10-Q/A: Nocera, Inc. Files Amended 10-Q/A Report Following SEC Comments

Nocera, Inc. has filed an amended quarterly report on Form 10-Q/A to revise and update certain disclosures in response to comments from the SEC.

Summary

• Nocera, Inc. filed an amendment to its Quarterly Report on Form 10-Q for the period ended September 30, 2024, to address SEC comments and provide additional clarity.
• The amendment includes new certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.
• The company had 14,016,987 shares of common stock outstanding as of November 14, 2024.
• Net sales for the three months ended September 30, 2024, were $1,363,101, compared to $7,283,281 for the same period in 2023.
• Net sales for the nine months ended September 30, 2024, were $13,016,093, compared to $16,448,325 for the same period in 2023.
• The net loss attributable to the company for the nine months ended September 30, 2024, was $1,126,116, compared to a net loss of $1,563,081 for the same period in 2023.
• The company's disclosure controls and procedures were deemed ineffective due to material weaknesses.
• The company is working to remediate these weaknesses, including investing in IT systems, enhancing the organizational structure, and providing employee training.

Sentiment

Score: 4

Explanation: The document highlights both positive and negative aspects. While the company is taking steps to address its challenges, the decrease in sales and the identified material weaknesses in disclosure controls weigh negatively on the overall sentiment.

Positives

• The company is actively working to remediate material weaknesses in its disclosure controls and procedures.
• The net loss attributable to the company decreased for the nine months ended September 30, 2024, compared to the same period in 2023.
• The company is developing the cultivation of alternative aquaculture species to diversify its product offerings.
• The company is expanding and strengthening various sales channels to enhance market reach and drive revenue growth.

Negatives

• Net sales decreased significantly for the three months ended September 30, 2024, compared to the same period in 2023.
• The company's disclosure controls and procedures were deemed ineffective due to material weaknesses.
• The company has net current liabilities of $1,176,035 as of September 30, 2024.

Risks

• The company's auditor is located in Hong Kong, making it subject to the Holding Foreign Companies Accountable Act (HFCAA) and potential delisting if PCAOB inspections are not possible.
• The company received a deficiency letter from Nasdaq for not maintaining the minimum required closing bid price of $1.00 per share.
• The company acknowledges risks of potential delisting, current liabilities exceeding current assets, and operating cash flow deficits.
• The company may need to raise additional capital in the future, but there is no assurance it will be successful in doing so on acceptable terms.

Future Outlook

The company plans to enhance market penetration through the establishment of its own fish farms and diversify revenue streams through various sales channels, and expects to sell over five thousand tanks in the next five years.

Industry Context

The document mentions the Taiwan government's support for the Green Power and Solar Sharing Fish Farms initiative, indicating a focus on sustainable aquaculture practices. The company aims to be a global leader in land-based aquaculture, which aligns with the increasing demand for sustainable and traceable fish production.

Comparison to Industry Standards

• The document does not provide specific benchmarks for comparison.
• However, the company's focus on land-based RAS systems aligns with a growing trend in the aquaculture industry towards more sustainable and controlled farming methods.
• Comparable companies in the RAS space include AquaBounty Technologies and Atlantic Sapphire, but direct financial comparisons are limited without more detailed information.

Related Party Transactions

• Sales to Grand Smooth Corporation Limited, a company with the same director, were $12,498 for the nine months ended September 30, 2024.

Stakeholder Impact

• Shareholders face the risk of potential delisting from Nasdaq if the company cannot regain compliance with the minimum bid price rule.
• The company's efforts to remediate material weaknesses in disclosure controls are aimed at improving the reliability of financial reporting for all stakeholders.
• Employees may be affected by the company's cost-cutting measures and organizational restructuring.

Next Steps

• The company intends to actively monitor the closing bid price of its Common Stock and, as appropriate, will consider available options to regain compliance with the Bid Price Rule.
• The company expects to remediate these material weaknesses in the second half of 2024.
• The company plans to build its land-based fish farming demo sites in Taiwan, the U.S. and Brazil to promote its fish farming systems to the global market.

Key Dates