8-K: New Era Energy & Digital Completes TCDC Acquisition, Partners with Primary Digital

New Era Energy & Digital, Inc. completed its acquisition of SharonAI's remaining 50% interest in Texas Critical Data Centers LLC for $70 million and announced a co-development partnership with Primary Digital Infrastructure for the hyperscale data center campus.

Summary

• Completed the acquisition of SharonAI's 50% equity interest in Texas Critical Data Centers LLC (TCDC) on January 16, 2026, resulting in 100% ownership of TCDC.
• The aggregate purchase price for the TCDC interest was $70 million.
• The purchase price was paid as: $10 million in cash ($150,000 deposit paid December 29, 2025, and $9.85 million delayed payment due by March 31, 2026, or Capital Closing), $10 million in equity securities (common stock or units from the Company's next equity financing, due by March 31, 2026, or Capital Closing), and $50 million via a Senior Secured Convertible Promissory Note.
• Equity issuance is subject to a 19.99% ownership cap (Nasdaq Maximum) unless shareholder approval is obtained within 90 days; if the cap is reached, the difference will be paid in cash.
• The Convertible Note matures on June 30, 2026, carries a 10% annual interest rate payable at maturity, and is secured by the Company's ownership in TCDC and TCDC's assets.
• SharonAI may convert up to 20% ($10 million) of the Convertible Note into common stock at a conversion price based on the 30-day volume-weighted average price (VWAP) prior to conversion, with a floor of $0.87 (20% of the $4.33 closing price on January 16, 2026), potentially issuing approximately 11.5 million shares at the floor price.
• Entered into a Waiver and Consent with ATW AI Infrastructure II LLC, waiving certain terms of a December 6, 2024, Securities Purchase Agreement.
• The exercise price of the First Tranche Warrants held by ATW AI Infrastructure II LLC was voluntarily reduced to $2.00, allowing for the issuance of up to 5 million shares.
• Agreed to negotiate the issuance of up to $60 million of convertible preferred stock to ATW AI Infrastructure II LLC, subject to a 4.99% ownership cap.
• Announced a partnership with Primary Digital Infrastructure to co-develop TCDC as a 1+ gigawatt hyperscale data center campus in Ector County, Texas.
• Primary Digital Infrastructure will serve as the lead capital partner and co-sponsor, leveraging its expertise to secure a hyperscale anchor tenant and arrange complex financing for the project.
• The Company will file any required financial statements and pro forma financial information related to the Transaction by amendment to this Current Report on Form 8-K no later than 71 calendar days after the filing date.

Sentiment

Score: 7

Explanation: The completion of the TCDC acquisition and the strategic partnership with Primary Digital Infrastructure are significant positive developments for the company's long-term strategy in the high-demand hyperscale data center market. While there are financial obligations and potential dilution, these are associated with a major growth initiative and the involvement of a reputable partner mitigates some risk. The overall outlook is positive, but execution risks and financial leverage warrant a score above neutral but not maximal.

Positives

• Achieved 100% ownership of Texas Critical Data Centers LLC (TCDC) through the acquisition of SharonAI's remaining 50% interest.
• Formed a strategic partnership with Primary Digital Infrastructure, bringing deep institutional expertise in energy, data center development, and institutional asset management to the TCDC project.
• The TCDC project is a significant 1+ gigawatt hyperscale campus, engineered for next-generation compute needs, featuring both grid and behind-the-meter power generation solutions.
• Primary Digital Infrastructure has a strong track record, including developing global data center portfolios and financing multi-billion dollar projects, such as the $15 billion Stargate program for a 1.2-gigawatt AI data center campus in Abilene, Texas, which secured over $11.6 billion in financing.
• Management expects to sign a hyperscale anchor tenant for TCDC in line with previous guidance, indicating positive progress.
• The buy-out agreement with SharonAI reflects a constructive outcome for both parties, positioning TCDC for its next stage of development and a shift from planning to execution.

Negatives

• The acquisition involves significant financial obligations, including a $50 million Senior Secured Convertible Promissory Note and a $10 million delayed cash payment.
• Potential for substantial equity dilution from the $10 million in equity securities issued for the acquisition and the conversion of the $50 million note, as well as the negotiated $60 million convertible preferred stock with ATW.
• The Company needs shareholder approval to issue equity exceeding Nasdaq's 19.99% cap, and failure to obtain this approval could result in additional cash payments.
• The exercise price of the First Tranche Warrants held by ATW AI Infrastructure II LLC was reduced to $2.00, increasing potential dilution from these warrants.
• The Company faces liquidated damages if registration statements for the convertible note shares and equity units are not filed or declared effective by specified deadlines.
• The Company has not yet secured a hyperscale anchor tenant, only stating it 'remains on track to sign,' indicating a key milestone is still pending.

Risks

• Failure to obtain shareholder approval for equity issuance exceeding the Nasdaq Maximum could necessitate cash payments in lieu of equity.
• Inability to file or achieve effectiveness for the required registration statements by the specified deadlines could result in significant liquidated damages.
• General risks associated with operating business segments, managing research, development, expansion, growth, and operating expenses.
• Challenges in competing in a highly competitive and evolving industry and adapting to changes in technology and customer behavior.
• Risks related to protecting intellectual property and developing, maintaining, and enhancing a strong brand.
• Inherent uncertainties, risks, and changes in circumstances that could cause actual results to differ materially from forward-looking statements regarding business strategy, future operating results, liquidity, and capital resources.
• Failure to secure a hyperscale anchor tenant for the TCDC project as anticipated.
• Difficulties in structuring and arranging the complex financing required for a data center project of this magnitude.

Future Outlook

The Company expects to sign a hyperscale anchor tenant for the TCDC project in line with previous guidance. The partnership with Primary Digital Infrastructure is anticipated to accelerate data center deployment, optimize total cost of ownership, and future-proof infrastructure investments. Primary Digital Infrastructure will leverage its relationships to secure an anchor tenant and arrange complex financing for the TCDC campus. The Company plans to hold a special meeting of stockholders within 90 days to approve equity issuance exceeding the Nasdaq Maximum. Negotiations for up to $60 million in convertible preferred stock with ATW are ongoing, with a target for definitive documentation and initial tranche closing by January 31, 2026.

Management Comments

• E. Will Gray II, CEO of New Era Energy & Digital, commented on the SharonAI acquisition: "We appreciate the support of Sharon AI throughout the development phase of TCDC. Their partnership helped us move the project forward, and we are grateful for their collaboration. This buy-out agreement reflects a constructive outcome for both parties and positions TCDC for its next stage of development as we shift from planning to execution."
• E. Will Gray II, CEO of New Era Energy & Digital, commented on the Primary Digital partnership: "The formation of our partnership with Primary Digital is a watershed moment for New Era Energy & Digital and a powerful validation of our vision. Their team's unparalleled track record, from developing global data center portfolios to financing multi-billion dollar projects, provides the critical expertise required to execute a development of this scale. This partnership is instrumental in bringing the TCDC project to its final completion. We remain on track to sign a hyperscale anchor tenant in line with our previous guidance, and we believe this development will deliver significant and durable value to our NUAI shareholders and project stakeholders."
• Bill Stein, Executive Managing Director and Chief Investment Officer at Primary Digital Infrastructure, stated: "The next wave of hyperscale and AI infrastructure is being built where power is abundant, flexible, and economically advantaged. This tactical co-development project exemplifies that shift while aligning with our strategy of building portfolios of high quality, risk-mitigated data center assets that are critical to tomorrow's digital economy. With an experienced, well-capitalized partner like New Era, together we will deliver a strategically located, hyperscale-ready campus that is designed to meet the demands of investment grade tenants seeking reliable solutions for their advanced computing needs."

Industry Context

The announcement positions New Era Energy & Digital at the forefront of the rapidly expanding hyperscale and AI infrastructure market, particularly in regions like the Permian Basin known for abundant and economically advantageous power. The partnership with Primary Digital Infrastructure, founded by industry pioneers, signifies a strategic move to leverage deep industry relationships and capital markets expertise, aligning with the trend of significant institutional investment in large-scale, specialized data center developments. The TCDC project's ambition for 1+ gigawatt capacity reflects the industry's shift towards massive, next-generation compute facilities, mirroring other major initiatives like Primary Digital's Stargate program, a $15 billion joint venture for a 1.2-gigawatt AI data center campus.

Comparison to Industry Standards

• The TCDC project's target of 1+ gigawatt capacity aligns with the scale of leading hyperscale and AI data center developments in the industry, such as Primary Digital Infrastructure's Stargate program, a 1.2-gigawatt AI data center campus in Abilene, Texas.
• The involvement of industry pioneers like Bill Stein (Executive Managing Director and Chief Investment Officer at Primary Digital Infrastructure) suggests that the TCDC co-development will adhere to high industry standards for design, development, and operational efficiency, comparable to other premier data center owners and operators.
• The strategic location of TCDC in Ector County, Texas, leveraging the Permian Basin's energy resources, is consistent with industry trends focusing on areas with abundant, flexible, and economically advantaged power for optimizing the total cost of ownership for hyperscale and AI infrastructure.

Management Changes

Corporate Governance

Related Party Transactions

• The acquisition of SharonAI's 50% equity interest in Texas Critical Data Centers LLC (TCDC) is a transaction with a former co-owner.
• The Consent and Waiver, and the negotiation for up to $60 million in convertible preferred stock, are transactions with ATW AI Infrastructure II LLC, an existing investor of the Company.

Stakeholder Impact

• **Shareholders:** Potential for significant long-term value creation from the TCDC project and strategic partnership, but also faces potential dilution from equity issuances and increased debt obligations. Shareholder approval is required for large equity issuances, providing a mechanism for oversight.
• **Employees:** No direct impact on current employees is mentioned, but the growth and development of the TCDC hyperscale campus could lead to future job creation and expansion opportunities.
• **Customers (future hyperscale tenants):** The TCDC project aims to provide next-generation digital infrastructure solutions, potentially benefiting future hyperscale, enterprise, and edge operators seeking reliable and advanced computing facilities.
• **Creditors:** The issuance of a $50 million Senior Secured Convertible Promissory Note creates a new significant secured financial obligation. The strategic partnership with Primary Digital Infrastructure and potential future capital raises could enhance the Company's financial stability and access to capital, potentially benefiting other creditors.

Next Steps

• File required financial statements and pro forma financial information related to the Transaction by amendment to the 8-K no later than 71 calendar days after the filing date.
• Use commercially reasonable efforts to file an S-3 Registration Statement for the Next Equity Financing by January 23, 2026.
• Use commercially reasonable efforts to cause the S-3 Registration Statement to be declared effective as promptly as practicable.
• File the Note Registration Statement within 10 days of the Closing Date (January 16, 2026).
• File the Unit Registration Statement within 10 days of the earlier of March 31, 2026, or the Capital Closing.
• Use commercially reasonable efforts to cause Resale Registration Statements to be effective within 30 days (or 90 days with SEC review) of filing.
• Hold a special meeting of stockholders within 90 days to approve equity issuance exceeding the Nasdaq Maximum.
• Negotiate and execute definitive documentation with ATW AI Infrastructure II LLC for up to $60 million in convertible preferred stock, with a target closing of the initial tranche by January 31, 2026.
• Sign a hyperscale anchor tenant for the TCDC project.
• Primary Digital Infrastructure will implement a comprehensive execution strategy, including securing an anchor tenant and arranging complex financing for the TCDC campus.

Key Dates

Recommendation

The acquisition of 100% of TCDC and the strategic partnership with Primary Digital Infrastructure are significant positive developments, positioning the company for substantial growth in the high-demand hyperscale and AI data center market. Primary Digital's expertise and capital access are crucial for a project of this scale. However, the transaction introduces considerable financial leverage through the $50 million convertible note and potential equity dilution from both the acquisition and the proposed $60 million preferred stock issuance. The need for shareholder approval for equity exceeding Nasdaq limits, along with the pending anchor tenant and complex financing arrangements, introduce execution risks. Given the balance of high growth potential and significant financial and operational hurdles, a 'hold' recommendation is appropriate until further clarity on financing, dilution, and tenant acquisition emerges.

Keywords

Data Center, Hyperscale, AI Infrastructure, Permian Basin, Digital Infrastructure, Acquisition, Convertible Note, Equity Financing, Strategic Partnership, Texas Critical Data Centers, TCDC, New Era Energy & Digital, Primary Digital Infrastructure, SharonAI, ATW AI Infrastructure