ha comunicato risultati interinali condensati che evidenziano perdite operative rilevanti e operazioni societarie nella prima metà del 2025. Le attività correnti totali comprendono voci quali $109.951 e $144.509 (diversi elementi di bilancio), mentre gli immobili, impianti e macchinari sono pari a circa $1.010.919 e l'avviamento, principalmente riconducibile ad acquisizioni, ammonta a $1.351.703 per Xinca. La società ha registrato perdite significative a livello di segmento e consolidato, inclusa una perdita netta di $(502.645) per il periodo riportato e perdite maggiori nell’anno sino alla data, quali $(760.262) e $(816.157) nelle tabelle comparative. Le operazioni di capitale hanno incluso l’emissione di azioni (14.367.539 azioni ordinarie in circolazione al 30 giugno 2025), esercizi di warrant e un'offerta pubblica che ha generato proventi lordi di $6,58 milioni (proventi netti ~ $5,3 milioni). Operazioni societarie: la società ha acquisito il 100% del controllo di Xinca tramite l’emissione di 1.800.000 azioni ordinarie vincolate, ha rilevato Meixin con una partecipazione dell’80% per $4.300.000 (tramite accordi VIE) e ha venduto SY Culture il 5 giugno 2025 per $550.000 ($500.000 incassati al 30 giugno 2025 e $50.000 ricevuti a luglio). La direzione ha segnalato carenze nei controlli interni e piani di rimedio per rafforzare il reporting finanziario, i controlli IT e le politiche interne.
Nocera, Inc. informó resultados interinos condensados que muestran pérdidas operativas sustanciales y transacciones corporativas en la primera mitad de 2025. Los activos corrientes totales incluyen partidas como $109.951 y $144.509 (varías partidas), con propiedades y equipos por aproximadamente $1.010.919 y plusvalía relacionada principalmente con adquisiciones por un total de $1.351.703 para Xinca. La empresa reconoció pérdidas importantes a nivel de segmento y consolidado, incluida una pérdida neta de $(502.645) en el periodo informado y pérdidas acumuladas mayores en el año, como $(760.262) y $(816.157) en las tablas comparativas. La actividad de capital incluyó la emisión de acciones (14.367.539 acciones ordinarias en circulación al 30 de junio de 2025), ejercicios de warrants y una oferta pública que generó ingresos brutos de $6,58 millones (ingresos netos ~ $5,3 millones). Transacciones corporativas: la compañía obtuvo el 100% del control de Xinca mediante la emisión de 1.800.000 acciones ordinarias restringidas, adquirió Meixin con un 80% de participación por $4.300.000 (a través de acuerdos VIE) y vendió SY Culture el 5 de junio de 2025 por $550.000 ($500.000 cobrados hasta el 30 de junio de 2025 y $50.000 recibidos en julio). La dirección informó debilidades en el control interno y planes de remediación para fortalecer la presentación de informes financieros, los controles de TI y las políticas.
Nocera, Inc.는 2025년 상반기에 상당한 영업손실과 기업 거래를 반영한 중간 요약 실적을 발표했습니다. 총 유동자산에는 $109,951 및 $144,509(여러 항목) 등의 금액이 포함되었고, 유형자산은 약 $1,010,919이며 영업권은 주로 인수와 관련되어 Xinca에 대해 $1,351,703입니다. 회사는 세그먼트 및 연결 기준에서 상당한 손실을 인식했으며, 보고 기간 순손실은 $(502,645)이고 비교표상 연초 이후 손실은 $(760,262) 및 $(816,157) 등으로 더 컸습니다. 자본 활동으로는 주식 발행(2025년 6월 30일 기준 발행 보통주 14,367,539주), 워런트 행사 및 총수익 $6.58백만(순수익 약 $5.3백만)을 창출한 공모가 있었습니다. 기업 거래: 회사는 1,800,000주의 제한 보통주 발행을 통해 Xinca의 100% 지배권을 취득했고, VIE 계약을 통해 $4,300,000에 Meixin의 80% 지분을 취득했으며, 2025년 6월 5일 SY Culture를 $550,000에 매각했습니다(2025년 6월 30일까지 $500,000 수령, $50,000은 7월에 수령). 경영진은 내부 통제상의 취약점을 공시했으며 재무보고, IT 통제 및 정책을 강화하기 위한 시정 계획을 제시했습니다.
Nocera, Inc. a publié des résultats intermédiaires condensés montrant des pertes d’exploitation substantielles et des opérations corporatives au premier semestre 2025. Les actifs courants totaux comprennent des montants tels que $109 951 et $144 509 (divers postes), les immobilisations corporelles s’élèvent à environ $1 010 919 et le goodwill, en grande partie lié à des acquisitions, totalise $1 351 703 pour Xinca. La société a enregistré des pertes importantes au niveau des segments et au niveau consolidé, y compris une perte nette de $(502 645) pour la période rapportée et des pertes cumulées supérieures sur l’année, telles que $(760 262) et $(816 157) dans les tableaux comparatifs. Les opérations de capital ont inclus l’émission d’actions (14 367 539 actions ordinaires en circulation au 30 juin 2025), l’exercice de bons de souscription et une offre publique ayant généré des produits bruts de $6,58 M (produits nets ~ $5,3 M). Transactions corporatives : la société a obtenu le contrôle à 100 % de Xinca via l’émission de 1 800 000 actions ordinaires restreintes, a acquis 80 % de Meixin pour $4 300 000 (via des accords VIE) et a vendu SY Culture le 5 juin 2025 pour $550 000 ($500 000 encaissés au 30 juin 2025 et $50 000 reçus en juillet). La direction a signalé des faiblesses de contrôle interne et des plans de remédiation pour renforcer le reporting financier, les contrôles informatiques et les politiques.
Nocera, Inc. meldete vorläufige verkürzte Ergebnisse, die erhebliche Betriebsverluste und Unternehmensgeschäfte in der ersten Hälfte 2025 aufzeigen. Zu den gesamten kurzfristigen Vermögenswerten gehören Beträge wie $109.951 und $144.509 (verschiedene Bilanzposten), das Sachanlagevermögen beläuft sich auf rund $1.010.919 und der Firmenwert, größtenteils auf Akquisitionen zurückzuführen, beträgt für Xinca $1.351.703. Das Unternehmen verzeichnete bedeutende Segment- und Konzernverluste, darunter einen Nettoverlust von $(502.645) für den berichteten Zeitraum sowie größere Jahresverluste wie $(760.262) und $(816.157) in den Vergleichstabellen. Kapitalmaßnahmen umfassten die Ausgabe von Aktien (14.367.539 Stammaktien ausstehend zum 30. Juni 2025), Ausübung von Warrants und ein öffentlicher Verkauf, der Bruttoerlöse von $6,58 Mio. (Nettoerlöse ~ $5,3 Mio.) erzielte. Unternehmensgeschäfte: Das Unternehmen erlangte 100% Kontrolle über Xinca durch die Ausgabe von 1.800.000 eingeschränkten Stammaktien, erwarb Meixin zu 80% für $4.300.000 (über VIE-Vereinbarungen) und verkaufte SY Culture am 5. Juni 2025 für $550.000 ($500.000 bis zum 30. Juni 2025 eingegangen, $50.000 im Juli erhalten). Das Management legte interne Kontrollschwächen offen und Sanierungspläne vor, um das Finanzreporting, IT-Kontrollen und Richtlinien zu stärken.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
OR
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO ___________
COMMISSION FILE NO.:
(Exact name of registrant as specified in charter)
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
(Address of principal executive offices and zip code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| The |
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ¨ | Accelerated filer ¨ | |
| Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ¨
No
There were
TABLE OF CONTENTS
| Cautionary Statement Regarding Forward-Looking Statements | 3 | |
| PART I | FINANCIAL INFORMATION | 4 |
| ITEM 1. | INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | 4 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 31 |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 49 |
| ITEM 4. | CONTROLS AND PROCEDURES | 49 |
| PART II | OTHER INFORMATION | 51 |
| ITEM 1. | LEGAL PROCEEDINGS | 51 |
| ITEM 1A. | RISK FACTORS | 51 |
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 51 |
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES | 51 |
| ITEM 4 | MINE SAFETY DISCLOSURES | 51 |
| ITEM 5 | OTHER INFORMATION | 51 |
| ITEM 6 | EXHIBITS | 52 |
| SIGNATURES | 53 | |
| 2 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” and “continue” or the negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of their dates.
We cannot predict all the risks and uncertainties that may impact our business, financial condition or results of operations. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on April 1, 2025.
Many of those risks and factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
| 3 |
PART I FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
NOCERA, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in US Dollars except for Number of Shares)
June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Advance to suppliers | ||||||||
| Prepaid expenses and other assets, net | ||||||||
| Financial assets at fair value through profit or loss | ||||||||
| Total current assets | ||||||||
| Investment | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets - customer relations | ||||||||
| Goodwill | ||||||||
| Other non-current asset | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Other payables and accrued liabilities | $ | $ | ||||||
| Advance receipts | ||||||||
| Due to related parties | ||||||||
| Warrant liability | ||||||||
| Long-term secured other borrowing – current portion | ||||||||
| Dividend payable | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Long-term secured other borrowing | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 20) | – | – | ||||||
| Stockholders’ equity | ||||||||
| Common stock ($ | ||||||||
| Preferred stock ($ | ||||||||
| Additional paid-in capital (1) | ||||||||
| Statutory and other reserves | ||||||||
| Accumulated losses | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total Nocera, Inc.’s stockholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.
| 4 |
NOCERA, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in US Dollars except for Number of Shares)
(UNAUDITED)
| Three months ended June 30 , | Six months ended June 30 , | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Revenue | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||
| (Loss) Income before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Net (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Less: Net loss attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net (loss) income attributable to the company | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive (loss) income | ||||||||||||||||
| Net (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign currency translation gain (loss) | ( | ) | ( | ) | ||||||||||||
| Total comprehensive (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Less: comprehensive loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Foreign currency translation gain (loss) attributable to noncontrolling interest | ( | ) | ||||||||||||||
| Comprehensive gain (loss) attributable to the Company | ( | ) | ( | ) | ( | ) | ||||||||||
| (Loss) Earning per share | ||||||||||||||||
| Basic | ( | ) | ( | ) | ( | ) | ||||||||||
| Diluted | ( | ) | ( | ) | ( | ) | ||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.
| 5 |
NOCERA, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in US Dollars except for Number of Shares)
(UNAUDITED)
| Six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation expenses | ||||||||
| Amortization of intangible assets | ||||||||
| Loss on fair value change of financial assets at FVTPL | ( | ) | ( | ) | ||||
| Gain on disposal of SY Culture | ||||||||
| Share of profit of associates | ||||||||
| Share-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ( | ) | ||||||
| Advance to suppliers | ||||||||
| Prepaid expenses and other assets, net | ( | ) | ||||||
| Other non-current assets | ||||||||
| Notes payable | ||||||||
| Accounts payable | ||||||||
| Advance receipts | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ( | ) | ||||
| Income tax payable | ||||||||
| Warrant Liability | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Purchase of financial assets at FVTPL | ||||||||
| Disposal of SY Culture | ||||||||
| Net cash inflow from acquisition of a subsidiary | ||||||||
| Acquisition of associate | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Repayment of short-term bank loan | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | ||||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for interest expenses | ||||||||
| Cash paid for Income taxes | ||||||||
See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.
| 6 |
NOCERA, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Stated in US Dollars except Number of Shares)
(UNAUDITED)
| Common Stock | Preferred stock | Additional Paid-in | Statutory and other | Accumulated | Accumulated Other Comprehensive Income | Total Nocera Inc.’s Stockholders’ | Non- controlling | Total Stockholders’ | |||||||||||||||||||||||||
| Stock | Amount | Stock | Amount | Capital | Reserves | Loss | (Loss) | Equity | Interests | Equity | |||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance, January 1, 2024 | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation Adjustments | – | – | – | – | – | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Common stock issuance | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Share-based compensation | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | ( | ) | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Balance, March 31, 2024 | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | – | – | – | – | – | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Common stock issuance | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Share-based compensation | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ||||||||||||||||||||||||
| Balance, June 30, 2024 | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, January 1, 2025 | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation Adjustments | – | – | – | – | – | – | – | ( | ) | ||||||||||||||||||||||||
| Common stock issuance | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | ( | ) | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Balance, March 31, 2025 | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | – | – | – | – | – | – | – | ) | |||||||||||||||||||||||||
| Common stock issuance | – | – | – | – | – | – | |||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | ( | ) | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Balance, June 30, 2025 | ( | ) | |||||||||||||||||||||||||||||||
See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.
| 7 |
NOCERA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 PRINCIPAL ACTIVITIES AND ORGANIZATION
The consolidated financial statements include the financial statements of Nocera, Inc. (“Nocera” or the “Company”) and its subsidiaries, Grand Smooth Inc. Limited (“GSI”) and Guizhou Grand Smooth Technology Ltd. (“GZ GST” or “WFOE”), and Meixin Institutional Food Development Co., Ltd. (“Meixin”) that is controlled through contractual arrangements. The Company, GSI, GZ GST and Mexin are collectively referred to as the “Company”
Nocera was incorporated in the State of Nevada on February 1, 2002 and is based in New Taipei City, Taiwan (R.O.C.). It did not engage in any operations and was dormant from its inception until its reverse merger with GSI on December 31, 2018.
Reverse Merger
Effective December 31, 2018, Nocera completed a reverse merger transaction (the “Transaction”) pursuant to an Agreement and Plan of Merger (the “Agreement”), with (i) GSI, (ii) GSI’s shareholders, Yin-Chieh Cheng and Bi Zhang, who together owned shares constituting 100% of the issued and outstanding ordinary shares of GSI (the “GSI Shares”) and (iii) GSI Acquisition Corp. Under the terms of the Agreement, the GSI Shareholders transferred to Nocera all of the GSI Shares in exchange for the issuance of 10,000,000 shares (the “Shares”) of Nocera’s common stock (the “Share Exchange”). As a result of the reverse merger, GSI became Nocera’s wholly-owned subsidiary and Yin-Chieh Cheng and Bi Zhang, the former shareholders of GSI, became Nocera’s controlling shareholders. The share exchange transaction with GSI was treated as a reverse merger, with GSI as the accounting acquirer and Nocera as the acquired party.
GSI is a limited company established under the laws and regulations of Hong Kong on August 1, 2014, and is a holding company without any operations.
GZ WFH was incorporated in Xingyi City, Guizhou Province, People’s Republic of China (“PRC”) on October 25, 2017, and is engaged in providing fish farming containers service, which integrates sales, installments, and maintenance of aquaculture equipment. The registered capital of GZ WFH is RMB$5,000,000 (equal to US$733,138).
On November 13, 2018, GSI incorporated GZ GST in PRC with registered capital of US$15,000.
Divestiture
On September 21, 2020, the Company filed a Current Report on Form 8-K outlining the lack of communication that led to the termination by Nocera of its relationship with its former variable interest entity, Guizhou Wan Feng Hu Intelligent Aquatic Technology Co. Limited (“GZ WFH”) and its management, and termination of the variable interest entity agreements between the parties.
Subsequently on October 8, 2020, Zhang Bi and GZ WFH entered into a Settlement Agreement and Release with Nocera wherein all claims as to GZ WFH’s debt (claim to shares in Nocera or GZ GST) were compromised, settled, and otherwise resolved as to any and all claims or causes of action whatsoever against Nocera for any matter, action, or representation as to Nocera, and any debt to ownership of Nocera or GZ GST up to the date of the agreement. The consideration for the agreement was mutual waiver of any and all claims against each other and GZ GST, and GZ WFH (including Zhang Bi) waived any claims to Nocera stock, meaning the 4,750,000 shares of common stock of Nocera owned by Zhang Bi were cancelled as part of the agreement. The Settlement Agreement and Release is attached hereto as Exhibit 10.8.
| 8 |
The VIE Agreements with XFC
On December 31, 2020, we exchanged
The VIE Agreements with Meixin
On September 7, 2022, we entered into a series
of contractual agreements (collectively, the “Meixin VIE Agreements”) with the majority stockholder (the “Selling Stockholder”)
of Meixin Institutional Food Development Co., Ltd., a Taiwan corporation and a food processing and catering company (“Meixin”),
and Meixin, of which we purchased
The VIE Agreements with Xinca
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
We have entered into the following contractual arrangements with stockholders of Xinca, which enable us to (1) have the power to direct the activities that most significantly affect the economic performance of Xinca, and (2) receive the economic benefits of Xinca that could be significant to Xinca. We are fully and exclusively responsible for the management of Xinca, assume all of the risk of losses of Xinca, and have the exclusive right to exercise all voting rights of Xinca’s stockholders. Therefore, in accordance with ASC 810 “Consolidation,” we are considered the primary beneficiary of Xinca and have consolidated Xinca’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements.
| 9 |
(1)Voting Rights Proxy Agreement & Power of Attorney
Zong Hui and Upward Software (Shanghai) Co., Ltd. (the “Existing Stockholders”) have irrevocably authorized us, or the individual then designated by us (the “Attorney”), to exercise, on their behalf, the following rights available to them in their capacity as stockholders of Xinca under the then-effective articles of association of Xinca (collectively, the “Powers”): (a) to propose the convening of, and attend, stockholders’ meetings in accordance with the articles of association of Xinca on behalf of the Existing Stockholders; (b) to exercise voting rights on behalf of the Existing Stockholders on all matters required to be deliberated and resolved by the stockholders’ meeting, including, without limitation, the appointment and election of the directors and other executives to be appointed and removed by the stockholders of Xinca, and the sale or transfer of all or part of the equity held by stockholders in Xinca; (c) to exercise other stockholders’ voting rights under the articles of association of Xinca (including any other stockholders’ voting rights stipulated upon an amendment to such articles of association); and (d) other voting rights that stockholders shall enjoy under the laws of the People’s Republic of China (“China”), as amended, revised, supplemented, and re-enacted, regardless of whether they take effect before or after the conclusion of this Agreement. The Existing Stockholders shall not revoke the authorization and entrustment accorded to the Attorney unless we issue a written notice requesting the replacement of the Attorney. In such event, the Existing Stockholders shall immediately appoint such other person as we designate to exercise the foregoing Powers, and such new authorization and entrustment shall supersede, immediately upon its grant, the original authorization and entrustment.
(2)Exclusive Business Cooperation Agreement
We agree to provide technical consulting and services, including management consulting services, general and financial advisory services, and various general and administrative services (collectively, the “Target Business”), to Xinca as its exclusive technical consulting and service provider in accordance with the terms set forth in this Agreement. Xinca agrees to accept the technical consulting and services provided by us. Xinca further agrees that, without our prior written consent, it shall not accept any technical consulting or services identical or similar to the Target Business from any third party during the term of this Agreement.
(3)Equity Pledge Agreement
Under the Equity Interest Pledge Agreement between us and Zong Hui and Upward Software (Shanghai) Co., Ltd., the stockholders of Xinca have pledged all of their equity interests in Xinca to us to guarantee the performance of Xinca’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in the event that Xinca or the stockholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, we, as the pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests.
(4)Exclusive Call Option Agreement
Xinca and its stockholders, Zong Hui and Upward Software (Shanghai) Co., Ltd., have entered into an Exclusive Call Option Agreement with us. Under this agreement, the Xinca stockholders have irrevocably granted us (or our designee) an exclusive option to purchase, to the extent permitted under the laws of China, part or all of their equity interests in Xinca. According to the Exclusive Call Option Agreement, the purchase price shall be the minimum price permitted under applicable Chinese law at the time the share transfer occurs.
The Equity Purchase Agreements with SY Culture
On April 14, 2024, we entered into a Equity Purchase
Agreement with Hangzhou SY Culture Media Co. Ltd. (“SY Culture Purchase Agreement”), 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”), in which we exchanged
| 10 |
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICY
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on May 6, 2025.
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s unaudited condensed consolidated financial position as of June 30, 2025, its consolidated results of operations for the six months ended June 30, 2025, cash flows for the six months ended June 30, 2025 and change in equity for the six months ended June 30, 2025, as applicable, have been made. Operating results for the six months ended June 30, 2025 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024 or any future periods.
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable. The Company conducts credit evaluations of its customers and suppliers and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
There was one customer who represents
The following table sets forth a summary of single customers who represent 10% or more of the Company’s total accounts receivable, net:
| Schedule of concentrations of credit risk | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Percentage of the Company’s accounts receivable | ||||||||
| Customer A | ||||||||
| Customer B | ||||||||
| Customer C | ||||||||
| Customer D | ||||||||
| Customer E | ||||||||
| 11 |
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”
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, the Company applies 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 | |
| Ÿ | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation |
The Company mainly offers and generates revenue from the fish trading business, bento box and fruit and vegetable processing business, and E-commerce live streaming business. Revenue recognition policies are discussed as follows:
Aquatic product trading revenue
The Company engages in the trading of fish, primarily eels. Revenue is generated when the Company receives customer orders specifying product types and requirements. Upon receiving an order, the Company arranges the harvesting of the eels, inspects the products to ensure compliance with the customer’s specifications, and coordinates delivery. Revenue is recognized at a point in time when control of the goods is transferred to the customer, typically upon delivery, which is the point at which the performance obligation is satisfied.
Bento box and produce processing revenue
The Company also operates a bento box and fresh produce processing business, primarily involving vegetables and fruits. The revenue recognition model for this segment is similar to the aquatic product trading business. Upon receiving customer orders, the Company processes and packages the required food or agricultural products, ensures product quality and conformity to order specifications, and arranges delivery. Revenue is recognized at a point in time, generally upon the transfer of the processed goods to the customer.
E-commerce live-streaming commission revenue
The Company acts as an agent in facilitating the sale of third-party products through live-streaming e-commerce platforms. The Company does not take control of the goods sold, and commission revenue is recognized on a net basis. Revenue is recognized at the point in time when the underlying product is sold and shipment is confirmed by the seller, which indicates the Company has fulfilled its performance obligation of facilitating the sale.
| 12 |
Recent Accounting Pronouncements
The FASB issued several updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption.
Note 3 ACCOUNTS RECEIVABLE, NET
As of June 30, 2025 and December 31, 2024, accounts receivable consisted of the following:
| Schedule of accounts receivable | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Accounts receivable | ||||||||
| Total | ||||||||
For the six months ended June 30, 2025 and for
the year ended December 31, 2024, the Company has recorded provision for doubtful accounts of $
Note 4 INVENTORIES
As of June 30, 2025 and December 31, 2024, inventories consisted of the following:
| Schedule of inventories | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Raw materials | ||||||||
| Total | ||||||||
Note 5 ADVANCE TO SUPPLIERS
Balances of advances to suppliers were $
| 13 |
Note 6 PREPAID EXPENSES AND OTHER ASSETS, NET
| Schedule of prepaid expenses and other assets | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Prepaid Expenses | ||||||||
| Other receivables from third party | ||||||||
| Prepaid expenses and other assets, net | ||||||||
Other receivables as of June 30, 2025 and
December 31, 2024 were $
Other receivables include e-commerce live stream
receivables for goods and e-commerce sales deposit. Other receivables from third parties primarily consist of amount due from third parties
of $
Note 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
The fair value of each investment in equity instrument to be measured at fair value through profit or loss is as follows:
| Schedule of financial assets at fair value through profit or loss | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Financial assets mandatorily measured at fair value through profit or loss | $ | $ | ||||||
| Funds | ||||||||
| Total | ||||||||
| Current | ||||||||
| Non-Current | ||||||||
| Total | ||||||||
Net gain of $
As of December 31, 2024, no financial assets at fair value through profit or loss were pledged with banks as collaterals.
| 14 |
Note 8 PROPERTY AND EQUIPMENT, NET
As of June 30, 2025 and December 31, 2024, property and equipment consisted of the following:
| Schedule of property and equipment | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Land | ||||||||
| Equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | ||||||||
Depreciation expenses for the six months ended
June 30, 2025 and 2024 were $
Note 9 GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL
As of June 30, 2025 and December 31, 2024, goodwill consisted of the following:
Goodwill
| Schedule of goodwill | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Goodwill - Meixin | ||||||||
| Goodwill - Xinca | ||||||||
| Goodwill – SY Culture | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Goodwill, net | ||||||||
Customer relations
| Schedule of customer relations | ||||||||
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Acquisitions | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Customer relations, net | ||||||||
| 15 |
Note 10 OTHER BORROWINGS
Others loans consisted of the following:
| Schedule of other loans | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Secured car loan from CITIC Bank wholly repayable | $ | $ | ||||||
| Total secured car loan wholly repayable within 1 year | ||||||||
| Secured car loan from CITIC Bank wholly repayable more than 1 year | ||||||||
| Total | $ | $ | ||||||
Note 11 WARRANTS
On April 1, 2021, the Company entered into a securities
purchase agreement with certain investors for an aggregate of 80,000 shares of its preferred stock at a per share purchase price of $2.50.
As part of the transaction, the investors received one Class C warrant and one Class D warrant for the subscription of each preferred
share. The Class C warrants consist of the right to purchase up to
On September 27, 2021, the Company entered into
another securities purchase agreement with the same investors, pursuant to which the Company issued in a registered direct offering, an
aggregate of 48,000 shares of common stock of the Company at a per share purchase price of $2.50. In addition, the investors also received
one Class C warrant and one Class D warrant for the subscription of each preferred share. The Class C warrants consist of the right to
purchase up to
In connection with the public offering and pursuant to a registration statement on Form S-1, amended (File No. 333-264059), originally filed with the SEC on April 1, 2022, and declared effective by the SEC on August 10, 2022 (the “Registration Statement”), the public offering price of each Unit was $3.50, and each unit consisting of one share of common stock and a warrant to purchase two shares of common stock from the date of issuance until the fifth anniversary of the date of issuance. The Shares and the Warrants comprising the Units were immediately separable and issued separately in the Offering, which closed on August 15, 2022.
In connection with the public offering and pursuant
to the underwriting agreement between us and the underwriters named therein, we granted the underwriters a 45-day option to purchase up
to 282,000 additional shares of common stock and warrants, equivalent to 15% of the Units sold in the public offering, at the public offering
price per Unit, less underwriting discounts and commissions, to cover over-allotments, if any. On September 23, 2022, the underwriters
exercised their option to purchase an additional
| 16 |
The exercise price of the Warrants shall be decreased to the reset price, which means the greater of (i) 50% of the exercise price and (ii) 100% of the last volume weighted average price immediately preceding the 90th calendar day following the initial issuance date (the greater of (i) and (ii), the “Reset Price”) if, on the date that is 90 calendar days immediately following the initial issuance date, the Reset Price is less than the exercise price on that date.
The following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs:
| Schedule of warranty liability activity | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| $ | $ | |||||||
| Balance at the beginning of period | ||||||||
| Fair value change of warrants included in earnings | ( | ) | ||||||
| Total | ||||||||
The following is a summary of the warrant activity:
| Schedule of warrant activity | ||||||||||||
Number of Warrants | Average Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Outstanding at January 1, 2025 | ||||||||||||
| Exercisable at January 1, 2025 | ||||||||||||
| Granted | – | |||||||||||
| Exercised / surrendered | – | |||||||||||
| Expired | – | |||||||||||
| Outstanding at June 30, 2025 | ||||||||||||
| Exercisable at June 30, 2025 | ||||||||||||
| 17 |
Note 12 LEASES
The Company has two non-cancelable lease agreements for certain of the office and accommodation as well as fish farming containers for research and develop advanced technology for water circulation applying in fishery with original lease periods expiring between 2024 and 2025. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. The Company recognizes rental expense on a straight-line basis over the lease term.
The components of lease expense for the six months ended June 30, 2025 and June 30, 2024 were as follows:
| Schedule of components of lease expenses | ||||||||||
| Statement of Income Location | Six months ended June 30, 2025 |
Six months ended June 30, 2024 |
||||||||
| (Unaudited) | (Audited) | |||||||||
| $ | $ | |||||||||
| Lease Costs | ||||||||||
| Operating lease expense | General and administrative expenses | |||||||||
| Total net lease costs | ||||||||||
Maturity of lease liabilities under our non-cancelable operating leases
as of December 31, 2024 and June 30, 2025 are US$
Note 13 OTHER PAYABLES AND ACCRUED LIABILITIES
| Schedule of other payables and accrued liabilities | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Accrued expenses | ||||||||
| Others | ||||||||
| Total | ||||||||
As of June 30, 2025, other payables and accrued
expenses were $
As of June 30, 2025, other payables and accrued expenses were $185,470 and $83,692, respectively, compared to $114,504 and $262,156 as of December 31, 2024. The accrued expenses in both periods primarily relate to audit fees. Other payables mainly consisted of amounts related to e-commerce intermediary transactions, specifically payables arising from cross-border settlements with Chinese e-commerce platforms amounting to $175,175 as of June 30, 2025 and $100,379 as of December 31, 2024.
| 18 |
Note 14 INCOME TAXES
The Company and its subsidiary, and the consolidated VIE file tax returns separately.
1) Value-added tax (“VAT”)
PRC
Pursuant to the Provisional Regulation of the
PRC on VAT and the related implementing rules, all entities and individuals (“taxpayers”) that are engaged in the sale of
products in the PRC are generally required to pay VAT, at a rate of which was changed from 16% to
Taiwan
Pursuant to the Value-added and Non-value-added
Business Tax Act and the related implementing rules, all entities and individuals (“taxpayers”) that are engaged in the sale
of products in the Taiwan are generally required to pay VAT, at a rate of
2) Income tax
United States
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into legislation. The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 34% to 21%, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax.
On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to provide guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. The Company has completed the assessment of the income tax effect of the Tax Act and there were no adjustments recorded to the provisional amounts.
The Coronavirus Aid, Relief and Economy Security Act (the “CARES Act”) was signed into law on 27 March 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for net operating loss (“NOL”) deductions for 2018-2020 tax years and reinstated NOL carrybacks for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The Company does not anticipate a significant tax impact on its financial statements and will continue to examine the impact the CARES Act may have on its business.
| 19 |
The Company evaluated the Global Intangible Low
Taxed Income (“GILTI”) inclusion on current earnings and profits of greater than 10% owned foreign controlled corporations.
The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of
its foreign controlled corporations. The law also provides that corporate taxpayers may benefit from a 50% reduction in the GILTI inclusion,
which effectively reduces the 21% U.S. corporate tax rate on the foreign income to an effective rate of
The reverse merger was completed on December 31,
2018 and the tax losses of US subsidiary was not in the scope as of December 31, 2018. As of December 31, 2019, net operating loss carried
forward which was available to offset future taxable income for the Company in the United States was $
Hong Kong
The HK tax reform has introduced two-tiered profits tax rates for corporations. Under the two-tiered profits tax rates regime, the profits tax rate for the first HK$2 million (approximately $257,931) of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations. Assessable profits above HK$2 million (approximately $257,931) will continue to be subject to the rate of 16.5% for corporations. The Company assessed that the HK entity will not earn a profit greater than HK$2 million (approximately $257,931), it is subject to a corporate income tax rate of 8.25%.
As of December 31, 2022, the Company’s subsidiary in Hong Kong had net operating loss carry forwards available to offset future taxable income. The net operating losses will be carryforward indefinitely under Hong Kong Profits Tax regulation. There is a full valuation allowance applied against these loss carry forward as management determined it was not more likely than not that these net operating losses would be utilized in the foreseeable future.
PRC
WFOE and the consolidated VIE established in the
PRC are subject to the PRC statutory income tax rate of
In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries were subject to income tax at a rate of 25% for the year ended December 31, 2022. According to PRC tax regulations, the PRC net operating loss can generally carry forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred.
Taiwan
The Company’s loss before income taxes is primarily derived from the operations in Taiwan and income tax expense is primarily incurred in Taiwan.
As a result of amendments to the “Taiwan Income Tax Act” enacted by the Office of the President of Taiwan on February 7, 2018, the statutory income tax rate increased from 17% to 20% and the undistributed earning tax, or a surtax, decreased from 10% to 5% effective from January 1, 2018. As a result, the statutory income tax rate in Taiwan is 20% for the years ended August 31, 2021 and 2020. An additional surtax, of which rate was reduced from 10% to 5% being applied to the Company starting from September 1, 2018, is assessed on undistributed income for the entities in Taiwan, but only to the extent such income is not distributed or set aside as a legal reserve before the end of the following year. The 5% surtax is recorded in the period the income is earned, and the reduction in the surtax liability is recognized in the period the distribution to stockholders or the setting aside of legal reserve is finalized in the following year.
| 20 |
The components of the income tax expense are:
| Schedule of income tax components | ||||||||||||||||
|
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Current | ( |
) | ( |
) | ( |
) | ||||||||||
| Deferred | ||||||||||||||||
| Total income tax expense | ( |
) | ( |
) | ( |
) | ||||||||||
The reconciliation of income taxes expenses computed at the Taiwan statutory tax rate (2024-2025: at PRC statutory rate) applicable to income tax expense is as follows:
| Schedule of reconciliation of income tax expense | ||||||||
|
Six months ended June 30, |
||||||||
| 2025 | 2024 | |||||||
| Taiwan (2024-2025:PRC) income tax statutory rate | ||||||||
| Tax effect of non-deductible expenses | ( |
) | ( |
) | ||||
| Tax effect of stock-based compensation | ( |
) | ( |
) | ||||
| Tax effect of non-taxable income | ||||||||
| Impact of different tax rates in other jurisdictions | ( |
) | ( |
) | ||||
| Others | ( |
) | ||||||
| Changes in valuation allowance | ( |
) | ( |
) | ||||
| Effective tax rate | ( |
) | ||||||
The valuation allowance as of June 30, 2025 and December 31, 2024 was primarily provided for the deferred income tax assets if it is more likely than not that these items will expire before the Company is able to realize its benefits, or that the future deductibility is uncertain. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. Management considers projected future taxable income and tax planning strategies in making this assessment. The movement for the valuation allowance is as follows.
| Schedule of movement in valuation allowance | ||||||||
|
June 30, 2025 |
December 31, 2024 |
|||||||
| $ | $ | |||||||
| Balance at beginning of the period (January 1, 2025) | ||||||||
| Additions of valuation allowance | ||||||||
| Reductions of valuation allowance | ||||||||
| Balance at the end of the period (June 30, 2025) | ||||||||
| 21 |
PRC Withholding Tax on Dividends
The current PRC Enterprise Income Tax Law imposes a 10% withholding income tax for dividends distributed by foreign-invested enterprises to their immediate holding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between the PRC and the jurisdiction of the foreign holding company. Distributions to holding companies in Hong Kong that satisfy certain requirements specified by PRC tax authorities, for example, will be subject to a 5% withholding tax rate.
As of December 31, 2021, the Company had not recorded any withholding tax on the retained earnings of its foreign-invested enterprises in the PRC, since the Company had intended to reinvest its earnings to potentially continue its business in mainland China, namely the manufacturing of the RASs through GZ GST, and its foreign-invested enterprises do not intend to declare dividends to their immediate foreign holding companies.
As of June 30, 2024, the Company had not recorded any withholding tax on the retained earnings of its foreign-invested enterprises in the PRC, and the Company decided not to reinvest its earnings since it is not continuing its business in mainland China, and its foreign-invested enterprises do not intend to declare dividends to their immediate foreign holding companies.
Note 15 RELATED PARTY BALANCES AND TRANSACTIONS
Due to related parties
The balance due to related parties was as follows:
| Schedule of related party transactions | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Mountain Share Transfer, LLC (1) | ||||||||
| Estate of Mr. Yin-Chieh Cheng (2) | ||||||||
| Feng-Hua Chen (3) | ||||||||
| Total | ||||||||
Sales
Note:
| (1) | |
| (2) | |
| (3) |
As of June 30, 2025, the Company had outstanding balances with related parties that are non-trade in nature, unsecured, non-interest bearing, and repayable on demand. These balances arose in the ordinary course of operations.
During the period, the Company received a financial communication from the estate of the former Chief Executive Officer and Chair of the Board, Lu Min-Huay Cheng, which is considered a related party due to the former executive’s prior leadership position and significant ownership interest. The nature of the transaction involves the repayment of loans, debt, and other liabilities owed to the estate. While the agreement does not specify individual dollar amounts, the Company has agreed to settle these obligations over a 12-month period beginning January 25, 2025. As of the reporting date, management continues to evaluate the terms and monitor the settlement process.
| 22 |
Note 16 COMMON STOCK
The Company’s authorized number of common
stock is
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,
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.
Issuance of Common Stock
| · | On February 20, 2024, we entered into VIE Agreement with Xinca and issued | |
| · | On April 14, 2024, we entered into an Equity Purchase Agreement with SY Culture and issued | |
| · | On February 7, 2025, our shareholder exercised | |
| · | On February 12, 2025, our shareholder exercised | |
| · | On May 8, 2025, our shareholder exercised |
| 23 |
Note 17 SHARE-BASED COMPENSATION
On December 27, 2018, Nocera granted Mr.
Yin-Chieh Cheng quarterly option awards 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
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
On December 22, 2022, the Company issued
On March 22, 2023, the Company issued
On July 31, 2023, Nocera granted Mr. Andy Chin-An
Jin
On October 11, 2023, the Company issued
On December 5, 2023, the Company vested
On August 26, 2024, the Company vested
| 24 |
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:
| Schedule of assumptions of option pricing | ||||||||
| June 30, 2025 |
December 31, 2024 |
|||||||
| (Unaudited) | (Audited) | |||||||
| Dividend yield | N/A | N/A | ||||||
| Risk-free interest rate | ||||||||
| Expected term (in years) | ||||||||
| Volatility | ||||||||
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 six months ended June 30, 2024 and year
ended December 31, 2023, $
For the years ended December 31, 2024, $
Note 18 PREFERRED STOCK
In August 2021, the Company issued
On August 11, 2022, the Company effected a
| 25 |
Note 19 (LOSS) EARNING PER SHARE
The following table sets forth the computation of basic and diluted (loss) earning per common share for the three and six months ended June 30, 2025 and 2024.
| Schedule of (loss) earning per share | ||||||||||||||||
|
For three months ended June 30, |
For six months ended June 30, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) attributable to the Company | ( |
) | ( |
) | ( |
) | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| - Basic | ||||||||||||||||
| - Diluted | ||||||||||||||||
| (Loss) Earning per share: | ||||||||||||||||
| - Basic | ( |
) | ( |
) | ( |
) | ||||||||||
| - Diluted | ( |
) | ( |
) | ( |
) | ||||||||||
Note 20 COMMITMENTS AND CONTINGENCIES
Lease Commitment
The Company has entered into operating lease agreement for certain office and accommodation as well as fish farming containers for research and develop advanced technology for water circulation applying in fishery. Future minimum lease payments under non-cancellable operating leases with initial terms within one year.
The total future minimum lease payments under non-cancellable short-term leases as of June 30, 2025 are payable as follows:
| Schedule of lease payments | ||||
| Lease Commitment | ||||
| $ | ||||
| Within 1 year | ||||
| Total | ||||
| 26 |
Note 21 SEGMENT REPORTING
Effective as of January 1, 2024, the Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The Company’s Chief Operating Decision Maker (“CODM”) is its Executive Director, Song-Yuan Teng, who is responsible for reviewing the results of operations and allocating resources across the Company’s reportable segments, including Fish Trading and Catering Services. These operating segments reflect the manner in which the CODM allocates resources and evaluates performance.
These segments align with how management evaluates performance and allocates resources. Segment performance is evaluated based on segment revenue and operating profit, which includes direct costs and segment-specific general and administrative expenses and tax, but excludes corporate overhead and interest.
The summary of key information by segments for the three months ended June 30, 2025 and 2024 was as follows:
For three months ended June 30, 2025
| Schedule of segment information | ||||||||||||||||
| Sales of Fish Trading | Sales of Catering | E-Commerce | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Segment operating losses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Income tax expenses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Segment losses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
For three months ended June 30, 2024
| Sales of Fish Trading | Sales of Catering | E-Commerce | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | ( | ) | $ | $ | ||||||||||
| General and administrative expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Segment operating losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax benefit | $ | $ | $ | $ | ||||||||||||
| Segment losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 27 |
For six months ended June 30, 2025
| Sales of Fish Trading | Sales of Catering | E-Commerce | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Segment operating losses | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Income tax expenses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Segment losses | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
For six months ended June 30, 2024
| Sales of Fish Trading | Sales of Catering | E-Commerce | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Gross profit | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Segment operating losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax expenses | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Segment losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The following tables set forth a summary of single customers who represent 10% or more of the Company’s segments revenue, net:
| Fish Trading | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Percentage of fish trading revenue | ||||||||
| Customer A | ||||||||
| Customer B | ||||||||
| Customer C | ||||||||
| Customer D | ||||||||
| Customer E | ||||||||
| Customer F | ||||||||
| Customer G | ||||||||
| Catering | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Percentage of catering revenue | ||||||||
| Customer H | ||||||||
| Customer I | ||||||||
| 28 |
Note 22 BUSINESS COMBINATION
Zhejiang Xinca Mutual Entertainment Culture Media Co., Ltd.
On January 31, 2024, the Company acquired 100% shares of Xinca. The fair values of assets acquired and liabilities assumed were as follows:
| Schedule of assets acquired and liabilities assumed | ||||
| Cash and bank balance | $ | |||
| Trade receivables | ||||
| Prepaid rent expense | ||||
| Goodwill | ||||
| Plant and equipment, net | ||||
| Depreciation | ( | ) | ||
| Advanced from customers | ( | ) | ||
| Long-term secured bank loan | ( | ) | ||
| Other payables and accrued liabilities | ( | ) | ||
| Net assets value | ||||
| Purchases price | $ | |||
Hangzhou SY Culture Media Co. Ltd.
On April 14, 2024, the Company acquired 100% shares of SY Culture. The fair values of assets acquired and liabilities assumed were as follows:
| Schedule of assets acquired and liabilities assumed | ||||
| Cash and bank balance | $ | |||
| Trade receivables | ||||
| Advance to supplier | ||||
| Investment | ||||
| Other payables and accrued liabilities | ( | ) | ||
| Net assets value | ||||
| Purchases price | $ | |||
| 29 |
Note 23 DISPOSAL OF SUBSIDIARY
On June 5, 2025, the Company completed the sale
of its wholly owned subsidiary, SY Culture, to an unrelated third party, Yuechi Technology Limited, for cash consideration of $
At the transaction date, the carrying amounts of SY Culture’s assets and liabilities were as follows:
| Schedule of SY cultures assets and liabilities | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Prepaid expenses and other assets, net | ||||
| Investment | ||||
| Goodwill | ||||
| Other payables and accrued liabilities | ( | ) | ||
| Net assets value | $ | |||
The sale did not represent a strategic shift in
the Company’s business and therefore did not qualify as a discontinued operation. A loss of $
Note 24 SUBSEQUENT EVENT
The Company has evaluated subsequent events through the issuance of the unaudited condensed consolidated financial statements and there are no subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
| 30 |
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 (“U.S. 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.
| 31 |
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 Culture 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. On June 5, 2025, we entered into an Equity Transfer Agreement with Yuechi Technology Limited (the “Purchaser”), in which we sold our controlling interest of SY Culture, to the Purchaser for a total purchase cash price of $550,000 (the “SY Culture Sale”). The closing of the SY Culture Sale occurred on June 5, 2025 and the SY Culture equity purchase agreement was terminated in connection with the SY Culture Sale.
On June 5, 2025, we acquired a 35% equity interest in Tachyonext Inc. (“Tachyonext”), a Delaware corporation engaged in e-commerce operations in the US, for an aggregate purchase price of $500,000 in cash. The purchase price was funded from existing cash resources. Under the terms of the Stock Purchase Agreement, we obtained certain governance and protective rights, including a non-voting board observer seat while holding at least 20% of Tachyonext’s outstanding common stock, a right of first refusal on certain share transfers, consent rights over certain new equity issuances, and a put option exercisable beginning one year after closing to sell shares back to the other major shareholder or Tachyonext, subject to a $300,000 aggregate cap. We account for this investment under the equity method of accounting as we have significant influence over Tachyonext’s operations and financial policies.
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 June 30, 2025, 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.
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In 2024, we initiated the e-commerce business in China, utilizing platforms like Douyin to expand our retail reach, utilizing interactive content and livestream shopping to drive engagement and sales. By integrating social commerce with our seafood resources, we enhance pricing advantages and optimize margins, strengthening our position in the evolving retail landscape.
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.
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. In response, the U.S. and certain other countries imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations, and the U.S. and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions should the conflict continue or worsen. It is not possible to predict the broader consequences of the conflict, including related geopolitical tensions, and the measures and retaliatory actions taken by the U.S. and other countries in respect thereof as well as any counter measures or retaliatory actions by Russia or Belarus in response, including, for example, potential cyberattacks or the disruption of energy exports, is likely to cause regional instability, geopolitical shifts, and could materially adversely affect global trade, currency exchange rates, regional economies and the global economy. The situation remains uncertain, and while it is difficult to predict the impact of any of the foregoing, the conflict and actions taken in response to the conflict could increase our costs, 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.
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 | |
|
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 | |
|
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 | |
|
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.
The company recognizes 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.
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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.
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 June 30, 2025 and 2024 were $150,130 and $586,423, 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 | |
| Land | Indefinite, as per land titles |
| Equipment | 3 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.
Land is classified as freehold and is not subject to depreciation. Freehold land represents ownership in perpetuity and, as such, is not considered a depreciable asset under applicable accounting standards.
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.
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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.
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 June 30, 2025, consolidated results of operations for the period ended June 30, 2025, cash flows for the year period ended June 30, 2025 and change in equity for the period ended June 30, 2025, 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.
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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 |
The Company mainly offers and generates revenue from the fish trading business, bento box and fruit and vegetable processing business, and E-commerce live streaming business. Revenue recognition policies are discussed as follows:
Aquatic product trading revenue
The Company engages in the trading of fish, primarily eels. Revenue is generated when the Company receives customer orders specifying product types and requirements. Upon receiving an order, the Company arranges the harvesting of the eels, inspects the products to ensure compliance with the customer’s specifications, and coordinates delivery. Revenue is recognized at a point in time when control of the goods is transferred to the customer, typically upon delivery, which is the point at which the performance obligation is satisfied.
Bento box and produce processing revenue
The Company also operates a bento box and fresh produce processing business, primarily involving vegetables and fruits. The revenue recognition model for this segment is similar to the aquatic product trading business. Upon receiving customer orders, the Company processes and packages the required food or agricultural products, ensures product quality and conformity to order specifications, and arranges delivery. Revenue is recognized at a point in time, generally upon the transfer of the processed goods to the customer.
E-commerce live-streaming commission revenue
The Company acts as an agent in facilitating the sale of third-party products through live-streaming e-commerce platforms. The Company does not take control of the goods sold, and commission revenue is recognized on a net basis. Revenue is recognized at the point in time when the underlying product is sold and shipment is confirmed by the seller, which indicates the Company has fulfilled its performance obligation of facilitating the sale.
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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.
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 June 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.
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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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 June 30, 2025 and 2024 are 7.1938 and 7.1268, respectively. The annual average exchange rates for the year ended December 31, 2024 and 2023 are 7.3512 and 7.1258, 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 six months ended June 30, 2025 and 2024.
Consolidated Statements of Operations
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Revenue | 3,971,716 | 6,753,112 | 8,505,844 | 11,652,992 | ||||||||||||
| Cost of sales | (3,939,262 | ) | (6,707,325 | ) | (8,422,440 | ) | (11,523,244 | ) | ||||||||
| Gross profit | 32,454 | 45,787 | 83,404 | 129,748 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | (236,322 | ) | (354,442 | ) | (570,693 | ) | (805,906 | ) | ||||||||
| Total operating expenses | (236,322 | ) | (354,442 | ) | (570,693 | ) | (805,906 | ) | ||||||||
| Loss from operations | (203,868 | ) | (308,655 | ) | (487,289 | ) | (676,158 | ) | ||||||||
| Other income (expense) | (158,216 | ) | 376,338 | (132,412 | ) | 571,911 | ||||||||||
| Income (Loss) before income taxes | (362,084 | ) | 67,683 | (619,701 | ) | (104,247 | ) | |||||||||
| Income tax expense | (140,561 | ) | 1,766 | (140,561 | ) | (122,380 | ) | |||||||||
| Net (loss) income | (502,645 | ) | 69,449 | (760,262 | ) | (226,627 | ) | |||||||||
| Less: Net loss attributable to non-controlling interests | (10,937 | ) | (14,974 | ) | (20,537 | ) | (22,474 | ) | ||||||||
| Net income (loss) attributable to the company | (491,708 | ) | 84,423 | (739,725 | ) | (204,153 | ) | |||||||||
| Comprehensive (loss) income | ||||||||||||||||
| Net income (loss) | (502,645 | ) | 69,449 | (760,262 | ) | (226,627 | ) | |||||||||
| Foreign currency translation gain (loss) | (53,057 | ) | 145,100 | (55,895 | ) | 202,407 | ||||||||||
| Total comprehensive income (loss) | (555,702 | ) | 214,549 | (816,157 | ) | (24,220 | ) | |||||||||
| Less: comprehensive loss attributable to non-controlling interest | (10,937 | ) | (14,974 | ) | (20,537 | ) | (22,474 | ) | ||||||||
| Less: Foreign currency translation gain (loss) attributable to noncontrolling interest | 3,443 | (873 | ) | 3,020 | 1,005 | |||||||||||
| Comprehensive income (loss) attributable to the Company | (548,208 | ) | 230,396 | (798,640 | ) | (2,751 | ) | |||||||||
| (Loss) Earning per share | ||||||||||||||||
| Basic | (0.0345 | ) | 0.0063 | (0.0523 | ) | (0.0161 | ) | |||||||||
| Diluted | (0.0345 | ) | 0.0063 | (0.0523 | ) | (0.0161 | ) | |||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | 14,256,576 | 13,471,273 | 14,143,498 | 12,719,624 | ||||||||||||
| Diluted | 14,256,576 | 13,471,273 | 14,143,498 | 12,719,624 | ||||||||||||
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Revenue
Revenue for the three months ended June 30, 2025 was $3,971,716, compared to $6,753,112 for the comparable period in 2024. The revenue for the three months ended June 30, 2025 was mostly decreased from Meixin catering business and the fish trading business from NTB with the revenue of $0.94 million and $2.98 million, respectively.
Revenue for the six months ended June 30, 2025 was $8,505,844, compared to $11,652,992 for the comparable period in 2024. The revenue for the six months ended June 30, 2025 was mostly decreased from the Meixin catering business, the fish trading business from NTB with revenues of $2.48 million and $5.92 million, respectively.
| · | Fish Trading Business: For the six months ended June 5, 2025, the fish trading business decreased in volume, but the selling price increased, the volume decreased from 443 tons to 388 tons for the comparable period in 2024 and 2025. The average selling price of eels increased from $ 15.38 to $15.66 per kilogram for the comparable period in 2024 and 2025. | |
| · | Catering Business: For the six months ended June 5, 2025, the fish, fruit and vegetable processing service and sales volume decreased from 190,962 kilograms to 102,006 kilograms in volume with average prices increased from $14.85 to $15.59 per kilograms for the comparable period in 2024 and 2025. |
For the six months ended June 30, 2025, our foreign currency translation loss was $55,895.
Gross profit
Gross profit for the three months ended June 30, 2025 was $ 32,454, compared to $45,787 for the comparable period in 2024. The gross profit for the three months ended June 30, 2025 was mostly decreased from the Meixin catering business and the fish trading business from NTB.
Gross profit for the six months ended June 30, 2025 was $83,404, compared to $129,748 for the comparable period in 2024. The gross profit for the six months ended June 30, 2025 was mostly decreased from the Meixin catering business and the fish trading business from NTB.
General and administrative expenses
General and administrative expenses were $236,322, for the three months ended June 30, 2025, compared to $354,442 for the comparable period in 2024. This increase was primarily due to the decrease of consulting fees, and salary expenses for the three months ended June 30, 2024.
General and administrative expenses were $570,693, for the six months ended June 30, 2025, compared to $805,906 for the comparable period in 2024. This decrease was primarily due to the decrease of salary and commission expenses for the six months ended June 30, 2025 in connection with securities filings and other related matters.
Other income (expense)
Other expense was $158,216, for the three months ended June 30, 2025, compared to other income of $376,338 for the comparable period in 2024. The other income was interest revenue of bank deposits and the remaining consideration of $50,000 recorded as the receivable of disposal of SY Culture. The other expense was interest expense for a bank loan, loss on disposals of investment, share of loss of subsidiaries.
Other expense was $132,412, for the six months ended June 30, 2025, compared to other income of $571,911 for the comparable period in 2024. The other income was interest revenue of bank deposits and the remaining consideration of $50,000 recorded as the receivable of disposal of SY Culture. The other expense was interest expense for a bank loan, loss on disposals of investment, share of loss of subsidiaries.
| 45 |
Income tax expense
During the six months ended June 30, 2025, we recorded an income tax expense of $140,561 compared to income tax expense of $ 122,380 for the comparable period in 2024. The increase of income tax expense is because we evaluated the income tax impact for the period ended June 30, 2025.
Net income (loss) attributable to the Company
Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the three months ended June 30, 2025 was $491,708 compared to net loss attributable to us (excluding net loss attributable to non-controlling interest) of $84,423 for the comparable period in 2024.
Net loss attributable to the Company (excluding net loss attributable to non-controlling interest) for the six months ended June 30, 2025 was $739,725, compared to a net loss attributable to the Company (excluding net loss attributable to non-controlling interest) of $204,153 for the comparable period in 2024. The increase was primarily due to the increase of general and administrative expenses for the six months ended June 30, 2025.
Liquidity and Capital Resources
We had net cash used by operating activities for the period ended June 30, 2025 and the cash balance was $150,130 as of June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $ 21,978,606, a net loss of $760,262, and net cash used in operating activities of $320,289. In their audit report for the fiscal year ended December 31, 2024 included in this report, our auditors have expressed their concern as to our ability to continue as a going concern.
We continue to control our 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. Management is focused on growing our existing product offering, as well as our customer base, to increase our revenues. Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations and obtain financing. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, however, management believes that our current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet our working capital requirements 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.
The Company anticipates that its primary source of liquidity over the next twelve months will be capital raised through financing activities. We currently expect to raise approximately $40 million through a combination of equity issuance, a leveraged buyout transaction, and debt financing. These funds are intended to support our capital-intensive strategic initiatives, including business combinations and acquisitions aligned with our long-term growth strategy.
On the cash outflow side, we expect to utilize approximately $5.9 million to support operating activities over the next twelve months. This includes an estimated $5.0 million allocated to operating costs related to our fish business, $0.7 million for general and administrative expenses, and $0.2 million for marketing and promotional efforts associated with our e-commerce platform. In addition to operating needs, we plan to allocate approximately $30 million toward capital expenditures, primarily for business combination and acquisition transactions. These planned investments are considered critical to the Company’s growth objectives and are expected to be financed through the aforementioned capital raising efforts.
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Management believes that the anticipated financing arrangements will provide sufficient liquidity to meet our obligations as they come due and to fund the Company’s ongoing and planned strategic initiatives over the next twelve months.
The following table provides detailed information about our net cash flows for the periods indicated:
For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| $ | $ | |||||||
| Net cash used in operating activities | (320,289 | ) | (700,577 | ) | ||||
| Net cash provided by (used in) investing activities | (135,942 | ) | 645,685 | |||||
| Net cash used in financing activities | 236,366 | (478,361 | ) | |||||
| Effect of the exchange rate change on cash | (114,166 | ) | (109,904 | ) | ||||
| Decrease in cash | (334,031 | ) | (643,157 | ) | ||||
Net cash used in operating activities
Net cash used in operating activities amounted to $320,289 for the six months ended June 30, 2025. This reflected a net loss of $760,262, depreciation of $200,652.
Net cash used in operating activities amounted to $658,042 for the six months ended June 30, 2024. This reflected a net loss of $863,172, depreciation of $54,529 and share-based compensation of $30,165.
Net cash used in investing activities
Net cash used in investing activities was $135,942 for the year ended June 30, 2025, which were primarily attributable to the proceeds from disposal of subsidiary, SY Culture, of $363,845 and acquisition of associate of $500,000.
Net cash provided by investing activities was $645,685 for the year ended June 30, 2024, which were primarily attributable to the proceeds from disposal of financial assets at fair value through profit and loss.
Net cash used by financing activities
Net cash provided by financing activities amounted to $236,366 for the six months ended June 30, 2025, which was the exercise of warrant.
Net cash used by financing activities amounted to$478,361 for the six months ended June 30, 2024, which was repayment of bank loans and acquisition of subsidiaries.
| 47 |
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 June 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 June 30, 2025 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 2025. 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 June 30, 2025, 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.
| 50 |
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We were not subject to any legal proceedings during the six months ended June 30, 2025 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, 2024, filed with the SEC on May 6, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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.
During the quarter ended June 30, 2025,
| 51 |
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 | Stock Purchase Agreement, dated June 5, 2025, by and between Nocera, Inc. and Tachyonext Inc. |
Exhibit 10.1 to the Current Report on Form 8-K of the Registrant filed on June 10, 2025 | ||
| 10.2 | Equity Transfer Agreement, dated June 5, 2025, by and between Gui Zhou Grand Smooth Technology Co., Ltd. and Yuechi Technology Limited. | Exhibit 10.2 to the Current Report on Form 8-K of the Registrant filed on June 10, 2025 | ||
| 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. |
| 52 |
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: August 14, 2025 | By: | /s/ Andy Ching-An Jin |
| Name: | Andy Ching-An Jin | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Shun-Chih Chuang |
| Name: | Shun-Chih Chuang | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer) | ||
| (Principal Accounting Officer) |
| 53 |
FAQ
What were Nocera (NCRA) major corporate transactions in H1 2025?
How much cash did Nocera raise from its public offering?
What are the reported profitability and cash flow trends?
Did Nocera report any control deficiencies?
What goodwill or intangibles resulted from acquisitions?
Was all consideration from the SY Culture sale collected by period end?
