SharonAI Holdings Inc. (SHAZ) - 10-K Summary
Business Context and Reporting Period
Company: SharonAI Holdings Inc.
Reporting Period: Fiscal Year Ended December 31, 2025
Business Model: Australian neocloud operator providing sovereign, low-latency access to advanced GPU infrastructure for AI and High-Performance Computing (HPC). The company operates as a "pure-play" neocloud, leveraging colocation partnerships (primarily NEXTDC) rather than building its own data centers.
Key Milestones: Completed a reverse recapitalization with Roth CH Acquisition Co. in December 2025. Listed on Nasdaq Capital Markets in February 2026. Transitioned from a hybrid model to a pure-play neocloud operator, divesting its Texas data center joint venture (TCDC).
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $1.57 million | $0.44 million |
| Gross Profit | $0.10 million | ($0.28 million) |
| Net Loss | ($39.82 million) | ($3.92 million) |
| Operating Cash Flow | ($2.64 million) | ($2.21 million) |
| Cash and Equivalents (Year End) | $71.07 million | $4.42 million |
| Total Assets | $133.14 million | $32.15 million |
| Total Liabilities | $143.29 million | $2.24 million |
Note: The significant increase in liabilities is primarily due to the fair value accounting of $103.4 million in convertible notes issued in December 2025.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 257% year-over-year, driven by the expansion of GPU cloud services and the cessation of Filecoin mining operations in Q2 2025.
- Net Loss Expansion: Net loss widened significantly to $39.8 million, primarily driven by a $26.0 million non-cash loss from the change in fair value of convertible notes and increased SG&A expenses ($12.1 million vs. $2.4 million) related to the business combination and operational scaling.
- Liquidity Position: Cash balances surged from $4.4 million to $71.1 million following a $103 million pre-IPO convertible note offering and subsequent capital raises.
- Asset Base: Property and equipment increased to $15.2 million as the company deployed 411 GPUs (including L40s, H100s, and H200s) and prepared for future B200/B300 deployments.
Guidance, Outlook, and Risks
Outlook: Management anticipates continued investment in infrastructure scaling. The company plans to deploy over 2,000 additional NVIDIA B200 and B300 GPUs in 2026, supported by secured capacity at NEXTDC data centers. The company expects to shift revenue recognition toward long-term "take-or-pay" contracts to align with capital expenditures.
Management Commentary: The company emphasizes its strategic partnerships with NVIDIA (NCP status), Cisco, and NEXTDC as key differentiators. The divestiture of the Texas Critical Data Center (TCDC) JV for $70 million (completed Jan 2026) allows a focus on the higher-margin neocloud model.
Key Risks:
- Going Concern & Liquidity: Despite recent capital raises, the company has a history of losses and requires additional capital to fund GPU acquisitions.
- Supplier Concentration: Substantial dependence on NVIDIA for GPUs and NEXTDC for data center capacity. Disruptions in supply or capacity delivery could materially impact operations.
- Customer Concentration: Approximately 82% of 2025 revenue was derived from just three customers.
- Internal Controls: Management identified a material weakness in internal controls related to the accounting for complex financial instruments (convertible notes).
- Regulatory & Geopolitical: Risks related to export controls on AI chips, energy regulations, and data sovereignty laws.
Investor Verification Checklist
- Convertible Note Terms: Verify the conversion triggers, maturity dates, and interest rates of the $103 million convertible notes issued in December 2025 to assess future dilution or cash repayment obligations.
- GPU Deployment Schedule: Confirm the delivery and installation timelines for the 2,024 planned B200/B300 GPUs, as revenue recognition is contingent on operational deployment.
- Customer Contracts: Review the specific terms of the "take-or-pay" agreements with the top three customers to understand revenue visibility and cancellation risks.
- Internal Control Remediation: Monitor progress on remediation of the material weakness in accounting for complex financial instruments.
- TCDC Sale Proceeds: Verify the receipt of the remaining consideration from the $70 million sale of the Texas Critical Data Center interest.