Nocera (NCRA) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01There is substantial doubt of our ability to continue as a going concern
2. 02We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful
3. 03If we fail to raise capital when needed it will have a material adverse effect on our business, financial condition and results of operations
4. 04Our failure to successfully market our brands could result in adverse financial consequences
5. 05We may not generate the same level of revenues from general construction projects
6. 06There is no assurance that we will be profitable
7. 07We may not have the ability to manage our growth
8. 08We will need additional financing in order to grow our business
9. 09We rely on our executive officers
10. 10We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed
11. 11We may have inadvertently violated Section 13(k) of the Exchange Act (implementing Section 402 of the Sarbanes-Oxley Act of 2002) and may be subject to sanctions as a result
12. 12Future acquisitions may have an adverse effect on our ability to manage our business
13. 13The value of seafood which we sell (e.g., eel) is subject to fluctuation which may result in volatility of our results of operations and the value of an investment in us
14. 14We are highly susceptible to changes in market demand for the types of seafood for which our recirculating aquaculture systems are used
15. 15A portion of our revenues are derived from a single product, eel and therefore we are highly susceptible to changes in market demand, which may be affected by factors over which we have limited or no control
16. 16There are risks associated with outsourced production that may result in a decrease in our profit
17. 17We have limited insurance coverage
18. 18Competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours
19. 19We may produce products of inferior quality which would cause us to lose customers
20. 20If our technologies or products are stolen, misappropriated, or reverse engineered, others could use the technologies to produce competing technologies or products
21. 21We are subject to certain risks by virtue of our international operations
22. 22Natural disasters or other catastrophic events could harm our operations
23. 23The primary substantial portion of our revenues will be derived from Taiwan
24. 24Currency fluctuations may adversely affect our business and if the NT dollar were to decline in value, that would reduce our revenue in U.S. dollar terms
25. 25We may be subject to product liability claims if people or properties are harmed by the services sold by us
26. 26Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
27. 27We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation, the loss of such assets would have a severe negative affect on our operations and liquidity

Regulatory Risks

1. 28We must comply with the Foreign Corrupt Practices Act while many of our competitors do not
2. 29Future laws, regulations and standards relating to corporate governance and public disclosure may create uncertainty for public companies, which may increase legal and financial compliance costs and make some activities more time consuming
3. 30Relations between the PRC and Taiwan could negatively affect our business and financial status and therefore the market value of your investment
4. 31A significant disruption in the operations of our suppliers in Taiwan, such as a trade war or political unrest, could materially adversely affect our business, financial condition and results of operations
5. 32Our business, including our costs and supply chain, is subject to risks associated with manufacturing
6. 33On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong, because of positions taken by PRC authorities in such jurisdictions
7. 34Our contractual arrangements may not be as effective in providing operational control as direct ownership and our VIE shareholders may fail to perform their obligations under our contractual arrangements
8. 35We may lose the ability to use, or otherwise benefit from licenses and assets held by one of our VIEs, which could render us unable to conduct some or all of our business operations and constrain our growth
9. 36Geopolitical conditions, including trade disputes and direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial results
10. 37We currently maintain operations in Taiwan, and may in the future expand, or seek to expand, our operations to additional foreign jurisdictions
11. 38We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
12. 39Evolving U.S. trade regulations and policies with China may in the future have a material and adverse effect on our business, financial condition and results of operations

Risks Related to our Securities

1. 40Our common stock has been listed on Nasdaq under the alternative initial listing standard which could suppress the trading price of our securities and the liquidity of your investment
2. 41We have a large number of authorized but unissued shares of our common stock which will dilute your ownership position when issued
3. 42Sales of our currently issued and outstanding shares of common stock and shares of common stock underlying warrants may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our common stock
4. 43An active, liquid, and orderly market for our common stock may not develop
5. 44Shares of our common stock may continue to be subject to illiquidity because our shares may continue to be thinly traded and may never become eligible for trading on a national securities exchange
6. 45We may issue preferred stock in different series with terms that could dilute the voting power or reduce the value of our common stock
7. 46The market valuation of our business may fluctuate due to factors beyond our control and the value of your investment may fluctuate correspondingly
8. 47The trading prices of our common stock could be volatile and could decline following this offering at a time when you want to sell your holdings
9. 48Additionally, the global economy and financial markets may be adversely affected by geopolitical events, including Russia’s invasion of Ukraine and the conflicts in the Middle East
10. 49Future sales or perceived sales of our common stock could depress the trading prices of our common stock
11. 50Our common stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock
12. 51We currently do not intend to declare dividends on our common stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our common stock
13. 52Because we initially became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms
14. 53We may not be able to satisfy the continued listing requirements of Nasdaq to maintain a listing of our common stock
15. 54We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors
16. 55The elimination of personal liability against our directors and officers under Nevada law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses
17. 56If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
18. 57The inability to use Form S-3 for securities offerings could adversely affect our ability to access capital in the markets and may hinder our growth strategies by limiting our funding options