Nature's Miracle Holding Inc 10-Q for FY2025 Q2
Nature's Miracle Holding Inc. (NMHI)
About this 10-Q
Nature's Miracle Holding Inc filed this 10-Q on August 14, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $484.01K
- down 85.8% from $3.4M a year earlier
- Net loss
- $1.77M
- compared with a net loss of $1.77M a year earlier
- Diluted EPS
- -$0.29
- compared with -$2.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD
ENDED
or
FOR THE TRANSITION PERIOD FROM _________ to __________
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No |
| (Address of principal executive offices) (Zip Code) | (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
| Title of each class | Trading symbol(s) | |
| * | The securities of Nature’s Miracle Holding Inc. have been suspended from trading on The Nasdaq Stock Market and are currently trading on the Market. |
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Indicate by check mark
whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
As of August 14, 2025, the registrant had a total of
INDEX
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “intend,” “seek,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “might,” “forecast,” “continue,” or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:
| ● | Our ability to effectively operate our business segments; |
| ● | Our ability to manage our research, development, expansion, growth and operating expenses; |
| ● | Our ability to evaluate and measure our business, prospects and performance metrics; |
| ● | Our ability to compete, directly and indirectly, and succeed in a highly competitive and evolving industry; |
| ● | Our ability to respond and adapt to changes in technology and customer behavior; and |
| ● | Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand. |
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.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Quarterly Report on Form 10-Q should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.
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PART I – FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NATURE’S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Accounts receivable - related parties, net | ||||||||
| Inventories, net | ||||||||
| Prepayments and other current assets | ||||||||
| Prepayments - related parties | ||||||||
| Total Current Assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Deposits | ||||||||
| Right-of-use assets, net | ||||||||
| Cost method investment | ||||||||
| Property and equipment, net | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Short-term loans | $ | $ | ||||||
| Short-term loans - related parties | ||||||||
| Current portion of long-term debts | ||||||||
| Convertible notes | ||||||||
| Convertible notes - related party | - | |||||||
| Accounts payable | ||||||||
| Accounts payable - related parties | ||||||||
| Other payables and accrued liabilities | ||||||||
| Other payables - related parties | ||||||||
| Operating lease liabilities - current | ||||||||
| Shares subscription paid in advance | ||||||||
| Tax accrual | ||||||||
| Deferred income - Contract liabilities | ||||||||
| Deferred income - Contract liabilities - related party | ||||||||
| Total Current Liabilities | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Long-term debts, net of current portion | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS' DEFICIT | ||||||||
| Preferred Stock ($ | ||||||||
| outstanding at June 30, 2025 and December 31, 2024, respectively) | ||||||||
| Common Stock ($ | ||||||||
| shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively)* | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Stockholders' Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
NATURE’S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Three Months Ended | For the Three Months Ended | For the Six Months Ended | For the Six Months Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| REVENUE (including related party revenue of $ | $ | $ | $ | $ | ||||||||||||
| COST OF REVENUE | ||||||||||||||||
| GROSS PROFIT | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Provision for credit losses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non cash finance expense | ( | ) | ||||||||||||||
| Gain on loan extinguishment | ||||||||||||||||
| Other (expense) income | ( | ) | ( | ) | ||||||||||||
| Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| LOSS PER SHARE | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
NATURE’S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ DEFICIT
| Preferred stock | Common stock | Additional paid in | Accumulated | Accumulated other comprehensive | ||||||||||||||||||||||||||||
| Shares | Amount | Shares* | Amount | capital | Deficit | loss | Total | |||||||||||||||||||||||||
| BALANCE, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| Shares to be issued for stock compensation | ( | ) | ||||||||||||||||||||||||||||||
| Shares issued through warrants exercises | ||||||||||||||||||||||||||||||||
| Shares issued through debt-to-equity conversion | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| BALANCE, March 31, 2025 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| Shares issued through convertible notes conversion | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| BALANCE, June 30, 2025 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Preferred stock | Common stock | Additional paid in | Accumulated | Accumulated other comprehensive | ||||||||||||||||||||||||||||
| Shares | Amount | Shares* | Amount | capital | Deficit | loss | Total | |||||||||||||||||||||||||
| BALANCE, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Issuance of shares upon the reverse recapitalization | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Additional shares issued in connection with reverse recapitalization | ( | ) | ||||||||||||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| Shares to be issued for stock compensation | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| BALANCE, March 31, 2024 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||||||||||||||
| Shares to be issued for stock compensation | ( | ) | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| BALANCE, June 30, 2024 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
NATURE’S MIRACLE HOLDING INC., SUBSIDIARIES AND VIE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended | For the Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Allowance for credit losses | ||||||||
| Amortization of operating right-of-use asset | ||||||||
| Amortization of debt issuance cost | ||||||||
| Gain on loan extinguishment | ( | ) | ||||||
| Stock compensation expenses | ||||||||
| Non cash finance expense | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ||||||||
| Prepayments and other current assets | ( | ) | ||||||
| Prepayments - related parties | ( | ) | ||||||
| Security deposit | ||||||||
| Accounts payable | ( | ) | ||||||
| Other payables and accrued liabilities | ||||||||
| Accrued interest payable - related parties | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Tax accrual | ( | ) | ||||||
| Deferred income - Contract liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Loan to Lakeshore | ( | ) | ||||||
| Deposit from investment of Future Tech | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from the reverse recapitalization | ||||||||
| Payments of transaction costs incurred by Lakeshore | ( | ) | ||||||
| Repayments of promissory note - related party of Lakeshore | ( | ) | ||||||
| Shares subscription paid in advance | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Payments of deferred offering costs | ( | ) | ||||||
| Repayments on long-term loan | ( | ) | ( | ) | ||||
| Short-term loan borrowing from third parties | ||||||||
| Repayments on short-term loan from third parties | ( | ) | ( | ) | ||||
| Repayments on short-term loan from related parties | ( | ) | ||||||
| Convertible notes borrowing | ||||||||
| Repayments on convertible notes | ( | ) | ||||||
| Borrowings from other payables - related parties | ||||||||
| Payments on other payables - related parties | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| EFFECT OF FOREIGN EXCHANGE ON CASH | ( | ) | ||||||
| CHANGES IN CASH | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: | ||||||||
| Right of use assets acquired under new operating leases | $ | $ | ||||||
| Reduce of right-of-use asset and operating lease liabilities based on modification | $ | $ | ||||||
| Accumulated deficit acquired upon the reverse recapitalization | $ | $ | ||||||
| Deferred offering cost converted to APIC upon the reverse recapitalization | $ | $ | ||||||
| Conversion of convertible notes into shares | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Nature’s Miracle Holding Inc., Subsidiaries
and VIE
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 — Nature of business and organization
Nature’s Miracle Holding Inc., which until March 11, 2024 was known as LBBB Merger Corp. (the “Company”, “Nature’s Miracle”) is a company incorporated on August 1, 2022 under Delaware law as a wholly owned subsidiary of the Lakeshore Acquisition II Corp., a Cayman Islands exempted company (“Lakeshore”).
On March 11, 2024, Lakeshore
merged with and into the Company for the sole purpose of reincorporating Lakeshore into the State of Delaware (“Reincorporation”).
Immediately after the Reincorporation, the Company consummated the merger contemplated by the Merger Agreement between the Company and
Nature’s Miracle, Inc., a Delaware corporation (“NMI”), resulting in the stockholders of NMI becoming
Pursuant to the Merger Agreement,
at the effective time of the Merger, each share of NMI common stock issued and outstanding immediately prior to the effective time was
canceled and automatically converted into the right to receive the applicable pro rata portion of shares of the Company common stock,
the aggregate value of which was equal to: (a) $
The Merger is considered
as a reverse recapitalization in accordance with Accounting Standards Codification (“ASC”) 805-40. Under this method of accounting,
Lakeshore will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based
on NMI’s stockholders comprise
Accordingly, for accounting purposes, the financial statements of the Company will represent a continuation of the financial statements of NMI with the Merger treated as the equivalent of NMI issuing stock for the net assets of Lakeshore, accompanied by a recapitalization. The net assets of Lakeshore will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be presented as those of NMI in financial statements of the Company. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5.
The Company is a growing agriculture technology company focusing on the greenhouse and cultivation industry and providing products to indoor growers in a CEA (Controlled Environment Agriculture) setting in North America.
Reorganization under NMI
NMI is a holding company incorporated on March 31, 2022 in Delaware. NMI has no substantial operations other than holding all the outstanding share capital of its subsidiaries. NMI, its subsidiaries and variable interest entity (“VIE”).
On June 1, 2022, NMI
entered into the Share Exchange Agreements with the stockholders of Visiontech Group, Inc. (“Visiontech”, a California Company),
resulting in the stockholders of Visiontech becoming
The transaction was accounted
as a reverse recapitalization in accordance with ASC 805. The process of identifying the accounting acquirer began with a consideration
of the guidance in ASC 810-10 related to determining the existence of a controlling financial interest. The general rule provided
by ASC 810-10 is that the party that holds directly or indirectly greater than
5
On June 1, 2022, NMI
also entered into the Share Exchange Agreements with the stockholders of Hydroman, Inc. (“Hydroman”, a California Company)
to acquire
On July 28, 2022, Nature’s Miracle (California), Inc., (“NMCA”), a California corporation wholly owned by NMI was incorporated. NMCA focuses on greenhouse development services and started providing container grow sales in first quarter of 2024.
On August 18, 2022,
NMI acquired
On August 27, 2021,
Visiontech and Upland 858 LLC (“Upland”), who share common stockholders with Visiontech, entered into a promissory note agreement.
Upland is a special purchase entity set up to purchase and hold a warehouse located in California. Upland promised to pay to Visiontech
the sum of $
On August 27, 2022,
Upland entered into an assignment and assumption of unsecured promissory note with Zhiyi (Jonathan) Zhang, Vartor Vahe Doudakian and Yang
Wei (collectively “Assignees”). Upland transferred to Assignees all of its right, title, duties, liabilities and obligation
under the promissory note signed by and among Visiontech and Upland on August 27, 2021 in the original principal amount of $
On May 10, 2024, NM Data, Inc. (“NM Data”), a Nevada corporation wholly owned by the Company was incorporated. NM Data aimed at entering the data center and Bitcoin mining business.
On October 18, 2024, NM Rebate, Inc. (“NM Rebate”), a California corporation wholly owned by the Company was incorporated. NM Rebate focus on energy rebate solutions combined with the supply of LED lights that qualify for energy-saving rebates provided by large Utility companies throughout the U.S.
On November 18, 2024, the
Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect a one-for-thirty (
6
Note 2 — Going concern
In assessing liquidity, the Company monitors and analyzes cash on-hand
and operating expenditure commitments. The Company’s liquidity needs are to meet working capital requirements and operating expense
obligations. To date, the Company financed its operations primarily through cash flows from operations, debt financing from financial
institution and related parties. As of June 30, 2025 and December 31, 2024, the Company had approximately $
Subsequent to June 30, 2025,
the Company obtained approximately $
The Company has experienced recurring losses from operations and negative cash flows from operating activities since 2022. In addition, the Company had, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund its expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.
If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources:
| ● | financial support from the Company’s related parties and stockholders; |
| ● | other available sources of financing from banks and other financial institutions; |
| ● | equity financing through capital market. |
The Company has a $
The Company has access to investors who are providing convertible note financing for public companies and we have been utilizing the convertible note for part of our financing needs.
The shareholder of the Company
also offers support for the Company. Big Lake Capital, LLC, a related party controlled by Tie Li (our Chairman and CEO) entered into a
$
The Company can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Company and would materially adversely affect its ability to continue as a going concern.
The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.
Note 3 — Basis of presentation and summary of significant accounting policies
Basis of presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2025, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation.
7
Principles of consolidation
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries, which include its wholly owned subsidiaries and VIE over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries and VIE have been eliminated upon consolidation.
Use of estimates and assumptions
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents consist of amounts held as cash on hand and bank deposits.
From time to time, the Company
may maintain bank balances in interest bearing accounts in excess of the $
Prepayments and other current assets
Prepaid expenses and other current assets primarily include prepaid expenses paid to product providers, and other deposits. Management regularly reviews the aging of such balances and changes in payment and realization trends and records allowances when management believes collection or realization of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2025 and December 31, 2024, no allowance for doubtful account was recorded.
Accounts receivable, net
Starting from January 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Company used a modified retrospective approach, and the adoption does not have an impact on our unaudited condensed consolidated financial statements. During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. An allowance for expected credit loss is recorded in the period in which loss is determined to be probable based on lifetime expected losses considering historical, current, and forecasted conditions. Amounts deem uncollectible are written off against the allowance after all collection efforts have ceased.
Inventory
Inventory consists of finished goods ready for sale and is stated at the lower of cost and net realizable value. The Company values its inventory using the weighted average costing method. The Company’s policy is to include as a part of cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in cost of revenue. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence.
8
If the estimated realizable
value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value.
The Company also reviews inventory for slow moving inventory and obsolescence and records impairment for obsolescence. For the three and
six months ended June 30, 2025, there was no inventory impairment loss amounted to $
Cost method investment
The Company accounts for
investments with less than
Cost method investment is evaluated for impairment when facts or circumstances indicate that the fair value of the long-term investments is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near-term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. No event had occurred and indicated that other-than-temporary impairment existed and therefore during the three and six months ended June 30, 2025, the Company did not record any impairment charges for its investments. During the three and six months ended June 30, 2024, the Company did not record any impairment charges for its investments.
Deposits
Deposit consists of
security deposits for vendors and deposits for acquisition. To maintain a stable supply for goods and build a
long-term relationship, the Company may pay certain amount of funds to its vendors as security deposits which are recorded as
non-current assets on the balance sheet depending on its return date. On November 22, 2024, NM Data entered into an investment
agreement to acquire
Property and equipment
Property and equipment are stated at historical cost. Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets are as follows:
| Useful Life | ||
| Machinery and equipment | ||
| Computer and peripherals | ||
| Trucks and automobiles | ||
| Buildings |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of operations. Expenditures for maintenance and repairs are expensed as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized.
9
Deferred offering costs
Deferred offering costs consist primarily of expenses paid to attorneys, consultants, underwriters, and etc. related to its merger transaction. The balance has been offset with the proceeds received after the close of the offering.
Fair value measurement
The Company adopted ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.
ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
Fair values of financial instruments
Financial instruments include cash and cash equivalents, accounts receivable, prepayments, loan receivable, and other current assets, other payable and accrued liabilities, accounts payable — related parties, short term loans and taxes payable. The Company considers the carrying amount of short-term financial instruments to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company’s long-term debts are measured at amortized cost, no fair value option is elected.
Revenue recognition
The Company follows Accounting Standards Codification (“ASC”) 606 Revenue Recognition and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.
The Company is a growing agriculture technology company providing CEA hardware products to growers in the controlled environment agriculture industry setting in North America. Majority of the Company’s products were grow lights and related products for the indoor growing settings. Starting from first quarter of 2024, the Company also provides indoor grow containers to its customers.
10
The Company’s contracts with customers where the amounts charged per product is fixed and determinable, the specific terms of the contracts were agreed on by the Company including payment terms which are typically 30 to 60 days for existing customers and prepaid for most new customers. In certain contracts involving sales to customers that entered into rebate programs who can get rebates with utility companies for using LED lighting, payment term ranges from 60 to 120 days.
The Company’s performance obligation is to deliver the products to customers. For indoor grow container products, the Company also involved in customization of the products to suit customer’s specific needs. The provision of customization and configuration to meet certain technical specification per US market and delivery of product is considered one performance obligation as the services provided are not distinct within the context of the contract whereas the customers can only obtain benefit when the services and products are provided together. At times, the Company may charge customers shipping and handling for delivery of products, control of goods does not transfer to the customer before shipment, therefore shipping is not a promised service to the Company and is not considered a separate performance obligation. Any fee charged for shipping would be included in the transaction price for the good.
Transaction prices are mostly fixed. In some contracts, when determining the transaction price, the Company adjusts consideration for the effects of the time value of money if the timing of payments provides the Company with a significant benefit of financing. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customers and the transfer of the promised goods or services to the licensees will be one year or less. For customers that entered into rebate programs with utility companies, transaction price may depend on level of energy saving the products achieved. The Company estimated the amount of consideration using the expected value of the most likely amount depending on which method the Company expects to better predict the amount of consideration to which it will receive with a constraint applied such that a significant reversal of revenue is not probable.
The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized at a point in time when control of product transfer to customer and the Company has no further obligation to provide services related to such product evidenced by customer signing acceptances upon receipt of goods. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience.
The Company evaluates the criteria of ASC 606 — Revenue Recognition Principal-Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. The Company ships the products according to shipping terms on the purchase order or sales order. Once delivery is complete, the Company then sends an invoice to the customer according to the quantity and price of shipment.
The Company evaluates the indicators of control in accordance with ASU 2016-08: 1) the Company is the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer inquiries directly and handling of product returns or refunds directly if any. For grow light products, the Company has its own brand for marketing. For indoor grow containers products, the Company is also involved in the design and technical specification of the products to meet requirement in the US market. 2) The Company assumes inventory risk either through storing the products in its own warehouses; or for drop shipments directly from vendors, the Company takes the title from vendors through inspection and acceptance and is responsible for product damage during shipment period prior to acceptance of its customers and is also responsible for product return if the customer is not satisfied with the products. 3) The Company determines the resale price of the products. 4) The Company is the party that directs the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer, after evaluating the above scenario, the Company considers itself the principal of these arrangements and records revenue on a gross basis.
The Company’s disaggregate revenue stream by products are summarized below:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Grow light | $ | $ | $ | $ | ||||||||||||
| Indoor grow containers | ||||||||||||||||
| Grow media and others | ||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
11
Prepayments received from customers prior to the delivery of goods to customers or picked up by the customers are recorded as contract liability under the account Deferred income — contract liabilities.
Movements of deferred income — contract liabilities (including related party) consisted of the following as of the date indicated:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Prepayments from customers | ||||||||
| Recognized as revenues | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the transaction price of the related transaction.
Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are recorded and estimated based on historical returns which were generally immaterial to the Company.
Estimated warranty are immaterial
because suppliers provide a warranty period of
Cost of revenue
Cost of revenue mainly consist of costs for purchases of products and related storage, warehouse rent, outbound freight, delivery fees and payroll related expenses.
Segment reporting
The Company follows ASC 280,
Segment Reporting. The Company’s chief operating decision maker, the Chief Executive Officer, reviews the results of operations
when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only
Leases
The Company follows ASC 842 — Leases (“ASC 842”), which requires lessees to record right-of-use (“ROU”) assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements.
12
ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Income taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.
As a result of the implementation of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company follows the provisions of ASC 740 and has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Delaware, as its “major” tax jurisdictions.
The Company believes that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.
Stock-based compensation
The Company accounts for stock-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.
The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received.
Warrants
The Company evaluates the public and private warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. Pursuant to such evaluation, both public and private warrants are classified in shareholders’ equity.
13
For issued warrants that meet all of the criteria for equity classification and issued with debt instruments, the proceeds from the sale of the debt instruments are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants is accounted for as paid-in capital. The remainder of the proceeds is allocated to the debt instrument portion of the transaction at a discount and amortized over the term of the debt instrument using the effective interest rate method.
Convertible notes
Upon adoption of ASU 2020-06 on January 1, 2021, the elimination of the beneficial conversion feature (“BCF”) and cash conversion models in ASC 470-20 that requires separate accounting for embedded conversion features in convertible instruments results in the convertible debt instruments being recorded as a single liability (i.e., there is no separation of the conversion feature, and all proceeds are allocated to the convertible debt instruments as a single unit of account). Unless conversion features are derivatives that must be bifurcated from the host contracts in accordance with ASC 815-15 or, in the case of convertible debt, if the instruments are issued with a substantial premium, in the latter case, ASC 470-20-25-13 requires the substantial premium to be attributable to the conversion feature and recorded in additional paid-in capital (APIC).
Commitments and Contingencies
In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.
Related party transactions
A related party is generally
defined as (i) any person and or their immediate family hold
Loss per share
Basic loss per share is computed by dividing net loss attributable to holders of common stock by the weighted average number of common stock outstanding during the year. Diluted loss per share presents the dilutive effect on a per share basis of the potential common stock (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted loss per share.
Recently issued accounting pronouncements
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its unaudited condensed consolidated financial statements and related disclosures.
14
In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt–Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Instruments (“ASU 2024–04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06, which includes the Company. Adoption can be on a prospective or retrospective basis. The Company adopted ASU 2024-04 effective January 1, 2025 on a prospective basis.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.
Note 4 — Variable interest entity
The Company does not have direct ownership in Upland but has been actively involved in their operations and has the power to direct the activities and significantly impact Upland’s economic performance. The Company also bears the risk of losses from Upland. As such, in accordance with ASC 810, Upland is considered variable interest entity (“VIE”) of the Company and the financial statements of Upland was consolidated from the date of control and variable interest existed.
Based on the loan agreement between its creditor and Upland 858 LLC, the loan is a non-recourse debt secured by the assets owned by Upland 858 LLC only and guaranteed by the stockholders of Upland 858 LLC only. Upland 858 LLC’s creditor will have no-recourse to Visiontech which is considered to be the primary beneficiary of the VIE structure but not the legal owner of Upland 858 LLC:
Accordingly, the accounts of Upland were consolidated in the accompanying financial statements as VIE of Visiontech from January 2022 when Upland acquired the warehouse in California.
The carrying amount of the assets and liabilities are as follows:
| As of June 30, 2025 | ||||
| Cash | $ | |||
| Property and equipment, net | ||||
| Total assets | $ | |||
| Current portion of long-term debt | $ | |||
| Long-term debt, net of current portion | ||||
| Accrued expenses | ||||
| Intercompany payable to Visiontech | ||||
| Total liabilities | $ | |||
15
The operating results of VIE included in the unaudited condensed consolidated statements of operations are as follows for the period indicated:
| For the three months ended June 30, 2025 | For the six months ended June 30, 2025 | |||||||
| Revenue* | $ | $ | ||||||
| Selling, general and administrative | ||||||||
| Interest expense | ||||||||
| Income tax | ||||||||
| Net loss | $ | $ | ||||||
| * |
Note 5 — Reverse recapitalization
On March 11, 2024, Lakeshore
merged with and into the Company for the sole purpose of reincorporating Lakeshore into the State of Delaware. Immediately after the Reincorporation,
the Company consummated the merger between the Company and NMI, resulting in the stockholders of NMI becoming
The following table presents the number of the Company’s common stock issued and outstanding immediately following the reverse recapitalization:
| Common Stock | ||||
| Lakeshore’s shares outstanding prior to reverse recapitalization | ||||
| Shares issued to private rights | ||||
| Conversion of the Lakeshore’s public shares and rights | ||||
| Shares issued to service providers | ||||
| Shares issued for commitment fee | ||||
| Bonus shares issued to investors | ||||
| Conversion of NMI’s shares into the Company’s ordinary shares | ||||
| Total shares outstanding | ||||
In connection with the reverse
recapitalization, the Company has assumed
In connection with the reverse
recapitalization, the Company raised approximately $
16
The following table reconcile the elements of the reverse recapitalization to the unaudited condensed consolidated statements of cash flows and the changes in shareholders’ equity (deficit):
| As of March 11, 2024 | ||||
| Funds held in Lakeshore’s trust account | $ | |||
| Funds held in Lakeshore’s operating cash account | ||||
| Less: amount paid to redeem public shares of Lakeshore’s ordinary shares | ( | ) | ||
| Proceeds from the reverse recapitalization | ||||
| Less: payments of transaction costs incurred by Lakeshore | ( | ) | ||
| Less: repayments of promissory note – related party of Lakeshore’ | ( | ) | ||
| Less: notes assumed from Lakeshore | ( | ) | ||
| Less: liability assumed from Lakeshore | ( | ) | ||
| Less: transaction costs paid by NMI | ( | ) | ||
| Add: receivable assumed from Lakeshore | ||||
| Net liabilities assumed from issuance of common stock upon the Merger, balance classified to retained deficit | $ | ( | ) | |
Note 6 — Accounts receivable, net
Accounts receivable consisted of the following as of the date indicated:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Subtotal accounts receivable, net | ||||||||
| Accounts receivable - related party | $ | $ | ||||||
| Less: allowance for credit losses – related party | ( | ) | ( | ) | ||||
| Subtotal accounts receivable – related party, net | $ | $ | ||||||
| Total accounts receivable | $ | $ | ||||||
| Total allowance for credit losses | ( | ) | ( | ) | ||||
| Total accounts receivable, net | $ | $ | ||||||
Provision for credit losses
were $
Provision for credit losses
were $
17
Movement of allowance:
Movement of allowance for expected credit losses (including related party) consisted of the following as of the date indicated:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Addition | ||||||||
| Write-off | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
Note 7 — Cost method investment
Cost method investment consists of the following:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| $ | $ | |||||||
| Total | $ | $ | ||||||
On April 11, 2023, one
of the Company’s customers, Iluminar Lighting LLC (“Iluminar”) entered into Debt Conversion Agreement with the Company
pursuant to which it will convert $
Note 8 — Property and equipment, net
Property and equipment, net consist of the following:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Trucks & Automobiles | $ | $ | ||||||
| Machinery & Equipment | ||||||||
| Building | ||||||||
| Land | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Depreciation expense for
the three months ended June 30, 2025 and 2024 amounted to $
Depreciation expense for
the six months ended June 30, 2025 and 2024 amounted to $
18
Note 9 — Loans payable
Short-term loans:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Factor H (1) | $ | $ | ||||||
| Factor I (2) | ||||||||
| Factor J (3) | ||||||||
| Factor K (4) | ||||||||
| Factor L(5) | ||||||||
| Jie Zhang (6) | ||||||||
| Peng Zhang (7) | ||||||||
| RedOne Investment Limited (“RedOne”) (8) | ||||||||
| Agile Capital Funding, LLC (9) | ||||||||
| ClassicPlan Premium Financing, Inc. (10) | ||||||||
| Maximcash Solutions LLC (11) | ||||||||
| Total short-term loans | $ | $ | ||||||
Short-term loans consist of account receivable factoring agreements, subordinated business loan and third parties loans as of June 30, 2025 and December 31, 2024.
| (1) | On October 23, 2023, the Merchants entered into a standard merchant cash advance agreement with Factor H. The Company sold $ |
On May 2, 2024, the Merchants entered
into another standard merchant cash advance agreement with Factor H. The Company sold $
On November 18, 2024, the Merchants
entered into another standard merchant cash advance agreement with Factor H. The Company sold $
| (2) | On August 29, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor I. The Company sold $ |
On December 12, 2024, the Merchants
entered into another standard merchant cash advance agreement with Factor I. The Company sold $
19
| (3) | On September 27, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor J. The Company sold $ |
On February 11, 2025, the Merchants
entered into another standard merchant cash advance agreement with Factor J. The Company sold $
| (4) | On September 30, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor K. The Company sold $ |
On February 11, 2025, the Merchants
entered into another standard merchant cash advance agreement with Factor K. The company sold $
| (5) | On February 7, 2025, the Merchants entered into a standard merchant cash advance agreement with Wave advance Inc (the “Factor L”). The Company sold $ |
On February 25, 2025, the Merchant
entered into another standard merchant cash advance agreement with Factor L. The Company sold $
These receivable purchase agreements
were accounted for as secured borrowing under ASC 860 since there is no legal, actual, effective transfer of the receivables to the
Factors. Rather, the Factors only have generally claim against the receivable pools not a particular receivable. As of June 30, 2025 and
December 31, 2024, outstanding balance amounted to $
| (6) |
20
| (7) |
| (8) | On February 10, March 28, June 5, June 27, September 22, December 22, 2023 and February 20, 2024, Lakeshore entered into seven promissory notes with RedOne to which Lakeshore borrowed an aggregate principal amount of $ |
The balance of $
| (9) | On June 6, 2024, the Merchants entered into a subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $ |
On September 25, 2024, the Merchants
entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the
principal amount of $
On November 21, 2024, the Merchants
entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the
principal amount of $
| (10) |
21
| (11) |
Interest expenses for short
term loans amounted to $
Interest expenses for short
term loans amounted to $
Short-term loans — related parties: refer to Note 11 Related Party transactions.
Long-term debts:
Long-term debts consist of three auto loans, one building loan, and one secured business loan as of June 30, 2025 and December 31, 2024.
The outstanding amount of
the auto loans were $
Minimum required principal payments towards the Company’s auto loans are as follows:
| Twelve months ended June 30, | Repayment | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total | $ | |||
The outstanding amount of
the building loan was $
Minimum required principal payments towards the Company’s building loan are as follows:
| Twelve months ended June 30, | Repayment | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
22
The outstanding amount of
the secured business loan was $
Minimum required principal payments towards the Company’s secured business loan 2025 are as follows:
| Twelve months ended June 30, | Repayment | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Interest expenses for long
term loans amounted to $
Interest expenses for long
term loans amounted to $
Note 10 — Convertible notes
The Company entered into a series of convertible note agreements with investors as described below. The Company also determined that the embedded conversions in the notes meets the scope exception to be considered indexed to a reporting’s own stock based on the two-step approach in accordance with ASC 815-40-15 and does not require to be separately accounted for as a derivative. As a result, the Company classified all the convertible notes as a debt instrument in its entirely.
On July 3, 2024, the Company
entered into four convertible note agreements total of $
On July 17, 2024, the Company
entered into a securities purchase agreement with a certain investor pursuant to which the Company sold, in a private placement, a $
23
On August 13, 2024, the Company
entered a securities purchase agreement with 1800 Diagonal Lending LLC (“Diagonal”), in connection with the issuance of a
promissory note in the aggregate principal amount of $
On September 18, 2024, the
Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible
promissory note in the aggregate principal amount of $
On October 14, 2024, the
Company issued and sold to Diagonal a promissory note in the principal amount of $
On November 18, 2024, the
Company signed one convertible note agreement of $
On December 17, 2024, the
Company entered into a securities purchase agreement with a certain investor pursuant for a $
24
On December 12, 2024, the
Company entered into a convertible promissory note with Diagonal in the principal amount of $
On March 26, 2025, the Company signed a convertible note with Black
Ice Advisors, LLC, face value of the note is $
On May 7, 2025, the Company entered into another securities purchase
agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount
of $
On June 10, 2025, the Company entered into another securities purchase
agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount
of $
Interest
expenses in connection with the convertible notes for the three and six months ended June 30, 2025 amounted to $
Note 11 — Related party transactions
Purchases and accounts payable – related parties:
UniNet Global Inc. (“Uninet”),
a vendor whose stockholder is Zhiyi (Jonathan) Zhang who is also one of the stockholders and management of the Company, sold certain products
to Visiontech. On September 24, 2024, the Company entered into a trade payable forgiveness agreement with Visiontech, Uninet and NMI,
relating to the cancellation of a portion of outstanding trade payables owed by Visiontech to Uninet. Visiontech owed Uninet a trade payable
in the amount of $
25
On April 11, 2023, one
of the Company’s customers and vendors, Iluminar Lighting LLC (“Iluminar”) entered into Debt Conversion Agreement with
the Company pursuant to which it will convert $
Revenue and accounts receivable - related party:
For the three and six months
ended June 30, 2025, the sales revenue from Iluminar was $
Prepayments - related party:
As
of June 30, 2025 and December 31, 2024, the prepayments from Jonathan was $
Deferred income – contract liabilities - related party:
As of June 30, 2025 and December
31, 2024, the deferred income - contract liabilities from Iluminar was $
Other payables — related parties
In 2022, Nature’s Miracle
Inc. (Cayman) (“NMCayman”), former stockholders of NMI, currently under common control of Mr. Tie (James) Li, the Company’s
CEO, paid a total amount of $
In 2021, Yang Wei, former
shareholder of the Visiontech and current shareholder of the Company, paid a total amount of $
In 2022, Zhiyi (Jonathan)
Zhang, paid a total amount of $
In September 2024, James
Li paid a total amount of $
As of June 30, 2025, Nature’s
Miracle Holding Inc. has an outstanding amount due to Mr. Tie (James) Li and Zhiyi (Jonathan) Zhang for $
As of June 30, 2025 and December
31, 2024, accrued interest expense from related parties, were $
26
Short-term loans — related parties
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Zhiyi Zhang (1) | $ | $ | ||||||
| Tie Li (2) | ||||||||
| NMCayman (3) | ||||||||
| Total short-term loans – related parties | $ | $ | ||||||
| (1) |
| (2) | In December 2022, the Company signed two loans with Tie (James) Li, the Company’s CEO, for the total principal amount of $ |
On July 11, 2023, Lakeshore signed
one loan with Tie (James) Li for a principal amount of $
| (3) | On January 17, 2023, the Company and NMCayman entered into a loan agreement for the principal amount of $ |
On January 17, 2023, the Company
and NMCayman entered into a loan agreement for the principal amount of $
27
Interest expense for short-term
loan - related parties amounted to $
Interest expense for short-term
loan – related parties amounted to $
Convertible notes — related party
On April 11, 2025, the Company
signed a convertible promissory note agreement with Big Lake Capital, LLC (“Big Lake”). Big Lake is a related party controlled
by Tie “James” Li, Chairman and CEO of the Company. The agreement calls for up to $
Note 12 — Income taxes
As of June 30, 2025 and December
31, 2024, the Company’s deferred tax asset had a full valuation allowance recorded against it. The effective tax rate for the three
and six months ended June 30, 2025, were
Note 13 — Equity
Reverse recapitalization
The total number of shares
which the Company shall have the authority to issue is one hundred and one million (
Shares issued in connection with the Company’s Merger on March 11, 2024:
| Common Stock | ||||
| Lakeshore’s shares outstanding prior to reverse recapitalization | ||||
| Shares issued to private rights | ||||
| Conversion of the Lakeshore’s public shares and rights | ||||
| Shares issued to service providers | ||||
| Shares issued for commitment fee | ||||
| Bonus shares issued to in connection with Lakeshore loans * | ||||
| Bonus shares issued to in connection with NMI loans * | ||||
| Conversion of NMI’s shares into the Company’s ordinary shares | ||||
| Total shares outstanding | ||||
| * | In connection with the Merger, the Company, Lakeshore and NMI further entered into a Letter Agreement on November 15, 2023, a total of |
28
The shares were valued $
| * |
The Company has paid YA Global
II SPV, LLC, a subsidiary of Yorkville, a structuring fee in the amount of $
Reverse Split
On November 18, 2024, the Company filed a certificate of amendment to its amended and restated certificate of incorporation to effect a one-for-thirty (1-for-30) reverse split (the “Reverse Split”). The Reverse Split became effective on November 21, 2024. As a result of the Reverse Split, every 30 shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, with no change to the par value per share. All share and per share data has been retroactively restated to reflect the Reverse Split of the Company.
Stock compensation
In connection with the Merger, the Company adopted the Equity Incentive Plan (the “2024 Incentive Plan”).
The 2024 Incentive Plan will provide for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or equity-related cash-based awards. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting or advisory services for the Company, will be eligible for grants under the 2024 Incentive Plan.
The 2024 Incentive Plan
provides for the future issuance of shares of the Company’s Common Stock, representing
29
Pursuant
to board resolution dated August 23, 2023, the Company is to grant a one-time award of
Pursuant
to board resolution dated September 20, 2023, the Company approved a stock grant to Mr. Darin Carpenter, Chief Operating Officer of the
Company, pursuant to which Mr. Carpenter will be issued
On August 1, 2024, the Company
and Darin Carpenter entered into the mutual termination of employment agreement and intent to transition to project-based work (the “Agreement”),
in which it was agreed that Mr. Carpenter shall resign from his position as Chief Operating Officer of the Company effective as of July
31, 2024. Pursuant to the Agreement, the Company and Mr. Carpenter agreed that Mr. Carpenter will provide services as a consultant to
the Company on a per project basis as needed. In addition, the Company agreed to fully vest
Shares award to Mr. Hausman
and Mr. Carpenter per Letter Agreement stated above has a fair value of $
Pursuant to board resolution
dated March 24, 2024, certain key employees were approved for stock incentives including George Yutuc (Chief Financial Officer), Kirk
Collins (Director of Sales), and Amber Wang (Controller). Each can receive shares that vest over time of
On April 2, 2024, the Company
entered into an investor relations consulting agreement with MZHCI LLC (“MZHCI”) pursuant to which MZHCI will provide investor
relations services to the company and the agreement has a term of six months. The Company will pay $
Pursuant to board resolution
dated October 25, 2024, the Company approved the issuance of
Pursuant to board resolution
dated November 18, 2024, the Company approved the issuance of
For the three months ended
June 30, 2025 and 2024, the Company recorded stock compensation expenses of $
For the six months ended
June 30, 2025 and 2024, the Company recorded stock compensation expenses of $
30
Shares issued with private placement
On July 19, 2024, the Company
issued a total of
Public Offering
On July 29, 2024, the Company
closed an underwriting public offering for the sale of
On November 7, 2024, the
Company entered into an underwriting agreement with D. Boral Capital LLC as the underwriter, relating to a firm commitment underwritten
public offering of (i)
On May 7, 2025, the Company
entered into the equity financing agreement (or the “EPFA”), with GHS Investments, LLC, a Nevada limited liability company
( (the “Investor”), in connection with an equity line of credit (“ELOC”) for up to $
Also on May 7, 2025, the
Company entered into a Securities Purchase Agreement (the “SPA”) where the Company sold to the Investor
The Company received $
Shares issued through debt-to-equity conversion
Refer to note 9 — Loans payable and note 11 — Related party transactions for detail.
31
Shares issued through convertible notes conversion
Refer to note 10 — Convertible notes for detail.
Warrants:
Warrants issued prior to reverse recapitalization
In connection with the reverse
recapitalization, the Company has assumed
Each whole warrant entitles
the holder to purchase one ordinary share at a price of $
The Company may redeem the
warrants at a price of $
Warrant issued with July convertible notes
On July 17, 2024, the Company
issued a total of
The issuance of the warrants described above were deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
The total number of these warrant shares is subject to adjustments for stock splits, recapitalizations and reorganizations. If the Company issues or sells any shares of common stock or other securities for a price per share, exercise price, or conversion price, as the case may be, that is less than the current exercise price of the warrant, subject to exceptions, the exercise price of the warrant will be adjusted to match the price per share, exercise price, or conversion price, in the issuance, as applicable.
Series A Warrant issued in July Public offering
On July 29, 2024, the Company
issued a total
The Series A warrant is immediately
exercisable on the date of issuance at an exercise price of $
The Series A warrants are exercisable at any time after their original issuance up to the date that is five years after their original issuance. The Series A warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full in immediately available funds for the number of shares of Common Stock subscribed for upon such exercise (except in the case of a cashless exercise as discussed below). If a registration statement registering the issuance of the shares of Common Stock underlying the Series A warrants under the Securities Act is not effective or available, the holder may, in its sole discretion, elect to exercise the Series A warrants through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Series A warrants.
32
The exercise price per whole
share of Common Stock issuable upon exercise of Series A warrants is $
In November 2024, a total
of
Warrants and Pre-Funded Warrants issued in November Public offering
On November 12, 2024, the
Company issued a total
The Series A Warrants was
exercisable commencing upon warrant stockholder approval (“Warrant Stockholder Approval”, see define below), have an exercise
price of $
The Series B Warrants was
exercisable commencing upon Warrant Stockholder Approval, will have an exercise price of $
The purchase price of each
Pre-Funded Unit is $
The exercise price and number
of shares of common stock issuable under the Series A Warrants are subject to adjustment and the number of shares of common stock issuable
under the Series B Warrants will be determined following the 10th trading day after the date of Warrant Stockholder Approval (the “Reset
Date”), and to be determined pursuant to
Warrant Stockholder Approval. Under Nasdaq listing rules, the Warrants may not be exercised unless and until the Company obtain the approval of its stockholders. While the Company intends to promptly seek stockholder approval, there is no guarantee that the Warrant Stockholder Approval will ever be obtained. If the Company is unable to obtain the Warrant Stockholder Approval, the Warrants may not be exercised and will have substantially less value. In addition, the Company will incur substantial cost, and management will devote substantial time and attention, in attempting to obtain the Warrant Stockholder Approval.
33
In December 2024, a total
of
On January 13, 2025, the
exercise price for the Series A warrant has been reset to $
In January 2025, a total
of
The summary of warrants activity is as follows:
| Warrants Outstanding | Common Stock Issuable | Weighted Average Exercise Price | Average Remaining Contractual Life (in years) | |||||||||||||
| US$ | ||||||||||||||||
| December 31, 2024 | $ | |||||||||||||||
| Adjustment | $ | |||||||||||||||
| Granted | $ | - | ||||||||||||||
| Forfeited | $ | - | ||||||||||||||
| Exercised | ( | ) | ( | ) | $ | - | ||||||||||
| March 31, 2025 | $ | |||||||||||||||
| Granted | $ | - | ||||||||||||||
| Forfeited | $ | - | ||||||||||||||
| Exercised | $ | - | ||||||||||||||
| June 30, 2025 | $ | |||||||||||||||
Note 14 — Concentration of risk
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
As of June 30, 2025 and
December 31, 2024, $
Accounts receivable is typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations.
34
Customer and vendor concentration risk
During the three and six months ended June 30, 2025 and during the three and six months ended June 30, 2024, the major customers of the Company are as below. Iluminar is a related party of the Company since April 11, 2023, as disclosed in Note 11— Related party transactions.
| For the Three Months ended June 30, 2025 | For the Six Months ended June 30, 2025 | As of June 30, 2025 | ||||||||||
| Percentage of Revenue | Percentage of Revenue | Percentage of Account Receivable | ||||||||||
| Customer A | < | % | < | % | % | |||||||
| Customer C | % | % | < | % | ||||||||
| Customer K | < | % | < | % | % | |||||||
| Customer L | < | % | % | < | % | |||||||
| Iluminar | % | < | % | % | ||||||||
| For the Three Month ended June 30, 2024 | For the Six months ended June 30, 2024 | As of December 31, 2024 | ||||||||||
| Percentage of Revenue | Percentage of Revenue | Percentage of Account Receivable | ||||||||||
| Customer A | % | % | % | |||||||||
| Customer C | % | % | < | % | ||||||||
| Iluminar | % | % | % | |||||||||
During the three and six months ended June 30, 2024 and during the three and six months ended June 30, 2024, the major vendors of the Company are as below. Both Megaphoton and Uninet Global Inc. are related parties of the Company (Megaphoton is no longer a related party of the Company after April 2023), as disclosed in Note 11— Related party transactions, and all purchases from Uninet Global Inc. are products originally manufactured by Megaphoton Inc.
| For the Three Months ended June 30, 2025 | For the Six months ended June 30, 2025 | As of June 30, 2025 | ||||||||||
| Percentage of Purchase | Percentage of Purchase | Percentage of Account Payable | ||||||||||
| Vendor A | < | % | < | % | % | |||||||
| Vendor E | < | % | % | < | % | |||||||
| Vendor F | % | < | % | < | % | |||||||
| Iluminar | < | % | % | < | % | |||||||
| Megaphoton Inc. | < | % | < | % | % | |||||||
| For the Three Months ended June 30, 2024 | For the Six Months ended June 30, 2024 | As of December 31, 2024 | ||||||||||
| Percentage of Purchase | Percentage of Purchase | Percentage of Account Payable | ||||||||||
| Vendor A | % | % | % | |||||||||
| Vendor C | % | % | % | |||||||||
| Megaphoton Inc. | < | % | < | % | % | |||||||
| Uninet Global Inc. | < | % | < | % | < | % | ||||||
35
Note 15 — Lease
The Company follows ASC 842
Leases. The Company has entered into lease agreements for vehicles, offices and warehouses space in California, Pennsylvania and Texas.
$
On May 15, 2021, Hydroman
entered into a lease agreement of the warehouse in California. The lease term was from
On May 28, 2023, Visiontech
entered into a lease agreement for a vehicle. The leasing term began on May 28, 2023 and will terminate on April 28, 2025 with
a first installment of $
On April 11, 2024, the Company
entered into a lease agreement for an office located in California. The lease term was from
On July 20, 2024, Visiontech
entered into a lease agreement for another vehicle. The leasing term began on September 3, 2024 and will terminate on August 3, 2028
with a first installment of $
As of June 30, 2025 and
December 31, 2024, the weighted-average remaining operating lease term of its existing leases is approximately
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| Lease cost | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Operating lease cost (included in Cost of Revenue and Other Expense in the Company’s Statement of Operations) | $ | $ | $ | $ | ||||||||||||
| Other information | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||
The supplemental balance sheet information related to leases for the period is as follows:
| As of June 30, 2025 | As of December 31, 2024 | |||||||
| Operating leases | ||||||||
| Right of use asset | ||||||||
| Lease Liability – current portion | ||||||||
| Lease Liability – net of current portion | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
36
Maturities of the Company’s lease liabilities are as follows:
| Twelve months ended June 30, | Operating Lease | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Less: Imputed interest/present value discount | ( | ) | ||
| Present value of lease liabilities | $ | |||
Note 16 — Commitment and Contingencies
The Company may, from time to time, be involved in legal matters arising in the ordinary course of its business. While the Company is not presently subject to any material legal proceedings, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company.
On August 22, 2023, two
separate lawsuits were filed against NMI and two of its wholly-owned subsidiaries: Visiontech Group Inc., a California corporation, and
Hydroman Inc., a California corporation (collectively referred to as the “Defendants”) by Megaphoton. Megaphoton, a manufacturer
and producer of artificial lighting equipment for use in agriculture and industrial applications, filed the lawsuits against the Defendants
in Los Angeles Superior Court, asserting that the Defendants have breached a contract/guarantee agreement by failing to pay a total of
$
On March 1, 2024 NMI was notified of a complaint in San Bernardino Superior Court by Vien Le, its former CFO, who was employed approximately 2 months. The lawsuit claims wrongful discharge, untimely payment of wages and other related items. The Company has retained counsel and believes it will successfully defend against this lawsuit.
On October 22, 2024, Growterra, LLC (“Growterra”) filed a complaint against the Company and the Company’s chief executive officer in the Court of Common Pleas, Hamilton County, Ohio, alleging that it purchased lighting products from the Company, under which the Company would provide Growterra software, IP, and design documentation related to hydroponic containers and identify Growterra as an additional insured on the Company’s product liability insurance. Growterra alleges the Company failed to perform these obligations. Growterra is alleging breach of contract, fraud, and misappropriation of trade secrets as well as related causes of action. Growterra does not state an amount of damages but is also seeking rescission. The Company has been negotiating with Growterra and feels it can defend itself successfully. The Company has filed a motion to compel discovery responses against Growterra LLC due to their failure to produce documents in discovery. In response, Growterra filed a partial motion for summary judgment on liability only, arguing they should not have to comply with their discovery obligations. The Company has argued to the court that Growterra must respond to discovery before any other motions are heard. The Company is awaiting the Court's decision.
On October 30, 2024, Visiontech
filed a cross-complaint against Beverly Hills View, Inc. (“BHV”) in Los Angeles Superior Court. This action responded to
an initial lawsuit filed by BHV on August 29, 2024, in which BHV claimed that the lighting products received were unsuitable for its
cannabis growing operation and claiming damages of $
On November 22, 2024, NM
Data entered into an investment agreement to acquire
37
Nasdaq Stock Market LLC (“Nasdaq”) Notification Letters
On January 13, 2025, the Company received notice from Nasdaq indicating that the Nasdaq Hearings Panel (the “Panel”) has determined to delist the Company’s securities from Nasdaq based upon the Company’s non-compliance with Listing Rule 5550(b)(1), Nasdaq’s minimum shareholders’ equity rule. As a result of the Panel’s decision, Nasdaq suspended trading in the Company’s securities effective at the open of trading on Wednesday, January 15, 2025.
Note 17 — Segment information
The key measure of segment
profitability that the CODM uses to allocate resources and assess performance is segment profit or loss, as reported on the statements
of operations.
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Salary and benefits expenses | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Other selling, general and administrative | ||||||||||||||||
| Provision for credit losses | ||||||||||||||||
| Other expenses (income): | ||||||||||||||||
| Interest expense, net | ||||||||||||||||
| Non cash finance expense | ||||||||||||||||
| Gain on loan extinguishment | ( | ) | ||||||||||||||
| Other segment expense (income) | ( | ) | ( | ) | ||||||||||||
| Income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Note 18 — Subsequent events
The Company evaluated subsequent events and transactions that occurred after the date of these unaudited condensed consolidated financial statements were issued. Based on this review, except as disclosed below, the Company did not identify any other subsequent events that would require adjustment or disclosure in the unaudited condensed consolidated financial statements.
On July 10, 2025, the Company entered into a convertible redeemable
note with Lender 1, a Florida limited liability company for an aggregate principal amount of $
On July 16, 2025, Funders
App LLC dba Tenthly, a lender to the Company (“Factor K”) filed a complaint in Court in Monroe County, New York referring
to an outstanding balance of $
On July 23, 2025,
the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible
promissory note in the aggregate principal amount of $
On July 24, 2025, the Company
entered into debt-to-equity conversion agreements with Tie (James) Li, Zhiyi (Jonathan) Zhang, George Yutuc, and Peng Zhang. Pursuant
to the Agreements, wages and salaries owed and unpaid to James Li, Jonathan Zhang, and George Yutuc were converted into shares of common
stock of the Company based on the trading price of $
38
Pursuant to the agreement
with Mr. Tie (James) Li, the parties agreed that his unpaid wages and salaries through July 23, 2025, or $
Pursuant to the agreement
with Jonathan Zhang, the parties agreed that his unpaid wages and salaries through July 23, 2025, or $
Pursuant to the agreement
with George Yutuc, the parties agreed that
Pursuant to the Agreement
with Mr. Peng Zhang, debt owed on a note issued to Mr. Peng Zhang by the Company in an outstanding amount of $
On July 25, 2025, the
Company entered into the Amended Equity Financing Agreement (the “Amended EPFA”) with GHS Investments, LLC, a Nevada limited
liability company (the “Investor”), which amends and supersedes the previously disclosed Equity Financing Agreement (“EPFA”),
dated as of May 6, 2025, by and between the Company and the Investor, in connection with an equity line of credit (“ELOC”)
for up to $
On July 30, 2025,
the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible
promissory note in the aggregate principal amount of $
On July 30, 2025, the
Company entered into a loan agreement with Lender 2, a Delaware limited partnership for an aggregate principal amount of $
On
July 31, 2025, Webfunder LLC (“Factor I”) filed a Settlement Agreement for Stay of Prosecution in the Seventeenth
Judicial Court in Broward County, Florida, pursuant to which both parties agreed to a new payment schedule from August 5, 2025 to
December 9, 2025 for a total amount of $
On August 1, 2025, the Company and Wave Advance, Inc. (“Factor
L”) signed a Settlement Agreement that required payments from August 5 to October 27, 2025, for an aggregate amount of $
On August 4, 2025, the Company
entered into a convertible promissory note with Lender 3, a Florida limited liability company for an aggregate principal amount of $
On August 4, 2025, the
On August 5, 2025 the Company
entered into a securities purchase agreement with Lender 5, a Delaware limited liability company, pursuant to which the Company sold,
and Lender 4 purchased, (i) a convertible promissory note in the principal amount of $
On August 6, 2025, the
Company entered into a Standstill Agreement with MaximCash Solutions LLC (“MaximCash”). A complaint was previously filed
on July 8, 2025 by MaximCash against the Company in the Third Judicial Court of Utah pertaining to the loan agreement dated December
30, 2024 (the “MaximCash Loan”), as a result of a failure to make the required repayment pursuant to the MaximCash Loan
agreement. The claimed amount was $
39
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2025. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The following Management’s Discussion and Analysis should be read in conjunction with our unaudited condensed financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with Securities and Exchange Commission (the “SEC”) on April 16, 2025. The Management’s Discussion and Analysis (“MD&A”) contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this form. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors.
Overview
We are a growing agriculture technology company providing products to indoor growers in a CEA (Controlled Environment Agriculture) setting in North America. Our main products are commercial grade LED lights and related equipment designed for indoor growers. For over 10 years, the Company has utilized manufacturing relationships in China to provide quality and cost-efficient products in this space. In the 4th quarter 2024, we renamed a subsidiary to Hydroman Electric Inc. for the purpose of entering electric vehicle (“EV”) market as we aim to distribute EV medium sized trucks to customers in Latin America and also develop indoor growing systems within these EV trucks. In 2024, the Company also started investments in Future Tech Inc., a Bitcoin mining and data center business.
We focus on the greenhouse and cultivation industry and aim at providing integrated greenhouse solutions, including grow lights, dehumidifiers, coco and grow media for vertical farming and multiple growing system. These systems enable year-round cultivation of crops, avoids harsh environments with very cold or hot climate. Many states focused on farming are limited to grow crops are certain months such as Spring to Fall only, and or are too far from production states too have fresh produce year-round. There are cost advantages also as vertical farming systems produces a much higher yield per acre of land. In most cases, water consumption is much lower, up to 90%. Many indoor growers can locate closer to large population centers which can significantly reduce cost of trucking, and lead time whilst reducing carbon emissions as well.
We operate mainly through two subsidiaries in California, Visiontech and Hydroman. Visiontech is known for the brand “eFinity” and provides high-efficiency and high-quality grow lights, grow media, fixtures and other related equipment; Hydroman supplies commercial greenhouse developers and owners with professional lighting technology and equipment. On November 11, 2024, Hydroman, Inc. changed its name to Hydroman Electric Corporation and will focus on business of electric vehicles distribution.
40
In its first expansion plan, the Company has added additional products to our offering. These include organic and non-organic fertilizers, organic plant growth additives, and dehumidifiers. We have diverse suppliers including from countries such as India, Holland and Turkey. Additional equipment is being considered as well. These are value add components that will help growers increase yield, but more importantly reduce failures and dramatically improve growing environments such. The new products are a natural complement to its our base of LED grow lights.
The Company also seeks to enter the joint ventures in other industry verticals to utilize excess space available for vertical farming.
Trends and Expectations
The following factors have been important to our business, and we expect them to impact our results of operations and financial condition in future periods:
Product and Brand Development
We plan to increase investments in product and brand development. We actively evaluate and pursue acquisitions of product brand names and improvements on existing products. We continue to work with our suppliers in improving lighting products to be both of the highest quality and simultaneously cost effective for the customer. The Company invests in trips abroad to source and partner with manufacturing companies. We expect to develop additional manufacturing relationships and suppliers in Europe in the near future.
The Company is also developing proprietary “all in one” automated and robotic indoor growing systems that are under design and testing phases.
The Company utilizes its vast network in the industry and recent publicity in listing on Nasdaq in acquiring leads for potential partnerships in sourcing, research and development of new product and business acquisitions.
Regulatory Environment
The importation of LED lighting and distribution of such equipment in the United States and Canada does not require strict government disclosures and technical inspections. The Company obtains local business permits to store in our main warehouses, obtain licenses to resell, and follows guidelines on packaging. Certain utility companies in the U.S. have programs that award rebates to heavy usage customers, some of which are in the indoor farming business. These customers are required to install LED lights with a minimum 50,000 hours life. There is also a performance requirement set by DesignLights Consortium, a non-profit energy improvement agency.
Sourcing
The Company has long-term relationships with suppliers in Asia. Our top three suppliers of LED equipment are American Agricultural Innovation Technology Inc., Solislike-Tech Co., Ltd., Dongguan ZSC Lighting Co., Ltd. Each supplier provides us net 30 to net 90-day terms. The Company has also been approached by established lighting companies based in Japan and Germany. On grow feed, fertilizers and nutrients, our potential suppliers are based in Europe and some in Asia. Our grow container product was jointly developed and manufactured by a company based in Shenzhen, China.
On April 24, 2023, we entered into a strategic cooperation agreement with Sinoinnovo Technology (Guangdong) Co., Ltd. (“Sinoinnovo”), a company incorporated under the laws of China, pursuant to which Nature’s Mircle will source from Sinoinnovo its grow light systems for distribution in the U.S. and Europe. Both companies will also cooperate jointly to set up advanced manufacturing capabilities in China and the U.S.
As of the date of this report, tariffs on imports from China levied by the U.S. government are at 10%. The proposal of both Chinese and U.S. government to sanction much higher tariffs has been paused for 90 days and it is uncertain as to the result of the upcoming talks to put permanent levels of tariffs.
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RESULTS OF OPERATIONS
For the Three Months ended June 30, 2025 and 2024
The following table presents certain combined statement of operations information and presentation of that data as a percentage of change from year to year.
| For the Three Months Ended June 30, | Percentage | |||||||||||||||
| 2025 | 2024 | Change | Change | |||||||||||||
| Revenues | 484,009 | 3,404,967 | (2,920,958 | ) | (85.8 | )% | ||||||||||
| Cost of revenues | 455,051 | 2,952,747 | (2,497,696 | ) | (84.6 | )% | ||||||||||
| Gross profit | 28,958 | 452,220 | (423,262 | ) | (93.6 | )% | ||||||||||
| Selling, general and administrative expenses | 1,025,625 | 1,722,715 | (697,090 | ) | (40.5 | )% | ||||||||||
| Provision for credit losses | 155,984 | 14,176 | 141,808 | 1,000.3 | % | |||||||||||
| Loss from operation | (1,152,651 | ) | (1,284,671 | ) | 132,020 | (10.3 | )% | |||||||||
| Total other expense, net | (618,286 | ) | (482,848 | ) | (135,438 | ) | 28.0 | % | ||||||||
| Loss before income taxes | (1,770,937 | ) | (1,767,519 | ) | (3,418 | ) | (0.2 | )% | ||||||||
| Total provision for income taxes | - | 800 | (800 | ) | (100 | )% | ||||||||||
| Net Loss | (1,770,937 | ) | (1,768,319 | ) | (2,618 | ) | (0.1 | )% | ||||||||
| Gross profit % of revenues | 6.0 | % | 13.3 | % | ||||||||||||
| Net Income % of revenues | (365.9 | )% | (51.9 | )% | ||||||||||||
Revenue
Revenue for the three months ended June 30, 2025 decreased by 85.8% to $484,009 as compared to $3,404,967 for the three months ended June 30, 2024. Revenue declined due to cash constraints that restricted inventory purchases; as we were mainly selling our inventory on hand. The Company is seeking additional financing in Q3 to replenish inventory, and management expects the revenue situation to improve once inventory levels are restored.
For the three months ended June 30, 2025 and 2024, we had 35 and 52 customers, respectively. Average revenue per customer for the three months ended June 30, 2025 and 2024 were $13,829 and $65,480, respectively. Our revenue from top 5 customers for the three months ended June 30, 2025 was $292,832 compared to $2,730,720 for the three months ended June 30, 2024, representing a decrease of 89.3%. The lower average sale and decreased revenue from top 5 customer are reflective the impact of limited inventory availability.
Costs of Revenue
Costs of revenue for the three months ended June 30, 2025 decreased 84.6% to $455,051 as compared to $2,952,747 for the three months ended June 30, 2024. Cost of revenue decreased primarily due to the decrease in revenue, which was in turn primarily driven by lower sales volume of our products due to limited inventory availability.
Gross Profit
Gross profit was $28,958 for the three months ended June 30, 2025 and $452,220 for the three months ended June 30, 2024, respectively. The gross margin for the three months ended June 30, 2025 decrease to 6.0% from 13.3% for the three months ended June 30, 2024. The decrease in gross margin was primarily driven by the sale of existing inventory, which carried lower margins.
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Operating expenses
Operating expenses for the three months ended June 30, 2025 decreased 32.0% to $1,181,609 as compared to $1,736,891 for the three months ended June 30, 2024. The decrease was mainly due to following reasons:
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended June 30, 2025 decreased 40.5% to $1,025,625 as compared to $1,722,715 for the three months ended June 30, 2024. The decrease was mainly due to decrease Company’s stock compensation expenses of $134,950 as a result of completion of vesting periods of certain employees; decrease in professional fees of $390,489, mainly related to lower spending on public relations and SEC filing activities; and a decrease in payroll expenses of $251,003 resulting from a reduced headcount.
Provision for credit losses
Provision for credit losses for the three months ended June 30, 2025 increased 1,000.3% to $155,984 as compared to $14,176 for the three months ended June 30, 2024. The increase was primarily due to higher estimated credit risk associated with outstanding receivables during the period.
Other Expenses
Other expenses primarily consist of net interest expense and other finance expense related to our loans. Other expenses for the three months ended June 30, 2025 was $618,286 as compared to other expense of $482,848 for the three months ended June 30, 2024. The increase was mainly due to the increase in interest expenses of $119,740.
Interest expense for the three months ended of June 30, 2025 and 2024 were $606,326 and $486,586, respectively; increased as a result of multiple convertible notes and high interest loans in 2025. The convertible notes and convertible notes – related party borrowing increased was approximately $878,000 and $0, respectively. As of June 30, 2025 and 2024, the short-term loan balances were approximately $2.5 million and $2.9 million, respectively. For the three months ended June 30, 2024, 66.1% of the loans were from third-party lenders with interest rates ranging from 8.0% to 12.0%, while the remaining loans were receivables factoring loans with significantly higher interest rates ranging from 66.4% to 100.0%. In contrast, for the three months ended June 30, 2025, 35.7% of the loans were from third-party lenders at 8.0% to 22.6%, with the remainder consisting of receivables factoring loans bearing interest rates between 84.0% and 97.0%. The increase in higher-rate factoring loans in the current year and the increase in overall loan balances contributed to the rise in interest expense.
Other expenses for the three months ended of June 30, 2025 was $11,960 and other income for the three months ended of June 30, 2024 was $3,738. The change was primarily due to a decrease in credit card cash rewards received during the period.
Income Tax Expense
Our income tax expense was amounted to $0 and $800 for the three months June 30, 2025 and 2024, respectively.
The effective tax rate for the three months ended June 30, 2025 and 2024 were (0.0)% and (0.1)%. The effective tax rate differs from the federal and state statutory tax rate of 21.0% primarily due to the valuation allowance on the deferred tax assets from our operating losses.
Net Loss
Net loss for the three months ended June 30, 2025 was $1,770,937 as compared to net loss of $1,768,319 for the three months ended June 30, 2024, representing an increase of $2,618. The increase was primarily due to decrease of gross profit and increase of other expenses.
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For the Six Months ended June 30, 2025 and 2024
The following table presents certain combined statement of operations information and presentation of that data as a percentage of change from year to year.
| For the Six Months Ended June 30, | Percentage | |||||||||||||||
| 2025 | 2024 | Change | Change | |||||||||||||
| Revenues | 1,590,828 | 5,609,687 | (4,018,859 | ) | (71.6 | )% | ||||||||||
| Cost of revenues | 1,386,570 | 4,845,150 | (3,458,580 | ) | (71.4 | )% | ||||||||||
| Gross profit | 204,258 | 764,537 | (560,279 | ) | (73.3 | )% | ||||||||||
| Selling, general and administrative expenses | 2,338,736 | 3,027,534 | (688,798 | ) | (22.8 | )% | ||||||||||
| Provision for credit losses | 179,267 | 24,391 | 154,876 | 635.0 | % | |||||||||||
| Loss from operation | (2,313,745 | ) | (2,287,388 | ) | (26,358 | ) | (1.2 | )% | ||||||||
| Total other expense, net | (1,475,303 | ) | (1,785,237 | ) | 309,934 | (17.4 | )% | |||||||||
| Loss before income taxes | (3,789,048 | ) | (4,072,625 | ) | 283,577 | (7.0 | )% | |||||||||
| Total provision for income taxes | 1,700 | 2,500 | (800 | ) | (32.0 | )% | ||||||||||
| Net Loss | (3,790,748 | ) | (4,075,125 | ) | 284,377 | (7.0 | )% | |||||||||
| Gross profit % of revenues | 12.8 | % | 13.6 | % | ||||||||||||
| Net Income % of revenues | (238.3 | )% | (72.6 | )% | ||||||||||||
Revenue
Revenue for the six months ended June 30, 2025 decreased 71.6% to $1,590,828 as compared to $5,609,687 for the six months ended June 30, 2024. Revenue declined due to cash constraints that restricted inventory purchases; as we were mainly selling our inventory on hand. The Company is seeking additional financing in Q3 to replenish inventory, and management expects the revenue situation to improve once inventory levels are restored.
For the six months ended June 30, 2025 and 2024, we had 59 and 90 customers, respectively. Average revenue per customer for the six months ended June 30, 2025 and 2024 were $26,963 and $62,330, respectively. Our revenue from top 5 customers for the six months ended June 30, 2025 was $951,955 compared to $3,506,906 for the six months ended June 30, 2024, representing a decrease of 72.9%. The lower average sale and decreased revenue from top 5 customer are reflective the impact of limited inventory availability.
Costs of Revenue
Costs of revenue for the six months ended June 30, 2025 decreased 71.4% to $1,386,570 as compared to $4,845,150 for the six months ended June 30, 2024. Cost of revenue decreased primarily due to the decrease in revenue, which was in turn primarily driven by lower sales volume of our products due to limited inventory availability.
Gross Profit
Gross profit was $204,258 for the six months ended June 30, 2025 and $764,537 for the six months ended June 30, 2024, respectively. The gross margin for the six months ended June 30, 2025 decrease to 12.8% from 13.6% for the six months ended June 30, 2024. The decrease in gross margin was primarily driven by the sale of existing inventory, which carried lower margins.
Operating expenses
Operating expenses for the six months ended June 30, 2025 decreased 17.5% to $2,518,003 as compared to $3,051,925 for the six months ended June 30, 2024. The decrease was mainly due to following reasons:
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the six months ended June 30, 2025 decreased 22.8% to $2,338,736 as compared to $3,027,534 for the six months ended June 30, 2024. The decrease was mainly due to decrease Company’s stock compensation expenses of $224,310 as a result of completion of vesting periods of certain employees; decrease in professional fees of $171,934, mainly related to lower spending on public relations and SEC filing activities; and a decrease in payroll expenses of $304,399 resulting from a reduced headcount.
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Provision for credit losses
Provision for credit losses for the six months ended June 30, 2025 increased 635.0% to $179,267 as compared to $24,391 for the six months ended June 30, 2024. The increase was primarily due to higher estimated credit risk associated with outstanding receivables during the period.
Other Expenses
Other expenses primarily consist of net interest expense and other finance expense related to our loans. Other expenses for the six months ended June 30, 2025 was $1,475,303 as compared to other expense of $1,785,237 for the six months ended June 30, 2024. The decrease was mainly due to the decrease in non cash finance expense of $1,000,000, offset by the increase of interest expenses of $714,368.
Interest expense for the six months ended of June 30, 2025 and 2024 were $1,503,343 and $788,975, respectively; increased as a result of multiple convertible notes and high interest loans in 2025. The convertible notes and convertible notes – related party borrowing increased was approximately $997,000 and $0, respectively. As of June 30, 2025 and 2024, the short-term loan balances were approximately $2.5 million and $2.9 million, respectively. For the six months ended June 30, 2024, 66.1% of the loans were from third-party lenders with interest rates ranging from 8.0% to 12.0%, while the remaining loans were receivables factoring loans with significantly higher interest rates ranging from 66.4% to 100.0%. In contrast, for the six months ended June 30, 2025, 35.7% of the loans were from third-party lenders at 8.0% to 22.6%, with the remainder consisting of receivables factoring loans bearing interest rates between 84.0% and 97.0%. The increase in higher-rate factoring loans in the current year and the increase in overall loan balances contributed to the rise in interest expense.
Non-cash finance expense for the six months ended of June 30, 2025 and 2024 were $0 and $1,000,000, respectively. This decrease is primarily due to the expensing of 3,334 shares of common stock issued under a Letter Agreement dated November 15, 2023, in connection with the merger. These shares, valued at approximately $1.0 million, were issued to Tie (James) Li and Zhiyi Zhang for their guarantees related to the repayment of the Newtek Loan, which had a principal amount of $3,700,000. The value of the shares was expensed as non-cash finance expenses upon the completion of the merger in 2024.
Other expenses for the six months ended of June 30, 2025 was $11,960 and other income for the six months ended of June 30, 2024 was $3,738. The change was primarily due to a decrease in credit card cash rewards received during the period.
Income Tax Expense
Our income tax expense was amounted to $1,700 and $2,500 for the six months June 30, 2025 and 2024, respectively.
The effective tax rate for the six months ended June 30, 2025 and 2024 were (0.0)% and (0.1)%. The effective tax rate differs from the federal and state statutory tax rate of 21.0% primarily due to the valuation allowance on the deferred tax assets from our operating losses.
Net Loss
Net loss for the six months ended June 30, 2025 was $3,790,748 as compared to net loss of $4,075,125 for the six months ended June 30, 2024, representing a decrease of $284,377. The decrease was primarily due to decrease of selling, general and administrative expenses.
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LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity
In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our liquidity needs are to meet working capital requirements and operating expense obligations. To date, we financed our operations primarily through debt financing from financial institution and related parties. As of June 30, 2025, we had $9,511 in cash which primarily consists of bank deposits, which are unrestricted as to withdrawal and use. Our working capital deficit was approximately $17.5 million as of June 30, 2025.
Subsequent to June 30, 2025, the Company obtained approximately $0.6 million proceed from convertible notes for liquidity. See note 18 for further details.
We have experienced recurring losses from operations and negative cash flows from operating activities since 2022. For the three months ended June 30, 2025 and 2024, and for the six months ended June 30, 2025 and 2024 we incurred substantial losses as shown in the financial statement section. Our actual revenue for the three months ended June 30, 2025 and 2024 was approximately $0.5 million and $3.4 million, respectively. Our actual revenue for the six months ended June 30, 2025 and 2024 was approximately $1.6 million and $5.6 million, respectively. Such volume and relatively low gross profit margins are not enough to support high administrative costs relating to our going public and expenses as a public company. We have raised equity capital twice in 2024 but utilized most proceeds towards repayment of debt incurred in the going-public merger, higher corporate costs and paying interest and principal on short-term loans. Due to the negative cash flow, our financial position is under pressure, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund our expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. If we are unable to realize our assets within the normal operating cycle of a twelve (12) month period, we may have to consider supplementing our available sources of funds through the following sources:
| ● | financial support from our related parties and shareholders; |
| ● | other available sources of financing from banks and other financial institutions; |
| ● | equity financing through capital market |
We have a $20 million equity financing program (“ELOC”) with GHS Investment and this was declared effective by SEC. The Company can draw on this facility for its working capital needs and others.
The Company has access to investors who are providing convertible note financing for public companies and we have been utilizing the convertible note for part of our financing needs.
Our shareholder also offers support for the Company. Big Lake Capital, LLC, a related party controlled by Tie Li (our Chairman and CEO) entered into a $2 million Convertible Promissory Note on April 11, 2025 with the initial tranche of $600,000. The Company may borrow up to an additional amount of $1,342,428 under the note.
We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on us and would materially adversely affect our ability to continue as a going concern.
The unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.
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Cash Flows
The following tables set forth our selected consolidated cash flow data for the periods indicated:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| US$ | US$ | |||||||
| Net cash used in operating activities | (909,024 | ) | (1,742,515 | ) | ||||
| Net cash used in investing activities | (721,000 | ) | (40,000 | ) | ||||
| Net cash provided by financing activities | 1,219,144 | 1,591,323 | ||||||
| Effect of exchange rate changes | 260 | (36 | ) | |||||
| Net change in cash | (410,620 | ) | (191,228 | ) | ||||
| Cash and cash equivalents, at the beginning of period | 420,131 | 221,760 | ||||||
| Cash and cash equivalents, at the end of period | 9,511 | 30,532 | ||||||
Operating Activities
Net cash used in operating activities was approximately $0.9 million for the six months ended June 30, 2025, which was mainly due to our net loss of approximately $3.8 million with non-cash items, including depreciation expense, provision for credit losses, amortization of debt issuance cost, stock compensation expense, and amortization of operating right-of-use asset of approximately $0.7 million. Our cash outflow is mainly due to decrease in accounts payable of approximately $1.1 million due to decrease in our purchase from vendor. Our cash outflow is offset by cash inflow of approximately $1.1 million of inventory due to sold more on hand inventory, increase from other payable and accrued liabilities of approximately $1.5 million accrued professional fees and accrued interest on short term loans, long term loans and convertible notes. Additionally, approximately $0.6 million decreased in accounts receivable as our sales decreased.
Net cash used in operating activities was approximately $1.7 million for the six months ended June 30, 2024, which was mainly due to our net loss of approximately $4.1 million after adjustment of non cash items and increased accounts receivable of approximately $1.3 million due to increased revenue offset by cash inflow of approximately $0.8 million from accounts payable as we increased our purchase from vendors and approximately $0.9 million as we used more on hand inventory.
Investing Activities
For the six months ended June 30, 2025, net cash used in investing activities amount to $721,000 which was primarily for deposit from investment of Future Tech.
For the six months ended June 30, 2024, net cash used in investing activities amount to approximately $40,000 which was for loan to Lakeshore of $40,000 prior to the Merger.
Financing Activities
Net cash provided by financing activities was approximately $1.2 million for the six months ended June 30, 2025. The increase in net cash provided was primarily a result of net proceeds from shares subscription paid in advance of approximately $0.2 million, net proceeds from exercise of warrants of approximately $0.9 million, net proceeds from short-term loan from third parties of approximately $0.4 million, net proceeds from convertible notes borrowing of approximately $0.1 million offset by repayments on short-term loan from third parties of approximately $0.6 million, repayments on convertible notes of approximately $0.4 million, repayments on short-term loan from related parties of approximately $0.2 million.
Net cash provided by financing activities was approximately $1.6 million for the six months ended June 30, 2024. The main reason for the increase in net cash provided was primarily a result of net proceeds from short-term loan from a third party of $2.5 million, offset by payments of deferred offering costs of approximately $0.3 million, repayments on long term loans which are mainly our car and mortgage loan of approximately $0.1 million, repayments on short-term loan from third parties of approximately $0.5 million.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition and results of operations will be affected. We base our estimates on experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies, which we discuss further below. While our significant accounting policies are more fully described in Note 3 to our unaudited condensed consolidated financial statements, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements.
Revenue recognition
We follow Accounting Standards Codification (“ASC”) 606 Revenue Recognition and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.
We are a growing agriculture technology company providing CEA hardware products to growers in the controlled environment agriculture industry setting in North America. Majority of our products were grow lights and related products for the indoor growing settings. Starting from first quarter of 2024, we also provide indoor grow containers to our customers.
Our contracts with customers where the amounts charged per product is fixed and determinable, the specific terms of the contracts were agreed on by us including payment terms which are typically 30 to 60 days for existing customers and prepaid for most new customers. In certain contracts involving sales to customers that entered into rebate programs who can get rebates with utility companies with utility companies for using LED lighting, payment term ranges from 60 to 120 days.
Our performance obligation is to deliver the products to customers. For indoor grow container products, we also involved in customization of the products to suit customer’s specific needs. The provision of customization and configuration to meet certain technical specification per US market and delivery of product is considered one performance obligation as the services provided are not distinct within the context of the contract whereas the customers can only obtain benefit when the services and products are provided together. At times, we may charge customers shipping and handling for delivery of products, control of goods does not transfer to the customer before shipment, therefore shipping is not a promised service to us and is not considered a separate performance obligation. Any fee charged for shipping would be included in the transaction price for the good.
Transaction prices are mostly fixed. In some contracts, when determining the transaction price, we adjust consideration for the effects of the time value of money if the timing of payments provides us with a significant benefit of financing. We does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customers and the transfer of the promised goods or services to the licensees will be one year or less. For customers that entered into rebate programs with utility companies, transaction price may depend on level of energy saving the products achieved. We estimated the amount of consideration using either the expected value of the most likely amount depending on which method we expects to better predict the amount of consideration to which it will receive with a constraint applied such that a significant reversal of revenue is not probable.
We transfer the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized at a point in time when control of product transfer to customer and we has no further obligation to provide services related to such product evidenced by customer signing acceptances upon receipt of goods. Return allowances, which reduce product revenue by our best estimate of expected product returns, are estimated using historical experience.
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We evaluate the criteria of ASC 606 — Revenue Recognition Principal-Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs, or the net amount earned as commissions. We ship the products according to shipping terms on the purchase order or sales order. Once delivery is complete, we then send an invoice to the customer according to the quantity and price of shipment.
We evaluate the indicators of control in accordance with ASU 2016-08: 1) We are the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer inquiries directly and handling of product returns or refunds directly if any. For grow light products, we have our own brand for marketing. For indoor grow containers products, we are also involved in the design and technical specification of the products to meet requirement in the US market. 2) We assume inventory risk either through storing the products in our own warehouses; or for drop shipments directly from vendors, we take the title from vendors through inspection and acceptance and are responsible for product damage during shipment period prior to acceptance of our customers and are also responsible for product return if the customer is not satisfied with the products. 3) We determine the resale price of the products. 4) We are the party that direct the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer, after evaluating the above scenario, we consider ourselves the principal of these arrangements and records revenue on a gross basis.
Payments received prior to the delivery of goods to customers or picked up by the customers are recorded as contract liabilities.
We periodically provide incentive offers to our customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers.
Current discount offers, when accepted by our customers, are treated as a reduction to the transaction price of the related transaction.
Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are recorded upon recognizing the related sales.
Accounts receivable, net
Starting from January 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Company used a modified retrospective approach, and the adoption does not have an impact on our consolidated financial statements. During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. An allowance for expected credit loss is recorded in the period in which loss is determined to be probable based on lifetime expected losses considering historical, current, and forecasted conditions. Amounts deem uncollectible are written off against the allowance after all collection efforts have ceased.
Inventory
Inventory consists of finished goods ready for sale and is stated at the lower of cost and net realizable value. We value our inventory using the weighted average costing method. We include a part of cost of goods sold any freight incurred to ship the product from our vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered period costs and reflected in cost of revenue. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.
If the estimated realizable value of the inventory is less than cost, we make provisions in order to reduce our carrying value to our estimated market value. We also review inventory for slow moving and obsolescence and records allowance for obsolescence.
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Recently issued accounting pronouncements
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt–Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Instruments (“ASU 2024–04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06, which includes the Company. Adoption can be on a prospective or retrospective basis. The Company adopted ASU 2024-04 effective January 1, 2025 on a prospective basis.
Except as mentioned above, we do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of June 30, 2025, due solely to the material weakness in our internal control over financial reporting related to (i) a lack of effective risk assessment process; (ii) a lack of effective overall control environment; (iii) a lack of controls over monitoring; (iv) a lack of human resources within finance and accounting functions leading to lack of segregation of duties; (v) a lack of information technology control design and operating effectiveness; (vi) a lack of controls or ineffectively designed controls impacting financial reporting; (vii) an inadequate control over proper revenue recognition and purchase cutoff; and (viii) a lack of controls over income tax. We plan to continue to take remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. generally accepted accounting principles (“GAAP”) and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii) engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control; and (iv) appointing independent directors, and strengthening corporate governance.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities. There were no reportable litigation events and there have been no material developments to litigation events previously disclosed in our SEC filings during the quarter ended June 30, 2025 except as described below.
On July 16, 2025, Funders App LLC dba Tenthly, a lender to the Company (“Factor K”) filed a complaint in Court in Monroe County, New York referring to an outstanding balance of $100,588 after payments of $46,551 on its loan agreement with the Company, dated February 11, 2025. The total claimed amount is $129,463 plus interest from June 30, 2025 and attorney fees. On July 22, 2025, Factor K and the Company entered into a Stipulation of Settlement Agreement pursuant to which each party agreed to a settlement amount and remittance schedule that commenced July 23, 2025. In the event of default on payments, Factor K may file a default judgement for the sum of $129,463.45 less remittances pursuant to the Stipulation of Settlement Agreement.
On July 31, 2025, Webfunder LLC (“Factor I”) filed a Settlement Agreement for Stay of Prosecution in the Seventeenth Judicial Court in Broward County, Florida, pursuant to which both parties agreed to a new payment schedule from August 5, 2025 to December 9, 2025 for a total amount of $186,572. The original loan referred to in this Settlement Agreement for Stay of Prosecution was a standard merchant cash advance settlement agreement dated December 12, 2024 (Refer to Note 9 for detail). There are remedies and other protective language for Factor I in the event of non-performance.
On August 1, 2025, the Company and Wave Advance, Inc. (“Factor L”) entered into a Settlement Agreement and Mutual Release that requires payments from August 5 to October 27, 2025, for an aggregate amount of $201,170. The original loan referred to in this Settlement Agreement was a Standard Merchant Cash Advance Settlement Agreement dated February 2, 2025 (Refer to Note 9 for detail). There are remedies and other protective language for Factor L in the event of non-performance.
On August 6, 2025, the Company entered into a Standstill Agreement with MaximCash Solutions LLC (“MaximCash”). A complaint was previously filed on July 8, 2025 by MaximCash against the Company in the Third Judicial Court of Utah pertaining to the loan agreement dated December 30, 2024 (the “MaximCash Loan”), as a result of a failure to make the required repayment pursuant to the MaximCash Loan agreement. The claimed amount was $230,738 plus daily interest and attorney fees. On August 7, the Company wired $61,720 to MaximCash as partial payment.
ITEM 1A. RISK FACTORS
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. In any event, there have been no material changes in our risk factors as previously disclosed in our final prospectus, dated July 15, 2025, filed with the SEC on July 17, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(A) Unregistered Sales of Equity Securities
On April 11, 2025, the Company signed a convertible promissory note agreement with Big Lake Capital, LLC (“Big Lake” or “Investor”). Big Lake is a related party controlled by Tie “James” Li, Chairman and CEO of the Company. The agreement provides for up to $2,000,000 in financing with an initial tranche of $600,000. The amount funded can be converted into shares of the Company at a conversion price equal to 110% of the end of the trading date. The rate of interest is 10%. The agreement also includes 100% warrant coverage with exercise price the same as conversion price. No underwriting discounts or commissions were paid with respect to such sale.
On May 7, 2025, the Company entered into the equity financing agreement (or the “EPFA”), with GHS Investments, LLC, a Nevada limited liability company (the “Investor”), in connection with an equity line of credit (“ELOC”) for up to $20,000,000 (the “Commitment Amount”), pursuant to the EPFA, dated as of May 6, 2025, for a period of 24 months from the effective date the registration statement (the “Registration Statement”) registering the shares of Common Stock relating to the EPFA (the “Term”). The Registration Statement became effective on July 15, 2025. Sales of the Common Stock to the Investor under the EPFA, and the timing of any sales, will be determined by us from time to time in our sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of our Common Stock and determinations by us regarding the use of proceeds from any sale of such Common Stock. As consideration for entering into the EPFA, the Company issued 150,000 shares out of 1,503,759 shares of Common Stock to the Investor (the “Commitment Shares”) (representing one percent (1%) of the total Commitment Amount) upon signing of the EPFA. Subject to the terms and conditions of the EPFA, the Company may deliver a put notice to the Investor which states the dollar amount which the Company intends to sell to the Investor on a closing date. The purchase price of the put shall be eighty percent (80%) percent of the market price of the Common Stock. Following an up-list to the Nasdaq or another national exchange, the purchase price shall be ninety percent (90%) of the lowest volume weighted average price during the ten (10) consecutive trading days preceding the relevant put notice date, subject to a floor price of $0.05 per share. During the three months ended June 30, 2025, the Company issued no shares of Common Stock to the Investor under its equity line of credit.
On May 7, 2025, the Company entered into a Securities Purchase Agreement (the “SPA”) where the Company sold to the Investor 250 shares of Series A Preferred Stock, $0.0001 par value per share (the “Series A Shares”) at a purchase price of $1,000 per Series A Share for an aggregate purchase price of $250,000. The Series A Shares have a face value of $1,200 per share, and are convertible into shares of Common Stock at a conversion price of $0.112 in accordance with the certificate of designations to be filed with the State of Delaware. No underwriting discounts or commissions were paid with respect to such sale.
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On May 7, 2025, the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount of $140,250 with an original issue discount of $12,750 and closing expenses of $7,500 deducted from funding amount. The note bears an annual interest charge of 14% and maturity date was February 28, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. No underwriting discounts or commissions were paid with respect to such sale.
These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder.
(B) Use of Proceeds
Not applicable.
(C) Issuer Purchases of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
EXHIBIT INDEX
| ** | Filed herewith. |
| ** | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NATURE’S MIRACLE HOLDING INC. | |
Dated: August 14, 2025 |
/s/ Tie (James) Li |
| Tie (James) Li | |
| Chief Executive Officer (Principal Executive Officer) | |
Dated: August 14, 2025 |
/s/ George Yutuc |
| George Yutuc | |
| Chief Financial Officer (Principal Financial and Accounting Officer) |
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Exhibit 10.6
STIPULATION OF SETTLEMENT PURSUANT TO CPLR 3215(i)
THIS STIPULATION OF SETTLEMENT (the “STIPULATION OF SETTLEMENT”) is entered into by and between FUNDERS APP LLC d/b/a TENTHLY (“Plaintiff”), on one hand, and VISIONTECH GROUP INC NATURE’S MIRACLE INC, THE FASHION FANTASIA COMPANY (collectively, the “Merchant”), and TIE LI (the “Guarantor” and together with Merchant the “Defendants”), on the other hand, on 7/22/2025 (the “Effective Date”).
Plaintiff and Seller entered into a Purchase Agreement on February 11, 2025 (the “Purchase Agreement”) pursuant to which Plaintiff purchased Fifteen percent (15%) % of the Seller’s total future receipts up to the sum of $147,000.00 (“Purchase Amount”) in exchange for a discounted upfront purchase price of $110,000.00 (the “Purchase Price”);
WHEREAS, pursuant to a Guaranty agreement (the “Guaranty” and together with the Purchase Agreement, the “Agreements”) that was contained in, or executed contemporaneously with the Purchase Agreement, the Guarantor guaranteed the Seller’s performance under the Purchase Agreement to Plaintiff in the event that Seller failed to perform.
WHEREAS, Defendants defaulted on their obligations to Plaintiff under the Agreements leaving an outstanding balance of purchased receipts in the amount of $100,588.45 (the “Outstanding Balance”)
WHEREAS, Plaintiff commenced an action against Defendants by the filing of a Summons and Complaint on July 16, 2025 asserting causes of action for breach of the Agreements by Defendants, in the New York State Supreme Court for the County of Monroe under Index Number E2025015602 (the “Action”) and alleging damages in the amount of $129,463.45 (“the Claim”);
WHEREAS, the parties seek to resolve the claims asserted in the Action pursuant to the terms of this Stipulation of Settlement.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. Recitals. The Parties hereby acknowledge, consent and agree that the recitals contained above are true and accurate in all respects and form an integral part of this Stipulation of Settlement.
2. Settlement Amount and Remittance Schedule. The Defendants shall remit the sum of $129,463.45 (the “Settlement Amount”), which shall be remitted as follows:
| a. | On or before July 23, 2025, Merchant shall remit, via wire/ACH, the sum of $1,000.00. |
| b. | On or before July 29, 2025, Merchant shall remit, via wire to the account below, the sum of $10,000.00. |
| c. | On or before August 5, 2025, Merchant shall remit, via wire to the account below, the sum of $15,000.00. |
| d. | Beginning on or before August 12, 2025 and weekly thereafter, Merchant shall remit, via wire to the account below, the sum of $7,500.00 until Settlement Amount is remitted in full. |
| e. | In the event the remittance date falls on a holiday, Funders App shall debit on the preceding business day. |
| f. | Bank statements shall be submitted each month and remittance amount shall be adjusted as per financial statements. If financials are not timely and adequately provided, remittance amount shall be equal to the initial scheduled remittance as per the APFR. |
Remittances pursuant to this Agreement shall be made via wire to Funders App using the following account information:
Account Name:
Routing Number:
Account Number:
Bank Name:
Bank Address:
Ft. Lauderdale, FL 33308
| g. | All remittance required pursuant to this Agreement shall be made via wire transfer pursuant to wire transfer instructions that will be provided by Plaintiff’s attorney to Defendant’s attorney upon full execution of this Stipulation of Settlement. |
| h. | All funds liened shall be released in full to Funders App, and the held sum shall be applied to the Settlement Amount balance. By execution of this Agreement, the Defendants hereby authorizes the release of any and all held funds to Funders App. Defendants shall execute any direction letter required, if necessary, to authorize the release of such funds to Funders App. Upon full receipt of funds, Funders App shall issue a release on the specified account. |
3. Default Judgment pursuant to CPLR 3215(i). This Stipulation of Settlement shall be filed in the Action. In the event that the Defendants fail to make a settlement remittance by the due date set forth above, Plaintiff shall provide notice of default to the Defendants via email to james.li@nature-miracle.com (a “Notice of Default”). The Defendants shall have two (2) days from the date that a Notice of Default is sent to cure the remittance default (a “Cure Period”). In the event that a settlement remittance is not made when due, or within an applicable Cure Period, the Defendants hereby acknowledge, consent and agree that the Plaintiff may file an application for a default judgment to the Monroe County Supreme Court Clerk in the Action pursuant to CPLR 3215(i) for the sum of the $129,463.45 less remittances made pursuant to this Agreement, plus the sum of 25% of the amount due at the time for attorneys’ fees based upon the standard contingency fee rates charged by collection lawyers to collect on judgments in this industry, plus interest at the rate of 9% per annum from the date of default to the date of entry of judgment. The Parties agree that it shall be sufficient for the entry of such default judgment for the Plaintiff’s attorney of record to submit an affirmation stating the amount remitted pursuant to this Stipulation of Settlement, the date of the default hereunder, the amount outstanding, and an amount for attorneys’ fees of to be included in the default judgment calculated as 25% of the amount due under this Stipulation of Settlement at the time of default. The Parties agree that the application to the Monroe County Supreme Court Clerk for a default judgment may be made without notice to the Defendants.
4. Withdrawal of Answer. N/A
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5. Release of Defendants. Upon the Defendants’ full performance of their obligations pursuant to this Stipulation of Settlement including, without limitation, the full payment of the Settlement Amount pursuant to Section 2 above, Plaintiff hereby releases and forever discharges the Defendants and their respective parents, divisions, subsidiaries, affiliates, related entities, representatives, successors, directors, officers, owners, agents, employees, insurance carriers, attorneys and assigns of and from any and all claims, counterclaims, demands, damages, debts, liabilities, accounts, actions, causes of action and suits, known or unknown, liquidated or contingent, arising from, which may arise in the future from, or which are related in any manner to the Action or the underlying Agreements, including any claims that were or could have been asserted, other than the obligations of the Defendants under this Stipulation of Settlement. All liens shall be rescinded, and accounts released, only upon full performance of Defendant’s obligations pursuant to this Stipulation Agreement.
6. Release of Plaintiff. Upon the Effective Date, the Defendants for themselves and on behalf of all parents, divisions, subsidiaries, affiliates, related entities, representatives, successors, directors, officers, owners, agents, employees, insurance carriers, attorneys and assigns, hereby releases and forever discharges Plaintiff and its respective parents, divisions, subsidiaries, affiliates, related entities, representatives, successors, directors, officers, owners, agents, employees, insurance carriers, attorneys and assigns of and from any and all claims, counterclaims, demands, damages, debts, liabilities, accounts, actions, causes of action and suits, known or unknown, liquidated or contingent, arising from, which may arise in the future from, or which are related in any manner to the Action or the underlying Agreements, including any claims that were or could have been asserted, other than Plaintiff’s obligations under this Settlement Agreement.
7. Representation by Counsel. The Parties hereby acknowledge, consent and agree that each of them have been represented by counsel in the negotiation and execution of this Stipulation of Settlement.
8. Consent to Jurisdiction. This Stipulation of Settlement shall be governed by and construed exclusively in accordance with the laws of the State of New York, without regards to any applicable principles of conflicts of law. The Defendants irrevocably submit to the exclusive jurisdiction of the New York State Supreme Court, for any disputes arising out of the terms of this Agreement, agree that the Forum is convenient and hereby waive any and all objections based upon jurisdiction in, or convenience of, the Forum.
9. Modifications; Agreements. No modification, amendment, waiver or consent of any provision of this Stipulation of Settlement shall be effective unless the same shall be in writing and signed by all Parties.
10. Assignment. Plaintiff may assign, transfer or sell its rights or delegate its duties hereunder, either in whole or in part upon the written consent of the Defendants. The Defendants shall not assign its rights or obligations under this Stipulation of Settlement without first obtaining Plaintiff’s written consent.
11. Waiver Remedies. No failure on the part of Plaintiff to exercise, and no delay in exercising, any right under this Stipulation of Settlement, shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right.
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12. Authorization. The parties that are signing this Stipulation of Settlement on behalf of the limited liability companies or corporations in their representative capacities hereby represent and warrant that they are authorized to bind those entities.
13. Binding Effect. This Stipulation of Settlement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.
14. JURY WAIVER. THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS STIPULATION OF SETTLEMENT, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. THE PARTIES ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.
15. Severability. In case any of the provisions in this Stipulation of Settlement are found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any other provision contained herein shall not in any way be affected or impaired. Any provision of this Stipulation of Settlement that may be found by a court having jurisdiction to be prohibited by law shall be ineffective only to the extent of such prohibition without invalidating the remaining provisions hereof.
16. Entire Agreement. This Stipulation of Settlement embodies the entire agreement between the Defendants and Plaintiff and supersedes all prior agreements and understandings relating to the subject matter hereof.
THE UNDERSIGNED REPRESENT AND WARRANT THAT THEY HAVE READ THIS STIPULATED SETTLEMENT AGREEMENT IN ITS ENTIRETY AND HAVE THE FULL CAPACITY, POWER, AND AUTHORITY TO MAKE THIS AGREEMENT AS SET FORTH ABOVE, AND THAT NO OTHER REPRESENTATIONS OR INDUCEMENTS APART FROM THIS STIPULATED SETTLEMENT AGREEMENT, EITHER WRITTEN OR ORAL, HAVE BEEN MADE.
IN WITNESS WHEREOF, the Parties are executing this Stipulation of Settlement as of the Effective Date set forth above.
*Signature Page to Follow*
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| “VISIONTECH GROUP INC” | “TIE LI” | |||
| X | /s/ Tie Li | X | /s/ Tie Li | |
| Name: | TIE LI, as authorized signer on behalf of the Merchants referenced above | TIE LI, Individually | ||
| “PLAINTIFF” | |||
| FUNDERS APP LLC d/b/a TENTHLY | |||
| “PLAINTIFF” | |||
| X |  | ||
| Name: | |||
| Title: | Authorized Representative | ||
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Authorization to Release
RE: VISIONTECH GROUP INC
EIN: 82-0864230
TIE LI
SS:
This letter of direction is sent as you are an Account Debtor of VISIONTECH GROUP INC, EIN: 82-0864230, TIE LI (collectively, the “Merchant”) due to your ongoing business relationship with the Merchant.
Please allow this letter to serve as an official request to remit all funds held in the merchant’s account to FUNDERS APP LLC using the payment method below.
Once funds are remitted and proof of transaction has been sent to the hold on the account may be released.
Please comply with the above immediately and feel free to contact us if you have any questions regarding this letter. I thank you in advance for your anticipated cooperation in this matter.
Check by Mail:
Attn:
Funders App LLC
3323 NE 163rd Street, Suite 404
North Miami Beach, FL 33160
Ref: VISIONTECH GROUP INC
| AUTHORIZED AND APPROVED | ||
| x | /s/ Tie Li | |
| TIE LI | ||
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ACH AUTHORIZATION
Enter Your Details
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Exhibit 10.7
IN THE CIRCUIT COURT OF THE SEVENTEENTH
JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA
CIVIL DIVISION
|
WEBFUNDER LLC,
Plaintiff,
v.
VISIONTECH GROUP INC. D/B/A EFINITY, THE FASHION FANTASIA COMPANY, NATURE’S MIRACLE (CALIFORNIA), INC., HYDROMAN, INC., HYDROMAN ELECTRIC CORPORATION and TIE LI, Defendants. |
CASE NO.: CACE-25-010596 |
SETTLEMENT AGREEMENT FOR STAY OF PROSECUTION
THIS STIPULATION OF SETTLEMENT (the “Settlement Stipulation”) is entered into as of July 31, 2025 (the “Execution Date”), by and between WEBFUNDER LLC (the “Plaintiff”) and TIE LI (the “Guarantor”) for the benefit of VISIONTECH GROUP INC. D/B/A EFINITY, THE FASHION FANTASIA COMPANY, NATURE’S MIRACLE (CALIFORNIA), INC., HYDROMAN, INC., and HYDROMAN ELECTRIC CORPORATION (the “Company Defendants” collectively “Defendants” and together with the Plaintiff, the “Parties”).
WHEREAS, the employment of counsel on behalf of the Company Defendants is at the Guarantor’s discretion.
WHEREAS, Plaintiff and Guarantor intend to resolve the underlying dispute between the Parties by the terms of this settlement Agreement (the “Settlement Agreement”).
WHEREAS, Plaintiff and Guarantor Agree to the entry of an Order by the Court enforcing the terms of this Settlement Agreement, the proposed form of which is attached hereto as Exhibit 1.
WHEREAS, Plaintiff and Guarantor agree that in the event of Guarantor’s default on the Settlement Agreement Plaintiff may submit the joint stipulation, the proposed form of which is attached hereto as Exhibit 2, for entry of default and to move the court for final judgment as to all Defendants.
NOW, THEREFORE, Plaintiff and Guarantor, by the signatures below, stipulate that:
1. Timely Payment is of the Essence to this Agreement – Guarantor agrees to pay $186,572.41 (the “Settlement Payment”) or to cause Settlement Payment to be paid by Company Defendants to Plaintiff, and Plaintiff agrees to accept the Settlement Payment, as settlement in full of Plaintiff’s claims against the Defendants. The Settlement Payment shall be split into nineteen (19) weekly installments. Weekly installments of $10,000.00 shall commence on August 5, 2025, to December 2, 2025, followed by a final installment of $6,572.41 on December 9, 2025, with each payment due on Tuesday of each week (the “Scheduled Payments”), as follows:
| Date of Payment | Method
of Payment |
Payment Amount |
| On or before Tuesday,
August 5, 2025, to December 2, 2025 (18 Weekly Payments) |
Wire Transfer | $10,000.00 |
| On
or before Tuesday, December 9, 2025 (Final Payment) |
Wire Transfer | $6,572.41 |
which shall be wired to:
Bank Name: JP Morgan Chase
Account Name: Lieberman and Klestzick, LLP, IOLTA Account
Address: 381 Sunrise Highway, Suite 302, Lynbrook, NY 11563
Account Number: 598607205
Routing Number: 021000021
2. Forbearance of Plaintiff’s Remedies & Stay of Litigation – Upon receipt and settlement of the first payment and so long as Guarantor is not in default of this Agreement, Plaintiff agrees to (a) stay any further legal action in this case, and (b) forebear from taking any actions on Defendants’ accounts it may otherwise be entitled to.
3. Default of Settlement and No Right to Cure – If Defendants fail to timely make any payment, or portion thereof, of the Settlement Payment in accordance with Section 1 above of this Settlement Agreement, then Defendants shall be deemed to have defaulted under the terms of this Settlement Agreement. Defendants expressly agree that they will have no right to cure any missed payments and Plaintiff, without providing notice to the Defendants, may choose to enforce all rights afforded to it under this Settlement Agreement, including, but not limited to, the rights delineated in Section 4, 5, and 6 below.
4. Remedies for Defendants’ Breach – In the event of Defendants’ failure to make a timely payment under this Settlement Agreement, such late payment shall be a default. Under this Settlement Agreement, any default on Defendants’ behalf shall be deemed a material breach of this Settlement Agreement. Additionally, in the event of Defendants’ default hereunder, Plaintiff may nevertheless elect to accept any late payment without giving up any future rights to initiate litigation for breach of the Settlement Agreement. For the avoidance of doubt, failure or delay of the Plaintiff in exercising any right or remedy under this Settlement Agreement will not operate as a waiver thereof. The express waiver by Plaintiff of a breach of any provision of this Settlement Agreement by Defendants shall not operate or be construed as a waiver of any subsequent breach by Defendants. No waiver will be effective unless and until it is in written form and signed by an authorized representative of Plaintiff.
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5. Liquidated Damages – In the event of a material breach of this Settlement Agreement by Defendant(s), the Parties agree that liquidated damages shall be adequate to make Plaintiff whole. The Parties acknowledge liquidated damages consisting of the Settlement Payment balance; plus an industry standard 25% contingency fee for legal collections. This calculation is reflective of the intent of the original transaction and adequately compensates Plaintiff for the additional harm caused by Plaintiff detrimentally relying on Defendants’ performance under the Settlement Agreement.
6. Default and Judgment – In the event of Guarantor’s default under this stipulated Agreement, Plaintiff shall have the immediate right to proceed to submit the joint stipulation for default and final judgment attached as an Exhibit to this Agreement against the Guarantor for the balance owed, and as to the Company Defendants to apply for entry of a default and to move for final judgment pursuant to Fla. R. Civ. P. 1.500. Such application for entry of a final judgment against the Guarantor will include an affidavit or affirmation specifying the default and the amount of the unpaid balance of the Settlement Payment, as stated in the recitals to this Agreement. Additionally, in the event of a default hereunder, Plaintiff may nevertheless elect to accept any late payment without giving up any future rights to initiate litigation for breach of the Settlement Agreement. For the avoidance of doubt, failure or delay of the Plaintiff in exercising any right or remedy under this Settlement Agreement will not operate as a waiver thereof. The express waiver by Plaintiff of a breach of any provision of this Settlement Agreement shall not operate or be construed as a waiver of any subsequent breach. No waiver will be effective unless and until it is in written form and signed by an authorized representative of Plaintiff.
7. Attorneys’ Fees – In any litigation or dispute arising from this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees from the non-prevailing party, in addition to the rights of Plaintiff delineated in Section 5 above.
8. UCC Release – Upon Creditor’s receipt of the entire Settlement Payment, Creditor shall, within ten (10) business days: file a UCC-3 Termination with the Secretary of State in Merchant’s state of organization and/or Principal’s domicile terminating any and all UCC-1 Financing Statements in favor of Creditor.
9. Additional Financing – During the term of this Settlement Agreement, Defendants shall not enter into with any other party any arrangement, agreement, or commitment that relates to or involves any financing of the business that involves the granting of any collateral of the Company Defendants without the prior written consent of Plaintiff.
10. Incorporation by Reference - The Choice of Law, Forum Selection, Arbitration, Process Service, and Jury Trial Waiver provisions contained in the underlying Agreement/Contract are incorporated by reference into this Settlement Agreement as if fully set forth herein. This Settlement Agreement fully and finally settles any claims against the Guarantor arising from the breach of the underlying guaranty; provided, however, that upon any breach of this Settlement Agreement, the Guarantor’s liability under the original guaranty shall be automatically reinstated and enforceable.
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11. Non-Circumvention – As additional consideration of the Settlement Payment, it is further acknowledged and agreed that the Defendants are hereby agreeing to take no action to circumvent, avoid, bypass, or obviate, directly or indirectly, the intent of this Settlement Agreement and Defendants’ obligations hereunder through any transaction, transfer, pledge, agreement, recapitalization, loan, lease, assignment, or otherwise.
12. Mutual Releases – Upon execution of this Settlement Agreement, Defendants for themselves and on behalf of all parents, divisions, subsidiaries, affiliates, related entities, representatives, successors, directors, officers, owners, agents, employees, insurance carriers, attorneys and assigns (together, the “Defendant Group”), shall release and forever discharge Plaintiff and each of its past and present parents, divisions, subsidiaries, affiliates, related entities, representatives, successors, directors, officers, owners, agents, employees, insurance carriers, attorneys and assigns (together, the “Plaintiff Group”) from any and all claims, demands, causes of action, obligations, damages and liabilities of any nature whatsoever, whether in law or equity, whether known or unknown, whether disclosed or undisclosed, whether anticipated or unanticipated, whether asserted or unasserted, whether direct or indirect, whether contingent or liquidated, that Defendants or the Defendant Group ever had or now has, or may claim to have against the Plaintiff Group. Upon Plaintiff’s receipt of the full Settlement Payment (unless Defendants default under the Settlement Agreement and Plaintiff pursues its rights as set forth in Section 4 and 5 above), Plaintiff and Plaintiff Group shall release and forever discharge Defendants and the Defendant Group from any and all claims, defenses, demands, causes of action, obligations, damages and liabilities of any nature whatsoever, whether in law or equity, whether known or unknown, whether disclosed or undisclosed, whether anticipated or unanticipated, whether asserted or unasserted, whether direct or indirect, whether contingent or liquidated, that Plaintiff or of its successors or assigns ever had or now has, or may claim to have against Defendant or the Defendant Group.
13. Jurisdiction – Guarantor consents to the retention of case jurisdiction of the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida over any litigation arising from or connected with this Settlement Agreement.
14. Dismissal of the Pending Litigation – Upon Plaintiff’s receipt of Final Payment in accordance with Section 1 above of this Settlement Agreement, Plaintiff shall voluntary dismiss with prejudice the action before the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida; CASE NO.: CACE-25-010596, expressly reserving jurisdiction for the Court to enforce the terms of this Settlement Agreement pursuant to paragraph 13.
15. Severability – The provisions of this Settlement Agreement are severable and the invalidity or unenforceability of any provision of this Settlement Agreement shall not affect the validity or enforceability of any other provision. In the event that any provision of this Settlement Agreement (or portion thereof) is determined by a court of competent jurisdiction to be unenforceable, void, voidable or unenforceable, as drafted by virtue of the scope, duration, extent, or character of any obligation contained therein, the Parties acknowledge that such provisions (or portion thereof) shall not affect any other term or provision of this Settlement Agreement.
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16. Amendments – This Settlement Agreement represents the full, complete and entire agreement between the Parties and may not be modified, supplemented, or amended except by written Amendment to this stipulated Settlement Agreement executed by all of the Parties hereto.
17. Execution – This Settlement Agreement may be executed in multiple counterparts, and each of such counterparts so executed shall be deemed an original. All such counterparts together shall be deemed to constitute one (1) final Settlement Agreement as if signed by all Parties hereto. A telecopy or facsimile transmission of a signed counterpart of this Settlement Agreement shall be sufficient to bind the Parties whose signatures appear thereon.
18. Joint and Several Liability - The obligations of all Defendants hereunder shall be joint and several, such that each Defendant, whether corporate or individual, is fully liable for the total outstanding balance of the Settlement Payment in the event of any default. In the event of a default under this Settlement Agreement, the full remaining balance, including any accrued interest, attorneys’ fees, and costs, shall immediately become due and payable by all Defendants, jointly and severally, without the need for any further notice, demand, or condition. Each individual Defendant expressly waives any requirement that the Plaintiff first seek payment from the Company Defendants or any other party before enforcing liability against such individual Defendant. The liability of each individual Defendant is co-extensive with that of the Company Defendant, meaning that each such person is liable to the same extent for any breach, and this personal obligation shall not be affected by the discharge, modification, or settlement of the company’s liability, including in bankruptcy, restructuring, or any other agreement. No compromise, extension, or waiver of any obligation of a Company Defendant shall release or diminish the obligations of the individual Defendants under this Settlement Agreement. This obligation is absolute, continuing, and unconditional until the Settlement Payment is paid in full.
19. Authority – The persons acting on behalf of the corporate entity hereto represent and warrant that said person has the complete and full authority/authorization to execute this Settlement Agreement on behalf of the respective entity.
20. Attorney Review – The Parties acknowledge they had ample time to consult with an attorney of their choosing with respect to the terms of this Settlement Agreement and that no provision thereof shall be interpreted for or against another Party because that party’s attorney drafted such provision.
21. Facsimile Acceptance – Facsimile signatures and/or via Portable Digital Format (PDF) shall be deemed acceptable for all purposes.
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IN WITNESS WHEREOF the Parties have executed this Settlement Agreement as of the date set forth above.
| AGREED AND ACCEPTED: | ||
| WEBFUNDER LLC, | ||
| By: | ||
| Name: | ||
| Title: | ||
| STATE OF | ||
| COUNTY OF |
Sworn to or affirmed and signed before me on _________________by _________________.
| NOTARY PUBLIC OR DEPUTY CLERK | |
| [Print, type, or stamp commissioned name of notary or deputy clerk.] |
| _______ | Personally known |
| _______ | Produced identification |
| Type of identification produced_________________________ |
TIE LI, individually
| By: | /s/ Tie Li | |
| STATE OF Texas | ||
| COUNTY OF Parker | ||
Sworn to or affirmed and signed before me on 08/01/2025 by /s/ Tie Li .
|
|
/S/ Pelard Faustin | |
| NOTARY PUBLIC OR DEPUTY CLERK | ||
| Pelard Faustin | ||
| [Print, type, or stamp commissioned name of notary or deputy clerk.] |
Personally known
☒ Produced identification
Type of identification produced DRIVER LICENSE
Electronically signed and notarized online using the Proof platform.
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EXHIBIT 1
7
IN THE CIRCUIT COURT OF THE SEVENTEENTH
JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA
CIVIL DIVISION
|
WEBFUNDER LLC, Plaintiff,
v.
VISIONTECH GROUP INC. D/B/A EFINITY, THE FASHION FANTASIA COMPANY, NATURE’S MIRACLE (CALIFORNIA), INC., HYDROMAN, INC., HYDROMAN ELECTRIC CORPORATION and TIE LI, Defendants. |
CASE NO.: CACE-25-010596 |
ORDER APPROVING SETTLEMENT
Before the Court is a settlement agreement filed with the Clerk on , 2025, entered between Plaintiff and Defendant, TIE LI. In lieu of appearing on his own behalf or hiring an attorney to appear for the Company Defendants, the Parties have agreed Plaintiff shall stay its prosecution of the case pursuant to the terms of the settlement. Plaintiff may move the Court for default judgment upon its breach. This case is hereby DISMISSED with the Court retaining jurisdiction to enforce the terms of settlement, including any issue of attorney fees and costs.
DONE AND ORDERED in Chambers at Broward County, Florida on .
COUNTY COURT JUDGE
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EXHIBIT 2
9
IN THE CIRCUIT COURT OF THE SEVENTEENTH
JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA
CIVIL DIVISION
|
WEBFUNDER LLC,
Plaintiff,
v.
VISIONTECH GROUP INC. D/B/A EFINITY, THE FASHION FANTASIA COMPANY, NATURE’S MIRACLE (CALIFORNIA), INC., HYDROMAN, INC., HYDROMAN ELECTRIC CORPORATION and TIE LI, Defendants. |
CASE NO.: CACE-25-010596 |
STIPULATION FOR D E F A U L T A N D F I N A L JUDGMENT
Pursuant to the Settlement Agreement for Stay of Prosecution dated , 2025, WEBFUNDER LLC and TIE LI hereto file this Joint Stipulation and agree as follows. If Defendant, TIE LI, shall default in payment hereunder, Plaintiff shall be entitled to e n t r y o f d e f a u l t a n d t o m o v e f o r judgment, execution, costs, and interest in accordance with Section 55.03, Florida Statutes after submission of written application and affidavit of non-payment to the court, without notice:
| 1. | That Defendant, TIE LI, acknowledges his/her indebtedness to the Plaintiff on the Future Receivables Sale and Purchase Agreement dated December 12, 2024, in the sum of $186,572.41 and breached June 22, 2025. |
| 2. | That Defendant, TIE LI, consents to the entry of a Final Judgment against him/her for the balance remaining on the Stipulated Settlement Agreement for the Stay of Prosecution of the aforementioned debt including interest, fees, and costs thereon. |
Dated this 1st day of August , 2025.
| /s/ TIE LI | ||
| Attorney for Plaintiff | TIE LI | |
| Abraham Jacob Jeger | ||
| /s/ TIE LI | ||
| Plaintiff Signature | Defendant Signature |
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Exhibit 10.8
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this “Agreement”) is entered into on August 1, 2025 (the “Effective Date”) between Visiontech Group Inc., Nature’s Miracle Holding, Inc., Natures Miracle, Inc., Natures Miracle California, Inc., Hydroman, Inc., Hydroman Electric Corporation, NM Rebate, Inc., NM Data Inc., and Tie LI (individually and collectively, “Merchants”) on one hand, and Wave Advance, Inc. (“Wave”) on the other hand. Merchants and Wave are sometimes hereinafter referred to individually as a “Party” or collectively referred to as the “Parties.”
WHEREAS, the Parties entered into a Standard Merchant Cash Advance Settlement Agreement, dated February 2, 2025 (the “MCA Agreement”);
WHEREAS, a dispute has arisen as to the Parties’ respective rights and obligations under the MCA Agreement; and
WHEREAS, the Parties wish to resolve all disputes between them.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. The Settlement Amount. Merchants will pay $201,170.00 (the “Settlement Amount”) to Wave as follows:
|
Payment Number |
Payment Date | Payment Amount |
| 1 | August 5, 2025 | $18,000.00 |
| 2 | August 11, 2025 | $18,000.00 |
| 3 | August 18, 2025 | $18,000.00 |
| 4 | August 25, 2025 | $18,000.00 |
| 5 | September 2, 2025 | $18,000.00 |
| 6 | September 8, 2025 | $18,000.00 |
| 7 | September 15, 2025 | $18,000.00 |
| 8 | September 22, 2025 | $18,000.00 |
| 9 | September 29, 2025 | $18,000.00 |
| 10 | October 14, 2025 | $18,000.00 |
| 11 | October 20, 2025 | $18,000.00 |
| 12 | October 27, 2025 | $3,170.00 |
2. Automatic Debts. Merchants hereby authorize Wave to collect the Settlement Amount via ACH debit from the account listed below:
| Financial Institution: | |
| Account Name: | Visiontech Group, Inc. |
| Routing Number: | |
| Account Number: |
If for any reason, Wave’s attempt to debit the full amount of any payment due pursuant to this Agreement from the above-referenced account ( ) is unsuccessful, Merchants hereby authorize Wave to collect the Settlement Amount via ACH debit from the following account:
| Financial Institution: | |
| Account Name: | Visiontech Group, Inc. |
| Routing Number: | |
| Account Number: |
3. Default. In the event Merchants fail to make any payment as required by this Agreement or otherwise default hereunder, then Wave will be entitled to pursue judgment against Merchants, jointly and severally, in the sum of the Settlement Amount, minus any payment made under this Agreement, but plus interest at a rate of 18% per annum (or the maximum amount permitted by law if less) from date of default. Any money judgment obtained by Wave against Merchants in relation to this Agreement will accrue post-judgment interest at a rate of 18% per annum (or the maximum amount permitted by law if less), which rate will govern over the statutory rate up until actual satisfaction of the judgment.
4. Releases.
4.1. Merchants’ Release. Merchants, together with their affiliates, parents, subsidiaries, officers, employees, directors, shareholders, members, partners, agents, representatives, administrators, attorneys, predecessors, successors and assigns, hereby unconditionally and irrevocably release and discharge Wave and its affiliates, parents, subsidiaries, officers, employees, directors, shareholders, members, partners, agents, representatives, administrators, attorneys, predecessors, successors, and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, controversies, agreements, contracts, variances, trespasses, damages, judgments, extensions, executions, claims, proceedings and demands whatsoever, in law, admiralty or equity and whether based on any state law, federal law, foreign law or common law right of action or otherwise, whether before a court or any other body or otherwise, whether now known or unknown, suspected or unsuspected, from the beginning of the world to the Effective Date, that have arisen, could have arisen, or could arise between them.
4.2. Wave Release. Wave together with its affiliates, parents, subsidiaries, officers, employees, directors, shareholders, members, partners, agents, representatives, administrators, attorneys, predecessors, successors and assigns, hereby unconditionally and irrevocably releases and discharges Merchants and their affiliates, parents, subsidiaries, officers, employees, directors, shareholders, members, partners, agents, representatives, administrators, attorneys, predecessors, successors, and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, controversies, agreements, contracts, variances, trespasses, damages, judgments, extensions, executions, claims, proceedings and demands whatsoever, in law, admiralty or equity and whether based on any state law, federal law, foreign law or common law right of action or otherwise, whether before a court or any other body or otherwise, whether now known or unknown, suspected or unsuspected, from the beginning of the world to the Effective Date, that have arisen, could have arisen, or could arise between them.
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4.3. Advice of Counsel. The Parties expressly acknowledge that they have had the opportunity to be advised by counsel of the contents and effect of the releases included in this Agreement. The Parties further acknowledge (a) the risk that they may later discover facts which, had such facts been known, would have affected their willingness to enter into this Agreement, and (b) that notwithstanding such risk and possibility, the Parties wish to execute the general releases and waivers in this Agreement.
4.4. Certain obligations not released. Nothing herein shall release a Party hereto from its obligation to perform the terms, conditions, covenants, and promises of this Agreement, or from any claim, loss, cause of action, cost, expense, attorney’s fees, damages, or liability that arises out of the breach of any obligation imposed by this Agreement.
5. Bankruptcy. If any of Merchants files for bankruptcy protection or an involuntary bankruptcy is commenced against any of Merchants prior to full payment of the Settlement Amount, such that any of the payments herein are deemed to have been made or cleared during the 90-day period for avoiding preferential transfers, then Wave will have the right to: (a) file a proof of claim for the sum of the Settlement Amount, minus any payment made under this Agreement, but plus interest at a rate of 18% per annum (or the maximum amount permitted by law if less) from date of default or date of bankruptcy filing (whichever is earlier) and for any amounts that may be subject to avoidance; and (b) file an action to declare the amounts due hereunder to be non-dischargeable by reason of fraud and/or any other basis allowable by the bankruptcy code, notwithstanding any settlement in this action. In such instance, Merchants will reserve all defenses available to them with respect to the non-discharge action.
6. Security Interest. To secure Merchants’ performance of their obligations to Wave under this Agreement, Merchants acknowledge and agree that, notwithstanding anything in this Agreement, all UCC-1 Financing Statement(s) previous filed by Wave pursuant to the MCA Agreement, and the corresponding security interests, will remain in full force and effect, and Wave will have full rights of enforcement, until Merchants’ obligations to Wave under this Agreement are satisfied in full.
For the avoidance of doubt, Merchants agree and acknowledge that, in the event Merchants fail to make any payment as required by this Agreement or otherwise default hereunder, Wave will have the right, without waiving any of its rights and remedies and without notice to Merchants, to notify Merchants’ credit card and/or check processors and account debtors of Merchants’ breach of this Agreement and to direct such credit card processors and account debtors to make payment to Wave of all or any portion of the amounts received by such credit card processor and account debtors on behalf of Merchants. Merchants hereby grant to Wave an irrevocable power-of-attorney, which power-of-attorney will be coupled with an interest, and hereby appoint Wave and Wave’s representative as Merchants’ attorney-in-fact to take any and all action necessary to direct such new or additional credit card and/or check processors and account debtors to make payment to Wave as contemplated by this Section 6.
7. UCC-1 Termination. If Merchants perform fully under this Agreement without default, then Wave will, within seven (7) days of Merchants’ full performance, terminate all UCC-1 Financing Statement(s) filed by Wave in connection with the MCA Agreement, and Merchants will have no further obligations to Wave under this Agreement.
8. Representations and Warranties. Each Party represents and warrants that:
| (a) | the person executing this Agreement on its behalf is authorized to do so; |
| (b) | they (i) have interest in, and ownership of, the claims being released sufficient to grant the releases of those claims as contemplated hereby, and (ii) have not assigned the claims, issues, causes of action, or other matters alleged or released and discharged by this Agreement; |
| (c) | this Agreement is executed without duress and, except as stated herein, without reliance upon any statement, inducement, or representation of any of the Parties or their respective representatives concerning the nature and extent of any damages or injuries and/or legal liability; and |
| (d) | as of the Effective Date, the Parties have no rights under any agreements between them (other than this Agreement) with respect to each other. |
9. Expenses and Fees. Except as otherwise provided for in this Agreement, each Party will pay and be solely responsible for all of the fees, expenses and disbursements of it and its respective agents, representatives and counsel in connection with this Agreement and the settlement contemplated hereby.
10. No Admission of Liability. The Parties agree that this Agreement shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing.
11. Binding Effect. The Agreement is binding upon, and shall inure to the benefit of, the Parties hereto and their respective heirs, executors, administrators, successors, and assigns.
12. Entire Agreement. This Agreement constitutes the entire agreement of the Parties with regard to the matters set forth herein and supersedes all prior agreements and undertakings, both written and oral, among the Parties with respect to this Agreement.
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13. Severability and Interpretation.
13.1. If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, void or unenforceable, such provision shall have no effect; however, the remaining provisions shall be enforced to the maximum extent possible; provided, however, if the release and/or covenant not to sue contained herein is deemed to be illegal, void or unenforceable, the Parties agree to enter into a valid release and/or covenant not to sue. Further, if a court of competent jurisdiction should determine that any portion of this Agreement is overbroad or unreasonable, such provision shall be given effect to the maximum extent permitted by law by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable.
13.2. Should any provision of this Agreement require interpretation or construction, it is agreed by the Parties that the entity interpreting or constructing this Agreement shall not apply a presumption against one Party by reason of the rule of construction that a document is to be construed more strictly against the Party who prepared the document.
14. Governing Law. This Agreement, and any and all disputes arising out of or relating in any way to this Agreement, including but not limited to its negotiation and execution, shall be governed by, and construed in accordance with, the laws of the State of Florida applicable to contracts executed in and to be performed entirely within such State without giving effect to any such laws that would give application to the laws of any other jurisdiction.
15. Confidential, Binding Arbitration.
15.1. Any action or dispute, whether sounding in contract, tort, law, equity, or otherwise, relating to this Agreement or involving Wave on one side and any Merchant on the other, including, but not limited to issues of arbitrability, and including, without limitation, any action or dispute that predates this Agreement, will, at the option of any party to such action or dispute, be determined by arbitration before a single arbitrator in Miami, Florida. The arbitration shall be administered by and pursuant to JAMS’ Streamlined Arbitration Rules and Procedures. The arbitrator shall apply Florida law to the merits of any dispute or claims, without reference to the rules of conflicts of law applicable therein. Judgment upon any award may be entered in any court having jurisdiction. Any legal fees and costs incurred in the enforcement of the arbitration award shall be paid by the party against whom enforcement is sought.
15.2. No discovery shall be taken in support of the arbitration, although each side shall exchange such documents and other information (a) as may be required by this Agreement; and (b) that the side intends to introduce at the arbitration hearing. In addition, each side shall exchange such additional information as may be directed by the arbitrator, either on his/her own motion or on application of any party for good cause shown.
15.3. The arbitral award (the “Award”) shall be (a) rendered within 120 days after the arbitrator’s acceptance of his or her appointment; (b) delivered in writing; (c) the sole and exclusive final and binding remedy with respect to the dispute between and among the parties without the possibility of challenge or appeal, which are hereby waived; and (d) accompanied by a form of judgment. The Award shall be deemed an award of the United States, the relationship between the parties shall be deemed commercial in nature, and any dispute arbitrated pursuant to this Agreement shall be deemed commercial. The arbitrator shall have the authority to grant any equitable or legal remedies, including, without limitation, entering preliminary or permanent injunctive relief.
15.4. The Parties agree that, subject to any non-waivable disclosure obligations under federal law, the arbitration, and all matters relating thereto or arising thereunder, including, without limitation, the existence of the dispute, the arbitration and all of its elements (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any decision of the arbitrator or Award), shall be kept strictly confidential, and each Party hereby agrees that such information shall not be disclosed beyond: (a) the arbitrator and necessary support personnel; (b) the participants in the arbitration; (c) those assisting the Parties in the preparation or presentation of the arbitration; and (d) other employees or agents of the Parties with a need to know such information. In all events, the Parties shall treat information pertaining to the arbitration with the same care that they treat their most valuable proprietary secrets. In the event that federal law imposes upon any Party an obligation to disclose the fact of the arbitration or the nature of the claims or counterclaims asserted, such Party or Parties shall disclose no more than the minimum information required by law after first consulting with and attempting in good faith to reach agreement with the opposing Party or Parties regarding the scope and content of any such required disclosure.
Notwithstanding any provisions of this Agreement, or any statute protecting the confidentiality of the arbitration and proceedings taken in connection therewith, in the event that either of the Parties is required to defend themselves in response to later proceedings instituted by the other in any court, relating to matters decided in the arbitration, such Party shall be relieved of any obligation to hold confidential the arbitration and its proceedings in order to submit, confidentially if and to the extent possible, sufficient information to such court to allow it to determine whether the doctrines of res judicata, collateral estoppel, bar by judgment, or other similar doctrines apply to such subsequent proceedings.
15.5. Any Party that prevails in arbitration or other legal proceeding arising out of this Agreement shall be entitled to recover reasonable attorney’s fees and costs, including administrative and filing fees, arbitrator compensation, and expert witness fees.
16. Miscellaneous.
16.1. No modification or amendment to this Agreement shall be binding unless it is in writing and signed by the person sought to be charged.
16.2. This Agreement may be executed in multiple counterparts and any Party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all counterparts taken together shall constitute but one and the same instrument. For purposes of this Agreement, facsimile signatures shall be deemed originals.
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IN WITNESS WHEREOF, the Parties hereto have set their hand as of the date and place stated below.
| MERCHANTS: | ||
| /s/ Tie LI | Dated: | 08/01/2025 |
| Tie LI |
| Visiontech Group Inc. | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie Li, Authorized Signatory | |||
| Nature’s Miracle Holding, Inc. | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie Li, Authorized Signatory | |||
| Natures Miracle, Inc. | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie LI, Authorized Signatory | |||
| Natures Miracle California, Inc. | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie LI, Authorized Signatory | |||
| Hydroman, Inc. | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie LI, Authorized Signatory | |||
| Hydroman Electric Corporation | |||
| By: | /s/ Tie Li | Dated: | 08/01/2025 |
| Tie LI, Authorized Signatory | |||
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| nm rebate, inc. | |||
| By: | /s/ Tie Li | Dated: | 08 / 01 / 2025 |
| Tie LI, Authorized Signatory | |||
| NM Data Inc. | |||
| By: | /s/ Tie Li | Dated: | 08 / 01 / 2025 |
| Tie LI, Authorized Signatory | |||
| WAVE: | ||
| Wave Advance, Inc. | ||
| By: | Dated: |
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Exhibit 10.9
STANDSTILL AGREEMENT
This Standstill Agreement (“Agreement”) is entered into as of August 6, 2025 (“Effective Date”), by and between MAXIMCASH SOLUTIONS LLC (“MaximCash”) and NATURE’S MIRACLE HOLDING, INC.; NATURE’S MIRACLE, INC.; NATURE’S MIRACLE (CALIFORNIA), INC.; HYDRO MAN, INC.; and VISIONTECH GROUP INC. (collectively, “Defendants”).
MaximCash and Defendants are sometimes referred to collectively as the “Parties” and individually as a “Party.”
RECITALS
A. MaximCash has filed an action against Defendants in the Third Judicial District Court, Salt Lake County, Utah, Case No. 250905494 (the “Litigation”) arising out of the Business Loan and Security Agreement dated December 30, 2024 (the “Loan Agreement”).
B. Defendants have represented that they will immediately make an interest payment of $61,720, sufficient to bring the Loan Agreement current through the Effective Date.
C. In reliance on such payment, and in the interest of facilitating further settlement discussions, the Parties desire to enter into this Agreement to temporarily suspend the Litigation for a limited period of time.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows:
1. Standstill Period. Upon receipt of the interest payment described in Section 2 below, MaximCash shall agree to forbear from taking any further action in the Litigation seeking default or otherwise prosecuting its claims, for a period commencing on August 6, 2025 and expiring on October 6, 2025 (“Standstill Period”).
2. Condition Precedent – Interest Payment. This Agreement shall become effective only upon Defendants’ payment to MaximCash of all accrued interest due under the Loan Agreement through the Effective Date. If such payment is not received, MaximCash shall have no obligation to forbear from prosecuting the Litigation.
3. Reservation of Rights.
(a) This Agreement is a temporary standstill only. MaximCash expressly reserves all rights and remedies under the Loan Agreement, applicable law, and in the Litigation.
(b) Upon expiration of the Standstill Period, or upon Defendants’ breach of this Agreement, MaximCash may immediately resume the Litigation, including seeking any and all available relief, without further notice.
4. Settlement Discussions. During the Standstill Period, the Parties shall negotiate in good faith to reach an agreement regarding the outstanding balance under the Loan Agreement. MaximCash may, at its sole discretion, offer a discount for early or lump-sum payoff during the Standstill Period.
5. No Waiver. Nothing contained herein shall be construed as a waiver of any default under the Loan Agreement or as an admission of liability by either Party.
6. Governing Law and Venue. This Agreement shall be governed by and construed under the laws of the State of Utah. Venue shall lie exclusively in the state and federal courts located in Salt Lake County, Utah.
7. Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof and may not be modified except in a writing signed by all Parties.
8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. Signatures delivered by electronic means shall be deemed effective.
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IN WITNESS WHEREOF, the Parties have executed this Standstill Agreement as of the Effective Date.
| MAXIMCASH SOLUTIONS LLC | ||||
| By: | ||||
| Name: | Mark Lev | |||
| Title: | ||||
| NATURE’S MIRACLE HOLDING, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| NATURE’S MIRACLE, INC. | HYDRO MAN, INC. | |||
| By: | By: | |||
| Name: | Name: | |||
| Title: | Title: | |||
| NATURE’S MIRACLE (CALIFORNIA), INC. | VISIONTECH GROUP INC. | |||
| By: | By: | |||
| Name: | Name: | |||
| Title: | Title: |
|||
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Exhibit 31.1
CERTIFICATION
I, Tie (James) Li, certify that:
| 1. | I have reviewed this report on Form 10-Q of Nature’s Miracle Holding Inc. for the quarter ending June 30, 2025; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Tie (James) Li | |
| Tie (James) Li | |
| Chief Executive Officer | |
August 14, 2025 |
Exhibit 31.2
CERTIFICATION
I, George Yutuc, certify that:
| 1. | I have reviewed this report on Form 10-Q of Nature’s Miracle Holding Inc. for the quarter ending June 30, 2025; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ George Yutuc | |
| George Yutuc | |
| Chief Financial Officer | |
August 14, 2025 |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nature’s Miracle Holding Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Tie (James) Li | |
| Tie (James) Li | |
| Chief Executive Officer | |
August 14, 2025 | |
| /s/ George Yutuc | |
| George Yutuc | |
| Chief Financial Officer | |
August 14, 2025 |