Nocera, Inc. (NCRA) 10-K Review FY2024

In Brief: In FY2024, Nocera, Inc. (NASDAQ: NCRA) continued its transition from a shell company to an integrated aquaculture solutions provider. The Company designs, builds and consults on large‐scale land-based recirculating aquaculture systems (RAS) for fish farms, operates an eel trading and ready-to-eat bento business in Taiwan, and is expanding into e-commerce, technology transfer and global demo sites in North America and beyond.

Warren.AI 💰 3.5 / 10

— Revenue: $17.01 million (down 29% from $23.92 million in 2023) — Gross Profit: $0.33 million (up from $0.19 million) — Net Loss: $2.35 million (vs. $4.10 million loss in 2023) — Cash: $0.48 million at year-end (down from $1.23 million) — Key Risks: Going-concern uncertainties, reliance on key customers, currency fluctuations, Nasdaq bid-price compliance

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Company Overview

Founding & Structure: Nocera, Inc. (formerly a Nevada shell) completed a reverse merger in December 2018 with Hong Kong–based Grand Smooth Inc. After strategic integrations of Meixin (Taiwan food processing), Xinca (China e-commerce), and SY Culture (China retail), Nocera now operates through two Taiwanese branches and Chinese VIE entities along with a newly acquired 229-acre land parcel in Alabama for U.S. freshwater farming.

Core Business Lines:

1. RAS Design & Deployment: 15,000 gal. state-of-the-art fish tank systems, modular and energy-efficient.
2. Consulting & Technology Transfer: Turnkey project management for land-based fish farms.
3. Seafood Trading & Processing: Eel trading (770 tons, avg. price $15.31/kg) and Taiwanese “seafood porridge” bento retail (65,376 boxes) plus produce (310 302 kg).
4. E-Commerce & Retail: Douyin live-streaming in China for outside the farm sales of value-added products.

Strategy: Move from China to Taiwan (2020), capture governmental incentives for solar-fish farms, build demo sites, expand into North America and Latin America, and diversify species beyond eel to catfish and tilapia.

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Key Results from MD&A (Item 7)

Metric	FY2024	FY2023	Change
Revenue	$17.01 M	$23.92 M	▼ 29%
Gross Profit	$0.33 M	$0.19 M	▲ 71%
Operating Loss	$(3.29 M)	$(4.60 M)	▼ 28%
Net Loss	$(2.35 M)	$(4.10 M)	▼ 43%
OCF	$(1.57 M)	$(1.08 M)	▼ 46%
Cash Balance	$0.48 M	$1.23 M	▼ 61%

• Revenue Decline: Driven by lower eel fry supply in 2022–23 causing smaller harvest volumes and reduced produce processing volumes.
• Gross Profit Expansion: Slight improvement as RAS demo sales and higher-margin e-commerce commissions grew.
• Operating Expense Control: G&A down 9% despite higher CEO/CFO wages; goodwill impairment of $1.16 M recognized.
• Cash Burn: OCF drains from working capital build, warrant-liability remeasurement, and inventory.
• Liquidity Measures: $0.48 M cash remaining post-FY2024; officers committed to provide additional financing; seeking equity/debt raises.

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Financial Position & Cash Flows (Item 8)

• Assets: $4.88 M (↓ 3%), driven by cash decline and warrant-liability adjustment.
• Liabilities: $0.66 M (↓ 58%), as portion of secured debt repaid.
• Equity: $4.22 M (↑ 22%), reflecting equity infusions and net loss offset by foreign currency gains.

Operating Cash Flow: $(1.57 M)
• Non-cash goodwill impairment and depreciation: + $1.29 M
• Working capital drag (AR, inventory, deposits): – $114 K
• Warrant liability remeasurement gain: + $797 K

Investing CF: + $212 K
• Fair value liquidation of small equity stake

Financing CF: + $597 K
• Stock issuances: + $1.08 M
• Secured debt repayment: – $478 K

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Risks & Uncertainties (Item 1A)

1. Going Concern: $2.35 M net loss, negative OCF, $4.2 M equity vs. dwindling cash. Requires financing or cutbacks.
2. Customer Concentration: Top-5 clients ≈ 82% of 2024 revenue. Any slip in these accounts could severely dent top line.
3. Currency Exposure: NT$ depreciation risks translate to U.S. results. Minimal hedging in place.
4. Liquidity & Capital Raising: Nasdaq bid-price deficiency; risk of delisting. Any headwinds to new capital could impact operations.
5. Management & Staff: Key man risk: CEO, CFO and COO hold critical leadership roles.
6. Geopolitical & Natural Disasters: Taiwan typhoons and PRC-U.S. tensions may disrupt supply chains and farming operations.
7. Contingencies & Accounting: Material weaknesses in internal controls and restatement of Q1–Q3 2024 statements.
8. VIE Structure: Exposure to enforcement, changes in offshore‐onshore regulations, and reliance on contractual arrangements for core PRC assets.

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Corporate & Governance Highlights

• Board Structure: majority-independent board with Audit, Compensation and Nominating/Governance Committees in place.
• Audit Committee Audit Fees: $233,600 in 2024; transitioned from Centurion ZD to Enrome LLP in October 2024.
• Code of Ethics & Insider Trading: Adopted in 2022; pre-clearance for dips in bid-price; clawback policy for restatements enacted.
• SEC/XBRL: All 2024 forms filed in Inline XBRL.

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Outlook & Strategy

Short-Term:

• Secure additional working capital through equity or debt financings.
• Drive sales through Taiwan demo sites, U.S. catfish farm phasing, and enhanced e-commerce channels.
• Close monitoring of Nasdaq bid price; possible reverse split.

Long-Term:

• Global roll-out of modular RAS systems for shrimp, tilapia and sustainable proteins.
• Expand technology licensing and turnkey pilot projects in Europe and Middle East.
• Vertical integration: feed, hatchery and value-added processing.

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Investment Score: 3.5/10

Rationale: A pioneering aquaculture tech provider with diversified lines, but facing steep losses, cash strain, VIE risks and Nasdaq compliance. The potential is real, yet execution, capital and control headwinds cap near-term upside.

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Disclaimer: This blog post is provided for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence and consult a qualified financial advisor before making any investment decision.