10-K: SharonAI Holdings Reports Significant 2025 Losses Amid Strategic AI Pivot

SharonAI Holdings Inc. reported a substantial net loss of $39.8 million in 2025, driven by strategic investments in AI infrastructure and non-cash fair value adjustments, as it pivots to a pure-play neocloud operator model.

Summary

• SharonAI Holdings Inc. is an Australian neocloud operator focused on AI and high-performance computing (HPC), providing GPU-as-a-Service, AI Studio (PaaS), and Cloud Storage Solutions.
• The company reported a net loss of $39.8 million for the fiscal year ended December 31, 2025, significantly wider than the $3.9 million loss in 2024.
• Revenue increased to $1.57 million in 2025 from $0.44 million in 2024, primarily driven by growth in GPU cloud services.
• Gross profit turned positive at $100,807 in 2025, compared to a gross loss of $(281,701) in 2024.
• Operating expenses surged, with Selling, General, and Administrative (SG&A) expenses rising to $12.12 million in 2025 from $2.37 million in 2024, reflecting foundational investments and professional fees.
• A significant non-cash loss of $26.03 million was recognized from the change in fair value of convertible notes issued in December 2025.
• The company completed a business combination with Roth CH Acquisition Co. in December 2025, leading to its listing on the OTC Markets under SHAZ, and subsequently on NASDAQ in February 2026, raising $125 million.
• SharonAI pivoted from a hybrid site development model to a pure-play neocloud operator, divesting its 50% interest in Texas Critical Data Center LLC (TCDC) for $70 million in January 2026.
• As of December 31, 2025, the company had $71.07 million in cash and cash equivalents.
• The company is heavily reliant on NVIDIA for GPUs and has secured up to 54MW of data center capacity with NEXTDC in Australia, with plans to deploy over 2,000 new NVIDIA B200/B300 GPUs in the first half of 2026.
• A material weakness in internal control over financial reporting related to accounting for complex financial instruments was identified as of December 31, 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed filing. While the company shows strong strategic positioning and significant capital raises for future growth in a high-demand industry, the substantial increase in net loss and liabilities, coupled with an identified material weakness in internal controls, indicates significant operational and financial challenges that temper optimism.

Positives

• Revenue increased significantly by 257% to $1.57 million in 2025, driven by GPU cloud services growth.
• Gross profit turned positive to $100,807 in 2025 from a loss of $(281,701) in 2024.
• Successfully completed a US$103 million Pre-IPO capital raising in December 2025 through convertible notes, attracting new institutional and strategic shareholders like Digital Alpha Advisors LLC.
• Secured a potential investment of up to $200 million from Digital Alpha and a strategic technology partnership with Cisco, expected to accelerate customer deployments and expand cloud infrastructure.
• USD.AI approved a debt facility of up to US$500 million, designed to support capital-efficient expansion of AI infrastructure with asset-backed, non-recourse financing.
• Successfully listed on the NASDAQ Capital Markets in February 2026, raising US$125 million, providing access to a larger public capital market.
• Strategic partnerships with global technology leaders like NVIDIA (NCP status, preferential GPU access), NEXTDC (up to 54MW capacity), Cisco, Lenovo, VAST, and Megaport.
• Signed first major customer contracts with Canva and GMI Cloud US Inc. in January 2026, demonstrating ability to serve large, sophisticated AI/HPC requirements.
• Expanded data center footprint with NEXTDC by up to 50MW, enabling deployment of over 20,000 NVIDIA B200, B300, or GB300 GPUs.
• Deployed 411 GPUs and 59 petabytes of storage capacity as of December 31, 2025, with plans to deploy an additional 2,024 NVIDIA B200/B300 GPUs in 1H 2026, increasing total GPUs to approximately 2,435.
• Launched SharonAI Cloud, an orchestration and automation platform, in February 2025, marking a transition to an AI infrastructure provider.
• Divested non-core Texas Critical Data Center LLC (TCDC) interest for US$70 million, aligning with a pure-play neocloud operator strategy.

Negatives

• Net loss significantly widened to $(39,815,021) in 2025 from $(3,923,998) in 2024.
• Accumulated deficit increased to $(43,529,190) in 2025 from $(3,905,281) in 2024.
• Total liabilities increased dramatically to $143.29 million in 2025 from $2.24 million in 2024, primarily due to $129.02 million in convertible notes.
• Incurred a significant non-cash loss of $(26,030,635) from the change in fair value of convertible notes in 2025.
• Operating cash flow remained negative, with net cash used in operating activities increasing to $(2,638,947) in 2025 from $(2,205,993) in 2024.
• Investing activities used substantially more cash, increasing to $(13,805,595) in 2025 from $(3,036,503) in 2024, reflecting high capital expenditures.
• Ceased Filecoin data storage operations in Q2 2025, leading to full amortization of related intangible assets and a decline in digital asset fair value.
• Significant customer concentration, with approximately 82% of 2025 revenue derived from just three customers.
• Identified a material weakness in internal control over financial reporting related to accounting for complex financial instruments and transactions as of December 31, 2025.
• The company has a limited operating history and anticipates continued losses in the foreseeable future.
• The exercise price for outstanding warrants is $575.00 per share, significantly higher than the historical trading price of Class A Common Stock (never above $95.00), making them likely to expire worthless.

Risks

• Limited operating history and anticipated continued operating losses in the foreseeable future.
• Inability to raise additional capital needed to grow the business, potentially leading to significant dilution for existing stockholders if equity financing is pursued.
• The capital-intensive nature of obtaining new and replacement compute and storage servers and ancillary data center equipment.
• Significant customer concentration, with approximately 82% of 2025 revenue from three customers, posing a risk if one or more customers are lost or reduce usage.
• Intense competition and rapid technological change in the HPC/AI cloud industry, requiring continuous adaptation and investment.
• Substantial dependence on NVIDIA Corporation as a supplier of GPUs, exposing the company to supply constraints, allocation risk, sole-source supplier risk, pricing risk, export controls, geopolitical risk, manufacturing concentration, and technological dependency.
• Supply chain and logistics issues for the company, its contractors, or suppliers may delay expansion plans or increase infrastructure construction costs.
• Reliance on NEXTDC as the primary data center provider, meaning any delay, disruption, or failure by NEXTDC could materially impair service delivery and revenue generation.
• Potential for long-term outages or limitations of internet and network connections at operational sites.
• Access to reliable electricity sources at reasonable prices, developed land, and co-location arrangements are critical to growth and profitability.
• Risk of serial defects in GPUs and other equipment leading to failure or underperformance.
• Cyberattacks and security breaches of cloud services or third parties could harm brand, reputation, business, operating results, and financial condition.
• Global climate change and related environmental regulations may adversely affect business operations and financial position, including increased costs or power disruptions.
• Operations could be negatively impacted by import tariffs and/or other government mandates.
• Cash deposits exceed federally insured limits, exposing the company to risks from bank failures.
• Exposure to foreign exchange rate risks due to international operations.
• International operational, financial, legal, political, and public health risks due to operations outside the United States.
• Potential claims from open-source licensors regarding ownership or release of technology developed using open-source components.
• Advancements in artificial intelligence may reduce the need for HPC and AI-specific data center infrastructure, impacting demand for services.
• Regulatory restrictions targeting AI, including export restrictions, may materially impact intended operations and create competitive disadvantages.
• The holders of Class B Super Common Stock (three stockholders) own a significant voting percentage (68.2% of total voting power), enabling them to exert significant control over stockholder approval matters.
• Failure to maintain effective internal control over financial reporting, as evidenced by the identified material weakness related to complex financial instruments.
• The dual-class capital structure may deter institutional investors, affecting liquidity and market price.
• The company's Class A Ordinary Common Stock is thinly traded, potentially leading to price volatility and difficulty for investors to sell shares.
• Risk of delisting from Nasdaq if compliance with listing standards is not maintained.
• Potential dilution from future sales and issuances of Class A Ordinary Common Stock, including conversion of convertible instruments and warrants.
• The $103 million of convertible notes issued in December 2025 may require full repayment if not converted, which could materially adversely affect financial position.
• Warrants with an exercise price of $575.00 per share may expire worthless given historical stock prices.

Future Outlook

The company anticipates continued investment in scaling its infrastructure and operations, expecting to require additional capital to support ongoing activities. Management believes current capital raising efforts, operational cash flows, and strategic investment plans will provide sufficient liquidity. The company aims to convert its pipeline of customers into signed agreements to materially scale the business in the Asia-Pacific region, supported by its product and service offering and sector tailwinds driven by anticipated structural demand for accelerated computing. Future growth is underpinned by rapid capacity expansion, securing long-term customer demand, capital-efficient deployment strategies, and maintaining technological leadership by deploying next-generation AI accelerators.

Management Comments

• We believe that we are well positioned to capture this demand for AI and HPC services.
• We are continuing the strong momentum and is aiming to convert its pipeline of customers into signed agreements to materially scale the business.
• 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.
• The Company views these developments as critical to its forward strategy, despite their limited impact on short-term results.
• The Company anticipates that once its GPU deployments are fully operational and its orchestration layers are in place to facilitate seamless customer interaction and resource management, it will be well-positioned to capture an increase in revenue from this expanding industry.
• Management continuously evaluates the Company’s capital structure and may seek additional financing, including equity issuances, debt facilities, or hybrid instruments, to support the expansion of its GPU infrastructure and related platform capabilities.
• Management believes that these efforts, together with operational cash flows and strategic investment plans, will provide sufficient liquidity to support the Company’s continued operations.
• Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition.
• Management has determined that the uncertainty regarding realizing certain deferred tax assets is sufficient to warrant the need for a valuation allowance against its worldwide net deferred tax assets.

Industry Context

StockSavvy.ai notes that SharonAI Holdings Inc. operates in the rapidly expanding yet highly competitive AI and high-performance computing (HPC) cloud industry. The company's strategic pivot to a pure-play neocloud operator, focusing on GPU-as-a-Service, aligns with the significant structural surge in demand for GPU compute capacity driven by Generative AI and large language models, as highlighted by NVIDIA's GPUs being sold out through 2026. Its partnerships with industry giants like NVIDIA, Cisco, and NEXTDC are crucial for securing advanced hardware and data center capacity, providing a competitive edge against larger, more diversified cloud providers like Amazon.com, Alphabet Inc., and Microsoft Corp., as well as specialized competitors like Coreweave, Inc. The emphasis on sovereign AI infrastructure in Australia also positions it favorably within regulated industries and government sectors, differentiating it from global hyperscalers. However, the industry faces challenges such as supply chain constraints, rising operational costs, and the risk of technological obsolescence, which SharonAI must navigate to sustain its growth trajectory.

Comparison to Industry Standards

• SharonAI is one of only three NVIDIA Cloud Partners (NCPs) currently operating in Australia, indicating a high level of technical capability and strategic alignment with NVIDIA's accelerated computing roadmap, a key industry standard for AI infrastructure.
• The company's deployment of a Supercluster with over 1,000 GPUs built to NVIDIA reference architecture specifications, and plans for a 1,024-unit NVIDIA B300 GPU cluster in partnership with Cisco (Australias first Cisco Secure AI Factory), positions it at the forefront of advanced AI infrastructure compared to many regional peers.
• Its utilization of NEXTDC's Tier III and Tier IV data centers, which boast industry-leading Power Usage Effectiveness (PUE) of 1.10 to 1.5, demonstrates a commitment to energy efficiency that is competitive with global benchmarks and superior to many traditional data centers.
• The shift to term-based "take-or-pay" contracts with customer prepayments is a common strategy among capital-intensive infrastructure providers to de-risk procurement and secure predictable revenue, aligning with best practices for scaling in a supply-constrained market.
• The company's proprietary AI Studio (PaaS) and orchestration platform, designed for higher efficiency and performance from advanced GPU infrastructure, aims to differentiate it from traditional hyperscalers that offer broader Infrastructure-as-a-Service (IaaS) with AI as one component.

Management Changes

Corporate Governance

Legal Proceedings

• No pending or threatened legal proceedings that, if determined adversely, would have a material adverse effect on the business, results of operations, or financial condition.

Related Party Transactions

• James Manning (CEO, Director, >10% stockholder) has a consulting agreement for AUD$334,500 (approx. $211,000 USD) annually for commercial development and advisory services.
• Nicholas Hughes Jones (Head of Corporate Development, >10% stockholder) has a consulting agreement for AUD$133,800 (approx. $84,294 USD) annually for business development services.
• Timothy Broadfoot (CFO) has a consulting agreement for AUD$111,500 (approx. $70,245 USD) annually for CFO support and executive assistant services.
• James Manning, Nicholas Hughes-Jones, and Andrew Leece (executives/directors) received 70,000 shares each (636,248 post-adjustment Class A) for the acquisition of SAIPL in April 2024.
• James Manning received 17,600 shares (part of 55,000 shares issued to DIF) for the acquisition of DIF assets in April 2024.
• James Manning, Nicholas Hughes-Jones, and Andrew Leece received shares (valued at $1,919,366, $1,071,623, and $1,692,639 respectively) for the acquisition of DSS in June 2024.
• Payments of $92,722.12 in 2025 and $167,638 in 2024 were made to Flynt ICS Pty Ltd, an affiliate of James Manning, for storage services.
• Approximately $419,590 in outstanding loans from affiliates of James Manning, Andrew Leece, and Nicholas Hughes-Jones were converted into 97,791 Class A Ordinary Common Stock in 2024.
• Wolfgang Schubert received 318,240 restricted stock units and a one-time grant of $50,000 restricted stock units, plus $8,334 per month as a consultant, in connection with his resignation as CEO and director in January 2026.

Stakeholder Impact

• Shareholders: Experience significant dilution from recent and potential future capital raises, including convertible notes and warrants. The dual-class share structure gives disproportionate voting power to a few key stockholders, potentially limiting influence for other shareholders. The substantial net loss and accumulated deficit negatively impact shareholder equity.
• Employees: The company's growth strategy and capital raises aim to support expansion, which could lead to new opportunities. Share-based compensation is used to attract and retain talent. However, the identified material weakness in internal controls could impact employee confidence and operational efficiency.
• Customers: Benefit from expanded GPU cloud services, strategic partnerships with technology leaders like NVIDIA and Cisco, and a focus on sovereign, low-latency AI infrastructure. The shift to term-based contracts aims to provide guaranteed access to scarce GPU capacity. However, reliance on a single primary data center provider (NEXTDC) and potential supply chain issues for GPUs could impact service delivery.
• Suppliers: Strategic partnerships with NVIDIA, NEXTDC, Cisco, Lenovo, VAST, and Megaport are critical for the company's operations and growth, indicating strong relationships. However, supply chain constraints for GPUs and other equipment could affect these relationships.
• Creditors: The issuance of $103 million in unsecured convertible notes and a $500 million debt facility from USD.AI significantly increases the company's debt obligations. While the TCDC divestment provided cash, the overall increase in liabilities and negative operating cash flow present heightened risk for creditors.

Next Steps

• Convert pipeline of customers into signed agreements to materially scale the business in the Asia-Pacific region.
• Deploy more than 20,000 NVIDIA B200, B300, or GB300 GPUs through the expanded NEXTDC data center footprint.
• Bring online the balance of the Supercluster (NVIDIA B200 GPUs) in the first half of 2026.
• Bring online the 1,024-unit NVIDIA B300 GPU cluster at NEXTDC S3 in the first half of 2026.
• Execute definitive documentation for the potential $200 million investment from Digital Alpha and strategic technology partnership with Cisco.
• Execute definitive documentation for the USD.AI debt facility of up to US$500 million.
• Continue to monitor and manage off-balance sheet arrangements, including colocation facility commitments and managed service agreements.
• Remediate the identified material weakness in internal control over financial reporting by expanding the accounting and financial reporting group and enhancing processes.
• Evaluate the potential impact of the One Big Beautiful Bill Act (OBBBA) on consolidated financial statements.
• Implement a retirement scheme for US employees in 2025 (as intended).
• Continue R&D on proprietary data storage software, system architecture, and service management.

Key Dates

Recommendation

StockSavvy.ai recommends a 'hold' for SharonAI Holdings Inc. The company is strategically positioned in the high-growth AI/HPC sector with strong partnerships and significant capital raises, indicating future potential. However, the substantial net losses, increased liabilities, negative operating cash flow, and identified material weakness in internal controls present considerable risks and uncertainties. The dual-class share structure and thinly traded stock also add to investor caution. A 'hold' allows investors to monitor the company's execution of its growth strategy and remediation of financial control issues before committing further capital.

Keywords

AI cloud, HPC, GPU-as-a-Service, NVIDIA, Data Center, Neocloud, Machine Learning, Generative AI, Cloud Storage, NASDAQ, SEC Filing, SHAZ, Australia, Digital Alpha, Cisco, Convertible Notes, Risk Factors, Corporate Governance