Nocera (US:NCRA)2025-05-15 21:00Business Expansion and Acquisitions - The company plans to sell over 5,000 tanks in the next five years, targeting markets in Taiwan, the U.S., and Brazil[117]. - The company completed the acquisition of 229 acres of land in Montgomery County, Alabama, for $857,870, intending to build RASs for fish farming[121]. - The company purchased an 80% controlling interest in Meixin Institutional Food Development Co., Ltd. for $4,300,000, enhancing its food processing capabilities[114]. - The company aims to expand its fish farming demo sites in Taiwan by adding 20 units of RAS eel farming equipment by the end of 2024[118]. - The company is actively working to resolve complexities related to the acquisition of Zhe Jiang Xin Shui Hu Digital Information, Ltd., which involves issuing 1,500,000 shares of common stock[115]. - The company is poised to grow its operations in Taiwan and expand into North and South America, aiming to become a global leader in land-based aquaculture[111]. - The company plans to build land-based fish farming demo sites in the U.S., Taiwan, Brazil, Japan, and Thailand to promote its fish farming systems globally, requiring additional capital for construction, marketing, and operations[203]. - The company expects to obtain financing from shareholders or raise additional capital through the sale of equity or debt securities, with shareholder commitment to provide necessary financing[203]. Financial Performance - Net sales for the three months ended March 31, 2025, were approximately $4.53 million, a decrease of 7.5% from $4.89 million in the same period of 2024[182]. - Gross profit for the three months ended March 31, 2025, was $50,950, down 39.5% from $83,961 in the comparable period in 2024[184]. - General and administrative expenses decreased to $334,371 for the three months ended March 31, 2025, compared to $451,464 in the same period of 2024, reflecting a reduction in salary and commission expenses[185]. - Net loss attributable to the Company for the three months ended March 31, 2025, was $248,017, an improvement from a net loss of $288,576 in the comparable period in 2024[188]. - Net cash used in operating activities was $115,102 for the three months ended March 31, 2025, significantly lower than $460,994 in the same period of 2024[199]. - The Company had an accumulated deficit of $21,486,898 as of March 31, 2025[190]. Revenue Recognition and Accounting Policies - Revenue is primarily generated from fish trading, bento box, and fruit and vegetable processing, with revenue recognized upon delivery of goods to customers[170][171]. - The company has adopted ASU 2014-09 for revenue recognition, which requires recognizing revenue that reflects the consideration expected in exchange for goods or services[169]. - Accounts receivable are stated at original amounts less an allowance for doubtful accounts, based on a review of outstanding amounts[147]. - Goodwill is tested for impairment annually, with an impairment charge recognized only when the estimated fair value of a reporting unit is less than its carrying amount[158]. - Deferred tax assets and liabilities are recognized for expected future tax consequences of differences between tax bases and financial reporting amounts[175]. - Business acquisitions are accounted for under ASC 805, with costs measured as the aggregate of acquisition date fair values of assets transferred, liabilities assumed, and equity instruments issued[204]. - Goodwill is recorded for the excess of total acquisition costs over the fair value of identifiable net assets of the acquired business[204]. - The company must exercise judgment and make estimates regarding fair values of business combinations, which may impact results of operations and financial position if adjustments are required[205]. - Estimates of future cash flows from acquired assets are critical, as changes in actual results compared to projections could lead to impairment charges[205]. - The economic lives of certain acquired assets are estimated for calculating depreciation and amortization expenses, which could materially impact results if these estimates change[205]. Market and Operational Challenges - The company has ceased all operations in China and moved its technology and back-office operations to Taiwan, focusing solely on Taiwanese operations[110]. - The company employs a sales and marketing strategy targeting government-supported solar fish farms, planning to expand through online marketing and data intelligence[116]. - The company is facing inflationary pressures affecting commodity prices, which may impact profit margins if not mitigated through pricing actions[123]. - The foreign currency translation loss for the three months ended March 31, 2025, was $2,838, compared to a gain of $57,307 in the same period of 2024[183]. Financing and Capital Expenditures - The Company anticipates raising approximately $40 million through financing activities over the next twelve months to support capital-intensive strategic initiatives[193]. - The Company plans to allocate approximately $30 million toward capital expenditures primarily for business combinations and acquisitions[194]. - The average selling price of eels increased from $14.58 to $15.16 per kilogram for the comparable periods in 2024 and 2025, despite a decrease in volume[189]. Valuation and Financial Instruments - The company recognizes impairment losses for financial instruments, adjusting their carrying amounts through a loss allowance account, except for certain investments measured at FVTOCI[139]. - The company applies ASC Topic 820 for fair value measurements, which defines fair value as the exit price in an orderly transaction between market participants[142][143]. - Cost of sales includes material costs, labor costs, and depreciation, with write-downs of inventories recorded to the lower of cost or net realizable value[174]. - The company uses the Black-Scholes pricing model to value share-based compensation, incorporating subjective assumptions such as expected volatility[163][164].