Nocera (US:NCRA)2025-11-14 22:01Aquaculture Systems and Expansion - The company provides land-based recirculation aquaculture systems (RAS) for fish farming, focusing on design, development, and production of large-scale fish tank systems [116]. - As of September 30, 2021, the company launched its first RAS demo site in Taiwan and is promoting RAS technology while seeking cooperation with the local solar energy industry [119]. - The company plans to sell over 5,000 tanks in the next five years, with production facilities to be established in Taiwan and sales targeted at the Americas and Europe [126]. - The company completed the acquisition of 229 acres of land in Montgomery County, Alabama, for building RAS systems for fish farming, with construction evaluations ongoing [127]. - The company aims to expand its sales and marketing strategy targeting government-supported solar fish farms, utilizing online marketing and data intelligence [125]. - The company plans to build land-based fish farming demo sites in Taiwan, the U.S., and Brazil, requiring additional capital for construction, marketing, and operations [216]. Financial Performance - Net sales for the three months ended September 30, 2025, were $1,603,392, an increase from $1,363,101 in the same period of 2024, primarily driven by improved results from the Meixin catering and fish trading businesses [192]. - For the nine months ended September 30, 2025, net sales decreased to $10,109,236 from $13,016,093 in 2024, mainly due to weaker performance in the Meixin catering and fish trading businesses [193]. - Gross profit for the three months ended September 30, 2025, was $49,102, up from $34,131 in 2024, attributed to better operating results [195]. - Gross profit for the nine months ended September 30, 2025, decreased to $132,506 from $163,879 in 2024, reflecting weaker operating results [196]. - General and administrative expenses for the three months ended September 30, 2025, were $869,686, significantly higher than $335,202 in 2024, due to increased audit and consulting fees [197]. - Net loss attributable to the company for the three months ended September 30, 2025, was $1,500,789, compared to a loss of $315,267 in 2024 [203]. - The company recorded an income tax expense of $143,431 for the nine months ended September 30, 2025, compared to $121,871 in 2024, reflecting an evaluation of tax impacts [202]. Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, were $2,034,205, compared to $372,270 in 2024, indicating a significant increase [155]. - The company had a cash balance of $2,034,205 as of September 30, 2025, with net cash used by operating activities amounting to $1,123,115 [205]. - The company anticipates raising approximately $40 million through financing activities over the next twelve months to support capital-intensive strategic initiatives [208]. - Planned cash outflows include approximately $5.9 million for operating activities and $30 million for capital expenditures related to business combinations and acquisitions [209]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $1,123,115, driven by a net loss of $2,272,286, partially offset by non-cash adjustments [211]. - Net cash used in investing activities was $135,942 for the nine months ended September 30, 2025, primarily due to cash outflows of $500,000 related to the investment in Tachyonext [213]. - Net cash provided by financing activities amounted to $2,869,549 for the nine months ended September 30, 2025, resulting from the exercise of warrants and issuance of preferred stock [215]. - The company expects to obtain financing from shareholders or raise additional capital through equity or debt securities to meet long-term operating requirements [216]. Accounting and Revenue Recognition - The company recognizes revenue from fish trading, bento box processing, and e-commerce live streaming, with revenue recognized upon delivery or sale confirmation [178][179][180]. - The company has adopted ASU 2014-09 for revenue recognition, ensuring revenue reflects the transfer of goods or services to customers [177]. - Cost of sales primarily includes material costs, labor costs, and depreciation, with inventory write-downs recorded as necessary [182]. - Inventories are stated at the lower of cost or net realizable value, with costs determined using the weighted average method [158]. - Goodwill is tested for impairment annually, with any impairment recognized when the estimated fair value of a reporting unit is less than its carrying amount [169]. - The company applies ASC Topic 820 for fair value measurements, utilizing quoted market prices when available and valuation techniques otherwise [151][154]. - Financial assets measured at amortized cost are subject to impairment assessments, with loss allowances recognized based on expected credit losses [146][147]. - The company recognizes liabilities for contingencies when it is probable that a loss has occurred and a reasonable estimate can be made [176]. - The acquisition method of accounting requires estimates and assumptions regarding fair values, which could materially impact results if adjustments are needed [218]. - The company incurred transaction costs directly attributable to acquisitions, which are expensed as incurred, impacting financial results [217]. Market and Operational Challenges - Geopolitical conditions and inflation are identified as key factors that may impact the company's operations and financial performance [129][130]. - The company is focused on reducing water pollution and disease in fisheries, positioning itself as a global leader in land-based aquaculture [118]. - The company entered into a series of Variable Interest Entity Purchase Agreements, acquiring controlling interests in Meixin, Xinca, and SY Culture, enhancing its operational footprint [120][121][122]. - The company acquired a 35% equity interest in Tachyonext Inc. for $500,000, recognizing a share of loss of $(315,224) for the year ended September 30, 2025 [124]. - In 2024, the company initiated e-commerce operations in China, utilizing platforms like Douyin to enhance retail reach and optimize margins through social commerce [123].