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What changed in NOCERA, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of NOCERA, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+241 added−215 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in NOCERA, INC.'s 2023 10-K

241 paragraphs added · 215 removed · 180 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

33 edited+3 added−7 removed51 unchanged
Biggest changeIn October 2021, Nocera began its eel trading business in response to domestic demands created by the COVID-19 lockdown. NTB currently procures and sells eel in Taiwan and plans to trade other types of seafood, such as tilapia and milkfish, in the near future. Significant Products & Services We manufacture, sell, and install RASs for land-based fish farms.
Biggest changeAs of November 30, 2022, we ceased providing services to construct indoor RASs and solar sharing fish farms in Taiwan. NTB was established on January 14, 2021 in Taiwan. In October 2021, Nocera began its eel trading business in response to domestic demands created by the COVID-19 lockdown.
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.
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.
Nocera Land-based RASs Overview Height / width 1.5m/10m Main composition of our tank Environmental-friendly PE Yield per growing season (Tilapia) 11,000 lbs. Fish farming density 100-109 lb./m3 Price per RASs Total Solution $35,000 USD Our RASs can raise both freshwater and saltwater fish, as well as a variety of crustaceans.
Nocera Land-based RASs Overview Height / width 1.5m/10m Main composition of our tank Environmental-friendly PE Yield per growing season (Tilapia) 11,000 lbs. Fish farming density 100-109 lb./m3 Price per RASs Total Solution $35,000 USD 3 Our RASs can raise both freshwater and saltwater fish, as well as a variety of crustaceans.
Our primary business operations currently consist of designing, developing and producing large scale recirculating aquaculture systems (“RASs”) for fish farms along with providing consulting, technology transfer and aquaculture project management services to new and existing aquaculture management business services. RASs operate by filtering water from the fish (or shellfish) tanks so it can be reused within the tank.
Our primary business operations currently consist of designing, developing and producing large scale recirculating aquaculture systems ("RASs") for fish farms along with providing consulting, technology transfer and aquaculture project management services to new and existing aquaculture management business services. RASs operate by filtering water from the fish (or shellfish) tanks so it can be reused within the tank.
XFC Sale On December 31, 2020, we exchanged 466,667 (post-split) shares of our restricted common stock to stockholders of Xin Feng Construction Co., Ltd., a Taiwan limited liability company (“XFC”), in exchange for 100% controlling interest in XFC.
XFC Sale On December 31, 2020, we exchanged 466,667 (post-split) shares of our restricted common stock to stockholders of Xin Feng Construction Co., Ltd., a Taiwan limited liability company ("XFC"), in exchange for 100% controlling interest in XFC.
Also, with respect to the potential sale of eel and any other seafood into the United States, we are subject to extensive regulation, including, among other things, the Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act (“FSMA”), the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, and the rules and regulations promulgated thereunder by the U.S.
Also, with respect to the potential sale of eel and any other seafood into the United States, we are subject to extensive regulation, including, among other things, the Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act ("FSMA"), the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, and the rules and regulations promulgated thereunder by the U.S.
The information contained in, or that can be accessed through, our website is not part of this Annual Report on Form 10-K.
The information contained in, or that can be accessed through, our website is not part of this Annual Report on Form 10-K. 8
We are aiming for the direct wholesale option, including live hauling, restaurants, supermarkets and specialty stores. As of December 2022, we sell our 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.
We are aiming for the direct wholesale option, including live hauling, restaurants, supermarkets and specialty stores. As of December 2023, we sell our 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.
Food and Drug Administration (the “FDA”). The FSMA was enacted in order to aid the effective prevention of food safety issues in the food supply. This comprehensive and evolving regulatory program impacts how food is grown, packed, processed, shipped and imported into the United States and it governs compliance with Good Manufacturing Practices regulations.
Food and Drug Administration (the "FDA"). The FSMA was enacted in order to aid the effective prevention of food safety issues in the food supply. This comprehensive and evolving regulatory program impacts how food is grown, packed, processed, shipped and imported into the United States and it governs compliance with Good Manufacturing Practices regulations.
In addition, we have 9 consultants. We are compliant with local prevailing wage, contractor licensing, and have good relations with our employees. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
In addition, we have 12 consultants. We are compliant with local prevailing wage, contractor licensing and have good relations with our employees. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
There are several significant benefits to our RASs: · the system provides a controlled and “traceable” environment; · the recirculating aquaculture system can be installed almost anywhere and requires minimal site preparation; and · it benefits local economies by providing fresher and, therefore, generally healthier fish . 3 Nocera’s RASs include the fish tank, circulation and filtration systems.
There are several significant benefits to our RASs: · the system provides a controlled and "traceable" environment; · the recirculating aquaculture system can be installed almost anywhere and requires minimal site preparation; and · it benefits local economies by providing fresher and, therefore, generally healthier fish. Nocera's RASs include the fish tank, circulation and filtration systems.
During the year ended December 31, 2022 and 2021, the net sales were approximately $16.3 million and approximately $9.9 million, respectively. ______________________ ] Ranganathan et al, How to Sustainably Feed 10 Billion People by 2050, in 21 Charts , WORLD RESOURCES INSTITUTE (Dec. 5, 2018); https://www.wri.org/insights/how-sustainably-feed-10-billion-people-2050-21-charts#:~:text= How%20to%20Sustainably%20Feed%2010%20Billion%20People%20by%202050%2C%20in%2021%20Charts,-December%205%2C%202018&text=There%20is%20a%20big%20shortfall,than%20there%20were%20in%202010. 5 Suppliers We intend to purchase raw materials and parts and equipment from third parties locally in Taiwan and build and sell them to customers.
During the year ended December 31, 2023 and 2022, the net sales were approximately $23.9 million and approximately $141 million, respectively. ______________________ ] Ranganathan et al, How to Sustainably Feed 10 Billion People by 2050, in 21 Charts , WORLD RESOURCES INSTITUTE (Dec. 5, 2018); https://www.wri.org/insights/how-sustainably-feed-10-billion-people-2050-21-charts#:~:text= How%20to%20Sustainably%20Feed%2010%20Billion%20People%20by%202050%2C%20in%2021%20Charts,-December%205%2C%202018&text=There%20is%20a%20big%20shortfall,than%20there%20were%20in%202010. 5 Suppliers We purchase raw materials and parts and equipment from third parties locally in Taiwan and build and sell them to customers.
Seasonality Since the global growing demand from aquaculture production along with the decreasing production from wild fisheries and our fish farming systems provide a controlled and traceable environment for species, our business rarely suffers a seasonal impact. Human Capital Resources As of December 31, 2022, we had a total of 19 employees, including 16 full-time employees and 3 part-time employees.
Seasonality Since the global growing demand from aquaculture production along with the decreasing production from wild fisheries and our fish farming systems provide a controlled and traceable environment for species, our business rarely suffers a seasonal impact. Human Capital Resources As of December 31, 2023, we had a total of 22 employees, including 19 full-time employees and 3 part-time employees.
The reports filed with the SEC by our executive officers and directors pursuant to Section 16 under the Exchange Act are also made available, free of charge on our website, as soon as reasonably practicable after copies of those filings are provided to us by those persons. These materials can be accessed through the “Investor Relations” section of our website.
The reports filed with the SEC by our executive officers and directors pursuant to Section 16 under the Exchange Act are also made available, free of charge on our website, as soon as reasonably practicable after copies of those filings are provided to us by those persons. These materials can be accessed through the "Investor Relations" section of our website.
The closing of the XFC Sale occurred on November 30, 2022 and the XFC variable interest entity (“VIE”) agreements were terminated in connection with the XFC Sale.
The closing of the XFC Sale occurred on November 30, 2022 and the XFC variable interest entity ("VIE") agreements were terminated in connection with the XFC Sale.
Prior to the merger, we were a “shell company” as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act). GSI is the parent holding company of GZ GST, which was incorporated on November 13, 2018, as a wholly foreign-owned enterprise established in the PRC.
Prior to the merger, we were a "shell company" as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act). GSI is the parent holding company of GZ GST, which was incorporated on November 13, 2018, as a wholly foreign-owned enterprise established in the PRC.
On November 30, 2022, we entered into a Purchase of Business Agreement with Han-Chieh Shih (the “Purchaser”), in which we sold our controlling interest of XFC, to the Purchaser for a total purchase cash price of $300,000 (the “XFC Sale”).
On November 30, 2022, we entered into a Purchase of Business Agreement with Han-Chieh Shih (the "Purchaser"), in which we sold our controlling interest of XFC, to the Purchaser for a total purchase cash price of $300,000 (the "XFC Sale").
Customers In 2023, we intend to target customers in a variety of markets (e.g., Japan, Taiwan, Thailand, Jordan, South Africa and the United States), such as individual investors, government supported or funded companies and other types of international customers.
Customers In 2023, we targeted customers in a variety of markets (e.g., Japan, Taiwan, Thailand, Jordan, South Africa and the United States), such as individual investors, government supported or funded companies and other types of international customers.
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 80% controlling interest of Meixin for $4,300,000.
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 80% controlling interest of Meixin for $4,300,000.
We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business. 7 Property We own 229 contiguous acres of land located in Montgomery County, Alabama up to the date of this report.
We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business. Property We own 229 contiguous acres of land located in Montgomery County, Alabama up to the date of this Annual Report on Form 10-K.
During the year ended December 31, 2022 and 2021, the net sales were approximately $16.3 million and approximately $9.9 million, respectively. Construction Services Prior to terminating the VIE agreements with XFC in connection with the XFC Sale, we were the only provider of RAS solar power energy sharing and construction services in Taiwan.
During the year ended December 31, 2023 and 2022, the net sales were approximately $23.9 million and approximately $14.1 million, respectively. Construction Services Prior to terminating the VIE agreements with XFC in connection with the XFC Sale, we were the only provider of RAS solar power energy sharing and construction services in Taiwan.
We plan to provide the following service offerings: · for qualified investors or investment groups who are interested in capitalizing on the potential of the aquaculture industry and want to develop or take part in commercial fish farming or shrimp farming but lack the experience, design, installation, build and management of aquaculture projects to meet these interests; · a full range of pilot and management services to aquaculture companies and new aquaculture projects throughout Taiwan and potentially the rest of the world, providing tailored solutions to meet customer needs and to fulfill our commitment, to encourage and support clean water and clean fish products from the fish farm to the table; and · select equipment and materials from suppliers to provide unique service offerings structured to generate higher profit margins.
We currently provide such services in Taiwan and intend to expand into other international markets and the United States to increase revenues and operate more efficiently. 4 We provide the following service offerings: · for qualified investors or investment groups who are interested in capitalizing on the potential of the aquaculture industry and want to develop or take part in commercial fish farming or shrimp farming but lack the experience, design, installation, build and management of aquaculture projects to meet these interests; · a full range of pilot and management services to aquaculture companies and new aquaculture projects throughout Taiwan and potentially the rest of the world, providing tailored solutions to meet customer needs and to fulfill our commitment, to encourage and support clean water and clean fish products from the fish farm to the table; and · select equipment and materials from suppliers to provide unique service offerings structured to generate higher profit margins.
Under certain of these laws and regulations, we may be subject to joint and several liability for environmental investigations and cleanups, including at properties that we currently or previously owned or operated, or at sites at which waste we generated was disposed, even if the contamination was not caused by us or was legal at the time it occurred. 6 We are also subject to laws regulating consumer products in the jurisdictions in which we sell our products.
Under certain of these laws and regulations, we may be subject to joint and several liability for environmental investigations and cleanups, including at properties that we currently or previously owned or operated, or at sites at which waste we generated was disposed, even if the contamination was not caused by us or was legal at the time it occurred.
In the United States for instance, certain of our products are subject to the U.S. Consumer Product Safety Act, under which the U.S.
We are also subject to laws regulating consumer products in the jurisdictions in which we sell our products. In the United States for instance, certain of our products are subject to the U.S. Consumer Product Safety Act, under which the U.S.
Originally, our systems were designed and constructed from used marine shipping containers. We then developed our next generation of RASs, a cylindrical shaped tank that holds approximately 15,000 U.S. gallons of water, which we believe make them among the largest systems in the market.
We then developed our next generation of RASs, a cylindrical shaped tank that holds approximately 15,000 U.S. gallons of water, which we believe make them among the largest systems in the market.
Trademarks and Patents We do not own any trademarks or patents. Sales and Marketing We intend to create a brand and by our creation of the brand, offer unique and better incentives to the consumers.
Trademarks and Patents We do not own any trademarks or patents. Sales and Marketing We continue to market our brand by offering unique and better incentives to the consumers.
In addition, it is possible that certain governments may seek to block or limit our products and services or otherwise impose other restrictions that may affect the accessibility or usability of any or all of our products and services for an extended period of time or indefinitely.
In addition, it is possible that certain governments may seek to block or limit our products and services or otherwise impose other restrictions that may affect the accessibility or usability of any or all of our products and services for an extended period of time or indefinitely. 6 Our properties and operations are subject to a number of environmental, health and safety laws and regulations in each of the jurisdictions in which we operate.
We believe that we have skills to help our customers obtain all necessary licenses, registrations and permits to comply with all requirements necessary to allow our customers and investors to conduct aquaculture business in Taiwan. Listing on The Nasdaq Capital Market Our common stock is listed on The Nasdaq Capital Market under the symbol “NCRA” since August 11, 2022.
We believe that we have skills to help our customers obtain all necessary licenses, registrations and permits to comply with all requirements necessary to allow our customers and investors to conduct aquaculture business in Taiwan.
We believe that the RASs, with its proven advantage in producing more fish in a more cost-effective and environmentally friendly manner while offering greater location flexibility and the potential for a “solar-fish sharing mode,” is a perfect solution to address the opportunities highlighted above. 4 Consulting Services We also provide consulting services and solutions for aquaculture projects, where we offer design innovation and RAS expertise to increase revenue, while decreasing operating expenses, allowing clients to operate more efficiently while increasing production.
We believe that the RASs, with its proven advantage in producing more fish in a more cost-effective and environmentally friendly manner while offering greater location flexibility and the potential for a "solar-fish sharing mode," is a perfect solution to address the opportunities highlighted above.
Additionally, we show clients how to operate more strategically by diversifying the species of fish raised to meet market demands. Our equipment enhances the management of fish farms by reducing the incidence of disease among the fish populations, while reducing water pollution from inland fish farms.
Our equipment enhances the management of fish farms by reducing the incidence of disease among the fish populations, while reducing water pollution from inland fish farms.
Legal Proceedings We are currently not a party to any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us in all material aspects.
Listing on The Nasdaq Capital Market Our common stock is listed on The Nasdaq Capital Market under the symbol "NCRA" since August 11, 2022. 7 Legal Proceedings We are currently not a party to any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us in all material aspects.
As of November 30, 2022, we ceased providing services to construct indoor RASs and solar sharing fish farms in Taiwan. On September 7, 2022, we entered into a series of contractual agreements with the majority stockholder of Meixin and Meixin, of which we purchased 80% controlling interest of Meixin for $4,300,000.
NTB currently procures and sells eel in Taiwan and plans to trade other types of seafood, such as tilapia and milkfish, in the near future. On September 7, 2022, we entered into a series of contractual agreements with the majority stockholder of Meixin and Meixin, of which we purchased 80% controlling interest of Meixin for $4,300,000.
Therefore, in accordance with ASC 810 “Consolidation,” we are considered the primary beneficiary of Meixin and have consolidated Meixin’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. NTB was established on January 14, 2021 in Taiwan.
Therefore, in accordance with ASC 810 "Consolidation," we are considered the primary beneficiary of Meixin and have consolidated Meixin's assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Significant Products & Services We manufacture, sell, and install RASs for land-based fish farms. Originally, our systems were designed and constructed from used marine shipping containers.
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Business Developments The following highlights recent material developments in our business: · On September 19, 2022, we announced that our seafood porridge bowl will be launched at the Ning Xia Night Market in the Datong District of Taipei City, Taiwan with a soft opening on September 26, 2022. · On November 17, 2022, we announced that we achieved eel sales revenue of over $3 million for the month of October 2022. · On December 13, 2022, we announced that we achieved eel sales revenue of approximately $3.2 million for the month of November 2022. · On December 15, 2022, we announced that our flagship bento box store located in the Datong District of Taipei City, Taiwan officially opened.
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Business Developments The following highlights recent material developments in our business: · On November 1, 2023, we announced that the Board appointed Yiwen Zhang and Song-Yuan Teng to the Board, with Yiwen Zhang serving on the Audit Committee of the Board and the Nominating and Corporate Governance Committee of the Board, as well as Chairman of the Audit Committee of the Board.
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The two signature dishes, grilled eel rice bowl and super value bento box, made an instant hit around Nangang Software Park.
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Recent Developments · On July 5, 2023, issued 325,708 shares of common stock in response to the exercise of 162,854 shares of warrants issued to our representative in our uplisting in August 2022 with gross proceeds of $626,987. 2 Corporate Structure We conduct our operations through (i) Meixin; and (ii) Nocera Taiwan Branch, an unincorporated division of the Company ("NTB").
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Nangang Software Park contains around 400 companies with more than 25,000 people. 2 Recent Developments Recent developments of the Company are summarized below and have been previously disclosed in Current Reports on Form 8-K filed with the SEC: · On September 8, 2022, we entered into a Real Estate Purchase Agreement with an unaffiliated third party pursuant to which we agreed to purchase 229 contiguous acres of land located in Montgomery County, Alabama (the “Land Acquisition”).
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Consulting Services We also provide consulting services and solutions for aquaculture projects, where we offer design innovation and RAS expertise to increase revenue, while decreasing operating expenses, allowing clients to operate more efficiently while increasing production. Additionally, we show clients how to operate more strategically by diversifying the species of fish raised to meet market demands.
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We paid an earnest deposit of $10,000 on the land with the balance of $865,000 payable at closing. We borrowed $650,000 to fund the purchase price. The Land Acquisition closed on February 16, 2023. We intend to build RASs on the land for fish farming.
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T he property includes a house, a manufactured home and a building site with sewer and power which we intend to develop into an office and dormitory for our future employees . Corporate Structure We conduct our operations through (i) Meixin; and (ii) Nocera Taiwan Branch, an unincorporated division of the Company (“NTB”).
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We currently provide such services in Taiwan and intend to expand into other international markets and the United States to increase revenues and operate more efficiently.
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Our properties and operations are subject to a number of environmental, health and safety laws and regulations in each of the jurisdictions in which we operate.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+28 added−17 removed156 unchanged
Biggest changeIn view of our limited operating history, we believe that period-to-period comparisons of its operating results are not necessarily meaningful and should not be relied upon as an indication of future performance. 9 We are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues.
Biggest changeWe are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources and lack of revenues. If we fail to raise capital when needed it will have a material adverse effect on our business, financial condition and results of operations.
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.
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 and geopolitical shifts and could materially adversely affect global trade, currency exchange rates, regional economies and the global economy.
Expanding in other international countries and in the United States may subject us to risks that we have either not faced before or increase our exposure to risks that we currently face, including risks associated with: 13 · recruiting and retaining qualified, multi-lingual employees, including customer support personnel; · increased competition from similar local businesses and potential preferences by local populations for local providers; · compliance with applicable foreign laws and regulations, including different liability standards and regulations; · providing solutions in different languages for different cultures; · credit risk and higher levels of payment fraud; · compliance with anti-bribery laws; · currency exchange rate fluctuations; · foreign exchange controls that might prevent us from repatriating cash earned outside the United States; · political and economic instability in some countries; · double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and · higher costs of doing business in other international countries.
Expanding in other international countries and in the United States may subject us to risks that we have either not faced before or increase our exposure to risks that we currently face, including risks associated with: · recruiting and retaining qualified, multi-lingual employees, including customer support personnel; · increased competition from similar local businesses and potential preferences by local populations for local providers; · compliance with applicable foreign laws and regulations, including different liability standards and regulations; · providing solutions in different languages for different cultures; · credit risk and higher levels of payment fraud; · compliance with anti-bribery laws; · currency exchange rate fluctuations; · foreign exchange controls that might prevent us from repatriating cash earned outside the United States; · political and economic instability in some countries; · double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and · higher costs of doing business in other international countries.
The SEC has provided an important exception to this prohibition, however, if the following conditions are met: 24 · the issuer of the securities that was formerly a shell company has ceased to be a shell company; · the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; · the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and · at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
The SEC has provided an important exception to this prohibition, however, if the following conditions are met: · the issuer of the securities that was formerly a shell company has ceased to be a shell company; · the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; · the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and · at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
Since the laws of Taiwan limit foreign equity ownership in certain businesses in Taiwan, we operate such business in Taiwan through our VIE (variable interest entity), Meixin Institutional Food Development Co., Ltd., a Taiwan corporation (“Meixin”), in which we have no ownership interest and rely on a series of contractual arrangements with Meixin and its respective equity holders to control and operate the VIE.
Since the laws of Taiwan limit foreign equity ownership in certain businesses in Taiwan, we operate such business in Taiwan through our VIE (variable interest entity), Meixin Institutional Food Development Co., Ltd., a Taiwan corporation ("Meixin"), in which we have no ownership interest and rely on a series of contractual arrangements with Meixin and its respective equity holders to control and operate the VIE.
All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. 23 Our common stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock.
All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. Our common stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock.
Any uninsured occurrence of loss or litigation or business disruption may result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating results. 12 Competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours.
Any uninsured occurrence of loss or litigation or business disruption may result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating results. Competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours.
This could result in a lower trading price for our common stock and may limit your ability to sell your shares, any of which could result in you losing some or all of your investments. 21 We may issue preferred stock in different series with terms that could dilute the voting power or reduce the value of our common stock.
This could result in a lower trading price for our common stock and may limit your ability to sell your shares, any of which could result in you losing some or all of your investments. We may issue preferred stock in different series with terms that could dilute the voting power or reduce the value of our common stock.
If this were to occur, it would be difficult for us to challenge this type of use, especially since we do not own any patents or other intellectual property rights with respect to our technologies and products. We are subject to certain risks by virtue of our international operations.
If this were to occur, it would be difficult for us to challenge this type of use, especially since we do not own any patents or other intellectual property rights with respect to our technologies and products. 13 We are subject to certain risks by virtue of our international operations.
The imposition of any of such sanctions on us could have a material adverse effect on our business, financial position, results of operations or cash flows. 11 Future acquisitions may have an adverse effect on our ability to manage our business. Selective acquisitions currently form part of our strategy to further expand our business.
The imposition of any of such sanctions on us could have a material adverse effect on our business, financial position, results of operations or cash flows. Future acquisitions may have an adverse effect on our ability to manage our business. Selective acquisitions currently form part of our strategy to further expand our business.
On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under 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 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 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under 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 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.
The occurrence of any of these circumstances may adversely affect our financial condition and results of operation. The primary substantial portion of our revenues will be derived from Taiwan. We anticipate that sales of our services in Taiwan will represent our primary revenues in the near future.
The occurrence of any of these circumstances may adversely affect our financial condition and results of operation. 14 The primary substantial portion of our revenues will be derived from Taiwan. We anticipate that sales of our services in Taiwan will represent our primary revenues in the near future.
Our Articles of Incorporation and our amended and restated bylaws (“Bylaws”) eliminate the personal liability of our directors and officers to us and our stockholders for damages for breach of fiduciary duty as a director or officer to the extent permissible under Nevada law.
Our Articles of Incorporation and our amended and restated bylaws ("Bylaws") eliminate the personal liability of our directors and officers to us and our stockholders for damages for breach of fiduciary duty as a director or officer to the extent permissible under Nevada law.
While we have no specific plan to issue preferred stock in different series, our amended and restated articles of incorporation, as amended (“Articles of Incorporation”) authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designation, relative powers, preferences (including preferences over our common stock respecting dividends and distributions), voting rights, terms of conversion or redemption, and other relative, participating, optional, or other special rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations, or restrictions thereof, as our Board may determine.
While we have no specific plan to issue preferred stock in different series, our amended and restated articles of incorporation, as amended ("Articles of Incorporation") authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designation, relative powers, preferences (including preferences over our common stock respecting dividends and distributions), voting rights, terms of conversion or redemption, and other relative, participating, optional, or other special rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations, or restrictions thereof, as our Board may determine.
There is no assurance that we will be profitable. There is no assurance that we will earn profits in the future, or that profitability will be sustained. There is no assurance that future revenues will be sufficient to generate the funds required to continue our business development and marketing activities.
There is no assurance that we will earn profits in the future, or that profitability will be sustained. There is no assurance that future revenues will be sufficient to generate the funds required to continue our business development and marketing activities.
The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President’s Working Group on Financial Markets (the “PWG”), issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States.
The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President's Working Group on Financial Markets (the "PWG"), issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States.
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires that we maintain internal control over financial reporting that meets applicable standards. We may err in the design or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met.
Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404") requires that we maintain internal control over financial reporting that meets applicable standards. We may err in the design or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met.
A company that qualifies only for initial listing under Nasdaq’s alternative listing standard could become a “penny stock” if it later fails the net tangible assets and revenue tests after listing and does not satisfy any of the other exclusions from being a penny stock contained in Rule 3a51-1 under the Exchange Act.
A company that qualifies only for initial listing under Nasdaq's alternative listing standard could become a "penny stock" if it later fails the net tangible assets and revenue tests after listing and does not satisfy any of the other exclusions from being a penny stock contained in Rule 3a51-1 under the Exchange Act.
We will be delisted and our securities will be prohibited from being traded on Nasdaq or any other national securities exchange or the over-the-counter trading market if we remain identified as a Commission-Identified Issuer for three consecutive years (or two if the AHFCAA is enacted).
We will be delisted and our securities will be prohibited from being traded on The Nasdaq Stock Market LLC ("Nasdaq") or any other national securities exchange or the over-the-counter trading market if we remain identified as a Commission-Identified Issuer for three consecutive years (or two if the AHFCAA is enacted).
Additional risks may exist as a result of our becoming a public reporting company through a “reverse merger.” Certain SEC rules are more restrictive when applied to reverse merger companies, such as the ability of stockholders to re-sell their shares pursuant to Rule 144.
Additional risks may exist as a result of our becoming a public reporting company through a "reverse merger." Certain SEC rules are more restrictive when applied to reverse merger companies, such as the ability of stockholders to re-sell their shares pursuant to Rule 144.
We may maintain our cash assets at certain financial institutions in the U.S. in amounts that may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000.
We may maintain our cash assets at certain financial institutions in the U.S. in amounts that may be in excess of the Federal Deposit Insurance Corporation ("FDIC") insurance limit of $250,000.
Trade restrictions and sanctions implemented by the United States or other countries, including sanctions imposed on Russia by the United States and other countries due to Russia’s recent invasion of Ukraine, could materially and adversely affect our business, financial condition and results of operations. Risks Related to our Securities.
Trade restrictions and sanctions implemented by the United States or other countries, including sanctions imposed on Russia by the United States and other countries due to Russia's recent invasion of Ukraine, could materially and adversely affect our business, financial condition and results of operations.
Because there are inherent limitations in all control systems, there can be no assurance that all control issues have been or will be detected. 20 As of December 31, 2022, we did not maintain effective controls over the control environment.
Because there are inherent limitations in all control systems, there can be no assurance that all control issues have been or will be detected. As of December 31, 2023, we did not maintain effective controls over the control environment.
As such, due to the fact that we were a shell company until the effective time of the reverse merger, holders of “restricted securities” within the meaning of Rule 144 will be subject to the above conditions. We may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.
As such, due to the fact that we were a shell company until the effective time of the reverse merger, holders of "restricted securities" within the meaning of Rule 144 will be subject to the above conditions. We may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock.
In 2019, we did not have a corporate bank account established in Hong Kong or the U.S., and certain funds that were supposed to be deposited into such corporate bank account were instead deposited into the personal bank account of our principal stockholder as well as Chairman of the Board of Directors of the Company (“Board”), President, Chief Executive Officer and Director, Yin-Chieh Cheng, which was considered to be a personal loan made by us to Yin-Chieh Cheng and may have violated Section 13(k) of the Exchange Act.
In 2019, we did not have a corporate bank account established in Hong Kong or the U.S., and certain funds that were supposed to be deposited into such corporate bank account were instead deposited into the personal bank account of our former Chairman of the Board of Directors of the Company ("Board"), President, Chief Executive Officer and Director, Yin-Chieh Cheng, which was considered to be a personal loan made by us to Yin-Chieh Cheng and may have violated Section 13(k) of the Exchange Act.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.
In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.
Decreased demand from a discrete event impacting a specific asset type, customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations. Recently, Russia initiated significant military action against Ukraine.
Decreased demand from a discrete event impacting a specific asset type, customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations. 19 In February 2022, Russia initiated significant military action against Ukraine.
We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
We are an "emerging growth company" and a "smaller reporting company" under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
If we fail to raise capital when needed it will have a material adverse effect on our business, financial condition and results of operations. We have limited revenue-producing operations and will require proceeds from future offerings to execute its full business plan.
We have limited revenue-producing operations and will require proceeds from future offerings to execute its full business plan. A failure to raise capital when needed would have a material adverse effect on our business, financial condition and results of operations.
If we remain identified as a Commission-Identified Issuer and have a “non-inspection” year, there is no assurance that we will be able to take remedial measures in a timely manner.
If we remain identified as a Commission-Identified Issuer and have a "non-inspection" year, there is no assurance that we will be able to take remedial measures in a timely manner.
Yin-Chieh (“Jeff”) Cheng, our Chief Executive Officer, or any failure on our part to hire, train and retain a sufficient number of qualified professionals could impair our business. We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed.
Andy Jin, our Chief Executive Officer, or any failure on our part to hire, train and retain a sufficient number of qualified professionals could impair our business. 11 We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed.
We will remain an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter. 25 We may continue to be a smaller reporting company even after we are no longer an emerging growth company.
We will remain an "emerging growth company" until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.
We have a large number of authorized but unissued shares of our common stock which will dilute your ownership position when issued. Our authorized capital stock consists of 200,000,000 shares of common stock, of which approximately 181,726,411 shares are available for issuance.
We have a large number of authorized but unissued shares of our common stock which will dilute your ownership position when issued. Our authorized capital stock consists of 200,000,000 shares of common stock, of which approximately 187,043,013 shares are available for issuance.
These factors include: · quarterly variations in our results of operations or those of our competitors; · delays in end-user deployments of products; · fluctuations in related commodities prices; · announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships or capital commitments; · intellectual property infringements; · our ability to develop and market new and enhanced products on a timely basis; · commencement of, or our involvement in, litigation; · major changes in our Board or management; 22 · changes in governmental regulations; · changes in earnings estimates or recommendations by securities analysts; · the impact of the COVID-19 pandemic on capital markets; · our failure to generate material revenues; · our public disclosure of the terms of this financing and any financing which we consummate in the future; · any acquisitions we may consummate; · short selling activities; · changes in market valuations of similar companies; · changes in our capital structure, such as future issuances of securities or the incurrence of debt; · changes in the prices of commodities associated with our business; and · general economic conditions and slow or negative growth of end markets.
These factors include: · quarterly variations in our results of operations or those of our competitors; · delays in end-user deployments of products; · fluctuations in related commodities prices; · announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships or capital commitments; · intellectual property infringements; · our ability to develop and market new and enhanced products on a timely basis; · commencement of, or our involvement in, litigation; · major changes in our Board or management; · changes in governmental regulations; · changes in earnings estimates or recommendations by securities analysts; · the impact of any future COVID-19 outbreak or similar epidemic on capital markets; · our failure to generate material revenues; · our public disclosure of the terms of this financing and any financing which we consummate in the future; · any acquisitions we may consummate; · short selling activities; · changes in market valuations of similar companies; · changes in our capital structure, such as future issuances of securities or the incurrence of debt; · changes in the prices of commodities associated with our business; and · general economic conditions and slow or negative growth of end markets. 23 Additionally, the global economy and financial markets may be adversely affected by geopolitical events, including Russia's invasion of Ukraine and the conflicts in the Middle East.
We therefore are highly susceptible to changes in market demand, which may be impacted by factors over which we have limited or no control. Factors that could lead to a decline in market demand for eel include economic conditions and evolving consumer preferences.
Approximately 98% of our revenues are derived from a single product, eel. We therefore are highly susceptible to changes in market demand, which may be impacted by factors over which we have limited or no control. Factors that could lead to a decline in market demand for eel include economic conditions and evolving consumer preferences.
In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 26 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several analysts may cover our stock.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Several analysts may cover our stock. If one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline.
These customers are not located in mainland China or Hong Kong. Our future plan of operations is to shift away from general construction services to the construction of fish farms and fish trading business. There can be no guarantee that such shift in operations will generate the same levels of revenues previously generated through our VIE.
Our future plan of operations is to shift away from general construction services to the construction of fish farms and fish trading business. There can be no guarantee that such shift in operations will generate the same levels of revenues previously generated through our VIE. There is no assurance that we will be profitable.
If we fail to promote and maintain our brand or incur substantial expenses in an attempt to promote and maintain our brand or if our existing or future strategic relationships fail to promote our brand or increase brand awareness, our business, results of operations and financial condition would be materially adversely affected.
If we fail to promote and maintain our brand or incur substantial expenses in an attempt to promote and maintain our brand or if our existing or future strategic relationships fail to promote our brand or increase brand awareness, our business, results of operations and financial condition would be materially adversely affected. 10 We may not generate the same level of revenues from general construction projects.
In addition, the inability of the PCAOB to conduct inspections or full investigations of auditors would make it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors that are subject to the PCAOB inspections, which could cause investors and potential investors to lose confidence in the audit procedures and reported financial information and the quality of our financial statements. 18 Our contractual arrangements may not be as effective in providing operational control as direct ownership and our VIE shareholders may fail to perform their obligations under our contractual arrangements.
In addition, the inability of the PCAOB to conduct inspections or full investigations of auditors would make it more difficult to evaluate the effectiveness of our independent registered public accounting firm's audit procedures or quality control procedures as compared to auditors that are subject to the PCAOB inspections, which could cause investors and potential investors to lose confidence in the audit procedures and reported financial information and the quality of our financial statements.
Since our auditor is located in Hong Kong, it 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 and currently not inspected by the PCAOB.
Since our auditor is located in Hong Kong, it 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 and currently not inspected by the PCAOB. 17 On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA.
Factors that could lead to a decline in market demand for seafood in general and specifically the type of fish farmed using our systems include economic conditions and evolving consumer preferences. A substantial downturn in market demand for such seafood may have a material adverse effect on our business and on our results of operations.
Factors that could lead to a decline in market demand for seafood in general and specifically the type of fish farmed using our systems include economic conditions and evolving consumer preferences.
To manage any material growth of its operations and personnel, we may be required to improve existing operational and financial systems, procedures and controls and to expand, train and manage our employee base.
Our anticipated expansion is expected to place a significant strain on our management, operational and financial resources. To manage any material growth of its operations and personnel, we may be required to improve existing operational and financial systems, procedures and controls and to expand, train and manage our employee base.
We are an “emerging growth company” and a “smaller reporting company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” and “smaller reporting companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an "emerging growth company" and a "smaller reporting company" as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" and "smaller reporting companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 25 In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
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.
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.
A portion of our revenues are derived from a single product, eel, and therefore we are highly susceptible to changes in market demand, which may be affected by factors over which we have limited or no control. Approximately 84% of our revenues are derived from a single product, eel.
A substantial downturn in market demand for such seafood may have a material adverse effect on our business and on our results of operations. 12 A portion of our revenues are derived from a single product, eel and therefore we are highly susceptible to changes in market demand, which may be affected by factors over which we have limited or no control.
In addition, a significant percentage of the production, downstream processing and sales of our products occurs outside the United States or with vendors, suppliers or customers located outside the United States.
For example, operating in Europe exposes us to political, legal and economic risks. In addition, a significant percentage of the production, downstream processing and sales of our products occurs outside the United States or with vendors, suppliers or customers located outside the United States.
Therefore, factors affecting military, political or economic conditions in Taiwan could have a material adverse effect on our results of operations. 16 A significant disruption in the operations of our suppliers in Taiwan, such as a trade war or political unrest, could materially adversely affect our business, financial condition and results of operations.
A significant disruption in the operations of our suppliers in Taiwan, such as a trade war or political unrest, could materially adversely affect our business, financial condition and results of operations.
If our management determines to issue shares of our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction.
If our management determines to issue shares of our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction. 21 Sales of our currently issued and outstanding shares of common stock and shares of common stock underlying warrants may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our common stock.
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, results or operations and reputation.
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, results or operations and reputation. 15 Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.
The market valuation of our business may fluctuate due to factors beyond our control and the value of your investment may fluctuate correspondingly. The market valuations of smaller reporting companies, such as us, frequently fluctuate due to factors unrelated to the past or present operating performance of such companies.
The market valuations of smaller reporting companies, such as us, frequently fluctuate due to factors unrelated to the past or present operating performance of such companies.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 15 We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation, the loss of such assets would have a severe negative affect on our operations and liquidity.
We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation, the loss of such assets would have a severe negative affect on our operations and liquidity.
We also expect that being listed on a national exchange will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board.
Being listed on a national exchange makes it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
Approximately 52.4% of the shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act (“Rule 144”).
Approximately 58% of the shares of common stock are "restricted securities" within the meaning of Rule 144 under the Securities Act ("Rule 144").
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, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations. 19 We continue to expand our international footprint and operations, and we may expand further in the future, which subjects us to a variety of risks and complexities which, if not effectively managed, could negatively affect our business.
The Russia-Ukraine war and conflicts in the Middle East remain 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, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.
This type of litigation could result in substantial costs to us and divert our management’s attention and resources. Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to the operating performance of particular companies, such as the uncertainty associated with the COVID-19 pandemic.
Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to the operating performance of particular companies, such as the uncertainty associated with any future COVID-19 outbreaks.
Because we were a shell company before we conducted a reverse merger, holders of restricted shares will not be able to rely on exemption Rule 144 to resell their shares unless we comply with Rule 144(i).
The failure to receive research coverage or support in the market for our shares will have an adverse effect on our ability to develop a liquid market for our common stock. 24 Because we were a shell company before we conducted a reverse merger, holders of restricted shares will not be able to rely on exemption Rule 144 to resell their shares unless we comply with Rule 144(i).
Inspections of other audit firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality.
Also, such a delisting could significantly affect our ability to raise capital on acceptable terms, or at all, which would have a material adverse effect on our business, financial condition and prospects. 18 Inspections of other audit firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms' audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality.
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. 14 The income statements of our operations are translated into U.S. dollars at the average exchange rates in each applicable period.
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.
If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed.
If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our securities could decline, and investors in our securities may lose all or part of their investment.
We intend to continue funding our operations through equity and debt financing arrangements, which may be insufficient to fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps management is taking will be successful. 10 We may not have the ability to manage our growth.
Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations and obtain financing. We intend to continue funding our operations through equity and debt financing arrangements, which may be insufficient to fund our capital expenditures, working capital and other cash requirements in the long term.
The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above. 17 In May 2021, the PCAOB issued a proposed rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act , for public comment.
In May 2021, the PCAOB issued a proposed rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act , for public comment.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, the repurchase or redemption rights or liquidation preferences we could assign to holders of a specific preferred stock class could affect the residual value of the common stock.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock.
A failure to raise capital when needed would have a material adverse effect on our business, financial condition and results of operations. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders.
In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders.
In their audit report for the fiscal year ended December 31, 2022 included in this report, our auditors have expressed their concern as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations and obtain financing.
As at December 31, 2023, we have working capital of $87,409 and had an accumulated deficit of $16,780,124. In their audit report for the fiscal year ended December 31, 2023 included in this report, our auditors have expressed their concern as to our ability to continue as a going concern.
Relations between the PRC and Taiwan could negatively affect our business and financial status and therefore the market value of your investment. Taiwan has a unique international political status. The PRC does not recognize the sovereignty of Taiwan. Although significant economic and cultural relations have been established in recent years between Taiwan and the PRC, relations have often been strained.
These factors could also make it more difficult for us to attract and retain qualified members of our Board. 16 Relations between the PRC and Taiwan could negatively affect our business and financial status and therefore the market value of your investment. Taiwan has a unique international political status. The PRC does not recognize the sovereignty of Taiwan.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. We would be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
We would be required to comply with these rules if the SEC identifies it as having a "non-inspection" year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above.
Such risks for us include, but are not limited to, dependence on the success and acceptance of our services and the management of growth.
Such risks for us include, but are not limited to, dependence on the success and acceptance of our services and the management of growth. In view of our limited operating history, we believe that period-to-period comparisons of its operating results are not necessarily meaningful and should not be relied upon as an indication of future performance.
Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets. We employ individuals who previously worked with other companies, including our competitors or potential competitors.
We employ individuals who previously worked with other companies, including our competitors or potential competitors.
If we do not have sufficient capital to fund our operations, we may be required to reduce our sales and marketing efforts or forego certain business opportunities. There is substantial doubt of our ability to continue as a going concern. We have incurred net losses since our inception.
If we do not have sufficient capital to fund our operations, we may be required to reduce our sales and marketing efforts or forego certain business opportunities. We may not have the ability to manage our growth. We anticipate that significant expansion will be required to address potential growth in our customer base and market opportunities.
We may not generate the same level of revenues from general construction projects. Our revenues for the year ended December 31, 2022 and for the year ended December 31, 2021 were approximately $16.3 million and $9.9 million, respectively.
Our revenues for the year ended December 31, 2023 and for the year ended December 31, 2022 were approximately $23.9 million and $14.1 million, respectively.
We currently maintain operations in Taiwan, and may in the future expand, or seek to expand, our operations to additional foreign jurisdictions. For example, operating in Europe exposes us to political, legal and economic risks.
We continue to expand our international footprint and operations, and we may expand further in the future, which subjects us to a variety of risks and complexities which, if not effectively managed, could negatively affect our business. We currently maintain operations in Taiwan, and may in the future expand, or seek to expand, our operations to additional foreign jurisdictions.
Our common stock has been listed on Nasdaq under the alternative initial listing standard which could suppress the trading price of our securities and the liquidity of your investment.
Further, any such interruption, security breach, loss or disclosure of confidential information could result in financial, legal, business and reputational harm to us and could have a material adverse effect on our business, financial position, results of operations and/or cash flow. 20 Risks Related to our Securities Our common stock has been listed on Nasdaq under the alternative initial listing standard which could suppress the trading price of our securities and the liquidity of your investment.
The government of the PRC has threatened to use military force to gain control over Taiwan in limited circumstances. Our principal executive offices are located in Taiwan and a substantial majority of our net revenues are derived from our operations in Taiwan.
Our principal executive offices are located in Taiwan and a substantial majority of our net revenues are derived from our operations in Taiwan. Therefore, factors affecting military, political or economic conditions in Taiwan could have a material adverse effect on our results of operations.
There were four customers (The Fifth District Management Office of Taiwan Water Corporation, Farmers Vending Machine Co., Ltd., Ming-Chi Chen, Kai-Ling Chen, and Yu-Zhen Zhang) who represented approximately 50% of our total revenue for the year ended December 31, 2022, and one customer, The Fifth District Management Office of Taiwan Water Corporation, who represented approximately 58% of our total revenue for the prior year period.
There were five customers (Sano Morio, Handou Syuji, Ming-Chi Chen, Kai-Ling Chen and Sano Morimoto) who represented approximately 80.8% of our total revenue for the year ended December 31, 2023 of our total revenue for the prior year period. These customers are not located in mainland China or Hong Kong.
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In that case, the trading price of our securities could decline, and investors in our securities may lose all or part of their investment. 8 Risks Related to Our Business Our business may be materially adversely affected by the coronavirus (COVID-19) outbreak.
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Risks Related to Our Business There is substantial doubt of our ability to continue as a going concern. We have incurred net losses since our inception. In the twelve months ended December 31, 2023 and 2022, we incurred operating losses of $2,030,672 and $5,180,208, respectively.
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The current outbreak of COVID-19 has globally resulted in loss of life, business closures, restrictions on travel, and widespread cancellation of social gatherings.
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There can be no assurance that the steps management is taking will be successful. Our business may be materially adversely affected by any future coronavirus (COVID-19) outbreak or similar global epidemic.
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The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted at this time, including: · new information which may emerge concerning the severity of the disease; · the duration and spread of the outbreak; · the severity of travel restrictions imposed by geographic areas in which we operate, mandatory or voluntary business closures; · regulatory actions taken in response to the pandemic, which may impact merchant operations, consumer and merchant pricing, and our product offerings; · other business disruptions that affect our workforce; · the impact on capital and financial markets; and · actions taken throughout the world, including in markets in which we operate, to contain the COVID-19 outbreak or treat its impact.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our headquarter is located at 3F (Building B), No. 185, Sec. 1, Datong Rd., Xizhi Dist., New Taipei City 221, Taiwan (R.O.C.). The office is rented by Taiwan Grand Smooth Enterprise Co., Ltd., a company 100% controlled by Yin-Chieh Cheng, our President, Chief Executive Officer, and Chairman of the Board. Mr.
Biggest changeITEM 2. PROPERTIES Our headquarter is located at 3F (Building B), No. 185, Sec. 1, Datong Rd., Xizhi Dist., New Taipei City 221, Taiwan (R.O.C.). The office is rented by Taiwan Grand Smooth Enterprise Co., Ltd., a company 100% controlled by Yin-Chieh Cheng, our former President, former Chief Executive Officer, and former Chairman of the Board. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe foregoing securities were issued in reliance on the exclusion from registration provided by either (i) Rule 903 of Regulation S under the Securities Act of the Securities Act because the recipient was a non-U.S.
Biggest changeCheng, our former Chief Executive Officer, former President, former Chairman of the Board, and former director, as a result of the exercise of Series A warrants. 29 The foregoing securities were issued in reliance on the exclusion from registration provided by either (i) Rule 701 of the Securities Act because the issuance was made pursuant to a compensatory benefit plan, (ii) Rule 903 of Regulation S under the Securities Act of the Securities Act because the recipient was a non-U.S.
The decision whether to pay cash dividends on our common stock will be made by our Board, at its discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the Board considers significant. We did not pay cash dividends in the years ended December 31, 2022 or 2021.
The decision whether to pay cash dividends on our common stock will be made by our Board, at its discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the Board considers significant. We did not pay cash dividends in the years ended December 31, 2023 or 2022.
Transfer Agent The transfer agent and registrar for our common stock is Mountain Share Transfer, LLC. Securities Authorized for Issuance under Equity Compensation Plans In 2018, the Board and stockholders adopted Nocera, Inc.’s 2018 Stock Option and Award Incentive Plan, effective December 31, 2018 (the “2018 Plan”).
Transfer Agent The transfer agent and registrar for our common stock is Mountain Share Transfer, LLC. Securities Authorized for Issuance under Equity Compensation Plans In 2018, the Board and stockholders adopted Nocera, Inc.'s 2018 Stock Option and Award Incentive Plan, effective December 31, 2018 (the "2018 Plan").
Person (as defined under Rule 902 Section (k)(2)(i) of Regulation S), or (ii) Section 4(a)(2) of the Securities Act due to the fact the issuance did not involve a public offering of securities to a U.S.
Person (as defined under Rule 902 Section (k)(2)(i) of Regulation S), or (iii) Section 4(a)(2) of the Securities Act due to the fact the issuance did not involve a public offering of securities to a U.S. Person.
ITEM 5. MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock, par value $0.001, is listed on The Nasdaq Capital Market under the symbol “NCRA.” Stockholders As of March 31, 2023, we had approximately 495 stockholders of record of our common stock, not including shares held in street name.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock, par value $0.001, is listed on The Nasdaq Capital Market under the symbol "NCRA." Stockholders As of April 1, 2024, we had approximately 508 stockholders of record of our common stock, not including shares held in street name.
EQUITY PLAN INFORMATION Plan Category: Number of securities to be issued upon exercise of outstanding options, warrants and rights: Weighted average exercise price of outstanding options, warrants and rights: Number of securities remaining available for future issuance: 2018 Equity Incentive Plan: Equity compensation plans approved by security holders – $ – 6,666,667 Equity compensation plans not approved by security holders – – – Total – $ – 6,666,667
EQUITY PLAN INFORMATION Plan Category: Number of securities to be issued upon exercise of outstanding options, warrants and rights: Weighted average exercise price of outstanding options, warrants and rights: Number of securities remaining available for future issuance: 2018 Equity Incentive Plan: Equity compensation plans approved by security holders – $ – 5,956,667 Equity compensation plans not approved by security holders – – – Total – $ – 5,956,667 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
The Board reserved 6,666,667 (post-split) shares of common stock under the 2018 Plan. No awards have been granted to any employees or consultants pursuant to the 2018 Plan.
The Board reserved 6,666,667 (post-split) shares of common stock under the 2018 Plan. No awards have been granted to any employees or consultants pursuant to the 2018 Plan. As of December 31, 2023, a total of 5,956,667 shares of common stock are available for future issuance pursuant to the 2018 Plan.
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Unregistered Sales of Equity Securities Issuance of Common Stock · On February 15, 2022, we issued 50,000 shares of our common stock to a consultant. · On January 28, 2022, we issued 66,667 shares of our common stock to our legal counsel. · On December 22, 2022, we issued 75,000 shares of our common stock to an investor relations company. · On December 22, 2022, we issued 150,000 shares of our common stock to a consultant.
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Unregistered Sales of Equity Securities Issuance of Common Stock · On March 22, 2023, we issued 450,000 shares of our common stock to our investor relation company, Hanover One International, Inc. · On July 31, 2023, we entered into an Employment Agreement with Andy Ching-An Jin, our Chief Executive Officer, in which, among other things, we issued a total of 240,000 shares of restricted stock, of which 60,000 shares vest at the end of every three months for a period of one year starting from July 31, 2023.
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Person. 28 Issuance of Warrants · On January 3, 2022, we agreed to issue 60,000 Class A Warrants, vesting in three equal installments commencing on the first anniversary date of the consulting agreement.
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As of December 31, 2023, a total of 60,000 shares vested. · On October 11, 2023, we issued 20,000 shares of our common stock to our consultant, Yu-Hao Chang. · On December 27, 2023, we issued a total of 1,057,692 shares of common stock to the estate of Mr.
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Each Class A Warrant is exercisable to purchase one share of common stock for $0.50 per share from the date of vesting until April 23, 2026. · On January 3, 2022, we agreed to issue two consultants an aggregate of 90,000 Class C Warrants, vesting in three equal installments commencing on the first anniversary date of the consulting agreements.
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Each Class C Warrant is exercisable to purchase one share of common stock for $2.50 per share from the date of vesting in each installment until the third anniversary date of the date of vesting.
Removed
The foregoing securities were issued in reliance on the exclusion from registration provided by either (i) Rule 903 of Regulation S under the Securities Act of the Securities Act because the recipient was a non-U.S.
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Person (as defined under Rule 902 Section (k)(2)(i) of Regulation S), or (ii) Section 4(a)(2) of the Securities Act due to the fact the issuance did not involve a public offering of securities to a U.S. Person.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table sets forth our consolidated statements of operations for the years ended December 31, 2022 and 2021. 38 Consolidated Statements of Operations For the years ended December 31, 2022 2021 Net Sales $ 16,338,754 $ 9,945,325 Cost of sales (16,071,659 ) (9,000,733 ) Gross profit 267,095 944,592 Operating expenses General and administrative expenses (5,447,303 ) (10,419,684 ) Total operating expenses (5,447,303 ) (10,419,684 ) Loss from operations (5,180,208 ) (9,475,092 ) Other income (expense) 419,811 (4,055 ) Loss before income taxes (4,760,397 ) (9,479,147 ) Income tax (expense) benefit 23,808 (139,932 ) Net loss (4,736,589 ) (9,619,079 ) Less: Net income attributable to non-controlling interests 76,319 – Net loss attributable to the Company $ (4,812,908 ) $ (9,619,079 ) Comprehensive (loss) income Net loss (4,736,589 ) (9,619,079 ) Foreign currency translation income (loss) (89,688 ) (63,676 ) Total comprehensive loss (4,826,277 ) (9,682,755 ) Less: Net income attributable to non-controlling interest 76,319 – Less: Foreign currency translation loss attributable to non-controlling interest – – Comprehensive loss attributable to the Company $ (4,902,596 ) $ (9,682,755 ) Loss per share Basic(1) $ (0.6111 ) $ (1.0757 ) Diluted(1) $ (0.6111 ) $ (1.0757 ) Weighted average number of common shares outstanding Basic(1) 7,876,367 6,107,727 Diluted(1) 7,876,367 6,107,727 (1) On August 11, 2022, the Company effected a 2:3 reverse stock split for each share of common stock issued and outstanding.
Biggest changeConsolidated Statements of Operations For the years ended December 31, 2023 2022 Net Sales $ 23,915,926 $ 14,102,138 Cost of sales (23,720,967 ) (13,846,172 ) Gross profit 194,959 255,966 Operating expenses Impairment of goodwill (2,250,553 ) – General and administrative expenses (2,225,323 ) (2,772,102 ) Total operating expenses (4,475,876 ) (2,772,102 ) Other income (expense) (40,386 ) 417,999 Net loss from continuing operations before income taxes (4,321,303 ) (2,098,137 ) Income tax (expense) benefit (22,703 ) 23,808 Net loss from continuing operations (4,344,006 ) (2,074,329 ) Net loss from discontinued operations Loss on disposal – (2,569,975 ) (Loss) income from discontinued operations – (92,285 ) Net (loss) income from discontinued operations – (2,662,260 ) Net loss (4,344,006 ) (4,736,589 ) Less: Net income attributable to non-controlling interests 54,395 (76,319 ) Net loss attributable to Nocera Shareholders $ (4,289,611 ) $ (4,812,908 ) Other Comprehensive loss Net loss (4,344,006 ) (4,736,589 ) Foreign currency translation income (loss) 4,688 (89,688 ) Total comprehensive loss (4,339,318 ) (4,826,257 ) Less: Net income attributable to non-controlling interest 6,060 (76,319 ) Less: Foreign currency translation loss attributable to non-controlling interest – – Comprehensive loss attributable to Nocera Shareholders $ (4,333,258 ) $ (4,902,596 ) Loss per share - basic and diluted $ (0.4383 ) $ (0.6111 ) Net loss per share from continuing operations – basic and diluted (1) (0.4383 ) (0.2731 ) Net (loss) income per share from discontinued operations – basic and diluted (1) $ – $ (0.3380 ) Weighted Average Shares Outstanding - Basic and Diluted 9,814,000 7,876,367 (1) On August 11, 2022, the Company effected a 2:3 reverse stock split for each share of common stock issued and outstanding.
The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted at this time, including: · new information which may emerge concerning the severity of the disease; · the duration and spread of the outbreak; · the severity of travel restrictions imposed by geographic areas in which we operate, mandatory or voluntary business closures; · regulatory actions taken in response to the pandemic, which may impact merchant operations, consumer and merchant pricing, and our product offerings; · other business disruptions that affect our workforce; · the impact on capital and financial markets; and · actions taken throughout the world, including in markets in which we operate, to contain the COVID-19 outbreak or treat its impact.
The extent to which any future COVID-19 outbreak impacts our business will depend on future developments, which are highly uncertain and cannot be predicted at this time, including: · new information which may emerge concerning the severity of the disease; · the duration and spread of the outbreak; · the severity of travel restrictions imposed by geographic areas in which we operate, mandatory or voluntary business closures; · regulatory actions taken in response to the pandemic, which may impact merchant operations, consumer and merchant pricing and our product offerings; · other business disruptions that affect our workforce; · the impact on capital and financial markets; and · actions taken throughout the world, including in markets in which we operate, to contain any future COVID-19 outbreak or treat its impact.
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.
Set forth below is a brief discussion of the key factors impacting our results of operations. 31 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.
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 36 We considered revenue is recognized when (or as) we satisfy performance obligations by transferring a promised goods and provide maintenance service to a customer.
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 We considered revenue is recognized when (or as) we satisfy performance obligations by transferring a promised goods and provide maintenance service to a customer.
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. 33 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.
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.
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 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. 30 In October 2020, the government of Taiwan began supporting the Green Power and Solar Sharing Fish Farms initiative.
Revenue is measured at the transaction price which is based on the amount of consideration that we expect to receive in exchange for transferring the promised goods and providing maintenance service to the customer. Contracts with customers are comprised of invoices, and written contracts. We do not have arrangements for returns from customers. We have no sales incentive programs.
Revenue is measured at the transaction price which is based on the amount of consideration that we expect to receive in exchange for transferring the promised goods and providing maintenance service to the customer. Contracts with customers are comprised of invoices, and written contracts. 39 We do not have arrangements for returns from customers. We have no sales incentive programs.
Except as may be required by law, we undertake no obligation to update any forward-looking statements to reflect events after the date of this Annual Report on Form 10-K. 29 Operations Overview As of December 31, 2019, we provide land-based recirculation aquaculture systems for fish farming.
Except as may be required by law, we undertake no obligation to update any forward-looking statements to reflect events after the date of this Annual Report on Form 10-K. Operations Overview As of December 31, 2019, we provide land-based recirculation aquaculture systems for fish farming.
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.
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. 36 Prepaid Expenses and Other Assets, Net Prepaid expense and other assets, net consist of receivable from prepaid rent, etc.
For additional information regarding these and other risks and uncertainties, please see the items listed above under the section captioned “ Risk Factors ”, as well as any other cautionary language contained in this Annual Report on Form 10-K.
For additional information regarding these and other risks and uncertainties, please see the items listed above under the section captioned " Risk Factors ", as well as any other cautionary language contained in this Annual Report on Form 10-K.
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. 35 We recognize intangibles assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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 intangibles assets in accordance with ASC 350, Intangibles—Goodwill and Other .
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.
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.
Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 pandemic and the actions taken by government authorities and other entities to contain the COVID-19 pandemic or treat its impact, almost all of which are beyond our control.
Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of any future COVID-19 outbreak and the actions taken by government authorities and other entities to contain any future COVID-19 outbreak or treat its impact, almost all of which are beyond our control.
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. 37 Uncertain Tax Positions We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.
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. 40 Uncertain Tax Positions We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.
There are no uncertain tax positions as of December 31, 2022 and 2021, 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.
There are no uncertain tax positions as of December 31, 2023 and 2022, 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.
Net cash (used in) provided by financing activities Net cash provided by financing activities amounted to $6,288,391 for the year ended December 31, 2022, which were primarily arising from proceeds from issuance of common stock and other borrowings during the year.
Net cash provided by financing activities amounted to $6,288,391 for the year ended December 31, 2022, which were primarily arising from proceeds from issuance of common stock and other borrowings during the year.
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.
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.
Variable Interest Entity A variable interest entity (“VIE”) is an entity (investee) is an entity 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).
Variable Interest Entity A variable interest entity ("VIE") is an entity (investee) is an entity 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).
Recently Issued Accounting Pronouncements Please refer to the Note 3 to the Consolidated Financial Statements included herewith.
Recently Issued Accounting Pronouncements Please refer to the Note 3 to the Consolidated Financial Statements included herewith. 45
On August 11, 2022, the shares of our common stock began trading on The Nasdaq Stock Market LLC under the symbol “NCRA.” The Shares and the Warrants comprising the units were immediately separable and issued separately in the Public Offering, which closed on August 15, 2022.
On August 11, 2022, the shares of our common stock began trading on The Nasdaq Stock Market LLC under the symbol "NCRA." The Shares and the Warrants comprising the units were immediately separable and issued separately in the Public Offering, which closed on August 15, 2022.
Consequently, our results of operations will likely be adversely, and may be materially affected, to the extent that the COVID-19 pandemic or any epidemic harms Taiwan’s economy and society and the global economy in general.
Consequently, our results of operations will likely be adversely, and may be materially affected, to the extent that any future COVID-19 outbreak or any epidemic harms Taiwan's economy and society and the global economy in general.
Comprehensive (Loss) Income Comprehensive income or loss is comprised of 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$”).
Comprehensive (Loss) Income Comprehensive income or loss is comprised of 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$").
Each unit consisted of one share of the Company’s common stock and an “equity kicker” of one share of our common stock, for a total of 557,334 shares of common stock. · On August 10, 2022, our Registration Statement relating to the Public Offering was declared effective by the SEC.
Each unit consisted of one share of the Company's common stock and an "equity kicker" of one share of our common stock, for a total of 557,334 shares of common stock. · On August 10, 2022, our Registration Statement relating to the Public Offering was declared effective by the SEC.
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. 31 Effects of the COVID-19 Pandemic The current outbreak of COVID-19 has globally resulted in the loss of life, business closures, restrictions on travel, and widespread cancellation of social gatherings.
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. 32 Effects of COVID-19 COVID-19 has globally resulted in the loss of life, business closures, restrictions on travel and widespread cancellation of social gatherings.
On September 23, 2022, the underwriters exercised their option to purchase an additional 282,000 warrants from us for gross proceeds of $2,820. The warrants were issued to the underwriters on September 26, 2022.
On September 23, 2022, the underwriters exercised their option to purchase an additional 282,000 warrants from us for gross proceeds of $2,820.
The annual average exchange rates for the year ended December 31, 2022 and 2021 are 6.7208 and 6.3700, 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 common shares outstanding during the year.
The annual average exchange rates for the year ended December 31, 2023 and 2022 are 7.1162 and 6.7208, respectively. (Loss) Earnings per Share Basic (loss) earnings per share is computed by dividing net (loss) income attributable to holders of common stock by the weighted average number of common shares outstanding during the year.
If the disruptions posed by the COVID-19 pandemic or other matters of global concern continue for an extensive period of time, the operations of our business may be materially adversely affected.
If the disruptions posed by any future COVID-19 outbreak or other matters of global concern continue for an extensive period of time, the operations of our business may be materially adversely affected.
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 December 31, 2022 and 2021 are 6.9646 and 6.4854, respectively.
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 December 31, 2023 and 2022 are 7.1258 and 6.9646, respectively.
Net cash (used in) provided by investing activities Net cash used in investing activities was $4,030,834 for the year ended December 31, 2022 which were primarily cash paid for acquisition of a subsidiary. Net cash used in investing activities was $25,067 for the year ended December 31, 2021 which were primarily attributable to the purchase of equipment and intangible asset.
Net cash (used in) provided by investing activities Net cash used in investing activities was $1,057,870 for the year ended December 31, 2023 which were primarily attributable to the purchase of equipment and intangible asset. Net cash used in investing activities was $4,030,834 for the year ended December 31, 2022 which were primarily cash paid for acquisition of a subsidiary.
In addition, the current outbreak of COVID-19 has resulted in a widespread global health crisis and adversely affected global economies and financial markets, and similar public health threats could do so in the future. Substantially all our revenues were concentrated in Taiwan pending expansion into other international markets.
In addition, COVID-19 has adversely affected global economies and financial markets, and similar public health threats could do so in the future. Substantially all our revenues were concentrated in Taiwan pending expansion into other international markets.
Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.
The functional currency of our VIE in Taiwan is Taiwan New Dollar (“TWD”), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars (“HK$”). 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$.
The functional currency of our VIE in Taiwan is Taiwan New Dollar ("TWD"), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars ("HK$"). 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$.
As of December 31, 2022, we had an accumulated deficit of $14,747,461. In their audit report for the fiscal year ended December 31, 2022 included in this report, our auditors have expressed their concern as to our ability to continue as a going concern.
As of December 31, 2023, we had an accumulated deficit of $16,780,128. In their audit report for the fiscal year ended December 31, 2023 included in this report, our auditors have expressed their concern as to our ability to continue as a going concern.
Net loss attributable Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the year ended December 31, 2022 was approximately $4.7 million compared to net loss attributable to us (excluding net income attributable to non-controlling interest) approximately of $9.6 million for the comparable period in 2021.
Net loss attributable Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the year ended December 31, 2023 was approximately $2 million compared to net loss attributable to us (excluding net income attributable to non-controlling interest) approximately of $4.8 million for the comparable period in 2022.
All shares and associated amounts have been retroactively restated to reflect the stock split. 39 Comparison of Results of Operations for the years ended December 31, 2022 and December 31, 2021 Revenue Revenue for the year ended December 31, 2022 was approximately $16.3 million compared to approximately $9.9 million for the comparable period in 2021.
All shares and associated amounts have been retroactively restated to reflect the stock split. 42 Comparison of Results of Operations for the years ended December 31, 2023 and December 31, 2022 Revenue Revenue of the Company for the year ended December 31, 2023 was approximately $23.9 million compared to approximately $14.1 million for the comparable period in 2022.
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. 40 To date, we have funded our operations through revenues, loans from our officers, and the issuance of equity securities.
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.
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.
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.
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.
Critical Accounting Policies, Estimates and Assumptions We prepare our financial statements in conformity with U.S. 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.
During the year ended December 31, 2022, we recorded an income tax benefit of $23,808 as compared to income tax expense of $139,932 for the comparable period in 2021.
The income for the year ended December 31, 2022 was mainly due to the waiver of payables. During the year ended December 31, 2022, we recorded an income tax benefit of $23,808 as compared to income tax expense of $0 for the comparable period in 2023.
Nocera’s cost base also reflects significant elements for freight, including fuel, which has significantly increased due to the effects of the coronavirus (COVID-19) pandemic and Russia’s initiation of military action against Ukraine.
Nocera's cost base also reflects significant elements for freight, including fuel, which has significantly increased due to the effects of the coronavirus (COVID-19) pandemic, the Russia-Ukraine war and the conflicts in the Middle East.
Net cash provided by financing activities amounted to $1,203,833 for the year ended December 31, 2021, which were primarily arising from proceeds from issuance of common stock and preferred stock during the year.
Net cash (used in) provided by financing activities Net cash provided by financing activities amounted to $449,898 for the year ended December 31, 2023, which were primarily arising from proceeds from issuance of common stock during the year.
To the extent the COVID-19 pandemic or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in the “ Risk Factors ” section of Part I Item 1A. 32 Critical Accounting Policies, Estimates and Assumptions We prepare our financial statements in conformity with U.S.
To the extent any future COVID-19 outbreak or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in the “ Risk Factors ” section of Part I Item 1A.
Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Recently Issued Accounting Standards See Note 3 to the Consolidated Financial Statements included herewith.
Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares.
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.
Although these assets are not currently impaired, there can be no assurance that future impairments will not occur. 38 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.
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.
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. 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.
The initial spread of COVID-19 in Asia caused some business disruption resulting in reduced net revenue in December 2019. There continues to be considerable uncertainty around the duration of the pandemic and its resultant economic effects. Therefore, we expect this matter to negatively impact our operating results for the foreseeable future.
The initial spread of COVID-19 in Asia caused some business disruption resulting in reduced net revenue in December 2019. Even though the COVID-19 pandemic has ended, there continues to be considerable uncertainty around any future COVID-19 outbreak and its resultant economic effects.
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 U.S. GAAP.
We consider the policies discussed below to be critical to an understanding of our financial statements. 33 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.
We obtained a financial support letter from Mr. Yin-Chieh Cheng, the Chief Executive Officer, also the Chairman of the Board and our principal stockholder. · On April 1, 2021, we entered in 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.
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 shareholders. · On April 1, 2021, we entered in 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.
Useful life Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Furniture and fixture 5 years Equipment 3 years Machinery 5 years Vehicle 5 years Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.
Useful life Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Land Indefinite, as per land titles Furniture and fixture 5 years Equipment 3 years Machinery 5 years Vehicle 5 years Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income. 37 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.
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. We employ a sales and marketing strategy targeting Taiwan government-supported solar fish farms.
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. On June 1, 2023, Gui Zhou Grand Smooth Technology Ltd.
Maintenance, repairs, and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. 34 Depreciation of property and equipment is provided using the straight-line method over their estimated useful lives, which are shown as follows.
Depreciation of property and equipment is provided using the straight-line method over their estimated useful lives, which are shown as follows.
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.
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.
The significant decrease was mainly because in 2021 we recognized significant share based compensation expenses to employees and consultants for professional services. Liquidity and Capital Resources; Going Concern We had net cash provided by operating activities for the year ended December 31, 2022 and the cash balance was $2.9 million as of December 31, 2022.
The decrease was primarily due to the decrease of General and administrative expenses for the year ended December 31, 2023. 43 Liquidity and Capital Resources; Going Concern We had net cash provided by operating activities for the year ended December 31, 2023 and the cash balance was approximately $1.2 million as of December 31, 2023.
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.
Some of our accounting policies require higher degrees of judgment than others in their application.
Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.
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.
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. 30 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.
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.
Other income (expense ) Other income of $419,811 for the year ended December 31, 2022, compared to other expense were $(4,055) for the comparable period in 2021. The income for the year ended December 31, 2022 was mainly due to the waiver of payables.
The decrease in general and administrative expenses was mainly due to the decrease expenses of XFC in 2023. Other income (expense ) Other expense was $40,386 for the year ended December 31, 2023, compared to other income of $417,999 for the comparable period in 2022.
The revenue for the year ended December 31, 2022 was mostly made from the construction services of XFC and the fish trading business from NTB. The revenue for the year ended December 31, 2021 was generated from XFC delivery of construction services to its customers. As of December 31, 2021, JC Development Co., Ltd.
The revenue for the year ended December 31, 2023 was mostly generated from Meixin catering business and the fish trading business from NTB with the revenue of $8.9 million and $14.9 million, respectively. The revenue for the year ended December 31, 2022 was mostly made from the catering business from Meixin and the fish trading business from NTB.
The following table provides detailed information about our net cash flows for the periods indicated: For the years ended December 31, 2022 2021 Net cash provided by (used in) provided by operating activities $ (1,910,977 ) $ 251,729 Net cash (used in) provided by investing activities (4,030,834 ) (25,067 ) Net cash (used in) provided by financing activities 6,288,391 1,203,833 Effect of the exchange rate change on cash and cash equivalents 115,485 (10,017 ) Increase in cash and cash equivalents $ 462,065 $ 1,420,478 41 Net cash provided by (used in) operating activities Net cash used in operating activities amounted to $1,910,977 for the year ended December 31, 2022.
The warrants were issued to the underwriters on September 26, 2022. 44 The following table provides detailed information about our net cash flows for the periods indicated: For the years ended December 31, 2023 2022 Net cash provided by (used in) provided by operating activities $ (1,061,851 ) $ (1,771,551 ) Net cash (used in) provided by investing activities (1,057,870 ) (4,030,834 ) Net cash (used in) provided by financing activities 463,533 6,288,391 Effect of the exchange rate change on cash and cash equivalents (20,306 ) (23,941 ) (Decrease) Increase in cash and cash equivalents $ (1,676,494 ) $ 462,065 Net cash provided by (used in) operating activities Net cash used in operating activities amounted to $1,061,851 for the year ended December 31, 2023 This reflected a net loss of $4,321,303, as adjusted for non-cash items primarily including depreciation of $171,312, share-based compensation of $163,621, consultancy services settled by equities of $657,900.
We also intend to build fish farming demo sites in the United States and Brazil in 2023 to promote our fish farming systems to the global market.
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.
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.
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. 35 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.
As of December 31, 2022 and 2021, there are no assets or liabilities that are measured and reported at fair value on a recurring basis. Cash and Cash Equivalents Cash and cash equivalents include all cash on hand and cash in bank with no restrictions.
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 December 31, 2023 and 2022 were $1,229,580 and $2,906,074, respectively.
Reclassification Certain prior period amounts have been reclassified to conform with current year presentation.
The accounting principles we utilized in preparing our consolidated financial statements conform in all material respects to U.S. 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 U.S.
General and administrative expenses General and administrative expenses were $5.4 million, for the year ended December 31, 2022, compared to $10.4 million for the comparable period in 2021. The significant decrease was mainly because in 2021 we recognized significant share based compensation expenses to employees and consultants for professional services.
We are confident that profitability can be achieved by optimizing management expenses and enhancing profit margins. General and administrative expenses General and administrative expenses were $2.2 million, for the year ended December 31, 2023, compared to $2.7 million for the comparable period in 2022.
Removed
The balance of cash as of December 31, 2022 and 2021 were $2,906,074 and $2,444,009, 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.
Added
(“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.
Removed
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.
Added
(“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.
Removed
(“JCD”) and us mutually agreed to termination of the Regional Agency Cooperation Agreement dated as of September 2019, as amended by the Regional Agency Cooperation Supplementary Agreement dated as of May 31, 2020, by and between Grand Smooth Inc Ltd and JCD.
Added
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.
Removed
Gross profit Gross profit for the year ended December 31, 2022 was approximately $0.3 million, compared to approximately $0.9 million for the comparable period in 2021. The decrease of gross profit margin was mainly because in 2022 we sold XFC and the revenue recognition decreased in November 2022.
Added
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. We employ a sales and marketing strategy targeting Taiwan government-supported solar fish farms.
Removed
Net cash provided by operating activities amounted to $251,729 for the year ended December 31, 2021. This reflected a net loss of $9,619,079, as adjusted for non-cash items primarily including share-based compensation of $6,638,371, consultancy services settled by equities of $3,045,150 and offset by effect of changes in working capital including increase of accounts receivable in the amount of $252,338.
Added
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.
Added
We plan to enhance market penetration through the establishment of our own fish farms and diversify revenue streams through various sales channels.
Added
Therefore, we expect this matter to negatively impact our operating results for the foreseeable future if there is any future COVID-19 outbreak.
Added
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.
Added
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 fair value through profit or loss (“FVTPL”), investments in debt instruments and equity instruments at fair value through other comprehensive income (“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.
Added
Any gain or loss arising from remeasurement is recognized in profit or loss.
Added
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.

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