Nocera (US:NCRA)2025-05-06 21:00Operations and Market Focus - Nocera, Inc. has transitioned its operations from China to Taiwan, focusing on land-based aquaculture systems and consulting services[23]. - The company has shifted its operational focus from China to Taiwan, establishing a branch to cater to various sectors including individual investors and government-supported companies[57]. - The company aims to expand its operations into North and South America, targeting markets with growing populations and food demands[24]. - The company is expanding its fish farming demo sites in Taiwan by adding 20 units of RAS eel farming equipment and plans to build a catfish farm in the U.S. by the end of 2024[216]. - The company has initiated an e-commerce business in China in 2024, utilizing platforms like Douyin for retail expansion and integrating social commerce with seafood resources[217]. Financial Performance - For the year ended December 31, 2024, net sales were approximately $17.01 million, a decrease from approximately $23.9 million in 2023, representing a decline of about 29.5%[58][60]. - Revenues for the year ended December 31, 2024, were approximately $17.01 million, down from $23.9 million in 2023, indicating a decline of about 28.5%[91]. - The company incurred operating losses of $2,393,803 in 2024, compared to $4,159,354 in 2023, indicating a reduction in losses by approximately 42.5%[85]. - As of December 31, 2024, the company had working capital of $641,256 and an accumulated deficit of $21,238,881[85]. - Five customers accounted for approximately 81.8% of total revenue for 2024, highlighting a significant reliance on a small customer base[91]. - Approximately 98% of revenues are derived from a single product, eel, making the company highly susceptible to changes in market demand for this product[102]. Strategic Initiatives - Nocera acquired an 80% controlling interest in Meixin for $4,300,000, enhancing its consulting and management capabilities in aquaculture[33]. - The company plans to invest in an additional 500 tanks to increase species selection and product forms, aiming for direct wholesale options including live hauling and retail[65]. - The company has acquired SY Culture in 2024 to enhance market position and broaden product offerings, deemed not significant under asset, investment, and income tests[176]. - The company is focusing on expanding its sales and marketing strategy through online marketing and data intelligence to generate international sales leads[214]. Compliance and Regulatory Issues - The company has received a deficiency letter from Nasdaq regarding its stock price, requiring compliance by July 14, 2025[36]. - The company received a deficiency letter from Nasdaq for not maintaining a minimum closing bid price of $1.00 per share, with a compliance deadline of July 14, 2025[166][167]. - The company is identified as a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act, which could lead to delisting if not resolved within three years[135]. - The inability of the PCAOB to conduct inspections of the company's auditor may undermine investor confidence in the financial statements and audit quality[136]. - Compliance with the Foreign Corrupt Practices Act may put the company at a disadvantage compared to competitors not subject to these regulations, potentially affecting business opportunities[120]. Risks and Challenges - The company operates in a highly competitive aquaculture market, facing competition from larger entities and smaller regional suppliers[62]. - The company anticipates needing additional financing to fund capital expenditures, working capital, and operational losses, which could increase financial risk[94]. - Future acquisitions are part of the growth strategy, but they may divert management's attention and expose the company to integration risks[99]. - The company operates primarily in Taiwan, and any significant economic decline in Taiwan could adversely affect consumer demand for its services[112]. - The company is subject to currency fluctuations, particularly with the NT dollar, which could impact revenue reported in U.S. dollars[113]. - The company faces intense competition, and the loss of key executive officers could impair its business operations[95]. - The company has limited insurance coverage, which could result in substantial costs in the event of loss or litigation[104]. - The company may face significant legal proceedings that could divert management's attention and incur substantial expenses, potentially affecting its financial condition[116]. - Geopolitical conditions, including trade disputes and acts of war, could adversely impact the company's operations and financial results[139]. - The ongoing Russia-Ukraine conflict and Middle East tensions may increase costs, disrupt supply chains, and reduce sales and earnings[141]. Corporate Governance and Internal Controls - The company has identified material weaknesses in its internal control over financial reporting, which could lead to a loss of investor confidence[147]. - As of December 31, 2024, the company lacked effective controls over its financial reporting environment due to insufficient personnel and resources[148]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure requirements, which may affect investor attractiveness[168][172]. Stock and Shareholder Information - The common stock of the company is listed on The Nasdaq Capital Market under the symbol "NCRA" since August 11, 2022[76]. - Approximately 178,232,053 shares of common stock are available for issuance, which could dilute existing ownership positions[150]. - The company's common stock is listed on Nasdaq under an alternative initial listing standard, which could suppress trading prices and liquidity[146]. - The market valuation of the company may fluctuate significantly due to factors beyond its control, affecting the value of investments[156]. - The company has approximately 442 stockholders of record as of May 6, 2025, with its common stock listed on The Nasdaq Capital Market under the symbol "NCRA"[194]. Cybersecurity - The company has not formalized cybersecurity measures or dedicated teams, leaving it vulnerable to potential cyber threats[182]. - The company has not experienced significant cybersecurity incidents to date, but recognizes the risks associated with the absence of a formal cybersecurity framework[183]. - The company aims to enhance its cybersecurity measures by engaging external experts and developing a comprehensive cybersecurity framework[184]. Dividend Policy - The company does not expect to declare or pay any cash dividends in the foreseeable future, intending to retain earnings for business expansion[195]. - The company has not declared dividends on its common stock and plans to use earnings for working capital and growth, which may affect returns for investors[163].