DEFM14A: Roth CH to Merge with SharonAI, Focus on HPC/AI Growth

Roth CH Acquisition Co. is set to merge with SharonAI Inc., an AI/HPC cloud platform and data center developer, with the combined entity renamed SharonAI Holdings, Inc. and pursuing significant growth in high-performance computing.

Summary

• Roth CH Acquisition Co. (Parent) will merge with SharonAI Inc. (Company), an AI/HPC cloud platform and data center developer, with the combined entity being renamed SharonAI Holdings, Inc. (Pubco).
• The transaction involves Roth CH re-domiciling from the Cayman Islands to Delaware and then merging with SharonAI Inc.
• SharonAI Inc. is focused on High-Performance Computing (HPC) and Artificial Intelligence (AI), providing cloud GPU compute infrastructure and data storage services.
• The Aggregate Merger Consideration is 560,835,633 shares of Pubco Common Stock, plus additional shares under Section 3.7 of the Business Combination Agreement.
• Pro forma ownership post-combination shows former SharonAI stockholders holding approximately 92.11% economically and 97.27% of voting power, while Roth CH Insiders will hold 7.61% economically and 2.72% of voting power.
• SharonAI reported a net loss of $4,028,322 for H1 2025 on revenue of $702,077, and a net loss of $3,923,998 for FY 2024 on revenue of $438,292.
• Roth CH reported a net loss of $1,350,520 for H1 2025 and a net income of $119,065 for FY 2024 (primarily due to fair value changes in warrant liabilities and interest income from trust account, not operating profit).
• The transaction is subject to shareholder approvals, including the Business Combination Proposal, Domestication Merger Proposal, Organizational Documents Proposal, Directors Proposal, Equity Incentive Plan Proposal, Reverse Stock Split Proposal, and YA Stock Issuance Proposal.
• The Roth CH Board unanimously recommends voting FOR all proposals, noting that Insiders own approximately 96.5% of outstanding Roth CH Ordinary Shares, enabling them to approve all proposals regardless of public shareholder votes.

Sentiment

Score: 3

Explanation: The sentiment is negative due to SharonAI's current unprofitability, significant losses, and high customer concentration. Roth CH's 'going concern' warning and the substantial potential dilution for public shareholders are major concerns. While the strategic focus on AI/HPC and partnerships are positive, the execution risk and financial challenges are considerable, warranting a cautious outlook.

Positives

• SharonAI is positioned in the high-growth Artificial Intelligence (AI) and High-Performance Computing (HPC) industries, capitalizing on increasing demand for GPU-as-a-Service.
• SharonAI is a certified NVIDIA Cloud Partner and has existing relationships with major players like Lenovo and NEXTDC for GPU/server supply and data center co-location.
• Plans are underway to develop a 250MW sustainable data center site project in the Permian Basin, Texas, through a joint venture (TCDC) with New Era Helium, Inc., aiming for on-site natural gas-fired power generation.
• SharonAI possesses a powerful GPU & CPU compute infrastructure, including NVIDIA H100, L40S, A40, RTX3090, and AMD MI300X GPUs.
• The management team and Board of SharonAI are highly experienced in finance, energy infrastructure, and AI & cloud computing, with a track record of building significant data center infrastructure.
• SharonAI has secured a commitment from YA II PN, Ltd. for up to $50 million in standby equity purchases and $5 million in convertible notes, providing a potential source of capital for growth.

Negatives

• SharonAI has a limited operating history and has incurred significant net losses, with a net loss of $4,028,322 for H1 2025 and $3,923,998 for FY 2024.
• Roth CH Acquisition Co. has a working capital deficit of $1,545,956 as of June 30, 2025, and its auditor's report expresses substantial doubt about its ability to continue as a going concern.
• SharonAI's business model and strategy are evolving, and there is no assurance of sustained profitability or successful implementation of new services.
• SharonAI generates a large portion of its revenue (around 99% in 2024) from a small number of customers (3 customers), creating significant customer concentration risk.
• The cost of obtaining new and replacement compute and storage servers and ancillary equipment is capital-intensive, and market disruptions could increase borrowing costs or affect access to capital.
• The proposed Reverse Stock Split, while intended to meet listing requirements, may not result in a sustainable market price or improved liquidity, and could decrease the liquidity of shares.
• The issuance of Pubco Common Stock as consideration in the Business Combination and future issuances under the Equity Incentive Plan or SEPA will result in significant dilution for existing public shareholders.
• Roth CH's directors and officers have financial interests in the Business Combination that differ from, and may conflict with, those of public shareholders, as they own approximately 96.5% of the voting shares and will benefit from the transaction's completion.

Risks

• SharonAI has a limited operating history and history of losses, with no certainty of achieving or sustaining profitability.
• The evolving business model and strategy of SharonAI may not be successful, potentially harming the business and operating results.
• Inability to raise additional capital on favorable terms could impair growth and adversely affect existing operations, leading to significant dilution if equity financing is pursued.
• High capital intensity for new and replacement equipment, with profitability dependent on managing these costs relative to service fees.
• Significant customer concentration (99% of 2024 revenue from 3 customers) poses a risk if key clients reduce usage or terminate contracts.
• High dependence on key personnel, with the loss of critical individuals potentially having a significant adverse impact.
• Potential inability to obtain or maintain relevant business insurance on commercially viable terms, exposing the company to uninsured losses.
• Failure to effectively manage growth could strain managerial, operational, and financial resources.
• Risks associated with growth and acquisitions, including integration difficulties, failure to achieve anticipated benefits, and assumption of unknown liabilities.
• Intense competition and rapid technological change in the HPC/AI industry, potentially leading to lower prices, reduced margins, or obsolescence of technology.
• Supply chain and logistics issues could delay expansion plans or increase infrastructure construction costs.
• Long-term outages or limitations of internet and network connections could materially impact operations and financial performance.
• Access to reliable electricity sources at reasonable prices, developed land, and co-location arrangements are critical and subject to various external factors.
• Critical failure of key electrical or data center equipment could lead to lengthy outages and material financial impacts.
• Serial defects in GPUs and other equipment could result in underperformance or outages.
• Loss of confidence in security systems or security breaches could harm reputation and business.
• Cyber-security threats and attacks on cloud services or third parties could adversely impact brand, reputation, and financial condition.
• Potential for material litigation, investigations, or enforcement actions by regulators and governmental authorities.
• Global climate change and related environmental regulations may increase costs or limit business plans.
• Changes in tax law may negatively affect the business, including potential impairment of deferred tax assets.
• Operations could be negatively impacted by import tariffs and other government mandates.
• Maintenance of cash deposits in excess of federally insured limits exposes the company to credit risk from financial institutions.
• Exposure to foreign exchange rate risks could adversely affect operating results.
• International operations subject the company to various operational, financial, legal, political, and public health risks.
• Failure to succeed in the HPC/AI cloud services market could materially and adversely affect revenues and growth prospects.
• HPC/AI cloud services technology and infrastructure may not operate properly, leading to fines or penalties.
• Use of open-source technology may lead to claims from licensors or unanticipated conditions.
• Advancements in AI may reduce demand for HPC/AI data center infrastructure.
• Flaws or misuse of AI, even by third parties, could negatively impact business and reputation.
• Cloud services business is subject to complex and evolving U.S. and foreign laws and regulations regarding AI, machine learning, and automated decision making.
• Regulatory restrictions targeting AI, including export restrictions, may materially impact intended operations.
• Operating results have fluctuated due to the highly volatile nature of digital assets (Filecoin storage business).
• Security breaches, computer malware, and hacking attacks are prevalent concerns in digital asset markets, with digital assets not being insured.
• Limited legal recourse and lack of insurance for digital asset losses expose the company to significant risk.
• Banks and financial institutions may cease providing services to cryptocurrency-related businesses.
• Disruptions in digital asset markets could lead to depreciation in stock value, financing risks, and increased losses.
• Uncertainty regarding the growth of blockchain and Web 3 technologies could adversely affect operations.
• High concentration in a single digital asset (Filecoin) enhances risk.
• Large sales or distributions by concentrated digital asset holders could adversely affect market price.
• Filecoin reward ratio changes and gas/transaction fee changes could impact profitability.
• Smart contract risks on the Filecoin network could lead to asset loss.
• Uncertainty regarding the completion and profitability of the NVIDIA GPU cluster and the 250MW data center project.
• Roth CH's material weakness in internal control over financial reporting could affect investor confidence and financial reporting accuracy.
• Increased regulatory scrutiny due to Roth CH's history as a SPAC could delay or prevent the business combination.
• The Domestication may be a taxable event for U.S. Holders of Roth CH securities under PFIC rules and Section 367(b) of the Code.
• The Merger may be a taxable event for U.S. Holders of SharonAI securities if it does not qualify as a reorganization.
• Lack of independent due diligence review by an underwriter in the SPAC merger process creates risks for unaffiliated investors.
• Subsequent to the Business Combination, Pubco may be exposed to unknown or contingent liabilities, leading to write-downs or other charges.
• The historical financial results of SharonAI and pro forma information may not be indicative of Pubco's future performance.
• Pubco's only significant asset post-combination will be its ownership in SharonAI, limiting diversification and ability to pay dividends.
• Changes in the market for directors and officers liability insurance could increase costs and make it harder to attract qualified personnel.
• Pubco's status as a smaller reporting company and emerging growth company may make its stock less attractive to investors due to reduced disclosure requirements.
• The Reverse Stock Split may not achieve the desired market price increase or improve liquidity, and could lead to a greater percentage decline if the price falls.
• Delaware law and Pubco's Proposed Organizational Documents contain anti-takeover provisions that could limit stockholder actions and discourage takeover attempts.

Future Outlook

SharonAI anticipates future scalability, improved product offerings, and enhanced customer engagement through continued investment in proprietary operating software and cloud computing platforms. The company expects increased revenue from its expanding GPU cloud business as deployments become fully operational. Future growth is also tied to the development of data center assets, including the 250MW sustainable data center project in Texas. However, the company acknowledges challenges in forecasting growth trends due to the rapidly evolving nature of the digital assets industry and market volatility.

Management Comments

• Roth CH Board believes the Business Combination and contemplated transactions are fair and in the best interests of Roth CH and its shareholders, as SharonAI is a company with strong revenue growth potential and a business plan dedicated to both near-term cash flow and long-term growth.
• SharonAI's management views the development and deployment of new proprietary operating software and cloud computing platforms as critical foundational work aimed at enabling future scalability, improved product offerings, and enhanced customer engagement.
• SharonAI's strategic decision to cease participation in the Filecoin ecosystem aligns with its long-term strategy to concentrate on providing scalable, on-demand computing infrastructure for artificial intelligence, research, and other data-intensive applications.
• The Roth CH Board considered SharonAI's strong margin profile with minimal capital expenditure as a key factor in its decision to recommend the Business Combination.

Industry Context

The merger positions the combined entity, SharonAI Holdings, Inc., to capitalize on the rapidly growing demand for High-Performance Computing (HPC) and Artificial Intelligence (AI) cloud services. The industry is characterized by rapid technological changes and intense competition from larger operators with significant energy infrastructure and compute equipment access. The shift towards GPU-as-a-Service is driven by increasing data-intensive workloads. The demand for data center infrastructure, particularly power-intensive facilities with energy-efficiency capabilities like liquid cooling, is also a key trend, with significant investments planned in the U.S. (e.g., Project Stargate). Regulatory scrutiny on AI technologies and environmental impact of data centers is increasing, posing both challenges and opportunities for companies like SharonAI.

Comparison to Industry Standards

• SharonAI's current operations are primarily in Australia, where it is a leading GPU-as-a-Service provider, indicating a strong regional position.
• The planned 1K GPU Cluster on NVIDIA Reference Architecture in partnership with NEXTDC's Tier IV co-location data center aims to meet demanding HPC/AI workloads, aligning with high industry standards for performance and reliability.
• The development of a 250MW sustainable data center site in the Permian Basin with New Era Helium, Inc. represents an innovative approach to power generation (natural gas-fired on-site) compared to developments connecting to existing power generation, potentially offering a competitive advantage in energy costs and reliability.
• SharonAI's reliance on a limited number of GPU aggregator customers (99% of 2024 revenue from 3 customers) is a significant concentration risk, which is generally higher than diversified industry players like Amazon.com Inc., Alphabet Inc., or Microsoft Corp. that serve a broad customer base.
• The company's gross loss and net losses for H1 2025 and FY 2024 indicate an early-stage or growth-phase financial profile, which is common for emerging technology companies but contrasts with established, profitable cloud service providers.
• The auditor's 'going concern' emphasis for Roth CH highlights financial instability, which is not typical for established public companies or industry leaders.

Management Changes

Corporate Governance

Legal Proceedings

• No material litigation or regulatory matters are pending or, to the knowledge of the Company or Parent, threatened against either entity or their respective officers/directors related to their work or the Business Combination.
• Roth CH's independent registered public accounting firm's report for 2024 and 2023 contains an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern, which could lead to future legal scrutiny.
• The Company has investigated all workplace harassment, discrimination, retaliation, and workplace violence claims or complaints reported since January 1, 2021, and taken appropriate corrective action for those with potential merit.
• The Company is not aware of any issues under review that could result in significant tax payments, accruals, or material deviation from its tax position.

Related Party Transactions

• Roth CH's Sponsor purchased Founder Shares for $25,000 and Private Warrants for $10,750,000.
• Anchor investors acquired indirect economic interests in Founder Shares and Private Warrants from the Sponsor.
• Roth CH's 2023 Promissory Note for $1,181,000 from related parties (Buyers) was converted into 39,366,667 Class A ordinary shares.
• The Sponsor advanced an additional $157,558 to Roth CH as of June 30, 2025.
• Affiliates of Roth CH's Sponsor forgave $60,556 of previously accrued expenses in 2023.
• SharonAI has independent contractor agreements with James Manning (Director) for AUD$334,500 annually, Nicholas Hughes-Jones (former SVP Business Development) for AUD$133,800 annually (terminated June 9, 2025), and Timothy Broadfoot (CFO) for AUD$111,500 annually.
• James Manning, Nicholas Hughes-Jones, and Andrew Leece (COO) received 70,000 shares each of SharonAI common stock for the acquisition of SAIPL.
• James Manning received 17,600 shares of SharonAI common stock (fair value $390,016) from the liquidation of Digital Income Fund (DIF).
• James Manning, Nicholas Hughes-Jones, and Andrew Leece received SharonAI common stock for the acquisition of DSS (Manning: 49,215 shares, $1,919,366; Hughes-Jones: 27,478 shares, $1,071,623; Leece: 43,401 shares, $1,692,639).
• SharonAI paid $167,638 in storage services to Flynt ICS Pty Ltd, an affiliate of James Manning, in 2024.
• SharonAI converted $419,590 in loans from affiliates of management/board members (Manning, Leece, Hughes-Jones) into 10,759 shares of SharonAI common stock.

Stakeholder Impact

• **Shareholders (Roth CH Public)**: Will experience significant dilution from the merger consideration, exercise of warrants, and potential capital raises. Their voting power will be substantially reduced (0.03% economic, 0.01% voting post-merger, excluding further dilution).
• **Shareholders (SharonAI)**: Will become the majority owners of the combined public company, SharonAI Holdings, Inc., gaining access to U.S. capital markets.
• **Employees**: SharonAI's employees will continue with the combined entity, and new equity incentive plans are proposed to attract and retain talent. DSS employees were transferred to SharonAI Pty Ltd.
• **Customers**: SharonAI's customers will benefit from continued investment in HPC/AI cloud platform and data center infrastructure, aiming for improved services and scalability. However, high customer concentration poses a risk to revenue stability.
• **Creditors**: Roth CH's 'going concern' doubt and SharonAI's losses indicate potential risks for creditors, though the capital raise plans aim to address liquidity. The conversion of related-party debt to equity and loans from YA provide some financial restructuring.

Next Steps

• Roth CH shareholders to vote on the Business Combination and related proposals at an extraordinary general meeting on December 2, 2025.
• Completion of the Business Combination is expected in the fourth quarter of 2025, subject to shareholder approvals and other closing conditions.
• SharonAI Holdings, Inc. (Pubco) intends to apply to list its Class A Ordinary Common Stock on Nasdaq after the Closing.
• SharonAI plans to continue developing and deploying new proprietary operating software and cloud computing platforms.
• SharonAI plans to expand its GPU cluster, including NVIDIA H100 or H200 GPUs, in partnership with NEXTDC.
• The TCDC joint venture will continue to fund, develop, and construct the planned 250MW sustainable data center site project in the Permian Basin, Texas.
• Pubco's management will have broad discretion over the use of proceeds from any capital raise through the SEPA.

Key Dates

Recommendation

The combined entity, SharonAI Holdings, Inc., operates in the high-growth AI and HPC sectors, with strategic partnerships and ambitious expansion plans, including a 250MW data center. This offers significant long-term upside potential. However, SharonAI is currently unprofitable, and Roth CH has a 'going concern' warning, indicating near-term financial instability. The substantial dilution for existing public shareholders and high customer concentration in SharonAI's current business model present considerable risks. A 'hold' recommendation is appropriate for investors who acknowledge the high-risk, high-reward nature of this early-stage growth company and are willing to monitor its execution of strategic plans and financial performance closely, especially regarding profitability and successful capital deployment.

Keywords

HPC, AI, Cloud GPU, Data Center, SPAC Merger, SharonAI, Roth CH, SEC Filing, Convertible Notes, Standby Equity Purchase Agreement, Dilution, Corporate Governance, Risk Factors, NVIDIA Cloud Partner, Filecoin, Delaware Re-domiciliation, Reverse Stock Split