UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
12b-25
NOTIFICATION
OF LATE FILING
(Check
one):
☒
Form 10-K ☐ Form 20-F ☐ Form 11-K ☐ Form 10-Q ☐ Form 10-D ☐ Form N-CEN ☐ Form N-CSR
For
Period Ended: December 31, 2022
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☐ |
Transition
Report on Form 10-K |
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☐ |
Transition
Report on Form 20-F |
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☐ |
Transition
Report on Form 11-K |
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☐ |
Transition
Report on Form 10-Q |
For
the Transition Period Ended:
Nothing
in this form shall be construed to imply that the Commission has verified any information contained
herein.
|
If
the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:
PART
I — REGISTRANT INFORMATION
Nova
LifeStyle, Inc.
Full
Name of Registrant
N/A
Former
Name if Applicable
6565
E. Washington Blvd
Address
of Principal Executive Office (Street and Number)
Commerce,
CA 90040
City,
State and Zip Code
PART
II — RULES 12b-25(b) AND (c)
If
the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b),
the following should be completed. (Check box if appropriate)
|
(a) |
The
reason described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense |
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☒ |
(b) |
The
subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-CEN or Form N-CSR, or portion
thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report
or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof, will be filed on or before the
fifth calendar day following the prescribed due date; and |
|
|
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(c) |
The
accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if applicable. |
PART
III — NARRATIVE
State
below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-CEN, N-CSR, or the transition report or portion thereof, could not
be filed within the prescribed time period.
Nova
Lifestyle, Inc. (the “Company”) is unable to file its Annual Report on Form 10-K for the fiscal year ended December
31, 2022 within the prescribed time period without unreasonable effort or expense because additional time is required to complete the
preparation of the Company’s financial statements in time for filing. The Company anticipates filing its Form 10-K on or before
the fifteenth calendar day following the prescribed due date.
PART
IV — OTHER INFORMATION
(1) |
Name
and telephone number of person to contact in regard to this notification |
|
Thanh
H. Lam |
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323 |
|
888-9999 |
|
(Name) |
|
(Area
Code) |
|
(Telephone
Number) |
(2) |
Have
all other periodic reports required under Section 13 or 15(d) of the Securities Exchange
Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months
or for such shorter period that the registrant was required to file such report(s) been filed
? If answer is no, identify report(s).
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|
☒
Yes ☐ No |
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(3) |
Is
it anticipated that any significant change in results of operations from the corresponding
period for the last fiscal year will be reflected by the earnings statements to be included
in the subject report or portion thereof?
☒
Yes ☐ No
If
so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons
why a reasonable estimate of the results cannot be made. |
Nova
LifeStyle Inc.
(Name
of Registrant as Specified in Charter)
has
caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.
Date:
April 3, 2023 |
By: |
/s/
Thanh H. Lam |
|
|
Thanh
H. Lam |
|
Title: |
Chief
Executive Officer |
Part
IV. (3) Anticipated Significant Changes in Results of Operations
We
anticipate reporting the following significant changes in the results of operations from the 2022 fiscal year.
Cost
of Sales
Cost
of sales from continuing operations consists primarily of costs of finished goods purchased from third-party manufacturers. Total cost
of sales from continuing operations increased by 192% to $20.53 million for the year ended December 31, 2022, compared to $7.03 million
for 2021. Cost of sales as a percentage of sales increased to 161% for the year ended December 31, 2022, compared to 56% for 2021. The
increase in cost of sales in dollar term and cost of sales as a percentage of sales, was mainly due to our write down of $12.90 million
of the slow-moving inventory, primarily the jade mats in Malaysia, to the lower of cost and net
realizable value for 2022, compared to no inventory write down for 2021. The substantial difference of the inventory write downs
between the years ended December 31, 2022 and 2021, was caused by the ownership transfer of the jade mats in Malaysia from Nova HK to
Nova Malaysia on February 15, 2022, as Nova HK entered a de-registration process in February 2022 and its operations were reported as
discontinued operations for all periods presented, and thus the write down of $15.96 million of the jade mats in Malaysia was reported
from the Company’s discontinued operations for 2021.
Moreover,
if total cost of sales from continuing operations excluded our inventory write down of $12.90 million for the year ended December 31,
2022, total cost of sales from continuing operations would increase by 8% to $7.62 million for the year ended December 31, 2022, compared
to $7.03 million for 2021, and cost of sales as a percentage of sales would increase to 60% for the year ended December 31, 2022, compared
to 56% for 2021. The increase in cost of sales in dollar term and cost of sales as a percentage of sales, was a result of the increase
in our direct container sales which came with low profit margin.
Gross
(Loss) Profit
Gross
loss from continuing operations was $7.78 million for the year ended December 31, 2022, compared to gross profit of $5.52 million for
2021, representing a decrease in gross profit of $13.30 million. Our gross loss margin was 61% for the year ended December 31, 2022,
compared to a gross profit margin of 44% for 2021. The decrease in gross profit and gross profit margin, was mainly a result of our inventory
write down of $12.90 million for 2022, primarily for the jade mats in Malaysia, compared to no inventory write down for 2021. For 2021,
the write down of $15.96 million of the jade mats was reported from the Company’s discontinued operations, since the ownership
of the jade mats remained with Nova HK until February 2022, which operations were reported as discontinued operations for all periods
presented.
Moreover,
if total cost of sales from continuing operations excluded our inventory write down of $12.90 million for the year ended December 31,
2022, gross profit would be $5.12 million for the year ended December 31, 2022, compared to gross profit of $5.52 million for 2021, and
our gross profit margin would be 40% for the year ended December 31, 2022, compared to a gross profit margin of 44% for 2021. The decrease
in gross profit and gross profit margin, was primarily due to the increasing direct container sales with low profit margin.
Other
Expenses, Net
Other
expenses, net, from continuing operations were $851,166 for the year ended December 31, 2022, compared to $200,675 for 2021, representing
an increase in other expenses of $650,491. The increase in other expenses was due primarily to an increase in foreign exchange loss of
$737,507 to $639,432 for the year ended December 31, 2022 from foreign exchange gain of $98,075 for 2021. The increase in foreign exchange
loss was mainly a result of the depreciation of Malaysian Ringgit against U.S. dollars on the Company’s assets in Malaysia. However,
the increase in other expenses was partially offset by a decrease in interest expenses of $97,928 to $25,216 for the year ended December
31, 2022, compared to $123,144 for 2021.
Loss
from Continuing Operations
As
a result of the foregoing, our loss from continuing operations was $17.08 million for the year ended December 31, 2022, compared to $4.23
million for 2021.
Loss
from Discontinued Operations
On
February 15, 2022, we transferred our entire assets and business in Nova HK to Nova Malaysia, one of our subsidiaries. Operations of
Nova HK were reported as discontinued operations in the accompanying consolidated financial statements for all periods presented. We
had loss from discontinued operations of $0.03 million and $15.74 million for the years ended December 31, 2022 and 2021, respectively.
Net
Loss
As
a result of the foregoing, our net loss was $17.10 million for the year ended December 31, 2022, compared to $19.96 million for 2021.
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