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NOCERA, INC. (NCRA)·Q4 2021 Earnings Summary

Executive Summary

  • Q4 revenue surged to $7.08M, driven by Taiwan construction services (XFC), lifting FY 2021 revenue to $9.95M, up 733% year over year, but the quarter posted a ~$9.15M net loss due to massive Q4 share-based and equity-settled compensation recorded in G&A .
  • Gross margin compressed in 2021 (FY 9.5%; Q4 ~8.1%) as mix shifted to construction services with higher cost of sales; nine-month gross profit was $0.37M versus FY $0.94M, implying Q4 gross profit of ~$0.57M on the $7.08M revenue ramp .
  • Operating expenses ballooned in Q4 (FY G&A $10.42M vs. nine months $1.03M), primarily non-cash share-based compensation ($6.64M) and consultancy services settled by equity ($3.05M), creating a Q4 operating loss of ~$9.10M and FY net loss of $9.62M .
  • No Q4 earnings call transcript or formal guidance found; management’s press release cites “continued strong demand for RAS as well as construction services” as 2022 drivers . Consensus estimates not available.

What Went Well and What Went Wrong

What Went Well

  • Revenue inflection: FY 2021 revenue reached $9.95M (+733% y/y) on construction services (XFC) delivery; management emphasized “significant growth in our total sales, operating income, and shareholders’ equity” and expected “continued strong demand” for RAS and construction services .
  • Cash and equity improved: Year-end cash rose to $2.44M (from $1.02M), shareholders’ equity to $4.77M (from $2.55M), supported by capital raises and equity issuance .
  • Operating cash flow positive: FY net cash provided by operating activities was $0.25M, reversing prior-year use of cash, aided by working capital dynamics as projects progressed .

What Went Wrong

  • Heavy Q4 non-cash expenses: FY G&A of $10.42M (vs. $1.03M for nine months) reflects substantial Q4 share-based comp ($6.64M) and consultancy settled in equity ($3.05M), driving a ~($9.10M) Q4 operating loss and FY net loss of ($9.62M) .
  • Margin pressure: FY gross margin fell to ~9.5% as construction services carried higher costs; nine months gross profit was $0.37M vs. FY $0.94M, implying modest Q4 gross margin of ~8.1% despite revenue surge .
  • Customer concentration and execution risk: 2021 revenue was concentrated (one customer ~58% in 2021) and mix shift from general construction to fish/solar farms carries uncertainty; internal controls remained weak (no audit committee, inadequate segregation of duties) .

Financial Results

MetricQ1 2021Q2 2021Q3 2021Q4 2021FY 2021
Revenue ($)$1,579,486 $1,267,547 $18,366 $7,079,926 (FY $9,945,325 − 9M $2,865,399) $9,945,325
Gross Profit ($)$348,644 $73,490 $(52,136) $574,594 (FY $944,592 − 9M $369,998) $944,592
Gross Margin (%)22.1% (348,644/1,579,486) 5.8% (73,490/1,267,547) −283.8% (−52,136/18,366) 8.1% (574,594/7,079,926) 9.5% (944,592/9,945,325)
G&A ($)$235,235 $334,991 $239,462 $9,387,071 (FY $10,419,684 − 9M $1,032,613) $10,419,684
Operating Income (Loss) ($)$113,409 $(261,501) $(291,598) $(9,098,158) (FY $(9,475,092) − 9M $(−376,934)) $(9,475,092)
Net Income (Loss) ($)$49,490 $(272,133) $(275,123) $(9,149,586) (FY $(9,619,079) − 9M $(−469,493)) $(9,619,079)
Basic EPS$0.0054 $(0.0298) $(0.0297) N/A (not separately disclosed)$(1.0500)
Diluted EPS$0.0036 $(0.0298) $(0.0297) N/A (not separately disclosed)$(1.0500)
  • KPIs and Balance Sheet (Year-end 2021): Cash $2.44M; Total Assets $6.87M; Total Equity $4.77M; Working Capital ~$4.30M (Current Assets $6.40M − Current Liabilities $2.10M) . Operating Cash Flow $0.25M; Share-based Compensation $6.64M; Consultancy settled by equity $3.05M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company guidance2022 / near-termNoneNone provided in Q4 press release or filingsMaintained (no guidance)

Earnings Call Themes & Trends

(No Q4 earnings call transcript located; below synthesizes themes from Q1–Q3 10-Qs and FY press/10-K.)

TopicPrevious Mentions (Q2 & Q3 2021)Current Period (Q4 2021)Trend
Demand/Business mixQ2/Q3: Revenue growth tied to Xin Feng Construction (XFC) construction services; RAS demo launched in Taiwan FY release cites “continued strong demand” for RAS and construction services Positive demand; mix tilted to construction
Geography/StrategyShift focus from China to Taiwan; global interest (Japan, Thailand, Jordan, South Africa, U.S.) Strategy reiterated; Taiwan construction drove 2021 revenue Expansion-oriented
Supply chain/COVIDCOVID-19 disruption risk acknowledged in Q2/Q3 MD&A No specific Q4 update beyond ongoing operations Ongoing risk, not quantified
MarginsCost of sales increased with construction projects, depressing margins in Q2/Q3 FY gross margin 9.5%; Q4 ~8.1% on mix Pressured by mix
Capital/Equity usagePreferred issuance/warrants; equity comp growing; warrant liability recognized in 2021 Large Q4 non-cash G&A (share-based, equity-settled consulting) Non-cash expense surge in Q4
Controls/GovernanceMaterial weaknesses (no audit committee; inadequate segregation of duties) Not specifically updated in Q4 press; persists into year-end Unresolved

Management Commentary

  • “We are pleased to report significant growth in our total sales, operating income, and shareholders’ equity. Fiscal 2021 saw strong growth in our construction services division. We expect there to be continued strong demand for our Recirculating Aquaculture Systems as well as construction services.” – Jeff Cheng, President, CEO and Chairman .

Q&A Highlights

  • No Q4 2021 earnings call transcript found; no Q&A available. (Searched company transcripts and press releases across 2021–early 2022; none returned) [functions.SearchDocuments: no results].

Estimates Context

  • Wall Street consensus estimates: Not available. Attempts to retrieve S&P Global consensus for Q4 2021 and FY 2021 encountered no accessible data for this microcap; treat estimates as unavailable (no comparison possible).

Key Takeaways for Investors

  • Q4 topline inflection came from Taiwan construction services, implying execution capability and pipeline conversion, but margins remain thin in this mix .
  • The FY loss was driven by Q4 non-cash items (equity-based compensation and equity-settled consulting); cash flow from operations was positive for the year, partially de-risking liquidity alongside higher year-end cash and equity .
  • Customer concentration and transition from general construction to fish/solar projects pose revenue visibility risk; monitor diversification and backlog disclosures .
  • Internal control weaknesses persist; remediation progress is a governance catalyst to watch, especially ahead of larger public capital raises or uplisting initiatives .
  • Near-term narrative hinges on converting RAS and construction demand into higher-margin revenues; tracking gross margin improvement and project mix will be key over the next two quarters .
  • With no guidance and limited Street coverage, quarterly filings and 8-Ks will drive price discovery; watch for contract wins, funding events, or new geographies mentioned in subsequent disclosures .
  • Equity issuance and non-cash expenses materially affect reported GAAP results; focus on operating cash flow, working capital trends, and project profitability as cleaner indicators of progress .