What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-15 · 581 added, 438 removed, 475 unchanged (68% of the section changed)

6 unchanged sentences

Trade and other receivables

Convertible notes receivable

Investment in NUAI shares

Convertible note proceeds receivable

2 unchanged sentences

Total current assets

1,938,173,372

Property and equipment, net

Right of use assets, net

Equipment and lease prepayments

Equipment, software and lease prepayments

Certificates of deposits

5 unchanged sentences

Trade and other payables

Customer deposits

Warrant liability

Convertible notes

Convertible notes, current portion

Finance lease liabilities, current portion

1 unchanged sentence

Total current liabilities

Finance lease liabilities, net of current portion

Convertible notes, non-current

1,006,515,000

Finance lease liabilities, non-current

TOTAL LIABILITIES

1,193,790,830

Stockholders’ equity (deficit):

Common Stock- Class A ( 15,998,830 and 11,832,164 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively)

Common Stock- Class B ( 136,341 shares issued and outstanding as of March 31, 2026 and December 31, 2025)

Common Stock- Class A ($ 0.0001 par value, 100,000,000 shares authorized;

35,667,164 and 11,832,164 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively)

Common Stock- Class B ($ 0.0001 par value, 136,341 shares authorized;

136,341 shares

issued and outstanding as of June 30, 2026 and December 31, 2025)

Common Stock, value

Additional paid-in capital

1,624,995,090

Accumulated deficit

4 unchanged sentences

Noncontrolling interest

( 2,285,399 )

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

1,127,547,379

( 10,148,257 )

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

5 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Cost of revenue

3 unchanged sentences

Other expenses

( 3,127,957 )

Gain on disposal of property and equipment

Loss from operations

1 unchanged sentence

( 2,610,233 )

( 27,603,403 )

( 3,771,481 )

Non-operating income (expense), net:

1 unchanged sentence

Change in fair value of warrant liabilities

Change in fair value of NUAI shares

( 6,138,775 )

( 5,255,450 )

Change in fair value of convertible notes

( 400,440,855 )

( 470,668,608 )

Change in fair value of share-based payment

Gain on investment in NUAI shares

Gain on sale of investment in TCDC

Interest income (expense), net

Interest expense, net

( 4,527,540 )

( 3,267,654 )

Loss before income taxes

1 unchanged sentence

( 2,716,411 )

( 435,555,915 )

( 4,218,483 )

Income tax (expense) benefit

2 unchanged sentences

( 430,368,696 )

( 2,588,832 )

( 450,380,518 )

( 4,028,322 )

Net loss attributable to non-controlling interest

( 2,065,770 )

( 2,161,826 )

Net loss attributable to SharonAI Holdings Inc.

1 unchanged sentence

$ ( 2,576,406 )

$ ( 448,218,692 )

$ ( 4,008,986 )

Net loss per share, basic and diluted

4 unchanged sentences

For the Three Months Ended

For the Six Months Ended

$ ( 430,368,696 )

$ ( 2,588,832 )

$ ( 450,380,518 )

$ ( 4,028,322 )

Net loss attributable to non-controlling interest

( 2,065,770 )

( 2,161,826 )

Net loss attributable to SharonAI Holdings Inc.

1 unchanged sentence

( 2,576,406 )

( 448,218,692 )

( 4,008,986 )

Foreign currency translation adjustments

( 1,968,468 )

( 3,059,707 )

Other comprehensive loss

( 1,968,468 )

( 3,059,707 )

Other comprehensive loss attributable to noncontrolling interest

Other comprehensive loss attributable to SharonAI Holdings Inc.

Other comprehensive loss attributable to SharonAI

Holdings Inc.

( 1,959,019 )

Comprehensive loss attributable to SharonAI Holdings Inc.

( 3,045,021 )

Comprehensive loss attributable to SharonAI

Holdings Inc.

$ ( 430,261,945 )

$ ( 2,819,172 )

$ ( 451,263,713 )

$ ( 4,356,760 )

accompanying Notes to Consolidated Condensed Financial Statements.

1 unchanged sentence

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Months Ended March 31, 2026

Months Ended June 30, 2026

Paid-In Capital

Comprehensive

Inc.’s Equity

Stockholders’

Balance at March 31, 2026 -

( 63,444,954 )

( 1,458,994 )

Issuance of common stock

1,068,440,294

1,068,442,188

Issuance of pre-funded warrants

Offering costs

( 38,000,602 )

Share based compensation

( 428,302,926 )

( 2,065,770 )

( 430,368,696 )

Equity adjustment from Foreign Currency Translation (CTA)

( 1,959,019 )

( 1,968,468 )

Balance at June 30, 2026 -

1,624,995,090

( 491,747,880 )

( 3,418,013 )

1,129,832,778

( 2,285,399 )

1,127,547,379

Months Ended June 30, 2025

Common Stock-

Comprehensive

Stockholders’

Balance at March 31, 2025

( 5,337,861 )

Share based compensation

( 2,576,406 )

( 2,588,832 )

Equity adjustment from Foreign Currency Translation (CTA)

Balance at June 30, 2025

( 7,914,267 )

Months Ended June 30, 2026

Common Stock-

Additional Paid-In Capital

Accumulated income (deficit)

Accumulated Comprehensive Income (Loss) (AOCI)

SharonAI Inc.’s

Non Controlling Interest

Total Stockholders’ Equity (Deficit)

Common Stock-

Comprehensive

Holdings Inc.’s

Stockholders’

Balance at December 31, 2025

2 unchanged sentences

( 10,148,257 )

Issuance of common stock – NASDAQ offering

Share issuance costs

Issuance of common stock

1,193,439,857

1 unchanged sentence

1,193,442,168

Issuance of pre-funded warrants

Offering costs

( 43,500,601 )

Share based compensation

2 unchanged sentences

( 2,161,828 )

( 450,380,518 )

Equity adjustment from Foreign Currency Translation (CTA)

2 unchanged sentences

( 3,059,707 )

Balance at March 31, 2026

Balance at June 30, 2026

1,624,995,090

( 491,747,880 )

Months Ended March 31, 2025

Common Stock-

Additional Paid-In Capital

Accumulated income (deficit)

Accumulated Comprehensive Income (Loss) (AOCI)

SharonAI Inc.’s

Non Controlling Interest

Total Stockholders’ Equity

( 3,418,013 )

1,129,832,778

( 2,285,399 )

1,127,547,379

Months Ended June 30, 2025

Stock- Class A

Comprehensive

Stockholders’

Balance at December 31, 2024

5 unchanged sentences

Equity adjustment from Foreign Currency Translation (CTA)

Balance at March 31, 2025

Balance at June 30, 2025

( 7,914,267 )

2 unchanged sentences

CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

$ ( 4,028,322 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating

Depreciation and amortization

Share based compensation

2 unchanged sentences

Intangible assets (FIL) cost of revenue

Amortization of intangible assets

Accelerated amortization of Intangible assets

Deferred tax liability

Unrealized (gains) losses on foreign currency exchange

( 3,206,678 )

Change in fair value of NUAI shares

Change in fair value of warrant liability

Change in fair value of convertible notes

Gain on investment in NUAI shares

( 4,984,130 )

Gain on sale of investment in TCDC

1 unchanged sentence

Gain on sale of property and equipment

Bad debt expense

Changes in assets and liabilities:

1 unchanged sentence

( 26,712,905 )

Customer deposits

Other current assets

1 unchanged sentence

Other long-term assets

( 2,212,252 )

Trade and other payables

Income tax payable

Other current liabilities

( 2,701,932 )

Net cash provided by (used in) operating activities

( 1,708,451 )

( 1,328,105 )

CASH FLOWS FROM INVESTING ACTIVITIES

Deposit paid on property and equipment

Advance payments for property and equipment

( 310,665,524 )

Purchase of certificates of deposit

( 11,804,654 )

Payment for the purchase of property and equipment

Proceeds received from the sale of TCDC investment

( 12,541,952 )

Investment in a joint venture

( 3,136,000 )

Cash proceeds from sale of TCDC investment

Proceeds from sale of NUAI Shares

Proceeds from convertible note receivable

Proceeds from sales of digital assets

Net cash provided by (used in) investing activities

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common stock, net of issuance costs

Proceeds from issuance of common stock

Cash received from convertible note issuance

1,065,636,015

Issuance costs related to capital raise

( 43,500,602 )

Proceeds from exercise of warrants

Proceeds from issuance of pre-funded warrants

Payment for lease liabilities

2 unchanged sentences

Net cash provided by (used in) financing activities

2,044,174,430

Effect of exchange rate changes on cash and cash equivalents

( 13,826,812 )

Net cash increase/(decreases) in cash and cash equivalents

1,790,274,798

( 2,019,027 )

Cash and cash equivalents at beginning of period

12 unchanged sentences

entities (“the Group”).

Inc (“SA Inc.”) is a digital infrastructure provider, incorporated in the state of Delaware in the United States of America

(“SA Inc.”) is a digital infrastructure provider, incorporated in the state of Delaware in the United States of America

on February 15, 2024.

2 unchanged sentences

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.

AAM did not have business operations but owned digital infrastructure assets, including GPU servers and related

equipment that had historically supported cryptocurrency mining activities and were subsequently utilized in the Company’s AI and high-performance

computing (“HPC”) infrastructure business.

Pursuant to the transaction there was no change in relative voting interest amongst

the existing shareholders of both entities.

See Note 2- principles of consolidation for additional reporting considerations for the share exchange.

June 30, 2024, SA Inc.

1 unchanged sentence

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.

storage provider providing robust data storage infrastructure in the Filecoin network with additional focus on high performance computing

(“HPC”) and artificial intelligence (“AI”), which was determined to be a business combination.

January of 2025, SA Inc.

formed a 50:50 joint venture with New Era Helium, Inc.

formed a 50:50 joint venture with New Era Energy & Digital Inc.

(“NUAI”), named Texas Critical Data Centers

1 unchanged sentence

gas-fired power plant within the Permian Basin in Western Texas.

New Era Helium, Inc.

New Era Energy & Digital 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 13, 2026, the Company completed the sale of its 50 % ownership interest in TCDC to NUAI.

Upon completion

of the transaction, the Company ceased to have an ownership interest in TCDC or participate in the joint venture.

January 28, 2025, the Company entered into a Business Combination Agreement (“BCA”) with Roth CH Acquisition Co.

4 unchanged sentences

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.

for AI, research, and other data-intensive applications.

of June 30, 2025, all activities related to the Company’s prior Filecoin-related operations had been fully wound down.

10 unchanged sentences

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

received an aggregate of 10,506,472 shares of Class A Ordinary Common Stock and 136,341 shares of Class B Super 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 current

liabilities and warrant liabilities.

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 condensed financial statements for additional information regarding

the accounting treatment of the business combination.

determined to be the accounting

acquirer and Roth treated as the acquired entity.

See Note 2 - principles of consolidation to the consolidated condensed financial

statements for additional information regarding the accounting treatment of the business combination.

the closing of the business combination, the Class A Ordinary Common Stock and warrants of SharonAI Holdings Inc.

2 unchanged sentences

February 2026, SharonAI Holdings Inc.

completed its initial public offering and listed its Class A Ordinary Common Stock on the Nasdaq

Stock Market.

completed its initial public offering and listed its Class A Ordinary Common Stock on the

Nasdaq Stock Market.

Summary of Significant Accounting Policies

of presentation

accompanying consolidated condensed 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.

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S.

GAAP for interim financial information and the applicable rules and regulations of the SEC.

Accordingly, they do not include all of the

information and disclosures required for complete annual financial statements.

In the opinion of management, all normal recurring adjustments

considered necessary for a fair presentation have been included.

These unaudited consolidated condensed financial statements should be

read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form

10-K for the fiscal year ended December 31, 2025.

of consolidation

to the share exchange with the holders of AAM’s equity, which had the same ownership structure as SA Inc.

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.

consolidated condensed statements of operations, consolidated condensed statements of changes in equity and consolidated condensed statements

of cash flows of SA Inc.

and AAM for the relevant periods include the results and cash flows of SA Inc.

and AAM from the earliest date

consolidated condensed balance sheets as of March 31, 2026 and March 31, 2025 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.

December 17, 2025, the Company completed a business combination with Roth pursuant to the Business Combination Agreement.

12 unchanged sentences

prior to the transaction.

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

December 23, 2025, we (i) effected a 1-for-50 reverse stock split of our outstanding common stock, including both shares of its Class

A Ordinary Common Stock and Class B Super Common Stock, and (ii) reduced our 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 Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the stock split.

reclassifications have been made to the prior period consolidated financial statements to conform to the current year presentation.

reclassifications had no impact on the previously reported net loss and accumulated deficit

stock outstanding, the reverse stock split effected 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 Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the reverse stock split.

all other business combinations, the Group’s consolidated financial statements include the financial position and performance of

3 unchanged sentences

inter-company transactions are eliminated in consolidation.

Reclassifications

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

preparation of consolidated condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions

2 unchanged sentences

could differ from those estimates.

accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States for interim financial statements and do not include all the information and footnotes required by

accounting principles generally accepted in the United States for complete financial statements.

However, the information furnished

reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary in order to make the unaudited consolidated financial

statements not misleading.

These unaudited consolidated financial statements should be read in conjunction with the audited

consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal

year ended December 31, 2025.

currency translation

financial statements of the Group’s subsidiaries with functional currencies other than the U.S.

dollar are translated into

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 condensed statements of operations and comprehensive loss.

The Company recorded realized foreign

currency transaction loss of $ 4

thousand and an unrealized foreign currency transaction loss of $ 1,087

thousand for the quarter ended March 31, 2026 and realized foreign currency transaction gain of $ 0.3

thousand and an unrealized foreign currency transaction loss of $ 105

thousand for the quarter ended March 31, 2025.

These are included in other income, in the consolidated statements of operations and

comprehensive loss.

Revenue and Other Income

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.

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 December 2025 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 13- Convertible Notes and Note 18-

Fair Value Measurements for additional information, including the fair value hierarchy classification.

For the Three Months Ended

For the Six Months Ended

Digital asset mining revenue

Provision of GPU Infrastructure services

Other revenue

Total Revenue

Schedule of Other Income

For the Three Months Ended

Gain on Disposal of Property and Equipment

currency gain or loss

Company’s effective income tax rate was ( 208.2 %) and 5.1 % for the three months ended March 31, 2026 and 2025, respectively.

effective income tax rate for the three months ended March 31, 2026 differed from the 21.0 % federal statutory rate primarily due to the

nonrecognition of fair value loss on convertible notes, the US federal and state tax expense associated with the sale of the Company’s

Company generates revenue primarily from the provision of GPU infrastructure services.

Revenue is recognized in accordance with ASC 606,

Revenue from Contracts with Customers, when control of the promised services is transferred to customers in an amount that reflects the

consideration the Company expects to receive.

from GPU infrastructure services is generally recognized over time as customers simultaneously receive and consume the benefits of the

Company’s computing infrastructure services.

The Company measures progress using the passage of time or usage of the contracted services,

as appropriate under the terms of each customer agreement.

the comparative 2025 periods, revenue also included digital asset mining activities, which ceased during 2025 following the Company’s

strategic transition to GPU infrastructure services.

Company’s effective income tax rate was ( 0.30 %) and 4.7 % for the three months ended June 30, 2026 and 2025, respectively, and ( 3.40 %)

and 4.5 % for the six months ended June 30, 2026 and 2025 respectively.

effective income tax rate for the three and six months ended June 30, 2026 differed from the 21.0 %

federal statutory rate primarily due to the nonrecognition of fair value loss on convertible notes, the US federal and state tax expense

associated with the sale of the Company’s 50 %

interest in TCDC, and the change in valuation allowance maintained against certain deferred tax assets.

The effective income tax

rate for the three months ended March 31, 2025 differed from the 21.0 % federal statutory rate primarily due to the change in valuation

allowance maintained against certain deferred tax assets, state income taxes, and the impact of research and development tax incentives.

The income tax expense (benefit) was $ 13,519 thousand and ($ 63 ) thousand for the three months ended March 31, 2026 and 2025, respectively.

The effective income tax rate

for the three and six months ended June 30, 2025 differed from the 21.0 %

federal statutory rate primarily due to the change in valuation allowance maintained against certain deferred tax assets, state income

taxes, and the impact of research and development tax incentives.

Certificates of Deposit

March 31, 2026, the Company held certificates of deposit (CDs) totaling $ 990 thousand which are restricted due to their use as collateral

June 30, 2026, the Company held certificates of deposit (CDs) totaling $ 12,748 thousand which are restricted due to their use as collateral

for bank guarantees issued for equipment managed service contracts.

11 unchanged sentences

Trade and Other Receivables

of Trade and Other Receivables

Schedule of Trade and Other Receivables

Trade receivables

GST receivable

Goods and services tax (GST) receivable

Total trade and other receivables

2 unchanged sentences

the Company received a $ 50 million senior secured convertible promissory note from New Era Energy & Digital Inc.

The note bears interest at 10.0 % per annum and matures on June 30, 2026 .

The note bore interest at 10.0 % per annum and matured on June 30, 2026 .

Under the terms of the agreement, the Company may elect to convert

7 unchanged sentences

For the three months ended

March 31, 2026, the Company recognized approximately $ 1.0 million of interest income related to the note.

to March 31, 2026, NUAI repaid the full outstanding principal balance and accrued interest in cash, and no conversion rights were exercised.

June 30, 2026, the Company recognized approximately $ 329 thousand of interest income related to the note.

On April 24, 2026, NUAI repaid the full outstanding principal balance and accrued interest in cash, and no conversion rights were exercised.

Investment in NUAI shares

part of the consideration received from the sale of TCDC, the Company received common shares of NUAI, which were initially measured at

fair value based on the quoted market price on the transaction date.

Management concluded that no liquidity or marketability discount

was necessary as the shares were traded in an active market with sufficient trading volume to support orderly disposition without materially

impacting market price.

The investment is subsequently remeasured using quoted market prices in an active market, with changes in fair

value recognized in earnings.

Property and Equipment

of Property and Equipment

part of the consideration received from the sale of Texas Critical Data Centers, LLC (“TCDC”), the Company received common

shares of New Era Energy & Digital Inc.

(“NUAI”), which were initially measured at fair value based on the quoted market

price on the transaction date.

Management concluded that no liquidity or marketability discount was necessary as the shares were traded

in an active market with sufficient trading volume to support orderly disposition without materially impacting market price.

The investment

is subsequently remeasured using quoted market prices in an active market, with changes in fair value recognized in earnings.

May 14, 2026, the Company sold all of its NUAI common shares for $ 14,984 thousand, with the proceeds received and recorded as cash held

The carrying amount of the investment immediately prior to the sale was $ 8,490 thousand, resulting in a realized gain on sale

of $ 6,493 thousand.

Property and Equipment and Right of Use Assets

Schedule of Property and Equipment

Computer equipment

3 unchanged sentences

Total computer equipment

Electrical equipment

Accumulated depreciation

Total electrical equipment

Capitalized software

Accumulated amortization

Total capitalized software

Other equipment

3 unchanged sentences

Right of use assets

Accumulated Depreciation

Accumulated amortization

( 1,984,481 )

( 1,095,601 )

Total right of use, net

Total property and equipment, net

Total right of use assets, net

Total property and equipment, net including right of use assets

expense related to computer equipment amounted to $ 1,318 thousand for the quarter ended March 31, 2026 and $ 382 thousand for the quarter

ended March 31, 2025.

Foreign currency translation adjustments of $ 93 thousand and $ 5 thousand were recognized for the same period.

Equipment and lease prepayments

and lease prepayments represent advance payments for goods and services to be received in future periods.

As of March 31, 2026, prepayments

primarily relate to deposits and milestone payments for high-performance computing equipment with WWT Australia Pty Ltd, and down payments

under an Equipment-as-a-Service (EaaS) / Device-as-a-Service (DaaS) arrangement with Lenovo Global Financial Services (Australia &

New Zealand) Pty Limited.

associated with hardware and managed services arrangements will be recognized as property and equipment or leases as the underlying

assets are delivered and placed into service or as services are rendered.

Warrant Liabilities

and amortization expense related to property and equipment amounted to $ 1,881

thousand and $ 3,199

thousand for the three and six months ended June 30, 2026,

respectively, and $ 422

thousand and $ 804

thousand for the three and six months ended June 30, 2025,

respectively.

Foreign currency translation adjustments related to property and equipment were $ 28

thousand and ($ 64 )

thousand were recognized for the three and six-month ended June 30, 2026, respectively , and $ 79

thousand and $ 242

thousand for the three and six months ended June 30, 2025,

respectively.

Equipment, Software and Lease Prepayments

software and lease prepayments represent advance payments for goods and services to be received in future periods.

As of June 30, 2026,

prepayments primarily relate to deposits and milestone payments for high-performance computing equipment with WWT Australia Pty Ltd,

down payments under an Equipment-as-a-Service (EaaS)/Device-as-a-Service (DaaS) arrangement with Lenovo Global Financial Services (Australia

& New Zealand) Pty Limited, and prepayments to Dicker Data Limited for VAST Data software.

of June 30, 2026, equipment, software and lease prepayments consisted of:

Of Equipment Software Lease Payment

Australia Pty Ltd – $ 256,186 thousand

Global Financial Services (Australia & New Zealand) Pty Limited – $ 33,094 thousand

Data Limited (VAST Data software) – $ 13,368 thousand

associated with hardware, software, and managed services arrangements will be recognized as property and equipment, capitalized software,

or leases as the underlying assets are delivered and placed into service or as services are rendered.

Other expenses

Other expenses consisted primarily of depreciation and amortization expense and foreign currency transaction gains and losses.

For the three months ended June 30, 2026, other expenses

totaled $ 14,598 thousand, primarily comprising $ 1,881 thousand of depreciation and amortization expense and $ 14,329 thousand of net unrealized

foreign currency transaction losses, partially offset by $ 1,612 thousand of net realized foreign currency transaction gains.

For the six months ended June 30, 2026, other expenses

totaled $ 12,788 thousand, primarily comprising $ 3,199 thousand of depreciation and amortization expense and $ 11,123 thousand of net unrealized

foreign currency transaction losses, partially offset by $ 1,534 thousand of net realized foreign currency transaction gains.

For the three months ended June 30, 2025, other expenses

totaled $ 1,170 thousand, primarily comprising $ 1,802 thousand of depreciation and amortization expense, partially offset by $ 632 thousand

of net unrealized foreign currency transaction gains, and other immaterial expenses.

For the six months ended June 30, 2025, other expenses

totaled $ 1,676 thousand, primarily comprising $ 2,463 thousand of depreciation and amortization expense, partially offset by $ 787 thousand

of net unrealized foreign currency transaction gains, and other immaterial expenses.

Warrant Liability

Company accounts for the 22,250,000 warrants that were assumed from Roth as part of the BCA (representing 11,500,000 Public Warrants

12 unchanged sentences

in fair value recognized in the Company’s consolidated condensed statement of operations.

— 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

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.

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

This registration statement was filed with the SEC on January 16, 2026 and declared effective by the SEC on February 13, 2026.

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

upon not less than 30 days’

prior written notice of redemption to each warrant holder;

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.

and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to

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

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 ;

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.

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.

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 ”).

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

Notes Payable

July 15, 2025, the Company entered into a Convertible Promissory Note Agreement with YA II PN, Ltd.

for proceeds of $ 500,000 .

1, 2025, the Company issued a second tranche under the agreement for additional proceeds of $ 2,000,000 .

The notes bore interest at 10 %

per annum, increasing to 18 % upon an event of default, and matured on July 15, 2026 .

notes included a contingent conversion feature linked to the closing of the Company’s Business Combination Agreement (“BCA”).

Prior to the closing of the BCA, the conversion price was fixed at $ 60.62 per share, resulting in a fixed and determinable number of

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.

December 15, 2025, the Company entered into an amendment to the notes and related agreements, pursuant to which the parties agreed to

temporarily suspend certain obligations through January 20, 2026.

In connection with the amendment, the Company agreed to make an initial

payment in December 2025 and a final payment consisting of the remaining outstanding principal, accrued interest, redemption premiums,

and contractual fees.

January 2026, the Company completed the final payment required under the amended agreements and fully extinguished the note payable.

As of March 31, 2026, no amounts remained outstanding under the agreement.

Convertible Notes

The following table summarizes the carrying amounts

of the Company’s convertible notes as of June 30, 2026 and December 31, 2025.

of Convertible Notes

December 2025 convertible notes- current

May 2026 convertible notes- noncurrent

June 2026 convertible notes- noncurrent

$ 1,006,535,059

$ 129,017,286

2025 Convertible Notes

December 17, 2025, the Company issued $ 2.25 million of convertible notes bearing interest at 10 % per annum and maturing December 17,

The notes automatically convert into Class A Ordinary Common Stock at $ 6.00 per share.

The notes automatically converted into Class A Ordinary Common Stock at $ 6.00 per share.

December 19, 2025, SharonAI, Inc.

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credit risk, which are recognized in other comprehensive income.

of March 31, 2026, the fair value of the Convertible Notes was approximately $ 199.4 million.

During the three months ended March 31,

2026, the Company recognized a $ 70.2 million loss from changes in fair value of convertible notes.

The change in fair value was primarily

driven by changes in valuation assumptions, including the estimated fair value of the Company’s equity and the probability and

timing of a potential additional IPO on the ASX or other conversion trigger.

June 11, 2026, the Company issued 8,430,784 shares of its Class A Ordinary Common Stock, par value $ 0.0001 per share (the “Conversion

Shares”) upon conversion of an aggregate principal amount of approximately $ 103.6 million of unsecured, redeemable, convertible

notes (the “Notes”), together with $ 2.08 million of accrued and unpaid interest thereon pursuant to the terms of that certain

Convertible Note Agreement (the “Agreement”), dated December 19, 2025, by and among SharonAI, Inc., SharonAI Pty Ltd and

certain investors (the “Noteholders”).

The Company assumed the obligations of SharonAI, Inc.

under the Agreement

promptly following the closing of the Business Combination Agreement, dated January 28, 2025.

The number of Conversion Shares issued

was determined in accordance with the conversion formula set forth in Section 4.6 of the Agreement, which provides that the conversion

price is equal to the lower of (i) the applicable Discount Rate multiplied by the relevant transaction price and (ii) the applicable

Valuation Cap (each as defined in the Agreement).

Application of this formula resulted in an effective conversion price of $ 12.53 per

the six months ended June 30, 2026, the Company recognized $ 2,081 thousand in accrued interest expense related to the Convertible Notes

prior to conversion.

Upon conversion in June 2026, the accrued interest was settled through the issuance of 165,749 common shares, with

an aggregate fair value of $ 11,852 thousand based on the market price of $ 71.51 per share on the conversion date.

2026 Convertible Notes

May 18, 2026, the Company issued $ 350 million aggregate principal amount of 6.00 % Convertible Senior Notes due May 1, 2031.

bear interest at 6.00 % per annum, payable quarterly in arrears, and mature on May 1, 2031 , unless earlier converted or repurchased in

accordance with their terms.

notes are convertible into the Company’s Class A ordinary common stock at an initial conversion price of $ 48.24 per share, subject to

customary anti-dilution adjustments and other terms specified in the Indenture (the “May 2026 Indenture”) dated May 18, 2026

between the Company and U.S.

Bank Trust Company, National Association, as trustee (The “Trustee”).

Beginning eighteen months

after issuance, the Company may require conversion upon the satisfaction of specified market-based conditions.

Upon certain fundamental

changes, holders may require the Company to repurchase the notes at 100 % of the principal amount, plus accrued and unpaid interest.

Company evaluated the embedded features of the May 2026 Convertible Senior Notes under ASC 815 and concluded that the conversion feature

qualifies for the equity scope exception and does not require bifurcation.

Accordingly, these notes are accounted for as a single debt

Debt issuance costs are recorded as a direct deduction from the carrying amount of the notes and are amortized to interest

expense using the effective interest method over the contractual term of the notes.

2026 Convertible Notes

June 22, 2026, the Company issued $ 700 million aggregate principal amount of 4.75 % Convertible Senior Notes due June 15, 2032 in a private

These notes bear interest at 4.75 % per annum, payable semi-annually in arrears, and mature on June 15, 2032, unless earlier

converted, redeemed or repurchased in accordance with their terms.

notes are convertible into the Company’s Class A ordinary common stock at an initial conversion price of approximately $ 99.66 per share,

subject to customary anti-dilution adjustments and other terms specified in the Indenture dated June 22, 2026 between the Company and

the Trustee (the “June 2026 Indenture”).

The Company evaluated the embedded features of the notes under ASC 815 and concluded

that the conversion feature qualifies for the equity scope exception and does not require bifurcation.

Accordingly, the notes are accounted

for as a single debt instrument.

Debt issuance costs are recorded as a direct deduction from the carrying amount of the notes and are

amortized to interest expense using the effective interest method over the contractual term of the notes.

Company leases GPU and associated computer and networking equipment under non-cancelable finance lease agreements.

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components of lease cost were as follows:

of Lease Cost

Schedule of Lease Cost

For the Three Months Ended

the Six Months Ended

Finance lease - interest

2 unchanged sentences

analysis of lease liabilities

minimum lease payments at March 31, 2026 and December 31, 2025 are as follows:

Minimum Lease Payments

minimum lease payments at June 30, 2026 and December 31, 2025 are as follows:

Schedule of Future Minimum Lease Payments

Imputed interest

6 unchanged sentences

$ 3,463,635 )

$ ( 288,927 )

Common Stocks

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.

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 .

Pre-funded Warrants

June 17, 2026, the Company entered into Securities Purchase Agreements with certain qualified institutional and accredited investors

in connection with a private placement of 6,719,896 shares of Class A common stock and 6,374,823 pre-funded warrants to purchase shares

of Class A common stock (the “Pre-Funded Warrants”).

The Company received aggregate gross proceeds of approximately $ 900

million before deducting placement agent fees and other offering costs.

Pre-Funded Warrant was issued at a purchase price of $ 68.2799 and is exercisable for one share of the Company’s Class A common stock

at a nominal exercise price of $ 0.0001 per share.

The Pre-Funded Warrants became exercisable on June 22, 2026 and remain exercisable

until exercised in full.

exercise of the Pre-Funded Warrants is subject to certain beneficial ownership limitations.

Prior to obtaining stockholder approval,

a holder generally may not exercise the warrants to the extent such exercise would result in beneficial ownership exceeding 9.99 % of

the Company’s outstanding common stock, subject to specified increases upon satisfaction of certain conditions and removal of the limitation

following stockholder approval.

evaluated the Pre-Funded Warrants under ASC 480, Distinguishing Liabilities from Equity , and ASC 815-40, Derivatives and Hedging-

Contracts in Entity’s Own Equity , and concluded that the Pre-Funded Warrants qualify for equity classification.

Accordingly, the

proceeds allocated to the Pre-Funded Warrants, net of the related allocated issuance costs, were recorded within additional paid-in capital.

Offering costs were allocated between the common shares issued and the Pre-Funded Warrants based on their relative fair values.

earnings per share purposes, the Pre-Funded Warrants are included in the calculation of basic earnings per share because the exercise

price is nominal and there are no substantive exercise contingencies.

Share-Based Compensation

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.

Group grants Options and Restricted Stock Units (RSUs) under the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”)

and has historical grants registered 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

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 March 31, 2026, the Group has the following share-based compensation:

compensation expense of $ 382 thousand has been recognized for the three-month period ending March 31, 2026, for options based on the

pro rata expense of the service-based options over the vesting period.

As of March 31, 2026, 22,793 options had vested.

Option Activity

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 using a Black-Scholes pricing model.

The grant-date fair value of restricted stock units (“RSUs”) is based on the closing market price of the Company’s common

stock on the grant date.

The grant-date fair value is recognized as share-based compensation expense over the requisite service

(vesting) period, with a corresponding increase to equity.

As of June 30, 2026, 27,067

options had vested.

Option Activity

Number of Options

Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term (Years)

Aggregate Intrinsic Value

Schedule of Stock Option Activity

Weighted-Average

Exercise Price

Weighted-Average

Contractual Term

Outstanding at December 31, 2025

Outstanding at March 31, 2026

Exercisable at March 31, 2026

Outstanding at June 30, 2026

Exercisable at June 30, 2026

Stock Units (RSUs)

of Performance-Based RSUs Activity

Performance-Based RSUs

Weighted-Average Grant Date Fair Value

Schedule of Performance-Based RSUs Activity

Performance-Based

Weighted-Average

Grant Date Aggregate Fair

Balance as of December 31, 2025

2 unchanged sentences

( 1,088,731 )

Unvested at March 31, 2026

RSUs listed as vested are

not exercisable but representative of the pro-rata portion of the RSU grant vested in the period

March 31, 2026, compensation costs related to these unvested stock-based compensation awards not yet recognized in the consolidated condensed

statements of operations was $ 2,365,448 .

Unvested at June 30, 2026

listed as vested are not exercisable but representative of the pro-rata portion of the RSU grant vested in the period

June 30, 2026, compensation costs related to these unvested stock-based compensation awards not yet recognized in the consolidated condensed

statements of operations was $ 8,105 thousand, which is expected to be recognized over a weighted-average period of 1.25 years,

Employee Benefit Plan

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.

Group’s employees that are located in Australia participate in a Superannuation defined contribution scheme.

Superannuation is

Australia’s mandatory retirement savings system, requiring employers to contribute 12 %

prior to 1 July 2025) 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.

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.

The Group recognized

superannuation expense of $ 128 thousand and $ 193 thousand for the three and six months ended June 30, 2026, respectively, compared with

$ 25 thousand and $ 46 thousand for the three and six months ended June 30, 2025, respectively.

Fair Value Measurement

1 unchanged sentence

Group’s recurring fair value measurements include the following:

Convertible notes – measured

at fair value under the fair value option

Warrant liability – measured at fair value

Shares in NUAI– measured at fair value

notes – measured at fair value under the fair value option

liability – measured at fair value

value hierarchy

16 unchanged sentences

table below shows the assigned level for each asset and liability held at fair value by the Group:

of Assigned Level for Each Asset and Liability Held at Fair Value

Fair value hierarchy

As of March 31, 2026

Recurring fair value measurements

Shares in NUAI

Convertible notes

$ 199,358,226

Warrant liability

As of December 31, 2025

Recurring fair value measurements

Convertible notes

$ 129,017,286

Schedule of Assigned Level for Each Asset and Liability Held at Fair Value

value hierarchy

of June 30, 2026

fair value measurements

of December 31, 2025

fair value measurements

Group elected the fair value option for its December 2025 convertible notes.

The fair value of the convertible notes was determined

using valuation techniques appropriate for the remaining outstanding instruments at the measurement date.

The valuation incorporated

significant unobservable inputs, including assumptions related to the remaining conversion features, market conditions, and other

factors specific to the instruments.

Because these inputs required significant management judgment, the convertible notes were

classified within Level 3 of the fair value hierarchy.

The following table presents the rollforward of the Level 3 convertible

notes, including fair value adjustments recognized in earnings, contractual interest expense, conversions into common shares, and

foreign currency translation effects during the period.

of Convertible Notes Including Fair Value Adjustments

Level 3 December 2025 Convertible Notes

For the Six Months Ended

June 30, 2026

Balance at January 1, 2026

Fair value adjustments recognized in earnings

Contractual interest expense recognized before conversion

Conversions into common shares

( 602,870,303 )

Warrant liability

in NUAI are classified within Level 1, as they are measured using quoted market prices in an active market.

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.

Effect of currency translation

Balance at June 30, 2026

At June 30, 2026, the Company had outstanding Convertible

Senior Notes measured at amortized cost using the effective interest method.

The estimated fair value of the notes approximated their

carrying amount as of June 30, 2026.

The estimated fair value is classified within Level 2 of the fair value hierarchy because it is based

on observable market inputs for similar debt instruments.

warrant liability is classified within Level 1, as it is measured using quoted market prices in an active market.

were no transfers between Levels 1, 2, or 3 during the quarter ended March 31, 2026 or year ended December 31, 2025.

were no transfers between Levels 1, 2, or 3 during the quarter ended June 30, 2026 or year ended December 31, 2025.

Supplemental Disclosure of Cash Flow Information

of Supplemental Disclosure of Cash Flow Information

For the Three Months Ended

For the Six Months Ended

Supplemental information:

Cash paid for interest

Non-cash transactions:

Cash paid for taxes

Non-cash investing and financing activities:

ROU assets obtained in exchange for lease liability

NUAI shares received in exchange for sale of TCDC

Convertible notes received in exchange for sale of TCDC

March 2026, the Company entered into a noncancelable purchase commitment with World Wide Technology (WWT) for the procurement of high-performance

computing equipment.

The total contractual value is approximately $ 92 million, of which a portion has been paid and recorded as a prepayment.

The remaining unpaid balance represents the Company’s commitment.

Payment terms require 20% upfront, with the balance payable within

15 days of invoice upon shipment.

As of March 31, 2026, no liability has been recognized, as the equipment has not yet been delivered.

Gain on sale of modular data centre (MDC)

Gain on sale of storage servers

Assets held for Sale- rerecognize MDC

Bad debt expense related to MDC sale

( 1,180,620 )

Issuance of common stock for settlement of trade and other payables

Conversion of convertible notes through the issuance of common shares

In connection with the $ 1.26 billion customer services arrangement with

ESDS Software Solution Limited entered into during the quarter ended March 31, 2026, the Company expects to incur capital expenditures

of approximately $ 720.0 million for the purchase of equipment and related infrastructure required to support the contracted services.

As of June 30, 2026, the Company had commenced procurement activities, with certain amounts paid and recorded as prepayments.

The remaining

commitments relate to equipment to be procured over the course of the project.

Management expects these capital expenditures to be incurred

as equipment purchases and related contractual commitments continue to be executed over the course of the project.

May 2026, the Company entered into a cloud computing infrastructure agreement with a global technology company with a major

Asia-Pacific presence, valued at approximately $ 950

million over five years.

In connection with this agreement, the Company has committed to procure additional high-performance

computing hardware and related infrastructure for approximately $ 400 m of which approximately 20% deposit has been paid.

As of June 30, 2026, the related hardware had not yet been delivered, and

accordingly, no liability has been recognized for the undelivered equipment.

In June 2026, t he

Company entered into a six-year AI infrastructure compute collaboration with NVIDIA (NASDAQ:

connection with this agreement, the Company has committed to procure additional high-performance computing hardware and related infrastructure

for approximately $ 4 billion.

Center Services Commitment

March 31, 2026, the Company has remaining contracted capacity of 70 MW , including a 15 MW commitment under a long-term data center

services agreement entered into in March 2026 with GreenSquareDC Entity for a facility located in Australia.

The 15 MW arrangement has

an initial term of 120 months from the Ready-for-Service date (targeted September 26, 2026), with monthly recurring fees based on contracted

kilowatt capacity.

As of March 31, 2026, no liability has been recognized because services have not commenced.

Expenditure Commitments Related to Customer Services Arrangement

connection with the $ 1.26 billion customer services arrangement with ESDS Software Solution Limited entered into during the quarter ended

March 31, 2026, the Company expects to incur capital expenditures of approximately $ 720.0 million for the purchase of equipment and related

infrastructure required to support the contracted services.

As of March 31, 2026, these commitments primarily relate to planned equipment

purchases that had not yet been incurred or recognized as liabilities in the Consolidated Condensed financial statements.

June 30, 2026, the Company has remaining contracted capacity of 132 MW, including a 15 MW commitment under a long-term data center services

agreement entered into in March 2026 with GreenSquareDC Entity for a facility located in Australia.

The 15 MW arrangement has an initial

term of 120 months from the Ready-for-Service date (targeted September 26, 2026), with monthly recurring fees based on contracted kilowatt

In July 2026, the Company executed an amended

and restated service order with NEXTDC for 72 MW of data center capacity in Australia.

The arrangement represents a total contractual

commitment of approximately $623 million over the term of the agreement and includes one-time establishment fees and ongoing monthly recurring

charges based on contracted capacity.

The capacity is scheduled to be deployed in five phases commencing in April 2027 through August

Company has also secured additional data center capacity in New Zealand for 14MW to support the deployment of cloud computing

infrastructure under a long-term customer service agreement with commencement expected in Q1 2027.

As of June 30, 2026, no liability has been recognized

because services have not commenced.

Managed Services Commitment

3 unchanged sentences

fees based on contracted infrastructure and services.

of March 31, 2026, the Company has made an upfront payment representing approximately 50% of the total contract value, which has been

of June 30, 2026, the Company has made an upfront payment representing approximately 50% of the total contract value, which has been

recorded as a prepayment.

4 unchanged sentences

Managed Services

connection with the termination of its data center services arrangement under the Digital Storage Solutions (DSS) agreement, the Company

entered into a noncancelable commitment with Andrew Sjoquist Enterprises (ASE), a managed service provider, totaling approximately AUD$ 400

connection with the termination of its data center services arrangement under the Distributed Storage Solutions (DSS) agreement, the

Company entered into a noncancelable commitment with Andrew Sjoquist Enterprises (ASE), a managed service provider, totaling

approximately AUD$ 400

thousand over five years.

commitment qualifies as an unconditional purchase obligation under ASC 440-10-50.

As of March 31, 2026, no liability has been recognized,

As of June 30, 2026, no liability has been recognized,

as the obligation represents future services to be received.

See additional capital asset purchase commitments entered into subsequent to period end in Note 26.

Net Income (loss) per share

6 unchanged sentences

is anti-dilutive.

Share-based options, warrants, and convertible notes 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.

Share-based options, warrants, and convertible notes 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.

following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive:

Stock options and RSUs:

options and RSUs:

1,139,093 shares

Convertible notes:

6,891,805 shares

14,281,632 shares

reconciliation of the numerators and denominators is as follows:

1 unchanged sentence

For the Three Months Ended

Net loss available to common shareholders

For the Six Months Ended

Net loss attributable to common shareholders

$ ( 428,302,926 )

$ ( 2,576,406 )

Net loss attributable to the noncontrolling interest

Net loss attributable to common shareholders

$ ( 448,218,692 )

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Segment Information

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.

Company operates in one operating

segment, and therefore one

reportable segment, focused on the provision of High Performance Compute Services.

The Company is also developing data center assets

to support its long-term growth strategy.

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.

Group’s method for measuring profitability on a reportable segment basis is operating profit or loss, which the CODM uses to assess

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expenses, excluding share-based compensation, by segment and treats them as significant segment expenses.

following table presents segment expenses, other segment items, and segment operating loss for the period:

of Segment Expenses, Other Segment Items, and Segment Operating Loss

For the Three Months Ended

Segment Expenses

Costs of revenue

Selling, general and administrative expenses

Other segment items (1)

Other income (2)

( 3,127,957 )

Segment expenses

Segment loss from operations

$ ( 2,819,223 )

$ ( 1,161,248 )

Other segment items for the reportable segment include share-based

compensation and other expenses.

Other income includes foreign currency transaction gains and losses.

For the interim 2026 and 2025 periods presented, all

revenue and expenses reflected in the loss from operations as presented in the consolidated condensed statement of operations represents

the sole segment’s revenue and operating loss.

Transactions with Related Parties

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Manning, SharonAI’s

Non-Executive Chairman, director and greater than 10 % stockholder, as the key person, provides certain services to SharonAI and SharonAI

Chief Executive Officer, 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

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This agreement was terminated in April 2026 with no notice period or payment.

March 23, 2026, the Company issued 90,893 shares of its Class A Ordinary Common Stock to Inbocalupo Pty Ltd (as trustee for the Inbocalupo

April 22, 2026, the Company issued 90,893 shares of its Class A Ordinary Common Stock to Inbocalupo Pty Ltd (as trustee for the Inbocalupo

Trust) in consideration for, and as full and final satisfaction of, the Company’s reimbursement obligation arising under the reimbursement

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in this financing.

Capital Pty Ltd, an entity affiliated with the Company’s Non-Executive Chairman and greater than 10% stockholder, subscribed

Capital Pty Ltd, an entity affiliated with the Company’s Chief Executive Officer and greater than 10 % stockholder, subscribed

for approximately AUD$ 700,000 (US$ 465,500 ) of convertible notes.

4 unchanged sentences

notes were issued on the same terms and conditions as those offered to unrelated third-party investors.

Company engaged First Equity Tax to provide audit and related compliance services required in connection with certain private local subsidiaries

of the Company, SharonAI Pty Ltd and Distributed Storage Solutions Pty Ltd.

First Equity Tax is considered a related party due to an

indirect relationship with the Company’s Chief Executive Officer.

the three and six months ended June 30, 2026, the Company recognized expenses of $ 44 thousand and $ 44 thousand, respectively, in connection

with services provided by First Equity Tax.

Media Holdings

Company engaged Bare Media Holdings for a discrete investor communications project.

Bare Media Holdings is considered a related party

due to an indirect relationship with the Company’s Chief Executive Officer.

the three and six months ended June 30, 2026, the Company recognized expenses of $ 10 thousand and $ 12 thousand, respectively, in connection

with the project.

The engagement related to a single project and was not ongoing as of June 30, 2026.

Company engaged Shift Advisory, an entity directly related to the Company’s Chief Revenue Officer, initially to provide outsourced

Chief Revenue Officer services prior to the individual’s employment by the Company.

Following the commencement of the individual’s

employment, Shift Advisory continued to provide limited advisory services relating to the Company’s revenue processes and related

operational matters.

the three and six months ended June 30, 2026, the Company recognized expenses of $ 134 thousand and $ 227 thousand, respectively, for services

provided by Shift Advisory.

associated with these related-party arrangements were recorded within general and administrative expenses in the Company’s

consolidated condensed statements of operations.

Subsequent Events

Company evaluated subsequent events from March 31, 2026 through the date the consolidated financial statements were issued in accordance

with ASC 855, Subsequent Events .

The following events occurred subsequent to March 31, 2026:

April 2026, the Company received the remaining outstanding principal amount under the US$ 50.0 million Senior Secured Convertible Promissory

Note from New Era Energy & Digital, Inc.

April 2026, in connection with the true-up share issuance related to NUAI shares received, the Company received an additional 893,724

shares of New Era Energy & Digital, Inc.

common stock.

April 26, 2026, the Company entered into a Securities Purchase Agreement with certain qualified institutional buyers for the private

placement of $ 350.0 million aggregate principal amount of 6.00 % Convertible Senior Notes due 2031.

The offering closed on April 30, 2026.

The Notes bear interest at 6.00 % per annum, payable quarterly, and are convertible into the Company’s Class A ordinary shares at

an initial conversion price of approximately $ 48.24 per share, subject to certain adjustments.

The Notes mature on May 1, 2031 , unless

earlier converted or repurchased in accordance with their terms.

Net proceeds from the offering are expected to be used for GPU and network

procurement and general working capital purposes related to AI cloud deployments.

As of the date of this report, this transaction has not yet closed.

April 30, 2026, SharonAI Holdings (the “Company”) and its wholly-owned indirect subsidiary, SharonAI Pty Ltd, entered into

employment agreements with James Manning, Tim Broadfoot, Andrew Leece, and Nick Hughes-Jones, each effective May 1, 2026.

agreements, Mr.

Manning was appointed Chief Executive Officer, Mr.

Broadfoot was appointed Chief Financial Officer, Mr.

Leece was appointed

Chief Operations Officer, and Mr.

Hughes-Jones was appointed Senior Vice President of Business Development.

The agreements provide for

annual base salaries, together with eligibility for short-term and long-term incentive awards, including restricted stock units and certain

one-time listing awards.

May 2026, the Company entered into multiple long-term agreements with third-party data center infrastructure providers for approximately

29.6 MW of additional capacity to support future operations.

The arrangements are expected to commence beginning in late 2026.

May 13, 2026, the Company entered into an additional customer contract with a global technology company with major Asia-pacific

presence with an aggregate total contract value of approximately $ 950

Computing Service Agreement

to June 30, 2026, the Company entered into a cloud computing service agreement with a global artificial intelligence (“AI”)

laboratory with an aggregate contract value of approximately $ 1.32 billion over a 5 five-year term.

the agreement, the Company expects to deploy cloud computing solutions across data center infrastructure located in New Zealand.

under the agreement is expected to commence during the first and second quarters of 2027 as the related infrastructure becomes operational

and services are delivered.

agreement supports the continued expansion of the Company’s AI Factory platform and is expected to utilize a portion of the Company’s

contracted AI computing capacity.

As of the date of the agreement, the Company had total AI Factory capacity of approximately 132MW,

of which 116MW had been contracted to end customers, with deployment of more than 62,000 NVIDIA GPUs expected by mid-2027.

connection with the execution of this agreement, the Company has entered into purchase commitments with hardware and infrastructure vendors

totaling approximately $ 765.1 million to procure equipment and related infrastructure necessary to support the deployment of the contracted

AI computing capacity.

As of the date of issuance of these condensed consolidated financial statements, these commitments had not been

recognized as liabilities because the related goods and services had not yet been received.

Computing Service Agreement

to June 30, 2026, the Company entered into a five-year cloud computing service agreement with a global artificial intelligence (“AI”)

platform with an aggregate contract value of approximately $ 373 million.

Revenue under the agreement is expected to commence during

the first quarter of 2027, subject to deployment of the required infrastructure.

The initial deployment is expected to utilize 2,048

NVIDIA Blackwell Ultra B300 GPUs.

In connection

with the deployment, the Company also entered into commitments to procure the required computing infrastructure, including equipment

with an aggregate purchase commitment of approximately $ 217.2 million (inclusive of estimated taxes), which will be recognized

as the related assets are received and the purchase obligations become payable.

The Company concluded that this represents a non-recognized subsequent event, and accordingly, no adjustment

to the June 30, 2026 condensed consolidated financial statements has been made.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements