What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-15 · 377 added, 188 removed, 230 unchanged (71% of the section changed)

13 unchanged sentences

“may,” “should,” “could,” “anticipate,” “will,” “will be,” “will

continue,” “will likely result,” “project,” “estimate,” “strategy” or their negatives

or other variations of these words or other comparable words, or by the fact that these statements do not relate strictly to historical

or current matters.

These forward-looking statements may be included in, but are not limited to, various filings made by us with the

United States Securities and Exchange Commission (the “ SEC ”), press releases or oral statements made by or with the

approval of one of our authorized executive officers.

These forward-looking statements are “forward-looking statements” within

the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities

Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

We intend such forward-looking

statements to be covered by the safe-harbor provisions for forward-looking statements contained in those provisions, and we are including

this statement for purposes of complying with those safe-harbor provisions.

continue,” “will likely result,” “project,” “estimate,” “strategy,” “positioned”

or their negatives or other variations of these words or other comparable words, or by the fact that these statements do not relate strictly

to historical or current matters.

These forward-looking statements may be included in, but are not limited to, various filings made by

us with the United States Securities and Exchange Commission (the “SEC”), press releases or oral statements made by or with

the approval of one of our authorized executive officers.

These forward-looking statements are “forward-looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the

“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in those

provisions, and we are including this statement for purposes of complying with those safe-harbor provisions.

Forward-looking

19 unchanged sentences

performance, unless expressed as such, and should only be viewed as historical data.

are an Australian neocloud operator, purpose-built to power the next generation of artificial intelligence (“ AI ”)

and high-performance computing (“ HPC ”).

Our infrastructure is architected from the ground up to meet the specific,

intensive and complex demands of modern AI training and inference workloads, machine learning, and Generative AI.

are an Australian neocloud operator, purpose-built to power the next generation of AI and HPC.

Our infrastructure is architected from

the ground up to meet the specific, intensive and complex demands of modern AI training and inference workloads, machine learning, and

Generative AI.

provide enterprise, government and research organizations with sovereign, low-latency access to advanced accelerated computing hardware,

7 unchanged sentences

Corporate Milestones

accomplished the following key milestones in the fiscal quarter ended March 31, 2026 and the second quarter of 2026:

January 28, 2025, Roth CH Acquisition Co., a publicly traded Cayman Islands company trading on the OTC Market (“ Roth CH” ),

entered into a business combination agreement, with Roth CH Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of

Roth CH (“ Merger Sub ”), SharonAI Inc.

(“ SharonAI ”) and Roth CH Holdings, Inc.

Holdings” ) (the “ BCA ”).

Under the BCA, Roth CH merged with and into Roth CH Holdings on December 16, 2025

and was renamed “SharonAI Holdings Inc.” and became domesticated in the State of Delaware, and Merger Sub merged with and

into SharonAI Inc.

becoming the wholly owned subsidiary of the Company.

The transaction completed in December 2025.

a result of the BCA transaction, equity holders of SharonAI Inc.

received securities of SharonAI Holdings.

Shares of SharonAI Holdings

Class A common stock began trading on the OTC Markets under the ticker symbol “SHAZ.”.

fund our expansion, we have undertaken two material capital raisings, and a divestment of a non-core asset.

successfully completed a US$103 million pre-initial public offering (“ Pre-IPO ”) capital raising in the form of unsecured

convertible notes in January 2026, introducing new institutional and strategic shareholders.

As part of this transaction, Digital Alpha

Advisors LLC, which has a strategic collaboration agreement with Cisco, invested in SharonAI via the unsecured convertible note and remain

strategic shareholders in the Company.

in December 2025, we announced a strategic pivot, transitioning from a hybrid model of site development to a pure-play neocloud operator

for the short term.

We had previously formed a 50:50 joint venture, Texas Critical Data Center LLC (‘ TCDC ”), with

New Era Energy & Digital Inc (“ New Era ”) in January 2025, to fund and develop a data center site with a natural

gas fired power plant in the Permian Basin of western Texas.

We sold our 50% interest in TCDC to our joint venture partner, New Era,

for consideration of US$70 million (which was subsequently modified to approximately $74 million post adjustments), paid via cash, secured

promissory note and equity in New Era.

The transaction completed in January 2026.

January 22, 2026, Mr.

Wolfgang Schubert, resigned as the Company’s Chief Executive Officer and from the Company’s board of

directors (the “ Board ”).

In connection with Mr.

Schubert’s resignation as Chief Executive Officer of the Company,

on January 22, 2026, the Board appointed Mr.

James Manning, Non-Executive Chairman, director and greater than 10% stockholder of the

Company, as its Chief Executive Officer.

February 2026, we listed on the NASDAQ Capital Markets, raising US$125 million in a concurrent underwritten public offering before costs.

This transaction was a key strategic step that is expected to enable us access to the largest public capital market in the world, providing

us with capital raising alternatives which could lower our weighted average cost of capital while minimizing near-term equity dilution.

March 31, 2026, through its wholly-owned subsidiary (together, the “Company”), entered into (i) a Master Services Agreement

(the “MSA”) and (ii) Service Order No.

1 (the “Service Order,” and together with the MSA, the “Agreements”)

with ESDS Software Solutions Limited and certain of its subsidiaries (together, the “Customer”), pursuant to which the Company

agreed to provide high-performance managed GPU compute and cloud infrastructure services to the Customer.

The Service Order has an initial

term of 60 months commencing on the Service Start Date (as defined in the Service Order), with a total contract value of approximately

USD $1,260,000,000.

The Customer has an option to extend for an additional 24 months.

Service fees are payable monthly in advance.

Customer is required to provide security in the form of letters of credit or bank guarantees in an aggregate amount of USD $140,000,000.

accomplished the following key milestones in the fiscal quarter ended June 30, 2026 and the second quarter of 2026:

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.

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

In 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.

This transaction closed on May 20, 2026.

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.

On 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 million.

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 million.

June 12, 2026, we entered into an agreement with Nvidia to deploy 72MW AI factory and up to 40,000 Grace Blackwell GB300 GPUs in Australia.

Under the terms of the agreement, NVIDIA and Sharon AI are collaborating to enable 72 megawatts (MW) of new data center capacity in Australia.

The companies will deploy NVIDIA’s DSX AI factory design, scaling up to 40,000 Grace Blackwell GB300 GPUs to serve growing demand

from AI startups, enterprises, and university researchers.

The collaboration is structured so that Sharon AI can commit to large-scale

NVIDIA infrastructure while aligning economics through a revenue-sharing and credit-support model.

Sharon AI will sell NVIDIA-powered

cloud services, and NVIDIA will earn both standard product revenue and a share of the cloud revenue on the supported capacity.

This structure

accelerates adoption of NVIDIA platforms among customers that historically lacked access to capital-intensive AI infrastructure, while

giving Sharon AI a capital-efficient path to scale and providing NVIDIA with a recurring, usage-linked earnings stream.

June 16, 2026, we expanded our partnership with VAST Data to Power AI Factories Across Australia and Asia-Pacific, where we will deploy

600PB of the VAST AI Operating System across its AI cloud infrastructure.

This deployment represents one of the largest and most advanced

sovereign AI data foundations in the Asia-Pacific region.

It positions Sharon AI at the forefront of Australia’s push to build

independent, high-performance AI capability – keeping the nation’s most sensitive workloads, intellectual property, and strategic

data firmly onshore while delivering the raw power needed for next-generation training, inference, and agentic AI systems.

Using a proven

benchmark of approximately 6PB of optimized AI storage per 1,000 GPUs for demanding large-scale workloads, the new 600PB VAST deployment

provides the scalable data backbone equivalent to supporting the data needs of ~100,000 GPUs.

This is a transformative leap that cements

Sharon AI’s AI Cloud platform as one of the most substantial sovereign AI clouds in Australia and Asia-Pacific.

June 17, 2026, we entered into securities purchase agreements with certain qualified institutional and accredited buyers relating to

the private offering of approximately 6,719,896 shares of the Company’s Class A Ordinary Common Stock at a purchase price of $68.73

per share and pre-funded warrants at a price per pre-funded warrant of $68.2799 to purchase up to an aggregate of 6,374,823 shares of

Class A Ordinary Common Stock for aggregate gross proceeds of approximately $900 million.

The offering closed on June 22, 2026, and the

net proceeds are expected to be used to support our previously announced six-year strategic compute collaboration with NVIDIA, where

we intend to deploy one of Australia’s largest AI Factories including up to 40,000 Grace Blackwell GB300 GPUs as well as broader

expansion plans.

June 17, 2026, we entered into a securities purchase agreement with certain qualified institutional buyers relating to a private offering

of $700 million aggregate principal amount of the Convertible Notes.

The Convertible Notes are senior, unsecured obligations that mature

on June 15, 2032, bear interest at a rate of 4.75% per year payable quarterly in arrears, and are convertible into shares of Class A

Ordinary Common Stock at an initial conversion price of approximately $99.66 per share.

The offering closed on June 22, 2026, and the

net proceeds are expected to be used for GPU and network procurement, along with working capital to support revenue-generating AI cloud

July 16, 2026, we announced the signing of a cloud computing service agreement with a global Artificial Intelligence (“AI”)

Lab valued at $1.32 Billion over five years.

Under the terms of the contract, we expect to deploy cloud computing solutions across

data center infrastructure in New Zealand with revenue from the contract expected to commence across the first and second quarter of

The Company announced on July 22, 2026, that effective

as of August 24, 2026, Mr.

Tim Broadfoot will resign as the Company’s Chief Financial Officer and Mr.

Anuj Goel will serve as the

Company’s Chief Financial Officer.

Factors Affecting Operating Results

9 unchanged sentences

as critical to its forward strategy, despite their limited impact on short-term results.

first quarter of 2026 showed a net loss of $20,012 thousand.

second quarter of 2026 showed a net loss of $430,369 thousand.

the prior year, the Company has strategically shifted its focus from providing storage services to developing and delivering GPU Cloud

services, aligning with the growing demand for high-performance computing (HPC) and AI-driven workloads.

This transition reflects a response

to changing market dynamics and the increasing need for scalable, on-demand GPU infrastructure to support machine learning, AI training,

and other compute-intensive applications.

services, aligning with the growing demand for HPC and AI-driven workloads.

This transition reflects a response to changing market dynamics

and the increasing need for scalable, on-demand GPU infrastructure to support machine learning, AI training, and other compute-intensive

applications.

market for GPU Cloud services has shown strong theoretical demand, with significant interest from AI developers, research institutions,

19 unchanged sentences

of Operations

of Operations for the quarter ended March 31, 2026 compared to quarter ended March 31, 2025

following table sets forth key components of the results of operations during the quarters ended March 31, 2026 and 2025.

of Operations for the quarter ended June 30, 2026 compared to quarter ended June 30, 2025

following table sets forth key components of the results of operations during the three months ended June 30, 2026 and 2025.

For the Three Months Ended

4 unchanged sentences

Other expenses

Gain on disposal of property and equipment

Loss from operations

(24,784,178 )

Non-operating income (expense), net:

1 unchanged sentence

Change in fair value of warrant liabilities

Change in fair value of NUAI shares

Change in fair value of convertible notes

(400,440,855 )

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

Loss before income taxes

Income tax (expense) benefit

(429,062,745 )

(20,011,821 )

Net loss attributable to non-controlling interest

Net loss attributable to SharonAI Holdings Inc.

$ (19,915,764 )

Income tax (expense) benefit

(430,368,696 )

1 unchanged sentence

$377 thousand

revenue for the three months ended March 31, 2026 and 2025 was $294 thousand and $325 thousand, respectively.

The decrease was primarily

attributable the discontinuation of Filecoin activities in the second quarter of 2025.

revenue for the three months ended June 30, 2026 and 2025 was $1,931 thousand and $377 thousand, respectively.

The increase of $1,554

thousand, or approximately 412%, was primarily attributable to revenue generated from new customers onboarded during the second quarter

of 2026, reflecting the continued expansion of the Company’s GPU infrastructure services business.

$762 thousand| Q2 2025:

$398 thousand

of revenue for the three months ended March 31, 2026 and 2025, was $526 thousand and $313 thousand, respectively, an increase of approximately

of revenue for the three months ended June 30, 2026 and 2025, was $762 thousand and $398 thousand, respectively, an increase of approximately

$363 thousand.

9 unchanged sentences

$489 thousand

figure represents stock-based compensation expenses issued to employees, executives, or advisors as part of recruitment and retention.

Given the company’s new formation, share-based compensation is a tool to attract key talent and align leadership with long-term

growth objectives.

The value of share-based payments represents the amount of share based payments that has reached the performance criteria

of the issuances (if any) pro rata expensed over the time based vesting term.

compensation expense for the three months ended June 30, 2026 and 2025 was $2,670 thousand and $489 thousand, respectively.

of $2,181 thousand, or approximately 446%, was primarily attributable to new equity awards granted during the quarter to employees, executives,

and advisors in support of the Company’s continued growth and talent acquisition initiatives.

Share-based compensation expense is recognized

over the requisite service period based on the grant-date fair value of the awards, subject to the satisfaction of any applicable performance

and service-based vesting conditions.

General, and Administrative Expenses (SG&A)

1 unchanged sentence

$1,083 thousand

general and administrative (SG&A) expenses for the quarter primarily reflect foundational investments to establish and scale the

Company’s operations.

The increase in expenses was largely attributable to employee-related costs, professional fees for legal,

consulting, and audit services.

Management expects SG&A expenses to stabilize over time as the Company transitions from its initial

setup and transactional activities to a more routine operating phase, with these foundational costs becoming less significant in future

general and administrative expenses for the three months ended June 30, 2026 and 2025 were $8,685 thousand and $1,083 thousand, respectively.

The increase of $7,602 thousand, or approximately 702%, was primarily attributable to higher employee-related costs, financing costs,

and professional fees, including legal, consulting, and audit services, incurred to support the Company’s growth initiatives, financing

activities, and expanding operations.

$14,598 thousand| Q2 2025:

$1,170 thousand

category includes depreciation and amortization expenses recognized during the quarter related to both new and existing property, and

equipment, as well as intangible assets acquired through recent business combinations.

These non-cash charges reflect the systematic

allocation of the cost of long-lived assets over their estimated useful lives and are primarily associated with infrastructure used in

the Company’s data storage operations and GPU cloud service operation.

$3,128 thousand| Q1 2025:

expenses for the three months ended June 30, 2026 and 2025 were $14,598 thousand and $1,170 thousand, respectively.

The increase of $13,428

thousand, or approximately 1,148%, was primarily attributable to unrealized foreign exchange losses arising from the remeasurement of

foreign currency-denominated monetary balances.

The increase was also attributed to routine depreciation and amortization expense recognized

on the Company’s property and equipment and intangible assets supporting its GPU infrastructure and cloud services operations.

$153 thousand

category captures the impact of material unrealized gains and losses arising from the remeasurement of cross-currency balances under

applicable foreign exchange accounting standards.

These foreign currency translation adjustments, while non-operational in nature, can

introduce volatility into reported results depending on exchange rate movements during the period.

income for the three months ended June 30, 2026 and 2025 was $0 and $153 thousand, respectively.

The decrease was attributable to the

absence of a gain on the sale of fixed assets recognized in the prior-year period.

During the three months ended June 30, 2025, the Company

recognized a gain of $153 thousand on the disposal of fully depreciated storage server assets that were no longer in active operational

in Fair Value of Digital Assets

1 unchanged sentence

(63) thousand

March 31, 2026, the Company no longer holds any digital assets, as all such holdings were fully disposed of during the third quarter

decrease in fair value of digital assets in Q1 2025 reflects a decline in the market value of cryptocurrency previously held in connection

with the Company’s Filecoin data storage operations.

in Fair Value of Warrants

$883 thousand| Q1 2025:

change in fair value of warrants for the quarter ended March 31, 2026, reflects the remeasurement of warrants classified as liabilities

under ASC 480 and ASC 815.

These warrants are initially recorded at fair value on the date of issuance and subsequently remeasured at

each reporting period.

Changes in fair value are recognized as non-cash gains or losses in the consolidated statements of operations.

The fair value measurement considers factors such as the Company’s stock price, expected volatility, risk-free interest rates,

remaining contractual term, and other relevant inputs.

Management applies professional judgment in determining whether warrants meet

the criteria for equity classification and in estimating their fair value, and views the resulting changes as non-cash adjustments that

do not affect the Company’s liquidity or operational cash flows.

in fair value of NUAI shares

in the fair value of digital assets for the three months ended June 30, 2026 and 2025 was $0 and a loss of $63 thousand, respectively.

No gain or loss on the fair value of digital assets was recognized during the current-year period, as the Company had fully disposed

of its digital asset holdings during the third quarter of 2025.

The prior-year loss reflected the decline in the market value of digital

assets previously held in connection with the Company’s former Filecoin data storage operations.

in fair value of warrant liabilities

$(6,139) thousand| Q2 2025:

change in fair value of NUAI shares for the three months ended March 31, 2026 reflects a loss of $1.5 million.

The NUAI shares were received

as part of the consideration from the sale of the Company’s TCDC investment in January 2026.

Upon initial recognition, the shares

were measured at $10.0 million and are subsequently remeasured at fair value based on quoted market prices.

Company recognized a loss of $6,139 thousand from the change in fair value of warrant liabilities for the three months ended June

30, 2026, compared to no such gain or loss in the prior-year period.

The warrant liabilities were assumed in connection with the

Company’s business combination completed in December 2025 and, accordingly, there were no comparable warrant liabilities

outstanding during the three months ended June 30, 2025.

The current-year loss was attributable to the periodic remeasurement of

these warrant liabilities, with changes in fair value primarily driven by movements in the Company’s share price and other

valuation assumptions during the quarter.

The resulting fair value adjustment is a non-cash item recognized in the consolidated

condensed statements of operations.

in Fair Value of Convertible Notes

($400,441) thousand | Q2 2025:

December 19, 2025, the Company issued convertible notes to a subset of investors, including related parties, to secure funding until

The Company elected to account for convertible notes under fair value option.

Accordingly, the notes are initially recognized

and subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in the statement of operations.

on sale of investment in TCDC

Company recognized a loss of $400,441 thousand from the change in fair value of convertible notes for the three months ended June

30, 2026, compared to no such gain or loss in the prior-year period.

The convertible notes were issued in December 2025 and were

accounted for under the fair value option.

Accordingly, changes in their fair value were recognized in the consolidated condensed

statements of operations until conversion.

During the quarter, approximately 99% of the outstanding convertible notes were converted

into the Company’s common shares on June 11, 2026.

The significant fair value loss recognized during the period was primarily

driven by the increase in the Company’s share price prior to the conversion of the notes.

Following the conversion,

substantially all of these convertible notes were derecognized from the Company’s balance sheet.

in fair value of share-based payment

$335 thousand| Q2 2025:

the three months ended March 31, 2026, the Company recognized a gain on sale of its investment in TCDC of $65.9 million.

Under the sale

agreement, the Company is entitled to total contractual consideration of $70.0 million, consisting of $10.0 million in cash consideration,

$10.0 million in NUAI common shares, and a $50.0 million senior secured convertible promissory note due June 30, 2026.

The gain recognized

during the period primarily reflects the excess of the fair value of consideration received over the carrying value of the Company’s

investment in TCDC at the date of disposal.

Company recognized a gain of $335 thousand from the change in fair value of share-based payment for the three months ended June 30, 2026,

compared to no such gain or loss in the prior-year period.

The gain was primarily attributable to adjustments related to the settlement

of vested share awards, including the accounting for shares withheld to satisfy employee tax withholding obligations.

This was partially

offset by a loss from the remeasurement of the Consulting Services Fee payable, which was settled in common shares in April 2026.

resulting fair value adjustment was a non-cash item recognized in the consolidated condensed statements of operations.

(loss) on investment in NUAI shares

$6,493 thousand| Q2 2025:

Company recognized a gain on investment in NUAI shares of $6,493 thousand for the three months ended June 30, 2026, compared to no

such gain or loss in the prior-year period.

The NUAI shares were received as part of the consideration for the sale of the

Company’s TCDC investment in January 2026.

On May 14, 2026, the Company sold all of its NUAI common shares for proceeds of

$14,984 thousand.

interest income for the three months ended March 31, 2026 was $1,260 thousand, compared with net interest expense of $12 thousand in

the prior-year period.

The increase was primarily attributable to interest earned on the $50.0 million convertible note and higher interest

income from bank deposits, partially offset by interest expense on lease liabilities under right-of-use assets.

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, which was recognized in the condensed consolidated condensed statements of operations.

proceeds were received and recorded as cash held in trust.

on sale of investment in TCDC

$856 | Q2 2025:

Company recognized a gain on the sale of its investment in TCDC of $856 for the three months ended June 30, 2026, compared to no such

gain in the prior-year period.

The gain was attributable to the reversal of an overaccrual of transaction costs associated with the TCDC

sale completed in January 2026.

No additional gain was recognized from the underlying sale transaction during the current quarter.

Income (Expense), Net

($4,527) thousand| Q2 2025:

$(44) thousand

interest expense for the three months ended June 30, 2026 was $4,527 thousand, compared with net interest expense of $44 thousand for

the three months ended June 30, 2025.

The increase of $4,484 thousand was primarily attributable to interest expense recognized on the

convertible notes issued in December 2025, May 2026, and June 2026, partially offset by interest income earned on the Company’s cash balances.

Tax Benefit (Expense)

$(1,306) thousand| Q2 2025:

tax expense for the three months ended March 31, 2026 was $13.5 million, compared with an income tax benefit of $63 thousand in the prior-year

The significant increase in income tax expense was primarily attributable to the tax impact of the gain recognized on the sale

of the Company’s investment in TCDC.

$128 thousand

tax expense for the three months ended June 30, 2026 was $(1,306) thousand, compared with an income tax benefit of $128 thousand for the

three months ended June 30, 2025.

The increase in income tax expense was primarily attributable to the non-deductibility of the fair

value loss on convertible notes for tax purposes, and changes in the valuation allowance maintained against certain deferred tax assets.

Results for the six months ended June 30, 2026, and 2025:

of Operations for the six months ended June 30, 2026 compared to six months ended June 30, 2025

following table sets forth key components of the results of operations during the six months ended June 30, 2026 and 2025.

For the Six Months Ended

Cost of revenue

Gross profit (loss)

Share-based compensation

Selling, general and administrative expenses

Other expenses

Gain on disposal of property and equipment

Loss from operations

(27,603,403 )

Non-operating income (expense), net:

Change in fair value of digital assets

Change in fair value of warrant liabilities

Change in fair value of convertible notes

(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 expense, net

Loss before income taxes

(435,555,915 )

Income tax (expense) benefit

(14,824,603 )

(450,380,518 )

$2,225 thousand| H1 2025:

$702 thousand

revenue for the six months ended June 30, 2026 and 2025 was $2,225 thousand and $702 thousand, respectively.

The increase of $1,523 thousand,

or approximately 217%, was primarily attributable to higher GPU infrastructure services revenue driven by new customers onboarded during

the second quarter of 2026, reflecting the continued expansion of the Company’s customer base and operations.

$1,288 thousand| H1 2025:

$712 thousand

of revenue for the six months ended June 30, 2026 and 2025 was $1,288 thousand and $712 thousand, respectively.

The increase of $576

thousand, or approximately 81%, was primarily attributable to higher costs incurred in delivering the Company’s GPU infrastructure services

as operations expanded during the period.

These costs primarily consisted of data center expenses, including colocation facility fees,

power consumption, and internet connectivity, as well as managed service fees paid to third-party providers for the operation, maintenance,

and monitoring of the Company’s computing infrastructure.

$3,053 thousand| H1 2025:

$957 thousand

compensation expense for the six months ended June 30, 2026 and 2025 was $3,053 thousand and $957 thousand, respectively.

of $2,096 thousand, or approximately 219%, was primarily attributable to new equity awards granted during the period to employees, executives,

and advisors in support of the Company’s continued growth and talent acquisition initiatives.

General, and Administrative Expenses (SG&A)

$12,701 thousand| H1 2025:

$2,091 thousand

general and administrative expenses for the six months ended June 30, 2026 and 2025 were $12,701 thousand and $2,091 thousand, respectively.

The increase of $10,610 thousand, or approximately 508%, was primarily attributable to higher legal and other professional fees associated

with the Company’s public offering and financing transactions, together with increased employee-related costs and financing costs incurred

to support the Company’s continued growth and expansion.

$12,788 thousand| H1 2025:

$1,676 thousand

expenses for the six months ended June 30, 2026 and 2025 were $12,788 thousand and $1,676 thousand, respectively.

The increase of $11,112

thousand, or approximately 663%, was primarily attributable to unrealized foreign exchange losses arising from the remeasurement of foreign

currency-denominated monetary balances.

The increase was also attributable, to a lesser extent, to depreciation and amortization expense

recognized on the Company’s property and equipment and intangible assets supporting its GPU infrastructure and cloud services operations.

$0 | H1 2025:

$962 thousand

income for the six months ended June 30, 2026 and 2025 was $0 and $962 thousand, respectively.

The decrease was attributable to the absence

of gains on the sale of fixed assets recognized during the prior-year period.

During the six months ended June 30, 2025, the Company

recognized gains on the disposal of fixed assets, including storage server assets and other equipment that were no longer required for

in Fair Value of Digital Assets

$0 | H1 2025:

(391) thousand

in the fair value of digital assets for the six months ended June 30, 2026 and 2025 was $0 and a loss of $391 thousand, respectively.

No gain or loss on the fair value of digital assets was recognized during the current period, as the Company had fully disposed of its

digital asset holdings during the third quarter of 2025.

The prior-year loss reflected the decline in the market value of digital assets

previously held in connection with the Company’s former Filecoin data storage operations.

in fair value of warrant liabilities

$(5,255) thousand| H1 2025:

Company recognized a loss of $5,255 thousand from the change in fair value of warrant liabilities for the six months ended June 30, 2026,

compared to no such gain or loss in the prior-year period.

The warrant liabilities were assumed in connection with the Company’s business

combination completed in December 2025 and, accordingly, there were no comparable warrant liabilities outstanding during the six months

ended June 30, 2025.

The current-period loss was attributable to the periodic remeasurement of these warrant liabilities, with changes

in fair value primarily driven by movements in the Company’s share price and other valuation assumptions.

The resulting fair value adjustment

is a non-cash item recognized in the consolidated condensed statements of operations.

in Fair Value of Convertible Notes

($470,669) thousand | H1 2025:

Company recognized a loss of $470,669 thousand from the change in fair value of convertible notes for the six months ended June 30,

2026, compared to no such gain or loss in the prior-year period.

The convertible notes were issued in December 2025 and were

accounted for under the fair value option.

Accordingly, changes in their fair value were recognized in the consolidated condensed

statements of operations until conversion.

During the six-month period, approximately 99% of the outstanding convertible notes were

converted into the Company’s common shares on June 11, 2026.

The significant fair value loss recognized during the period was

primarily driven by the increase in the Company’s share price prior to the conversion of the notes.

Following the conversion,

substantially all of these convertible notes were derecognized from the Company’s balance sheet.

in fair value of share-based payment

$335 thousand| H1 2025:

Company recognized a gain of $335 thousand from the change in fair value of share-based payment for the six months ended June 30, 2026,

compared to no such gain or loss in the prior-year period.

The gain was primarily attributable to adjustments related to the settlement

of vested share awards, including the accounting for shares withheld to satisfy employee tax withholding obligations.

The resulting fair

value adjustment was a non-cash item recognized in the consolidated condensed statements of operations.

(loss) on investment in NUAI shares

$4,984 thousand| H1 2025:

Company recognized a net gain on investment in NUAI shares of $4,984 thousand for the six months ended June 30, 2026, compared to no

such gain or loss in the prior-year period.

The NUAI shares were received as part of the consideration for the sale of the Company’s

TCDC investment in January 2026 and were subsequently measured at fair value based on quoted market prices.

On May 14, 2026, the Company

sold all of its NUAI common shares for proceeds of $14,984 thousand.

The investment had a carrying amount of $8,490 thousand immediately

prior to the sale, resulting in a realized gain on sale of $6,493 thousand.

The net gain recognized for the six-month period reflects

this realized gain, partially offset by fair value losses recognized prior to the sale.

The sale proceeds were received and recorded

as cash held in trust.

on sale of investment in TCDC

$65,920 thousand | H1 2025:

Company recognized a gain on the sale of its investment in TCDC of $65,920 thousand for the six months ended June 30, 2026, compared

to no such gain in the prior-year period.

The gain arose from the completion of the sale of the Company’s investment in TCDC in January

Under the sale agreement, the Company received total consideration with a fair value of approximately $70 million, consisting

of $10 million in cash, $10 million of NUAI common shares (including additional shares issued pursuant to the agreement’s top-off

mechanism, which was designed to preserve the agreed $10 million equity consideration following a decline in NUAI’s share price), and

a $50 million senior secured convertible promissory note.

Income (Expense), Net

($3,268) thousand| H1 2025:

$(56) thousand

interest expense for the six months ended June 30, 2026 was $3,268 thousand, compared with net interest expense of $56 thousand for

the six months ended June 30, 2025.

The increase of $3,212 thousand was primarily attributable to interest expense recognized on the

convertible notes issued in December 2025, May 2026, and June 2026, partially offset by interest income earned on the Company’s cash balances and

interest earned on the $50 million senior secured convertible promissory note received as part of the consideration for the sale

of the Company’s TCDC investment.

Tax Benefit (Expense)

$(14,825) thousand| H1 2025:

$190 thousand

tax expense for the six months ended June 30, 2026 was $(14,825) thousand, compared with an income tax benefit of $190 thousand for

the six months ended June 30, 2025.

The increase in income tax expense was primarily attributable to the non-deductibility of the

fair value loss on convertible notes for tax purposes, tax impact of the gain recognized on the sale of the Company’s

investment in TCDC and the changes in the valuation allowance maintained against certain deferred tax assets

and Capital Resources

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of customer receipts, vendor payment terms, and strategic investment activities.

of March 31, 2026, the Company held cash of $164.29 million.

The Company strengthened its liquidity position through multiple financing

activities, including the issuance of approximately $104 million of pre-IPO convertible notes during 2025 and the receipt of approximately

$125 million in gross proceeds from its February 2026 Nasdaq Stock Market listing.

of June 30, 2026, the Company had cash and cash equivalents of approximately $1.86 billion.

During the six months ended June 30, 2026,

the Company significantly strengthened its liquidity position through several financing and strategic transactions, including the completion

of its February 2026 Nasdaq listing, which generated gross proceeds of approximately $125 million;

the issuance of $350 million aggregate

principal amount of Convertible Senior Notes in May 2026;

and the completion of the $1.6 billion strategic financing in June 2026.

The Company also benefited from the proceeds of approximately $104 million of pre-IPO convertible notes issued during 2025, which provided

funding prior to the Company’s public listing.

disclosed in Note 13, Convertible Notes, to the consolidated condensed financial statements, the Company continues to have outstanding

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Company has incurred operating losses to date and expects to continue investing in scaling its infrastructure and operations.

These factors

indicate that additional capital will be required to support ongoing activities and meet obligations as they become due.

also expects to incur significant capital expenditures in connection with the deployment of its AI infrastructure, including investments

in GPU hardware, data center infrastructure, and related technology assets to support existing customer commitments and future growth

opportunities.

As of June 30, 2026, the Company’s material future cash requirements consisted primarily of obligations under

finance leases, debt service requirements, and infrastructure-related purchase commitments.

The Company expects to satisfy these obligations

through a combination of cash generated from operations and available liquidity.

Contractual purchase and infrastructure commitments

make up the majority of the future spending and total approximately $6 billion as of June 30, 2026.

management believes existing cash resources, anticipated operating cash flows, and access to capital markets are sufficient to fund currently

anticipated requirements, the Company may seek additional financing to support future growth opportunities, strategic investments, or

accelerated expansion initiatives.

Company is actively engaged in capital raising discussions with existing and prospective investors.

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flow analysis

following table provides a summary of the cash flow statement for the three months ended March 31, 2026 and 2025:

For the Three Months Ended

following table provides a summary of the cash flow statement for the six months ended June 30, 2026 and 2025:

For the Six Months Ended

Net cash provided by (used in) operating activities

$ (1,708,451 )

$ (1,328,105 )

Net cash provided by (used in) investing activities

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$ 2,044,174,430

cash used in operating activities was $7,450 thousand for the quarter ended March 31, 2026.

Operating cash flows reflected receipts from

the data storage operations and GPU cloud services, offset by operating expenditures, including product development costs, infrastructure-related

expenses to support expansion, and professional fees.

cash flows used in operating activities was $1,328 thousand for the quarter ended March 31, 2025.

Cash flows from operating activities

during the period were primarily driven by the continuation of the Company’s Filecoin storage operations and the emerging revenue

from its growing GPU cloud services business.

The Filecoin operations ceased during the second quarter of 2025.

cash used in investing activities was $32,720 thousand for the three months ended March 31, 2026, primarily reflecting the Company’s

payment for the deposit on capital expenditures, partially offset by proceeds received from the sale of TCDC investment.

cash flows used in investing activities was $33 thousand for the quarter ended March 31, 2025.

Cash flows used in investing activities

during the period primarily reflect capital outflows used for payment for the purchase of equipment.

cash provided by financing activities was $132,202 thousand for the quarter ended March 31, 2026, primarily driven by proceeds from the

issuance of common stock in February 2026 and the receipt of the remaining proceeds from convertible notes issued in December 2025.

cash inflows were partially offset by repayments of the Yorkville loan and lease liabilities.

cash flows used in financing activities was $109 thousand for the quarter ended March 31, 2025.

Cash flows used in financing activities

during the period was for the payment of lease liabilities.

cash provided by operating activities was $23,241 thousand for the six months ended June 30, 2026, compared with net cash used in

operating activities of $1,708 thousand for the six months ended June 30, 2025.

The improvement in operating cash flows was

primarily attributable to increased receipts from the Company’s GPU infrastructure and cloud services business, including

customer deposits, partially offset by payments for operating expenses, infrastructure-related costs, employee-related costs, and

professional fees incurred to support the Company’s continued growth and expansion.

cash used in operating activities for the six months ended June 30, 2025 primarily reflected operating expenditures, including product

development costs, equipment-related costs to support infrastructure expansion, and professional fees associated with strategic corporate

These cash outflows were only partially offset by cash receipts generated from the Company’s Filecoin data storage operations

and its early-stage GPU cloud services business.

cash used in investing activities was $263,314 thousand for the six months ended June 30, 2026.

The cash outflows primarily reflected

deposits on capital expenditures, purchases of certificates of deposit, and the investment in Joint Venture interests.

These outflows were partially offset

by proceeds received from the sale of the Company’s investment in TCDC, the sale of NUAI common shares, and the repayment of the convertible

promissory note receivable.

cash provided by investing activities was $56 thousand for the six months ended June 30, 2025.

Investing cash flows during the period

primarily reflected proceeds from the sale of digital assets, which were partially offset by capital expenditures.

cash provided by financing activities was $2,044,173 thousand for the six months ended June 30, 2026, compared with net cash used in

financing activities of $284 thousand for the six months ended June 30, 2025.

The significant increase in financing cash flows was primarily

attributable to proceeds from the issuance of common stock, convertible notes, and pre-funded warrants in connection with the Company’s

financing activities during the period.

Financing cash inflows were partially offset by capital raising costs, repayments of note payable

obligations, and payments of lease liabilities.

cash used in financing activities for the six months ended June 30, 2025 primarily reflected payments of lease liabilities.

cash requirements

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development activities.

Companies with an annual turnover below AUD$20 million receive a refundable tax offset of their corporate tax

Companies with an aggregated turnover below AUD$20 million receive a refundable tax offset of their corporate tax

rate plus an 18.5% premium, while larger businesses receive a non-refundable offset based on their R&D intensity.

2 unchanged sentences

Businesses must register their

R&D activities with AusIndustry and then claim the offset through the Australian Taxation Office.

R&D activities with Department of Industry Science and Resources and then claim the offset through the Australian Taxation Office.

The incentive is designed to support

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Factors that could materially affect these commitments include:

in power costs:

Volatility in energy pricing could increase the total cost of colocation facility commitments.

Scalability of IT infrastructure:

of IT infrastructure:

Higher-than-expected deployment of new equipment may lead to increased costs under colocation agreements.

Service provider risks:

Changes in vendor pricing, contract renewals, or service disruptions could impact the cost-effectiveness of managed service agreements.

provider risks:

Changes in vendor pricing, contract renewals, or service disruptions could impact the cost-effectiveness of managed

service agreements.

this time, the Company does not believe that these off-balance sheet arrangements create material risks beyond those disclosed in its

14 unchanged sentences

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 2. Management’s Discussion and Analysis