NCRA — Q2 2026 Financial Report Analysis

Eel sales shrank, costs jumped, and a lender default after quarter-end matters more than the quarter itself

Nocera is a small Taiwan-based company whose revenue comes almost entirely from trading fish, mainly eels, plus a tiny business acting as a sales agent on live-streaming shopping platforms. In the second quarter of 2026 (April to June) revenue fell 29.3% to $2.14 million because it sold fewer eels, and the net loss grew to $1.54 million from $0.33 million a year earlier. The loss came from higher overhead and stock-based pay, plus a fall in the value of the Bitcoin it bought in January. This report uses the amended quarterly filing (10-Q/A) filed on October 2, 2026, which restates last year's comparison figures. The 2026 figures are the same as in the original August 5 filing.

At a glance

• $2.14 million revenue, down 29.3%. Eel volume fell about 30% in the first half (388 to 272 tons) while the price per kilogram barely moved, so the drop is volume, not price.
• Gross margin of 0.8%. Nocera keeps less than one cent of each sales dollar after paying for the fish, so the trading business cannot cover even a small head office.
• Cash fell from $7.95 million to $4.79 million in six months, and then on July 27 the lender took about $4.66 million of pledged collateral after declaring a default on its convertible note. The money the company planned to fund its pivot with has mostly gone to pay down debt.

The numbers

Operating margin is the share of revenue left after running the business, before interest and tax; here it is negative because costs far exceed sales. "n/m" means a percentage change is not meaningful because both figures are losses. Per-share figures reflect the 1-for-30 reverse stock split of July 6, 2026.

For the first half of the year, revenue was $4.42 million (down 26.6%) and the net loss attributable to Nocera was $2.89 million, compared with $0.56 million a year earlier.

Where the revenue and the loss came from

Fish trading made $2.10 million of the quarter's $2.14 million revenue, down 29.8% from $2.99 million. Management attributes the decline to lower volume. First-half figures show eel tonnage down by almost a third while the average price rose about 1%. This is a pass-through trading business: cost of sales was $2.09 million against $2.10 million of revenue, leaving $4,178 of gross profit for the whole segment. By geography, Japan took $2.40 million of first-half revenue and Taiwan $1.94 million.

E-commerce (acting as an agent for third-party products sold through live-stream shopping) brought in $43,695, up 10.8% from $39,428, with $13,820 of gross profit. It is profitable at the segment level but too small to matter.

Operating costs rose almost sevenfold, from $0.18 million to $1.19 million:

• General and administrative expenses rose to $0.59 million from $0.18 million. The MD&A attributes this to "costs of wages and reimbursement fees generated from employees". The quarter also included $150,000 of cash fees to Phoenix MGMT & Consulting under a strategic advisory agreement signed on May 18.
• Share-based compensation added $0.60 million, against none a year earlier. This is a non-cash charge for paying people in stock; 92,333 shares were issued under the stock plan on April 15.

Below the operating line, other expense was $0.37 million, compared with $17,000 of other income a year ago. Most of it is a $394,587 unrealized loss on Bitcoin. Nocera put $2.0 million into about 23.53 Bitcoin in January at an average of roughly $84,998, and those coins were valued at $1.38 million on June 30. That is a $622,426 loss for the half-year, recorded as fair value (market price) changes even though nothing was sold.

What the headline numbers hide

• The share count roughly tripled, and the per-share loss looks understated. Shares outstanding went from 481,121 at December 31 to 1,560,210 at June 30 (post-split). Most of the increase came from the lender converting $4.97 million of its note into 583,793 shares, preferred stockholders converting into 402,963 shares, and stock-plan issuance. By October 2 the count was 2,421,612, about five times the year-end figure. The income statement divides both the quarter's and the half-year's loss by the June 30 count of 1,560,210, even though about 1.08 million of those shares were issued during the half. A true weighted average (the average number of shares outstanding over the period) would be lower, which would make the reported loss per share larger.
• Cash burn ran at about the same pace as the accounting loss once Bitcoin is set aside. Operating cash outflow for the half-year was $1.16 million. The rest of the $3.16 million fall in cash was the $2.0 million Bitcoin purchase. The non-cash items bridging the $2.82 million net loss to that outflow were the Bitcoin markdown ($0.62 million), stock pay ($0.60 million) and non-cash note interest ($0.33 million).
• The balance-sheet improvement came from conversions, not earnings. Stockholders' equity went from -$0.44 million to +$5.44 million, which let Nocera regain Nasdaq's $2.5 million minimum equity rule (Nasdaq confirmed this on August 10). The gain came from turning debt and preferred stock into common shares: the note's carrying value fell from $7.21 million to $2.19 million and $2.64 million of preferred stock was converted. The business itself lost $2.82 million in the half.
• The July default changes the picture after quarter-end. On July 27 the noteholder declared a default over unpaid "alternate conversion floor amounts", payments the note requires when the share price falls below a floor. The collateral agent then applied about $4,658,686 from a blocked custodial account to the note, and the investor says about $1,370,809 is still owed. Together that is about $6.0 million, against the note's $2.19 million fair value on the June 30 balance sheet. The filing does not say how the difference will be accounted for, or whether the blocked account was part of the $4.79 million reported as cash. Nocera says it is negotiating a possible waiver of the remainder. It also sold 231 acres of Alabama land in August for $0.65 million net, below its roughly $0.88 million book value.
• The filings themselves need caution. In August the board declared the 2024 and 2025 financial statements, including all three 2025 quarters, unreliable (Form 8-K Item 4.02). This amendment exists to restate the year-ago comparison: it moves the sold catering business (Meixin) into discontinued operations, which cut reported Q2 2025 revenue from $3.97 million to $3.03 million. It also deducts $70,126 of preferred dividends, which changed the first-half 2026 loss per share from -$1.80 to -$1.85. Even so, some MD&A figures still don't match the statements. The MD&A gives operating cash use of $1.76 million and investing outflow of $1.40 million, while the cash flow statement shows $1.16 million and $2.00 million. It also describes a warrant-liability loss, but the warrant note shows that liability falling to zero, which is a gain. Management reports material weaknesses in its controls, including too few staff with knowledge of US accounting standards.

Takeaway: The quarter's trading results matter less than the cash. Nocera's eel business earns well under 1% gross margin, and the $7.95 million it held at year-end, raised largely through a convertible note and preferred stock, has mostly gone into Bitcoin, operating losses, and the collateral the lender seized after the July 27 default. Future growth plans now depend on raising new money by issuing shares, after the share count has already grown about fivefold since December.

What to watch next

Management wants to turn Nocera into a "diversified, technology-focused holding company" investing in AI computing, data centers, edge computing and energy storage. It estimates this will need $30 million to $50 million over about three years and says it has no committed financing for that amount. The steps announced so far are small or still preliminary:

• QMAX Technology: in July Nocera took control of a 30% stake in this Taiwanese company through a variable interest entity (control by contract rather than direct share ownership), paying 300,000 shares. Management expects QMAX to start contributing revenue in Q3 2026.
• INERGX: a non-binding letter of intent to buy up to 9.99% of this UK energy-optimisation company. It expires after 90 days unless a definitive agreement is signed.
• iPhone distribution deal (September 17): Nocera became a non-exclusive distributor of pre-owned iPhone 17 Pro handsets for E-PRO Display. The 600,000 units and $520.5 million cited in the announcement are E-PRO's allocation; the 8-K states they "do not represent revenue, orders, backlog or commitments of the Company".
• Funding: a $100 million equity purchase facility lets Nocera sell shares to an investor over 24 months. However, it is capped at 19.99% of shares outstanding without a shareholder vote, and the S-3 registration covers 7.5 million shares, about $15 million at the July 7 price. No shares had been sold under it by June 30.

Our read: the base business is shrinking and earns almost nothing, so the next 10-Q (for the September quarter, due by mid-November 2026) matters mainly for three things. First, how the July collateral seizure and the disputed $1.37 million balance are booked. Second, whether equity stays above Nasdaq's $2.5 million minimum after that. Third, whether QMAX or the iPhone deal produces any real revenue. The company itself states that there is substantial doubt about its ability to continue as a going concern.