NOCERA INC
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
NCRA$1.43+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001683168-24-003458
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001683168-24-005657
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 150 previous paragraphs and 155 current paragraphs.
123 unchanged; 23 reworded; 6 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Revenue for the six months ended June 30, 2024 was $11,523,244, compared to $9,165,044 for the comparable period in 2023. The revenue for the six months ended June 30, 2024 was mostly generated from the Meixin catering business, the fish trading business from NTB with revenues of $6.3 million and $10 million, respectively.
Current report
General and administrative expenses were $308,795, for the three months ended June 30, 2024, compared to approximately $368,667 for the comparable period in 2023. This increase was primarily due to the increase of audit fees, consulting fees, and salary expenses for the three months ended June 30, 2024.
Current report
Other income was $13,866, for the six months ended June 30, 2024, compared to other expense of $12,388 for the comparable period in 2023. The other income was interest revenue of bank deposits and gains from foreign currency translation. The other expense was interest expense for a bank loan.
Current report
Income tax expense
Current report
During the six months ended June 30, 2024, we recorded an income tax expense of $122,380 compared to income tax expense of $ nil for the comparable period in 2023. The increase of income tax expense is because we evaluated the income tax impact for the period ended June 30, 2024.
Current report
Net income attributable to the Company
Removed paragraphs (4)
Previous report
Net income attributable
Previous report
Financings
Previous report
On August 15, 2022, we consummated a public offering of 1,880,000 units (the “Units”) for $3.50 per Unit pursuant to an effective registration statement on Form S-1, as amended (File No. 333-264059). Each Unit consisted of one share of common stock, par value $0.001 per share, and one warrant to purchase two shares of common stock (the “Warrants”) from the date of issuance until the fifth anniversary of the issuance date for $3.85 per share of common stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the common stock. The shares of common stock and the Warrants comprising the Units were immediately separable and issued separately in the Public Offering. The exercise price of the Warrants will be decreased to the reset price, which means the greater of (i) 50% of the exercise price and (ii) 100% of the last volume weighted average price immediately preceding the 90 th calendar day following the initial exercise date if, on the date that is 90 calendar days immediately following the initial exercise date, the exercise price is less than the reset price. We have not applied nor intend to apply to have the warrants listed on any exchange. The Public Offering closed on August 15, 2022, and we received total gross proceeds of $6.58 million. After deducting the underwriting commissions, discounts, and offering expenses, we received net proceeds of approximately $5.3 million.
Previous report
In connection with the Public Offering and pursuant to the underwriting agreement between us and the underwriters named therein, we granted the underwriters a 45-day option to purchase up to 282,000 additional shares of common stock and warrants, equivalent to 15% of the Units sold in the Public Offering, at the public offering price per Unit, less underwriting discounts and commissions, to cover over-allotments, if any. On September 23, 2022, the underwriters exercised their option to purchase an additional 282,000 warrants from us for gross proceeds of $2,820. The warrants were issued to the underwriters on September 26, 2022.
Reworded paragraphs (23)
Previous wording
We also intend to expend the fish farming demo sites in Taiwan by adding 20 units of RAS eel farming equipment with outsourcing construction services and build the catfish farm in the U.S. by the end of 2024 to promote our fish farming systems to the global market. We are expecting more customers from various countries actively inquiring about our equipment. As of February 16, 2023, we completed the acquisition of 229 acres of land in Montgomery County, Alabama, of which we intend to build RASs on that land for fish farming. We plan to enhance market penetration through the establishment of our own fish farms and diversify revenue streams through various sales channels.
Current wording
We also intend to expend the fish farming demo sites in Taiwan by adding 20 units of RAS eel farming equipment with outsourcing construction services and build the catfish farm in the U.S. by the end of 2024 to promote our fish farming systems to the global market. We are expecting more customers from various countries actively inquiring about our equipment. As of February 16, 2023, we completed the acquisition of 229 acres of land in Montgomery County, Alabama, of which we intend to build RASs on that land for fish farming. As of June 30, 2024, we are still ensuring all requirements and evaluations are being thoroughly addressed prior to constructing any RASs on the Alabama land. Simultaneously, the design of the RAS equipment is underway, progressing in alignment with the project’s timeline. Both aspects are being managed concurrently to maintain project efficiency and coherence. We plan to enhance market penetration through the establishment of our own fish farms and diversify revenue streams through various sales channels.
Previous wording
Prices of certain commodity products, including raw materials, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs. Increasing prices in the component materials for our goods may impact the availability, the quality and the price of our products, as suppliers search for alternatives to existing materials and increase the prices they charge. Our suppliers may also fail to provide consistent quality of product as they may substitute lower cost materials to maintain pricing levels. Nocera’s cost base also reflects significant elements for freight, including fuel, which has significantly increased due to the effects of the coronavirus (COVID-19) pandemic and Russia’s illegal military invasion of Ukraine. Rapid and significant changes in commodity prices such as fuel and plastic may negatively affect our profit margins if Nocera is unable to mitigate any inflationary increases through various customer pricing actions and cost reduction initiatives.
Current wording
Prices of certain commodity products, including raw materials, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs. Increasing prices in the component materials for our goods may impact the availability, the quality and the price of our products, as suppliers search for alternatives to existing materials and increase the prices they charge. Our suppliers may also fail to provide consistent quality of product as they may substitute lower cost materials to maintain pricing levels. Nocera’s cost base also reflects significant elements for freight, including fuel, which significantly increased due to the effects of coronavirus (COVID-19), Russia’s illegal military invasion of Ukraine and the conflicts in the Middle East. Rapid and significant changes in commodity prices such as fuel and plastic may negatively affect our profit margins if Nocera is unable to mitigate any inflationary increases through various customer pricing actions and cost reduction initiatives.
Previous wording
In addition, the any outbreak of COVID-19 may result in a widespread global health crisis and adversely affected global economies and financial markets, and similar public health threats could do so in the future.
Current wording
In addition, any future outbreak of COVID-19 may result in a widespread global health crisis and adversely affected global economies and financial markets, and similar public health threats could do so in the future.
Previous wording
Since 2021, substantially all our revenues are concentrated in Taiwan pending expansion into other international markets. Consequently, our results of operations will likely be adversely materially affected to the extent that any COVID-19 outbreak or any epidemic harms Taiwan’s economy and society and the global economy in general. Any potential impact to our results will depend on to a large extent, future developments and new information that may emerge regarding the duration and severity of any COVID-19 outbreak and the actions taken by government authorities and other entities to contain any COVID-19 outbreak or treat its impact, almost all of which are beyond our control. If the disruptions posed by any 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.
Current wording
Since 2021, substantially all our revenues are concentrated in Taiwan pending expansion into other international markets. Consequently, our results of operations will likely be adversely materially affected to the extent that any COVID-19 outbreak or any epidemic harms Taiwan’s economy and society and the global economy in general. Any potential impact to our results will depend on to a large extent, future developments and new information that may emerge regarding the duration and severity of any future COVID-19 outbreak and the actions taken by government authorities and other entities to contain any future COVID-19 outbreak or treat its impact, almost all of which are beyond our control. If the disruptions posed by any future COVID-19 outbreak or other matters of global concern continue for an extensive period of time, the operations of our business may be materially adversely affected.
Previous wording
To the extent any COVID-19 outbreak or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 initially filed with the SEC on April 1, 2024.
Current wording
To the extent any future COVID-19 outbreak or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 initially filed with the SEC on April 1, 2024.
Previous wording
Cash and cash equivalents include all cash on hand and cash in bank with no restrictions. The balance of cash as of March 31, 2024 and 2023 were $961,777 and $1,460,504, respectively.
Current wording
Cash and cash equivalents include all cash on hand and cash in bank with no restrictions. The balance of cash as of June 30, 2024 and 2023 were $586,424 and $1,116,183, respectively.
Previous wording
Our reporting currency is the United States dollar (“US$”). The functional currency of our VIE in Taiwan is the New Taiwan dollar (“NT”), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars (“HK$”). The functional currency of PRC companies is the Renminbi (“RMB”). In the consolidated financial statements, the financial information of our subsidiary and the consolidated VIE has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, except for changes in accumulated deficit during the year which is the result of income statement translation process, and revenue, expense, gains or losses are translated using the average exchange rate during the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a separate component of other comprehensive income or loss in the consolidated statements of changes in equity and comprehensive (loss) income. The exchange rates for US$ to RMB as of March 31, 2024 and 2023 are 6.89259 and 6.8737, respectively. The annual average exchange rates for the year ended March 31, 2024 and 2023 are 7.2329 and 6.8716, respectively.
Current wording
Our reporting currency is the United States dollar (“US$”). The functional currency of our VIE in Taiwan is the New Taiwan dollar (“NT”), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars (“HK$”). The functional currency of PRC companies is the Renminbi (“RMB”). In the consolidated financial statements, the financial information of our subsidiary and the consolidated VIE has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, except for changes in accumulated deficit during the year which is the result of income statement translation process, and revenue, expense, gains or losses are translated using the average exchange rate during the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a separate component of other comprehensive income or loss in the consolidated statements of changes in equity and comprehensive (loss) income. The exchange rates as of June 30, 2024 and 2023 are 7.1268 and 7.2258, respectively. The annual average exchange rates for the year ended December 31, 2023 and 2022 are 7.0423 and 6.7208, respectively.
Previous wording
The following table sets forth our unaudited consolidated statements of operations for the three months ended March 31, 2024 and 2022.
Current wording
The following table sets forth the consolidated statements of operations of the Company for the three and six months ended June 30, 2024 and 2023.
Previous wording
Revenue for the three months ended March 31, 2024 was $4,899,880 compared to $3,837,863 for the comparable period in 2023. The revenue for the three months ended March 31, 2024 was mostly generated from the Meixin catering business and the fish trading business from NTB with revenues of $1.6 million and $3.2 million, respectively. The revenue for the three months ended March 31, 2024 was mostly from the Meixin catering business and the fish trading business from NTB.
Current wording
Revenue for the three months ended June 30, 2024 was $6,753,112, compared to $5,327,181 for the comparable period in 2023. The revenue for the three months ended June 30, 2024 was mostly generated from the Meixin catering business, the fish trading business from NTB with revenues of $4.7 million and $6.8 million, respectively.
Previous wording
For the three months ended March 31, 2024, our foreign currency translation gain was $57,307.
Current wording
For the six months ended June 30, 2024, our foreign currency translation gain was $187,634.
Previous wording
Gross profit for the three months ended March 31, 2024 was $83,961, compared to $68,656 for the comparable period in 2023. The gross profitfor the three months ended March 31, 2024 was mostly generated from the Meixin catering business and the e-commerce live-stream sales from Xinca with revenues of approximately $45,491 and $76,607, respectively. The increase of gross profit margin was mainly because in 2024, we had increased the fish trading business and acquired Xinca that has strong potential to develop livestream sales on TikTok/Douyin which increase the gross profit.
Current wording
Gross profit for the three months ended June 30, 2024 was $ 45,787, compared to $37,235 for the comparable period in 2023. The gross profitfor the three months ended June 30, 2024 was mostly generated from the Meixin catering business and the e-commerce live-stream sales from Xinca with revenues of approximately $31,638 and $103,729, respectively.
Previous wording
General and administrative expenses were $451,465, for the three months ended March 31, 2024, compared to approximately $1,059,337 for the comparable period in 2023. This decrease was primarily due to the decrease of legal, accounting, and consulting fees for the three months ended March 31, 2023 in connection with securities filings and other related matters.
Current wording
General and administrative expenses were $884,406, for the six months ended June 30, 2024, compared to approximately $1,428,004 for the comparable period in 2023. This decrease was primarily due to the decrease of consulting fees for the six months ended June 30, 2024.
Previous wording
Other expenses were $2,270, for the three months ended March 31, 2024, compared to $11,508 for the comparable period in 2023. The decrease was mainly the effect of interest expense recognized for the three months ended March 31, 2024.
Current wording
Other income was $16,136, for the three months ended June 30, 2024, compared to other expense of $880 for the comparable period in 2023. The other income was interest revenue of bank deposits. The other expense was interest expense for a bank loan. The increase was mainly the effect of interest expense recognized for the three months ended June 30, 2023.
Previous wording
Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the three months ended March 31, 2024 was $486,420 compared to net loss attributable to us (excluding net loss attributable to non-controlling interest) of $987,648 for the comparable period in 2023 The decrease of loss was because we recognized the foreign currency translation loss and the fish trading business has yielded a low margin, while expenses in other operational areas have increased significantly for the period ended March 31, 2023.
Current wording
Net loss attributable to the Company (excluding net loss attributable to non-controlling interest) for the six months ended June 30, 2024 was $840,698, compared to a net loss attributable to the Company (excluding net loss attributable to non-controlling interest) of $1,299,022 for the comparable period in 2023. The decrease was primarily due to the decrease of General and administrative expenses for the six months ended June 30, 2024.
Previous wording
We had net cash provided by operating activities for the period ended March 31, 2024 and the cash balance was $461,515 as of March 31, 2024. We believe 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. We continue to control our cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Management is focused on growing our existing product offering, as well as our customer base, to increase our revenues. Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations and obtain financing. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, however, management believes that our current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements.
Current wording
The Company had net cash used by operating activities for the period ended June 30, 2023 and the cash balance was $586,424 as of June 30, 2024 and stockholders’ equity of $803,618. The Company believes its current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet its working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements. The Company continues to control its cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date of issuance of the accompanying consolidated financial statements. Management is also focused on growing the Company’s existing product offering, as well as its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot assure that it will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that the Company has sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying consolidated financial statements.
Previous wording
Since the net asset balance as of March 31, 2024 was $7,283,344, there is no substantial doubt as to our ability to continue as a going concern.
Current wording
Since the net asset balance as of June 30, 2024 was $803,618, there is no substantial doubt as to our ability to continue as a going concern.
Previous wording
Net cash used in operating activities amounted to $460,993 for the three months ended March 31, 2024. This reflected a net loss of $493,920, depreciation of $22,559 and share-based compensation of $14,999.
Current wording
Net cash used in operating activities amounted to $658,042 for the six months ended June 30, 2024. This reflected a net loss of $863,172, depreciation of $54,529 and share-based compensation of $30,165.
Previous wording
Net cash used in operating activities amounted to $364,370 for the three months ended March 31, 2023. This reflected a net loss of $ 1,002,189, depreciation of $44,728 and share-based compensation of $103,155.
Current wording
Net cash used in operating activities amounted to $649,888 for the six months ended June 30, 2023. This reflected a net loss of $1,334,501, consultancy services settled by equities of $521,100, depreciation of $ 81,608 and share-based compensation of $132,955.
Previous wording
Net cash generated from investing activities was $201,863 for the year ended March 31, 2024, which were primarily attributable to the net cash inflow from acquisition of a subsidiary.
Current wording
Net cash provided by investing activities was $212,007 for the year ended June 30, 2024, which were primarily attributable to the proceeds from disposal of financial assets at fair value through profit and loss.
Previous wording
Net cash used in investing activities was $1,058,821 for the year ended March 31, 2023, which were primarily attributable to the purchase of land and investment funds.
Current wording
Net cash used in investing activities was $1,057,870 for the year ended June 30, 2023, which were primarily attributable to the purchase of land and investment funds.
Previous wording
Net cash used in financing activities amounted to $60,678 for the three months ended March 31, 2024, which was repayment of bank loans.
Current wording
Net cash used by financing activities amounted to $44,683 for the six months ended June 30, 2024, which was repayment of bank loans and acquisition of subsidiaries.
Previous wording
Net cash used by financing activities amounted to $41,137 for the three months ended March 31, 2023, which was repayment of bank loans.
Current wording
Net cash used by financing activities amounted to $81,034 for the six months ended June 30, 2023, which was repayment of bank loans.
Previous wording
Since we plan to build our land-based fish farming demo sites in the U.S., Taiwan, Brazil, Japan and Thailand to promote our fish farming systems to the global market, we expect that we will require additional capital, which includes construction costs, marketing costs, operation costs, etc., to meet our long-term operating requirements. We expect to obtain financing from shareholders or raise additional capital through, among other things, the sale of equity or debt securities. The shareholders are committed to provide additional financing required when we try to raise additional capital from third party investors or banks. However, there can be no assurance that we will be successful in raising this additional capital.
Current wording
Since we plan to build our land-based fish farming demo sites in Taiwan, the U.S. and Brazil to promote our fish farming systems to the global market, we expect that we will require additional capital, which includes construction costs, marketing costs, operation costs, etc., to meet our long-term operating requirements. We expect to obtain financing from shareholders or raise additional capital through, among other things, the sale of equity or debt securities. The shareholders are committed to provide additional financing required when we try to raise additional capital from third party investors or banks. However, there can be no assurance that we will be successful in raising this additional capital.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
On April 14, 2024, we entered into a Variable Interest Entity Purchase Agreement (“SY Media Purchase Agreement”) with Hangzhou SY Culture Media Co. Ltd. (“SY Culture”), a domestic funded limited liability company registered in China (P.R.C). The SY Culture Purchase Agreement was entered into by our wholly-owned subsidiary and foreign enterprise, Gui Zhou Grand Smooth Technology Ltd. (“WFOE”), through a series of contractual agreements (“VIE Agreements”), in which we exchanged 600,000 shares of our restricted common stock for a 100% controlling interest in SY Culture. As a result, the Company has been determined to be the primary beneficiary of SY Culture and SY Culture became a variable interest entity (“VIE”) of the Company.
Current report — wording carried from elsewhere
Gross profit for the six months ended June 30, 2024 was $129,748, compared to $105,891 for the comparable period in 2023. The gross profitfor the six months ended June 30, 2024 was mostly generated from the Meixin catering business and the e-commerce live-stream sales from Xinca with revenues of approximately $77,129 and $180,336, respectively.
Current report — wording carried from elsewhere
Net loss attributable to us (excluding net loss attributable to non-controlling interest) for the three months ended June 30, 2024 was $354,278 compared to net loss attributable to us (excluding net loss attributable to non-controlling interest) of $311,374 for the comparable period in 2023. Margins remained similar profit margin for three months ended June 30, 2024.