NOCERA, INC. 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______ TO ___________

COMMISSION FILE NO.: 001-41434

NOCERA, INC.

(Exact name of registrant as specified in charter)

Nevada		16-1626611
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

3F (Building B), No. 185, Sec. 1, Datong Rd., Xizhi Dist., New Taipei City 221, Taiwan (R.O.C.)

(Address of principal executive offices and zip code)

(886)-910-163-358

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	NCRA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer x		Smaller reporting company x
		Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨ No x

There were 13,636,987 shares outstanding of the registrant’s common stock, par value $0.001 per share, as of October 8, 2024.

Explanatory Note

This Amendment No. 1 on Form 10-Q/A (this “Amendment No. 1”) to the Quarterly Report on Form 10-Q of Nocera, Inc. (the “Company”) for the quarter ended June 30, 2024, originally filed with the U.S. Securities and Exchange Commission on August 14, 2024 (the “Original Filing”), is being filed solely to update the number of certain warrants in Note 10 under Item 1.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment No. 1 also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached hereto.

Except as described above, no other changes have been made to the Original Filing, and this Amendment No. 1 does not modify, amend or update in any way any of the financial or other information contained in the Original Filing. This Amendment No. 1 does not reflect events that may have occurred subsequent to the filing date of the Original Filing.

TABLE OF CONTENTS

Cautionary Statement Regarding Forward-Looking Statements

PART I	FINANCIAL INFORMATION	4

ITEM 1.	INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
ITEM 4.	CONTROLS AND PROCEDURES	42

PART II	OTHER INFORMATION	44

ITEM 1.	LEGAL PROCEEDINGS	44
ITEM 1A.	RISK FACTORS	44
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	44
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	44
ITEM 4	MINE SAFETY DISCLOSURES	44
ITEM 5	OTHER INFORMATION	44
ITEM 6	EXHIBITS	45

SIGNATURES		46

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” and “continue” or the negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of their dates.

We cannot predict all the risks and uncertainties that may impact our business, financial condition or results of operations. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on April 1, 2024.

Many of those risks and factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NOCERA, INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars except for Number of Shares)


	June 30, 2024			December 31, 2023
	(Unaudited)			(Audited)

ASSETS
Current assets
Cash and cash equivalents	$	586,424		$	1,229,580
Accounts receivable, net		156,517			173,395
Inventories, net		85,964			88,432
Advance to suppliers		8,423			1,732
Prepaid expenses and other assets, net		536,887			10,365
Financial assets at fair value through profit or loss		–			208,697
Total current assets		1,374,215			1,712,201
Investment		27,284			–
Property and equipment, net		1,486,270			1,547,801
Intangible assets - customer relations		105,977			114,129
Goodwill		3,236,900			1,655,182
Other non-current asset		723,214			4,730
Total assets	$	6,953,860		$	5,034,043
LIABILITIES AND EQUITY
Liabilities
Current liabilities
Accounts payable	$	696,649		$	–
Other payables and accrued liabilities		71,052			34,093
Advance receipts		49,480			–
Due to related parties		27,239			28,484
Warrant liability		1,179,768			1,179,768
Long-term secured other borrowing – current portion		–			487,800
Dividend payable		38,312			38,312
Income tax payable		53,650			1,859
Total current liabilities		2,116,150			1,770,316
Deferred tax liabilities, net		–			–
Long-term secured other borrowing		34,092			–
Total liabilities		2,150,242			1,770,316
Commitments and contingencies		–			–
Equity
Common stock ($0.001 par value; authorized 200,000,000 shares; 13,556,987 shares and 11,156,987 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)		13,557			11,157
Preferred stock ($0.001 par value; authorized 10,000,000 shares; Series A Preferred Stock, 2,000,000 authorized, 80,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)		80			80
Additional paid-in capital ⁽¹⁾		24,580,877			21,931,112
Statutory and other reserves		191,219			191,219
(Accumulated losses) retained earnings		(19,893,770	)		(19,053,072	)
Accumulated other comprehensive loss		(146,035	)		98,906
Total Nocera, Inc.’s stockholders’ equity		4,745,928			3,179,402
Non-controlling interests		57,690			84,325
Total equity		4,803,618			3,263,727
Total liabilities and equity	$	6,953,860		$	5,034,043

See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.

NOCERA, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Stated in US Dollars except for Number of Shares)

(UNAUDITED)


	Three months ended June 30 ,						Six months ended June 30 ,
	2024			2023			2024			2023
	(Unaudited)			(Audited)			(Unaudited)			(Audited)
	$			$			$			$
Net sales		6,753,112			5,327,181			11,652,992			9,165,044
Cost of sales		(6,707,325	)		(5,289,946	)		(11,523,244	)		(9,059,153	)
Gross profit		45,787			37,235			129,748			105,891

Operating expenses
General and administrative expenses		(308,795	)		(368,667	)		(884,406	)		(1,428,004	)
Total operating expenses		(308,795	)		(368,667	)		(884,406	)		(1,428,004	)

Loss from operations		(263,008	)		(331,432	)		(754,658	)		(1,322,113	)

Other income (expense)		16,136			(880			13,866			(12,388	)
Loss before income taxes		(246,872	)		(332,312	)		(740,792	)		(1,334,501	)

Income tax expense		(122,380	)		–			(122,380	)		–
Net loss		(369,252	)		(332,312	)		(863,172	)		(1,334,501	)

Less: Net loss attributable to non-controlling interests		(14,974	)		(20,938			(22,474	)		(35,479	)
Net loss attributable to the company		(354,278	)		(311,374	)		(840,698	)		(1,299,022	)

Comprehensive (loss) income
Net loss		(369,252	)		(332,312	)		(863,172	)		(1,334,501	)
Foreign currency translation gain (loss)		187,634			42,882			244,941			19,594
Total comprehensive loss		(181,618	)		(289,430	)		(618,231	)		(1,314,907	)

Less: comprehensive loss attributable to non-controlling interest		(15,847	)		(8,533	)		(21,469	)		(23,413	)
Comprehensive loss attributable to the Company		(165,771	)		(280,897	)		(596,762	)		(1,291,494	)

Loss per share
Basic		(0.0263	)		(0.0344	)		(0.0661	)		(0.1368	)
Diluted		(0.0263	)		(0.0344	)		(0.0661	)		(0.1368	)

Weighted average number of common shares outstanding
Basic		13,471,273			9,494,692			12,719,624			9,494,692
Diluted		13,471,273			9,494,692			12,719,624			9,494,692

See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.

NOCERA, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US Dollars except for Number of Shares)

(UNAUDITED)


	Six months ended June 30,
	2024			2023
	(Unaudited)			(Audited)
	$			$
Cash flows from operating activities:
Net loss		(863,172	)		(1,334,501	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation expenses		54,529			81,608
Amortization of intangible assets		8,152			8,152
Gain on fair value change of financial assets held for trading		(4,266	)		(3,199	)
Consultancy services settled by equities		–			521,100
Share-based compensation		30,165			132,955
Changes in operating assets and liabilities:
Accounts receivable, net		31,923			4,273
Inventories		–			1,343
Advance to suppliers		–			–
Prepaid expenses and other assets, net		(399	)		(2,054	)
Other non-current assets		69			(4,865	)
Notes payable		–			–
Accounts payable		–			(2,631	)
Advance receipts		–			(42,492	)
Other payables and accrued liabilities		33,217			(9,387	)
Income tax payable		51,739			(190	)
Amount due from a related party		–			–
Net cash used in operating activities		(658,042	)		(649,888	)

Cash flows from investing activities:
Purchase of property and equipment		(956	)		(857,870	)
Purchase of financial assets at FVTPL		–			(200,000	)
Proceeds from disposal of financial assets at FVTPL		212,963			–
Net cash provided by (used in) investing activities		212,007			(1,057,870	)

Cash flows from financing activities:
Repayment of short-term bank loan		(478,361	)		(81,034	)
Cash acquired from acquisition of subsidiaries		433,678			–
Net cash used in financing activities		(44,683	)		(81,034	)

Effect of exchange rate changes on cash and cash equivalents		(152,438	)		(1,100	)
Net decrease in cash and cash equivalents		(643,157	)		(1,789,891	)
Cash and cash equivalents at beginning of period		1,229,580			2,906,074
Cash and cash equivalents at end of period		586,423			1,116,183

Supplemental disclosures of cash flow information
Cash paid for interest expenses		–			–
Cash paid for Income taxes		–			–

See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.

NOCERA, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Stated in US Dollars except Number of Shares)

(UNAUDITED)


	Common Stock		Preferred stock		Additional Paid-in	Statutory and other	Retained		Accumulated Other Comprehensive		Total Nocera Inc.’s Stockholders’ Equity		Non- controlling		Total Stockholders’ Equity
	Stock	Amount	Stock	Amount	Capital	Reserves	Earnings		Loss		(Deficit)		Interests		(Deficit)
		$		$	$	$	$		$		$		$		$
Balance, January 1, 2023	9,243,587	9,243	80,000	80	20,484,518	191,219	(14,747,461	)	103,594		6,041,193		141,054		6,182,247
Foreign currency translation Adjustments	–	–	–	–	–	–	–		23,627		23,627		(339	)	23,288
Share-based compensation	–	–	–	–	103,155	–	–		–		103,155		–		103,155
Consultancy services settled by equities	450,000	450	–	–	520,650	–	–		–		521,100		–		521,100
Net loss	–	–	–	–	–	–	(987,648	)	–		(987,648	)	(14,541	)	(1,002,189	)
Balance, March 31, 2023	9,693,587	9,693	80,000	80	21,108,323	191,219	(15,735,109	)	127,221		5,701,427		126,174		5,827,601
Foreign currency translation adjustments	–	–	–	–	–	–	–		(43,221	)	(43,221	)	(2,475	)	(45,696	)
Share-based compensation	–	–	–	–	29,800	–	–		–		29,800		–		29,800
Net loss	–	–	–	–	–	–	(311,374	)	–		(311,374	)	(20,938	)	(332,312	)
Balance, June 30, 2023	9,693,587	9,693	80,000	80	21,138,123	191,219	(16,046,483	)	84,000		5,376,632		102,761		5,479,393



Balance, January 1, 2024	11,156,987	11,157	80,000	80	21,931,112	191,219	(19,053,072	)	98,906		3,179,402		84,325		3,263,727
Foreign currency translation Adjustments	–	–	–	–	–	–	–		(57,307	)	(57,307	)	(3,288	)	(60,595	)
Common stock issuance	1,800,000	1,800	–	–	1,978,200	–	–		–		1,980,000		–		1,980,000
Share-based compensation	–	–	–	–	14,999	–	–		–		14,999		–		14,999
Net loss	–	–	–	–	–	–	(486,420	)	–		(486,420	)	(7,500	)	(493,920	)
Balance, March 31, 2024	12,956,987	12,957	80,000	80	23,924,311	191,219	(19,539,492	)	41,599		4,630,674		73,537		4,704,211
Foreign currency translation adjustments	–	–	–	–	–	–	–		(187,634	)	(187,634	)	(873	)	(188,507	)
Common stock issuance	600,000	600	–	–	641,400	–	–		–		642,000		–		642,000
Share-based compensation	–	–	–	–	15,166	–	–		–		15,166		–		15,166
Net loss	–	–	–	–	–	–	(354,278	)	–		(354,278	)	(14,974	)	(369,252	)
Balance, June 30, 2024	13,556,987	13,557	80,000	80	24,580,877	191,219	(19,893,770	)	(146,035	)	4,745,928		57,690		4,803,618

See notes to the condensed consolidated financial statements which are an integral part of these unaudited condensed financial statements.

NOCERA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 PRINCIPAL ACTIVITIES AND ORGANIZATION

The consolidated financial statements include the financial statements of Nocera, Inc. (“Nocera” or the “Company”) and its subsidiaries, Grand Smooth Inc. Limited (“GSI”) and Guizhou Grand Smooth Technology Ltd. (“GZ GST” or “WFOE”), and Meixin Institutional Food Development Co., Ltd. (“Meixin”) that is controlled through contractual arrangements. The Company, GSI, GZ GST and Mexin are collectively referred to as the “Company”

Nocera was incorporated in the State of Nevada on February 1, 2002 and is based in New Taipei City, Taiwan (R.O.C.). It did not engage in any operations and was dormant from its inception until its reverse merger with GSI on December 31, 2018.

Reverse Merger

Effective December 31, 2018, Nocera completed a reverse merger transaction (the “Transaction”) pursuant to an Agreement and Plan of Merger (the “Agreement”), with (i) GSI, (ii) GSI’s shareholders, Yin-Chieh Cheng and Bi Zhang, who together owned shares constituting 100% of the issued and outstanding ordinary shares of GSI (the “GSI Shares”) and (iii) GSI Acquisition Corp. Under the terms of the Agreement, the GSI Shareholders transferred to Nocera all of the GSI Shares in exchange for the issuance of 10,000,000 shares (the “Shares”) of Nocera’s common stock (the “Share Exchange”). As a result of the reverse merger, GSI became Nocera’s wholly-owned subsidiary and Yin-Chieh Cheng and Bi Zhang, the former shareholders of GSI, became Nocera’s controlling shareholders. The share exchange transaction with GSI was treated as a reverse merger, with GSI as the accounting acquirer and Nocera as the acquired party.

GSI is a limited company established under the laws and regulations of Hong Kong on August 1, 2014, and is a holding company without any operations.

GZ WFH was incorporated in Xingyi City, Guizhou Province, People’s Republic of China (“PRC”) on October 25, 2017, and is engaged in providing fish farming containers service, which integrates sales, installments, and maintenance of aquaculture equipment. The registered capital of GZ WFH is RMB$5,000,000 (equal to US$733,138).

On November 13, 2018, GSI incorporated GZ GST in PRC with registered capital of US$15,000.

Divestiture

On September 21, 2020, the Company filed a Current Report on Form 8-K outlining the lack of communication that led to the termination by Nocera of its relationship with its former variable interest entity, Guizhou Wan Feng Hu Intelligent Aquatic Technology Co. Limited (“GZ WFH”) and its management, and termination of the variable interest entity agreements between the parties.

Subsequently on October 8, 2020, Zhang Bi and GZ WFH entered into a Settlement Agreement and Release with Nocera wherein all claims as to GZ WFH’s debt (claim to shares in Nocera or GZ GST) were compromised, settled, and otherwise resolved as to any and all claims or causes of action whatsoever against Nocera for any matter, action, or representation as to Nocera, and any debt to ownership of Nocera or GZ GST up to the date of the agreement. The consideration for the agreement was mutual waiver of any and all claims against each other and GZ GST, and GZ WFH (including Zhang Bi) waived any claims to Nocera stock, meaning the 4,750,000 shares of common stock of Nocera owned by Zhang Bi were cancelled as part of the agreement. The Settlement Agreement and Release is attached hereto as Exhibit 10.8.

The VIE Agreements with XFC

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. We also entered into contractual arrangements with a stockholder of XFC, that enabled us to have the power to direct the activities that most significantly affects the economic performance of XFC and receive the economic benefits of XFC that could be significant to XFC. 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”). 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 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 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 VIE Agreements with Xinca

On January 31, 2024, we entered into a Variable Interest Entity Purchase Agreement (“Xinca Purchase Agreement”) with Zhejiang Xinca Mutual Entertainment Culture Media Co., Ltd. (“Xinca”), a domestic funded limited liability company registered in China (P.R.C). The Xinca Purchase Agreement was entered into by our wholly-owned subsidiary and foreign enterprise, Shanghai Nocera Culture Co., Ltd. (“WFOE”), through a series of contractual agreements (“VIE Agreements”), in which we exchanged 1,800,000 shares of our restricted common stock for a 100% controlling interest in Xinca. As a result, the Company has been determined to be the primary beneficiary of Xinca and Xinca became a variable interest entity (“VIE”) of the Company.

The VIE Agreements with SY Media

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.

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICY

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on June 30, 2024.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s unaudited condensed consolidated financial position as of June 30, 2024, its consolidated results of operations for the six months ended June 30, 2024, cash flows for the six months ended June 30, 2024 and change in equity for the six months ended June 30, 2024, as applicable, have been made. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2023 or any future periods.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable. The Company conducts credit evaluations of its customers and suppliers and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.

There were five customers who represent 99% of the Company’s total revenue for the six months ended June 30, 2024. There were six customers who represent 93% of the Company’s total revenue for the six months ended June 30, 2024.

The following table sets forth a summary of single customers who represent 10% or more of the Company’s total accounts receivable, net:


	June 30, 2024		December 31, 2023
		(Unaudited)		(Audited)
Percentage of the Company’s accounts receivable
Customer A		61.25%		60.11%
Customer B		25.21%		–
Customer C		13.07%		–
Customer D		–		21.99%
Customer E		–		16.10%
		99.53%		98.19%

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.”

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:

	·	Step 1: Identify the contract(s) with a customer

	·	Step 2: Identify the performance obligations in the contract

	·	Step 3: Determine the transaction price

	·	Step 4: Allocate the transaction price to the performance obligation in the contract

	Ÿ	Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Company recognizes revenue when (or as) the Company satisfies performance obligations by transferring promised goods or services to its customers. Revenue is measured at the transaction price which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods or services to its customers. Contracts with customers are comprised of invoices and written contracts.

The Company does not have arrangements for returns from customers. The Company has no sales incentive programs.

The Company provides goods, maintenance service warranties for goods sold with a period varying from 18 months to 72 months, a majority of which are 18 months, and an exclusive sales agency license to its customers. For performance obligations related to providing products, the Company expects to recognize the revenue according to the delivery of products. For performance obligation related to maintenance service warranties, the Company expects to recognize the revenue on a ratable basis using a time-based output method. The performance obligations are typically satisfied as services are rendered on a straight-line basis over the contract term, which is generally for 18 months as a majority of the maintenance service warranties periods provided are 18 months. For performance obligation related to exclusive agency license, the Company recognizes the revenue ratably upon the satisfaction over the estimated economic life of the license.

The Company does not have amounts of contract assets since revenue is recognized as control of goods is transferred. The contract liabilities consist of advance payments from customers and deferred revenue. Advance payments from customers are expected to be recognized as revenue within 12 months. Deferred revenue is expected to be recognized as revenue within 12 months.

Recent Accounting Pronouncements

The FASB issued several updates during the period, none of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the consolidated financial statements upon adoption.

Note 3 ACCOUNTS RECEIVABLE, NET

As of June 30, 2024 and December 31, 2023, accounts receivable consisted of the following:

Schedule of accounts receivable
	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited)
	$		$
Accounts receivable		156,517		173,395
Less: Allowance for doubtful accounts		–		–
Total		156,517		173,395

For the six months ended June 30, 2024 and for the year ended December 31, 2022, the Company has recorded provision for doubtful accounts of nil.

Note 4 INVENTORIES

As of June 30, 2024 and December 31, 2023, inventories consisted of the following:

Schedule of inventories
	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited)
	$		$
Raw materials		85,964		88,432
Work in process		–		–
Total		85,964		88,432

Note 5 PREPAID EXPENSES AND OTHER ASSETS, NET


	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited)
	$		$
Other receivables from third party		536,887		10,365
Prepaid expenses and other assets, net		536,887		10,365

Note 6 PROPERTY AND EQUIPMENT, NET

As of June 30, 2024 and December 31, 2023, property and equipment consisted of the following:

Schedule of property and equipment
	June 30, 2024			December 31, 2023
	(Unaudited)			(Audited)
	$			$
Equipment		1,796,666			1,783,300
Less: Accumulated depreciation		(310,396	)		(235,499	)
Property and equipment, net		1,486,270			1,547,801

Depreciation expenses for the six months ended June 30, 2024 and 2023 were $54,529 and $81,608, respectively, and $32,492 and $36,880 for the three months ended June 30, 2024 and 2023, respectively.

Note 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

The fair value of each investment in equity instrument to be measured at fair value through profit or loss is as follows:


	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited)
Financial assets mandatorily measured at fair value through profit or loss	$		$
			-
Funds		–		208,697
Total		–		208,697

Current		–		–
Non-Current		–		208,697
Total		–		208,697

Net gain of $4,266 was recognized under changes in fair value of financial assets at fair value through profit or loss in the consolidated statement of profit or loss for the period ended June 30, 2024.

Note 8 GOODWILL

As of June 30, 2024 and December 31, 2023, goodwill consisted of the following:

Goodwill

Schedule of goodwill
	June 30, 2024			December 31, 2023
	(Unaudited)			(Audited)
	$			$
Goodwill - Meixin		3,905,735			3,905,735
Goodwill - Xinca		1,351,703			–
Goodwill – SY Media		230,015			–
Less: Accumulated amortization		(2,250,553	)		(2,250,553	)
Goodwill, net		3,236,900			1,655,182

Customer relations

Schedule of customer relations
	June 30,			December 31,
	2024			2023
	(Unaudited)			(Audited)
	$			$
Balance b/f		135,325			135,325
Acquisitions		–			–
Translation/ Adjustments		–			–
Less: Accumulated amortization		(29,348	)		(21,196	)
Less: Impairment		–			–
Customer relations, net		105,977			114,129

Note 9 OTHER BORROWINGS

Others loans consisted of the following:

Schedule of other loans
	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited)

Secured loan from Chailease Finance Co., Ltd wholly repayable within 1 year	$	–	$	487,800
Total secured loan wholly repayable within 1 year		–		487,800

Secured loan from Chailease Finance Co., Ltd wholly repayable more than 1 year		–		–
Total	$	–	$	487,800

The loan has been repaid in full.

Note 10 WARRANTS

On April 1, 2021, the Company entered into a securities purchase agreement with certain investors for an aggregate of 80,000 shares of its preferred stock at a per share purchase price of $2.50. As part of the transaction, the investors received one Class C warrant and one Class D warrant for the subscription of each preferred share. The Class C warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $2.50 per share exercisable for 36 months from the date of inception. The Class D warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $5.00 per share exercisable for 36 months from the date of inception. The subscription was completed on August 10, 2021.

On September 27, 2021, the Company entered into another securities purchase agreement with the same investors, pursuant to which the Company issued in a registered direct offering, an aggregate of 48,000 shares of common stock of the Company at a per share purchase price of $2.50. In addition, the investors also received one Class C warrant and one Class D warrant for the subscription of each preferred share. The Class C warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $2.50 per share exercisable for 36 months from the date of inception. The Class D warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $5.00 per share exercisable for 36 months from the date of inception.

Public Offering

In connection with a firm commitment underwritten public offering (the “Public Offering”) pursuant to a registration statement on Form S-1, amended (File No. 333-264059), originally filed with the SEC on April 1, 2022, and declared effective by the SEC on August 10, 2022, the Company sold an aggregate of 1,880,000 units (the “Units”). Each Unit consisted of one share of common stock and a warrant to purchase two shares of common stock. Each warrant underlying the Units was exercisable from the date of issuance until the fifth anniversary of the issuance date for $3.85 per share of Common Stock (110% of the public offering price per Unit), subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the common stock as described in the warrants. The Public Offering closed on August 15, 2022, and the Company received total gross proceeds of $6.58 million. After deducting the underwriting commissions, discounts, and offering expenses, the Company received net proceeds of approximately $5.3 million.

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.

On November 14, 2022, the exercise price of the warrants was decreased to $1.925. Under the terms of the warrants, the exercise price was to be decreased to the greater of (i) $1.925, which represented 50% of the original exercise price; and (ii) 100% of the last volume weighted average price immediately preceding the 90^th calendar day following the initial issuance date (the “Reset Exercise Price”) if, on the date that is 90 calendar days immediately following the initial issuance date, the Reset Exercise Price is less than the original $3.85 exercise price on that date.

The Reset Exercise Price remains subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Common Stock as described in the Warrants.

Reverse Split

In connection with the Public Offering, on August 11, 2022, the Company effected a 2:3 reverse stock split for each share of common stock issued and outstanding. As a result of reverse stock split, the shares of common stock issuable upon the conversion of Class C warrant decreased from 80,000 shares to 53,334 shares for $3.75 per share and Class D warrant decreased from 80,000 shares to 53,334 shares for $7.50 per share.

Schedule of assumptions used
Appraisal Date (Inception Date)	C Warrant August 10, 2021		D Warrant August 10, 2021
(Unaudited)	$		$

Market price per share (USD/share)		1.47		0.66
Exercise price (USD/price)		2.50		5.00
Risk free rate		0.14%		0.14%
Dividend yield		0.00%		0.00%
Expected term/ Contractual life (years)		1.39		1.39
Expected volatility		56.36%		56.36%

Appraisal Date (Inception Date)	C Warrant September 27, 2021		D Warrant September 27, 2021
(Unaudited)	$		$

Market price per share (USD/share)		1.71		0.73
Exercise price (USD/price)		2.50		5.00
Risk free rate		0.15%

Amendment: SEC Form 10-Q/A filed by Nocera Inc.