Product Development - Benitec Biopharma is developing BB-301, a first-in-class genetic medicine for Oculopharyngeal Muscular Dystrophy (OPMD), utilizing a "silence and replace" approach[150]. - The Investigational New Drug (IND) application for BB-301 was approved by the U.S. FDA in June 2023, with the first subject treated in November 2023[152]. - BB-301 has been granted Orphan Drug Designation in both the United States and the European Union[150]. - The company aims to leverage its proprietary ddRNAi technology to achieve permanent silencing of disease-causing genes and restoration of normal gene function[140]. - The silence and replace approach allows for the simultaneous silencing of disease-causing genes and replacement with wild type genes, potentially improving treatment outcomes[130]. - BB-301 is designed to permanently silence the expression of the disease-causing gene while replacing it with a wild type gene[129]. - The BB-301 clinical development program includes a 76-week follow-up, with a 6-month pre-treatment observation period for OPMD patients[167]. - All six subjects in the BB-301 trial have been safely treated, with no treatment-related severe adverse events reported[169]. - Cohort 1 patients in the BB-301 trial achieved a 100% response rate, demonstrating significant improvements in dysphagia symptoms[170]. - Interim results showed a 40% decline in Total Pharyngeal Residue (TPR) and a 42% decline in Pharyngeal Area at Maximum Constriction (PhAMPC) post-treatment[175]. - The FDA granted Fast Track designation to BB-301 for the treatment of OPMD with dysphagia following positive interim clinical results[170]. Financial Performance - The company has not generated any revenues from product sales, with no revenue recognized during the three months ended September 30, 2025, and September 30, 2024[192]. - Total operating expenses for the three months ended September 30, 2025, were $9.8 million, a 69.5% increase from $5.8 million in the same period of 2024[196]. - Research and development expenses decreased to $3.4 million for the three months ended September 30, 2025, down from $3.6 million in the comparable period, primarily due to timing of contract manufacturing activities[196]. - General and administrative expenses rose significantly to $6.4 million in Q3 2025, compared to $2.2 million in Q3 2024, driven by a $4.0 million increase in share-based compensation[197]. - Other income (loss), net for the three months ended September 30, 2025, was $838 thousand, compared to $732 thousand in the same period of 2024, reflecting an increase in interest income[198]. - The company reported accumulated losses of $237 million as of September 30, 2025, with expectations of increased research and development expenses[200]. - Cash and cash equivalents stood at approximately $94.5 million as of September 30, 2025, with no borrowings or credit facilities in place[201]. - Net cash used in operating activities was $3.4 million for the three months ended September 30, 2025, an improvement from $4.6 million in the same period of 2024[203]. - The company has no products approved for sale and does not expect to generate significant revenue until regulatory approval is obtained[207]. - Future funding requirements will depend on various factors, including the timing and costs of clinical trials and regulatory approvals[209]. - The company anticipates continued losses for the foreseeable future as it develops product candidates and prepares for commercialization[208]. Strategic Collaborations and Financing - The company plans to collaborate with large biopharmaceutical companies for co-development and commercialization of its products[147]. - The company will require additional financing to progress its product candidates through key inflection points[131]. - The company is exploring long-term manufacturing alliances to support future commercialization efforts, as it does not currently own manufacturing facilities[177]. - The company entered into a Sales Agreement allowing for the sale of up to $75 million in common stock, with a 3.0% commission to the agent[190]. Market and Disease Context - OPMD is characterized by progressive swallowing difficulties and eyelid drooping, typically presenting in patients aged 40 to 50[149]. - Significant geographical clustering of OPMD patients has been noted, which could facilitate clinical development and commercialization efforts[158]. - BB-301 has received Orphan Drug Designation in the U.S. and EU, with a projected commercial opportunity exceeding $1 billion over its product life[160].

Financial Performance - The net loss from continuing operations for the three months ended September 30, 2025, was $16,305,228, compared to a loss of $1,216,986 for the same period in 2024[22]. - Total revenues for the nine months ended September 30, 2025, were $0, consistent with the same period in 2024[22]. - The company reported a comprehensive loss of $16,151,343 for the three months ended September 30, 2025, compared to a comprehensive income of $4,320,730 for the same period in 2024[24]. - The basic net loss per common share for the three months ended September 30, 2025, was $(2.02), compared to earnings of $2.18 for the same period in 2024[24]. - The company reported a net loss of $16,365,492 for the three months ending September 30, 2025[26]. - The net income from continuing operations for the nine months ended September 30, 2025, was $90,072,207, contrasting with a net loss of $4,570,383 for the same period in 2024[30]. - The company experienced a net cash used in operating activities of $5,199,446 for the nine months ended September 30, 2025, compared to $3,212,291 for the same period in 2024[30]. - Total other (expense) income, net for the three months ending September 30, 2025, was $(11,533,653), a significant increase in losses compared to $(28,300) in 2024[213]. Assets and Liabilities - Total assets increased to $13,287,908 as of September 30, 2025, compared to $9,109,284 as of December 31, 2024, representing a growth of approximately 46.5%[19]. - Current liabilities decreased significantly from $171,450,366 in December 31, 2024, to $43,630,885 as of September 30, 2025, a reduction of about 74.6%[19]. - The accumulated deficit increased to $(111,464,507) as of September 30, 2025, from $(201,075,743) as of December 31, 2024[20]. - The total stockholders' deficit improved to $(30,417,971) as of September 30, 2025, from $(163,350,109) as of December 31, 2024, indicating a positive change in financial position[20]. - The total stockholders' deficit as of September 30, 2025, was $30,417,971, reflecting a decrease from the previous period[26]. - The company had cash and cash equivalents of $7,611,465 as of September 30, 2025, compared to $6,897,697 as of December 31, 2024, reflecting an increase of approximately 10.4%[19]. - As of September 30, 2025, the company had cash of approximately $7,611,000 and a working capital deficit of approximately $30,512,000, indicating substantial doubt about its ability to continue as a going concern[47]. - The company incurred cash flow used in operating activities from continuing operations of approximately $4,944,000 for the nine months ended September 30, 2025[47]. Stock and Equity - The balance of common stock increased to 11,096,264 shares as of September 30, 2025, from 2,098,999 shares as of September 30, 2024[28]. - The Company issued common stock for services performed amounting to $750,000 during the nine months ended September 30, 2024[28]. - The Company issued 4,770,340 shares of common stock to Star Equity Holders and 12,017,648 stock purchase warrants with a five-year term at an exercise price of $1.50 per share[180]. - The Company established the 2025 Equity Incentive Plan, reserving 3,950,000 shares of common stock for issuance, subject to shareholder approval[157]. - The Company issued 310,000 shares of common stock in connection with a new joint venture agreement in September 2025[146]. - The Company issued 84,276 shares of common stock in May 2025 in connection with a cashless exercise of stock options[156]. - The Company had 6,497,072 warrants outstanding as of September 30, 2025, with a weighted average exercise price of $14.88[152]. - The Company had 837,625 public and private warrants outstanding as of September 30, 2025, with an average remaining contractual life of 0.42 years[152]. Acquisitions and Investments - In December 2024, the company entered into a Securities Purchase Agreement to acquire a controlling 51% interest in Star, an Israeli corporation, with plans to increase this to 100%[36]. - The Company acquired a controlling 100% interest in Star for $21,000,000, including a $16,000,000 promissory note and $5,000,000 in cash, along with shares and warrants[196]. - The Company plans to focus its business on the defense sector following the acquisition of Star, which will provide a controlling interest in a supplier of defense products[176]. - The Company will acquire 100% of Tiltan Software Engineering Ltd. for a total purchase price of NIS 47,600,000 (approximately $14 million) with 75% paid in cash and 25% in equity[202][203]. - The Company advanced a total of $4,500,000 to Star as of September 30, 2025, including $1,000,000 in December 2024 and an additional $3,500,000 during the nine months ended September 30, 2025[166]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $4,771,575, up from $1,188,686 in the same period of 2024, marking an increase of approximately 301.5%[22]. - Professional fees surged by 688.6% to $4,359,640 for the three months ending September 30, 2025, primarily due to increased consulting fees[213][216]. - Compensation and related benefits rose by 333.1% to $230,988 for the three months ending September 30, 2025, reflecting anticipated increases due to pending acquisitions[213][217]. - Stock-based compensation for the nine months ended September 30, 2025, was $177,905, compared to $154,938 for the same period in 2024[30]. Legal and Regulatory Matters - The Company is subject to various legal proceedings and regulatory investigations, establishing accruals for potential losses when they become probable and can be reasonably estimated[170]. - The transaction is subject to regulatory approvals, including from the Israel Ministry of Defense, with hopes to close before the end of 2025[204]. Future Outlook - The Company expects to report revenue upon the closing of the Star and Tiltan acquisitions, anticipated by the end of Q4 2025[215]. - The Company plans to establish an employee retention and incentive program totaling NIS 2,500,000 for Tiltan employees[205].

Financial Performance - The net loss from continuing operations for the three months ended September 30, 2025, was $16,305,228, compared to a loss of $1,216,986 for the same period in 2024[22]. - Total revenues for the nine months ended September 30, 2025, were $0, consistent with the same period in 2024[22]. - The company reported a net income loss of $16,365,492 for the three months ended September 30, 2025, compared to a net income of $4,455,233 for the same period in 2024[22]. - For the nine months ended September 30, 2025, net income from continuing operations was $90,072,207, compared to a net loss of $4,570,383 for the same period in 2024[30]. - The company reported a net loss from discontinued operations of $60,264 for the three months ended September 30, 2025, compared to a net gain of $5,672,219 in the same period in 2024[110]. - Total other (expense) income, net for the three months ending September 30, 2025, was $(11,533,653), a significant increase in losses compared to $(28,300) in 2024[213]. Assets and Liabilities - Total assets increased to $13,287,908 as of September 30, 2025, compared to $9,109,284 as of December 31, 2024, representing a growth of approximately 46.5%[19]. - Current liabilities decreased significantly from $171,450,366 in December 31, 2024, to $43,630,885 as of September 30, 2025, a reduction of about 74.6%[19]. - The accumulated deficit increased to $(111,464,507) as of September 30, 2025, from $(201,075,743) as of December 31, 2024[20]. - As of September 30, 2025, total stockholders' equity was $(30,417,971), reflecting a significant increase in common stock to 11,096,264 shares[26]. - Total liabilities as of September 30, 2025, were $3,179,877, indicating a significant financial obligation[109]. Cash Flow and Financing - The company had cash and cash equivalents of $7,611,465 as of September 30, 2025, compared to $6,897,697 as of December 31, 2024, reflecting an increase of approximately 10.4%[19]. - Cash used in operating activities from continuing operations was $(4,943,890) for the nine months ended September 30, 2025, compared to $(1,636,275) for the same period in 2024[30]. - The company raised $9,225,000 from the issuance of private placement, net of issuance costs, during the nine months ended September 30, 2025[30]. - The Company issued promissory notes totaling $1,353,639 under the Shareholder 2024 Loans, with interest at 5.0% per annum, due in three years[115]. - The total loans payable to related parties as of September 30, 2025 amounted to $1,566,988, after accounting for repayments[117]. Stock and Equity - The weighted average common shares outstanding for the three months ended September 30, 2025, were 8,124,786, compared to 2,043,928 for the same period in 2024[24]. - The company underwent a reverse stock split of one-for-eight effective October 24, 2024, increasing the number of authorized shares from 40,000,000 to 150,000,000[42]. - The Company issued 4,770,340 shares of common stock to Star Equity Holders and 12,017,648 stock purchase warrants with a five-year term at an exercise price of $1.50 per share[180]. - The Company established the 2025 Equity Incentive Plan, reserving 3,950,000 shares of common stock for issuance, subject to shareholder approval[157]. - The Company issued 310,000 shares of common stock in September 2025 in connection with a new joint venture agreement[146]. Operational Changes and Future Plans - Nukkleus Inc. plans to focus its business on the defense sector following the acquisition of a controlling 100% interest in Star, an Israeli corporation engaged in defense products[36]. - The Company will acquire 100% of Tiltan Software Engineering Ltd. for a total purchase price of NIS 47,600,000 (approximately $14 million) with 75% paid in cash and 25% in equity[202][203]. - The Company expects to report revenue upon the closing of the Star and Tiltan acquisitions, anticipated by the end of Q4 2025[215]. - The Company has exclusive distribution rights for BladeRanger's drone payload systems in the U.S. defense market, with a minimum purchase commitment of 5 payloads in Year 1[200]. - A joint venture was established to create advanced manufacturing zones in the Baltics and Israel, with a committed credit line of up to $1.5 million from Mandragola[201]. Accounting and Compliance - The company is currently evaluating the impact of several recently issued accounting standards on its consolidated financial statements and disclosures[98][99][100][101][102][103]. - The Company has adopted ASU 2023-07 for the nine months ended September 30, 2025, with no material impact on the consolidated financial statements[96]. - The Company recognizes interest and penalties related to income tax matters in general and administrative expense[88]. - The Company accounts for stock-based compensation using the Black-Scholes option-pricing model, estimating fair value and expected volatility[85]. - The Company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards[50].

FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38105 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ETHZilla Corporation (Exact name of registrant as specified in its charter) | Delaware | 90-1890354 | | --- | --- | | ( ...

Treasury Management and ETH Strategy - The company adopted an Ethereum-focused treasury management strategy in August 2025, aiming to acquire and grow its ETH position [279]. - The company aims to maximize ETH accumulation and value accretion while maintaining robust controls over its digital assets [280]. - The company's treasury strategy is designed to bring value to shareholders by deploying ETH across various DeFi activities [282]. - The company has not reduced its treasury or sold any of its ETH staking rewards to date [283]. - The company actively deploys ETH in the treasury across staking, lending, and advanced DeFi protocols to generate yields [284]. - The transition of Ethereum to a Proof-of-Stake consensus mechanism is expected to enhance ETH's value as a yield-bearing digital asset [281]. - The issuance rate of new ETH has dropped significantly since Ethereum switched from Proof-of-Work to Proof-of-Stake in September 2022 [295]. - The Ethereum network's transition to Proof-of-Stake is designed to dramatically reduce energy use while maintaining security and decentralization [299]. - The company implemented an Ethereum-focused treasury strategy in August 2025, aiming to acquire and grow its ETH position without a specific target for maximum holdings [430]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $4,110,169, compared to $0 for the same period in 2024 [407]. - General and administrative expenses increased to $224,604,532 for the three months ended September 30, 2025, from $596,172 in 2024, representing an increase of $224,008,360 [409]. - The net loss from continuing operations for the three months ended September 30, 2025, was $208,670,965, compared to a net loss of $532,389 for the same period in 2024, an increase of $208,138,576 [411]. - Other income, net for the three months ended September 30, 2025, was $11,823,398, compared to $63,783 for the same period in 2024, an increase of $11,759,615 [410]. - For the nine months ended September 30, 2025, total revenue was $4,110,169, with general and administrative expenses rising to $227,954,479 from $3,471,965 in 2024 [413][414]. - The net loss for the nine months ended September 30, 2025, was $220,837,892, compared to a net loss of $1,894,683 for the same period in 2024, representing an increase of $218,943,209 [416]. - The net loss from continuing operations for the nine months ended September 30, 2025, was $212,008,038, significantly higher than the net loss of $1,658,746 for the same period in 2024 [421]. - Cash used in operating activities from continuing operations totaled $18,286,323 for the nine months ended September 30, 2025, compared to $531,565 for the same period in 2024 [425]. - Cash used in investing activities from continuing operations was $252,370,414 for the nine months ended September 30, 2025, compared to $0 for the same period in 2024 [426]. - Cash provided by financing activities from continuing operations totaled $825,274,591 for the nine months ended September 30, 2025, compared to cash used of $996,005 for the same period in 2024 [427]. Capital Raising and Stock Transactions - The company plans to raise capital through equity or equity-linked debt to increase its ETH holdings, benefiting shareholders [282]. - The company increased its authorized number of shares of common stock from 100 million to 1 billion on July 24, 2025 [324]. - Following a special meeting on October 7, 2025, the company further increased its authorized shares from 1 billion to 5 billion [327]. - On July 29, 2025, the company entered into a securities purchase agreement to sell 14,393,417 shares at an offering price of $26.50 per share [329]. - The company issued senior secured convertible notes totaling $156.25 million on August 8, 2025, at a cash exchange of 96% of the principal amount [335]. - The September 2025 Convertible Notes were sold for an aggregate principal amount of $360 million, with cash received equal to 97.25% of this amount [343]. - The company authorized a stock repurchase program for up to $250 million of its common stock, set to expire by June 30, 2026, or upon repurchase of the maximum amount [363]. - The company sold 739,050 shares under the Sales Agreement for gross proceeds of approximately $40,990,338 during the three months ended September 30, 2025 [373]. - Since September 30, 2025, the company sold 410,403 shares for net proceeds of approximately $6,861,299 after deducting commissions [374]. - The company entered into a Transaction Agreement to obtain up to $50.0 million with a forward rate of 9.90% per annum, collateralized by approximately $80.8 million of ETH [379]. Operational Changes and Strategic Initiatives - The company has alleviated substantial doubt about its ability to continue as a going concern due to significant fundraising events in the third quarter of 2025 [275]. - The company focuses on generating recurring revenues through various DeFi protocols that improve Ethereum network integrity and security [276]. - The company has two legacy biotechnology programs classified as discontinued operations, focusing on different diseases [278]. - The company made a strategic shift to discontinue its pharmaceutical research operations and Gaming Technology Platform, impacting financial reporting for the period [408]. - The company invested $15 million to acquire a 15% interest in Satschel, securing exclusive rights to list Ethereum L2 tokens on the platform [401]. - The company commenced native staking in August 2025 and liquid staking in September 2025, intending for staking to become a primary yield generation strategy within the current fiscal year [457]. Regulatory and Compliance Considerations - The regulatory landscape for digital assets is rapidly evolving, potentially impacting the company's operations and compliance obligations [323]. - The company utilizes third-party qualified custodians to hold its Ethereum, ensuring risk management and operational best practices [308]. - The company is in the process of onboarding a third qualified custodian as part of its risk management process [314].

Financial Performance - For the three months ended September 30, 2025, the company reported a net income of $96, consisting solely of interest income [132]. - The company has no revenues to date and expects to incur increased expenses as a result of being a public company, including legal and compliance costs [131]. Initial Public Offering (IPO) - The company completed its Initial Public Offering on November 10, 2025, raising gross proceeds of $172,000,000 from the sale of 17,250,000 Units at $10.00 per Unit [134]. - Following the IPO, a total of $172,500,000 was placed in the Trust Account, with transaction costs amounting to $2,079,000 [135]. Liquidity and Financial Needs - As of September 30, 2025, the company had liquidity needs satisfied through $25,000 from founder shares and $243,748 borrowed under an unsecured promissory note [133]. - The company intends to use substantially all funds in the trust account to complete its initial business combination and may make permitted withdrawals of interest as needed [136]. - The company has estimated primary liquidity requirements of approximately $180,000 for legal and accounting expenses, $150,000 for directors and officers insurance, and $205,000 for miscellaneous expenses [139]. - Prior to the initial business combination, the company will have $695,000 of proceeds held outside the trust account for operational and due diligence expenses [137]. - The company does not expect to need additional funds following the IPO to meet operating expenditures, but may require additional financing for the business combination [142]. Accounting Standards and Reporting - The FASB issued ASU 2023-07, effective for fiscal years beginning after December 15, 2023, requiring enhanced segment reporting disclosures [154]. - The ASU mandates annual and interim disclosures of significant segment expenses provided to the chief operating decision maker (CODM) [154]. - Public entities must disclose the title and position of the CODM and how they use reported measures of segment profit or loss [154]. - Companies with a single reportable segment must provide all disclosures required by the ASU and existing segment disclosures [154]. - Management believes that recently issued accounting standards will not materially affect condensed financial statements [155]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [157]. Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements or long-term liabilities as of September 30, 2025 [145].

Financial Performance - Rental income for the three months ended September 30, 2025, increased by $1.7 million to $4.6 million compared to $2.9 million for the same period in 2024 [170]. - Rental income increased by $0.8 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily driven by the Aventura, FL property [182]. - The Company reported a net loss of $12.4 million for the three months ended September 30, 2025, compared to a net loss of $22.0 million for the same period in 2024 [230]. - For the nine months ended September 30, 2025, the net loss was $63.1 million, down from $142.2 million in the same period of 2024 [230]. - Net Operating Income (NOI) on a cash basis for the three months ended September 30, 2025, was $235,000, compared to a loss of $2.3 million in 2024 [230]. - NOI-cash basis at share for the nine months ended September 30, 2025, was $6.8 million, compared to $1.0 million in 2024 [230]. Asset Management - As of September 30, 2025, the company's portfolio consisted of 13 properties with approximately 1.3 million square feet of gross leasable area (GLA) and 198 acres of land [158]. - The company recorded a gain of $8.9 million from the sale of two properties for $52.6 million during the nine months ended September 30, 2025 [188]. - The company sold 91 consolidated properties from October 24, 2022, through September 30, 2025, generating approximately $1.1 billion in gross proceeds [200]. - The company had four assets under contract for sale as of November 13, 2025, with total anticipated proceeds of $240.8 million [201]. - The company is currently executing a Plan of Sale approved by shareholders, which allows for the sale of all assets and distribution of net proceeds [160]. Expenses and Impairments - The company recorded an impairment loss of $0.8 million for the three months ended September 30, 2025, and a total of $18.8 million for the nine months ended September 30, 2025 [161][181]. - The company recorded $8.5 million in other-than-temporary impairment losses on investments in unconsolidated entities during the nine months ended September 30, 2025 [161]. - An impairment of real estate assets of $18.8 million was recognized due to the agreement to sell one property below book value during the nine months ended September 30, 2025 [191]. - General and administrative expenses decreased by $2.3 million for the three months ended September 30, 2025, primarily due to reduced staffing and lower employee bonuses [176]. - Property operating expenses decreased by $2.3 million for the nine months ended September 30, 2025, mainly due to a $1.0 million reduction in common area expenses and a $1.3 million decrease in insurance expenses related to sold properties [183]. Debt and Cash Flow - As of September 30, 2025, the company had outstanding debt of $200.0 million after repaying $40.0 million against the principal of the Term Loan Facility [205]. - Net operating cash outflows amounted to $33.7 million for the nine months ended September 30, 2025, as rental income did not fully cover obligations [197]. - The company generated net investing cash inflows of $43.6 million during the nine months ended September 30, 2025, driven by asset sales [197]. - Interest expense decreased by $0.8 million for the three months ended September 30, 2025, due to partial pay downs of the Term Loan Facility [180]. Legal Matters - The Company is currently involved in multiple derivative lawsuits alleging breaches of fiduciary duty against its executives and board members [220][221]. - The Company intends to vigorously defend itself against the allegations in these lawsuits [221]. - Management believes that the resolution of ordinary course legal proceedings will not have a material effect on the Company's financial position [222]. Strategic Initiatives - The strategic review process for enhancing shareholder value remains ongoing, with the Board of Trustees overseeing the Plan of Sale [159]. - The company faces challenging market conditions, including elevated interest rates and limited availability of debt and equity capital, which may impact asset pricing [164]. Investment Activities - The Company invested $3.8 million and $21.8 million in consolidated properties during the three and nine months ended September 30, 2025, respectively [217]. - For the same periods in 2024, the Company invested $3.3 million and $25.7 million in consolidated properties, along with $5.8 million and $9.0 million in unconsolidated joint ventures [218]. Dividends - The company did not declare dividends on Class A common shares during the nine months ended September 30, 2025, with the last dividend declared on February 25, 2019 [211].

Financial Performance - As of June 30, 2025, the company reported a net income of $53, consisting solely of interest income[134]. - The company completed its Initial Public Offering on November 10, 2025, raising gross proceeds of $172,000,000 from the sale of 17,250,000 Units at $10.00 per Unit[136]. - Following the IPO, a total of $172,500,000 was placed in the Trust Account, with transaction costs amounting to $2,079,000[137]. Liquidity and Funding - The company has liquidity needs satisfied through $25,000 from founder shares and up to $5,000,000 in loans from the sponsor, with $171,148 borrowed under an unsecured promissory note as of June 30, 2025[135][148]. - The company intends to use substantially all funds in the trust account to complete its initial business combination, with any remaining proceeds used for working capital[138]. - The company does not anticipate needing to raise additional funds to meet operating expenditures prior to the initial business combination[145]. - Prior to the initial business combination, the company will have $695,000 available outside the trust account for operational expenses and due diligence[139]. Expenses and Costs - The company expects to incur approximately $180,000 for legal, accounting, and due diligence expenses related to business combinations, along with $150,000 for directors and officers insurance[141]. - The company does not have any long-term debt or off-balance sheet arrangements as of June 30, 2025[146]. Accounting Policies and Standards - The company has identified critical accounting policies, including the treatment of ordinary shares subject to possible redemption as temporary equity[154]. - The FASB issued ASU 2023-07, effective for fiscal years beginning after December 15, 2023, requiring significant segment expense disclosures[156]. - Public entities must disclose the title and position of the chief operating decision maker (CODM) and how they use reported segment profit or loss measures[156]. - Companies with a single reportable segment must provide all disclosures required by ASU 2023-07 and existing segment disclosures in Topic 280[156]. - Management believes that recently issued accounting standards will not materially affect the condensed financial statements[157]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[158].

Mining Operations - The company has not mined or sold thermal coal since mid-2019, with all mining operations currently idled due to adverse market conditions [191]. - In 2023, the Carnegie 1 Mine produced approximately 67,000 tons of coal, selling at an average price of $180 per ton [194]. - The Carnegie 2 Mine produced approximately 13,000 tons of coal in 2023, with an average selling price of $237 per ton [195]. - The McCoy Elkhorn subsidiary has an estimated capacity to produce up to approximately 40,000 tons per month from Mine 15 when operational [193]. - The company holds 11 additional coal mining permits that are currently idled or in various stages of reclamation [200]. - Wyoming County Coal holds approximately 5,668,000 tons of coal deposits, with no current production [214]. - The E4-2 mine produced approximately 106,000 tons of coal in 2022, selling at an average price of $153 per ton [225]. - The Gold Star Mine is currently idled and has been mined in the past using room-and-pillar methods [233]. - ERC Mining Indiana Corporation holds approximately 4,383,298 tons of coal deposits in reclamation status [232]. Processing Facilities - The Bevins 1 Preparation Plant has a processing capacity of 800 tons per hour and can store approximately 100,000 tons of clean coal [196]. - The Mill Creek Preparation Plant has an 800 ton-per-hour processing capacity, currently utilizing less than 10% of its available capacity [211]. - The Supreme Energy Preparation Plant is a 400 ton-per-hour facility that is currently idled and would require capital investment to bring back into operation [206]. - The Davidson Branch Preparation Plant has a capacity of 1,300 tons per hour but is currently not operating due to idled mining operations [226]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $50,165, a decrease of $185,278 (78.7%) compared to $235,443 in 2024, primarily due to the absence of revenue from metal recovery and sales [251]. - Total revenue for the nine months ended September 30, 2025, was $95,349, down $238,208 (71.4%) from $333,557 in 2024, mainly driven by a reduction of $146,055 in royalty income [254]. - Total operating expenses for the three months ended September 30, 2025, were $4,359,718, a decrease of $3,985,618 (47.8%) compared to $8,345,336 in 2024, largely due to lower general and administrative expenses [252]. - Total operating expenses for the nine months ended September 30, 2025, were $16,152,058, down $7,519,858 (31.7%) from $23,671,916 in 2024, primarily due to reduced coal production costs [256]. - Net loss for the three months ended September 30, 2025, was $6,302,798, a decrease of $2,614,084 (29.3%) compared to a net loss of $8,916,882 in 2024 [250]. - Net loss for the nine months ended September 30, 2025, was $21,620,830, down $5,424,925 (20.1%) from $27,045,755 in 2024 [250]. - Interest expense for the three months ended September 30, 2025, was $1,980,211, an increase of $1,003,750 (102.8%) compared to $976,461 in 2024 [253]. - Interest income for the nine months ended September 30, 2025, was $21,356, a decrease of $977,301 (97.9%) from $998,657 in 2024 [257]. Cash Flow and Liquidity - As of September 30, 2025, the company has a cash balance of $2,081,780 and a working deficit of $75,743,188 [259]. - Cash used in operating activities decreased by $6,864,631 to $(10,685,238) compared to the prior period, primarily due to a $5,424,925 decrease in net loss [260]. - Cash provided by investing activities was $3,930,735 for the nine months ended September 30, 2025, a significant improvement from cash used of $(145,900,141) in the same period of 2024 [261]. - Cash provided by financing activities decreased to $9,341,649 in 2025 from $145,065,317 in 2024, largely due to the absence of proceeds from tax-exempt bonds received in the prior year [262]. - The company does not have any credit lines currently available to fund liquidity requirements, which poses significant uncertainties for future liquidity [259]. Business Diversification - The company has established subsidiaries focused on the recovery and sale of metals and rare earth elements, diversifying its revenue streams [189]. - The company anticipates increasing revenues from its new ReElement and Electrified Materials businesses in 2025, following the suspension of coal production activities in 2023 [258]. - The company will continue to require cash flows from financing activities to support operations and the development of new business models [258]. Management and Internal Controls - Management concluded that disclosure controls and procedures were not effective due to insufficient staffing and lack of timely reconciliations [271]. - There have been no changes in the company's internal control over financial reporting that materially affected its controls during the period ended September 30, 2025 [273].

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ___________ COMMISSION FILE NO.: 001-41434 NOCERA, INC. (Exact name of registrant as specified in charter) Nevada 16-1626611 (State or o ...