NOCERA, INC. 10-K
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2025
OR
☐ 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)
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
3F (Building B), No. 185, Sec. 1 , Datong Rd.,
Xizhi Dist., New Taipei City221, 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:
Common Stock, par value $0.001 per share NCRA The Nasdaq Capital Market LLC
SECURITIES REGISTERED PURSUANT TO SECTION 12(g)
OF THE ACT:
None.
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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 ☒ 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 ☒ 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 ☒ Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether
the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The
aggregate market value of the registrant’s issued and outstanding shares of common stock held by non-affiliates of the registrant as of
June 30, 2025 based on $1.05 per share, the price at which the registrant’s common stock was last sold on June 30, 2025, was approximately
$14,367,529.
There
were 17,075,471 shares outstanding of the registrant’s common stock, par value $0.001 per share, as of April 14, 2026.
NOCERA, INC.
TABLE OF CONTENTS TO ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 2025
PART I 1
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 5
ITEM 1B. UNRESOLVED STAFF COMMENTS 20
ITEM 1C. CYBERSECURITY 21
ITEM 2. PROPERTIES 21
ITEM 3. LEGAL PROCEEDINGS 21
ITEM 4. MINE SAFETY DISCLOSURES 21
ITEM 6. [RESERVED] 24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 36
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 36
ITEM 9A. CONTROLS AND PROCEDURES 37
ITEM 9B. OTHER INFORMATION 39
ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 39
PART III 40
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 40
ITEM 11. EXECUTIVE COMPENSATION 46
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 51
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 52
EXHIBIT INDEX 52
SIGNATURES 55
INDEX TO FINANCIAL STATEMENTS F-1
i
In this Annual Report on Form 10-K, unless otherwise
stated or as the context otherwise requires, references to “Nocera, Inc.,” “Nocera,” the “Company,”
“we," “us,” “our” and similar references refer to Nocera, Inc., a Nevada corporation. Our logo and
other trademarks or service marks of the Company appearing in this Annual Report on Form 10-K are the property of Nocera, Inc.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains certain
“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking
statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any
statements regarding our assumptions about financial performance; the continuation of historical trends; growth strategies; the sufficiency
of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results
of operations, financial condition or cash flows; anticipated problems and our plans for future operations; our future financing plans
and anticipated needs for working capital; and the economy in general or the future of the food production industry, all of which are
subject to various risks and uncertainties. Such statements, when used in this Annual Report on Form 10-K and other reports, statements
and information we have filed with the Securities and Exchange Commission (the “SEC”), in our press releases, presentations
to securities analysts or investors, in oral statements made by or with the approval of an executive officer, are generally identifiable
by use of the words “may, ” “will, ” “should,” “expect,” “anticipate,” “continue”,
“estimate,” “believe,” “intend” or “project” or the negative of these words or other variations
on these words or comparable terminology. However, any statements contained in this Annual Report on Form 10-K that are not statements
of historical fact may be deemed to be forward-looking statements. These statements are expressed in good faith and based upon a reasonable
basis when made, but there can be no assurance that the expectations, beliefs, etc., for the Company or our industry, will be realized.
These statements may be found under Part I Item
1 “Business” and Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” as well as in other parts of this Annual Report on Form 10-K. In addition to the information expressly required
to be included in this filing, we will provide such further material information, if any, as may be necessary to ensure that the required
statements, in light of the circumstances under which they are made, are not misleading. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various factors described in this Annual Report on Form 10-K generally.
As a result, readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this
Annual Report on Form 10-K.
We assume no obligation to update any forward-looking
statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K, other than
as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by
us in our reports filed with the SEC which attempt to advise interested parties of the risk factors that may affect our business, financial
condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions
prove incorrect, our actual results may vary materially from those expected or projected.
This Annual Report on Form 10-K also contains
estimates, projections and other information concerning our industry, our business and particular markets, including data regarding the
estimated size of those markets. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports,
research surveys, studies and similar data prepared by market research firms and other third parties, industry, general publications,
government data and similar sources.
ii
PART I
ITEM 1. BUSINESS
Overview
As of the date of this Annual Report on Form 10-K,
our business operations consist primarily of two segments: (i) Fish Trading and (ii) E-Commerce. Our Fish Trading segment is carried out
by our wholly-owned subsidiary, Nocera Inc. Taiwan Branch (“NTB”). NTB engages in the trading of fish, primarily eels, in
the Republic of Taiwan, or Taiwan. Upon receiving an order, the Company arranges for the harvesting of the eels, inspects the products
to ensure compliance with the customer’s specifications, and coordinates delivery. In the E-Commerce segment, which is administered
through Xinca, an unincorporated division of the Company (“Xinca”), we act as an agent in facilitating the sale of third-party
products through live-streaming e-commerce platforms. The Company does not take control of the goods sold, and commission revenue is recognized
on a net basis. In 2025, the Company made substantial equity investments in two e-commerce companies, one based in the United States and
the other in France.
In addition, we design recirculation aquaculture
systems (“RAS”) for fish farming, and we consult with customers in the manufacture and installation of RAS. RAS are land-based
facilities in which water is continuously treated and reused, which provides a controlled environment for the cultivation of aquatic species.
This allows for high-density fish production with minimal water usage and environmental impact, as waste products are removed or converted
into non-toxic substances. Our primary business operations once consisted of the design, development and production of RAS in bulk, but
we discontinued the production and sale of the units in late 2022, while continuing to leverage our expertise in RAS to generate revenue.
We also had a Catering segment, which was administered through our variable interest entity (“VIE”), Meixin Institutional
Food Development Co. a Taiwan corporation, but we sold our interest in the VIE at the end of 2025 and have discontinued this segment.
In January 2026, the Company allocated an aggregate
$2.0 million of corporate funds to purchase Bitcoin as part of its corporate treasury strategy. The Company completed the first $1.0 million
tranche on January 25, 2026 and the remaining $1.0 million tranche on January 29, 2026, acquiring approximately 12 Bitcoin at an average
purchase price of approximately $83,000. The Company intends to continue its corporate treasury strategy, with an emphasis on Bitcoin
for now, for the foreseeable future.
Sales and Marketing and Growth Strategy
Corporate History
Nocera, Inc. was incorporated in the State of
Nevada on February 1, 2002, and is based in New Taipei City, Taiwan. Prior to December 31, 2018, we existed as a “shell company”
as defined under Rule 12b-2 of the Exchange Act but, as a result of a reverse merger that year in which we were the acquiring party, we
reorganized as a public operating company engaged in the RAS business through a wholly-owned subsidiary, Grand Smooth Inc. Limited, a
company organized under the laws of Hong Kong, China (“GSI”). In mid-2021, the Company relocated its principal executive offices
to New Taipei City, Taiwan (R.O.C), as it concentrated its RAS operations in the Taiwanese market. As of August 11, 2022, the Company
uplisted its common stock, par value $0.001 per share, to the Nasdaq Capital Market (“Nasdaq”) and the common stock initiated
trading on Nasdaq under the ticker symbol “NCRA.”
Corporate Structure
We conduct our operations primarily through NTB
and Xinca. Our other subsidiaries, Shanghai Nocera Culture Co., Ltd., and GSI, which wholly-owns GZ GST.
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. 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 April 14, 2024, GZ GST entered into Equity
Purchase Agreement with SY Culture to expend the e-commerce business, specifically with foods and kitchen goods retail channel.
Customers
In 2025, we targeted customers in a variety of
markets, including Japan, Taiwan, China, the U.S., South Africa, and France. In the Fish Trading segment, our emphasis over the last year
has been in Japan and Taiwan. In the E-Commerce segment, we have focused on the United States, France, and the People’s Republic
of China, or China. Our RAS consulting services have concentrated on China and South Africa. During the year ended December 31, 2025 and
2024, our net sales were approximately $13.63 million and approximately $17.01 million, respectively.
Trademarks and Patents
We do not own any trademarks or patents.
Government Regulation
We are subject to many varying laws and regulations
in Taiwan and throughout the world, including, without limitation, those related to privacy, data protection, intellectual property, consumer
protection, e-commerce, marketing, advertising, messaging, rights of publicity, health and safety, employment and labor, product liability,
accessibility, competition, and taxation. These laws and regulations are constantly evolving and may be interpreted, applied, created,
or amended in a manner that could harm our current or future business and operations. 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.
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. 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.
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. Consumer Product Safety Commission may exclude products from the market that
are found to be unsafe or hazardous, require repair, replacement or refund of products, impose fines for noncompliance with requirements
and impose fines for failure to timely notify them of potential safety hazards.
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. 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. The FDA has finalized seven major rules to implement FSMA, recognizing that ensuring the safety of
the food supply is a shared responsibility among many different points in the global supply chain. The FSMA rules are designed to make
clear specific actions that must be taken at each of these points to prevent contamination. Some aspects of these laws use a strict liability
standard for imposing sanctions on corporate behavior. If we fail to comply with applicable laws and regulations, we may be subject to
civil remedies, including fines, injunctions, recalls, or seizures, and criminal sanctions, any of which could impact our results of operations.
In addition, the Nutrition Labeling and Education
Act of 1990 prescribes the format and content of certain information required to appear on the labels of food products.
Our operations and products are also subject to
state and local regulation, including the registration and licensing of plants, enforcement by state health agencies of various state
standards, and the registration and inspection of facilities. Compliance with federal, state and local regulation is costly and time-consuming.
Enforcement actions for violations of federal, state, and local regulations may include seizure and condemnation of products, cease and
desist orders, injunctions or monetary penalties. We believe that our practices are sufficient to maintain compliance with applicable
government regulations.
We are subject to certain regulations by the U.S.
Federal Trade Commission. Advertising of our products is subject to such regulation pursuant to the Federal Trade Commission Act and the
regulations promulgated thereunder.
We are also subject to certain health and safety
regulations, including regulations issued pursuant to the Occupational Safety and Health Act. These regulations require us to comply with
certain manufacturing, health, and safety standards to protect our employees from accidents.
Our business depends in part on environmental
regulations and programs of Taiwan that promote cleaner water sources to restore clean water back to people. Our customers may be encouraged
with incentives by the local governments relating to aquaculture investment. The approvals of land, licenses or permits, are required
from relevant central and local government authorities. In addition, from time to time, relevant government authorities may impose new
regulations at a local level regulating fish farming. 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. As detailed in “Recent Developments” below, we have recently
received a deficiency letter from Nasdaq and are actively addressing it as of the date of this Annual Report on Form 10-K.
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. 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 as of the date of this Annual Report on Form 10-K. We acquired this real property with the intent of developing
it in order to grow our RAS business in the United States but since our decision to limit RAS to design and consulting only, we have suspended
these plans and have no present intent to develop the property at this time.
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, 2025, we had a total of 20 employees, including 17 full-time employees and 3 part-time employees. In addition, we have 8 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. The principal purposes of our equity and cash incentive plans
are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to
increase stockholder value and the success of our Company by motivating such individuals to perform to the best of their abilities
and achieve our objectives.
Recent Developments
The following highlights recent material developments
in our business during the fiscal year covered by this Annual Report on Form 10-K:
Nasdaq
On February 2, 2026, we received a deficiency
letter (the “Nasdaq Letter”) from The Nasdaq Stock Market LLC notifying us that, for the 30 consecutive business days from
December 17, 2025 through January 30, 2026, the closing bid price of our Common Stock had not been maintained at the minimum required
closing bid price of at least $1.00 per share, as required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2)
(the “Bid Price Rule”).
In accordance with Nasdaq Listing Rule 5810(c)(3)(A),
we have been provided an initial compliance period of 180 calendar days, or until August 3, 2026 (the “Compliance Period”),
to regain compliance with the Bid Price Rule. If at any time during the Compliance Period the closing bid price of our Common Stock is
at least $1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq will provide written confirmation that we have regained
compliance and the matter will be closed. If we do not regain compliance during the Compliance Period, we may be eligible for an additional
180-day compliance period, subject to meeting the other continued listing requirements for Nasdaq and providing written notice of our
intention to cure the deficiency, including by effecting a reverse stock split, if necessary.
The Nasdaq Letter does not result in the immediate
delisting of our Common Stock, and our Common Stock will continue to trade uninterrupted on Nasdaq under the symbol “NCRA”.
Corporate Information
Our principal executive offices are located at
3F (Building B), No. 185, Sec. 1, Datong Rd., Xizhi Dist., New Taipei City 221, Taiwan (R.O.C.). Our telephone number is 886-910-163-358.
Available Information
Our website address is www.nocera.company.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, any amendments to those reports, proxy and
registration statements filed or furnished with the SEC, are available free of charge through our website. We make these materials available
through our website as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to,
the SEC. 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 information contained
in, or that can be accessed through, our website is not part of this Annual Report on Form 10-K.
ITEM 1A. RISK FACTORS
Our business is subject to many risks and uncertainties,
which may affect our future financial performance. If any of the events or circumstances described below occur, our business and financial
performance could be adversely affected, our actual results could differ materially from our expectations, and the price of our securities
could decline. The risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties
not currently known to us or that we currently do not believe are material that may adversely affect our business and financial performance.
The statements contained in this Annual Report on Form 10-K that are not historic facts are forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking
statements. 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.
These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company
and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete
listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
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, 2025 and 2024, we incurred operating losses of $2,669,493 and $4,944,026, respectively. As at
December 31, 2025, we have working capital of $7,583,695 and had an accumulated deficit of $26,188,471. In their audit report
for the fiscal year ended December 31, 2025 included in this Annual Report on Form 10-K, 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 cash
flows 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. 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.
A significant outbreak, epidemic or pandemic of
contagious diseases in any geographic area in which we operate or plan to operate could result in a health crisis adversely affecting
the economies, financial markets and overall demand for our services in such areas. In addition, any preventative or protective actions
that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines or site closures,
may interfere with the ability of our employees, suppliers and customers to perform their responsibilities. Such results could have a
material adverse effect on our business.
COVID-19 created significant volatility, uncertainty
and economic disruption. COVID-19 has affected nearly all regions around the world. In the United States, businesses as well as federal,
state and local governments implemented significant actions to mitigate this public health crisis. While we cannot predict the duration
or scope of any future COVID-19 outbreak, it may negatively impact our business and such impact could be material to our financial results,
condition and outlook related to:
To the extent COVID-19 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 this “Risk
Factors” section.
We have a limited operating history in an
evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We have a limited operating history on which to
base an evaluation of its business and prospects. We are subject to all the risks inherent in a small company seeking to develop, market
and distribute new services, particularly companies in evolving markets. The likelihood of our success must be considered, in light of
the problems, expenses, difficulties, complications and delays frequently encountered in connection with the development, introduction,
marketing and distribution of new products and services in a competitive environment.
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.
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.
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. 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. Any debt financing secured in the future could involve restrictive
covenants relating to capital raising activities and other financial and operational matters, which may make it more difficult for us
to obtain additional capital or to pursue business opportunities, including potential acquisitions. If adequate funds are not obtained,
we may be required to reduce, curtail or discontinue operations.
Our ability to obtain additional capital on acceptable
terms is subject to a variety of uncertainties, including:
· investors’ perception of, and demand for, our securities;
· our future results of operations, financial condition and cash flow.
Our failure to successfully market our brands
could result in adverse financial consequences.
We believe that continuing to strengthen our brands
is critical to achieving our widespread acceptance, particularly in light of the competitive nature of the market in which we operate.
Promoting and positioning its brands will depend largely on the success of our marketing efforts and our ability to provide high quality
services. There can be no assurance that brand promotion activities will yield increased revenues or that any such revenues would offset
the expenses incurred us in building our brand. 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.
We may not generate the same level of revenues
from general construction projects.
Our revenues for the year ended December 31,
2025 and for the year ended December 31, 2024 were approximately $13.63 million and $17.01 million, respectively. There were five
customers (Sano Morio, Handou Syuji, Ming-Chi Chen, Kai-Ling Chen and Sano Morimoto) who represented approximately 81.8% of our
total revenue for the year ended December 31, 2025 of our total revenue for the prior year period. 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.
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. 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. 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. There can be no assurance that our planned personnel, systems, procedures and controls will be adequate to support our
future operations, that management will be able to hire, train, retain, motivate and manage required personnel or that our management
will be able to successfully identify, manage and exploit existing and potential market opportunities. If we are unable to manage growth
effectively, our business, prospects, financial condition and results of operations may be materially adversely affected.
We will need additional financing in order
to grow our business.
From time to time, in order to expand operations
to meet customer demand, we will need to incur additional capital expenditures. These capital expenditures are intended to be funded from
third party sources, including the incurring of debt and/or the sale of additional equity securities. In addition to requiring additional
financing to fund capital expenditures, we may require additional financing to fund working capital, research and development, sales and
marketing, general and administrative expenditures and operating losses. The incurrence of debt creates additional financial leverage
and therefore an increase in the financial risk of our operations. The sale of additional equity securities will be dilutive to the interests
of current equity holders. In addition, there can be no assurance that such additional financing, whether debt or equity, will be available
to us or that it will be available on acceptable commercial terms. Any inability to secure such additional financing on appropriate terms
could have a materially adverse impact on our business, financial condition and operating results.
We rely on our executive officers and the
performance of certain highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business
could be harmed.
Our success is dependent on our current executive
officers. Our success also depends in large part on the continued service of our key operational and management personnel. We face intense
competition from our competitors, customers and other companies throughout the industry. The loss of any our executive officers, specifically
Mr. Andy Chin-An Jin, our Chief Executive Officer, or any failure on our part to hire, train and retain a sufficient number of qualified
management -level professionals could impair our business.
In addition, we are also, and will continue to
be, heavily dependent on the skill, acumen and services of our non-management employees. Our future success depends on our continuing
ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and
we may incur significant costs to attract them. In addition, the loss of any of our key employees could materially adversely affect our
ability to execute our business plan, and we may not be able to find adequate replacements. We cannot ensure that we will be able to retain
the services of any members of our key employees. If we do not succeed in attracting well-qualified employees or retaining and motivating
existing employees, our business could be harmed.
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. If we are presented with appropriate opportunities, we may acquire additional businesses,
services or products that are complementary to our core business. Future acquisitions and the subsequent integration of new companies
into ours would require significant attention from our management. Future acquisitions would also expose us to potential risks, including
risks associated with the assimilation of new operations, services and personnel, unforeseen or hidden liabilities, the diversion of resources
from our existing businesses and technologies, the inability to generate sufficient revenue to offset the costs and expenses of acquisitions
and potential loss of, or harm to, relationships with employees as a result of integration of new businesses. The diversion of our management’s
attention and any difficulties encountered in any integration process could have a material adverse effect on our ability to manage our
business.
The value of seafood which we sell (e.g.,
eel) is subject to fluctuation which may result in volatility of our results of operations and the value of an investment in us.
Our business is partly dependent upon the sale
of eel which value is subject to fluctuation and which value greatly fluctuates. Our net sales and operating results vary significantly
due to the volatility of the value of eel and any other seafood that we sell which may result in the volatility of the market price of
our common stock.
We have limited insurance coverage.
We do not have any business liability, disruption
or litigation insurance coverage for our operations in Taiwan. 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 services, products and technologies that make ours obsolete or garner greater market share than ours.
Our ability to compete successfully will depend
on our ability to demonstrate that our services and products are superior to and/or less expensive than other products available in the
market. Some of our competitors have the benefit of marketing their products under brand names that have better market recognition than
ours or have stronger marketing and distribution channels than we do. Increased competition as to any of our products could result in
price reduction, reduced margins and loss of market share, which could negatively affect our profitability.
Certain of our competitors may benefit from government
support and other incentives that are not available to us. As a result, our competitors may be able to develop competing and/or superior
products and compete more aggressively and sustain that competition over a longer period of time than we can. As more companies develop
new intellectual property in our markets, a competitor could acquire patent or other rights that may limit our ability to successfully
market our product.
If our technologies or products are stolen,
misappropriated, or reverse engineered, others could use the technologies to produce competing technologies or products.
Third parties, including our collaborators, contractors,
and others involved in our business often have access to our technologies. If our technologies or products were stolen, misappropriated,
or reverse engineered, they could be used by other parties that may be able to reproduce our technologies or products using our technologies
for their own commercial gain. 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.
We mainly operate in Taiwan and plan to expand
in other international countries and in the United States. We expect to expand our operations significantly by accessing new markets abroad
and expanding our services offerings. Our ability to manage our business and conduct our operations in other international countries and
in the United States requires considerable management attention and resources and is subject to the particular challenges of supporting
a growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute systems, regulatory
systems and commercial infrastructures. Furthermore, in most international markets, we would not be the first entrant, and our competitors
may be better positioned than we are to succeed. 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:
· 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;
· political and economic instability in some countries;
· higher costs of doing business in other international countries.
Natural disasters or other catastrophic
events could harm our operations.
Our operations in the U.S. and Taiwan could be
subject to significant risk of natural disasters, including earthquakes, hurricanes, typhoons, flooding and tornadoes, as well as other
catastrophic events, such as terrorist attacks or wars. For example, our manufacturers are all located in Taiwan, which is susceptible
to typhoons and earthquakes. Any disruption in our manufacturers’ manufacturing facilities arising from these and other natural disasters
or other catastrophic events could cause significant delays in the production or shipment of the components of our products until such
manufacturers are able to shift production to different facilities or until we are able to arrange for other third party manufacturers
to manufacture the components of our products. The affected manufacturers may not be able to obtain alternate capacity to manufacture
the components of our products or we may not be able to arrange for other third party manufacturers to manufacture the components of our
products on favorable terms or at all. 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. Any significant decline in the condition of the economy of Taiwan could adversely
affect consumer demand of our services, among other things, which in turn would have a material adverse effect on our business and financial
condition.
Currency fluctuations may adversely affect
our business and if the NT dollar were to decline in value, that would reduce our revenue in U.S. dollar terms.
Our reporting currency is the U.S. dollar and
our operations in Taiwan use their local currency as their functional currencies. Substantially all of our revenue and expenses are in
NT dollars. We are subject to the effects of exchange rate fluctuations with respect to any of such currency. For example, the value of
the NT dollar depends to a large extent on Taiwan government policies and Taiwan’s domestic and international economic and political developments,
as well as supply and demand in the local market.
The income statements of our operations are translated
into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies,
the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for
our international operations. Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign
currency denominated transactions results in increased revenue, operating expenses and net income for our international operations. We
are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars
in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries’ financial statements
into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income. In addition,
we have certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency. Changes
in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We
have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability
and effectiveness of any hedging transaction may be limited, and we may not be able to successfully hedge our exchange rate risks.
We may be subject to product liability claims
if people or properties are harmed by the services sold by us.
The components of our products intended to be
sold by us, as part of our services, are manufactured by third parties. The components of our products may be defectively designed or
manufactured. As a result, sales of the products could expose us to liability claims relating to personal injury or property damage and
may require product recalls or other actions. Third parties subject to such injury or damage may bring claims or legal proceedings against
us as the reseller of the products. We do not currently maintain any third-party liability insurance or products liability insurance in
relation to products we intend to sell in conjunction with our services. As a result, any material products liability claim or litigation
could have a material and adverse effect on our business, financial condition and results of operations. Even unsuccessful claims could
result in the expenditure of funds and managerial efforts in defending them and could have a negative impact on our reputation.
Risk of litigation.
We and/or its directors and officers may be subject
to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, we
may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental
and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and
cause us to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may
have a material adverse effect on our business, operating results or financial condition.
Even if the claims are without merit, the costs
associated with defending these types of claims may be substantial, both in terms of time, money, and management distraction. The results
of litigation and claims to which we may be subject cannot be predicted with certainty. 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.
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. Although we try to ensure that our employees and consultants do not
use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants
or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary
information, of a former employer or other third party. Litigation may be necessary to defend against these claims. If we fail in defending
any such claims or settling those claims, in addition to paying monetary damages or a settlement payment, we may lose valuable intellectual
property rights or personnel. 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.
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 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. In the event of a failure of any financial institutions where we maintain our deposits or other assets, we may incur a loss
to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial
condition and our results of operations.
Risks Related to Our Bitcoin Treasury Strategy
Our Bitcoin treasury strategy exposes us
to significant volatility in the price of Bitcoin, which could materially adversely affect our financial condition and results of operations.
We have allocated a portion of our corporate funds
to purchase Bitcoin as part of our corporate treasury strategy. Bitcoin has historically experienced significant price volatility and
is subject to rapid and substantial changes in value driven by market sentiment, liquidity, macroeconomic conditions, changes in interest
rates and other factors that are difficult to predict. Any decline in the market price of Bitcoin could require us to recognize losses
in our financial statements and could reduce our liquidity, increase our need for additional financing and adversely affect our ability
to fund operations, capital expenditures and working capital needs. In addition, our Bitcoin holdings may result in increased volatility
in our reported earnings and cash flows, which may adversely affect investor perception and the market price of our common stock.
Accounting, tax and regulatory developments
relating to digital assets could adversely affect us.
The accounting treatment for digital assets and
related disclosure requirements may evolve and could require us to change our accounting policies, restate prior period financial statements
or incur increased costs to comply with new or revised accounting standards. In addition, the U.S. and foreign jurisdictions continue
to evaluate and implement regulations governing digital assets, including rules relating to custody, reporting, trading, market integrity,
anti-money laundering and sanctions compliance. Changes in laws, regulations, enforcement priorities or interpretations could restrict
our ability to purchase, hold or dispose of Bitcoin, increase our compliance costs, subject us to additional taxes or reporting obligations,
or otherwise materially adversely affect our business, financial condition and results of operations.
We may be unable to safeguard our Bitcoin
holdings, and any compromise, loss, theft or misappropriation of our Bitcoin could materially adversely affect our business, financial
condition and results of operations.
Digital assets are subject to unique risks, including
theft, hacking, social engineering, malware, insider misconduct and technological vulnerabilities. We may hold Bitcoin directly or through
third-party custodians, exchanges or other service providers, and we may be exposed to losses resulting from (i) security breaches, cyberattacks
or operational failures impacting our systems or those of third parties, (ii) the loss or compromise of private keys, passwords or other
credentials necessary to access our Bitcoin, (iii) insolvency, bankruptcy, fraud, misconduct or failure of a custodian, exchange or other
service provider, or (iv) disruptions, delays, forks or other events affecting the Bitcoin network. Any of these events could result in
partial or total loss of our Bitcoin holdings, impair our liquidity and adversely affect our ability to operate our business. Further,
our insurance coverage, if any, may not be sufficient to cover losses relating to digital assets.
Regulatory Risks
We must comply with the Foreign Corrupt
Practices Act while many of our competitors do not.
We are required to comply with the United States
Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials
for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors, are not subject to these prohibitions.
Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time to time in Taiwan. If our competitors engage
in these practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing
business or from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage. Although
we inform our personnel that such practices are illegal, we cannot assure you that our employees or other agents will not engage in such
conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could
suffer severe penalties.
Future laws, regulations and standards relating
to corporate governance and public disclosure may create uncertainty for public companies, which may increase legal and financial compliance
costs and make some activities more time consuming.