Nocera, Inc. (NCRA) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended September 30, 2025. Nocera, Inc. is a Nevada corporation operating primarily in Taiwan, with business segments in Fish Trading (eels), Catering (bento boxes and produce processing), and E-Commerce (live-streaming). The company is classified as a smaller reporting company and an emerging growth company.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Net Sales | $1,603,392 | $1,363,101 | $10,109,236 | $13,016,093 |
| Gross Profit | $49,102 | $34,131 | $132,506 | $163,879 |
| Gross Margin | 3.1% | 2.5% | 1.3% | 1.3% |
| Net Loss (Company) | $(1,500,789) | $(315,267) | $(2,240,514) | $(519,420) |
| Loss Per Share (Basic) | $(0.1045) | $(0.0232) | $(0.1569) | $(0.0399) |
| Cash & Equivalents | $2,034,205 (as of Sept 30, 2025) | |||
| Total Debt | $25,724 (Secured car loan) | |||
| Warrant Liability | $528,159 (Fair value liability) |
Material Changes vs. Prior Period
- Revenue Decline YTD: Nine-month revenue decreased by approximately 22.3% compared to the prior year, driven by a significant drop in the Fish Trading segment volume (from 827 tons to 643 tons) and the Catering segment. However, Q3 2025 revenue increased 17.6% quarter-over-quarter.
- Expense Surge: General and administrative expenses for Q3 2025 rose to $869,686 from $335,202 in Q3 2024, primarily due to increased audit and consulting fees.
- Non-Operating Losses: Other expenses for Q3 2025 were $688,750, a sharp increase from $27,669 in Q3 2024. This includes a $451,312 fair value adjustment on warrant liabilities and a loss on the disposal of the SY Culture subsidiary.
- Liquidity Improvement: Cash and cash equivalents increased from $484,161 at year-end 2024 to $2,034,205 as of September 30, 2025, largely due to financing activities.
Guidance, Outlook, and Risks
- Capital Raising: The company expects to raise approximately $40 million through equity, debt, and leveraged buyout transactions to fund strategic initiatives. On October 31, 2025 (subsequent event), the company entered an agreement to issue up to $300 million in senior secured convertible notes, with an initial closing of $8 million.
- Strategic Focus: Management plans to expand land-based aquaculture (RAS) systems in Taiwan, the U.S., and Brazil. A 229-acre land acquisition in Alabama is pending construction requirements.
- Going Concern: While auditors previously expressed concern regarding the company's ability to continue as a going concern, management asserts that current cash balances and anticipated financing mitigate this risk for the next 12 months.
- Internal Controls: The company disclosed material weaknesses in internal controls, including lack of written documentation, insufficient monitoring, and inadequate segregation of duties. Remediation is expected in the second half of 2025.
- HFCAA Risk: The company is identified as a "Commission-Identified Issuer" under the Holding Foreign Companies Accountable Act due to its auditor's location in Hong Kong. Continued identification for three consecutive years could lead to delisting.
Investor Verification Checklist
- Warrant Liability Volatility: Verify the impact of the $451k fair value adjustment on warrant liabilities on future earnings, as this is a non-cash but significant expense driver.
- Customer Concentration: Confirm the stability of the top 5 customers who represented 85% of revenue for the nine months ended September 30, 2025.
- Financing Execution: Monitor the closing of the $300 million convertible note facility and the $2.6 million Series B Preferred Stock issuance to ensure liquidity targets are met.
- Internal Control Remediation: Track progress on fixing material weaknesses in financial reporting to avoid potential restatements or regulatory penalties.
- HFCAA Status: Review the status of the PCAOB inspection of the Hong Kong auditor to assess delisting risk.