Nocera, Inc. (NCRA) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended March 31, 2026. Nocera, Inc. operates primarily in two segments: Fish Trading (wholly-owned subsidiary in Taiwan) and E-Commerce (via a Variable Interest Entity in China). The company also maintains a legacy Recirculation Aquaculture Systems (RAS) design business. In January 2026, the company initiated a corporate treasury strategy, allocating $2.0 million to purchase Bitcoin.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $2,277,784 | $4,534,128 |
| Gross Profit | $41,980 | $50,950 |
| Gross Margin | 1.8% | 1.1% |
| Net Loss | $(1,273,741) | $(257,618) |
| Loss Per Share (Basic/Diluted) | $(0.0865) | $(0.0175) |
| Cash and Equivalents (End of Period) | $5,367,067 | $531,771 |
| Net Cash Used in Operating Activities | $(583,026) | $(113,305) |
| Total Liabilities | $8,110,806 | $7,916,954 |
| Stockholders' Equity | $(1,428,976) | $(440,735) |
Material Changes vs. Prior Period
- Revenue Decline: Net sales decreased by approximately 49.8% to $2.28 million, primarily due to a decline in the Fish Trading segment.
- Increased Losses: Net loss widened significantly to $1.27 million from $258,000. This was driven by a $697,000 net expense in "Other (expenses) income," largely attributed to unrealized losses on Bitcoin holdings ($394,587) and equity method investment losses ($148,636).
- Operating Expenses: General and administrative expenses rose to $559,000 from $334,000, driven by wage and reimbursement costs.
- Balance Sheet Shifts: The company added $1.6 million in Digital Assets (Bitcoin) while cash reserves decreased by $2.6 million due to the crypto purchase and operating burn. Stockholders' equity turned more negative, dropping from $(440k) to $(1.43M).
Guidance, Risks, and Unusual Items
- Going Concern Warning: Management has raised substantial doubt about the company's ability to continue as a going concern due to accumulated losses of $27.5 million and negative operating cash flows. No definitive financing agreements have been executed.
- Nasdaq Delisting Risk: On April 17, 2026, the company received notice from Nasdaq that it failed to meet the minimum stockholders' equity requirement of $2.5 million. The company currently has negative equity and does not meet alternative listing standards.
- Internal Control Weaknesses: Management concluded that disclosure controls and procedures were ineffective due to material weaknesses, including lack of written documentation, insufficient monitoring, and inadequate segregation of duties.
- Debt Obligations: The company holds a senior secured convertible note with a principal of $8.0 million (fair value ~$7.4 million) bearing 9% interest, which increases to 18% upon default.
Investor Verification Checklist
- Liquidity Runway: Verify the timeline for securing additional capital given the "substantial doubt" going concern warning and negative equity.
- Nasdaq Compliance Plan: Confirm the specific steps and timeline the company intends to take to regain compliance with Nasdaq listing rules to avoid delisting.
- Crypto Volatility Impact: Assess the sensitivity of the balance sheet to further declines in Bitcoin value, which already caused a $395k unrealized loss in Q1.
- Debt Covenants: Review the terms of the $8M convertible note for potential default triggers given the current financial trajectory.
- Revenue Sustainability: Investigate the causes of the 50% revenue drop in the core Fish Trading segment and the viability of the E-Commerce segment.