Executive Summary / Key Takeaways

• Strategic Pivot and Diversification: Nocera, Inc. (NCRA) is undergoing a significant transformation, shifting from its historical focus on land-based Recirculating Aquaculture Systems (RAS) in Asia to a multi-faceted approach encompassing RAS development in Taiwan, the U.S., and Brazil, alongside strategic entries into catering and e-commerce.
• Technological Edge in Sustainable Aquaculture: NCRA's core RAS technology offers a controlled and traceable environment for fish, aiming to reduce water pollution and disease, providing a crucial competitive advantage in the growing global aquaculture market.
• Financial Headwinds and Liquidity Needs: Despite strategic initiatives, NCRA reported a net loss of $739,725 for H1 2025, with auditors expressing "going concern" concerns. The company plans to raise $40 million in the next 12 months to fund ambitious operating and capital expenditures.
• High-Stakes Growth Strategy: Management projects selling over five thousand RAS tanks in five years and expanding demo sites, signaling aggressive growth targets that hinge on successful capital raises and operational execution.
• Significant Risks to Monitor: Investors must weigh substantial risks, including a high customer concentration (95.33% of H1 2025 revenue from one customer), internal control weaknesses, and the potential for delisting due to the Holding Foreign Companies Accountable Act (HFCAA).

The Shifting Tides of Nocera: A Vision for Global Aquaculture

Nocera, Inc. (NASDAQ:NCRA) is charting an ambitious course, aiming to become a global leader in land-based aquaculture. The company's core mission revolves around providing consulting services and solutions for aquaculture projects, specifically leveraging its Recirculating Aquaculture Systems (RAS) technology to mitigate water pollution and disease issues in fisheries. This strategic focus positions Nocera at the intersection of growing global demand for sustainable seafood and the decreasing output from wild fisheries.

Nocera's journey began with its incorporation in Nevada in 2002, remaining dormant until a reverse merger with Grand Smooth Inc. Limited (GSI) in 2018. This merger brought GSI's fish farming container services in China under the Nocera umbrella. A pivotal strategic shift occurred in October 2020 when Nocera ceased all China operations, relocating its technology and back-office functions to Taiwan to capitalize on the Green Power and Solar Sharing Fish Farms initiative. This move marked a clear intent to expand its land-based fish farming expertise globally, specifically targeting Taiwan, North America, and South America.

The company's business model is structured around three primary segments: Fish Trading, Catering, and E-commerce Live-streaming. While fish trading, primarily eels, remains the largest revenue contributor, Nocera has diversified into bento box and fresh produce processing (Meixin acquisition in 2022) and, more recently, e-commerce live-streaming in China (Xinca acquisition in 2024) and the U.S. (Tachyonext investment in 2025). This diversification reflects a broader strategy to enhance market penetration and revenue streams beyond its core aquaculture technology.

Technological Moat: The Power of Recirculating Aquaculture Systems

At the heart of Nocera's long-term vision lies its proprietary Recirculating Aquaculture Systems (RAS) technology. These land-based systems are designed to create a controlled and traceable environment for fish species, offering a significant advantage over traditional farming methods. The core benefit of RAS is its ability to reduce water pollution and decrease disease problems, which are critical challenges in conventional aquaculture.

While specific quantitative performance metrics for Nocera's RAS technology are not detailed in the latest filings, the strategic intent is clear: to deliver superior environmental and operational outcomes. The controlled environment of RAS inherently allows for better management of water quality, temperature, and feed, which can lead to improved growth rates, higher survival rates, and consistent product quality. This technological approach also mitigates the seasonal impacts often associated with traditional fisheries, providing a more stable and predictable production cycle. Nocera's ongoing research and development efforts, including the use of fish farming containers for advanced water circulation technology, aim to further enhance these benefits.

For investors, this technological differentiation translates into a potential competitive moat. In an industry increasingly scrutinized for environmental impact, Nocera's RAS offers a sustainable solution that can command premium pricing or open access to markets with stringent environmental regulations. This focus on efficiency and sustainability can lead to lower operational costs over time, better margins, and a stronger market position as global demand for responsibly farmed fish grows. The company's plans to establish RAS demo sites in Taiwan, the U.S., and Brazil underscore its confidence in the technology's global applicability and market appeal.

Competitive Landscape: A Niche Player in a Growing Market

Nocera operates in a competitive aquaculture market, facing both direct and indirect rivals. Direct competitors include established players like AKVA Group (AKVA), Mowi ASA (MOWI), and Leroy Seafood Group ASA (LSG), which offer various aquaculture technologies and farming operations. AKVA Group, for instance, boasts established expertise in advanced aquaculture technology and global operational scale. Mowi and Leroy, while primarily focused on large-scale salmon farming and processing, also engage in system design and operational efficiency, benefiting from global brand recognition and extensive distribution networks.

Nocera's competitive positioning is characterized by its localized expertise and integrated service offerings, particularly in Taiwan. While larger competitors like AKVA Group may have broader technological offerings and greater innovation speed, Nocera's tailored consulting and project management for turnkey RAS operations could provide greater efficiency in implementation for regional clients. Nocera's smaller operational scale, however, could lead to higher operating costs per unit compared to its larger, vertically integrated rivals, potentially impacting profitability and bargaining power with suppliers. This scale difference also means Nocera may lag in overall market expansion and cash flow generation compared to Mowi or Leroy.

Indirect competitors, such as plant-based protein companies or advancements in vertical farming, also pose a threat by offering alternative protein sources. These alternatives could shift consumer preferences and reduce demand for traditional aquaculture. Nocera's strategic response involves leveraging its RAS technology's sustainability benefits and diversifying into e-commerce to capture new market segments and enhance pricing advantages. The company's customer concentration, with 95.33% of H1 2025 revenue from a single customer, represents a significant vulnerability, contrasting with the more diversified customer bases of larger competitors.

Financial Performance and Liquidity: A Path to Profitability

Nocera's recent financial performance reflects the challenges and investments associated with its strategic pivots. For the six months ended June 30, 2025, total revenue decreased to $8.51 million from $11.65 million in the comparable 2024 period. This decline was primarily driven by a significant reduction in the Meixin catering business (revenue dropped from $87,495 to $4,507) and a decrease in the fish trading business volume (from 443 tons to 388 tons), despite an increase in average eel selling prices. Gross profit also fell to $83,404 from $129,748 year-over-year.

Despite the revenue decline, the company's loss from operations improved, narrowing to $487,289 in H1 2025 from $676,158 in H1 2024, largely due to a decrease in general and administrative expenses. However, net loss attributable to the company widened to $739,725 in H1 2025, compared to $204,153 in H1 2024. This increase in net loss, despite lower operating losses, was influenced by other expenses, including interest expense for a bank loan and losses on investment disposals.

Liquidity remains a critical concern. As of June 30, 2025, Nocera reported an accumulated deficit of $21.98 million, a net loss of $760,262, and net cash used in operating activities of $320,289. The company's auditors have expressed "going concern" concerns. Management, however, believes current cash balances and anticipated operating cash flow will suffice for the next year. To fuel its ambitious growth, Nocera plans to raise approximately $40 million over the next twelve months through a combination of equity issuance, a leveraged buyout, and debt financing. These funds are earmarked for $5.9 million in operating activities (including $5 million for the fish business and $0.7 million for G&A) and $30 million for capital expenditures, primarily for business combinations and acquisitions.

Outlook and Risks: Charting an Uncertain Course

Nocera's forward-looking statements paint a picture of aggressive expansion. The company expects to sell over five thousand RAS tanks in the next five years and plans to expand its fish farming demo sites in Taiwan with 20 RAS eel farming units. A catfish farm in the U.S. is also slated for development by the end of 2024, with the goal of promoting its systems globally and attracting more international inquiries. The strategic investment in Tachyonext Inc. marks its official entry into the U.S. direct-to-consumer e-commerce market, complementing its existing e-commerce efforts in China.

However, this ambitious outlook is tempered by significant risks. The high concentration of revenue from a single customer exposes Nocera to considerable financial vulnerability. Internal control weaknesses, including a lack of written documentation and insufficient monitoring over financial reporting, have been identified, leading to past restatements. While remediation efforts are underway, expected to be completed in H2 2025, these issues highlight operational and governance challenges. Furthermore, Nocera faces a potential delisting risk under the Holding Foreign Companies Accountable Act (HFCAA) due to its auditor being located in Hong Kong and on the PCAOB's non-inspection list. If identified as a "Commission-Identified Issuer" for three consecutive years, its securities could be prohibited from trading. The Accelerating HFCAA could shorten this period to two years, intensifying the risk. Geopolitical conditions, inflation, and foreign currency fluctuations also pose ongoing threats to the company's financial performance.

Conclusion

Nocera, Inc. stands at a critical juncture, attempting to transform from a niche aquaculture technology provider into a diversified, global player in sustainable food systems and e-commerce. Its core RAS technology offers a compelling value proposition in an industry ripe for innovation, promising environmental benefits and operational efficiencies that could drive long-term growth. The company's strategic moves into new geographies and complementary business lines demonstrate a clear intent to capitalize on evolving market demands.

However, the path forward is fraught with financial and operational challenges. The significant net losses, the "going concern" warning, and the substantial capital required for its ambitious expansion plans underscore the high-risk, high-reward nature of this investment. Investors must closely monitor Nocera's ability to successfully execute its capital raising initiatives, remediate internal control weaknesses, and mitigate the concentration of credit risk. While the vision for sustainable aquaculture and diversified revenue streams is compelling, Nocera's ability to overcome these hurdles will ultimately determine its success in cultivating shareholder value.