SHAZ 10-K & 10-Q changes, risk factors and insider trading
SharonAI Holdings Inc. (also SHAZW) · Nasdaq · Services-Computer Processing & Data Preparation · CIK 2068385 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Comparison not available: Not available: fewer than two 10-K filings on EDGAR to compare (only one so far)..
What changed in the latest 10-Q
Risk Factors
New heading “We 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.”
New heading “The 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.”
New heading “We 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.”
New heading “Our 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.”
New heading “Our Australian operations are subject to export control laws that may restrict certain activities”
Largest changes
“Our 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. …”see in full comparison
“Our Australian operations are subject to export control laws that may restrict certain activities”see in full comparison
“We 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.”see in full comparison
“The 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.”see in full comparison
“Our 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.”see in full comparison
“We 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.”see in full comparison
Full comparison: every changed paragraph (13)
This 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.
Except as set forth below, there have been no material changes from the risk factors previously disclosed in those filings.
We 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.
We have secured up to 87MW of capacity through NEXTDC and rely on NEXTDC to host substantially all of our GPU infrastructure. If NEXTDC 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.
The 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.
The 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.
We 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.
We have committed to delivering a specified numbers of GPUs as of specific dates pursuant to our various customer contracts. For each day 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.
Our 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.
Our 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.
Our Australian operations are subject to export control laws that may restrict certain activities
Our 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.
Risk
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. You should
carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future
results. 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
results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
Management's Discussion & Analysis (MD&A)
New heading “Change in fair value of share-based payment”
New heading “Gain (loss) on investment in NUAI shares”
New heading “Comparative Results for the six months ended June 30, 2026, and 2025:”
New heading “Results of Operations for the six months ended June 30, 2026 compared to six months ended June 30, 2025”
New heading “Cost of Revenue”
New heading “Share-Based Compensation”
New heading “Selling, General, and Administrative Expenses (SG&A)”
New heading “Change in Fair Value of Digital Assets”
New heading “Change in fair value of warrant liabilities”
New heading “Change in Fair Value of Convertible Notes”
New heading “Change in fair value of share-based payment”
New heading “Gain (loss) on investment in NUAI shares”
New heading “Gain on sale of investment in TCDC”
New heading “Interest Income (Expense), Net”
New heading “Income Tax Benefit (Expense)”
Removed heading “Change in fair value of NUAI shares”
Largest changes
“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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“Results of Operations for the six months ended June 30, 2026 compared to six months ended June 30, 2025”see in full comparison
“Comparative Results for the six months ended June 30, 2026, and 2025:”see in full comparison
Full comparison: every changed paragraph (120)
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,” “strategystrategy,” “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 the
approval of one of our authorized executive officers. These forward-looking statements are “forward-looking statements”
within 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.
We
are an Australian neocloud operator, purpose-built to power the next generation of artificialAI intelligence (“AI”)
and high-performance computing (“HPC”).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.
We
accomplished the following key milestones in the fiscal quarter ended MarchJune 31,30, 2026 and the second quarter of 2026:
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.
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.”.
To
fund our expansion, we have undertaken two material capital raisings, and a divestment of a non-core asset.
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.
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.
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.
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.
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.
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, thisThis transaction hasclosed noton yetMay closed.20, 2026.
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.
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.
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.
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.
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.
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.
The
firstsecond quarter of 2026 showed a net loss of $20,012$430,369 thousand.
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.
Results
of Operations for the quarter ended MarchJune 31,30, 2026 compared to quarter ended MarchJune 31,30, 2025
The
following table sets forth key components of the results of operations during the quartersthree months ended MarchJune 31,30, 2026 and 2025.
Total
revenue for the three months ended MarchJune 31,30, 2026 and 2025 was $294$1,931 thousand and $325$377 thousand, respectively. The decreaseincrease of $1,554
thousand, or approximately 412%, was primarily
attributable theto discontinuationrevenue ofgenerated Filecoinfrom activitiesnew incustomers onboarded during the second quarter
of 2026, reflecting the continued expansion of 2025.the Company’s GPU infrastructure services business.
Cost
of revenue for the three months ended MarchJune 31,30, 2026 and 2025, was $526$762 thousand and $313$398 thousand, respectively, an increase of approximately
$213$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.
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.
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.
Selling,
general and administrative (SG&A) expenses for the quarterthree primarilymonths reflectended foundationalJune investments30, to establish2026 and scale2025 thewere $8,685 thousand and $1,083 thousand, respectively.
Company’s operations. The increase inof expenses$7,602 thousand, or approximately 702%, was largelyprimarily attributable to higher employee-related costs, financing costs,
and professional feesfees, forincluding legal,
consulting, and audit services.services, Management expects SG&A expensesincurred to stabilize over time assupport the CompanyCompany’s transitionsgrowth frominitiatives, its initialfinancing
setupactivities, and transactionalexpanding activities to a more routine operating phase, with these foundational costs becoming less significant in future
periods.operations.
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.
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.
Q2 2026: 0 | Q2 2025: $153 thousand
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.
Q1
2026: $3,128 thousand| Q1 2025: $808 thousand
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.
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.
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.
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.
Change
in Fairfair Valuevalue of Warrantswarrant liabilities
Q1Q2
2026: $883$(6,139) thousand| Q1Q2 2025: $0 thousand
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.
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.
Change
in fair value of NUAI shares
Q1
2026: $(1,509) thousand| Q1 2025: $0
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.
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.
Change in fair value of share-based payment
Q2 2026: $335 thousand| Q2 2025: $0
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.
Gain (loss) on investment in NUAI shares
Q2 2026: $6,493 thousand| Q2 2025: $0
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.
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.
Q1Q2
2026: $65,920$856 thousand| Q1Q2 2025: $0
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.
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.
Interest
Income,Income (Expense), Net
Q1Q2
2026: $1,260($4,527) thousand| Q1Q2 2025: $(1244) thousand
Net
interest incomeexpense for the three months ended MarchJune 31,30, 2026 was $1,260$4,527 thousand, compared with net interest expense of $12$44 thousand infor
the prior-yearthree period.months ended June 30, 2025. The increase of $4,484 thousand was primarily attributable to interest earnedexpense recognized on the $50.0 million
convertible notenotes issued in December 2025, May 2026, and higherJune interest
income from bank deposits,2026, partially offset by interest expenseincome earned on leasethe liabilitiesCompany’s undercash right-of-use assets.balances.
Income
tax expense for the three months ended MarchJune 31,30, 2026 was $13.5$(1,306) million,thousand, compared with an income tax benefit of $63$128 thousand infor the
three prior-year
period.months ended June 30, 2025. The significant increase in income tax expense was primarily attributable to the tax impactnon-deductibility of the gainfair
value recognizedloss on theconvertible sale
ofnotes for tax purposes, and changes in the Company’svaluation investmentallowance inmaintained TCDC.against certain deferred tax assets.
Comparative Results for the six months ended June 30, 2026, and 2025:
Results of Operations for the six months ended June 30, 2026 compared to six months ended June 30, 2025
SHAZ insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-15 | Situational Awareness Lp |
Option exercise | 2,674,823 | — | — |
| 2026-06-30 | Situational Awareness Lp |
Option exercise | 3,700,000 | — | — |
Well-known investors holding SHAZ (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 1,334,105 | $112.1M | 0.08% | Added 91% |
| Lone Pine Capital (Stephen Mandel) | 2026-06-30 | 1,209,848 | $102.4M | 0.63% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,229,398 | $100.2M | 0.06% | Added 1437% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 436,490 | $37.0M | 0.06% | New position |
| Oaktree Capital Management (Howard Marks) | 2026-06-30 | 289,456 | $24.5M | 0.46% | New position |
| Soros Fund Management | 2026-06-30 | 72,748 | $6.2M | 0.08% | New position |
| Renaissance Technologies | 2026-06-30 | 17,654 | $1.5M | 0.0% | New position |
| Two Sigma Investments | 2026-06-30 | 6,532 | $553.0K | 0.0% | New position |