Nocera, Inc. — FY2023 Form 10-K Summary
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2023; it does not provide standalone fourth-quarter results. Nocera operates primarily in Taiwan, combining recirculating aquaculture systems (RAS) and related services with eel/fish trading and Meixin’s food catering business. FY2023 revenue was principally from fish trading and catering, rather than RAS system sales.
Key financial metrics
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $23.92 million | $14.10 million |
| Gross profit / margin | $194,959 / 0.8% | $255,966 / 1.8% |
| Operating expenses | $4.48 million, including $2.25 million goodwill impairment | $2.77 million |
| Net loss | $4.34 million; attributable to Nocera shareholders: $4.29 million | $4.74 million; attributable to Nocera shareholders: $4.81 million |
| Basic and diluted loss per share | $0.4383 | $0.6111 |
| Cash from operating activities | $(1.06) million | $(1.77) million |
| Cash from investing activities | $(1.06) million | $(4.03) million |
| Cash from financing activities | $0.46 million | $6.29 million |
| Cash and cash equivalents at year-end | $1.23 million | $2.91 million |
| Total assets / equity | $5.03 million / $3.26 million | $8.14 million / $6.18 million |
| Current secured borrowing | $487,800 | $214,913 current, plus $436,341 long-term |
Revenue increased about 70%, but gross profit declined and gross margin contracted to less than 1%. FY2023’s continuing-operations loss included the goodwill impairment; FY2022’s reported net loss also included the discontinued XFC operation and disposal loss. The balance sheet shows current assets of $1.71 million and current liabilities of $1.77 million, implying negative working capital of approximately $58,000. A $1.18 million warrant liability is also reported.
Material changes versus FY2022
- Revenue rose by approximately $9.81 million. Management attributes about $14.9 million to fish trading and $8.9 million to Meixin catering in 2023.
- Gross profit fell by approximately $61,000 despite higher revenue; management links the margin decline to a greater share of lower-margin fish trading and reduced catering revenue.
- Nocera recorded a $2.25 million impairment of Meixin goodwill, reducing its carrying amount to $1.66 million.
- Cash fell by approximately $1.68 million. Operating cash outflow improved year over year, while investing outflows were lower than in 2022, when the Meixin acquisition was a major use of cash.
- The company issued common shares during 2023, including shares associated with warrant exercise and services or compensation.
Outlook, risks and unusual items
- Going concern: The auditor highlighted substantial doubt about Nocera’s ability to continue as a going concern. Management says current cash and anticipated operating cash flows should cover working capital needs for at least a year after financial-statement issuance, but acknowledges that additional capital may be needed and is not assured.
- Business plans: Management plans to expand fish-farm/RAS operations, develop U.S. operations on its 229-acre Alabama property, add Taiwan demonstration capacity and pursue international markets. It refers to a U.S. catfish farm by the end of 2024 and a goal of selling more than 5,000 tanks over five years; these are plans, not guaranteed results. No quantified financial guidance is provided.
- Concentration and margins: Five customers generated approximately 80.8% of FY2023 revenue. The filing also describes eel as approximately 98% of revenue, a characterization that should be reconciled with its stated fish-trading and catering revenue mix.
- Financial reporting and liquidity risks: Management found disclosure controls and internal control over financial reporting ineffective, citing inadequate documentation, review and monitoring, trained personnel, accounting systems and segregation of duties. The company says it is pursuing remediation.
- Other material risks: The filing highlights reliance on Taiwan suppliers and markets, foreign-exchange exposure without hedging, limited insurance, dependence on Meixin contractual VIE arrangements, and potential dilution or difficulty accessing capital. It also discloses a restriction on Form S-3 offerings tied to missing Meixin acquisition financial information, expected to last until that information is no longer required.
- Goodwill and audit: The independent auditor issued an unqualified opinion on the financial statements and identified Meixin goodwill valuation as a critical audit matter. The audit did not include an opinion on internal-control effectiveness.
- Corporate developments: The filing says a June 2023 Zhe Jiang acquisition remained subject to unresolved diligence/closing complexities. It also reports a January 2024 VIE agreement involving Xinca. The filing provides no clear completed-acquisition financial impact for these developments.
Most important facts for investors to verify
- Reconcile inconsistent filing disclosures: FY2023 net loss is $4.34 million in the audited statements, while portions of the MD&A and risk factors cite different loss figures; working capital is described as both positive $87,409 and negative approximately $58,000 based on the balance sheet.
- Confirm the actual revenue and gross-profit mix by business, including the claim that eel represents approximately 98% of revenue and the reported $14.9 million fish-trading and $8.9 million catering figures.
- Assess the company’s near-term funding needs, cash burn, secured-loan repayment terms and the practical availability of shareholder or external financing.
- Track remediation of material weaknesses and the reliability of future financial reporting, including the status of Meixin financial information and the Form S-3 restriction.
- Verify progress, funding and permitting for the Alabama farm and other expansion plans, as well as the status and terms of the Zhe Jiang and Xinca arrangements.
- Evaluate customer concentration, Meixin VIE enforceability, and potential share dilution from warrants, equity compensation and other authorized shares.