SharonAI Holdings Inc. 10-K

Item 8. Financial Statements and Supplementary Data Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCOAB ID 483 ) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations an d Comprehensive Income (Loss) F-4 Consolidated Statements of Statements of Equity (Deficit) F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of SharonAI Holdings Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of SharonAI Holdings Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity (deficit) and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ HoganTaylor LLP We have served as the Company’s auditor since 2025. Tulsa, Oklahoma March 31, 2026 F- 2 SHARONAI HOLDINGS INC. CONSOLIDATED BALANCE SHEETS As of December 31, 2025 and December 31, 2024 (Expressed in US dollars, except for the number of shares) December 31, December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 71,073,024 $ 4,424,805 Certificates of deposits - 770,799 Trade and other receivables 749,677 984,547 Convertible note proceeds receivable 15,171,072 - Assets held for sale 1,135,490 - Other current assets 288,191 30,018 Total current assets 88,417,454 6,210,169 Property and equipment, net 15,207,775 4,576,105 Right of use assets, net 7,140,877 935,336 Digital assets - 721,664 Intangible assets, net - 1,658,963 Certificates of deposits 915,397 - Other long-term assets 3,414,432 - Goodwill 18,044,215 18,044,215 TOTAL ASSETS $ 133,140,150 $ 32,146,452 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities Trade and other payables $ 3,433,320 $ 957,829 Warrant liability 890,000 - Note payable 2,254,968 5,435 Convertible notes 129,017,286 - Finance lease liabilities, current portion 1,072,820 186,620 Other current liabilities 2,701,932 - Total current liabilities 139,370,326 1,149,884 Finance lease liabilities, net of current portion 3,918,081 760,087 Deferred tax liabilities - 327,535 TOTAL LIABILITIES 143,288,407 2,237,506 Stockholders’ equity: Series A Preferred Stock ( 0 and 15,000 shares issued and outstanding as of December 31, 2025 and December 31,2024, respectively) - 2 Series B Convertible Preferred Stock ( 0 and 27,000 shares issued and outstanding as of December 31, 2025 and December 31,2024, respectively) - 3 Preferred Stock, value - 3 Common Stock- Class A ( 11,832,164 and 1,067,213 shares issued and outstanding as of December 31, 2025 and December 31,2024, respectively) 1,183 107 Common Stock- Class B ( 136,341 and 0 shares issued and outstanding as of December 31, 2025 and December 31,2024 14 - Common Stock, value 14 - Additional paid-in capital 33,861,613 33,304,160 Accumulated deficit ( 43,529,190 ) ( 3,905,281 ) Accumulated other comprehensive income (loss) ( 372,992 ) 423,858 Noncontrolling interest ( 108,885 ) 86,096 TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) ( 10,148,257 ) 29,908,945 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 133,140,150 $ 32,146,452 See Accompanying Notes to Consolidated Financial Statements. F- 3 SHARONAI HOLDINGS INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended December 31, 2025 and 2024 (Expressed in US dollars, except for the number of shares) 2025 2024 For the Years Ended December 31, 2025 2024 Revenue $ 1,566,631 $ 438,292 Cost of Revenue 1,465,824 719,993 Gross profit (loss) 100,807 ( 281,701 ) Share based compensation 1,761,785 253,728 Selling, general and administrative expenses 12,116,600 2,368,745 Other expenses 1,024,166 2,047,133 Other income ( 1,015,803 ) ( 921,322 ) Loss from operations ( 13,785,941 ) ( 4,029,985 ) Non-operating income (expense): Change in fair value of digital assets ( 406,345 ) 157,923 Change in fair value of warrants 445,000 - Change in fair value of convertible notes ( 26,030,635 ) - Interest expense, net ( 253,334 ) ( 19,028 ) Loss before income taxes ( 40,031,255 ) ( 3,891,090 ) Income tax benefit (expense) 216,234 ( 32,908 ) Net Loss $ ( 39,815,021 ) $ ( 3,923,998 ) Net loss attributable to non-controlling interest ( 191,112 ) ( 18,717 ) Net Loss Attributable to SharonAI Holdings Inc. $ ( 39,623,909 ) $ ( 3,905,281 ) Other comprehensive income (loss) Foreign currency translation adjustments ( 800,719 ) 424,883 Other comprehensive income (loss) ( 800,719 ) 424,883 Other comprehensive income (loss) attributable to noncontrolling interest ( 3,869 ) 1,025 Other comprehensive income (loss) attributable to SharonAI Holdings Inc. ( 796,850 ) 423,858 Comprehensive loss attributable to SharonAI Holdings Inc. $ ( 40,420,759 ) $ ( 3,481,423 ) Net loss per share, basic and diluted $ ( 4.04 ) $ ( 0.77 ) Weighted average number of shares outstanding 9,804,075 5,056,870 See Accompanying Notes to Consolidated Financial Statements. F- 4 SHARONAI HOLDINGS INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) For the Years Ended December 31, 2025 and 2024 (Expressed in U.S. dollars, except for the number of shares) # $ # $ # $ $ # $ $ $ $ $ $ $ Series A Preferred Series B Preferred Common Stock- Class A Common Stock- Class B Options Reserve Additional Paid-In Capital Accumulated deficit Accumulated Comprehensive Income (Loss) (AOCI) Total SharonAI Inc.’s Equity Non Controlling Interest Total Stockholders’ Equity # $ # $ # $ # $ # $ $ $ $ $ $ $ Balance at December 31, 2023 - - - - 2,727 - - - - - 204 - - 204 - 204 Issuance of Series A preferred stock 15,000 2 - - - - - - - - 14,998 - - 15,000 - 15,000 Issuance of Series B preferred stock - - 27,000 3 - - - - - - 26,997 - - 27,000 - 27,000 Issuance of common stock - - - - 2,337,567 26 - - - - 10,640,694 - - 10,640,719 - 10,640,719 Capital raising costs - - - - - - - - - - ( 593,059 ) - - ( 593,059 ) - ( 593,059 ) AAM share exchange, net - - - - 1,906,018 21 - - - - ( 21 ) - - - - - Acquisition of DIF - - - - 499,909 6 - - - - 1,256,040 - - 1,256,046 - 1,256,046 Acquisition of DSS - - - - 4,840,633 53 - - 8,195 - 20,865,114 - - 20,865,167 766,256 21,631,423 Conversion of SAFE securities - - - - 31,276 - - - - - 176,999 - - 176,999 - 176,999 Purchase of noncontrolling interest - - - - 84,912 1 - - - - 662,467 - - 662,468 ( 662,468 ) - Share based compensation - - - - - - - - 57,294 - 253,728 - - 253,728 - 253,728 Net loss - - - - - - - - - - - ( 3,905,281 ) - ( 3,905,281 ) ( 18,717 ) ( 3,923,998 ) Equity adjustment from Foreign Currency Translation (CTA) - - - - - - - - - - - - 423,858 423,858 1,025 424,883 Balance at December 31, 2024 15,000 2 27,000 3 9,703,042 107 - - 65,489 - 33,304,160 ( 3,905,281 ) 423,858 29,822,849 86,096 29,908,945 Balance 15,000 2 27,000 3 9,703,042 107 - - 65,489 - 33,304,160 ( 3,905,281 ) 423,858 29,822,849 86,096 29,908,945 Conversion of 45,203,220 Roth Class A ordinary shares and 75,000 Roth Class B ordinary shares into 905,566 SharonAI Holdings Inc. Class A ordinary common stock - - - - 905,566 - - - - - - - - - - - Conversion of $270,000 of related party debt converted in 2,249,999 Roth Class A ordinary shares and subsequently into 45,000 SharonAI Holdings Inc. Class A Ordinary Common stock - - - - 45,000 - - - - - - - - - - - Conversion of SAI Preferred A shares into Class B common stock ( 15,000 ) ( 2 ) - - - - 136,341 14 - - ( 12 ) - - - - - Conversion of SAI Preferred B shares into Class A common stock - - ( 27,000 ) ( 3 ) 736,230 74 - - - - ( 71 ) - - - - - Consolidation of Roth CH and elimination of pre-acquisition equity balances with corresponding adjustment to additional paid-in capital - - - - - 957 - - - - ( 3,935,503 ) - - ( 3,934,546 ) - ( 3,934,546 ) Issuance of common stock upon exercise of warrants - - - - 67,325 7 - - - - 481,292 - - 481,299 - 481,299 Issuance and immediate conversion on closing of $ 2,250,000 of convertible note instruments converted in to 375,001 Class A ordinary shares - - - - 375,001 38 - - - - 2,249,962 - - 2,250,000 - 2,250,000 Share based compensation - - - - - - - - - - 1,761,785 - - 1,761,785 - 1,761,785 Net income - - - - - - - - - - - ( 39,623,909 ) - ( 39,623,909 ) ( 191,112 ) ( 39,815,021 ) Net income (Loss) - - - - - - - - - - - ( 39,623,909 ) - ( 39,623,909 ) ( 191,112 ) ( 39,815,021 ) Equity adjustment from Foreign Currency Translation (CTA) - - - - - - - - - - - - ( 796,850 ) ( 796,850 ) ( 3,869 ) ( 800,719 ) Balance at December 31, 2025 - - - - 11,832,164 1,183 136,341 14 65,489 - 33,861,613 ( 43,529,190 ) ( 372,992 ) ( 10,039,372 ) ( 108,885 ) ( 10,148,257 ) Balance - - - - 11,832,164 1,183 136,341 14 65,489 - 33,861,613 ( 43,529,190 ) ( 372,992 ) ( 10,039,372 ) ( 108,885 ) ( 10,148,257 ) See Accompanying Notes to Consolidated Financial Statements. F- 5 SHARONAI HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2025 and 2024 (Expressed in US dollars) 2025 2024 For the Years Ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the period, including noncontrolling interest $ ( 39,815,021 ) $ ( 3,923,998 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 2,052,411 566,110 Share based compensation 1,761,785 253,728 Change in fair value of digital assets 406,345 ( 157,923 ) Intangible assets (FIL) revenue ( 133,235 ) ( 219,763 ) Intangible assets (FIL) cost of revenue 141,338 118,497 Amortization of Intangible assets 1,650,000 564,671 Income tax (benefit) expense ( 216,234 ) 32,908 Unrealized (gains) losses on foreign currency exchange ( 1,106,756 ) 956,560 Change in fair value of convertible notes 26,030,635 - Change in fair value of warranty liability ( 445,000 ) - Gain on sale of fixed property and equipment ( 945,662 ) ( 273,273 ) Bad debt expense 73,434 - Debt issuance costs 5,935,530 - Changes in assets and liabilities: Trade and other receivables 181,427 ( 759,340 ) Other current assets ( 239,242 ) 27,285 Other long-term assets 8,963 - Trade and other payables ( 531,597 ) 608,545 Other current liabilities 2,551,932 - Net cash flows from/(used in) operating activities ( 2,638,947 ) ( 2,205,993 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash received from DSS acquisition - 55,836 Purchase of certificates of deposit ( 86,828 ) ( 264,363 ) Payment for the purchase of property and equipment ( 10,950,712 ) ( 2,947,244 ) Proceeds from sales of digital assets 339,412 119,268 Investment - Texas Critical Data Centers JV ( 3,414,432 ) - Cash received as initial deposit related to the sale of TCDC investment 150,000 - Proceeds from sale of property and equipment 156,965 - Net cash flows from/(used in) investing activities ( 13,805,595 ) ( 3,036,503 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock, net of issuance costs 481,299 10,184,394 Issuance costs related to capital raise ( 5,731,313 ) ( 622,231 ) Proceeds from debt issuance with related parties - 419,601 Proceeds from issuance of preferred shares - 42,000 Cash received from convertible note issuance 89,221,502 - Payment for lease liabilities ( 3,176,273 ) - Proceeds from issuance of note payable 2,249,124 - Net cash flows from/(used in) financing activities 83,044,339 10,023,764 Effect of exchange rates changes on cash and cash equivalents 48,422 ( 356,667 ) Net cash increase/(decreases) in cash and cash equivalents 66,648,219 4,424,601 Cash and cash equivalents at beginning of period 4,424,805 204 Cash and cash equivalents at end of period $ 71,073,024 $ 4,424,805 Refer to Note 19 for the supplemental cash flows information. See Accompanying Notes to Consolidated Financial Statements. F- 6 SHARONAI HOLDINGS, INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Description of Business Unless otherwise stated in this Notes to Consolidated Financial Statements, references to “we,” “us,” “our,” “Company” or “our Company” are to SharonAI Holdings Inc. and its subsidiaries. The consolidated financial statements cover SharonAI Holdings Inc. (“the Company” or “SAI”) and its controlled entities (“the Group”). SAI is a digital infrastructure provider, incorporated in Delaware, United States on February 15, 2024. On April 29, 2024, SAI and Alternative Asset Management Pty Ltd (“AAM”), who had identical ownership interest as SAI, completed a share exchange. AAM did not have business operations but owned certain mining assets. Pursuant to the transaction there was no change in relative voting interest amongst the existing shareholders of both entities. See Note 2(b) for additional reporting considerations for the share exchange. On June 30, 2024, SAI acquired the majority equity interest of Distributed Storage Solutions Limited (“DSS”). DSS is a cloud storage provider providing robust data storage infrastructure in the Filecoin network with additional focus on high performance computers (HPC) and artificial intelligence, which was determined to be a business combination. In January of 2025, SAI formed a 50:50 joint venture with New Era Helium, Inc., named Texas Critical Data Centers LLC (“TCDC”), to fund, develop, and construct a planned 250MW net-zero energy data center behind the meter with a natural gas-fired power plant within the Permian Basin in Western Texas. New Era Helium, Inc. is a Nasdaq listed industrial gas company that is expected to provide a portion of the natural gas required by the power plant. On January 28, 2025, the Company entered into a Business Combination Agreement (“BCA”) with Roth CH Acquisition Co. (“Roth”) and subsequently on October 21, 2025 filed an S-4 registration statement in participation with Roth with the Securities and Exchange Commission (“SEC”). On June 9, 2025, the Company made a strategic decision to cease its participation in the operations associated with the Filecoin ecosystem in order to focus its resources and efforts on the continued growth of its high-performance GPU-as-a-Service (GPUaaS) business. This decision aligns with the Company’s long-term strategy to concentrate on providing scalable, on-demand computing infrastructure for artificial intelligence, research, and other data-intensive applications. As of June 30, 2025, all activities related to the Company’s prior Filecoin-related operations had been fully wound down. This transition reflects a broader shift toward infrastructure services with more predictable and scalable revenue opportunities and supports the Company’s goal of building a focused, capital-efficient technology services platform. On December 17, 2025, the Company completed its previously announced business combination pursuant to the Business Combination Agreement dated January 28, 2025, as amended, with Roth and Roth CH Holdings Inc. In connection with the closing, Roth domesticated from the Cayman Islands to the State of Delaware by merging into Roth CH Holdings Inc., which subsequently changed its name to SharonAI Holdings Inc. Immediately following the domestication, SharonAI Inc. merged with a subsidiary of SharonAI Holdings Inc., with SharonAI Inc. surviving the merger as a wholly owned subsidiary of SharonAI Holdings Inc. As a result of the transaction, former equity holders of SharonAI Inc. received an aggregate of 10,506,472 shares of Class A common stock and 136,341 shares of Class B common stock of SharonAI Holdings Inc., subject to the terms and conditions of the Business Combination Agreement. In connection with the business combination, the Company assumed approximately $ 3.9 million of liabilities, consisting primarily of accounts payable and accrued expenses, accrued liabilities, and warrant liabilities. For accounting purposes, the transaction was treated as a reverse recapitalization, with SharonAI Inc. determined to be the accounting acquirer and Roth treated as the acquired entity. See Note 2 to the consolidated financial statements for additional information regarding the accounting treatment of the business combination. Following the closing of the business combination, the common stock and warrants of SharonAI Holdings Inc. began trading on the OTC Market under the ticker symbols “SHAZ” and “SHAZW,” respectively. Note 2. Summary of Significant Accounting Policies Basis of presentation The accompanying consolidated financial statements include the balances and results of operations of the Company and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). Principles of consolidation Pursuant to the share exchange with the holders of AAM’s equity, which had the same ownership structure as SAI before and after the share exchange, the Group financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the AAM share exchange had been completed at the beginning of the earliest reporting period. The consolidated statements of profit or loss and other comprehensive income (loss), consolidated statements of changes in equity and consolidated statements of cash flows of SAI and AAM for the relevant periods include the results and cash flows of SAI and AAM from the earliest date presented. F- 7 The consolidated balance sheets as of December 31, 2025 and December 31, 2024 have been prepared to present the assets and liabilities of the subsidiaries using the existing book values from the common shareholders’ perspective. No adjustments are made to reflect fair values, or to recognize any new assets or liabilities as a result of the share exchange. On December 17, 2025, the Company completed a business combination with Roth pursuant to the Business Combination Agreement. Following the transaction, SharonAI Inc. became a wholly owned subsidiary of SharonAI Holdings Inc. For accounting purposes, the transaction was treated as a reverse recapitalization in accordance with Accounting Standards Codification (ASC) 805-40, Business Combinations- Reverse Acquisitions. Under this method of accounting, SharonAI Inc. was determined to be the accounting acquirer and Roth was treated as the acquired entity for financial reporting purposes. Accordingly, the transaction was accounted for as a capital transaction, with no recognition of goodwill or other intangible assets. The net assets of Roth were recorded at historical cost, and the consolidated financial statements reflect the historical financial position and results of operations of SharonAI Inc. prior to the transaction. On December 23, 2025 , we (i) effected a 1-for-50 reverse stock split of its outstanding common stock, including both shares of its Class A Ordinary Common Stock and Class B Super Common Stock, and (ii) reduce its authorized common stock to 100,136,341 shares, being 100,000,000 shares of Class A Ordinary Common Stock and 136,341 shares of Class B Super Common Stock. In addition to reducing the shares of common stock outstanding, the reverse stock split will effect a reduction in the number of shares of common stock issuable upon the exercise of stock options, warrants and unit purchase options and conversion of convertible notes outstanding immediately prior to the reverse stock split, with a proportional increase in the respective exercise/conversion prices. All share and per share information, including share-based compensation, throughout this Annual Report on Form 10-K has been retroactively adjusted to reflect the stock split. Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current year presentation. These reclassifications had no impact on the previously reported net loss and accumulated deficit For all other business combinations, the Group’s consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost. For all periods presented, the consolidated financial statements include the Group. All inter-company transactions are eliminated in consolidation. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates. Foreign currency translation The financial statements of the Group’s subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders’ equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive (loss) income in stockholders’ equity. Foreign currency transaction gains and losses are included in other expenses in the consolidated statements of operations and comprehensive loss. The Company recorded realized foreign currency transaction loss of $ 2 thousand and an unrealized foreign currency transaction loss of $ 799 thousand for the years ended December 31, 2025 and realized foreign currency transaction gain of $ 40 thousand and an unrealized foreign currency transaction loss of $ 971 thousand for the December 31, 2024. These are included in other expenses, in the consolidated statements of operations and comprehensive loss. Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the fair value is concentrated in a single identifiable asset, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the test to determine whether an acquisition is a business combination or an acquisition of assets. Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes pre-acquisition direct costs recorded in accrued professional and consulting fees. Goodwill is not recognized in asset acquisitions. Revenue recognition The Group recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows: i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to the performance obligation in the contract v. recognize revenue when the entity satisfies a performance obligation. Below is a discussion of how the Group’s revenues are earned and the Group’s accounting policies pertaining to revenue recognition under ASC 606 and other required disclosures. F- 8 Digital asset - mining revenue The Group provided data storage services in exchange for non-cash consideration in the form of a digital asset. The Group’s performance obligations to provide the data storage services arises in the Filecoin (“FIL”) network when a customer in this network digitally requests the service from data storage providers such as the Group. The Group satisfies this performance obligation when it proves delivery of data storage services on the FIL blockchain by undertaking daily computations that validate the successful delivery of the data storage services to the end FIL customer. Upon selection as the storage provider and successful validation, the Group receives its share of network block rewards, and therefore recognizes revenue at that point in time, for the satisfactory completion of this performance obligation. The relative share of network block rewards in Filecoin is determined by the amount of “sealed” or proven storage that the Group has in the network. The more data the Group stores the higher the probability of winning block rewards. Block rewards are deposited into the Group’s digital wallets immediately upon completing the validation (WinningPoSt) computations. In the second quarter of 2025, the Company discontinued its Filecoin-related activities as part of a strategic shift in operations. Revenue from provision of GPU infrastructure The Group earns revenues from the provision of GPU infrastructure as a service to customers via a marketplace. Revenue from provision of GPU infrastructure for the Group is recognized on a weekly basis as the performance obligation of the supplied GPU IaaS is met. The Group satisfies this performance obligation when it has the required equipment available to the customer for the period. Cost of revenue Cost of revenue consists primarily of expenses that are directly related to providing the Group’s service to its paying customers. These primarily consist of material costs related to digital currency mining and provision of GPU infrastructure services. Income tax benefit (expense) The income tax benefit (expense) recognized in the consolidated statements of operations and comprehensive loss comprises current income tax expense plus deferred tax expense. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized. F- 9 Tax positions taken or expected to be taken in the course of preparing the Group’s tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There are no uncertain tax positions that require accrual or disclosure to the financial statements as of December 31, 2025, or December 31, 2024. The Group’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The Group had no material accruals for interest or penalties related to income tax matters as of December 31, 2025, or December 31, 2024. Generally, the Group’s tax returns are subject to examinations by local Australian tax authorities for tax filings for all years since inception. Cash and cash equivalents Cash and cash equivalents comprise cash in bank, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Warrant Liabilities The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgement, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. See Note 7 for valuation methodology of warrants. Financial instruments Financial instruments are recognized initially on the date that the Group becomes party to the contractual provisions of the instrument. The carrying amounts cash and cash equivalents and certificates of deposit approximate fair value due to the short-term nature of these instruments. The Company has elected the fair value option for its convertible notes in accordance with ASC 825. These instruments are initially recorded at fair value and subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings, except for changes attributable to instrument-specific credit risk, which are recognized in other comprehensive income. Refer to Note 9- Convertible Notes and Note 18- Fair Value Measurements for additional information, including the fair value hierarchy classification. Goods and services tax (GST) Revenue, expenses and assets are recognized net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of GST. Cash flows in the consolidated statements of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. Property and equipment Property and equipment is stated at cost, net of accumulated depreciation. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statements of operations and comprehensive loss. The Group provides for depreciation using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Schedule of Property and Equipment Estimated Useful Lives Fixed asset class Useful life Used Computer Equipment 1 year Computer Equipment 2 - 5 years Other Equipment 5 years Other Equipment above includes modular data centers, electrical equipment, cooling infrastructure equipment, telecommunication modules and sundry building and storage. Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Intangible assets Intangible assets are recognized at fair value when acquired, either separately or as part of a business combination, in accordance with ASC 805. Identifiable intangibles are those that are either separable or arise from contractual or legal rights. Internally generated intangible assets, such as brands or customer relationships, are generally expensed as incurred, with the exception of certain software development costs, which may be capitalized once technological feasibility is established, per ASC 350-40. Finite-lived intangible assets are amortized over their estimated useful lives, typically on a straight-line basis, reflecting the consumption of economic benefits. Useful lives are based on legal, contractual, or economic factors and are generally between 1 to 20 years. Residual values are assumed to be zero unless a third-party commitment exists. Amortization begins when the asset is available for use and any changes in useful life or method are accounted for prospectively. Intangible assets with indefinite lives, such as trademarks or perpetual licenses, are not amortized but are tested for impairment at least annually, or more frequently if indicators of impairment arise, in accordance with ASC 350. Goodwill, which arises in business combinations, is also not amortized but tested for impairment annually at the reporting unit level or when triggering events occur. An optional qualitative assessment may be performed before a quantitative test. Intangible assets with indefinite lives and goodwill are evaluated at the beginning of the fourth quarter annually in line with company policy. Finite-lived intangible assets are assessed for impairment under ASC 360-10 if events suggest their carrying amount may not be recoverable. If undiscounted future cash flows are less than the carrying amount, an impairment loss is recognized as equal to the excess of carrying value over fair value. For indefinite-lived intangibles and goodwill, impairment losses are recorded when the carrying amount exceeds fair value, with goodwill impairment limited to the carrying amount of goodwill. F- 10 During the second quarter of 2025, the Company discontinued its Filecoin operations. As a result of this strategic decision, the Company determined that the intangible assets associated with Filecoin-related technology no longer had any future economic benefit. In accordance with ASC 350, Intangibles- Goodwill and Other, the carrying amount of these intangible assets was fully amortized. Digital assets The Group purchased or mined digital assets or received digital assets as consideration for the delivery of its services. The Group accounted for all digital assets held as crypto assets, a subset of indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles- Goodwill and Other- Crypto Assets. The Group has ownership of and control over the digital assets and may use third-party custodial services to secure it. The digital assets are initially recorded at cost if purchased or fair value if received in mining revenue operations and are subsequently remeasured on the consolidated balance sheet at fair value. Cost is determined based on the cash consideration paid net of the transaction costs. The Group remeasures on a monthly basis the fair value of the digital assets determined by observable market rates. The Group recognized a loss of $ 406 thousand from the fair value measurement of digital assets during the year ended December 31, 2025, and a gain of $ 158 thousand for the fair value measurement of digital assets during the year ended December 31, 2024. Gains and losses from the remeasurement of digital assets are included in net income and are presented separately from other intangible assets. At times, the Group may settle various payables and accrued liabilities in digital assets within the normal course of operations. Gains and losses arising from transactions settled with digital assets are included as a component of other income or selling, general, and administrative expenses within the accompanying consolidated statements of operations and comprehensive loss. The Group’s digital assets consisted primarily of Filecoin crypto-currency. Goodwill Goodwill of $ 18.0 million arose from the acquisition of Distributed Storage Solutions Pty Ltd in June 2024 and is allocated to the Group’s single reporting unit, which is also its sole operating segment focused on high-performance computing services. During the second quarter of 2025, the Group approved the closure of its distributed storage operations, which constituted a triggering event. An interim impairment test was performed as of June 30, 2025, and no impairment was recognized. The Group performs its annual goodwill impairment test as of October 1 in accordance with ASC 350-20. Accordingly, a quantitative impairment assessment was performed as of October 1, 2025 using a discounted cash flow (“DCF”) model. The analysis indicated that the fair value of the reporting unit significantly exceeded its carrying amount. Management also assessed whether events or changes in circumstances between October 1, 2025 and December 31, 2025 indicated impairment and concluded that no additional impairment indicators were present. Accordingly, no goodwill impairment was recognized for the year ended December 31, 2025. Management will continue to monitor for impairment indicators in future periods in accordance with ASC 350-20. Equity-settled compensation The Group follows ASC 718-10, Compensation-Stock Compensation . The Group offers equity-settled stock-based compensation employee share and option plans. The fair value of the equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, with a corresponding increase to equity. Vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of options which are expected to vest. Revisions to the prior period estimates are recognized in profit or loss and equity. The Group has the following types of equity settled transactions: Options The Group issues options to board members. The options are measured at fair value based on the Black-Scholes option pricing model on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period. Restricted Stock Units The Group issues restricted stock units to employees. These units are measured at fair value based on observable market bid prices on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period. Recently Adopted and Issued Accounting Standards In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendment improves income tax disclosure requirements by requiring public entities, on an annual basis, to provide disclosure of defined categories in the income tax reconciliation, as well as disclosure of income taxes paid, disaggregated by jurisdiction. This guidance is effective for annual reporting periods in fiscal years beginning after December 15, 2024. As of December 31, 2025, the Company has adopted ASU 2023-09 prospectively and has enhanced its income tax disclosures included herein, to comply with the requirements. The adoption did not have an impact on the Company’s financial statements. The Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. F- 11 Note 3. Revenue and Other Income Schedule of Revenue 2025 2024 For the Years Ended December 31, 2025 2024 Revenue Digital Asset Mining Revenue $ 128,842 $ 232,510 Provision of GPU Infrastructure services 1,436,420 205,043 Other revenue 1,369 739 Total Revenue $ 1,566,631 $ 438,292 Other income Schedule of Other Income 2025 2024 For the Years Ended December 31, 2025 2024 Other income Gain on Disposal of Fixed Assets $ 961,713 $ - Fixed asset donation - 273,273 Other Income 54,090 - Research and development Grants - 648,049 Other Income $ 1,015,803 $ 921,322 The sale of fixed asset in first quarter is for the sale of the tier 3 by design modular data center and ancillary infrastructure equipment owned by SharonAI Pty Ltd. The assets were located in Australia and were sold to a private Australian company with proceeds due in May 2025. The assets were sold for a total of $ 1,257 thousand (AUD$ 2,000 thousand) including Goods and Service Tax (GST). A gain on sale of $ 809 thousand was recognized from the sale. On June 20, 2025, the Company repossessed the Modular Data Center (MDC) following the buyer default on the previously recognized sale transaction. In accordance with ASC 360, the MDC was re-recognized as an asset held for sale and measured at its fair value less costs to sell (FVLCTS). As of June 30, 2025, management determined the FVLCTS of the modular data center to be $ 1,109 thousand (AUD$ 1,700 thousand), based on a cost approach adjusted for obsolescence, market corroboration from non-binding offers, and consideration of the asset’s specialized nature and limited liquidity. In the absence of a completed sale, management performed an updated valuation analysis as of December 31, 2025 to reassess the asset’s fair value. As of December 31, 2025, the Company engaged an independent third-party valuation specialist who estimated the MDC’s value. Management evaluated this valuation in the context of the requirements for measuring assets held for sale under ASC 360, including consideration of expected selling costs, market liquidity, and the likelihood of achieving the appraised value in an orderly transaction within a reasonable period. Based on this assessment and corroborating market evidence, management concluded that the previously determined fair value less costs to sell of $ 1,135 thousand (AUD$ 1,700 thousand) remained the most representative estimate of the amount expected to be realized from a sale as of December 31, 2025. Accordingly, the carrying value of the MDC was not adjusted at year-end. On June 30, 2025, the Company completed the sale of a set of storage servers for total consideration of $ 153 thousand (AUD$ 235 thousand). The assets, which were previously classified as property and equipment, were fully depreciated and no longer in active use at the time of sale. As a result, the entire sale proceeds were recognized as a gain on disposal in the consolidated statement of operations for the year ended December 31, 2025. On October 15, 2025, the Company received a settlement payment of $ 54 thousand (AUD$ 82 thousand) from the buyer in connection with the failed MDC sale transaction. The settlement was recognized as other income in the consolidated statement of operations for the year ended December 31, 2025. Note 4. Income Tax In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendment improves income tax disclosure requirements by requiring public entities, on an annual basis, to provide disclosure of defined categories in the income tax reconciliation, as well as disclosure of income taxes paid, disaggregated by jurisdiction. This guidance is effective for annual reporting periods in fiscal years beginning after December 15, 2024. As of December 31, 2025, the Company has adopted ASU 2023-09 prospectively and has enhanced its income tax disclosures included herein, to comply with the requirements. The adoption did not have an impact on the Company’s financial statements. Income (loss) before income taxes consists of the following: Schedule of Income (Loss) Before Income Taxes 2025 2024 For the Years Ended December 31, 2025 2024 United States $ ( 5,560,443 ) $ 865,102 Foreign ( 34,470,812 ) ( 4,756,192 ) Income (loss) before income taxes $ ( 40,031,255 ) $ ( 3,891,090 ) The Company is subject to income taxes in U.S. federal, state, and foreign jurisdictions. The provision (benefit) for income taxes in the accompanying consolidated financial statements is comprised of the following: Schedule of Provision (Benefit) for Income Taxes 2025 2024 For the Years Ended December 31, 2025 2024 Current taxes: Federal $ - $ - State - 40,714 Foreign - 99,299 Total current taxes - 140,013 Deferred taxes: Federal - - State - - Foreign ( 216,234 ) ( 107,105 ) Total deferred taxes ( 216,234 ) ( 107,105 ) Income tax expense (benefit) $ ( 216,234 ) $ 32,908 F- 12 A reconciliation of the U.S. federal statutory income tax rate of 21 % to the Company’s effective income tax rate, post the adoption of ASU 2023-09, is as follows: Schedule of Effective Income Tax Rate 2025 2024 For the Years Ended 2025 2024 Income tax expense (benefit) using U.S. federal statutory rate 21.0 % 21.0 % State income taxes, net of federal benefit 0.1 % 5.0 % Foreign tax effects Australia Statutory tax rate difference 3.6 % 1.0 % Fair value loss on convertible notes - 16.2 % 0.0 % Change in valuation allowance - 9.2 % 0.0 % Capital loss carryforwards 3.7 % 0.0 % Other - 0.4 % 0.0 % Nontaxable or nondeductible items - 0.6 % 0.0 % Changes in valuation allowance - 1.5 % - 19.0 % Permanent Difference 0.0 % - 3.0 % Research and development tax incentive 0.0 % - 5.0 % Other 0.0 % 0.0 % Income tax expense (benefit) and effective tax rate 0.5 % 0.0 % For the year ended December 31, 2025, state income taxes in New York and New York City make up the majority (greater than 50%) of the state income taxes, net of federal benefit category. The Company’s effective tax rate for the year ended December 31, 2025 differs from the U.S. statutory rate primarily due to the change in valuation allowance maintained against certain deferred tax assets and the nonrecognition of fair value loss on convertible notes. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to be in effect for the years in which differences are expected to reverse. Deferred tax assets and liabilities were determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Schedule of Deferred Tax Assets and Liabilities December 31, December 31, 2025 2024 Net operating loss carryforward $ 4,337,890 $ 303,257 Unrealized Gain (Loss) - 293,707 Capitalized transaction costs 1,829,760 77,225 Accrued expenses 36,117 78,878 Stock based compensation 378,290 65,208 Lease liabilities 1,247,725 - Total deferred tax assets 7,829,782 818,275 Less valuation allowance ( 5,283,165 ) ( 733,310 ) Net deferred tax asset 2,546,617 84,965 Intangibles - ( 412,500 ) Right-of -use asset ( 1,785,219 ) - Other deferred tax liabilities ( 761,398 ) - Total deferred tax liabilities ( 2,546,617 ) ( 412,500 ) Net deferred tax liability $ - $ ( 327,535 ) F- 13 The Company’s valuation allowance increased by $ 4,549,855 , primarily as a result of current year losses and an increase in capitalized legal expenses against which a valuation allowance is maintained during the year ended December 31, 2025. In assessing the ability to realize the Company’s net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income projections to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Management has determined that the uncertainty regarding realizing certain deferred tax assets is sufficient to warrant the need for a valuation allowance against its worldwide net deferred tax assets after consideration of the reversals of existing taxable temporary differences. As of December 31, 2025, the Company had $ 3,224,739 of federal and $ 5,939,808 of state net operating loss carryforwards. The federal net operating losses have an indefinite life and can be utilized to offset 80% of future taxable income, while the state net operating losses will begin to expire in 2044. As of December 31, 2025, the Company had Australian net operating loss carryforwards and capital loss carryforwards of $ 7,198,497 and $ 6,003,699 , respectively, that can be carried forward indefinitely. As of December 31, 2025, the Company had no recorded liabilities for uncertain tax positions. As of December 31, 2025, the Company had no accrued interest or penalties related to uncertain tax positions. The Company’s accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company files income tax returns in the United States, various US state jurisdictions, and Australia. The Company is not currently under examination by the Internal Revenue Service or any other jurisdiction. All tax years remain open to tax examination. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may be adjusted upon examination by the Internal Revenue Service or other tax authorities to the extent utilized in a future period. The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries, as such amounts are considered to be indefinitely reinvested. Any accumulated earnings in foreign subsidiaries are primarily utilized to fund working capital requirements as the Group continues to expand operations. The Company did not make any income tax payments (net of refunds received) during the year ended December 31, 2025. Note 5. Certificates of Deposits At December 31, 2025, the Company held certificates of deposits (CDs) totaling $ 915 thousand which are restricted due to their use as collateral for bank guarantees issued for equipment managed service contracts. The CDs have either a 6-month or 12-month term and are maintained in a bank account in the Company’s name. Interest earned on the CDs is accrued to the Company. Under the terms of the service contracts, the supplier may claim the funds in the event of a material default by the Company in fulfilling its payment obligations. These arrangements do not transfer ownership or control of the CDs but restrict their use for the duration of the CD term. Additionally, in conjunction with the Company’s new service contracts in 2025, the supplier required the Company to maintain these CD’s throughout the duration of the contract period, or until the supplier agrees to release them. This resulted in a long-term restriction on the CDs. Note 6. Trade and Other Receivables Schedule of Trade and Other Receivables December 31, December 31, 2025 2024 Trade receivables $ 44,142 $ 15,799 Research and development grant receivable - 891,482 GST receivable 705,535 77,266 Total trade and other receivables $ 749,677 $ 984,547 Note 7. Convertible note proceeds receivable During December 2025, the Company received the majority of the committed proceeds under the AU Convertible Notes agreement. As of December 31, 2025, approximately $ 15,171 thousand of proceeds remained contractually receivable from investors and is presented as Convertible Notes Proceeds Receivable within current assets in the consolidated balance sheets. The outstanding receivable was collected in January 2026 in accordance with the contractual funding terms. Management evaluated collectability at December 31, 2025 and concluded that no allowance was required, as the amount was contractually committed and subsequently received after year end. F- 14 Note 8. Property and Equipment Schedule of Property and Equipment December 31, December 31, 2025 2024 Computer equipment At cost $ 16,863,167 $ 4,640,967 Accumulated Depreciation ( 1,666,017 ) ( 407,672 ) Total Computer Equipment 15,197,150 4,233,295 Other equipment At cost 11,828 380,900 Accumulated Depreciation ( 1,203 ) ( 38,090 ) Total Office Equipment 10,625 342,810 Total property and equipment, net $ 15,207,775 $ 4,576,105 Right of use assets At cost 8,236,479 1,011,179 Accumulated Depreciation ( 1,095,602 ) ( 75,843 ) Total right of use, net 7,140,877 935,336 Total property and equipment, net $ 22,348,652 $ 5,511,441 Depreciation expense related to computer equipment amounted to $ 2,043 thousand for the year ended December 31, 2025 and $ 460 thousand for the year ended December 31, 2024. Foreign currency translation adjustments of $ 198 thousand were recognized for the same period. Note 9. Digital Assets The following table provides details of the activities related to our digital assets for the year ended December 31, 2025 and December 31, 2024. Schedule of Activities Related to Digital assets December 31, December 31, 2025 2024 Balance at beginning of the period $ 721,664 $ - Acquisitions - 535,697 Disposals ( 351,755 ) ( 119,268 ) Earned FIL revenue 133,235 219,763 FIL cost of revenue ( 141,338 ) ( 118,497 ) Change in fair value of digital assets ( 406,345 ) 157,923 Unrealized gain (loss) on foreign currency translation 44,539 46,046 Balance at the end of period $ - $ 721,664 As of December 31, 2025, the Company no longer holds any digital assets. All previously held digital assets were disposed of or sold during the period. F- 15 Note 10. Intangible Assets Schedule of Intangible Assets 2025 2024 For the Years Ended December 31, 2025 2024 Finite-Lived Intangible Assets Balance at beginning of the period $ 8,963 $ - Acquired Definite-Lived Intangible Assets - 24,369 Amortization of Definite-Lived Intangible Assets ( 8,963 ) ( 15,406 ) Technology acquired - 2,200,000 Accumulated amortization ( 1,650,000 ) ( 550,000 ) Balance at the end of period $ - $ 8,963 Technology Balance at beginning of the period $ 1,650,000 $ - Technology acquired - 2,200,000 Accumulated amortization ( 1,650,000 ) ( 550,000 ) Balance at the end of period $ - $ 1,650,000 Finite-Lived Intangible Assets Finite-lived intangible assets include digital asset deals contracts which are paid in Filecoin tokens and are amortized over the life of the contract. As part of the Company’s decision to discontinue its Filecoin operations in the second quarter of 2025, the related finite-lived intangible asset was fully amortized during the period. Technology The acquired technology relates to the DSS acquisition in June 2024. As part of the Company’s decision to discontinue its Filecoin operations in the second quarter of 2025, management evaluated the recoverability of intangible assets related to Filecoin-related technology. Based on this assessment and in accordance with ASC 350, Intangibles- Goodwill and Other , the Company concluded that this intangible asset no longer had any future economic benefit. Accordingly, their full carrying amount was fully amortized during the period. Note 11. Note Payable On July 15, 2025, the Company entered into a Convertible Promissory Note Agreement with YA II PN, Ltd. for proceeds of $ 500,000 . On October 1, 2025, the Company issued a second tranche under the agreement for additional proceeds of $ 2,000,000 . The notes bear interest at 10 % per annum, increasing to 18 % upon an event of default, and mature on July 15, 2026 . The notes include a contingent conversion feature linked to the closing of the Company’s Business Combination Agreement (“BCA”). Prior to the closing of the BCA, which was expected by December 31, 2025, the conversion price was fixed at $ 60.62 per share, resulting in a fixed and determinable number of shares. The Company concluded that the conversion feature qualified for the own-equity scope exception and did not require bifurcation. Accordingly, the notes were accounted for as a single debt instrument at amortized cost. Monthly cash payments were required to commence only upon the occurrence of specified triggering events, including failure to close the BCA by the stated deadline or the occurrence of an amortization event, and would continue until the outstanding principal and accrued interest were repaid. On December 15, 2025, the Company entered into an amendment to the notes and related agreements. The amendment temporarily suspended certain obligations of the parties from December 15, 2025 through January 20, 2026. In connection with the amendment, the Company agreed to make (i) an initial payment of $ 350,000 in December 2025, consisting of partial principal repayment, a redemption premium, and accrued interest, and (ii) a final payment on or before the end of the suspension period equal to the remaining outstanding principal, applicable redemption premiums, accrued interest, and a contractual fee of $ 250,000 . Upon payment of the final amount, all obligations under the agreements were fully satisfied and the agreements terminated . F- 16 At December 31, 2025, the outstanding balance of the notes was classified as a current liability in the consolidated balance sheets. Subsequent to year end and prior to the issuance of these consolidated financial statements, the Company completed the final payment required under the amendment, and extinguished the note. As a result, all amounts due under the amended agreements have been paid and no further obligations remain outstanding. Note 12. Convertible Notes On December 17, 2025, the Company issued $ 2.25 million of convertible notes bearing interest at 10 % per annum and maturing December 17, 2026 . The notes automatically convert into Class A Ordinary Common Stock at $ 6.00 per share. On December 19, 2025, SharonAI, Inc. and SharonAI Pty Ltd (collectively, the Company) entered into a Convertible Note Agreement with several institutional investors and issued unsecured redeemable convertible notes with an aggregate principal amount of $ 103.4 million. The Convertible Notes bear interest at 12.0 % per annum if an initial public offering (IPO) does not occur within four months of issuance, increasing to 15.0 % per annum if an IPO has not occurred within 12 months. Interest accrues daily and is payable upon conversion in shares unless the notes are redeemed earlier. The Convertible Notes mature 24 months from the issue date. The Convertible Notes automatically convert into common stock upon an IPO at a discount to the IPO price, or mandatorily convert upon certain corporate transactions, each subject to a valuation cap. At maturity, investors may elect to convert the notes into common stock or require cash redemption of the outstanding principal and accrued interest. The notes are also redeemable upon the occurrence of an event of default. The Company elected to account for the Convertible Notes under the fair value option in accordance with ASC 825. Upon issuance, the Convertible Notes were recorded at a fair value of $ 129.4 million as a noncurrent liability. Transaction costs were recognized in earnings as incurred. The difference between the fair value of the Convertible Notes and the cash proceeds received was recognized as an expense following its issuance. The Convertible Notes are subsequently remeasured at fair value each reporting period, with changes in fair value recognized in earnings, except for changes attributable to instrument-specific credit risk, which are recognized in other comprehensive income. There was no change in fair value from the issuance date through December 31, 2025. Note 13. Common Stocks The Company has two classes of common stock: Class A Ordinary Common Stock and Class B Super Voting Common Stock. Both classes have identical economic rights, including rights to dividends and distributions. However, the classes differ in voting rights. Each share of Class A Ordinary Common Stock entitles the holder to one (1) vote per share, while each share of Class B Super Voting Common Stock entitles the holder to one hundred sixty (160) votes per share. Note 14. Warrant Liabilities The Company accounts for the 22,250,000 warrants that were assumed from Roth as part of the BCA (representing 11,500,000 Public Warrants and 10,750,000 Private Placement Warrants exercisable for 230,000 shares of Class A Ordinary Common Stock and 214,982 shares of Class A Ordinary Common Stock, respectively) which are exercisable of 444,982 shares of Class A Ordinary Common Stock in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The warrants do not meet the criteria to be considered indexed to the Company’s stock due to settlement provisions that result in holders of warrants receiving variable settlement amounts determined by the reference table. Additionally, an event that is not within the entity’s control could require net cash settlement, thus precluding equity classification. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each consolidated balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s consolidated statement of operations. F- 17 Warrants — Public Warrants may only be exercised for a whole number of Class A ordinary shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Accordingly, unless holders purchase at least two Units, they will not be able to receive or trade a whole warrant. The Public Warrants will become exercisable 30 days after the completion of an initial business combination. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrant will be exercisable, and the Company will not be obligated to issue any Class A ordinary shares upon exercise of a Public Warrant unless the Class A ordinary shares issuable upon such Public Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrants. The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of an initial business combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement filed in connection with its IPO or a new registration statement covering registration under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of an initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Public Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the 60th day after the closing of an initial business combination, Public Warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. This registration statement was filed with the SEC on January 16, 2026 and declared effective by the SEC on February 13, 2026. Redemption of warrants when the price per Class A ordinary share equals or exceeds $900.00 . Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $900.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders. If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of warrants when the price per Class A ordinary share equals or exceeds $500.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $ 0.10 per warrant; ● upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary share; ● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $500.00 per share (as adjusted per share sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company send the notice of redemption to the warrant holders; and ● if the last reported sale price of the Class A ordinary share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $900.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. F- 18 In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities (excluding the forward purchase securities) for capital raising purposes in connection with the closing of an initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial business combination on the date of the consummation of an initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates an initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $900.00 per share redemption trigger price described above under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $500.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $500.00 per share redemption trigger price described above under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $200.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or saleable until 30 days after the completion of an initial business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of Class A ordinary shares as described above under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $900.00”). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants. Note 15. Leases The Company leases GPU and associated computer and networking equipment under non-cancelable finance lease agreements. Lease terms generally range from 3 to 5 years and may include options to extend or terminate the lease. Lease agreements may contain both lease and non-lease components, which the Company accounts for as a single lease component for all asset classes under a practical expedient election. The Company also elected the short-term lease exemption for all leases with original terms of 12 months or less, whereby such leases are not recognized on the consolidated balance sheet. Lease cost The components of lease cost were as follows: Schedule of Lease Cost 2025 2024 For the Years Ended December 31, 2025 2024 Description Finance lease – interest $ 319,944 $ 25,275 Finance lease – amortization 3,211,697 89,748 Total Lease Cost $ 3,531,641 $ 115,023 Maturity analysis of lease liabilities Future minimum lease payments as of December 31, 2025 are as follows: Schedule of Future Minimum Lease Payments December 31, December 31, 2025 2024 Description 2025 $ - $ 230,044 2026 1,324,782 230,044 2027 1,324,782 230,044 2028 1,324,782 230,044 2029 1,201,139 115,022 2030 379,091 - Total 5,554,576 1,035,198 Less: Imputed interest 563,675 88,492 Present value of lease liabilities $ 4,990,901 $ 946,706 F- 19 Other information Schedule of Other Information of Lease December 31, December 31, 2025 2024 Weighted-average remaining lease term (years) 3.9 4.5 Weighted-average discount rate: 5.72 % 5.19 % ROU assets obtained in exchange for ROU Liability $ 8,236,478 $ 1,057,779 Operating cash impact of finance leases $ 3,463,635 $ 26,847 Note 16. Share-Based Compensation The Group grants Options and Restricted Stock Units (RSUs) under the 2024 Equity Incentive Plan (the “2024 Plan”) to Board Members, Advisory Board Members, Employees and Contractors. The grants have a combination of performance based and time-based hurdles and vesting periods. On January 16, 2025, the Group granted 48,484 options which have a contractual term of 10 years. The options have an exercise price of $ 6.71 per share and convert on a 1:1 basis. The Group ascertains the fair value of the Options and RSUs using a Black-Scholes pricing model. The fair value of equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, along with a corresponding increase to equity. As of December 31, 2025, the Group has the following share-based compensation: Stock Options Share-based compensation expense of $ 1,762 thousand has been recognized in the period ending December 31, 2025, for options based on the pro rata expense of the service-based options over the vesting period. As of December 31, 2025, 1900 options had vested. Stock Option Activity Schedule of Stock Option Activity Activity Number of Options Weighted-Average Exercise Price post adjustment in SharonAI Holdings Inc Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2024 41,958 6.71 8.92 - Granted 48,484 6.71 9.00 - Exercised - 6.71 - - Forfeited - 6.71 - - Outstanding at December 31, 2025 90,442 6.71 8.96 - Exercisable at December 31, 2025 22,727 6.71 9.50 - Restricted Stock Units (RSUs) Share-based compensation expense of $ 529 thousand has been recognized in the period ending December 31, 2025, for the performance-based RSUs based on the portion of hurdles being met and pro rata time-based vesting conditions being satisfied during the period. Schedule of Performance-Based RSUs Activity Activity Performance-Based RSUs Weighted-Average Grant Date Fair Value Balance at December 31, 2024 478,806 3,193,353.00 Granted 1 79,295 528,851.00 Vested 2 ( 243,180 ) ( 1,621,867.00 ) Vested in prior periods ( 39,357.00 ) ( 262,487.00 ) Forfeited - - Unvested at December 31, 2025 275,564 1,837,850.00 (1) The company is contractually obligated to issue these RSU’s at 1 January 2025, however, the RSU’s have yet to be documented and granted. (2) RSU’s listed as vested are not exercisable but representative of the pro-rata portion of the RSU grant vested in the period At December 31, 2025, compensation costs related to these unvested stock-based compensation awards not yet recognized in the consolidated statements of operations was $ 1,837,850 . F- 20 Note 17. Employee Benefit Plan The Group’s employees that are located in Australia participate in a Superannuation defined benefit scheme. Superannuation is Australia’s mandatory retirement savings system, requiring employers to contribute 11.5 % of an employee’s earnings into a regulated fund. Contributions receive concessional tax treatment, with employer payments taxed at 15 % within the fund. Superannuation is typically preserved until retirement age (55–60), with limited early access exceptions. Funds are regulated by Australian Prudential Regulation Authority, Australian Securities and Investments Commission, and the Australian Taxation Office, and offer various investment options, often including insurance coverage. Withdrawals can be taken as a lump sum or income stream, subject to tax rules. Legislative changes may affect contribution limits, taxation, and access conditions. Note 18. Fair Value Measurement The Group measures the following assets and liabilities at fair value on a recurring basis: The Group’s recurring fair value measurements include the following: ● Intangible assets – indefinite-lived digital assets ● Convertible notes – measured at fair value under the fair value option ● Warrant liability – measured at fair value Fair value hierarchy ASC Topic 820, Fair Value Measurement and Disclosures (“ASC Topic 820”) requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The table below shows the assigned level for each asset and liability held at fair value by the Group: Schedule of Assigned Level for Each Asset and Liability Held at Fair Value Fair value hierarchy Level 1 Level 2 Level 3 Total As of December 31, 2025 Recurring fair value measurements Digital Assets - - - - Convertible notes - - $ 129,017,286 $ 129,017,286 Warrant liability $ 890,000 $ 890,000 As of December 31, 2024 Recurring fair value measurements Digital assets $ 721,664 - - $ 721,664 The Group’s assets held at fair value comprise of indefinite lived cryptocurrency (digital assets) classified at level 1. See Note 9 for support. The Group elected the fair value option for its convertible notes. The fair value of the convertible notes is determined using valuation techniques that include significant unobservable inputs, including assumptions related to expected volatility, discount rates, and the probability and timing of conversion. Accordingly, the convertible notes are classified within Level 3 of the fair value hierarchy. The warrants are classified within Level 1 as they are valued using quoted market prices in an active market. There were no transfers between Levels 1, 2, or 3 during the years ended December 31, 2025 and 2024. Note 19. Supplemental Disclosure of Cash Flow Information Schedule of Supplemental Disclosure of Cash Flow Information 2025 2024 For the Years Ended December 31, 2025 2024 Supplemental information: Cash paid for interest $ 25,275 $ 2,827 Non-cash transactions: Director issued common stock upon termination - 15,000 Acquisition of a business through the issuance of common stocks and warrants - 20,865,167 Settlement of related party notes payable with the issuance of common stock - 419,601 Settlement of liabilities through the issuance of common stock - 176,999 Acquisition of assets through the issuance of common stock - 1,256,040 Assets held for Sale- rerecognize MDC 1,105,000 - Bad debt expense related to MDC sale ( 1,180,620 ) - ROU assets obtained in exchange for lease liability 8,153,736 1,061,831 Debt issuance converted to stock - ( 419,601 ) Issuance of convertible notes receivable 15,171,072 - Roth CH Acquisition Corp merger $ 3,934,546 $ - F- 21 Note 20. Commitments Unconditional Purchase Obligation In connection with the termination of its data center services arrangement under the Digital Storage Solutions (DSS) agreement, the Company entered into a contractual commitment with Andrew Sjoquist Enterprises (ASE), a managed service provider. Under the termination arrangement, the Company is required to utilize services from ASE totaling approximately AUD$ 400 thousand over the next five years. The commitment is noncancelable and qualifies as an Unconditional Purchase Obligation under ASC 440-10-50. As of December 31, 2025, no liability has been recognized, as the obligation represents future purchases of services expected to benefit the Company. The Company will disclose in future periods any material changes or if the commitment becomes onerous. Data Center Services Commitment The Group has entered into service orders with NEXTDC pursuant to a Master Services Agreement dated 1 November 2022 for the provision of data center whitespace and power capacity. During the year, the Group activated additional contracted power capacity of 600kW and amended its existing allocation. At December 31, 2025, the Group has remaining contracted capacity of 40MW under phased deployment arrangements. Service commencement dates and establishment fees are subject to agreement in accordance with the underlying service orders. Monthly recurring fees are based on contracted kilowatt capacity. Note 21. Net Loss per Share Basic net income (loss) per share is computed by dividing net income (loss) applicable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of securities that could share in the earnings of an entity using the treasury method or the if-converted method, if applicable. The calculation of diluted net income (loss) per share gives effect to common share equivalents; however, potential common shares are excluded if their effect is anti-dilutive. Convertible Series B Preferred Stock issued and outstanding, and share-based options are considered common share equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive. The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive: ● Stock options and RSU’s: 558,101 shares ● Warrants: 444,982 shares A reconciliation of the numerators and denominators is as follows: Schedule of Reconciliation of Numerators and Denominators 2025 2024 For the Years Ended December 31, 2025 2024 Numerator: Net loss available to common shareholders $ ( 39,815,021 ) $ ( 3,923,998 ) Less: Net loss attributable to the noncontrolling interest ( 191,112 ) ( 18,717 ) Net loss attributable to common shareholders $ ( 39,623,909 ) $ ( 3,905,281 ) Denominator: Basic and diluted weighted average number of common shares outstanding 9,804,075 5,056,870 Basic and diluted net loss per common share outstanding $ ( 4.04 ) $ ( 0.77 ) Note 22. Segment Information The Company operates in one operating segment, and therefore one reportable segment, focused on the provision of High Performance Compute Services (HPC). The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Group’s chief operating decision maker (“CODM”), who is the Chief Executive Officer. F- 22 The Group’s method for measuring profitability on a reportable segment basis is operating profit or loss, which the CODM uses to assess performance for the Group and in deciding how to allocate resources. The CODM does not review disaggregated assets by segment. The Group adopted ASU 2023-07 in December 2024. The most significant provision was for the Group to disclose significant segment expenses that are regularly provided to the CODM. The Group’s CODM periodically reviews cost of revenues and selling, general and administrative expenses, excluding share-based compensation, by segment and treats them as significant segment expenses. The following table presents segment expenses, other segment items, and segment operating loss for the period: Schedule of Segment Expenses, Other Segment Items, and Segment Operating Loss 2025 2024 For the Years Ended December 31, 2025 2024 Revenue $ 1,566,631 $ 438,292 Less: Segment Expenses Costs of revenue 1,465,824 719,993 Selling, general and administrative expenses 12,116,600 2,368,745 Other segment items (1) 2,785,951 2,300,861 Loss (gain) on sale/ exchange of equipment ( 1,015,803 ) ( 921,322 ) Segment expenses 15,352,572 4,468,277 Segment loss from operations $ ( 13,785,941 ) $ ( 4,029,985 ) (1) Other segment items for the reportable segment include share-based compensation and other expenses. Note 23. Transactions with Related Parties SharonAI and SharonAI Pty Ltd have entered into an independent contractor agreement-corporate with James Manning and Manning Group Pty Ltd ATF MG Office Trust (“ Manning Consulting Agreement ”). Pursuant to the Manning Consultant Agreement, Mr. Manning, SharonAI’s Non-Executive Chairman, director and greater than 10 % stockholder, as the key person, provides certain services to SharonAI and SharonAI Pty Ltd relating to commercial opportunity development, discovery of future data center sites, future data center acquisition and construction advisory, transaction advisory services and key relationship introduction and development. In consideration for these services, Manning Group Pty Ltd ATF MG Office Trust is entitled to receive an annual remuneration of AUD$ 334,500 (approximately $ 211,000 based on a conversion rate of $ 1.00 AUD to $ 0.63 USD), exclusive of Australian goods and services taxes. The Manning Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months’ notice. SharonAI Pty Ltd has entered into an independent contractor agreement with Nicholas Hughes Jones related entity Inbocalupo Consulting Pty Ltd (“ Inbocalupo Consulting Agreement ”). Pursuant to the Inbocalupo Consultant Agreement and combined with Mr. Hughes-Jones employment agreement, Mr. Hughes-Jones who until July 2025 was SharonAI’s Senior Vice President Business Development and is a currently the Company’s Head of Business Development and a current greater than 10 % stockholder, as the key person, provides certain services to SharonAI and SharonAI Pty Ltd relating to business development services. In consideration for these services, Inbocalupo Consulting Pty Ltd is entitled to receive an annual remuneration of AUD$ 133,800 (approximately $ 84,294 based on a conversion rate of $ 1.00 AUD to $ 0.63 USD), exclusive of Australian goods and services taxes. The Inbocalupo Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months’ notice. SharonAI Pty Ltd has entered into an independent contractor agreement with Broadfoot Group Pty Ltd (“ Broadfoot Consulting Agreement ”). Pursuant to the Broadfoot Consultant Agreement, Mr. Broadfoot, SharonAI’s Chief Financial Officer, Treasurer, Corporate Secretary, and Mrs. Broadfoot, as the key persons, provides certain services to SharonAI and SharonAI Pty Ltd relating to Chief Financial Officer support and executive assistant services to the CFO. In consideration for these services, Broadfoot Group Pty Ltd is entitled to receive an annual remuneration of AUD$ 111,500 (approximately $ 70,245 based on a conversion rate of $ 1.00 AUD to $ 0.63 USD), exclusive of Australian goods and services taxes. The Broadfoot Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months’ notice. James Manning, Nicholas Hughes-Jones (who until July 2025 was SharonAI’s Senior Vice President Business Development) and Andrew Leece were the sole three shareholders of Alternative Asset Management Pty Ltd/SharonAI Pty Ltd (“ SAIPL ”) prior to SharonAI’s acquisition of all of the shares of SAIPL on April 29, 2024. In consideration for their shares of SAIPL, each of Messrs. Manning, Hughes-Jones and Leece were issued 70,000 shares of SharonAI common stock ( 636,248 post adjustments of SharonAI Holding Inc Ordinary Class A Common Stock) at a fair value of $ 70,000 . James Manning was a unitholder of Digital Income Fund Pty Ltd (“ DIF ”) prior to SAIPL acquiring the assets of DIF on April 29, 2024. In consideration for the assets of DIF, DIF was issued 55,000 shares of SharonAI common stock (499,909 post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock), 17,600 shares ( 159,971 post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock) of which were transferred to Mr. Manning upon DIF’s liquidation. The shares were issued at a fair value of $ 390,016 . James Manning, Nicholas Hughes-Jones and Andrew Leece were shareholders of Distributed Storage Solutions Limited ACN 646 979 222 (“ DSS ”) prior to SharonAI’s acquisition of DSS in June of 2024. In consideration for their shares of DSS, Mr. Manning was issued 49,215 shares of SharonAI common stock (447,328 post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock) at a fair value of $ 1,919,366 , Mr. Hughes-Jones was issued 27,478 shares of SharonAI common stock (249,754 post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock) at a fair value of $ 1,071,623 , and Mr. Leece was issued 43,401 shares of SharonAI common stock ( 394,483 post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock) at a fair value of $ 1,692,639 . F- 23 During 2024, the Group paid storage services expense to Flynt ICS Pty Ltd (“ Flynt ”). Flynt is a subsidiary of Vertua Limited and affiliated to the Group through common ownership by James Manning. For the year ended December 31, 2024 and 2025, the Group paid Flynt $ 167,638 and $ 92,722.12 respectively in services expenses. Between January, 2024, and May, 2024, the SharonAI received approximately $ 419,590 in outstanding loans from various entities affiliated with members of SharonAI’s management and board of directors, including: (a) Woodville Super Pty Ltd, an affiliate of James Manning, Director; (b) Manning Capital Holdings Pty Ltd, an affiliate of James Manning, Director; (c) Strat Capital Pty Ltd (Alpha Juliett), an affiliate of Andrew Leece, Chief Operating Officer; and (d) Inbocalupo Pty Ltd, an affiliate of Nick Hughes-Jones, the former Senior Vice President Business Development. These debts were converted into equity of SharonAI as part of a private placement conducted by SharonAI at the same price that stock was sold to other investors in the offering. The following chart shows the amount of debt from each lender and the shares into which the debt was converted. Schedule of Debt Conversion USD Amount outstanding Subscription price per share post adjustment in SharonAI Holdings Inc Shares received upon conversion post adjustment in SharonAI Holdings Inc Class A Ordinary Common Stock Woodville Super Pty Ltd $ 66,370.00 4.29 15,470 Manning Capital Holdings Pty Ltd $ 84,555.00 4.29 19,706 Strat Capital Pty Ltd (Alpha Juliett) $ 117,740.00 4.29 27,440 Inbocalupo Pty Ltd $ 150,925.00 4.29 35,175 Total: $ 419,590.00 97,791 Note 24. Subsequent Events The Company evaluated subsequent events from December 31, 2025 through the date the consolidated financial statements were issued in accordance with ASC 855, Subsequent Events . The following events occurred subsequent to December 31, 2025: Termination of Yorkville Agreements On December 15, 2025, the Company entered into an amendment to its agreements with Yorkville Advisors (the “YA Amendment”), which provided for the temporary suspension of certain obligations during a defined suspension period. In January 2026, the Company completed all required payments under the YA Amendment, including principal, redemption premium, accrued interest, and related fees. As a result, all obligations under the Yorkville agreements were satisfied in full, and the agreements were terminated. No continuing liabilities remain under these arrangements. IPO and NASDAQ Listing In February 2026, SharonAI Holdings, Inc. completed its initial public offering and listed its common stock on the Nasdaq Stock Market. The offering generated gross proceeds of approximately $ 125 million, prior to deducting underwriting discounts and other offering expenses. The Company intends to use future proceeds from potential capital raises, if any, primarily for GPU acquisitions and related infrastructure deployment. Sale of TCDC Investment Subsequent to December 31, 2025, the Company completed the sale of its 50 % membership interest in Texas Critical Data Centers, LLC (“TCDC”) to New Era Energy & Digital Inc. (“NUAI”). On December 19, 2025, the Company entered into a binding term sheet with NUAI outlining the key terms of the transaction. The definitive agreements were executed in January 2026, at which time legal ownership of the TCDC membership interest was transferred. Total consideration for the transaction is contractually valued at $ 70.0 million, consisting of cash consideration, equity in NUAI, and a secured convertible promissory note. As of December 31, 2025, the Company received a non-refundable deposit of $ 150,000 , which is recorded as a deposit liability in the consolidated balance sheet. The Company will recognize the sale of the investment and the related gain in the first quarter of 2026, upon completion of the transaction. F- 24 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure On, and effective as of, January 6, 2026, the Audit and risk management committee (the “ Committee ”) of the Board of Directors of the Company approved the dismissal of CBIZ CPAs P.C. (“ CBIZ CPAs ”) as the Company’s independent registered public accounting firm. Also on, and effective as of, January 6, 2026, the Committee approved the engagement of HoganTaylor LLP (“HoganTaylor”) as the Company’s independent registered public accounting firm for the Company’s fiscal year 2025 audit. As previously disclosed, CBIZ CPAs acquired the attest business of Marcum, LLP (“ Marcum ”), the Company’s prior independent registered public accounting firm, effective November 1, 2024. Marcum continued to serve as the Company’s independent registered public accounting firm through May 23, 2025. On May 23, 2025, the Company terminated its relationship with Marcum as the Company’s independent registered accounting firm and, with the approval of the Committee, engaged CBIZ CPAs as the Company’s independent registered public accounting firm. CBIZ CPAs did not issue any audit report during the period of its engagement. From May 23, 2025 through January 6, 2026, the date of CBIZ CPAs’ dismissal, there were (a) no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and CBIZ CPAs on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of CBIZ CPAs, would have caused CBIZ CPAs to make reference to such disagreement in its reports, if such reports had been issued, and (b) no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions). During the fiscal year ended December 31, 2024 neither the Company, nor anyone on behalf of the Company, consulted HoganTaylor regarding: (i) the application of accounting principles to a specified transaction (either completed or proposed), or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that HoganTaylor concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (within the meaning of Item 304(a)(1)(iv) of Regulation S-K) or a “reportable event” (within the meaning of Item 304(a)(1)(v) of Regulation S-K).