What changed in this filing

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Item 1A. Risk Factors

2026-08-06 compared with 2026-05-15 · 70 added, 9 removed, 37 unchanged (68% of the section changed)

factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report

on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 31, 2026 (“Annual Report”).

Except as set

forth below, there have been no material changes in our risk factors from those previously disclosed in our Annual Report.

carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future

The risks described in our Annual Report are not the only risks we face.

Additional risks and uncertainties not currently known

to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating

If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

Risk Factors.

quarterly report should be read in conjunction with the risk factors included in our 2025 Annual Report on Form 10-K for the year ended

December 31, 2025, as filed with the SEC on March 31, 2026, and those disclosed in our Quarterly Report on Form 10-Q for the quarter

ended March 31, 2026.

These risk factors do not identify all risks that we face — our operations could also be affected by factors

that are not presently known to us or that we currently consider to be immaterial to our operations.

Due to risks and uncertainties,

known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not

be used to anticipate results or trends in future periods.

as set forth below, there have been no material changes from the risk factors previously disclosed in those filings.

are substantially dependent on NEXTDC as our primary data center provider, and any delay, disruption or failure by NEXTDC could materially

impair our ability to deliver services and generate revenue.

have secured up to 87MW of capacity through NEXTDC and rely on NEXTDC to host substantially all of our GPU infrastructure.

experiences construction delays, financial difficulties, power supply issues, or fails to deliver contracted capacity on schedule, we

may be unable to deploy our GPU fleet, fulfill customer contracts, or generate anticipated revenue.

Our revenue projections and growth

strategy are materially dependent on NEXTDC delivering capacity on time and as contracted.

Any failure or delay by NEXTDC could cause

us to miss revenue guidance, breach customer agreements, and suffer reputational harm, any of which could have a material adverse effect

on our business, financial condition, and results of operations.

Declining GPU Per-Hour Rate Structure in our Agreement with a Significant Customer Will Result in Materially Lower Revenues Over the

Term of the Agreement, and Our Ability to Generate Sufficient Revenue From Third Party Sales to Offset This Decline Is Uncertain.

customer price for GPU services in our agreement with a significant customer declines predictably over the six-year contract term —

The business model contemplates that we will sell all or part of this compute to Third Parties, generating a revenue share with such

customer on the spread.

However, the Third Party market for GPU compute is highly competitive and subject to rapid price changes driven

by evolving AI hardware generations, competing hyperscaler offerings, and fluctuating AI workload demand.

There is no assurance that

we can sustain Third Party revenues, and failure to do so will result in a material decline in revenues and profitability during the

contract term.

Face Significant Execution and Delivery Risk in Deploying a Large-Scale, Multi-Phase GPU Clusters on a Compressed Timeline, and Failure

to Meet Agreed Delivery Milestones May Result in Automatic Reductions to the Applicable Service Period and May Give our Customer the

Right to Terminate.

have committed to delivering a specified numbers of GPUs as of specific dates pursuant to our various customer contracts.

of delay beyond the handover date, the total service period may be reduced, directly reducing lifetime revenue for that customer contract.

If cluster acceptance testing cannot be completed by specified deadlines, the customer may have the right to terminate the contract.

Clusters of this scale involve complex hardware procurement and multi-phase acceptance testing.

Supply chain disruptions, construction

delays, hardware shortages, or technical failures during testing are all realistic risks.

Investors should understand that execution

risk is extremely high in the critical 2026–2027 period, and that any delay directly reduces the aggregate revenue that can be

generated over the life of the various customer contracts.

Revenue Model with Regards to our Agreement with A Significant Customer Is Dependent on Uncertain Third Party Customer Demand, and the

Revenue-Sharing Mechanics May Result in Revenues Materially Lower Than Expected.

customer contract with a significant customer contemplates that such customer will have little to no access to or use of the services

unless they are not fully utilized Third Parties.

Our ability to earn revenue above the price such customer has agreed to pay —

which is the basis for a Shareable Revenue split — is entirely dependent on our ability to attract Third Party customers at pricing

above the price such customer has agreed to pay.

Revenue share is only earned on the spread between what a Third Party pays and what

such customer would have paid, and all revenue is reduced by any service credits provided to customers.

At the same time, the varying

contract price over the contract term means that the contract price that the Company is entitled to also varies..

We must simultaneously

manage Third Party relationships, negotiate pricing, maintain SLAs for those customers, and comply with all notice obligations to NVIDIA

in respect of sold services.

The net revenue profile of the business is therefore highly sensitive to Third Party market conditions that

we do not control, and investors should not rely on the revenue share as a predictable or stable revenue stream.

Australian operations are subject to export control laws that may restrict certain activities

Australian subsidiary, SAI AU Holding Co Pty Ltd, is subject to Australian export control laws.

While Defence Export Controls (DEC) has

advised that our Token-as-a-Service technology does not currently require an export permit under the Defence and Strategic Goods List,

this assessment expires after 12 months.

The Defence and Strategic Goods List is updated regularly, and any changes could result in our

technology becoming subject to additional export control requirements.

We are also independently responsible for obtaining authorizations

from the Australian Department of Foreign Affairs and Trade before exporting, supplying, or brokering our technology to any sanctioned

destination or entity.

Failure to comply with applicable export control laws could result in penalties, reputational harm, and disruption

to our business.

to United States trade, tariff, import/export regulations or AI-related laws which may require SharonAI to restrict or terminate customer

36 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 1A. Risk Factors