SharonAI Holdings Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
SHAZ$21.81+11.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023769
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001493152-26-036377
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 110 previous paragraphs and 155 current paragraphs.
55 unchanged; 15 reworded; 80 added; 40 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (80)
Current report
On 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.
Current report
On 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.
Current report
On 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.
Current report
On 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 deployments.
Current report
On 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 2027.
Current report
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.
Current report
Q2 2026: $1,931 thousand| Q2 2025: $377 thousand
Current report
Total 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.
Current report
Q2 2026: $762 thousand| Q2 2025: $398 thousand
Current report
Q2 2026: $2,670 thousand| Q2 2025: $489 thousand
Current report
Share-based compensation expense for the three months ended June 30, 2026 and 2025 was $2,670 thousand and $489 thousand, respectively. The increase 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.
Current report
Q2 2026: $8,685 thousand| Q2 2025: $1,083 thousand
Current report
Selling, 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.
Current report
Q2 2026: $14,598 thousand| Q2 2025: $1,170 thousand
Current report
Other 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.*** ***
Current report
Q2 2026: 0 | Q2 2025: $153 thousand
Current report
Other 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 use.
Current report
Q2 2026: $0 | Q2 2025: (63) thousand
Current report
Change 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.
Current report
Change in fair value of warrant liabilities
Current report
Q2 2026: $(6,139) thousand| Q2 2025: $0 thousand
Current report
The 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.
Current report
Q2 2026: ($400,441) thousand | Q2 2025: $0
Current report
The 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.
Current report
Change in fair value of share-based payment
Current report
Q2 2026: $335 thousand| Q2 2025: $0
Current report
The 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. The resulting fair value adjustment was a non-cash item recognized in the consolidated condensed statements of operations.
Current report
Gain (loss) on investment in NUAI shares
Current report
Q2 2026: $6,493 thousand| Q2 2025: $0
Current report
The 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. 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. The sale proceeds were received and recorded as cash held in trust.
Current report
The 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.
Current report
Interest Income (Expense), Net
Current report
Q2 2026: ($4,527) thousand| Q2 2025: $(44) thousand
Current report
Q2 2026: $(1,306) thousand| Q2 2025: $128 thousand
Current report
Income 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.
Current report
Comparative Results for the six months ended June 30, 2026, and 2025:
Current report
Results of Operations for the six months ended June 30, 2026 compared to six months ended June 30, 2025
Current report
Revenue
Current report
H1 2026: $2,225 thousand| H1 2025: $702 thousand
Current report
Total 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.
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Removed paragraphs (40)
Previous report
On 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. (“Roth CH 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.
Previous report
As a result of the BCA transaction, equity holders of SharonAI Inc. received securities of SharonAI Holdings. Shares of SharonAI Holdings Inc. Class A common stock began trading on the OTC Markets under the ticker symbol “SHAZ.”.
Previous report
To fund our expansion, we have undertaken two material capital raisings, and a divestment of a non-core asset.
Previous report
We 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.
Previous report
Also 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.
Previous report
On 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.
Previous report
In 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.
Previous report
On 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. The 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.
Previous report
Q1 2026: $294 thousand| Q1 2025: $325 thousand
Previous report
Total 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.
Previous report
Q1 2026: $526 thousand| Q1 2025: $313 thousand
Previous report
Q1 2026: $382 thousand| Q1 2025: $468 thousand
Previous report
This 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.
Previous report
Q1 2026: $4,015 thousand| Q1 2025: $1,007 thousand
Previous report
Selling, 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 periods.
Previous report
Q1 2026: $1,318 thousand| Q1 2025: $506 thousand
Previous report
This 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.
Previous report
Q1 2026: $3,128 thousand| Q1 2025: $808 thousand
Previous report
This 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.
Previous report
Q1 2026: $0 | Q1 2025: (328) thousand
Previous report
At March 31, 2026, the Company no longer holds any digital assets, as all such holdings were fully disposed of during the third quarter of 2025.
Previous report
The 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.
Previous report
Change in Fair Value of Warrants
Previous report
Q1 2026: $883 thousand| Q1 2025: $0 thousand
Previous report
The 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.
Previous report
Change in fair value of NUAI shares
Previous report
Q1 2026: $(1,509) thousand| Q1 2025: $0
Previous report
The 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.
Previous report
Q1 2026: ($70,228) thousand | Q1 2025: $0
Previous report
On December 19, 2025, the Company issued convertible notes to a subset of investors, including related parties, to secure funding until the IPO. 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.
Previous report
Q1 2026: $65,920 thousand| Q1 2025: $0
Previous report
For 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.
Previous report
Interest Income, Net
Previous report
Q1 2026: $1,260 thousand| Q1 2025: $(12) thousand
Previous report
Q1 2026: $(13,519) thousand| Q1 2025: $63 thousand
Previous report
As 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.
Previous report
Net 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.
Previous report
Net 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.
Previous report
Net 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. These cash inflows were partially offset by repayments of the Yorkville loan and lease liabilities.
Previous report
Net 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.
Reworded paragraphs (15)
Previous wording
This Quarterly Report contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. Forward-looking statements can be identified using forward-looking words such as “believe,” “expect,” “intend,” “plan,” “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.
Current wording
This Quarterly Report contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. Forward-looking statements can be identified using forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should,” “could,” “anticipate,” “will,” “will be,” “will 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”). 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.
Previous wording
We 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.
Current wording
We 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.
Previous wording
On 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.
Current wording
On 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. This transaction closed on May 20, 2026.
Previous wording
The first quarter of 2026 showed a net loss of $20,012 thousand.
Current wording
The second quarter of 2026 showed a net loss of $430,369 thousand.
Previous wording
During 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.
Current wording
During 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 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.
Previous wording
The following table sets forth key components of the results of operations during the quarters ended March 31, 2026 and 2025.
Current wording
The following table sets forth key components of the results of operations during the three months ended June 30, 2026 and 2025.
Previous wording
Cost of revenue for the three months ended March 31, 2026 and 2025, was $526 thousand and $313 thousand, respectively, an increase of approximately $213 thousand. The increase was primarily driven by costs incurred in delivering GPU cloud computing operations. Key components included data center costs- comprising colocation facility fees, internet connectivity, and power consumption necessary to support high-performance infrastructure. The Company also incurred service fees under managed service agreements with third-party suppliers who provide and maintain the computer data storage equipment used in its operations. These fees include the use, upkeep, and performance monitoring of the hardware infrastructure.
Current wording
Cost 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. The increase was primarily driven by costs incurred in delivering GPU cloud computing operations. Key components included data center costs- comprising colocation facility fees, internet connectivity, and power consumption necessary to support high-performance infrastructure. The Company also incurred service fees under managed service agreements with third-party suppliers who provide and maintain the computer data storage equipment used in its operations. These fees include the use, upkeep, and performance monitoring of the hardware infrastructure.
Previous wording
Net 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.
Current wording
Net 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.
Previous wording
Income 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 period. 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.
Current wording
Income 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
Previous wording
As disclosed in Note 13, Convertible Notes, to the consolidated condensed financial statements, the Company continues to have outstanding note payables with terms that may require cash settlement, conversion into equity, or repayment upon maturity depending on future events. Other than scheduled repayments associated with these notes, no significant principal repayments are contractually required within the next 12 months. The Company continues to monitor its liquidity position and obligations in light of operational funding needs and market condition
Current wording
As disclosed in Note 13, Convertible Notes, to the consolidated condensed financial statements, the Company continues to have outstanding note payables with terms that may require cash settlement, conversion into equity, or repayment upon maturity depending on future events. Other than scheduled repayments associated with these notes, no significant principal repayments are contractually required within the next 12 months. The Company continues to monitor its liquidity position and obligations in light of operational funding needs and market conditions.
Previous wording
The 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.
Current wording
The Company has incurred operating losses to date and expects to continue investing in scaling its infrastructure and operations. The Company 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.
Previous wording
The following table provides a summary of the cash flow statement for the three months ended March 31, 2026 and 2025:
Current wording
The following table provides a summary of the cash flow statement for the six months ended June 30, 2026 and 2025:
Previous wording
Net 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.
Current wording
Net 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 activities. 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.
Previous wording
Net 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.
Current wording
Net 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.
Previous wording
The R&D Tax Incentive in Australia is a government program that provides tax offsets to businesses investing in eligible research and development activities. Companies with an annual 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. To qualify, activities must involve systematic experimentation to generate new knowledge, adhering to scientific principles. Businesses must register their R&D activities with AusIndustry and then claim the offset through the Australian Taxation Office. The incentive is designed to support innovation, technology development, and business growth, but companies must ensure reporting and compliance to be eligible.
Current wording
The R&D Tax Incentive in Australia is a government program that provides tax offsets to businesses investing in eligible research and development activities. 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. To qualify, activities must involve systematic experimentation to generate new knowledge, adhering to scientific principles. Businesses must register their 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 innovation, technology development, and business growth, but companies must ensure reporting and compliance to be eligible.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following table sets forth key components of the results of operations during the six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Selling, General, and Administrative Expenses (SG&A)
Current report — wording carried from elsewhere
Change in Fair Value of Digital Assets
Current report — wording carried from elsewhere
Change in Fair Value of Convertible Notes
Current report — wording carried from elsewhere
Gain on sale of investment in TCDC