Mawson Infrastructure Group Inc.

Previous wording

This report and the 2024 Form 10-K identify important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, including those set forth under Item 1A. “Risk Factors” below.

Current wording

This report, our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2025, and the 2024 Form 10-K identify important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, including those set forth under Item 1A. “Risk Factors” below.

Previous wording

The risk factors included in this Quarterly Report on Form 10-Q and on the 2024 Form 10-K are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those expressed or implied in our forward-looking statements:

Current wording

The risk factors included in this Quarterly Report on Form 10-Q, our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2025, and on the 2024 Form 10-K are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those expressed or implied in our forward-looking statements:

Previous wording

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the risk factors set out in Item 1A. Risk Factors and in our 2024 Form 10-K**.**

Current wording

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the risk factors set out in Item 1A. Risk Factors in this Quarterly Report on Form 10-Q, our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2025 and in our 2024 Form 10-K**.**

Previous wording

The Company develops and operates digital infrastructure platforms for enterprise customers and for its own purposes. The Company’s digital infrastructure platforms can be used to operate computing resources for a number of applications, and are offered across artificial intelligence (“AI”), high-performance computing (“HPC”), digital assets, and other computing applications. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company participates in energy management programs related to the real-time needs of the power grid.

Current wording

The Company develops and operates digital infrastructure platforms for enterprise customers and for its own purposes. The Company’s digital infrastructure platforms can be used to operate computing resources for a number of applications, and are offered across AI, HPC, digital assets, and other computing applications. The Company also has an energy management business, which utilizes software and analysis, to generate revenue when the Company participates in energy management programs related to the real-time needs of the power grid.

Previous wording

Digital Co-location revenues for three months ended March 31, 2025 and 2024, were $10.4 million and $8.2 million, respectively. This represented a 27% revenue increase or an increase of $2.2 million, compared to the same period in 2024. The increase in revenue was due to the Company enhancing its digital colocation capabilities, expanding its number of digital colocation customers, increasing the number of machines using our digital colocation infrastructure services, and growing its digital colocation business.

Current wording

Digital colocation revenues for the three months ended June 30, 2025 and 2024, were $3.7 million and $8.1 million, respectively. This represented a 55% revenue decrease or a decrease of $4.4 million, compared to the same period in 2024. The decrease in revenue was due to a decline in both the number of customers and the size of those contracts with customers as compared to the 2024 period. The Company continues to enhance its digital colocation capabilities in order to grow the number of digital colocation customers, and increase the number of machines using our digital colocation infrastructure services.

Previous wording

Energy management revenues for the three months ended March 31, 2025 and 2024, were $3.1 million and $2.5 million, respectively. This represented a 24% revenue increase or an increase of $0.6 million, compared to the same period in 2024. This increase is due to the Company’s enhanced energy management programs, which utilizes software and analysis, to generate revenue when the Company adapts its power usage to the real-time needs of the grid and enhanced participation in energy programs in the 2025 period than in the 2024 period.

Current wording

Energy management revenues for the three months ended June 30, 2025 and 2024, were $5.1 million and $1.7 million, respectively. This represented a 196% revenue increase or an increase of $3.4 million, compared to the same period in 2024. This increase is due to the Company’s enhanced energy management programs, which utilizes software and analysis, to generate revenue when the Company adapts its power usage to the real-time needs of the grid. Higher energy prices and demand drove higher participation in energy programs in the 2025 period than in the 2024 period.

Previous wording

Digital assets mining revenues from self-mining of bitcoin for the three months ended March 31, 2025 and 2024, were $0.3 million and $7.5 million, respectively, representing a decrease of $7.2 million. The decrease for the three months ended March 31, 2025 compared to the same period in 2024, was due to a number of factors, including the impact of the April 2024 halving industry event, and a higher global network difficulty rate, which led to lower bitcoin production from self-mining. In the three months ended March 31, 2025, compared to the same period in 2024, the Company also significantly expanded and grew its digital colocation services business across multiple customers reallocating some of its digital asset mining capacities.

Current wording

Digital assets mining revenues from self-mining of bitcoin for the three months ended June 30, 2025 and 2024, were $0.7 million and $3.2 million, respectively. This represented a decrease of $2.5 million compared to the same period in 2024. This decrease was due to a number of factors, including the impact of the April 2024 halving industry event, and a higher global network difficulty rate, which led to lower bitcoin production from self-mining.

Previous wording

Our cost of revenue consists primarily of direct power costs related to digital asset mining and co-location services and cost of mining equipment sold.

Current wording

Our cost of revenue consists primarily of direct power costs related to digital asset mining and colocation services and cost of mining equipment sold.

Previous wording

Cost of revenue for the three months ended March 31, 2025 and 2024, were $7.9 million and $11.8 million, respectively. The decrease in cost of revenue was primarily attributable to a decrease in power costs related to the energy used to operate the Company mining equipment and co-located mining equipment within our facilities.

Current wording

Cost of revenue for the three months ended June 30, 2025 and 2024, were $5.6 million and $8.8 million, respectively. The decrease in cost of revenue was attributable to a decrease in power costs due to lower colocation and self mining revenues. The decrease in power costs related to the energy used to operate the Company’s mining equipment and co-located mining equipment within our facilities was partially offset by an increase in the cost of energy in the 2025 period compared to the 2024 period.

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2025 and 2024 were $5.8 million and $3.5 million, respectively, which is an increase of $2.3 million from period to period, primarily due to increased legal and litigation related expenses, employee compensation and provision for doubtful accounts.

Current wording

Selling, general and administrative expenses for the three months ended June 30, 2025 and 2024 were $5.9 million and $3.6 million, respectively, an increase of $2.3 million from period to period, primarily due to increased legal and litigation related expenses and employee compensation.

Previous wording

Depreciation and amortization for the three months ended March 31, 2025 and 2024, were $1.5 million and $8.0 million, respectively. The lower depreciation and amortization expense is the result of an increased number of the Company’s digital asset mining hardware being fully depreciated in prior periods.

Current wording

Depreciation and amortization for the three months ended June 30, 2025 and 2024, were $1.5 million and $4.6 million, respectively. The lower depreciation and amortization expense is the result of liquidation and an increased number of the Company’s digital asset mining hardware being fully depreciated in prior periods.

Previous wording

During the three months ended March 31, 2025 and 2024, there was a gain on the fair value of the derivative asset of $4.1 million and $1.7 million, respectively, in relation to our power supply arrangements. The change in fair value between March 31, 2025 and 2024 is primarily due to an increase in the forward market prices between 2025 and 2024.

Current wording

During the three months ended June 30, 2025 and 2024, there was a loss on the fair value of the derivative asset of $2.1 million and $1.8 million, respectively, in relation to our power supply arrangements. Due to milder weather during the second quarter of 2025, energy prices dropped and lowered the value of energy hedges compared to the first quarter. The change in fair value between June 30, 2025 and 2024 was due to higher overall volatility in future prices derived from first quarter 2025 energy prices compared to 2024.

Previous wording

Interest expenses for the three months ended March 31, 2025 and 2024, were $0.8 million and $0.7 million, respectively. This increase of $0.05 million was attributable to the increase in interest rates during 2024 and 2025.

Current wording

Interest expenses for each of the three months ended June 30, 2025 and 2024, were $0.8 million.

Previous wording

During the three months ended March 31, 2025, loss on foreign currency transactions was $0.09 million. During the three months ended March 31, 2024, gain on foreign currency transactions was $0.2 million. This difference was due mostly to the movement in foreign exchange rates.

Current wording

During the three months ended June 30, 2025, loss on foreign currency transactions was $0.7 million. During the three months ended June 30, 2024, loss on foreign currency transactions was $0.3 million. This difference was due to higher Australian Dollar denominated liabilities in the 2025 period compared with the 2024 period and movement in the foreign exchange rate.

Previous wording

Stock based compensation expenses for the three months ended March 31, 2025 and 2024 were $2.1 million and $4.9 million, respectively. The decrease was primarily due to a reduction in new issuances of long-term incentives for the Company’s directors, management, and employees in the quarter ended March 31, 2025.

Current wording

Stock based compensation expenses for the six months ended June 30, 2025 and 2024 were $3.1 million and $6.0 million, respectively. The decrease was primarily due to lower fair values of new issuances of long-term incentives for the Company’s directors, management, and employees during the first six-months ended June 30, 2025 compared with the same period in 2024

Previous wording

Non-operating income (expense) consist primarily of interest expenses, loss on deconsolidation, gain (loss) on foreign currency transactions, and other income and expenses.

Current wording

Non-operating income (expense) consist primarily of interest expenses, gain (loss) on foreign currency transactions, loss on deconsolidation and other income and expenses.

Previous wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. For the three months ended March 31, 2025, we financed our operations primarily through cash flow provided by operating activities and other cash reserves.

Current wording

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. For the six months ended June 30, 2025, we financed our operations primarily through cash flow provided by operating activities and other cash reserves.

Previous wording

On December 13, 2024, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Lead Agent”) and A.G.P./Alliance Global Partners (collectively with the Lead Agent, the “Agents” and individually an “Agent”), to sell shares of our Common Stock (the “Shares”), having an aggregate sales price of up to $12 million, from time to time, through an “at the market offering” program under which the Agents will act as sales agent. The sales, if any, of the Shares made under the Sales Agreement will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act.

Current wording

On December 13, 2024, the Company entered into a Sales Agreement with Roth Capital Partners, LLC (the “Lead Agent”) and A.G.P./Alliance Global Partners (collectively with the Lead Agent, the “Agents” and individually an “Agent”), to sell shares of our Common Stock (the “Shares”), having an aggregate sales price of up to $12 million, from time to time, through an “at-the-market” program (the “ATM Program”) under which the Agents will act as sales agent. The ATM Program is currently unavailable because the Company does not have an effective registration statement on Form S-3 on file with the SEC. The Company intends to file a registration statement on Form S-3 with the SEC and re-commence the ATM Program in 2025.

Previous wording

We believe our near-term working capital requirements will continue to be funded through a combination of the cash we expect to generate from future operations, our existing funds, external debt facilities that may be available to us, future issuances of shares, and other potential sources of capital, monetization, or funds. We believe a combination of these opportunities are expected to be adequate to fund our long-term operations needed over the next twelve months. For our business growth, it is expected we may continue investing in expanding our infrastructure, expanding and/or upgrading our infrastructure and/or other equipment and will require additional working capital in the short-term and long-term. As of March 31, 2025, we had an aggregate of $21.8 million of debt, all of which is overdue for repayment unless we refinance, renegotiate the terms, or prevail in our disputes and/or related claims and/or counterclaims. In addition, the Celsius deposit of $15.3 million is the subject of an ongoing legal dispute in arbitration with Mawson and Celsius having claims and counterclaims. See Note 9 – Commitments and Contingencies, Celsius Promissory Note and Digital Colocation Agreement.

Current wording

We believe our near-term working capital requirements will continue to be funded through a combination of the cash we expect to generate from future operations, our existing funds, external debt facilities that may be available to use, future issuances of shares, and other potential sources of capital, monetization, or funds. We believe a combination of these opportunities are expected to be adequate to fund our operations over the next twelve months. For our business growth, it is expected we may continue investing in expanding and/or upgrading our infrastructure and/or other equipment and will require additional working capital in the short-term and long-term. As of June 30, 2025, we had an aggregate of $23.1 million of debt, all of which is overdue for repayment unless we refinance, renegotiate the terms, or prevail in our disputes and/or related claims and/or counterclaims. In addition, the Celsius deposit of $15.3 million is the subject of an ongoing legal dispute in arbitration with Mawson and Celsius having claims and counterclaims. See Note 9 – Commitments and Contingencies, Celsius Promissory Note and Digital Colocation Agreement to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report.

Previous wording

As of March 31, 2025 and December 31, 2024, we had a cash and cash equivalent balance of $5.5 million and $6.1 million, respectively. As of March 31, 2025 and December 31, 2024, the trade receivables balance was $10.9 million and $15.2 million, respectively. As of March 31, 2025, we had $21.8 million of outstanding short-term loans, and as of December 31, 2024, we had $20.9 million of short-term loans. The short-term loans as of March 31, 2025, relate to the Celsius Promissory Note, W Capital Loan, Secured Convertible Promissory Notes and Marshall Loan (these loans are currently in default, refer to Material Cash Requirements section below for more information*)*. As of March 31, 2025 and December 31, 2024, we had negative working capital of $36.7 million and $35.9 million, respectively.

Current wording

As of June 30, 2025 and December 31, 2024, we had a cash and cash equivalent balance of $3.2 million and $6.1 million, respectively. As of June 30, 2025 and December 31, 2024, the trade receivables balance was $11.9 million and $15.2 million, respectively. As of June 30, 2025, we had $23.1 million of outstanding short-term loans, and as of December 31, 2024, we had $20.9 million of short-term loans. The short-term loans as of June 30, 2025, relate to the Celsius Promissory Note, W Capital Loan, Secured Convertible Promissory Notes and Marshall Loan (each of which is currently in default). Refer to “Material Cash Requirements” below for more information. As of June 30, 2025 and December 31, 2024, we had negative working capital of $40.3 million and $35.9 million, respectively.

Previous wording

The following table presents the major components of net cash flows (used in) provided by operating, investing and financing activities for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents the major components of net cash flows (used in) provided by operating, investing and financing activities for the six months ended June 30, 2025 and 2024:

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $0.5 million and for the three months ended March 31, 2024, net cash provided by operating activities was $1.9 million. We had a net loss of $0.3 million for the three months ended March 31, 2025, which included $4.1 million of gain on derivative asset, $2.1 million of stock based compensation, $1.5 million of depreciation and amortization expense, $1.0 million of provision for doubtful accounts and $0.8 million of non-cash interest expense. We had a net loss of $20.0 million for the three months ended March 31, 2024, which included $11.9 million of loss on deconsolidation, $8.0 million of depreciation and amortization expense, $4.0 million of stock based compensation expense, and $1.7 million of gain on derivative asset.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $2.6 million and for the six months ended June 30, 2024, net cash provided by operating activities was $4.3 million. We had a net loss of $8.3 million for the six months ended June 30, 2025, which included $1.9 million of gain on derivative asset, $3.1 million of stock based compensation, $3.0 million of depreciation and amortization expense, $1.0 million of provision for doubtful accounts and $1.6 million of non-cash interest expense. We had a net loss of $29.6 million for the six months ended June 30, 2024, which included $12.0 million loss on deconsolidation, $12.6 million of depreciation and amortization expense, $3.1 million of stock based compensation expense, and $0.09 million of loss on derivative asset.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $0 and for the three months ended March 31, 2024, net cash provided by investing activities was $.5 million. The net cash provided by investing activities during the three months ended March 31, 2024, was primarily due to proceeds from sale of property, plant and equipment.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $0.05 and for the six months ended June 30, 2024, net cash used in investing activities was $1.4million. The net cash used in investing activities during the six months ended June 30, 2024, was primarily attributable to capital expenditures partially offset by proceeds from sale of certain non-utilized equipment.

Previous wording

For the three months ended March 31, 2025 and 2024, net cash used in financing activities was $0.1 million and $0.5 million, respectively. The cash used in financing activities during the three months ended March 31, 2024, was primarily attributable to loan payments.

Current wording

For the six months ended June 30, 2025 and 2024, net cash used in financing activities was $0.2 million and $0.6 million, respectively. The cash used in financing activities during the six months ended June 30, 2025 and June 30, 2024, was primarily attributable to lease payments and loan payments, respectively.

Previous wording

The following discussion summarizes our material cash requirements from contractual and other obligations. For more information on these matters, please see Note 9 – Commitments and Contingencies.

Current wording

The following discussion summarizes our material cash requirements from contractual and other obligations. For more information on these matters, please see Note 9 – Commitments and Contingencies to the unaudited consolidated condensed financial statements included in Item 1. “Financial Statements” of this Quarterly Report.

Previous wording

The Company is included as a guarantor of the Marshall Loan. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 and a general security agreement given by the Company. Principal repayments began during November 2022. There has been no principal and interest payments made since May 2023. The outstanding balance including interest is $10.4 million as of March 31, 2025, all of which is currently classified as a current liability.

Current wording

The Company is included as a guarantor of the Marshall Loan. The loan matured in February 2024 and bears interest at a rate of 12% per annum (with an overdue rate provision of an additional 500bps), payable monthly with interest payments that commenced in December 2021. This loan facility is secured by direct assets of MIG No.1 and a general security agreement given by the Company. Principal repayments began during November 2022. There has been no principal and interest payments made since May 2023. The outstanding balance including interest is $11.3 million as of June 30, 2025, all of which is currently classified as a current liability.

Previous wording

The Company is included as a guarantor of the W Capital Loan. As of March 31, 2025, the balance was AUD $2.2 million (USD $1.3 million) representing outstanding interest, all of which is currently classified as a current liability. The W Capital Loan accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps). The W Capital Loan expired in March 2023.

Current wording

The Company is included as a guarantor of the W Capital Loan. As of June 30, 2025, the balance was AUD $2.3 million (USD $1.5 million) representing outstanding interest, all of which is currently classified as a current liability. The W Capital Loan accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 800bps). The W Capital Loan expired in March 2023.

Previous wording

On February 23, 2022, Luna Squares entered into the Digital Colocation Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares a principal amount of $20.0 million, for the purpose of funding the infrastructure required to meet the obligations of the Digital Colocation Agreement, for which Luna Squares issued the Celsius Promissory Note for repayment of such amount. The Celsius Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna Squares is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Celsius Promissory Note had a maturity date of August 23, 2023. The outstanding balance including interest is $9.9 million as of March 31, 2025, all of which is currently classified as a current liability.

Current wording

On February 23, 2022, Luna Squares entered into the Digital Colocation Agreement with Celsius Mining LLC. In connection with this agreement, Celsius Mining LLC loaned Luna Squares a principal amount of $20.0 million, for the purpose of funding the infrastructure required to meet the obligations of the Digital Colocation Agreement, for which Luna Squares issued the Celsius Promissory Note for repayment of such amount. The Celsius Promissory Note accrues interest daily at a rate of 12% per annum (with an overdue rate provision of an additional 200bps). Luna Squares is required to amortize the loan at a rate of 15% per quarter, principal repayments began at the end of September 2022. The Celsius Promissory Note had a maturity date of August 23, 2023. The outstanding balance including interest is $10.2 million as of June 30, 2025, all of which is currently classified as a current liability.

Previous wording

As of March 31, 2025, and December 31, 2024, we had net current liabilities of $56.9 million and $61.9 million, respectively. As of March 31, 2025, and December 31, 2024, we had negative net assets of $1.4 million and $3.2 million, respectively. As of March 31, 2025, we had an accumulated deficit of $229.1 million compared to $228.8 million as of December 31, 2024. Our cash position of March 31, 2025, was $5.5 million in comparison to $6.1 million as of December 31, 2024.

Current wording

As of June 30, 2025, and December 31, 2024, we had current liabilities of $59.3 million and $61.9 million, respectively. As of June 30, 2025, and December 31, 2024, we had negative net assets of $8.3 million and $3.2 million, respectively. As of June 30, 2025, we had an accumulated deficit of $237.1 million compared to $228.8 million as of December 31, 2024. Our cash position of June 30, 2025, was $3.2 million in comparison to $6.1 million as of December 31, 2024.

Previous wording

For the three-month period ended March 31, 2025 and 2024, the Company incurred a loss after tax of $0.3 million and $20.0 million, a decrease in financial loss of $19.7 million, respectively.

Current wording

For the six- month period ended June 30, 2025 and 2024, the Company incurred a net loss attributed to Mawson common stockholders of 8.3 million and $29.4 million, respectively, a decrease in financial loss of $21.1 million.

Previous wording

We require additional capital to respond to near-term debt repayment obligations, competitive pressure, market dynamics, new technologies, customer demands, business opportunities, challenges, potential acquisitions or unforeseen circumstances, and we will likely need to determine to engage in equity or debt financings in the short term. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to fund, grow or support our business model and to respond to business challenges could be significantly limited, our business, financial condition and results of operations could be adversely affected, and this may result in bankruptcy or our ceasing operations.

Current wording

We require additional capital to respond to near-term debt repayment obligations, competitive pressure, market dynamics, new technologies, customer demands, business opportunities, and challenges, potential acquisitions or unforeseen circumstances, and we will likely need to engage in equity or debt financings in the short term. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to fund, grow or support our business model and to respond to business challenges could be significantly limited, our business, financial condition and results of operations could be adversely affected, and this may result in bankruptcy or our ceasing operations.

Previous wording

The Company continues to take steps to preserve cash by optimizing costs and negotiating with its suppliers to improve or extend their terms of trade. The Company has been improving its revenue generation by improving the efficiency of its operations and adding multiple, institutional co-location services customers. The Company will continue to seek to optimize its cashflows through these and other initiatives.

Current wording

The Company continues to take steps to preserve cash by optimizing costs and negotiating with its suppliers to improve or extend their terms of trade. The Company has been improving its revenue generation by improving the efficiency of its operations and adding multiple, institutional colocation services customers. The Company will continue to seek to optimize its cashflows through these and other initiatives.