NOCERA, INC. current report, Q4 FY2025

Business Context and Reporting Period

Company: Nocera, Inc. (Nasdaq: NCRA)
Filing Type: Form 8-K (Current Report)
Date of Report: October 31, 2025
Event: Entry into a Material Definitive Agreement for a senior secured convertible note offering.

Key Financial Metrics and Transaction Terms

  • Total Facility Size: Up to $300,000,000 in aggregate original principal amount.
  • Initial Closing: $8,000,000 principal amount for a purchase price of $7,280,000 (implying a discount).
  • Interest Rate: 9% per annum, payable monthly in arrears.
  • Default Interest: Increases to 18% per annum upon customary events of default.
  • Maturity: 24 months from the date of issuance.
  • Security: Senior secured by a first-priority security interest in substantially all company assets.
  • Conversion Price: Lower of (A) the lower of the prior day's closing price or the 5-day average closing price, and (B) 93% of the lowest 10-day VWAP, subject to a Floor Price.
  • Beneficial Ownership Limitation: 4.99% (waivable up to 9.99% with 61-day notice).

Material Changes and Structural Impacts

The filing represents a significant change in the company's capital structure through the creation of a direct financial obligation. Key structural impacts include:

  • Debt Seniority: The Notes rank senior to all existing and future indebtedness (except Permitted Indebtedness).
  • Financing Restrictions: The Company is prohibited from entering into subsequent Variable Rate Transactions without the Investor's written consent during the Covenant Period.
  • Participation Rights: The Investor holds a 25% participation right in future equity or equity-linked financings for two years post-agreement.
  • Corporate Governance: The Company must seek stockholder approval within 60 days of the Initial Closing to increase authorized shares to 2 billion and to approve the issuance of Conversion Shares.

Guidance, Risks, and Contingencies

  • Contingencies: The Initial Closing is subject to the satisfaction or waiver of certain closing conditions. Subsequent closings (Company's Option and Investor's Option) are also subject to specific conditions.
  • Registration Rights: The Company must file a Form S-3 registration statement within 30 days of the Initial Closing and have it declared effective within 90 days.
  • Risks: The transaction involves a discount on the initial purchase price and high interest rates (9% standard, 18% default). The conversion mechanics may result in significant dilution to existing shareholders.
  • Unusual Items: The agreement includes a "Floor Price" for conversion, though the specific value is defined in the Notes and not explicitly stated in this summary text.

Investor Verification Checklist

  • Verify the specific definition and current value of the "Floor Price" in the attached Note form (Exhibit 4.1).
  • Confirm the status of the closing conditions required for the $8,000,000 Initial Closing.
  • Review the "Permitted Indebtedness" and "Permitted Liens" definitions to understand the scope of the senior security interest.
  • Monitor the timeline for the required stockholder vote to increase authorized shares to 2 billion.
  • Assess the impact of the 25% participation right on future fundraising flexibility.