UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

NOCERA, INC.

(Exact Name of the Registrant as Specified in its Charter)

 

     
Nevada   16-1626611

(State or Other Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification No.)

 

2030 POWERS FERRY ROAD SE, SUITE #212, ATLANTA, GA 30339

  (Address of Principal Executive Offices and Zip Code)

 

404-816-8240

(Registrant's Telephone Number, Including Area Code)

 

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

 

Securities to be registered under Section 12(g) of the Act:

Common Stock, Par Value $0.001

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

 

             
Large accelerated filer     Accelerated filer  
       
Non-accelerated filer     (Do not check if a smaller reporting company)   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 7(a)(2)(B) of the Securities Act.  

 

 

 
 

TABLE OF CONTENTS

 

    PAGE
ITEM 1 DESCRIPTION OF BUSINESS 1
     
ITEM 1A RISK FACTORS 6
     
ITEM 2 FINANCIAL INFORMATION   14
     
ITEM 3 PROPERTIES 27
     
ITEM 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT   28
     
ITEM 5 DIRECTORS AND EXECUTIVE OFFICERS   30
     
ITEM 6 EXECUTIVE COMPENSATION   32
     
ITEM 7 CERTAIN BENEFICIAL RELATIONSHIPS AND RELATED TRANSACTIONS  32
     
ITEM 8 LEGAL PROCEEDINGS   32
     
ITEM 9 MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS   33
     
ITEM 10 RECENT SALES OF UNREGISTERED SECURITIES  35
     
ITEM 11 DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED   35
     
ITEM 12 INDEMNIFICATION OF DIRECTORS AND OFFICERS   36
     
ITEM 13 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA   36
     
ITEM 14 CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON ACCOUNTING AND FINANCIAL DISCLOSURE  36
     
ITEM 15 FINANCIAL STATEMENTS AND EXHIBITS   37
     
  SIGNATURES 38
     
    EXHIBIT INDEX 39
     
  FINANCIAL STATEMENTS F-1 – F-26

 

 
 

ITEM 1: DESCRIPTION OF BUSINESS

Our Company

 

Nocera, Inc., a Nevada corporation, (“Nocera”, “we", "us" or “our”) is a publicly quoted shell company seeking to create value for its shareholders by merging with another entity with experienced management and opportunities for growth in return for shares of our common stock.

 

No potential merger candidate has been identified at this time.

 

We do not propose to restrict our search for a business opportunity to any particular industry or geographical area and may, therefore, engage in essentially any business in any industry. We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.

 

The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management's best business judgment.

 

Our activities are subject to several significant risks, which arise primarily as a result of the fact that we have no specific business and may acquire or participate in a business opportunity based on the decision of management, which potentially could act without the consent, vote, or approval of our shareholders. The risks faced by us are further increased as a result of its lack of resources and our inability to provide a prospective business opportunity with significant capital.

 

Reports to Security Holders

 

Upon effectiveness of this Registration Statement, we will be subject to the reporting requirements of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures.

 

You may read and copy any materials we file with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

 

Jumpstart Our Business Startups Act

 

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we did not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2017, our last fiscal year.

 

We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1,000,000,000 or (ii) we issue more than $1,000,000,000 in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement.

 

As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies. These provisions include:

 

 

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  - A requirement to have only two years of audited financial statement and only two years of related Management Discussion and Analysis Disclosures:

 

  - Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

 

  - No non-binding advisory votes on executive compensation or golden parachute arrangements.

 

As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Such sections are provided below:

 

Section 404(b) of the Sarbanes-Oxley Act of 2002 requires a public company’s auditor to attest to, and report on, management’s assessment of its internal controls.

 

Sections 14A(a) and (b) of the Securities and Exchange Act, implemented by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation.

 

We have already taken advantage of these reduced reporting burdens in this registration statement, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

As long as we qualify as an emerging growth company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.  We are choosing to irrevocably opt out of the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act.  

 

Our History

 

NOCERA, INC. (“ Company ”) was organized February 1, 2002 under the laws of the State of Nevada.

 

On February 11, 2002, Rocco Fiorino was appointed President of the Company, and a member of the Board of Directors of the Company.

 

On February 12, 2002, we acquired Felice Conserve, an Italian corporation, as a wholly owned subsidiary in exchange for 20 million shares of our common stock. The principal business of Felice Conserve was the production and processing of agricultural products in Italy. The principal product was canned tomatoes. Our principal US office location was 950 Eulalia Road NE, Atlanta, GA. 30339.

 

In 2003, we established two subsidiaries in Uruguay; Sontemar, SA (“Sontemar”), and Noldicor, SA (“Noldicor”). The principal business of Noldicor was the production of tomatoes. The principal business of Sontemar was the processing and sale of packaged tomatoes.

 

On April 23, 2004, we paid a 4 for 1 stock dividend to our shareholders.

 

The Company abandoned operations in 2005.

 

In 2006, due to financial difficulties, Noldicor and Sontemar ceased operations. As a result of this, our operations in Uruguay ceased. Additionally, during 2006, Felice Conserve was divested back to its original shareholders. This resulted in our returning to development stage status.

 

 

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Mr. Erik S. Nelson, our sole officer and director, was appointed as Corporate Secretary and a member of the Board of Directors on September 19, 2011. Following the death of Rocco Fiorino, Mr. Nelson was appointed President on November 12, 2017.

 

On approximately November 3, 2017, we effected a reverse-split of our common shares as follows:

 

· A 1 for 40,000 reverse-split of the Company’s common shares, followed immediately by;

 

· All fractional shares shall be rounded upwards to the nearest whole s hare, followed immediately by;

  

· A 200 for 1 forward stock split.

 

The net effect of these actions was a 1 for 200 reverse-split of the Company’s common shares, with no shareholder being reduced below 200 shares. All shareholders who prior to the reverse-split had 40,000 or less of the pre-split shares received 200 of the new, post-split shares.

 

Revenue

 

We have no revenues for the years ended December 31, 2017 and 2016, for the three and nine-month period ended September 30, 2018 or for the period from September 30, 2018 through the date of this filing. We do not anticipate recognizing any revenues in the quarter ending December 31, 2018.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10 contains forward-looking statements that may be affected by matters outside our control that could cause materially different results.

Some of the information in this Form 10-12g contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933. These statements express, or are based on, our expectations about future events. Forward-looking statements give our current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology, such as, "may", "will", "expect", "intend", "project", "estimate", "anticipate", "believe" or "continue" or the negative thereof or similar terminology. They include statements regarding our: 

financial position,
business plans,
budgets,
amount, nature and timing of capital expenditures,
cash flow and anticipated liquidity,
future operations of unknown nature costs,
acquisition and development of other technology,
future demand for any products and services acquired,
operating costs and other expenses.

Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results are described under "Risk Factors" and include: 

general economic conditions,
our cost of operations,
our ability to generate sufficient cash flows to operate,
availability of capital,
the strength and financial resources of our competitors,
our ability to find and retain skilled personnel, and
the lack of liquidity of our common stock.

 

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Any of the factors listed above and other factors contained in this Form 10 could cause our actual results to differ materially from the results implied by these or any other forward-looking statements made by us or on our behalf. We cannot assure you that our future results will meet our expectations. When you consider these forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this Form 10. Our forward-looking statements speak only as of the date made.

General Business Plan

Our business plan to seek a merger has many uncertainties which pose risks to investors.

 

We intend to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms which desire to seek the advantages of an issuer who has complied with the Securities Act of 1934 (the “1934 Act”). We will not restrict our search to any specific business, industry or geographical location, and we may participate in business ventures of virtually any nature. This discussion of our proposed business is purposefully general and is not meant to be restrictive of our unlimited discretion to search for and enter into potential business opportunities. We anticipate that we may be able to participate in only one potential business venture because of our lack of financial resources. We may seek a business opportunity with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. All of these activities have risk to investors including dilution and management.

 

We expect that the selection of a business opportunity will be complex. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the benefits of an issuer who has complied with the 1934 Act. Such benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all stockholders and other factors. Potentially, available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We have, and will continue to have, essentially no assets to provide the owners of business opportunities. However, we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in an issuer who has complied with the 1934 Act without incurring the cost and time required to conduct an initial public offering.

 

The analysis of new business opportunities will be undertaken by, or under the supervision of, our Board of Directors. We intend to concentrate on identifying preliminary prospective business opportunities which may be brought to our attention through present associations of our director, professional advisors or by our stockholders. In analyzing prospective business opportunities, we will consider such matters as (i) available technical, financial and managerial resources; (ii) working capital and other financial requirements; (iii) history of operations, if any, and prospects for the future; (iv) nature of present and expected competition; (v) quality, experience and depth of management services; (vi) potential for further research, development or exploration; (vii) specific risk factors not now foreseeable but that may be anticipated to impact the proposed activities of the company; (viii) potential for growth or expansion; (ix) potential for profit; (x) public recognition and acceptance of products, services or trades; (xi) name identification; and (xii) other factors that we consider relevant. As part of our investigation of the business opportunity, we expect to meet personally with management and key personnel. To the extent possible, we intend to utilize written reports and personal investigation to evaluate the above factors.

 

We will not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction.

 

Acquisition Interest

 

In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another company or entity. We may also acquire stock or assets of

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an existing business. Upon consummation of a transaction, it is probable that our present management and stockholders will no longer be in control of us. In addition, our sole director may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of our stockholders, or sell his stock in us. Any such sale will only be made in compliance with the securities laws of the United States and any applicable state.

 

It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under application federal and state securities laws. In some circumstances, as a negotiated element of the transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after it has successfully consummated a merger or acquisition and is no longer considered an inactive company.

 

The issuance of substantial additional securities and their potential sale into any trading market which may develop in our securities may have a depressive effect on the value of our securities in the future. There is no assurance that such a trading market will develop.

 

While the actual terms of a transaction cannot be predicted, it is expected that the parties to any business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the business transaction in a so-called “tax-free” reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code (the “Code”). In order to obtain tax-free treatment under the Code, it may be necessary for the owner of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, our stockholders would retain less than 20% of the issued and outstanding shares of the surviving entity. This would result in significant dilution in the equity of our stockholders.

 

As part of our investigation, we expect to meet personally with management and key personnel, visit and inspect material facilities, obtain independent analysis of verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial resources and management expertise. The manner in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires of both parties, and the management of the opportunity.

 

With respect to any merger or acquisition, and depending upon, among other things, the target company’s assets and liabilities, our stockholders will in all likelihood hold a substantially lesser percentage ownership interest in us following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event we acquire a target company with assets and expectations of growth. Any merger or acquisition can be expected to have a significant dilutive effect on the percentage of shares held by our stockholders.

 

We will participate in a business opportunity only after the negotiation and execution of appropriate written business agreements. Although the terms of such agreements cannot be predicted, generally we anticipate that such agreements will (i) require specific representations and warranties by all of the parties; (ii) specify certain events of default; (iii) detail the terms of

closing and the conditions which must be satisfied by each of the parties prior to and after such closing; (iv) outline the manner of bearing costs, including costs associated with the Company’s attorneys and accountants; (v) set forth remedies on defaults; and (vi) include miscellaneous other terms.

 

As stated above, we will not acquire or merge with any entity which cannot provide independent audited financial statements within a reasonable period of time after closing of the proposed transaction. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance within the requirements of the 1934 Act, or if the audited financial statements provided do not conform to the representations made by that business to be acquired, the definitive closing documents will provide that the proposed transaction will be voidable, at the discretion of our present management. If such transaction is voided, the definitive closing documents will also contain a provision providing for reimbursement for our costs associated with the proposed transaction.

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Competition

 

We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

 

Investment Company Act 1940

 

Although we will be subject to regulation under the Securities Act of 1933, as amended, and the 1934 Act, we believe we will not be subject to regulation under the Investment Company Act of 1940 (the “1940 Act”) insofar as we will not be engaged in the business of investing or trading in securities. In the event we engage in business combinations that result in us holding passive investment interests in a number of entities, we could be subject to regulation under the 1940 Act. In such event, we would be required to register as an investment company and incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the 1940 Act and, consequently, any violation of the 1940 Act would subject us to material adverse consequences. We believe that, currently, we are exempt under Regulation 3a-2 of the 1940 Act.

 

Intellectual Property

 

We own no intellectual property.

 

Employees

 

We presently have no full time executive, operational or clerical staff.

 

Mr. Erik Nelson was appointed as Corporate Secretary and a member of the Board of Directors on September 19, 2011; and was appointed President on November 12, 2017.

 

Factors Effecting Future Performance

 

Rather than an operating business, our goal is to obtain debt and/or equity finance meet our ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders.

 

Although there is no assurance that this series of events will be successfully completed, we believe we can successfully complete an acquisition or merger which will enable us to continue as a going concern. Any acquisition or merger will most likely be dilutive to our existing stockholders.

 

The factors affecting our future performance are listed and explained below under the section “Risk Factors” below:

 

ITEM 1A: RISK FACTORS

 

We need to find financing for our business idea which is uncertain and risky.

 

Our plan of operation is to obtain debt or equity finance to meet our ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that any of the events can be successfully completed, that any such business will be identified or that any stockholder will realize any return on their shares after such a transaction has been completed. In particular, there is no assurance that any such business will be located or that any stockholder will realize any return on their shares after such a transaction. Any merger or acquisition completed by us can be expected to have a significant dilutive effect on the percentage of shares held by our current stockholders.

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We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

 

You should be aware that there are various risks associated with our business, including the risks discussed below. You should carefully consider these risk factors, as well as the other information contained in this Registration Statement, in evaluating our business and us.

 

Rather than our previous operating business, our business is now to seek to raise the debt and/or equity to meet our ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that this series of events will be successfully completed or that any stockholder will realize any return on their shares after the new business plan has been implemented.

 

RISKS RELATED TO OUR COMPANY

 

WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES

 

As of December 31, 2017, we had an accumulated deficit in excess of $1 million and a stockholders’ deficit of approximately $7,725.

 

As of September 30, 2018, we had an accumulated deficit in excess of $1 million and a stockholders’ deficit of approximately $10,546.

 

Future losses are likely to occur as, until we are able to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders as we have no sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2017 and 2016, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES

 

We have no sources of income at this time and no existing cash balances to meet our ongoing operating expenses. In the short term, unless we are able to raise additional debt and/or equity we shall be unable to meet our ongoing operating expenses. On a longer-term basis, we intend to raise the debt and/or equity to meet our ongoing operating expenses and merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that this series of events will be successfully completed.

 

WE INTEND TO PURSUE THE ACQUISITION OF AN OPERATING BUSINESS

 

Our sole strategy is to acquire an operating business. Successful implementation of this strategy depends on our ability to identify a suitable acquisition candidate, acquire such company on acceptable terms and integrate its operations. In pursuing acquisition opportunities, we compete with other companies with similar strategies. Competition for acquisition targets may result in increased prices of acquisition targets and a diminished pool of companies available for acquisition. Acquisitions involve a number of other risks, including risks of acquiring undisclosed or undesired liabilities, acquired in-process technology, stock compensation expense, diversion of management attention, potential disputes with the seller of one or more

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acquired entities and possible failure to retain key acquired personnel. Any acquired entity or assets may not perform relative to our expectations. Our ability to meet these challenges has not been established.

 

SCARCITY OF, AND COMPETITION FOR, BUSINESS OPPORTUNITIES AND COMBINATIONS

 

We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. Nearly all such entities have significantly greater financial resources, technical expertise and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. Moreover, we will also compete in seeking merger or acquisition candidates with numerous other small public companies. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

 

WE HAVE NOT EXECUTED ANY FORMAL AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION AND HAVE ESTABLISHED NO STANDARDS FOR BUSINESS COMBINATIONS

 

We have not executed any formal arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of a private or public entity. There can be no assurance that we will be successful in identifying and evaluating suitable business opportunities or in concluding a business combination. We have not identified any particular industry or specific business within an industry for evaluation. There is no assurance we will be able to negotiate a business combination on terms favorable, if at all. We have not established a specific length of operating history or specified level of earnings, assets, net worth or other criteria which we will require a target business opportunity to have achieved, and without which we would not consider a business combination. Accordingly, we may enter into a business combination with a business opportunity having no significant operating history, losses, limited or no potential for earnings, limited assets, negative net worth or other negative characteristics.

 

WE MAY BE NEGATIVELY AFFECTED BY ADVERSE GENERAL ECONOMIC CONDITIONS

 

Current conditions in domestic and global economies are extremely uncertain. Adverse changes may occur as a result of softening global economies, wavering consumer confidence caused by the threat of terrorism and war, and other factors capable of affecting economic conditions. Such changes could have a material adverse effect on our business, financial condition, and results of operations.

 

BECAUSE OUR PRINCIPAL SHAREHOLDER CONTROLS OUR ACTIVITIES, HE MAY CAUSE US TO ACT IN A MANNER THAT IS MOST BENEFICIAL TO HIMSELF AND NOT TO OTHER SHAREHOLDERS WHICH COULD CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY

 

Our principal shareholder has voting authority for fifty-five percent (55%) of our outstanding common stock. As a result, he effectively controls all matters requiring stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transaction. These insiders also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably.

 

OUR DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE RESOLVED FAVORABLY TO US .

 

Certain conflicts of interest may exist between our sole director and us. Our sole Director has other business interests to which he devotes his attention and may be expected to continue to do so although management time should be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through exercise of such judgment as is

 

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consistent with fiduciary duties to us. See "Directors and Executive Officers" (page 30 below), and "Conflicts of Interest." (page 31 below).

 

WE MAY DEPEND UPON OUTSIDE ADVISORS; WHO MAY NOT BE AVAILABLE ON REASONABLE TERMS AND AS NEEDED.

 

To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. Our Board without any input from stockholders will make the selection of any such advisors. Furthermore, it is anticipated that such persons may be engaged on an "as needed" basis without a continuing fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect to hire persons who are affiliates, if they are able to provide the required services.

 

WE ARE NOT A REPORTING COMPANY AT THIS TIME, BUT WILL BECOME ONE DUE TO THE FILING OF THIS FORM 10-12G

 

Upon the successful filing of this Form 10-12G, we will be subject to the reporting requirements under the Securities and Exchange Act of 1934. As a result, shareholders will have access to the information required to be reported by publicly held companies under the Exchange Act and the regulations thereunder. We intend to provide our shareholders with quarterly unaudited reports and annual reports containing financial information prepared in accordance with generally accepted accounting principles audited by independent certified public accountants and intend to register under the Securities Exchange Act, Section12(g). There can be no assurance that we shall be able to file this Form 10–12G successfully or that we shall become a reporting company.

 

 

WE ARE AN “EMERGING GROWTH COMPANY,” AND ANY DECISION ON OUR PART TO COMPLY ONLY WITH CERTAIN REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO “EMERGING GROWTH COMPANIES” COULD MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.

 

We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,” we expect and fully intend to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)2(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to opt in to the extended transition period for complying with the revised accounting standards. We have elected to rely on these exemptions and reduced disclosure requirements applicable to “emerging growth companies” and expect to continue to do so.

 

WE MAY NOT BE ABLE TO MEET THE FILING AND INTERNAL CONTROL REPORTING REQUIREMENTS IMPOSED BY THE SEC WHICH MAY RESULT IN A DECLINE IN THE PRICE OF OUR COMMON SHARES AND AN INABILITY TO OBTAIN FUTURE FINANCING.

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As directed by Section 404 of the Sarbanes-Oxley Act, as amended by SEC Release No. 33-8934 on June 26, 2008, the SEC adopted rules requiring each public company to include a report of management on the company’s internal controls over financial reporting in its annual reports. In addition, the independent registered public accounting firm auditing a company’s financial statements may have to also attest to and report on management’s assessment of the effectiveness of the company’s internal controls over financial reporting. We may be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement

 

· Of management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

 

· Of management’s assessment of the effectiveness of its internal control over financial reporting as of year-end; and

 

· Of the framework used by management to evaluate the effectiveness of our internal control over financial reporting.

 

Furthermore, our independent registered public accounting firm may be required to file its attestation on whether it believes that we have maintained, in all material respects, effective internal control over financial reporting.

 

While we expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act, there is a risk that we may not be able to comply timely with all of the requirements imposed by this rule. In the event that we are unable to receive a positive attestation from our independent registered public accounting firm with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements and our stock price and ability to obtain equity or debt financing as needed could suffer.

 

In addition, in the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with its audit of our financial statements, and in the further event that it is unable to devise alternative procedures in order to satisfy itself as to the material accuracy of our financial statements and related disclosures, it is possible that we would be unable to file our Annual Report on Form 10-K with the SEC, which could also adversely affect the market price of our common stock and our ability to secure additional financing as needed.

 

 

REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT AND COMPLIANCE WITH THE SARBANES-OXLEY ACT OF 2002, INCLUDING ESTABLISHING AND MAINTAINING ACCEPTABLE INTERNAL CONTROLS OVER FINANCIAL REPORTING, ARE COSTLY AND MAY INCREASE SUBSTANTIALLY.

 

The rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require that the Company engage legal, accounting, auditing and other professional services. The engagement of such services is costly. Additionally, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we design, implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley Act and the limited technically qualified personnel we have may make it difficult for us to design, implement and maintain adequate internal controls over financial reporting. In the event that we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports or report fraud, which may harm our overall financial condition and result in loss of investor confidence and a decline in our share price.

 

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act of 2010 and other applicable securities rules and regulations. Despite recent reforms made

 

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possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.

 

We are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas. However, we anticipate that the expenses that will be required in order to adequately prepare for being a public company could be material. We estimate that the aggregate cost of increased legal services; accounting and audit functions; personnel, such as a chief financial officer familiar with the obligations of public company reporting; consultants to design and implement internal controls; and financial printing alone will be a few hundred thousand dollars per year and could be several hundred thousand dollars per year. In addition, if and when we retain independent directors and/or additional members of senior management, we may incur additional expenses related to director compensation and/or premiums for directors’ and officers’ liability insurance, the costs of which we cannot estimate at this time. We may also incur additional expenses associated with investor relations and similar functions, the cost of which we also cannot estimate at this time. However, these additional expenses individually, or in the aggregate, may also be material.

 

In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

 

The increased costs associated with operating as a public company may decrease our net income or increase our net loss and may cause us to reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of such increased costs. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

 

THE JOBS ACT ALLOWS US TO DELAY THE ADOPTION OF NEW OR REVISED ACCOUNTING STANDARDS THAT HAVE DIFFERENT EFFECTIVE DATES FOR PUBLIC AND PRIVATE COMPANIES.

 

Since, we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act, this election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

RISKS RELATED TO OUR SECURITIES

 

REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION AND DILUTION TO STOCKHOLDERS

 

Our primary plan of operation is based upon a business combination with a private concern which, in all likelihood, would result in us issuing securities to stockholders of such private company. The issuance of previously authorized and unissued shares of our common stock would result in reduction in percentage of shares owned by present and prospective stockholders and may result in a change in control or management. In addition, any merger or acquisition can be expected to have a significant dilutive effect on the percentage of the shares held our stockholders.

 

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THE REGULATION OF PENNY STOCKS BY SEC AND NASD MAY HAVE AN EFFECT ON THE TRADABILITY OF OUR SECURITIES.

 

Our securities are currently listed on the Over the Counter market and we are currently seeking to have them listed on the OTC Markets Pink Sheets. Our shares are subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. For purposes of the rule, the phrase "accredited investors" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000).

 

For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore.

 

In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities. The rules may further affect the ability of owners of Shares to sell our securities in any market that might develop for them.

 

Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

 

The shares of our common stock may be thinly-traded on the Pink Sheets, meaning that the number of persons interested in purchasing our shares of common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of our shares of common stock until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares of common stock is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on Securities price.

 

OUR STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES.

 

We cannot give you any assurance that a broader or more active public trading market for our shares of common stock will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give investors no assurance that they will be able to sell their shares of common stock at or near ask prices or at all if you need money or otherwise desire to liquidate your shares of common stock of our Company.

 

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RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.

 

All of the outstanding shares of common stock held by our present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. We are registering all of our outstanding shares so officers, directors and affiliates will be able to sell their shares if this Registration Statement becomes effective. Rule 144 provides in essence that a person who has held restricted securities for one year may, under certain conditions, sell every three months, in brokerage transactions, a number of Shares that does not exceed the greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a nonaffiliate after the owner has held the restricted securities for a period of two years. A sale under Rule 144 or under any other exemption from the Act, may have a depressive effect upon the price of the common stock in any market that may develop.

 

THE PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE

 

Our shares are currently listed on the Over the Counter (OTC) market. Due to this listing on the OTC market it is likely that our common stock will be subject to price volatility, low volumes of trades and large spreads in bid and ask prices quoted by market makers. Due to the low volume of shares traded on any trading day, persons buying or selling in relatively small quantities may easily influence prices of our common stock. This low volume of trades could also cause the price of our stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. If high spreads between the bid and ask prices of our common stock exist at the time of a purchase, the stock would have to appreciate substantially on a relative percentage basis for an investor to recoup their investment. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock. No assurance can be given that an active market in our common stock will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

 

LOSS OF CONTROL BY OUR PRESENT MANAGEMENT AND STOCKHOLDERS MAY OCCUR UPON ISSUANCE OF ADDITIONAL SHARES.

 

We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of our voting power and equity. The result of such an issuance would be those new stockholders and management would control us, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of us by our current Shareholders.

 

IF THE REGISTRATION OF OUR COMMON STOCK IS REVOKED IN THE FUTURE, OUR BUSINESS OPPORTUNITIES WILL CEASE TO EXIST

 

In the event our securities registration was to be revoked, we would not have the ability to raise money through the issuance of shares and would lose the ability to continue the business plan set out in this filing. Common stock issued and outstanding at that time would no longer be tradable.

 

WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK

 

We do not anticipate paying any cash dividends on our common stock in the foreseeable future.

 

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WE MAY BE UNSUCCESSFUL IN FINDING A MERGER THAT CAN BE ACCOMPLISHED WITH POSITIVE LONG-TERM RESULTS

The business of selecting and entering into a merger is fraught with all kinds of issues. For instance, the business may need capital that is never achieved, the management is not capable of carrying the business forward successfully, the business plan is ill conceived, and not executed, or competitive factors cause business failure. There are many other factors in addition to these, as may have been discussed above in “Risk Factors” which could cause our company to fail and the investors capital will be at risk.

I TEM 2: FINANCIAL INFORMATION

Management's Discussion and Analysis of Financial Condition and Results of Operations.

This registration statement on Form 10-12G and other reports filed by us from time to time with the SEC (collectively, the "Filings") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, our management as well as estimates and assumptions made by our management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to us or our management identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes to those statements included elsewhere in this prospectus.  In addition to the historical financial information, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" and elsewhere in this prospectus.

 

OVERVIEW

 

NOCERA, INC. (“ Company ”) was organized February 1, 2002 under the laws of the State of Nevada.

 

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On February 11, 2002, Rocco Fiorino was appointed President of the Company, and a member of the Board of Directors of the Company.

 

On February 12, 2002, we acquired Felice Conserve, an Italian corporation, as a wholly owned subsidiary in exchange for 20 million shares of our common stock. The principal business of Felice Conserve was the production and processing of agricultural products in Italy. The principal product was canned tomatoes.

 

On August 15, 2002, Erik Nelson was appointed Corporate Secretary and a member of the Board of Directors.

 

In 2003, we established two subsidiaries in Uruguay; Sontemar, SA (“Sontemar”), and Noldicor, SA (“Noldicor”). The principal business of Noldicor was the production of tomatoes. The principal business of Sontemar was the processing and sale of packaged tomatoes.

 

On April 23, 2004, we paid a 4 for 1 stock dividend to our shareholders.

 

On November 12, 2005, Erik Nelson resigned as an officer and director of the Company.

 

The Company abandoned operations in 2006.

 

In 2006, due to financial difficulties, Noldicor and Sontemar ceased operations. As a result of this, our operations in Uruguay ceased. Additionally, during 2006, Felice Conserve was divested back to its original shareholders. This resulted in our returning to development stage status.

 

Mr. Erik S. Nelson, our sole officer and director, was appointed as Corporate Secretary and a member of the Board of Directors on September 19, 2011.

 

On approximately November 3, 2017, we effected a reverse-split of our common shares as follows:

 

· A 1 for 40,000 reverse-split of the Company’s common shares, followed immediately by;

 

· All fractional shares shall be rounded upwards to the nearest whole share, followed immediately by;

 

· A 200 for 1 forward stock split.

 

The net effect of these actions was a 1 for 200 reverse-split of the Company’s common shares, with no shareholder being reduced below 200 shares. All shareholders who prior to the reverse-split had 40,000 or less of the pre-split shares received 200 of the new, post-split shares.

 

Following the death of Rocco Fiorino, Mr. Nelson was appointed President on November 12, 2017.

 

PLAN OF OPERATION

 

Our plan of operations is to raise debt and/or equity to meet our ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that we will successfully complete this series of transactions. In particular, there is no assurance that any such business will be located or that any stockholder will realize any return on their shares after such a transaction. Any merger or acquisition completed by us can be expected to have a significant dilutive effect on the percentage of shares held by our current stockholders.

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Our intended budget for the next twelve months is as follows:

 

 

    Q4 financial year ended December 31, 2018   Q1 financial year ended December 31, 2019   Q2 financial year ended December 31, 2019   Q3 financial year ended December 31, 2019   Twelve Month
Total
                     
Accounting   $ 6,000     $ 3,000     $ 3,000     $ 3,000     $ 15,000  
Legal                                        
Other fees                                        
General and administrative   $ 2,000     $ 2,000     $ 2,000     $ 2,000     $ 8,000  
Miscellaneous                                        
                                         
Total Operating Expenses   $ 8,000     $ 5,000     $ 5,000     $ 5,000     $ 23,000  

 

At this time, we have four thousand dollars ($4,000) cash on hand, and we are dependent on advances from our principal shareholder or our directors and officers. There can be no guarantee that we will be able to obtain sufficient funding these sources.

 

We believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

 

We intend to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms which desire to seek the advantages of an issuer who has complied with the Securities Act of 1934 (the “1934 Act”). We will not restrict our search to any specific business, industry or geographical location, and we may participate in business ventures of virtually any nature. This discussion of our proposed business is purposefully general and is not meant to be restrictive of our virtually unlimited discretion to search for and enter into potential business opportunities. We anticipate that we may be able to participate in only one potential business venture because of our lack of financial resources.

 

We may seek a business opportunity with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

 

We expect that the selection of a business opportunity will be complex and risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the benefits of an issuer who has complied with the 1934 Act. Such benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all stockholders and other factors. Potentially, available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We have, and will continue to have, essentially no assets to provide the owners of business opportunities. However, we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling

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ownership interest in an issuer who has complied with the 1934 Act without incurring the cost and time required to conduct an initial public offering.

 

The analysis of new business opportunities will be undertaken by, or under the supervision of, our sole director. We intend to concentrate on identifying preliminary prospective business opportunities which may be brought to our attention through present associations of our director, professional advisors or by our stockholders. In analyzing prospective business opportunities, we will consider such matters as (i) available technical, financial and managerial resources; (ii) working capital and other financial requirements; (iii) history of operations, if any, and prospects for the future; (iv) nature of present and expected competition; (v) quality, experience and depth of management services; (vi) potential for further research, development or exploration; (vii) specific risk factors not now foreseeable but that may be anticipated to impact the proposed activities of the company; (viii) potential for growth or expansion; (ix) potential for profit; (x) public recognition and acceptance of products, services or trades; (xi) name identification; and (xii) other factors that we consider relevant. As part of our investigation of the business opportunity, we expect to meet personally with management and key personnel. To the extent possible, we intend to utilize written reports and personal investigation to evaluate the above factors.

 

We will not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time after closing of the proposed transaction.

 

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2017 COMPARED TO THE YEAR ENDED DECEMBER 31, 2016

 

Revenue

 

We recognized no revenue during the years ended December 31, 2017 and 2016. We had no business from which to generate revenues in the fiscal years 2016 and 2017.

 

Cost of Revenue

 

We recognized no cost of revenue during the years ended December 31, 2017 and 2016.

 

Gross Profit / (Loss)

 

We recognized no gross profit / (loss) during the year ended December 31, 2017 and 2016.

 

General and Administrative Expenses

 

During the year ended December 31, 2017, we incurred $5,100 in general, selling and administrative expenses compared to $875 in the year ended December 31, 2016, an increase of $4,225. During the year ended December 31, 2017 we incurred $0 in income expense. By comparison, during the year ended December 31, 2016, we incurred in $0 in income expense.

 

Operating Loss

 

During the year ended December 31, 2017, we incurred an operating loss of $5,100 compared to an operating loss of $875 in the year ended December 31, 2016, an increase of $4,225 due to an increase in general, selling and administrative expenses as stated above.

 

Interest and Other Income / (Expenses) Net

 

During the years ended December 31, 2017 and 2016 we recognized interest expense of $0 and $0, respectively.

 

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Loss before Income Tax

 

During the year ended December 31, 2017, we incurred an operating loss of $5,100 compared to an operating loss of $875 in the year ended December 31, 2016, an increase of $4,225, due to the factors discussed above.

 

Provision for Income Tax

 

No provision for income taxes was recorded in either the years ended December 31, 2017 or 2016, as we have incurred taxable losses in both periods.

 

Net Loss

 

During the year ended December 31, 2017, we incurred a net loss of $5,100 compared to a net loss of $875 in the year ended December 31, 2016, an increase of $4,225, due to the factors discussed above.

 

CASH FLOW

 

At December 31, 2017, we did not have any cash or cash equivalents, no assets, no operating business or other source of income and outstanding liabilities and a stockholders’ deficit of $0.

 

Consequently, we are now dependent on raising additional equity and/or debt to meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to fund our ongoing operating expenses.

 

It is our current intention to seek to raise debt and/or equity financing to meet ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There is no assurance that this series of events will be satisfactorily completed.

 

Future losses are likely to occur as, until we are able to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders as we have no sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2017 and 2016, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

 

      Year Ended       Year Ended  
      December 31, 2017       December 31, 2016  
                 
                 
Net Cash Used in Operating Activities   $ —       $ —    
Net Cash Provided (Used In) by Investing Activities     —         —    
Net Cash Provided by Financing Activities     —         —    
Net Movement in Cash and Cash Equivalents     —         —    

 

Operating Activities

 

We neither generated nor used funds in operating activities during the years ended December 31, 2017 and 2016.

   

Investing Activities

 

We neither generated nor used funds in investing activities during the years ended December 31, 2017 and 2016.

 

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Financing Activities

 

We neither generated nor used funds in financing activities during the years ended December 31, 2017 and 2016.

 

We are dependent upon the receipt of capital investment or other financing to fund our ongoing operations and to execute our business plan of seeking a combination with a private operating company. In addition, we are dependent upon our controlling shareholder to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations.

 

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2017

 

Revenue

 

We recognized no revenue during the three-month periods ended September 30, 2018 and 2017. We currently have no business from which to generate revenues.

 

Cost of Revenue

 

We recognized no cost of revenue during the three-month periods ended September 30, 2018 and 2017.

 

Gross Profit / (Loss)

 

We recognized no gross profit / (loss) during the three-month periods ended September 30, 2018 and 2017.

 

General and Administrative Expenses

 

During the three months ended September 30, 2018, we incurred $717 in general and administrative expenses compared to $755 in the three months ended September 30, 2017, a decrease of $38. The decrease was due largely from the fact that we incurred lower transfer agency fees. No director’s or officer’s fees were accrued during the three months ended September 30, 2018. The balance of general and administrative expenses incurred during the three months ended September 30, 2018 related to audit and review fees, accounting fees, share transfer fees and other general office expenses. The balance of general and administrative expenses incurred during the three months ended September 30, 2017 related to share transfer agent fees.

 

Operating Loss

 

During the three months ended September 30, 2018, we incurred an operating loss of $717 compared to an operating loss of $755 in the three months ended September 30, 2017, a decrease of $38, due to the factors discussed above.

 

Interest and Other Income / (Expenses) Net

 

During the three months ended September 30, 2018, we incurred an interest expense of $10,000 compared to no interest expense in the three months ended September 30, 2017. This increase in interest expenses was due to the issuance of a convertible promissory note to a related party. Please see Note 8 of the September 30 financial statements.

 

Loss before Income Tax

 

During the three months ended September 30, 2018, we incurred an operating loss of $717 compared to an operating loss of $755 in the three months ended September 30, 2017, a decrease of $38, due to the factors discussed above.

 

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Provision for Income Tax

 

No provision for income taxes was recorded in either the three months ended September 30, 2018 or 2017, as we have incurred taxable losses in both periods.

 

Net Loss

 

During the three months ended September 30, 2018, we incurred a net loss of $10,717 compared to a net loss of $755 in the three months ended September 30, 2017, an increase of $9,962, due to the factors discussed above.

 

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2017

 

Revenue

 

We recognized no revenue during the nine-month periods ended September 30, 2018 and 2017. We currently have no business from which to generate revenues.

 

Cost of Revenue

 

We recognized no cost of revenue during the nine-month periods ended September 30, 2018 and 2017.

 

Gross Profit / (Loss)

 

We recognized no gross profit / (loss) during the nine-month periods ended September 30, 2018 and 2017.

 

General and Administrative Expenses

 

During the nine months ended September 30, 2018, we incurred $3,131 in general and administrative expenses compared to $3,420 in the nine months ended September 30, 2017, a decrease of $289. The decrease was due to the following: During the nine months ended September 30, 2018 we incurred interest expense of approximately $2,110 compared to an interest expense of $-0- during the nine months ended September 30, 2017, an increase of $2,110. During the nine months ended September 30, 2018 we did not incur any license fee expenses compared to license and fee expenses of $1,350 during the nine-month period ended September 30, 2017, a decrease of $1,350. During the nine months ended September 30, 2018 we incurred transfer agency fees of $995 compared to $2,070 during the nine months ended September 30, 2017, a decrease of approximately $1,075.

 

Operating Loss

 

During the nine months ended September 30, 2018, we incurred an operating loss of ($3,131) compared to an operating loss of ($3,420) during the nine months ended September 30, 2017, a decrease of $289 due to the factors discussed above.

 

Interest and Nonoperating Income / (Loss)

 

During the nine-month periods ended September 30, 2018 we recognized Nonoperating Income /Loss of ($602,469) due to Warrant issue expense of $592,469 and interest expense of $10,000 compared to $0 during the nine-month period ended September 30, 2017.

 

Loss before Income Tax

 

During the nine months ended September 30, 2018, we incurred an operating loss of $(3,131) compared to an operating loss of $(3,420) in the nine months ended September 30, 2017, a decrease of $289, due to the factors discussed above.

 

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Provision for Income Tax

 

No provision for income taxes was recorded in either of the nine-month periods ended September 30, 2018 or 2017, as we have incurred taxable losses in both periods.

 

Net Loss

 

During the nine months ended September 30, 2018, we incurred a net loss of ($605,600) compared to a net loss of ($3,420) in the nine months ended September 30, 2017, an increase of $602,180, due to the factors discussed above.

 

CASH FLOW

 

At September 30, 2018, we had cash of $10,483, no assets, no operating business or other source of income and outstanding liabilities and a stockholders’ deficit of ($10,546).

 

Consequently, we are now dependent on raising additional equity and/or debt to meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to fund our ongoing operating expenses.

 

It is our current intention to seek to raise debt and/or equity financing to meet ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There is no assurance that this series of events will be satisfactorily completed.

 

Future losses are likely to occur as, until we are able to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders as we have no sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2017 and 2016, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

    Nine Months   Nine Months
    Ended   Ended
    September 30, 2018   September 30, 2017
         
Net Cash Used in Operating Activities   $ 173     $ —    
Net Cash Provided (Used In) by Investing Activities   $ 310     $ —    
Net Cash Provided by Financing Activities   $ 10,000     $ —    
Net Movement in Cash and Cash Equivalents                

 

Operating Activities

 

During the nine months ended September 30, 2018, we incurred a net loss of ($605,600), Warrant Issue Expense of $592,469l, interest expense of $10,000 and an increase in accounts payable of $3,304. By comparison, during the nine months ended September 30, 2017, we incurred a net loss of ($3,420) which, without the need for adjustment for non-cash items, represented the net cash used in operating activities during the period.

 

Investing Activities

 

During the nine months ended September 30, 2018 and 2017, we generated $310 and $0, respectively in investing activities.

 

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Financing Activities

 

During the nine months ended September 30, 2018, we received $10,000 by way of loan advance from our sole officer and director, Erik S. Nelson. By comparison during the nine months ended September 30, 2017, we received $0. 

 

We are dependent upon the receipt of capital investment or other financing to fund our ongoing operations and to execute our business plan of seeking a combination with a private operating company. In addition, we are dependent upon our controlling shareholder to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations.

 

Liquidity and Capital Resources

 

At September 30, 2018, we had cash of $10,483, no assets, no operating business or other source of income and outstanding liabilities and a stockholders’ deficit of ($10,546).

 

Consequently, we are now dependent on raising additional equity and/or debt to meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to fund our ongoing operating expenses.

 

It is our current intention to seek to raise debt and/or equity financing to meet ongoing operating expenses and attempt to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There is no assurance that this series of events will be satisfactorily completed.

 

Future losses are likely to occur as, until we are able to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders as we have no sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2017 and 2016, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

We are now focused raising debt and/or equity financing to meet ongoing operating expenses and attempting to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There is no assurance that this series of events will be satisfactorily completed.

 

CRITICAL ACCOUNTING POLICIES

 

All companies are required to include a discussion of critical accounting policies and estimates used in the preparation of their financial statements. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Our significant accounting policies are described in Note 3 to our Financial Statements on page F-8. These policies were selected because they represent the more significant accounting policies and methods that are broadly applied in the preparation of our financial statements. However, it should be noted that we intend to acquire a new operating business. The critical accounting policies and estimates for such new operations will, in all likelihood, be significantly different from our current policies and estimates.

 

 

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Inflation

 

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future.

 

Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

 

Off-Balance Sheet Arrangements

 

Per SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. As of December 31, 2017 and September 30, 2018, we have no off-balance sheet arrangements.

 

Accounting for Acquisitions 

 

In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions and immediately expense acquisition-related costs and fees associated with business combinations. 

 

CRITICAL ACCOUNTING POLICIES

 

Our significant accounting policies are disclosed in Note 3 of our Financial Statements included elsewhere in this Form 10. The following discussion addresses our most critical accounting policies, which are those that are both important to the portrayal of our financial condition and results of operations and that require significant judgment or use of complex estimates.

 

Revenue Recognition

 

We recognize revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” (“ASC-605”). ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period that the related sales are recorded. We w ill defer any revenue for which the product or servicers has not been delivered or provided, or is subject to refund, until such time that we and the customer jointly determine that the product has been delivered or that no refund will be required.

 

Income Taxes

 

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

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Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the years ended December 31, 2017 and 2016 and the nine months ended September 30, 2018.

 

Distinguishing Liabilities from Equity

 

We rely on the guidance provided by ASC Topic 480,  Distinguishing Liabilities from Equity , to classify certain redeemable and/or convertible instruments. We first determine whether a financial instrument should be classified as a liability. We will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that we must or may settle by issuing a variable number of its equity shares.

 

Once we determine that a financial instrument should not be classified as a liability, we determine whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). We will determine temporary equity classification if the redemption of the financial instrument is outside the control of our Company (i.e. at the option of the holder). Otherwise, we account for the financial instrument as permanent equity.

 

Initial Measurement

 

We record our financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

 

Subsequent Measurement - Financial instruments classified as liabilities

 

We record the fair value of our financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of our financial instruments classified as liabilities are recorded as other expense/income.

 

Share-based Compensation

 

In accordance with ASC 718, Compensation – Stock Based Compensation , and ASC 505, Equity Based Payments to Non-Employees , we account for share-based payment using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is readily determinable.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU 2014-09,  Revenue from Contracts with Customers (Topic 606) . The core principle of ASU 2014-09 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 and services. This standard is effective for fiscal years and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14,  Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.  The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. Topic 606 is effective for the Company in the first quarter of fiscal 2019. We are currently evaluating the effects of ASU 2014-09 and related ASUs noted below on our consolidated financial statements.

 

From March through December 2016, the FASB issued ASU 2016-08,  Revenue from Contracts with Customers (Topic 606):   Principal versus Agent Considerations (Reporting Revenue Gross versus Net),  ASU 2016-10,  Revenue from Contracts with Customers (Topic 606):   Identifying Performance Obligations and Licensing,  ASU 2016-11,  Revenue Recognition

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(Topic 605) and Derivatives and Hedging (Topic 815):   Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting,  ASU No. 2016-12,  Revenue from Contracts with Customers (Topic 606):Narrow-Scope Improvements and Practical Expedients  and ASU No. 2016-20,  Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.  These amendments are intended to improve and clarify the implementation guidance of Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of ASU No. 2014-09 and ASU No. 2015-14.

 

In August 2016, the FASB issued ASU 2016-15, Statement  of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The guidance is effective for us beginning after December 15, 2017, although early adoption is permitted. We currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

 

In November 2016, the FASB issued ASU No. 2016-18,  Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force . ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement cash flows. The new standard is expected to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

 

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. We currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-04,  Intangibles – Goodwill and Other (Topic 350); Simplifying the Test for Goodwill Impairment. The amendments in this update simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for public companies for the reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Although we cannot anticipate future goodwill impairment, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, does not anticipate a material impact on our financial statements. The current accounting policies and procedures are not anticipated to change, except for the elimination of the Step 2 analysis. We currently are in the process of evaluating the impact of the adoption on our consolidated financial statements.

 

In May 2017, the FASB issued ASU No 2017-09  “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” . ASU 2017-09 provides clarity and reduces both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all three of the following are met: (1) The fair value (or calculated value or

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intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. Note that the current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in ASU 2017-09. ASU 2017-09 is effective for all annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the effects of ASU 2017-09 on our audited consolidated financial statements.

 

Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures.

 

CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management conducted an evaluation, with the participation of our Chief Executive Officer, who is our principal executive officer and our principal financial and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this registration statement on Form 10. Based on that evaluation, we concluded that because of the material weakness and significant deficiencies in our internal control over financial reporting described below, our disclosure controls and procedures were not sufficient as of December 31, 2017 or 2016.

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Management is responsible for the preparation of our financial statements and related information. Management uses its best judgment to ensure that the financial statements present accurately, in material respects, our financial position and results of operations in fairness and conformity with generally accepted accounting principles.

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in the Exchange Act. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate, and that the assumptions and opinions in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error and overriding of controls. Consequently, an ineffective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.

 

Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and that the receipts and expenditures of company assets are made in accordance with our management’s and directors’ authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on our financial statements.

 

We conducted an evaluation of the effectiveness of our internal control over financial reporting, based on the framework in “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway

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Commission (“COSO”) and published in 2013, and subsequent guidance prepared by COSO specifically for smaller public companies. Based on that evaluation, management concluded that our internal control over financial reporting was not sufficient as of December 31, 2017 and 2016 and September 30, 2018 for the reasons discussed below.

 

A significant deficiency is a deficiency, or combination of deficiencies in internal control over financial reporting, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Management identified the following material weakness and significant deficiencies in its assessment of the effectiveness of internal control over financial reporting as of December 31, 2017 and September 30, 2018:

 

· The Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked personnel with accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements.

 

· Material Weakness – Inadequate segregation of duties.

 

We expect to be materially dependent on a third party that can provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements, which could lead to a restatement of those financial statements. Our management does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and maintained, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must account for resource constraints. In addition, the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, can and will be detected.

 

This registration statement on Form 10 does not include an attestation report from our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Commission that permit us to provide only management’s report in this registration statement on Form 10.

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the quarter ended September 31, 2018 or the nine months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

SUBSEQUENT EVENTS

 

We have evaluated subsequent events after September 30, 2018 through the date this report was filed and have determined there have been no subsequent events for which disclosure is required.

 

ITEM 3: PROPERTIES

 

We do not own or lease any properties.

 

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Since October 16, 2016 through the date of this filing, our corporate offices have been located at 2030 Powers Ferry Road SE, Suite 212, Atlanta, GA 30339 and are provided to us by our sole officer and director at no cost to us.

 

ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following tables set forth as of September 30, 2018 the number and percentage of the outstanding shares of common stock, which according to the information available to us, were beneficially owned by:

(i) each person who is currently a director,
(ii) each executive officer,
(iii) all current directors and executive officers as a group, and
(iv) each person who is known by us to own beneficially more than 5% of our outstanding common stock.

Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.

OFFICERS AND DIRECTORS

  Title of Class Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Owner Percent of Class Outstanding (2) Number of Shares & Warrants if fully exercised Percent of Class including Warrants(4)
Common Shares

Erik S. Nelson,

Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3)

650,000 27.65% 1,450,000 39.7%
           
Form “A” Warrants Erik S. Nelson, Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3) 400,000      
           
Form “B” Warrants Erik S. Nelson, Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3) 400,000      
           
Common Shares All Directors and Executive Officers as a Group (1 person) Common Shares 650,000 27.65% 1,450,000 39.7%
           
Form “A” Warrants

All Directors and Executive Officers as a Group (1 person)

 

400,000      
Form “B” Warrants All Directors and Executive Officers as a Group ( 1 person) 400,000      
           
    (1) The address of each person listed above, unless otherwise indicated, is c/o Nocera, Inc., 2030 Powers Ferry Road SE, Suite 212, Atlanta, GA 30339.  

 

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  (2) Based upon 3,649,200 common shares issued and outstanding on a fully diluted basis.
  (3) Coral Investment Partners, LP. is an investment partnership.  Mr. Nelson is President of the General Partner, and thus has control of the shares owned by the partnership.
  (4) Assuming full exercise of all warrants.

 

GREATER THAN 5% STOCKHOLDERS

 

  Title of Class Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Owner Percent of Class Outstanding (2) Number of Shares & Warrants if fully exercised Percent of Class including Warrants(4)
Common Shares

Erik S. Nelson,

Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3)

650,000 27.659% 1,450,000 39.7%
           
Form “A” Warrants Erik S. Nelson, Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3) 400,000      
           
Form “B” Warrants Erik S. Nelson, Chief Executive Officer, President, Chief Financial Officer, Secretary and Director (3) 400,000      
           
Common Shares

Marina S. Fiorino (5)

Via La Malfa 26

San Marzano Sulsarno

Salerno, 84010

Italy

1,043,600 44.4% 1,843,600 50.5%
           
Form “A” Warrants

Marina S. Fiorino (5)

Via La Malfa 26

San Marzano Sulsarno

Salerno, 84010

Italy

400,000      
           
Form “B” Warrants

Marina S. Fiorino (5)

Via La Malfa 26

San Marzano Sulsarno

Salerno, 84010

Italy

400,000      
           
Common Shares

Capital Market Solutions SL (6)

 

295,000 12.59% 295,000 8.1%
           
Common Shares Coral Investment Partners, LP (7) 150,000 6.39% 150,000 4.1%
           
       

 

 

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    (1) The address of each person listed above, unless otherwise indicated, is c/o 2030 Powers Ferry Road SE, Suite 212, Atlanta, GA 30339.  
    (2) Based upon 3,649,200 common shares issued and outstanding on a fully diluted basis.  
    (3) Coral Investment Partners, LP. is an investment partnership.  Mr. Nelson is President of the General Partner, and thus has control of the shares owned by the partnership.  
    (4) Assuming full exercise of all warrants.  
    (5) Following the passing of Rocco Fiorino, our Former President and Director, Marina Fiorino inherited her ownership of the shares of Nocera previously owned by her father.    
    (6) Capital Market Solutions SL has disbanded. No known contact information is available.  
    (7) Coral Investment Partners, LP is a limited partnership.  Mr. Nelson is the President of the General Partner,     our Company’s sole officer and director  

 

 

Rule 13d-3 under the Securities Exchange Act of 1934 governs the determination of beneficial ownership of securities. That rule provides that a beneficial owner of a security includes any person who directly or indirectly has or shares voting power and/or investment power with respect to such security. Rule 13d-3 also provides that a beneficial owner of a security includes any person who has the right to acquire beneficial ownership of such security within sixty days, including through the exercise of any option, warrant or conversion of a security. Any securities not outstanding which are subject to such options, warrants or conversion privileges are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person. Those securities are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person. Included in this table are only those derivative securities with exercise prices that we believe have a reasonable likelihood of being “in the money” within the next sixty days.

 

As of the date of this filing and since September 30, 2018, there have been no issuances of any class of stock, warrants or any other security .

ITEM 5: DIRECTORS AND EXECUTIVE OFFICERS

Directors and Executive Officers

The following table sets forth the names, ages, and positions with us for each of our directors and officers as of September 30, 2018:

Name   Age   Position    
Erik S. Nelson     51   Chief Executive Officer, President, Chief Financial Officer, Secretary and Director    
Rocco Fiorino     62   Former President and Director (2002 - October 2017)    

 

Erik S. Nelson, Chief Executive Officer, President, Chief Financial Officer, Secretary and Director  

 

Mr. Erik S. Nelson, our sole officer and director, was appointed as Corporate Secretary and a member of the Board of Directors on September 19, 2011. Following the death of Rocco Fiorino, Mr. Nelson was appointed President on November 12, 2017. He is the sole officer and director of our Company. Mr. Nelson is also the President of Coral Capital Partners, Inc. an advisory services firm founded in 1995 that provides services to privately held and publicly traded companies. Mr. Nelson is also the President of Mountain Share Transfer, LLC, an SEC registered stock transfer agent since September 2012.

 

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Mr. Nelson is a graduate of the University of Colorado (1989) with a bachelors in Business Administration, with an emphasis in Finance.

 

Rocco Fiorino, Former President and Director (2002 - October 7, 2017)

 

Rocco Fiorino was appointed President and a member of the Board of Directors on February 11, 2002. Tragically, Mr. Fiorino passed away on October 7, 2017 due to complications resulting from kidney failure. Mr. Fiorino was the President of Felice Conserve, Noldicor SA, and Sontemar, SA. Mr. Fiorino had a life-long career in the growing and processing of tomatoes and agricultural products in Italy. It was through his vision that the Company expanded into Uruguay.

 

CONFLICTS OF INTEREST - GENERAL

 

Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts and corporation opportunity, involved in participation with such other business entities. While our sole officer and director of our business is engaged in business activities outside of our business, he devotes to our business such time as he believes to be necessary.

 

CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES

 

Presently no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring an affiliate, associate person or business opportunity from any affiliate or any client of any such person.

 

COMMITTEES OF THE BOARD OF DIRECTORS

 

In the ordinary course of business, the board of directors maintains a compensation committee and an audit committee.

 

The primary function of the compensation committee is to review and make recommendations to the board of directors with respect to the compensation, including bonuses, of our officers and to administer the grants under our stock option plan.

 

The functions of the audit committee are to review the scope of the audit procedures employed by our independent auditors, to review with the independent auditors our accounting practices and policies and recommend to whom reports should be submitted, to review with the independent auditors their final audit reports, to review with our internal and independent auditors our overall accounting and financial controls, to be available to the independent auditors during the year for consultation, to approve the audit fee charged by the independent auditors, to report to the board of directors with respect to such matters and to recommend the selection of the independent auditors.

 

In the absence of a separate audit committee our board of directors’ functions as audit committee and performs some of the same functions of an audit committee, such as recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditor’s independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls.

 

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ITEM 6: EXECUTIVE COMPENSATION

 

During the year ended December 31, 2017, Mr. Erik S. Nelson was our sole director and officer.

 

Executive compensation during the years ended December 31, 2017 and 2016 was as follows:

  

NAME AND PRINCIPAL POSITION   YEAR  

SALARY

($)

 

BONUS

($)

 

STOCK AWARDS

($)

 

OPTIONS

AWARDS ($)

 

NONQUALIFIED DEFERRED COMPENS-

ATION ($)

 

ALL OTHER COMP

($)

  TOTAL
Erik S. Nelson,
Chief Executive Officer, Chief Financial Officer & Director (1)
    2017     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
    2016     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
                                                                 
Rocco Fiorino, Former President & Director(2)
    2017     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
    2016     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
                                                                 

(1) Mr. Erik S. Nelson, our sole officer and director, was appointed as Corporate Secretary and a member of the Board of Directors on September 19, 2011. Following the death of Rocco Fiorino, Mr. Nelson was appointed President on November 12, 2017.

(2) Rocco Fiorino passed away on October 7, 2017 due to complications resulting from kidney failure.

ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Erik S. Nelson, President and sole Director, has advanced payment for expenses of the Company through his business, Coral Capital Partners. Expenses for the years ended December 31, 2017 and 2016 were $3,975 and $0, respectively. The balance due to Coral Capital Partners was $3,975 and $0 as of December 31, 2017 and 2016, respectively.

 

Mr. Nelson also controls Mountain Share Transfer, LLC, the stock transfer agent for the Company. Expenses for the years ended December 31, 2017 and 2016 were $3,7,50 and $0, respectively. The balance due to Mountain Share Transfer, LLC was $3,750 and $0 as of December 31, 2017 and 2016, respectively.

 

Stock Options

 

The Company has no stock option plan at this time.

 

ITEM 8: LEGAL PROCEEDINGS  

 

Neither we nor our sole officer, directors or holders of five percent or more of its common stock is a party to any pending legal proceedings and to the best of our knowledge, no such proceedings by or against us or our officers, or directors or holders of five percent or more of its common stock have been threatened or is pending against us.

 

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ITEM 9: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED NOCERA MATTERS

 

Market Price and Stockholder Matters

 

Shares of our common stock trade in the pink sheets market and quotations for the common stock are listed in the "Pink Sheets" produced by the OTC Markets under the symbol "NCRA".

 

The following table sets forth for the respective periods indicated the prices of our common stock in this market as reported and summarized by the National Quotation Bureau. Such prices are based on inter-dealer bid and asked prices, without markup, markdown, commissions, or adjustments and may not represent actual transactions.

 

During the fiscal years ended December 31, 2017, 2016 and 2015, and the nine months ended September 30, 2018 it had a trading history as follows:

 

    HIGH   LOW
         
Fiscal Year 2018                
                 
March 31, 2018   $ 0.25     $ 0.05  
June 30, 2018   $ 1.01     $ 0.10  
September 30, 2018   $ 0.51     $ 0.17  
                 
Fiscal 2017                
                 
March 31, 2017   $ 1.44     $ 1.40  
June 30, 2017   $ 1.54     $ 1.44  
September 30, 2017   $ 1.54     $ 0.24  
December 31, 2017   $ 0.82     $ 0.05  
                 
Fiscal Year 2016:                
                 
March 31, 2016   $ 0.36     $ 0.14  
June 30, 2016   $ 2.00     $ 0.36  
September 30, 2016   $ 1.80     $ 1.40  
December 30, 2016   $ 1.40     $ 1.40  
                 
Fiscal Year 2015:                
                 
March 31, 2015   $ 0.70     $ 0.70  
June 30, 2015   $ 0.70     $ 0.18  
September 30, 2015   $ 0.22     $ 0.16  
December 31, 2015   $ 0.16     $ 0.14  

 

Last Reported Price

 

On October 16, 2018, the last reported bid price of our shares of common stock reported on the OTC Markets was $0.17 per share.

 

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Record Holders

 

There were 431 holders of record as of October 16, 2018; however, we believe the number of beneficial holders of our shares of common stock to be approximately 651. In many instances, a registered stockholder is a broker or other entity holding shares in street name for one or more customers who beneficially own the shares.

 

Our transfer agent is Mountain Share Transfer, LLC, 2030 Powers Ferry Road SE, Suite 212, Atlanta, GA 30339. Their telephone number is (303) 460-1149.

 

Dividend Policy

 

We have never paid cash dividends and have no plans to do so in the foreseeable future. Our future dividend policy will be determined by our board of directors and will depend upon a number of factors, including our financial condition and performance, our cash needs and expansion plans, income tax consequences, and the restrictions that applicable laws, any future preferred stock instruments, and any future credit arrangements may then impose.

 

Penny Stock

 

Penny Stock Regulation Broker-dealer practices in connection with transactions in "penny stocks" are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00. Excluded from the penny stock designation are securities registered on certain national securities exchanges or quoted on NASDAQ, provided that current price and volume information with respect to transactions in such securities is provided by the exchange/system or sold to established customers or accredited investors.

 

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in connection with the transaction, and the monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.

 

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. As our securities have become subject to the penny stock rules, investors may find it more difficult to sell their securities.

 

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ITEM 10: RECENT SALES OF UNREGISTERED SECURITIES

 

During the period of January 1, 2015 through September 30, 2018, we have made unregistered sales or issuances of securities as set forth below:

  

DATE OF TITLE OF NO. OF   CLASS OF
ISSUANCE SECURITIES SHARES CONSIDERATION PURCHASER
         
April 16, 2018 Common Stock 1,000,000 $7.00 Accredited
         
April 16, 2018 Form “A” Warrants 500,000 $2.00 Accredited
         
April 16, 2018 Form “B” Warrants 500,000 $1.00 Accredited
         
September 20, 2018 Common Stock 150,000 $100 Accredited
         
September 20, 2018 Form “A” Warrants 150,000 $100 Accredited
         
September 20, 2018 Form “B” Warrants 150,000 $100 Accredited

 

Exemption From Registration Claimed –

 

All of the above sales by our Company of its unregistered securities were made by our Company in reliance upon the available exemptions from registration requirements of Section 4(2) at such time (and now 4(a)(5)) of the Securities Act of 1933, as amended (the "'33 Act"). All of the individuals and/or entities that purchased the unregistered securities were primarily existing shareholders, known to our Company and its management, through pre-existing business relationships, as long-standing business associates and employees. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of our Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to our Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

 

ITEM 11: DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED

 

Description of Common Stock

 

We are authorized to issue 200,000,000 shares of our Common Stock, $0.001 par value (the "Common Stock"). Each share of the Common Stock is entitled to share equally with each other share of Common Stock in dividends from sources legally available therefore, when, and if, declared by our board of directors and, upon our liquidation or dissolution, whether voluntary or involuntary, to share equally in the assets of the Company that are available for distribution to the holders of the Common Stock. Each holder of Common Stock is entitled to one vote per share for all purposes, except that in the election of directors, each holder shall have the right to vote such number of shares for as many persons as there are directors to be elected. Cumulative voting shall not be allowed in the election of directors or for any other purpose, and the holders of Common Stock have no preemptive rights, redemption rights or rights of conversion with respect to the Common Stock. Our

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board of directors is authorized to issue additional shares of our Common Stock within the limits authorized by our Articles of Incorporation and without stockholder action. All shares of Common Stock have equal voting rights, and voting rights are not cumulative.

 

Description of Preferred Stock

 

No shares of Preferred Stock are authorized.

 

Transfer Agent

 

Mountain Share Transfer, LLC is our share transfer agent. Their address is 2030 Powers Ferry Road SE, Suite 212, Atlanta, GA 30339. Their telephone number is (303) 460-1149.

 

ITEM 12: INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The Nevada Revised Statutes requires us to indemnify officers and directors for any expenses incurred by any officer or director in connection with any actions or proceedings, whether civil, criminal, administrative, or investigative, brought against such officer or director because of his or her status as an officer or director, to the extent that the director or officer has been successful on the merits or otherwise in defense of the action or proceeding. The Nevada Revised Statutes permits a corporation to indemnify an officer or director, even in the absence of an agreement to do so, for expenses incurred in connection with any action or proceeding if such officer or director acted in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of us and such indemnification is authorized by the stockholders, by a quorum of disinterested directors, by independent legal counsel in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors, or by independent legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained.

 

The Nevada Revised Statutes prohibits indemnification of a director or officer if a final adjudication establishes that the officer's or director's acts or omissions involved intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing limitations on indemnification, the Nevada Revised Statutes may permit an officer or director to apply to the court for approval of indemnification even if the officer or director is adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law.

 

The Nevada Revised Statutes also provides that indemnification of directors is not permitted for the unlawful payment of distributions, except for those directors registering their dissent to the payment of the distribution.

 

According to our bylaws, we are authorized to indemnify its directors to the fullest extent authorized under Nevada Law subject to certain specified limitations.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and persons controlling us pursuant to the foregoing provisions or otherwise, we are advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

 

ITEM 13: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Our audited financial statements for the years ended December 31, 2017 and 2016 and unaudited financial statements for the three and nine-month periods ended September 30, 2018 and 2017 appear at the end of this registration statement on pages F-1 though F-26.

 

ITEM 14: CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

There have been no disagreements with the independent registered public accounting firm regarding accounting and financial disclosure.

 

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ITEM 15: FINANCIAL STATEMENTS AND EXHIBITS

 

(a) Audited financial statements for the years ended December 31, 2017 and 2016.

 

Unaudited financial statements for the three and nine months ended September 30, 2018.

 

(b)

 

Exhibit No. Description  
3(i).1 Articles of Incorporation of Nocera, Inc. (2.1.2002) Filed Herewith
     
3(i).2 Certificate of Amendment (7.12.17) Filed Herewith
     
3(i).3 Certificate of Change (8.3.17) Filed Herewith
     
3(ii).4 Bylaws of Nocera, Inc. Filed Herewith
     
4.1 Form of “A” Warrant Filed Herewith
     
4.2 Form of “B” Warrant Filed Herewith
     
10.1 Promissory Note Filed Herewith
     
23.1 Consent of Independent Registered Public Accounting Firm Filed Herewith
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SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized.

 

    Nocera, Inc.
         
Date:   October 19, 2018       By:    /s/ Erik S. Nelson
               

Erik S. Nelson

Chief Executive Officer (Principal Executive Officer), President and Chief Financial Officer (Principal Accounting Officer)

 

 

 

 

 

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Exhibit Index

Copies of the following documents are included as exhibits to this registration statement.

 

Exhibit No. Description
   
3(i).1 Articles of Incorporation of Nocera, Inc . (2.1.2002)
   
3(i).2 Certificate of Amendment (7.12.17)
   
3(i).3 Certificate of Change (8.3.17)
   
3(ii).4 Bylaws of Nocera, Inc.
   
4.1 Form of “A” Warrant
   
4.2 Form of “B” Warrant
   
10.1 Promissory Note
   
23.1 Consent of Independent Registered Public Accounting Firm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NOCERA, INC.

 

FINANCIAL STATEMENTS

 

C O N T E N T S

 

 

AUDITED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2017 AND 201 6

 

COVER PAGE F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-3
BALANCE SHEETS as of December 31, 2017 and 2016 F-4
STATEMENTS OF OPERATIONS for the years ending December 31, 2017 and 2016 F-5
STATEMENTS OF CHANGES STOCKHOLDERS DEFICIT for the years ending December 31, 2017 and 2016 F-6
STATEMENTS OF CASH FLOWS for the years ending December 31, 2017 and 2016 F-7
NOTES TO FINANCIAL STATEMENTS F-8-F-13
   

CONDENSED UNAUDITED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

 

COVER PAGE F-14
CONDENSED BALANCE SHEETS as of September 30, 2018 (unaudited) and December 31, 2017 (audited) F-16
CONDENSED UNAUDITED STATEMENTS OF OPERATIONS for the three and nine-month periods ending September 30, 2018 and 2017 F-17
CONDENSED UNAUDITED STATEMENTS OF CASH FLOWS for the nine-month periods ending September 30, 2018 and 2017 F-19
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS F-20-F-26

 

 

 

  

 

 

 

 

 

 

 

 

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NOCERA, INC.

 

 

Financial REPORTS

 

 

 

DECEMBER 31, 2017

DECEMBER 31, 2016

 

 

 

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NOCERA, INC.

Contents

 

 

   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-3
   
FINANCIAL STATEMENTS  
   
Balance Sheets F-4
   
Statements of Operations F-5
   
Statements of Stockholders' Deficit F-6
   
Statements of Cash Flows F-7
   
Notes to Financial Statements F-8-F-13
   

 

 

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Report of Independent Registered Public Accounting Firm

 

To the shareholders and the board of directors of Nocera, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Nocera, Inc. (the "Company") as of December 31, 2017 and 2016, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/S/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2018

Lakewood, CO

October 18, 2018

F- 3  
 

NOCERA, INC.

BALANCE SHEETS

 

    December 31,   December 31,
    2017   2016
         
ASSETS
         
CURRENT ASSETS                
Cash   $ —       $ —    
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                 
CURRENT LIABILITIES                
Accounts payable - Related Party     7,725       2,625  
                 
Total current liabilities     7,725       2,625  
                 
STOCKHOLDERS’ DEFICIT                
Common stock; $0.001 par value;                
authorized 200,000,000 shares;                
issued and outstanding:                
2,199,200 shares at December 31, 2017                
and December 31, 2016;     2,199       2,199  
Additional paid in capital     1,019,188       1,019,188  
Accumulated deficit     (1,029,112 )     (1,024,012 )
                 
Total stockholders’ deficit     (7,725 )     (2,625 )
                 
Total liabilities and stockholders’ deficit   $ —       $ —    

 

 

 

 

See Accompanying Notes to Financial Statements

 

 

 

 

 

 

 

 

F- 4  
 

 

NOCERA, INC.

STATEMENTS OF OPERATIONS

 

    Year Ended   Year Ended
    December 31,   December 31,
    2017   2016
         
         
         
Revenues   $ —       $ —    
                 
                 
General, selling, and                
Administrative expenses     5,100       875  
      5,100       875  
                 
Operating loss     (5,100 )     (875 )
                 
Nonoperating income (expense)     —         —    
                 
Net loss   $ (5,100 )   $ (875 )
                 
Net loss per share, basic and diluted   $ (0.00 )   $ (0.00 )
                 
Average number of shares of common stock outstanding     2,199,200       2,199,200  
                 

 

 

 

 

See Accompanying Notes to Financial Statements

F- 5  
 

 

NOCERA, INC.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

 

 

 

            Additional        
    Common Stock   Paid-In   Accumulated    
    Shares   Amount   Capital   Deficit   Total
                     
Balance, December 31, 2015     2,199,200     $ 2,199     $ 1,019,188     $ (1,023,137 )     (1,700 )
                                         
Net loss, December 31, 2016     —         —         —         (875 )     (875 )
                                         
Balance, December 31, 2016     2,199,200       2,199     $ 1,019,188     $ (1,024,012 )     (2,625 )
                                         
June 28, 2017, 1:40,000 reverse stock split                                        
                                         
June 28, 2017, 200:1 forward stock split                                        
                                         
Net loss, December 31, 2017     —         —         —         (5,100 )     (5,100 )
                                         
Balance, December 31, 2017     2,199,200     $ 2,199     $ 1,019,188     $ (1,029,112 )   $ (7,725 )
                                         

 

 

See Accompanying Notes to Financial Statements

 

 

 

F- 6  
 

 

NOCERA, INC.

STATEMENTS OF CASH FLOWS

 

    Year Ended   Year Ended
    December 31,   December 31,
    2017   2016
         
Cash Flows From Operating Activities                
                 
Net loss   $ (5,100 )   $ (875 )
Adjustments to reconcile net (loss)                
to cash provided by (used in) operating activities:                
Changes in assets and liabilities                
Increase in accounts payable - related party     5,100       875  
                 
Net cash (used in) operating activities     —         —    
                 
Cash Flows From Investing Activities     —         —    
                 
Cash Flows From Financing Activities     —         —    
                 
Net increase in cash   $ —       $ —    
                 
Cash, beginning of period     —         —    
                 
Cash, end of period   $ —       $ —    
                 

 

 

 

 

See Accompanying Notes to Financial Statements

 

 

 

 

F- 7  
 

NOCERA, INC.

NOTES TO FINANCIAL STATEMENTS

 

Note 1.          NATURE OF BUSINESS

 

Nocera, Inc., a Nevada corporation, (“Nocera”, “We”, or “Us”) is a publicly quoted shell company seeking to create value for our shareholders by merging with another entity with experienced management and opportunities for growth return for shares of our common stock. No potential merger candidate has been identified at this time.

 

History

 

NOCERA, INC. (“ Company ”) was organized February 1, 2002 under the laws of the State of Nevada. The Company abandoned operations in 2005.

 

On February 12, 2002, we acquired Felice Conserve, an Italian corporation, as a wholly owned subsidiary in exchange for 20 million shares of our common stock. The principal business of Felice Conserve was the production and processing of agricultural products in Italy. The principal product was canned tomatoes. Our principal US office location was 950 Eulalia Road NE, Atlanta, GA. 30339.

 

In 2003, we established two subsidiaries in Uruguay; Sontemar, SA (“Sontemar”), and Noldicor, SA (“Noldicor”). The principal business of Noldicor was the production of tomatoes. The principal business of Sontemar was the processing and sale of packaged tomatoes.

 

On April 23, 2004, we paid a 4 for 1 stock dividend to our shareholders.

 

In 2006, due to financial difficulties, Noldicor and Sontemar ceased operations. As a result of this our operations in Uruguay ceased. Additionally, during 2006, Felice Conserve was divested back to its original shareholders. This resulted in our returning to development stage status.

 

On approximately November 3, 2017 we effected a reverse-split of our common shares as follows:

 

· A 1 for 40,000 reverse-split of the Company’s common shares, followed immediately by;

 

· All fractional shares shall be rounded upwards to the nearest whole share, followed immediately by;

 

· A 200 for 1 forward stock split.

 

The net effect of these actions was a 1 for 200 reverse-split of the Company’s common shares, with no shareholder being reduced below 200 shares. All shareholders who prior to the reverse-split had 40,000 or less of the pre-split shares received 200 of the new, post-split shares.

 

NOTE 2. GOING CONCERN

 

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company incurred operating losses of $5,100 during the year ended December 31, 2017 and has an accumulated deficit of $1,029,112 as of December 31, 2017.

 

F- 8  
 

 

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.

 

Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

 

NOTE 3. A SUMMARY OF THE COMPANY’S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:

 

ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

 

We consider highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2017 and 2016.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

FASB ASC 820 “FAIR VALUE MEASUREMENTS AND DISCLOSURES,” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows.

 

Level 1. Observable inputs such as quoted prices in active markets;

 

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and

 

Level 3. Unobservable inputs in which there is little or no market data which requires the reporting entity to develop its own assumptions.

 

F- 9  
 

 

The Company does not have any assets or liabilities measured at fair market value on a recurring basis at December 31, 2017 and 2016. The Company did not have any fair value adjustments for assets or liabilities measured at fair market value on a nonrecurring basis during periods ended December 31, 2017 and 2016.

 

INCOME TAXES

 

The Company accounts for income taxes under FASB ASC 740 “INCOME TAXES.” Under the asset and liability method of FASB ASC 740, deferred tax asset and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax asset if it is likely than not that the Company will not realize tax assets through future operations.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The guidance is effective for annual and interim periods beginning after December 15, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company will adopt the new standard utilizing the modified retrospective approach. The Company does not expect the adoption of this ASU to have a material impact on its financial statements. However, we anticipate the new standard will result in more robust footnote disclosures.

 

In February 2016, the FASB issued ASU 2016-02, a lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

 

The Company evaluates new pronouncements as issued and evaluates the effect of adoption on the Company at the time. The Company has determined that the adoption of recently adopted accounting pronouncements will not have an impact on the financial statements.

 

NOTE 4. ASSETS

 

Concurrent with the discontinuation of operations in Uruguay and the divestiture of Felice Conserve in 2006, the Company ceased to have any assets.

 

Since then, the only asset of the Company has been cash loaned to the Company by affiliates to cover regulatory and filing expenses.

 

F- 10  
 

 

NOTE 5. INCOME TAXES

 

On December 22, 2017, the President of the United States signed into law the  Tax Cuts and Jobs Act (Tax Reform Act) . The Tax Reform Act alters U.S. corporate income taxation in a number of significant ways including, lowering the corporate income tax rate from 35% to 21%, implementing a quasi-territorial tax regime by providing a 100% Dividends Received Deduction (“DRD”) of foreign dividends, imposing a one-time transition tax on deemed repatriated post-1986 undistributed earnings of foreign subsidiaries and revising or eliminating certain deductions.

 

In accordance with FASB ASC 740, “INCOME TAXES,” the deferred tax liabilities and valuation allowance has been adjusted for the effect of the change in tax rates.

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not a tax asset cannot be realized through future income the Company must allow for future tax benefits. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more than likely than not we will not earn income sufficient to realize deferred tax assets during the carryforward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the twelve months ended December 31, 2017 and 2016, or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. The Company is in process of filing the 2017 tax return.

The components of the Company’s deferred tax asset as of December 31, 2017 and 2016 is as follows:

    2017   2016
Net operating loss carryforward   $ 216,114     $ 215,043  
Valuation allowance     (216,114 )     (215,043 )
                 
Net deferred tax asset   $ —       $ —    

 

A reconciliation of income taxes computed at the 21% statutory rate to the income tax recorded is as follows:

 

    2017   2016
Tax at statutory rate (21%)   $ 1,071     $ 184  
Valuation allowance     (1,071 )     (184 )
                 
Net deferred tax asset   $ —       $ —    

  

The Company did not pay any income taxes during the periods ended December 31, 2017 and 2016.

The net federal operating loss carry forward of $1,029,112 will expire between 2032 and 2037. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.

 

F- 11  
 

 

NOTE 6. COMMON STOCK

 

The authorized common stock of the Company consists of 200,000,000 shares with par value of $0.001. The Company has 2,199,200 shares issued and outstanding as of December 31, 2017.

 

On June 28, 2017, the Company approved a 1:40,000 reverse-split of the Company’s common shares. All fractional shares were rounded upwards to the nearest whole share. The reverse split was followed by a 200:1 forward stock split.

 

As a result of the reverse-split and forward stock split, issued and outstanding shares decreased from 190,475,405 shares to 2,199,200.

 

The Company has not authorized shares of preferred stock.

 

NET LOSS PER COMMON SHARE

 

Net loss per share is calculated in accordance with FASB ASC 260, “EARNINGS PER SHARE.” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net loss per common share is based on the weighted average number of shares of common stock outstanding of 2,199,200 during 2017 and 2016, respectively. As of December 31, 2017, December 31, 2016 and since inception, the Company had no dilutive potential common shares.

 

NOTE 7. RELATED PARTY TRANSACTION

 

Erik S. Nelson, President has advanced payment for expenses of the Company through his business, Coral Capital Partners. Expenses for the years ended December 31, 2017 and 2016 were $3,975 and $0, respectively. The balance due to Coral Capital Partners was $3,975 and $0 as of December 31, 2017 and 2016, respectively.

 

Mr. Nelson also controls Mountain Share Transfer, LLC, the stock transfer agent for the Company. Expenses for the years ended December 31, 2017 and 2016 were $3,750.33 and $0, respectively. The balance due to Mountain Share Transfer, LLC was $3,750.33 and $0 as of December 31, 2017 and 2016, respectively.

 

NOTE 8. SUBSEQUENT EVENTS

 

Events subsequent to December 31, 2017 have been evaluated through October 2, 2018, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading.

 

On April 16 th , 2018 Nelson Fiorino Holdings, LLC. returned One Million (1,000,000) shares (the “ original NFH shares ”) to the company for cancellation. Concurrent with the cancellation of the original NFH shares, Nelson Fiorino Holdings, LLC. subscribed to One Million (1,000,000), Five Hundred Thousand Class A Warrants, and Five Hundred Thousand Class B Warrants. The Class A Warrants are exercisable at a price of $0.50/share and expire at 5:00pm eastern time on April 16 th , 2023. The Class B Warrants are exercisable at a price of $1.00/share and expire at 5:00pm eastern time on April 16 th , 2023.

 

On September 28 th , 2018, Coral Investment Partners, LP. (“ CIP ”) a partnership managed by Mr. Nelson, entered into a Promissory Note Agreement with the Company whereby it agreed to loan the Company ten

F- 12  
 

 

thousand dollars. Under the terms of the Promissory Note Agreement, the outstanding balance due may be converted into common shares of the Company at a rate of $0.01/share. Additionally, CIP subscribed to One Hundred Fifty Thousand (150,000) shares of the Company’s common stock, One Hundred Fifty Thousand (150,000) Class A warrants, and One Hundred Fifty Thousand (150,000) Class B warrants.

 

NOTE 9. LEGAL PROCEEDINGS

 

We are not subject to any legal proceedings the years ended December 31 st , 2017 and 2016. To the best of our knowledge, no legal proceedings are pending or threatened.

 

 

 

F- 13  

 

 

 

 

 
 

NOCERA, INC.

 

 

Financial REPORTS

 

 

September 30, 2018

September 30, 2017

 

 

 

F- 14  
 

 

NOCERA, INC.

Contents

 

 

   
   
FINANCIAL STATEMENTS  
   
Balance Sheets F-16
   
Statements of Operations F-17
   
Statements of Cash Flows F-19
   
Notes to Financial Statements F-20-F-26
   

 

 

 

 

 

 

F- 15  
 

 

NOCERA, INC.

BALANCE SHEETS

 

    Unaudited   Audited
    September 30,   December 31,
    2018   2017
         
ASSETS
         
CURRENT ASSETS                
Cash   $ 10,483     $ —    
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
CURRENT LIABILITIES                
Accounts payable - Related Parties     11,029       7,725  
Related party Convertible Note,                
$10,000 Beneficial Conversion Feature fully recognized     10,000       —    
                 
Total current liabilities     21,029       7,725  
                 
STOCKHOLDERS’ DEFICIT                
Common stock; $0.001 par value;                
authorized 200,000,000 shares;                
issued and outstanding:                
2,349,200 shares at September 30, 2018                
and 190,475,405 at September 30, 2017;     2,349       2,199  
Additional paid in capital     1,622,096       1,019,188  
Accumulated deficit     (1,634,991 )     (1,024,012 )
                 
Total stockholders’ deficit     (10,546 )     (7,725 )
                 
Total liabilities and stockholders’ deficit   $ 10,483     $ —    

 

 

 

 

See Accompanying Notes to Financial Statements

 

 

 

 

 

 

 

 

F- 16  
 

 

NOCERA, INC.

STATEMENTS OF OPERATIONS

(unaudited)

 

 

    3 Months Ended   3 Months Ended
    September 30,   September 30,
    2018   2017
         
         
         
Revenues   $ —       $ —    
                 
                 
General, selling, and                
Administrative expenses     716       755  
      716       755  
                 
Operating loss     (716 )     (755 )
                 
Nonoperating income (expense)                
Related Party Interest Expense (Beneficial Conversion Feature)     (10,000 )        
Warrant Issuance Expense (related party)     (592,469 )     —    
                 
Nonoperating income (expense)     (602,469 )     —    
                 
Net loss   $ (603,185 )   $ (755 )
                 
Net loss per share, basic and diluted   $ (0.27 )   $ (0.00 )
                 
Average number of shares of common stock outstanding     2,205,244       2,199,200  
                 

 

 

 

 

See Accompanying Notes to Financial Statements

F- 17  
 

 

NOCERA, INC.

STATEMENTS OF OPERATIONS

(unaudited) 

 

 

    9 Months Ended   9 Months Ended
    September 30,   September 30,
    2018   2017
         
         
         
Revenues   $ —       $ —    
                 
                 
General, selling, and                
Administrative expenses     3,131       3,420  
      3,131       3,420  
                 
Operating loss     (3,131 )     (3,420 )
                 
Nonoperating income (expense)                
Related Party Interest Expense (Beneficial Conversion Feature)     (10,000 )        
Warrant Issuance Expense (related party)     (592,469 )     —    
                 
Nonoperating Income (expense)     (602,469 )     —    
                 
Net loss   $ (605,600 )   $ (3,420 )
                 
Net loss per share, basic and diluted   $ (0.27 )   $ (0.00 )
                 
Average number of shares of common stock outstanding     2,205,244       2,199,200  
                 

 

 

 

 

See Accompanying Notes to Financial Statements

 

 

 

F- 18  
 

 

NOCERA, INC.

STATEMENTS OF CASH FLOWS

 

    9 Months Ended   9 Months Ended
    September 30,   September 30,
    2018   2017
         
Cash Flows From Operating Activities                
                 
Net loss   $ (605,600 )   $ (3,420 )
Adjustments to reconcile net (loss)                
to cash provided by (used in) operating activities:                
Warrant Issuance Expense - Related party     592,469       —    
Interest Expense - Beneficial Conversion Feature - Related Party     10,000       —    
Changes in assets and liabilities                
Increase in accounts payable     3,304       3,420  
                 
Net cash provided by (used in) operating activities     173       —    
                 
Cash Flows From Investing Activities                
Issuance of Common Shares (related party)     107       —    
Issuance of Class A Warrants (related party)     102       —    
Issuance of Class B Warrants (related party)     101       —    
                 
Net cash provided by (used in) Investing Activities     310       —    
                 
Cash Flows From Financing Activities                
Related party convertible note payable     10,000       —    
                 
Net increase in cash   $ 10,483     $ —    
                 
Cash, beginning of period     —         —    
                 
Cash, end of period   $ 10,483     $ —    
                 

 

 

 

 

See Accompanying Notes to Financial Statements

 

 

 

F- 19  
 

 

NOCERA, INC.

NOTES TO FINANCIAL STATEMENTS

 

Note 1.          NATURE OF BUSINESS

 

Nocera, Inc., a Nevada corporation, (“Nocera”, “We”, or “Us”) is a publicly quoted shell company seeking to create value for our shareholders by merging with another entity with experienced management and opportunities for growth return for shares of our common stock. No potential merger candidate has been identified at this time.

 

History

 

NOCERA, INC. (“ Company ”) was organized February 1, 2002 under the laws of the State of Nevada. The Company abandoned operations in 2005.

 

On February 12, 2002, we acquired Felice Conserve, an Italian corporation, as a wholly owned subsidiary in exchange for 20 million shares of our common stock. The principal business of Felice Conserve was the production and processing of agricultural products in Italy. The principal product was canned tomatoes. Our principal US office location was 950 Eulalia Road NE, Atlanta, GA. 30339.

 

In 2003, we established two subsidiaries in Uruguay; Sontemar, SA (“ Sontemar ”), and Noldicor, SA (“ Noldicor” ). The principal business of Noldicor was the production of tomatoes. The principal business of Sontemar was the processing and sale of packaged tomatoes.

 

On April 23, 2004, we paid a 4 for 1 stock dividend to our shareholders.

 

In 2006, due to financial difficulties, Noldicor and Sontemar ceased operations. As a result of this our operations in Uruguay ceased. Additionally, during 2006, Felice Conserve was divested back to its original shareholders. This resulted in our returning to development stage status.

 

On approximately November 3, 2017 we effected a reverse-split of our common shares as follows:

 

· A 1 for 40,000 reverse-split of the Company’s common shares, followed immediately by;

 

· All fractional shares shall be rounded upwards to the nearest whole share, followed immediately by;

 

· A 200 for 1 forward stock split.

 

The net effect of these actions was a 1 for 200 reverse-split of the Company’s common shares, with no shareholder being reduced below 200 shares. All shareholders who prior to the reverse-split had 40,000 or less of the pre-split shares received 200 of the new, post-split shares.

 

NOTE 2. GOING CONCERN

 

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company incurred operating losses of $3,131 during the 9 months ended September 30, 2018 and has an accumulated deficit of $10,546 as of September 30, 2018.

 

F- 20  
 

 

Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail or cease its operations.

 

Due to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

 

 

NOTE 3. A SUMMARY OF THE COMPANY’S SIGNIFICANT ACCOUNTING POLICIES IS AS FOLLOWS:

 

ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

 

We consider highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of September 30, 2018 and 2017.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

FASB ASC 820 “FAIR VALUE MEASUREMENTS AND DISCLOSURES,” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows.

 

Level 1. Observable inputs such as quoted prices in active markets;

 

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and

 

Level 3. Unobservable inputs in which there is little or no market data which requires the reporting entity to develop its own assumptions.

 

F- 21  
 

 

The Company does not have any assets or liabilities measured at fair market value on a recurring basis at December 31, 2017 and 2016. The Company did not have any fair value adjustments for assets or liabilities measured at fair market value on a nonrecurring basis during periods ended December 31, 2017 and 2016.

 

INCOME TAXES

 

The Company accounts for income taxes under FASB ASC 740 “INCOME TAXES.” Under the asset and liability method of FASB ASC 740, deferred tax asset and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax asset if it is likely than not that the Company will not realize tax assets through future operations.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The guidance is effective for annual and interim periods beginning after December 15, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company will adopt the new standard utilizing the modified retrospective approach. The Company does not expect the adoption of this ASU to have a material impact on its financial statements. However, we anticipate the new standard will result in more robust footnote disclosures.

 

In February 2016, the FASB issued ASU 2016-02, a lease standard requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

 

The Company evaluates new pronouncements as issued and evaluates the effect of adoption on the Company at the time. The Company has determined that the adoption of recently adopted accounting pronouncements will not have an impact on the financial statements.

 

NOTE 4. ASSETS

 

Concurrent with the discontinuation of operations in Uruguay and the divestiture of Felice Conserve in 2006, the Company ceased to have any assets.

 

Since then, the only asset of the Company has been cash loaned to the Company by affiliates to cover regulatory and filing expenses.

 

F- 22  
 

 

NOTE 5. INCOME TAXES

 

On December 22, 2017, the President of the United States signed into law the  Tax Cuts and Jobs Act (Tax Reform Act) . The Tax Reform Act alters U.S. corporate income taxation in a number of significant ways including, lowering the corporate income tax rate from 35% to 21%, implementing a quasi-territorial tax regime by providing a 100% Dividends Received Deduction (“DRD”) of foreign dividends, imposing a one-time transition tax on deemed repatriated post-1986 undistributed earnings of foreign subsidiaries and revising or eliminating certain deductions.

 

In accordance with FASB ASC 740, “INCOME TAXES,” the deferred tax liabilities and valuation allowance has been adjusted for the effect of the change in tax rates.

We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not a tax asset cannot be realized through future income the Company must allow for future tax benefits. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more than likely than not we will not earn income sufficient to realize deferred tax assets during the carryforward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the twelve months ended December 31, 2017 and 2016, or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. The Company is in process of filing the 2017 tax return.

The components of the Company’s deferred tax asset as of December 31, 2017 and 2016 is as follows:

 

    2017   2016
Net operating loss carryforward   $ 216,114     $ 215,043  
Valuation allowance     (216,114 )     (215,043 )
                 
Net deferred tax asset   $ —       $ —    

 

A reconciliation of income taxes computed at the 21% statutory rate to the income tax recorded is as follows:

    2017   2016
Tax at statutory rate (21%)   $ 1,071     $ 184  
Valuation allowance     (1,071 )     (184 )
                 
Net deferred tax asset   $ —       $ —    

  

The Company did not pay any income taxes during the periods ended December 31, 2017 and 2016.

The net federal operating loss carry forward of $1,029,112 will expire between 2032 and 2037. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.

 

F- 23  
 

 

NOTE 6. COMMON STOCK

 

The authorized common stock of the Company consists of 200,000,000 shares with par value of $0.001. The Company has 2,199,200 shares issued and outstanding as of December 31, 2017.

 

On June 28, 2017, the Company approved a 1:40,000 reverse-split of the Company’s common shares. All fractional shares were rounded upwards to the nearest whole share. The reverse split was followed by a 200:1 forward stock split.

 

As a result of the reverse-split and forward stock split, issued and outstanding shares decreased from 190,475,405 shares to 2,199,200.

 

On April 16 th , 2018 Nelson Fiorino Holdings, LLC. returned One Million (1,000,000) shares (the “ original NFH shares ”) to the company for cancellation. Concurrent with the cancellation of the original NFH shares, Nelson Fiorino Holdings, LLC. subscribed to One Million (1,000,000), Five Hundred Thousand Class A Warrants, and Five Hundred Thousand Class B Warrants. The Class A Warrants are exercisable at a price of $0.50/share and expire at 5:00pm eastern time on April 16 th , 2023. The Class B Warrants are exercisable at a price of $1.00/share and expire at 5:00pm eastern time on April 16 th , 2023.

 

On September 20th, 2018, Coral Investment Partners, LP. (“ CIP ”) a partnership managed by Mr. Nelson, entered into a Promissory Note Agreement with the Company whereby it agreed to loan the Company ten thousand dollars. Under the terms of the Promissory Note Agreement, the outstanding balance due may be converted into common shares of the Company at a rate of $0.01/share. Additionally, CIP subscribed to One Hundred Fifty Thousand (150,000) shares of the Company’s common stock, One Hundred Fifty Thousand (150,000) Class A warrants, and One Hundred Fifty Thousand (150,000) Class B warrants.

 

The Company has not authorized shares of preferred stock.

 

Please see Note 7 below for additional information on the warrants issued and outstanding.

 

NET LOSS PER COMMON SHARE

 

Net loss per share is calculated in accordance with FASB ASC 260, “EARNINGS PER SHARE.” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net loss per common share is based on the weighted average number of shares of common stock outstanding of 2,205,244 for the 9 months ended September 30, 2018 and 2,199,200 during the 9 months ended September 30, 2017, respectively. As of September 30, 2018 and since inception the Company had no dilutive potential common shares. As of September 30, 2018 the Company had a total of One Million Three Hundred Thousand (1,300,000) dilutive warrants issued and outstanding. (please see above). If all the Class A and Class B warrants were to be exercised, the number of shares of the Company’s common stock issued and outstanding would be 3,649,200.

 

NOTE 7. WARRANTS

 

The Company has two (2) classes of warrants authorized; Class A and Class B warrants. The Class A warrants are exercisable into shares of the Company’s common stock at a price of $0.50 per warrant. The Class B warrants are exercisable into shares of the Company’s common stock at a price of $1.00 per warrant. Both classes of warrants expire at 5:00pm eastern time on April 16 th , 2023.

 

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The Company has issued the following warrants, and recorded the following charges in connection with the issuance of the warrants:

 

Date Class A Warrants Class B Warrants Warrant Expense
April 16, 2018 500,000   $269,502
April 16, 2018   500,000 $269,299
September 20, 2018 150,000   $26,845
September 20, 2018   150,000 $26,823
  ---------------- ----------------- -------------------
Totals 650,000 650,000 $592,469

 

NOTE 8. CONVERTIBLE PROMISSORY NOTE

 

On September 20 th , 2018 the Company entered into a Promissory Note with Coral Investment Partners, LP. (“CIP”) an entity controlled by Erik Nelson, our sole officer and director. The Promissory Note carries an interest rate of twenty-four percent (24%), and is convertible into shares of the Company’s common stock at a price of $0.01 per share.

 

The issuance of a convertible note with a conversion price lower than the market price of the Company’s common shares created a Beneficial Conversion Feature (“BCF”). In accordance with EITF 98-5, the Company recorded a charge equal to the lower amount of either i) the Intrinsic Value of the BCF or ii) the proceeds realized upon the issuance of the note. The intrinsic value of the BCF was determined to be approximately $314,000. In accordance with EITF 98-5, the Company recorded an interest expense due to Beneficial Conversion Feature of $10,000.

 

NOTE 9. RELATED PARTY TRANSACION

 

Erik S. Nelson, President has advanced payment for expenses of the Company through his business, Coral Capital Partners. Expenses for the nine months ended September 30, 2018 and 2017 were $1,963 and $3,975, respectively. The balance due to Coral Capital Partners was $5,938 and $3,975 as of September 30, 2018 and 2017, respectively.

 

Mr. Nelson also controls Mountain Share Transfer, LLC, the stock transfer agent for the Company. Expenses for the nine months ended September 30, 2018 and 2017 were $1,341 and $2,070, respectively. The balance due to Mountain Share Transfer, LLC was $5,092 and $2,070 as of September 30, 2018 and 2017, respectively.

 

Common Stock & Warrant Issuance

 

On April 16 th , 2018 Nelson Fiorino Holdings, LLC. returned One Million (1,000,000) shares (the “ original NFH shares ”) to the company for cancellation. Concurrent with the cancellation of the original NFH shares, Nelson Fiorino Holdings, LLC. subscribed to One Million (1,000,000), Five Hundred Thousand Class A Warrants, and Five Hundred Thousand Class B Warrants. The Class A Warrants are exercisable at a price of $0.50/share and expire at 5:00pm eastern time on April 16 th , 2023. The Class B Warrants are exercisable at a price of $1.00/share and expire at 5:00pm eastern time on April 16 th , 2023.

 

On September 20th, 2018, Coral Investment Partners, LP. (“ CIP ”) a partnership managed by Mr. Nelson, entered into a Promissory Note Agreement with the Company whereby it agreed to loan the Company ten thousand dollars. Under the terms of the Promissory Note Agreement, the outstanding balance due may

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be converted into common shares of the Company at a rate of $0.01/share. Additionally, CIP subscribed to One Hundred Fifty Thousand (150,000) shares of the Company’s common stock, One Hundred Fifty Thousand (150,000) Class A warrants, and One Hundred Fifty Thousand (150,000) Class B warrants.

 

Promissory Note

 

On September 20 th , 2018 the Company entered into a Promissory Note with Coral Investment Partners, LP. (“CIP”) an entity controlled by Erik Nelson, our sole officer and director. The Promissory Note carries an interest rate of twenty-four percent (24%), and is convertible into shares of the Company’s common stock at a price of $0.01 per share.

 

NOTE 10. SUBSEQUENT EVENTS

 

Events subsequent to September 30, 2018 have been evaluated through October 16, 2018, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading.

 

 

 

 

 

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EXHIBIT 3.1

 

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EXHIBIT 3.2

 

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EXHIBIT 3.3

 

 
 

EXHIBIT 3.4

 

NOCERA, INC.

 

BY-LAWS

 

       

ARTICLE I

 

The Stockholders

 

SECTION 1.1. ANNUAL MEETING. The annual meeting of the stockholders of NOCERA, INC. (the "Corporation") shall be held on the third Thursday in May of each year at 10:30 a.m. local time, or at such other date or time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, for the election of directors and for the transaction of such other business as may come before the meeting.

 

SECTION 1.2. SPECIAL MEETINGS. A special meeting of the stockholders may be called at any time by the written resolution or request of two-thirds or more of the members of the Board of Directors, the president, or any executive vice president and shall be called upon the written request of the holders of two-thirds or more in amount, of each class or series of the capital stock of the Corporation entitled to vote at such meeting on the matters(s) that are the subject of the proposed meeting, such written request in each case to specify the purpose or purposes for which such meeting shall be called, and with respect to stockholder proposals, shall further comply with the requirements of this Article.

 

SECTION 1.3. NOTICE OF MEETINGS. Written notice of each meeting of stockholders, whether annual or special, stating the date, hour and place where it is to be held, shall be served either personally or by mail, not less than fifteen nor more than sixty days before the meeting, upon each stockholder of record entitled to vote at such meeting, and to any other stockholder to whom the giving of notice may be required by law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called and shall indicate that it is being issued by, or at the direction of, the person or persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if taken, entitle stockholders to receive payment for their stock, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, notice shall be deemed to be delivered when deposited in the United States mail or with any private express mail service, postage or delivery fee prepaid, and shall be directed to each such stockholder at his address, as it appears on the records of the stockholders of the Corporation, unless he shall have previously filed with the secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request.

 

SECTION 1.4. FIXING DATE OF RECORD. (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record

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date for determining stockholders entitled to notice of, or to vote at, a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of, or to vote at, a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting (to the extent that such action by written consent is permitted by law, the Certificate of Incorporation or these By-Laws), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in its state of incorporation, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

SECTION 1.5. INSPECTORS. At each meeting of the stockholders, the polls shall be opened and closed and the proxies and ballots shall be received and be taken in charge. All questions touching on the qualification of voters and the validity of proxies and the acceptance or rejection of votes, shall be decided by one or more inspectors. Such inspectors shall be appointed by the Board of Directors before or at the meeting, or, if no such appointment shall have been made, then by the presiding officer at the meeting. If for any reason any of the inspectors previously appointed shall fail to attend or refuse or be unable to serve, inspectors in place of any so failing to attend or refusing or unable to serve shall be appointed in like manner.

 

SECTION 1.6. QUORUM . At any meeting of the stockholders, the holders of a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum of the stockholders for all purposes,

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unless the representation of a larger number shall be required by law, and, in that case, the representation of the number so required shall constitute a quorum.

 

If the holders of the amount of stock necessary to constitute a quorum shall fail to attend in person or by proxy at the time and place fixed in accordance with these By-Laws for an annual or special meeting, a majority in interest of the stockholders present in person or by proxy may adjourn, from time to time, without notice other than by announcement at the meeting, until holders of the amount of stock requisite to constitute a quorum shall attend. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

 

SECTION 1.7. BUSINESS. The chairman of the Board, if any, the president, or in his absence the vice-chairman, if any, or an executive vice president, in the order named, shall call meetings of the stockholders to order, and shall act as chairman of such meeting; provided, however, that the Board of Directors or executive committee may appoint any stockholder to act as chairman of any meeting in the absence of the chairman of the Board. The secretary of the Corporation shall act as secretary at all meetings of the stockholders, but in the absence of the secretary at any meeting of the stockholders, the presiding officer may appoint any person to act as secretary of the meeting.

 

SECTION 1.8. STOCKHOLDER PROPOSALS. No proposal by a stockholder shall be presented for vote at a special or annual meeting of stockholders unless such stockholder shall, not later than the close of business on the fifth day following the date on which notice of the meeting is first given to stockholders, provide the Board of Directors or the secretary of the Corporation with written notice of intention to present a proposal for action at the forthcoming meeting of stockholders, which notice shall include the name and address of such stockholder, the number of voting securities that he holds of record and that he holds beneficially, the text of the proposal to be presented to the meeting and a statement in support of the proposal.

 

Any stockholder who was a stockholder of record on the applicable record date may make any other proposal at an annual meeting or special meeting of stockholders and the same may be discussed and considered, but unless stated in writing and filed with the Board of Directors or the secretary prior to the date set forth herein above, such proposal shall be laid over for action at an adjourned, special, or annual meeting of the stockholders taking place sixty days or more thereafter. This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors, and committees, but in connection with such reports, no new business proposed by a stockholder, qua stockholder, shall be acted upon at such annual meeting unless stated and filed as herein provided.

 

Notwithstanding any other provision of these By-Laws, the Corporation shall be under no obligation to include any stockholder proposal in its proxy statement materials or otherwise present any such proposal to stockholders at a special or annual meeting of stockholders if the Board of Directors reasonably believes the

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proponents thereof have not complied with Sections 13 or 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder; nor shall the Corporation be required to include any stockholder proposal not required to be included in its proxy materials to stockholders in accordance with any such section, rule or regulation.

 

SECTION 1.9. PROXIES. At all meetings of stockholders, a stockholder entitled to vote may vote either in person or by proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. Such proxy shall be filed with the secretary before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

 

SECTION 1.10. VOTING BY BALLOT. The votes for directors, and upon the demand of any stockholder or when required by law, the votes upon any question before the meeting, shall be by ballot.

 

SECTION 1.11. VOTING LISTS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares of stock registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present.

 

SECTION 1.12. PLACE OF MEETING. The Board of Directors may designate any place, either within or without the state of incorporation, as the place of meeting for any annual meeting or any special meeting called by the Board of Directors. If no designation is made or if a special meeting is otherwise called, the place of meeting shall be the principal office of the Corporation.

 

SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. Shares of capital stock of the Corporation standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the by-laws of such corporation may prescribe, or in the absence of such provision, as the board of directors of such corporation may determine.

 

Shares of capital stock of the Corporation standing in the name of a deceased person, a minor ward or an incompetent person may be voted by his administrator, executor, court-appointed guardian or conservator, either in person or by proxy, without a transfer of such stock into the name of such administrator, executor, court-appointed guardian or conservator. Shares of capital stock of the Corporation standing in the name of a trustee may be voted by him, either in person or by proxy.

 

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Shares of capital stock of the Corporation standing in the name of a receiver may be voted, either in person or by proxy, by such receiver, and stock held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so is contained in any appropriate order of the court by which such receiver was appointed.

 

A stockholder whose stock is pledged shall be entitled to vote such stock, either in person or by proxy, until the stock has been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote, either in person or by proxy, the stock so transferred.

 

Shares of its own capital stock belonging to this Corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding stock at any given time, but shares of its own stock held by it in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding stock at any given time.

 

 

ARTICLE II

 

Board of Directors

 

SECTION 2.1. GENERAL POWERS. The business, affairs, and the property of the Corporation shall be managed and controlled by the Board of Directors (the "Board"), and, except as otherwise expressly provided by law, the Certificate of Incorporation or these By-Laws, all of the powers of the Corporation shall be vested in the Board.

 

SECTION 2.2. NUMBER OF DIRECTORS. The number of directors which shall constitute the whole Board shall be not fewer than one nor more than five. Within the limits above specified, the number of directors shall be determined by the Board of Directors pursuant to a resolution adopted by a majority of the directors then in office.

 

SECTION 2.3. ELECTION, TERM AND REMOVAL. Directors shall be elected at the annual meeting of stockholders to succeed those directors whose terms have expired. Each director shall hold office for the term for which elected and until his or her successor shall be elected and qualified. Directors need not be stockholders. A director may be removed from office at a meeting expressly called for that purpose by the vote of not less than a majority of the outstanding capital stock entitled to vote at an election of directors.

 

SECTION 2.4. VACANCIES. Vacancies in the Board of Directors, including vacancies resulting from an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors then in office, though less than a quorum; except that vacancies resulting from removal from office by a vote of the stockholders may be filled by the stockholders at the same meeting at which such removal occurs provided that the holders of not less than a majority of the outstanding capital stock of the Corporation (assessed

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upon the basis of votes and not on the basis of number of shares) entitled to vote for the election of directors, voting together as a single class, shall vote for each replacement director. All directors elected to fill vacancies shall hold office for a term expiring at the time of the next annual meeting of stockholders and upon election and qualification of his successor. No decrease in the number of directors constituting the Board of Directors shall shorten the term of an incumbent director.

 

SECTION 2.5. RESIGNATIONS. Any director of the Corporation may resign at any time by giving written notice to the president or to the secretary of the Corporation. The resignation of any director shall take effect at the time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

SECTION 2.6. PLACE OF MEETINGS, ETC. The Board of Directors may hold its meetings, and may have an office and keep the books of the Corporation (except as otherwise may be provided for by law), in such place or places in or outside the state of incorporation as the Board from time to time may determine.

 

SECTION 2.7. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held as soon as practicable after adjournment of the annual meeting of stockholders at such time and place as the Board of Directors may fix. No notice shall be required for any such regular meeting of the Board.

 

SECTION 2.8. SPECIAL MEETINGS . Special meetings of the Board of Directors shall be held at places and times fixed by resolution of the Board of Directors, or upon call of the chairman of the Board, if any, or vice-chairman of the Board, if any, the president, an executive vice president or two-thirds of the directors then in office.

 

The secretary or officer performing the secretary's duties shall give not less than twenty-four hours' notice by letter, telegraph or telephone (or in person) of all special meetings of the Board of Directors, provided that notice need not given of the annual meeting or of regular meetings held at times and places fixed by resolution of the Board. Meetings may be held at any time without notice if all of the directors are present, or if those not present waive notice in writing either before or after the meeting. The notice of meetings of the Board need not state the purpose of the meeting.

 

SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE. Members of the Board of Directors of the Corporation, or any committee thereof, may participate in a regular or special or any other meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

 

SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if prior or

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subsequent to such action all the members of the Board or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

 

SECTION 2.11. QUORUM. A majority of the total number of directors then in office shall constitute a quorum for the transaction of business; but if at any meeting of the Board there be less than a quorum present, a majority of those present may adjourn the meeting from time to time.

 

SECTION 2.12. BUSINESS. Business shall be transacted at meetings of the Board of Directors in such order as the Board may determine. At all meetings of the Board of Directors, the chairman of the Board, if any, the president, or in his absence the vice-chairman, if any, or an executive vice president, in the order named, shall preside.

 

SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (a) No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of the Corporation's directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if:

 

a. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

 

b. The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

 

The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee of the Board of Directors or the stockholders.

 

(b) Interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

SECTION 2.14. COMPENSATION OF DIRECTORS. Each director of the Corporation who is not a salaried officer or employee of the Corporation, or of a subsidiary of the Corporation, shall receive such allowances for serving as a director and such fees for attendance at meetings of the Board of Directors or the

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executive committee or any other committee appointed by the Board as the Board may from time to time determine.

 

SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. The Board of Directors may lend money to, guarantee any obligation of, or otherwise assist, any officer or other employee of the Corporation or of any subsidiary, whether or not such officer or employee is also a director of the Corporation, whenever, in the judgment of the directors, such loan, guarantee, or assistance may reasonably be expected to benefit the Corporation; provided, however, that any such loan, guarantee, or other assistance given to an officer or employee who is also a director of the Corporation must be authorized by a majority of the entire Board of Directors. Any such loan, guarantee, or other assistance may be made with or without interest and may be unsecured or secured in such manner as the Board of Directors shall approve, including, but not limited to, a pledge of shares of the Corporation, and may be made upon such other terms and conditions as the Board of Directors may determine.

 

SECTION 2.16. NOMINATION. Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote in the election of directors generally. However, any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such stockholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of stockholders, the close of business on the last day of the eighth month after the immediately preceding annual meeting of stockholders, and (ii) with respect to an election to be held at a special meeting of stockholders for the election of directors, the close of business on the fifth day following the date on which notice of such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated, or intended to be nominated, by the Board of Directors, and; (e) the consent of each nominee to serve as a director of the Corporation if so elected. The presiding officer at the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

 

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ARTICLE III

 

Committees

 

SECTION 3.1. COMMITTEES. The Board of Directors, by resolution adopted by a majority of the number of directors then fixed by these By-Laws or resolution thereto, may establish such standing or special committees of the Board as it may deem advisable, and the members, terms, and authority of such committees shall be set forth in the resolutions establishing such committee.

 

SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF OFFICE. The Board of Directors may, at any meeting, by majority vote of the Board of Directors, elect from the directors an executive committee. The executive committee shall consist of such number of members as may be fixed from time to time by resolution of the Board of Directors. The Board of Directors may designate a chairman of the committee who shall preside at all meetings thereof, and the committee shall designate a member thereof to preside in the absence of the chairman.

 

SECTION 3.3. EXECUTIVE COMMITTEE POWERS. The executive committee may, while the Board of Directors is not in session, exercise all or any of the powers of the Board of Directors in all cases in which specific directions shall not have been given by the Board of Directors; except that the executive committee shall not have the power or authority of the Board of Directors to (i) amend the Certificate of Incorporation or the By-Laws of the Corporation, (ii) fill vacancies on the Board of Directors, (iii) adopt an agreement or certification of ownership, merger or consolidation, (iv) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, or a dissolution of the Corporation or a revocation of a dissolution, (v) declare a dividend, or (vi) authorize the issuance of stock.

 

SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. Regular and special meetings of the executive committee may be called and held subject to the same requirements with respect to time, place and notice as are specified in these By-Laws for regular and special meetings of the Board of Directors. Special meetings of the executive committee may be called by any member thereof. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special or regular meeting of the executive meeting if a quorum is present. At any meeting at which every member of the executive committee shall be present, in person or by telephone, even though without any notice, any business may be transacted. All action by the executive committee shall be reported to the Board of Directors at its meeting next succeeding such action.

 

The executive committee shall fix its own rules of procedure, and shall meet where and as provided by such rules or by resolution of the Board of Directors, but in every case the presence of a majority of the total

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number of members of the executive committee shall be necessary to constitute a quorum. In every case, the affirmative vote of a quorum shall be necessary for the adoption of any resolution.

 

SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES . The Board of Directors, by majority vote of the Board of Directors then in office, shall fill vacancies in the executive committee by election from the directors.

 

 

ARTICLE IV

 

The Officers

 

SECTION 4.1. NUMBER AND TERM OF OFFICE. The officers of the Corporation shall consist of, as the Board of Directors may determine and appoint from time to time, a chief executive officer, a president, one or more executive vice-presidents, a secretary, a treasurer, a controller, and/or such other officers as may from time to time be elected or appointed by the Board of Directors, including such additional vice-presidents with such designations, if any, as may be determined by the Board of Directors and such assistant secretaries and assistant treasurers. In addition, the Board of Directors may elect a chairman of the Board and may also elect a vice-chairman as officers of the Corporation. Any two or more offices may be held by the same person. In its discretion, the Board of Directors may leave unfilled any office except as may be required by law.

 

The officers of the Corporation shall be elected or appointed from time to time by the Board of Directors. Each officer shall hold office until his successor shall have been duly elected or appointed or until his death or until he shall resign or shall have been removed by the Board of Directors.

 

Each of the salaried officers of the Corporation shall devote his entire time, skill and energy to the business of the Corporation, unless the contrary is expressly consented to by the Board of Directors or the executive committee.

 

SECTION 4.2. REMOVAL. Any officer may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation would be served thereby.

 

SECTION 4.3. THE CHAIRMAN OF THE BOARD. The chairman of the Board, if any, shall preside at all meetings of stockholders and of the Board of Directors and shall have such other authority and perform such other duties as are prescribed by law, by these By-Laws and by the Board of Directors. The Board of Directors may designate the chairman of the Board as chief executive officer, in which case he shall have such authority and perform such duties as are prescribed by these By-Laws and the Board of Directors for the chief executive officer.

 

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SECTION 4.4. THE VICE-CHAIRMAN . The vice-chairman, if any, shall have such authority and perform such other duties as are prescribed by these By-Laws and by the Board of Directors. In the absence or inability to act of the chairman of the Board and the president, he shall preside at the meetings of the stockholders and of the Board of Directors and shall have and exercise all of the powers and duties of the chairman of the Board. The Board of Directors may designate the vice-chairman as chief executive officer, in which case he shall have such authority and perform such duties as are prescribed by these By-Laws and the Board of Directors for the chief executive officer.

 

SECTION 4.5. THE PRESIDENT. The president shall have such authority and perform such duties as are prescribed by law, by these By-Laws, by the Board of Directors and by the chief executive officer (if the president is not the chief executive officer). The president, if there is no chairman of the Board, or in the absence or the inability to act of the chairman of the Board, shall preside at all meetings of stockholders and of the Board of Directors. Unless the Board of Directors designates the chairman of the Board or the vice-chairman as chief executive officer, the president shall be the chief executive officer, in which case he shall have such authority and perform such duties as are prescribed by these By-Laws and the Board of Directors for the chief executive officer.

 

SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. Unless the Board of Directors designates the chairman of the Board or the vice-chairman as chief executive officer, the president shall be the chief executive officer. The chief executive officer of the Corporation shall have, subject to the supervision and direction of the Board of Directors, general supervision of the business, property and affairs of the Corporation, including the power to appoint and discharge agents and employees, and the powers vested in him by the Board of Directors, by law or by these By-Laws or which usually attach or pertain to such office.

 

SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. In the absence of the chairman of the Board, if any, the president and the vice-chairman, if any, or in the event of their inability or refusal to act, the executive vice-president (or in the event there is more than one executive vice-president, the executive vice-presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the chairman of the Board, of the president and of the vice-chairman, and when so acting, shall have all the powers of and be subject to all the restrictions upon the chairman of the Board, the president and the vice-chairman. Any executive vice-president may sign, with the secretary or an authorized assistant secretary, certificates for stock of the Corporation and shall perform such other duties as from time to time may be assigned to him by the chairman of the Board, the president, the vice-chairman, the Board of Directors or these By-Laws.

 

SECTION 4.8. THE VICE-PRESIDENTS. The vice-presidents, if any, shall perform such duties as may be assigned to them from time to time by the chairman of the Board, the president, the vice-chairman, the Board of Directors, or these By-Laws.

 

SECTION 4.9. THE TREASURER. Subject to the direction of chief executive officer and the Board of Directors, the treasurer shall have charge and custody of all the funds and securities of the Corporation; when

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necessary or proper he shall endorse for collection, or cause to be endorsed, on behalf of the Corporation, checks, notes and other obligations, and shall cause the deposit of the same to the credit of the Corporation in such bank or banks or depositary as the Board of Directors may designate or as the Board of Directors by resolution may authorize; he shall sign all receipts and vouchers for payments made to the Corporation other than routine receipts and vouchers, the signing of which he may delegate; he shall sign all checks made by the Corporation (provided, however, that the Board of Directors may authorize and prescribe by resolution the manner in which checks drawn on banks or depositories shall be signed, including the use of facsimile signatures, and the manner in which officers, agents or employees shall be authorized to sign); unless otherwise provided by resolution of the Board of Directors, he shall sign with an officer-director all bills of exchange and promissory notes of the Corporation; whenever required by the Board of Directors, he shall render a statement of his cash account; he shall enter regularly full and accurate account of the Corporation in books of the Corporation to be kept by him for that purpose; he shall, at all reasonable times, exhibit his books and accounts to any director of the Corporation upon application at his office during business hours; and he shall perform all acts incident to the position of treasurer. If required by the Board of Directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such sure ties as the Board of Directors may require.

 

SECTION 4.10. THE SECRETARY. The secretary shall keep the minutes of all meetings of the Board of Directors, the minutes of all meetings of the stockholders and (unless otherwise directed by the Board of Directors) the minutes of all committees, in books provided for that purpose; he shall attend to the giving and serving of all notices of the Corporation; he may sign with an officer-director or any other duly authorized person, in the name of the Corporation, all contracts authorized by the Board of Directors or by the executive committee, and, when so ordered by the Board of Directors or the executive committee, he shall affix the seal of the Corporation thereto; he may sign with the president or an executive vice-president all certificates of shares of the capital stock; he shall have charge of the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors or the executive committee may direct, all of which shall, at all reasonable times, be open to the examination of any director, upon application at the secretary's office during business hours; and he shall in general perform all the duties incident to the office of the secretary, subject to the control of the chief executive officer and the Board of Directors.

 

SECTION 4.11. THE CONTROLLER. The controller shall be the chief accounting officer of the Corporation. Subject to the supervision of the Board of Directors, the chief executive officer and the treasurer, the controller shall provide for and maintain adequate records of all assets, liabilities and transactions of the Corporation, shall see that accurate audits of the Corporation's affairs are currently and adequately made and shall perform such other duties as from time to time may be assigned to him.

 

SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge

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of their duties in such sums and with such sureties as the Board of Directors may determine. The assistant secretaries as thereunto authorized by the Board of Directors may sign with the chairman of the Board, the president, the vice-chairman or an executive vice-president, certificates for stock of the Corporation, the issue of which shall have been authorized by a resolution of the Board of Directors. The assistant treasurers and assistant secretaries, in general, shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or chief executive officer, the Board of Directors, or these By-Laws.

 

SECTION 4.13. SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation.

 

SECTION 4.14. VOTING UPON STOCKS. Unless otherwise ordered by the Board of Directors or by the executive committee, any officer, director or any person or persons appointed in writing by any of them, shall have full power and authority in behalf of the Corporation to attend and to act and to vote at any meetings of stockholders of any corporation in which the Corporation may hold stock, and at any such meeting shall possess and may exercise any and all the rights and powers incident to the ownership of such stock, and which, as the owner thereof, the Corporation might have possessed and exercised if present. The Board of Directors may confer like powers upon any other person or persons.

 

 

ARTICLE V

 

Contracts and Loans

 

SECTION 5.1. CONTRACTS. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

 

SECTION 5.2. LOANS. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

 

 

ARTICLE VI

 

Certificates for Stock and Their Transfer

 

SECTION 6.1. CERTIFICATES FOR STOCK. Certificates representing stock of the Corporation shall be in such form as may be determined by the Board of Directors. Such certificates shall be signed by the

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chairman of the Board, the president, the vice-chairman or an executive vice-president and/or by the secretary or an authorized assistant secretary and shall be sealed with the seal of the Corporation. The seal may be a facsimile. If a stock certificate is countersigned (i) by a transfer agent other than the Corporation or its employee, or (ii) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In the event that any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. All certificates for stock shall be consecutively numbered or otherwise identified. The name of the person to whom the shares of stock represented thereby are issued, with the number of shares of stock and date of issue, shall be entered on the books of the Corporation. All certificates surrendered to the Corporation for transfer shall be canceled and no new certificates shall be issued until the former certificate for a like number of shares of stock shall have been surrendered and canceled, except that, in the event of a lost, destroyed or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may prescribe.

 

SECTION 6.2. TRANSFERS OF STOCK. Transfers of stock of the Corporation shall be made only on the books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the secretary of the Corporation, and on surrender for cancellation of the certificate for such stock. The person in whose name stock stands on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation.

 

 

ARTICLE VII

 

Fiscal Year

 

SECTION 7.1. FISCAL YEAR. The fiscal year of the Corporation shall begin on the first day of January in each year and end on the last day of December in each year.

 

ARTICLE VIII

 

Seal

 

SECTION 8.1. SEAL. The Board of Directors shall approve a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation.

 

 

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ARTICLE IX

 

Waiver of Notice

 

SECTION 9.1. WAIVER OF NOTICE. Whenever any notice is required to be given under the provisions of these By-Laws or under the provisions of the Certificate of Incorporation or under the provisions of the corporation law of the state of incorporation, waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance of any person at a meeting for which any notice is required to be given under the provisions of these By-Laws, the Certificate of Incorporation or the corporation law of the state of incorporation shall constitute a waiver of notice of such meeting except when the person attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

 

ARTICLE X

 

Amendments

 

SECTION 10.1. AMENDMENTS. These By-Laws may be altered, amended or repealed and new By-Laws may be adopted at any meeting of the Board of Directors of the Corporation by the affirmative vote of a majority of the members of the Board, or by the affirmative vote of a majority of the outstanding capital stock of the Corporation (assessed upon the basis of votes and not on the basis of number of shares) entitled to vote generally in the election of directors, voting together as a single class.

 

 

ARTICLE XI

 

Indemnification

 

SECTION 11.1. INDEMNIFICATION. The Corporation shall indemnify its officers, directors, employees and agents to the fullest extent permitted by the General Corporation Law of Nevada, as amended from time to time.

 

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EXHIBIT 4.1

 

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("FEDERAL ACT") OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE UPON THE EXEMPTIONS CONTAINED THEREIN, AND IN PARTICULAR PARAGRAPH (13) OF SECTION 10-5-9 OF THE GEORGIA SECURITIES LAW. THIS WARRANT AND ANY SHARES ISSUED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY IS SATISFIED THAT SUCH REGISTRATION IS NOT REQUIRED.

 

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

 

INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

Class A Warrant to Purchase for 500,000 Shares of Common Stock

April 16 th , 2018

 

NOCERA, INC.

CLASS A WARRANT CERTIFICATE

 

 

1.        Issuance of Warrant; Term .

 

(a)       For and in consideration of good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, Nocera, Inc. (the " Compan y") hereby grants to ________________________________. (" Holder ") the right to purchase five hundred thousand (500,000) shares of the Company's Common Stock, $.001 par value per share (the " Common Stock ").

 

(b)       The shares of Common Stock issuable upon exercise of this Warrant are hereinafter referred to as the " Shares. " This Warrant shall be exercisable at any time and from time to time from the date hereof until this Warrant expires at 5:00 P.M. Eastern time on April 16 th , 2023.

 

2.        Exercise Price . The exercise price (the " Exercise Price ") per share for which all or any of the Shares may be purchased pursuant to the terms of this Warrant shall be Zero Dollars and 50/100ths ($0.50)

 

3.        Exercise . This Warrant may be exercised by the Holder hereof (but only on the conditions hereafter set forth) as to all or any increment or increments of ten (10) Shares (or the balance of the Shares if less than that number), upon delivery of written notice of intent to exercise to the Company’s transfer agent, Mountain Share Transfer at the following address: 2030 Powers Ferry Road SE, Suite # 212, Atlanta, GA. 30339, Attention: President, or any other address as the Company shall designate in a written notice to the Holder hereof, together with this Warrant and payment to the Company of the aggregate Exercise Price of the Shares so purchased. The Exercise Price shall be payable by certified or bank check. Upon exercise of this Warrant, the Company shall as promptly as practicable, and in any event within fifteen (15) days thereafter, execute and deliver to the Holder of this Warrant a certificate or certificates for the total number of whole

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Shares for which this Warrant is being exercised in the names and denominations as are requested by the Holder. If this Warrant shall be exercised with respect to less than all of the Shares, the Holder shall be entitled to receive a new Warrant covering the number of Shares in respect of which this Warrant shall not have been exercised, which new Warrant shall in all other respects be identical to this Warrant. The Company covenants and agrees that it will pay when due any and all state and federal issue taxes which may be payable in respect of the issuance of this Warrant or the issuance of any Shares upon exercise of this Warrant.

 

4.        Covenants and Conditions . The above provisions are subject to the following:

 

(a)       Neither this Warrant nor the Shares have been registered under the Securities Act of 1933, as amended (" Securities Act "), or any state securities laws (" Blue Sky Laws "). This Warrant has been acquired for investment purposes and not with a view to distribution or resale and may not be pledged, hypothecated, sold, made subject to a security interest, or otherwise transferred without (i) an effective registration statement for the Warrant under the Securities Act and all applicable Blue Sky Laws, or (ii) an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company and its counsel, that registration is not required under the Securities Act or under any applicable Blue Sky Laws (the Company hereby acknowledges that Investment Law Group LLP is acceptable counsel). Transfer of Shares issued upon the exercise of this Warrant shall be restricted in the same manner and to the same extent as the Warrant, and the certificates representing the Shares shall, subject to Section 6 hereof, bear substantially the following legend:

 

The securities represented by this certificate have been issued in reliance upon the representation of the Holder that they have been acquired for investment and not with a view toward the resale or other distribution thereof, and have not been registered under the Securities Act of 1933 (the "Securities Act") or the securities laws of any state in reliance upon the exemptions from registration contained therein, and may not be offered, sold, transferred, encumbered or otherwise disposed of unless there is an effective registration statement under the Federal Act and applicable state securities laws relating thereto or the Company is satisfied registration is not required.

 

The Holder hereof and the Company agree to execute all other documents and instruments as counsel for the Company reasonably deems necessary to effect the compliance of the issuance of this Warrant and any shares of Common Stock issued upon exercise hereof with applicable federal and state securities laws.

 

(b)       The Company covenants and agrees that all Shares which may be issued upon exercise of this Warrant will, upon issuance and payment therefor, be legally and validly issued and outstanding, fully paid and nonassessable, free from all taxes, liens, charges and preemptive rights, if any, with respect thereto or to the issuance thereof. The Company shall at all times reserve and keep available for issuance upon the exercise of this Warrant that number of authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of this Warrant.

 

5.        Adjustment of Exercise Price and Number of Shares Issuable . The Exercise Price and the number of Shares (or other securities or property) issuable upon exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of any of the events enumerated in this Section 5.

 

(a)        Common Stock Reorganization . If the Company shall (i) subdivide or consolidate its outstanding shares of Common Stock (or any class thereof) into a greater or smaller number of shares, (ii) pay a dividend or make a distribution on its Common Stock (or any class thereof) in shares of its capital stock, or (iii) issue by reclassification of its Common Stock (or any class thereof) any shares of its capital stock (any event described in clauses (i), (ii) or (iii) being called a "Common Stock Reorganization"), then the Exercise Price and the type of securities for which this Warrant is exercisable shall be adjusted immediately so that the

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Holder thereafter shall be entitled to receive upon exercise of this Warrant the aggregate number and type of securities that it would have received if this Warrant had been exercised immediately prior to the Common Stock Reorganization.

 

(b)        Adjustment in Number of Shares . Upon each adjustment to the Exercise Price pursuant to subsections (a) of this Section 5, this Warrant shall thereafter evidence the right to receive upon payment of the adjusted Exercise Price that number of Shares obtained by multiplying the number of Shares previously issuable upon exercise of this Warrant by a fraction, the numerator of which is the Exercise Price prior to adjustment and the denominator of which is the adjusted Exercise Price.

 

(c)        Capital Reorganizations . If there shall be any consolidation, merger or amalgamation of the Company with another person or entity or any acquisition of capital stock of the Company by means of a share exchange, other than a consolidation, merger or share exchange in which the Company is the continuing corporation or any sale or conveyance of the property of the Company as an entirety or substantially as an entirety, or any reorganization or recapitalization of the Company (a "Capital Reorganization"), then the Holder of this Warrant shall no longer have the right to purchase Common Stock, but shall have instead the right to purchase, upon exercise of this Warrant, the kind and amount of shares of stock and other securities and property (including cash) which the Holder would have owned or have been entitled to receive pursuant to the Capital Reorganization if this Warrant had been exercised immediately prior to the effective date of the Capital Reorganization. As a condition to effecting any Capital Reorganization, the Company or the successor or surviving corporation, as the case may be, shall assume by a supplemental agreement, satisfactory in form, scope and substance to the Holder (which shall be mailed or delivered to the Holder of this Warrant at the last address of the Holder appearing on the books of the Company) the obligation to deliver to the Holder shares of stock, securities, cash or property as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, and all other obligations of the Company set forth in this Warrant.

 

(d)        Determination of Fair Market Value . Subject to the provisions set forth below, the fair market value of the Company or of any non-cash consideration received by the Company upon any Common Stock Distribution shall be determined in good faith by the Board of Directors of the Company. Upon each determination, the Company shall promptly give notice thereof to the Holder, setting forth in reasonable detail the calculation of the fair market value and the method and basis of determination thereof (the "Company Determination"). If the Holder shall disagree with the Company Determination and shall, by notice to the

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Company given within thirty (30) days after the Company's notice of the Company Determination, elect to dispute the Company Determination, the Company shall, within thirty (30) days after receipt of the notice, engage an investment bank or other qualified appraisal firm acceptable to the Holder to make an independent determination of the fair market value of the Company or of any non-cash consideration received by the Company upon any Common Stock Distribution (the "Appraiser Determination"). The Appraiser Determination shall be final and binding on the Company and the Holder. The cost of the Appraiser Determination shall be borne by the Company.

 

(e)        Adjustment Rules . Any adjustments pursuant to this Section 5 shall be made successively whenever an event referred to herein shall occur. No adjustment shall be made pursuant to this Section 5 in respect of the issuance from time to time of shares of Common Stock upon the exercise of this Warrant or upon the exercise or conversion of any other Option Securities or Convertible Securities.

 

(f)        Proceedings Prior to Any Action Requiring Adjustment . As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 5, the Company shall take any action which may be necessary, including obtaining regulatory approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock which the Holder of this Warrant is entitled to receive upon exercise thereof.

 

(g)        Notice of Adjustment . Not less than ten (10) days prior to the record date or effective date, as the case may be, of any action which requires or might require an adjustment or readjustment pursuant to this Section 5, the Company shall give notice to the Holder of the event, describing the event in reasonable detail and specifying the record date or effective date, as the case may be, and, if determinable, the required adjustment and the computation hereof. If the required adjustment is not determinable at the time of the notice, the Company shall give notice to the Holder of the adjustment and computation promptly after the adjustment becomes determinable.

 

6.        Transfer of Warrant . Subject to the provisions of Section 4 hereof, this Warrant may be transferred, in whole or in part, to any person or business entity, by presentation of the Warrant to the Company with written instructions for the transfer. Upon the presentation for transfer, the Company shall promptly execute and deliver a new Warrant or Warrants in the form hereof in the name of the assignee or assignees and in the denominations specified in the instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Warrants under this Section. Any transferee of this Warrant by acceptance thereof, agrees to be bound by all of the terms and conditions of this Warrant.

 

7.        Warrant Holder Not Shareholder; Rights Offering; Preemptive Rights . Except as otherwise provided herein, this Warrant does not confer upon the Holder any right whatsoever as a shareholder of the Company. Notwithstanding the foregoing, if the Company should offer to all of the Company's shareholders the right to purchase any securities of the Company, then all shares of Common Stock that are subject to this Warrant shall be deemed to be outstanding and owned by the Holder and the Holder shall be

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entitled to participate in the offer. The Company shall not grant any preemptive rights with respect to any of its capital stock if the preemptive rights are exercisable upon exercise of this Warrant.

 

8.        Basic Financial Information .

 

The Company will deliver to Holder:

 

(a)       As soon as practicable after the end of each fiscal year of the Company, and in any event within ninety (90) days thereafter, a consolidated balance sheet of the Company as at the end of such fiscal year, and consolidated statements of operations, cash flow and changes in equity of the Company for such year, prepared in accordance with GAAP consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and audited and reported on by independent public accountants of recognized national standing selected by the Company.

 

(b)       From the date the Company becomes subject to the reporting requirements of the Exchange Act, and in lieu of the financial information required pursuant to Section 8(a), copies of its annual reports and all exhibits thereto and its quarterly reports, if any, respectively,

 

(c)       As soon as practicable after transmission or occurrence and in any event within ten (10) days thereof, copies of any financial reports or communications (exclusive of reports or communications relating to the practice of medicine) delivered to any class of the Company's security Holders or broadly to the financial community, including any filings by the Company with any securities exchange, the Commission or the National Association of Securities Dealers.

 

(d)                with reasonable promptness, any other financial data as the Holder may reasonably request.

 

9.        Lost, Stolen, Mutilated or Destroyed Warrant . If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may in its discretion reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall represent the original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

10.        Piggy Back Registration Rights : In the event that the Company files a registration statement with the SEC, the Investor may make a written request (the “ Piggy-Back Request ”) that the Company include in the proposed Registration all, or a portion, of the Warrants owned by the Investor, and the shares issuable upon the exercise of the warrants. The Company will use its commercially reasonable efforts to include in any Registration all Registrable Securities which the Company has been requested to register pursuant to any timely Piggy-Back Request to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered. The expenses of the registration shall be paid by the Company.

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11.        Certain Notices . In case at any time the Company shall propose to:

 

(a)       declare any cash dividend upon its Common Stock;

 

(b)       declare any dividend upon its Common Stock payable in stock or make any special dividend or other distribution to the Holders of its Common Stock;

 

(c)       offer for subscription to the Holders of any of its Common Stock any additional shares of stock in any class or other rights;

 

(d)       reorganize, or reclassify the capital stock of the Company, or consolidate, merge or otherwise combine with, or sell all or substantially all of its assets to, another corporation; or

 

(e)       voluntarily or involuntarily dissolve, liquidate or wind up of the affairs of the Company;

 

then in any one or more of these events, the Company shall give to the Holder, by certified or registered mail, (i) at least twenty (20) days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for the dividend, distribution or subscription rights or for determining rights to vote in respect of any reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in the case of the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least twenty (20) days' prior written notice of the date when the same shall take place. Any notice required by clause (i) shall also specify, in the case of any dividend, distribution or subscription rights, the date on which the Holders of Common Stock shall be entitled thereto, and any notice required by clause (ii) shall specify the date on which the Holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be.

 

12.        Redemption . This Warrant shall be redeemable by the Company at $0.01 per share remaining subject hereto after 20 business days' written notice if the price of the Common Stock closes above $1.00 for 20 consecutive trading days and provided that the Company then has in effect an effective registration statement with respect to the shares of Common Stock issuable upon exercises of this Warrant.

 

IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the date first above written.

 

Nocera, Inc..

 

By:_________________________

Name: Erik S. Nelson

Title: President

 

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EXHIBIT 4.2

 

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("FEDERAL ACT") OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE UPON THE EXEMPTIONS CONTAINED THEREIN, AND IN PARTICULAR PARAGRAPH (13) OF SECTION 10-5-9 OF THE GEORGIA SECURITIES LAW. THIS WARRANT AND ANY SHARES ISSUED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY IS SATISFIED THAT SUCH REGISTRATION IS NOT REQUIRED.

 

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

 

INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

Class B Warrant to Purchase for 150,000 Shares of Common Stock

September 20 th , 2018

 

NOCERA, INC.

CLASS B WARRANT CERTIFICATE

 

 

1.        Issuance of Warrant; Term .

 

(a)       For and in consideration of good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, Nocera, Inc.. (the " Compan y") hereby grants to _______________________________. (" Holder ") the right to purchase One Hundred Fifty Thousand (150,000) shares of the Company's Common Stock, $.001 par value per share (the " Common Stock ").

 

(b)       The shares of Common Stock issuable upon exercise of this Warrant are hereinafter referred to as the " Shares. " This Warrant shall be exercisable at any time and from time to time from the date hereof until this Warrant expires at 5:00 P.M. Eastern time on April 16 th , 2023.

 

2.        Exercise Price . The exercise price (the " Exercise Price ") per share for which all or any of the Shares may be purchased pursuant to the terms of this Warrant shall be One Dollars and 00/100ths ($1.00)

 

3.        Exercise . This Warrant may be exercised by the Holder hereof (but only on the conditions hereafter set forth) as to all or any increment or increments of ten (10) Shares (or the balance of the Shares if less than that number), upon delivery of written notice of intent to exercise to the Company’s transfer agent, Mountain Share Transfer at the following address: 2030 Powers Ferry Road SE, Suite # 212, Atlanta, GA. 30339, Attention: President, or any other address as the Company shall designate in a written notice to the Holder hereof, together with this Warrant and payment to the Company of the aggregate Exercise Price of the Shares so purchased. The Exercise Price shall be payable by certified or bank check. Upon exercise of this Warrant, the Company shall as promptly as practicable, and in any event within fifteen (15) days thereafter,

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execute and deliver to the Holder of this Warrant a certificate or certificates for the total number of whole Shares for which this Warrant is being exercised in the names and denominations as are requested by the Holder. If this Warrant shall be exercised with respect to less than all of the Shares, the Holder shall be entitled to receive a new Warrant covering the number of Shares in respect of which this Warrant shall not have been exercised, which new Warrant shall in all other respects be identical to this Warrant. The Company covenants and agrees that it will pay when due any and all state and federal issue taxes which may be payable in respect of the issuance of this Warrant or the issuance of any Shares upon exercise of this Warrant.

 

4.        Covenants and Conditions . The above provisions are subject to the following:

 

(a)       Neither this Warrant nor the Shares have been registered under the Securities Act of 1933, as amended (" Securities Act "), or any state securities laws (" Blue Sky Laws "). This Warrant has been acquired for investment purposes and not with a view to distribution or resale and may not be pledged, hypothecated, sold, made subject to a security interest, or otherwise transferred without (i) an effective registration statement for the Warrant under the Securities Act and all applicable Blue Sky Laws, or (ii) an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company and its counsel, that registration is not required under the Securities Act or under any applicable Blue Sky Laws (the Company hereby acknowledges that Investment Law Group LLP is acceptable counsel). Transfer of Shares issued upon the exercise of this Warrant shall be restricted in the same manner and to the same extent as the Warrant, and the certificates representing the Shares shall, subject to Section 6 hereof, bear substantially the following legend:

 

The securities represented by this certificate have been issued in reliance upon the representation of the Holder that they have been acquired for investment and not with a view toward the resale or other distribution thereof, and have not been registered under the Securities Act of 1933 (the "Securities Act") or the securities laws of any state in reliance upon the exemptions from registration contained therein, and may not be offered, sold, transferred, encumbered or otherwise disposed of unless there is an effective registration statement under the Federal Act and applicable state securities laws relating thereto or the Company is satisfied registration is not required.

 

The Holder hereof and the Company agree to execute all other documents and instruments as counsel for the Company reasonably deems necessary to effect the compliance of the issuance of this Warrant and any shares of Common Stock issued upon exercise hereof with applicable federal and state securities laws.

 

(b)       The Company covenants and agrees that all Shares which may be issued upon exercise of this Warrant will, upon issuance and payment therefor, be legally and validly issued and outstanding, fully paid and nonassessable, free from all taxes, liens, charges and preemptive rights, if any, with respect thereto or to the issuance thereof. The Company shall at all times reserve and keep available for issuance upon the exercise of this Warrant that number of authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of this Warrant.

 

5.        Adjustment of Exercise Price and Number of Shares Issuable . The Exercise Price and the number of Shares (or other securities or property) issuable upon exercise of this Warrant shall be subject to

2  
 

 

adjustment from time to time upon the occurrence of any of the events enumerated in this Section 5.

 

(a)        Common Stock Reorganization . If the Company shall (i) subdivide or consolidate its outstanding shares of Common Stock (or any class thereof) into a greater or smaller number of shares, (ii) pay a dividend or make a distribution on its Common Stock (or any class thereof) in shares of its capital stock, or (iii) issue by reclassification of its Common Stock (or any class thereof) any shares of its capital stock (any event described in clauses (i), (ii) or (iii) being called a "Common Stock Reorganization"), then the Exercise Price and the type of securities for which this Warrant is exercisable shall be adjusted immediately so that the Holder thereafter shall be entitled to receive upon exercise of this Warrant the aggregate number and type of securities that it would have received if this Warrant had been exercised immediately prior to the Common Stock Reorganization.

 

(b)        Adjustment in Number of Shares . Upon each adjustment to the Exercise Price pursuant to subsections (a) of this Section 5, this Warrant shall thereafter evidence the right to receive upon payment of the adjusted Exercise Price that number of Shares obtained by multiplying the number of Shares previously issuable upon exercise of this Warrant by a fraction, the numerator of which is the Exercise Price prior to adjustment and the denominator of which is the adjusted Exercise Price.

 

(c)        Capital Reorganizations . If there shall be any consolidation, merger or amalgamation of the Company with another person or entity or any acquisition of capital stock of the Company by means of a share exchange, other than a consolidation, merger or share exchange in which the Company is the continuing corporation or any sale or conveyance of the property of the Company as an entirety or substantially as an entirety, or any reorganization or recapitalization of the Company (a "Capital Reorganization"), then the Holder of this Warrant shall no longer have the right to purchase Common Stock, but shall have instead the right to purchase, upon exercise of this Warrant, the kind and amount of shares of stock and other securities and property (including cash) which the Holder would have owned or have been entitled to receive pursuant to the Capital Reorganization if this Warrant had been exercised immediately prior to the effective date of the Capital Reorganization. As a condition to effecting any Capital Reorganization, the Company or the successor or surviving corporation, as the case may be, shall assume by a supplemental agreement, satisfactory in form, scope and substance to the Holder (which shall be mailed or delivered to the Holder of this Warrant at the last address of the Holder appearing on the books of the Company) the obligation to deliver to the Holder shares of stock, securities, cash or property as, in accordance with the foregoing provisions, the Holder may be entitled to purchase, and all other obligations of the Company set forth in this Warrant.

 

(d)        Determination of Fair Market Value . Subject to the provisions set forth below, the fair market value of the Company or of any non-cash consideration received by the Company upon any Common Stock Distribution shall be determined in good faith by the Board of Directors of the Company. Upon each determination, the Company shall promptly give notice thereof to the Holder, setting forth in reasonable detail the calculation of the fair market value and the method and basis of determination thereof (the "Company Determination"). If the Holder shall disagree with the Company Determination and shall, by notice to the Company given within thirty (30) days after the Company's notice of the Company Determination, elect to dispute the Company Determination, the Company shall, within thirty (30) days after receipt of the notice,

3  
 

 

engage an investment bank or other qualified appraisal firm acceptable to the Holder to make an independent determination of the fair market value of the Company or of any non-cash consideration received by the Company upon any Common Stock Distribution (the "Appraiser Determination"). The Appraiser Determination shall be final and binding on the Company and the Holder. The cost of the Appraiser Determination shall be borne by the Company.

 

(e)        Adjustment Rules . Any adjustments pursuant to this Section 5 shall be made successively whenever an event referred to herein shall occur. No adjustment shall be made pursuant to this Section 5 in respect of the issuance from time to time of shares of Common Stock upon the exercise of this Warrant or upon the exercise or conversion of any other Option Securities or Convertible Securities.

 

(f)        Proceedings Prior to Any Action Requiring Adjustment . As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 5, the Company shall take any action which may be necessary, including obtaining regulatory approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock which the Holder of this Warrant is entitled to receive upon exercise thereof.

 

(g)        Notice of Adjustment . Not less than ten (10) days prior to the record date or effective date, as the case may be, of any action which requires or might require an adjustment or readjustment pursuant to this Section 5, the Company shall give notice to the Holder of the event, describing the event in reasonable detail and specifying the record date or effective date, as the case may be, and, if determinable, the required adjustment and the computation hereof. If the required adjustment is not determinable at the time of the notice, the Company shall give notice to the Holder of the adjustment and computation promptly after the adjustment becomes determinable.

 

6.        Transfer of Warrant . Subject to the provisions of Section 4 hereof, this Warrant may be transferred, in whole or in part, to any person or business entity, by presentation of the Warrant to the Company with written instructions for the transfer. Upon the presentation for transfer, the Company shall promptly execute and deliver a new Warrant or Warrants in the form hereof in the name of the assignee or assignees and in the denominations specified in the instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Warrants under this Section. Any transferee of this Warrant by acceptance thereof, agrees to be bound by all of the terms and conditions of this Warrant.

 

7.        Warrant Holder Not Shareholder; Rights Offering; Preemptive Rights . Except as otherwise provided herein, this Warrant does not confer upon the Holder any right whatsoever as a shareholder of the Company. Notwithstanding the foregoing, if the Company should offer to all of the Company's shareholders the right to purchase any securities of the Company, then all shares of Common Stock that are

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subject to this Warrant shall be deemed to be outstanding and owned by the Holder and the Holder shall be entitled to participate in the offer. The Company shall not grant any preemptive rights with respect to any of its capital stock if the preemptive rights are exercisable upon exercise of this Warrant.

 

8.        Basic Financial Information .

 

The Company will deliver to Holder:

 

(a)       As soon as practicable after the end of each fiscal year of the Company, and in any event within ninety (90) days thereafter, a consolidated balance sheet of the Company as at the end of such fiscal year, and consolidated statements of operations, cash flow and changes in equity of the Company for such year, prepared in accordance with GAAP consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and audited and reported on by independent public accountants of recognized national standing selected by the Company.

 

(b)       From the date the Company becomes subject to the reporting requirements of the Exchange Act, and in lieu of the financial information required pursuant to Section 8(a), copies of its annual reports and all exhibits thereto and its quarterly reports, if any, respectively,

 

(c)       As soon as practicable after transmission or occurrence and in any event within ten (10) days thereof, copies of any financial reports or communications (exclusive of reports or communications relating to the practice of medicine) delivered to any class of the Company's security Holders or broadly to the financial community, including any filings by the Company with any securities exchange, the Commission or the National Association of Securities Dealers.

 

(d)                with reasonable promptness, any other financial data as the Holder may reasonably request.

 

9.        Lost, Stolen, Mutilated or Destroyed Warrant . If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may in its discretion reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall represent the original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

10.        Piggy Back Registration Rights : In the event that the Company files a registration statement with the SEC, the Investor may make a written request (the “ Piggy-Back Request ”) that the Company include in the proposed Registration all, or a portion, of the Warrants owned by the Investor, and the shares issuable upon the exercise of the warrants. The Company will use its commercially reasonable efforts to include in any Registration all Registrable Securities which the Company has been requested to register pursuant to any timely Piggy-Back Request to the extent required to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered. The expenses of the registration shall be paid by the Company.

 

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11.        Certain Notices . In case at any time the Company shall propose to:

 

(a)       declare any cash dividend upon its Common Stock;

 

(b)       declare any dividend upon its Common Stock payable in stock or make any special dividend or other distribution to the Holders of its Common Stock;

 

(c)       offer for subscription to the Holders of any of its Common Stock any additional shares of stock in any class or other rights;

 

(d)       reorganize, or reclassify the capital stock of the Company, or consolidate, merge or otherwise combine with, or sell all or substantially all of its assets to, another corporation; or

 

(e)       voluntarily or involuntarily dissolve, liquidate or wind up of the affairs of the Company;

 

then in any one or more of these events, the Company shall give to the Holder, by certified or registered mail, (i) at least twenty (20) days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for the dividend, distribution or subscription rights or for determining rights to vote in respect of any reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in the case of the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least twenty (20) days' prior written notice of the date when the same shall take place. Any notice required by clause (i) shall also specify, in the case of any dividend, distribution or subscription rights, the date on which the Holders of Common Stock shall be entitled thereto, and any notice required by clause (ii) shall specify the date on which the Holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be.

 

12.       Redemption . This Warrant shall be redeemable by the Company at $0.01 per share remaining subject hereto after 20 business days' written notice if the price of the Common Stock closes above $3.00 for 20 consecutive trading days and provided that the Company then has in effect an effective registration statement with respect to the shares of Common Stock issuable upon exercises of this Warrant.

 

IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the date first above written.

 

Nocera, Inc..

 

By:_________________________

Name: Erik S. Nelson

Title: President

 

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EXHIBIT 10.1

 
 

 
 

 
 

 
 

 
 

 
 

 
 

EXHIBIT 23.1    

Consent of Independent Registered Public Accounting Firm

 

 

 

 

 

BF BORGERS CPA PC

CERTIFIED PUBLIC ACCOUNTANTS

5400 WEST CEDAR AVENUE

LAKEWOOD, CO 80226

(303) 953-1454

 

 

 

 

 

 

 

Consent of Independent Registered Public Accounting Firm

 

To the Board of Directors

Nocera, Inc.

 

 

We consent to the use of our report dated October 18, 2018 with respect to the financial statements of Nocera, Inc. as of December 31, 2017 and 2016 and the related statements of operations, shareholders’ equity/(deficit) and cash flows for the years then ended. We also consent to the reference to our firm under the caption “Experts” in the Form 10.

 

 /s/ BF Borgers CPA PC

_________________________________________ 

 

BF Borgers CPA PC

Lakewood, CO

 

October 19, 2018