# EDGAR Filing Document

**Accession Number:** 0002068385
**File Stem:** 0001829126-26-001061
**Filing Date:** 2026-2
**Character Count:** 1128285
**Document Hash:** 128c76321b479cfb6ae22ad86ef0ea9f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-26-001061.hdr.sgml**: 20260206

**ACCESSION NUMBER**: 0001829126-26-001061

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 33

**FILED AS OF DATE**: 20260206

**DATE AS OF CHANGE**: 20260206

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SharonAI Holdings Inc.
- **CENTRAL INDEX KEY:** 0002068385
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-292798
- **FILM NUMBER:** 26608084

**BUSINESS ADDRESS:**
- **STREET 1:** 2340 COLLINS AVENUE, SUITE 402
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33141
- **BUSINESS PHONE:** 949-720-7133

**MAIL ADDRESS:**
- **STREET 1:** 2340 COLLINS AVENUE, SUITE 402
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33141

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SharonAI Holdings, Inc.
- **DATE OF NAME CHANGE:** 20251218

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Roth CH Holdings, Inc.
- **DATE OF NAME CHANGE:** 20250513

As filed with the Securities and Exchange Commission on February 6, 2026

**Registration No. 333-** **292798**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**AMENDMENT NO. 1<br> to**

**FORM S-1**

**REGISTRATION STATEMENT**

**UNDER THE**

**SECURITIES ACT OF 1933**

**SHARONAI HOLDINGS INC.**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Delaware** | **7370** | **41-2349750** |
| (State or other jurisdiction of<br> incorporation or organization) | (Primary Standard Industrial<br> Classification Code Number) | (I.R.S. Employer<br> Identification Number) |

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**745 5th Ave, Suite 500** **<br> New York, NY 10151**

**Tel. No. (347) 212-5075**

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

**Wolfgang Schubert**

**745 5th Ave, Suite 500**

**New York, NY 10151**

**Tel. No. (347) 212-5075**

(Name, address including zip code, and telephone number, including area code, of agent for service)

***With copies to:***

**Chad R. Ensz, Esq.**<br> **Gregory Carney, Esq.**<br>**Sheppard Mullin Richter & Hampton LLP**<br> **12275 El Camino Real, Suite 100**<br> **San Diego, CA 92130-4092**<br> **(858)-720-8900**<br>

**Approximate date of commencement of proposed sale to the public:** From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule l2b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.**

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The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offeror sale is not permitted.

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| | | |
|:---|:---|:---|
| **PRELIMINARY PROSPECTUS** | **SUBJECT TO COMPLETION** | **DATED FEBRUARY 6, 2026** |

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**SHARONAI HOLDINGS INC.**

**5,302,072 Shares of Class A Ordinary Common Stock**

**Up to 214,982 Shares of Class A Ordinary Common Stock Upon Exercise of Certain Private Warrants**

**Up to 230,000 Shares of Common Stock Underlying Public Warrants**

This prospectus relates to the offer and resale of up to an aggregate of (i) 4,927,071 shares (the "<u>BCA Shares</u>") of Class A Ordinary common stock, par value $0.0001 per share ("<u>Class A Ordinary Common Stock</u>") of SharonAI Holdings Inc. (the "<u>Company</u>") issued on December 17, 2025 pursuant to terms of that Business Combination Agreement, dated January 28, 2025 (the "<u>Business Combination Agreement</u>"), by and among Roth CH Acquisition Co. ("<u>Roth CH</u>"), SharonAI Inc. ("<u>SharonAI</u>"), Roth CH Holdings, Inc. ("<u>Pubco</u>") and Roth CH Merger Sub, Inc. ("<u>Merger Sub</u>") on December 17, 2025; (ii) 375,001 shares of Class A Ordinary Common Stock issued upon conversion of those certain convertible notes issued by Pubco in December 2025 (the "<u>Note Conversion Shares</u>," together with BCA Shares, the "<u>Shares</u>" and (iii) 214,982 shares of Class A Ordinary Common Stock ("<u>Private Warrant Shares</u>") issuable upon the exercise of common stock purchase warrants (the "<u>Private Warrants</u>") to be issued pursuant to the terms of the Business Combination Agreement to purchase up to 214,982 shares of Class A Ordinary Common Stock at an exercise price of $575.00 per share of Class A Ordinary Common Stock. In connection with the Business Combination contemplated by the Business Combination Agreement, Roth CH has merged with and into Pubco with the Pubco as the surviving corporation (the Domestication Merger") and Merger Sub has merged with and into SharonAI with the SharonAI as the surviving corporation (the Acquisition Merger" and collectively with the Domestication Merger the "<u>Business Combination</u>") on or about the date of effectiveness of the registration statement of which this prospectus forms a part. Upon consummation of the Business Combination described herein, Pubco was renamed SharonAI Holdings Inc. and is also referred to in this prospectus as the "Company."

In addition, this prospectus relates to the issuance by us of up to 230,000 shares of Class A Ordinary Common Stock (the "<u>Public Warrant Shares</u>," together with the Private Warrant Shares, the "Warrant Shares") that are issuable upon the exercise of the public warrants at an exercise price per share of Class A Ordinary Common Stock of $575.00 (the "<u>Public Warrants</u>," and together with the Private Warrants, the "<u>Warrants</u>") contained in the units sold at a price of $10.00 per unit in Roth CH's October 26, 2021 initial public offering.

The holders of the Shares, and the Private Warrant Shares are each referred to herein as a "Selling Shareholder" and collectively as the "Selling Shareholders."

This prospectus describes the general manner in which the Shares and the Private Warrant Shares may be offered and sold. If necessary, the specific manner in which the Shares and the Private Warrant Shares may be offered and sold will be described in a supplement to this prospectus. The Private Warrants were issued to the applicable Selling Shareholders in connection with private placement offerings pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), and/or Regulation D promulgated thereunder.

The Shares and the Private Warrant Shares will be resold from time to time by the Selling Shareholders listed in the section titled "Selling Shareholders" beginning on page 52.

The Selling Shareholders, or their respective transferees, pledgees, donees or other successors-in-interest, will sell the Shares through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The Selling Shareholders may sell any, all or none of the securities offered by this prospectus, and we do not know when or in what amount the Selling Shareholders may sell their Shares hereunder following the effective date of this registration statement. We provide more information about how a Selling Shareholder may sell its Shares in the section titled "Plan of Distribution" on page 145.

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We are registering the Shares, and the Private Warrant Shares on behalf of the Selling Shareholders, to be offered and sold by them from time to time. While we will not receive any proceeds from the sale of Shares and/or the Warrant Shares by the Selling Shareholders in the offering described in this prospectus, we may receive up to (i) $575.00 per share of Class A Ordinary Stock upon the cash exercise of the Private Warrants; and (ii) $575.00 per share of Class A Ordinary Stock upon the cash exercise of the Public Warrants. Upon the exercise of the Warrants for all 444,982 shares of Class A Ordinary Stock by payment of cash, we would receive aggregate gross proceeds of approximately $256 million. However, we cannot predict when and in what amounts or if any of the Warrants will be exercised, and it is possible that the Warrants may expire and never be exercised (or exercised on a cashless basis), in which case we would not receive any cash proceeds. We have agreed to bear all of the expenses incurred in connection with the registration of the Shares and the Warrant Shares. The Selling Shareholders will pay or assume discounts, commissions, fees of underwriters, selling brokers or dealer managers and similar expenses, if any, incurred for the sale of the Shares.

On December 18, 2025 following consummation of the Business Combination, the Company's Class A Ordinary Common Stock and the Public Warrants began trading on OTC Markets Group, Inc. - Pink Open Market under the symbols "SHAZ," and "SHAZW," respectively. On January 15, 2026, the last reported sale price of the Company's Class A Ordinary Common Stock and Public Warrants on the OTC Markets was $1.90 and $0.04, respectively.

**This offering will terminate on the earlier of** (i) **the date when all of the Securities registered hereunder have been sold pursuant to this prospectus or Rule 144 under the Securities Act, and** (ii) **the date on which all of such securities may be sold pursuant to Rule 144 without volume or manner-of-sale restrictions, unless we terminate it earlier.**

**Investing in the Company's Class A Ordinary Common Stock involves risks. You should carefully review the risks described under the heading "Risk Factors" beginning on page 15 before you invest in the Company's Class A Ordinary Common Stock.**

**We are an "emerging growth company" as defined under the federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

The date of this prospectus is , 2026.

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**TABLE OF CONTENTS**

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| | |
|:---|:---|
|  | **Page** |
| [ABOUT THIS PROSPECTUS](#a_001) | 1 |
| [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](#a_002) | 2 |
| [INDUSTRY AND MARKET DATA](#a_003) | 4 |
| [PROSPECTUS SUMMARY](#a_004) | 5 |
| [ABOUT THIS OFFERING](#a_005) | 14 |
| [RISK FACTORS](#a_006) | 15 |
| [SELLING SHAREHOLDERS](#a_007) | 52 |
| [USE OF PROCEEDS](#a_008) | 57 |
| [DIVIDEND POLICY](#a_009) | 58 |
| [UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION](#aa_001) | 59 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ROTH CH](#a_010) | 70 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SHARON AI.](#a_011) | 75 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DSS](#a_012) | 91 |
| [BUSINESS OF SHARONAI](#a_013) | 98 |
| [MANAGEMENT OF THE COMPANY](#a_014) | 116 |
| [EXECUTIVE COMPENSATION](#a_015) | 122 |
| [BENEFICIAL OWNERSHIP OF SECURITIES](#a_016) | 134 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#a_017) | 136 |
| [DESCRIPTION OF CAPITAL STOCK](#a_018) | 142 |
| [PLAN OF DISTRIBUTION](#a_019) | 145 |
| [DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY](#a_020) | 147 |
| [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.](#a1_020) | 148 |
| [LEGAL MATTERS](#a_021) | 149 |
| [EXPERTS](#a_022) | 149 |
| [WHERE YOU CAN FIND MORE INFORMATION](#a_023) | 149 |
| [INDEX TO FINANCIAL STATEMENTS](#a_024) | F-1 |

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i

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**ABOUT THIS PROSPECTUS**

This prospectus relates to the offer and resale of up to an aggregate of (i) 4,927,071 shares (the "<u>BCA Shares</u>") of Class A Ordinary common stock, par value $0.0001 per share ("<u>Class A Ordinary Common Stock</u>") of SharonAI Holdings Inc. issued on December 17, 2025 pursuant to terms of that Business Combination Agreement January 28, 2025 (the "<u>Business Combination Agreement</u>") by and among Roth CH Acquisition Co. ("<u>Roth CH</u>"), SharonAI Inc. ("<u>SharonAI</u>"), Roth CH Holdings, Inc. ("<u>Pubco</u>") and Roth CH Merger Sub, Inc. ("<u>Merger Sub</u>"); (ii) 375,001 shares of Class A Ordinary Common Stock issued upon conversion of those certain convertible notes issued by Pubco in December 2025 (the "Note Conversion Shares," together with BCA Shares, the "Shares" and (iii) and (ii) 214,982 shares of Class A Ordinary Common Stock ("<u>Private Warrant Shares</u>") issuable upon the exercise of common stock purchase warrants (the "<u>Private Warrants</u>") to be issued pursuant to the terms of the Business Combination Agreement to purchase up to 214,982 shares of Class A Ordinary Common Stock at an exercise price of $575.00 per share of Class A Ordinary Common Stock. In connection with the Business Combination contemplated by the Business Combination Agreement, Roth CH has merged with and into Pubco with the Pubco as the surviving corporation (the "<u>Domestication Merger</u>") and Merger Sub has merged with and into SharonAI with the SharonAI as the surviving corporation (the Acquisition Merger" and collectively with the Domestication Merger the "Business Combination") on or about the date of effectiveness of the registration statement of which this prospectus forms a part. Upon consummation of the Business Combination described herein, Pubco was renamed SharonAI Holdings Inc. and is also referred to in this prospectus as the "Company."

In addition, this prospectus relates to the issuance by us of up to 230,000 shares of Class A Ordinary Common Stock (the "<u>Public Warrant Shares</u>," together with the Private Warrant Shares, the "<u>Warrant Shares</u>") that are issuable upon the exercise of the public warrants at an exercise price per share of Class A Ordinary Common Stock of $575.00 (the "<u>Public Warrants</u>," and together with the Private Warrants, the "<u>Warrants</u>") contained in the units sold at a price of $10.00 per unit in Roth CH's October 26, 2021 initial public offering.

You should rely only on the information contained in this prospectus and the related exhibits, and any prospectus supplement or amendment thereto, or to which we have referred you, before making your investment decision. Neither we nor the Selling Shareholders have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus, any prospectus supplement or amendments thereto do not constitute an offer to sell, or a solicitation of an offer to purchase, the shares of Common Stock offered by this prospectus, any prospectus supplement or amendments thereto in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. You should not assume that the information contained in this prospectus, any prospectus supplement or amendments thereto, as well as information we have previously filed with the U.S. Securities and Exchange Commission (the "<u>SEC</u>"), is accurate as of any date other than the date on the front cover of the applicable document.

If necessary, the specific manner in which the shares of our common stock may be offered and sold will be described in a supplement to this prospectus, which supplement may also add, update or change any of the information contained in this prospectus. To the extent there is a conflict between the information contained in this prospectus and any prospectus supplement, you should rely on the information in such prospectus supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later - the statement in the document having the later date modifies or supersedes the earlier statement.

Neither the delivery of this prospectus nor any distribution of shares of our common stock pursuant to this prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth or in our affairs since the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date.

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**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus, and any amendment contain various forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities and Exchange Act of 1934, as amended (the "<u>Exchange Act</u>"), which represent our expectations or beliefs concerning future events. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this prospectus, words such as "anticipate", "believe", "can", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "might", "plan", "possible", "potential", "predict", "project", "seek", "should", "strive", "target", "will", "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements in this prospectus and in any document incorporated by reference in this prospectus may include, for example, statements about:

● the benefits of the Business Combination;

● the future financial performance of the Company following the Business Combination;

● changes in the market for the Company's products and services; and

● expansion plans and opportunities.

These forward-looking statements are based on information available as of the date of this prospectus the Company management's current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of the Company and their directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing the Company's views as of any subsequent date. The Company does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how your vote should be cast or in voting your shares on the proposals set out in this prospectus. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

● estimates and forecasts of financial and performance metrics and expectations and timing related to potential benefits and terms of the Business Combination;

● risks relating to the uncertainty of the projected financial information with respect to the Company

● the Company's public securities' liquidity and trading;

● the Company's ability to obtain sufficient additional financing, on acceptable terms or at all, and ability to continue as a going concern;

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● the impact of the Company's remaining indebtedness outstanding following the Business Combination;

● changes in the market in which the Company competes, including with respect to its competitive landscape, technology evolution or changes in applicable laws or regulations;

● the impact of macroeconomic events, such as inflation, recessions or depressions, and war or fears of war;

● changes in the vertical markets that the Company targets;

● the impact of current or future government regulation and oversight, including the U.S. federal, state and local authorities;

● the Company's ability to launch new services and products or to profitably expand into new markets;

● the ability to execute the Company's growth strategies, including identifying and executing acquisitions;

● the ability to develop and maintain effective internal controls and procedures, correct or remediate the previously identified material weakness, or correct or remediate any future identified material weaknesses;

● the exposure to any liability, protracted and costly litigation or reputational damage relating to the Company's data security;

● the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and

● other risks and uncertainties indicated in this prospectus, including those set forth under "*Risk Factors*" of this prospectus.

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**INDUSTRY AND MARKET DATA**

Unless otherwise indicated, information contained in this prospectus concerning our industry and the market in which we operate, including our market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made based on such data and other similar sources and on our knowledge of the markets for our products. These data sources involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.

We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk Factors" and elsewhere in this prospectus and the registration statement of which this prospectus forms a part. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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**PROSPECTUS SUMMARY**

*This summary highlights certain information appearing elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of the Company's Class A Ordinary Common Stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. Before you decide to invest in the Company's Class A Ordinary Common Stock, you should read the entire prospectus carefully, including "Risk Factors" and the financial statements of Pubco, Roth CH and SharonAI and related notes thereto included elsewhere in this prospectus.*

*On December 24, 2025, we effected a 1-for-50 reverse split of our outstanding shares of common stock. No fractional shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole number of shares of common stock. The conversion and/or exercise prices of our issued and outstanding convertible securities, including shares issuable upon exercise of outstanding stock options and warrants, conversion of our outstanding convertible notes and conversions of preferred stock have been adjusted accordingly. All information presented in this prospectus supplement relating to the Company on a post-merger basis has been retrospectively restated to give effect to our 1-for-50 reverse split of our outstanding shares of common stock, and unless otherwise indicated, all such amounts and corresponding conversion price and/or exercise price data set forth in this prospectus have been adjusted to give effect to such reverse stock split; provided however, that there has been no adjustments to the financial statements of Roth CH Holdings, Inc., Roth CH Acquisition Co. and SharonAI, Inc.*

 *Unless the context otherwise requires, references in this section to "we," "us," or the "Company" refers to SharonAI Holdings Inc.*

**Parties to the Business Combination**

**Roth CH Holdings, Inc.**

Roth CH Holdings, Inc. ("<u>Pubco</u>") was incorporated in Delaware on December 30, 2024 as a wholly-owned subsidiary of Roth CH Acquisition Co. for the purpose of merging with Roth CH Acquisition Co., a Cayman Islands exempt company ("<u>Roth CH</u>") to redomicile as a Delaware corporation prior to the transactions contemplated in the Business Combination Agreement, and became the ultimate parent company upon consummation of the Business Combination. Concurrent with the consummation of the Business Combination, Roth CH Holdings, Inc. changed its name to SharonAI Holdings Inc. (the "<u>Company</u>")

**Roth CH**

Roth CH is a blank check company incorporated on April 20, 2021 under the name "TKB Critical Technologies 1", as a Cayman Islands exempted company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. Effective September 7, 2023, shareholders approved a change in the company's name to Roth CH Acquisition Co.

***Formation and Initial Public Offering.*** On October 29, 2021, we consummated our initial public offering of 23,000,000 units (the "<u>Units</u>"), including 3,000,000 Units that were issued pursuant to the underwriters' exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds of $230,000,000. Each Unit consists of one Class A Ordinary Share, par value $0.0001 per share (the "<u>Roth Class A Ordinary Shares</u>") and one-half of one warrant to purchase a Roth Class A Ordinary Share (the "<u>Public Warrants</u>"). Simultaneously with the closing of our initial public offering, we consummated the sale of 10,750,000 private placement warrants (the "<u>Private Warrants</u>") at a price of $1.00 per Private Warrant in a private placement to our former sponsor, TKB Sponsor I, LLC, (the "<u>Former Sponsor</u>") generating proceeds of $10,750,000.

A total of $234,600,000 of the proceeds from the initial public offering and the sale of the Private Warrants was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee (the "<u>Trust Account</u>").

Our Units commenced public trading on October 27, 2021 on the Nasdaq Stock Market LLC, and our Roth Class A Ordinary Shares and Public Warrants commenced separate public trading on December 17, 2021. On April 25, 2024, Roth CH voluntarily delisted its securities from Nasdaq and they began being quoted on the OTC Markets. Our Roth Class A Ordinary Shares and Public Warrants are each quoted on the OTC Markets under the symbols "USCTF," and "USTWF," respectively.

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***Securities Transfer Agreement and Name Change***. On June 25, 2023, Roth CH, the Former Sponsor, each independent director of Roth CH, and affiliates of Roth Capital Partners and Craig-Hallum Capital Group LLC (the "<u>New Sponsor</u>") entered into a Securities Transfer Agreement (the "<u>Agreement</u>") pursuant to which the Former Sponsor and the former directors of Roth CH sold to the Buyers, an aggregate of 4,312,500 Ordinary Shares consisting of 4,237,500 Roth Class A Ordinary Shares and 75,000 of Roth CH's Class B ordinary shares, par value $0.0001 per share, and 8,062,500 private placement warrants (together, the "<u>Transferred Securities</u>") for an aggregate purchase price (the "<u>Purchase Price</u>") of $1.00 (the "<u>Transaction</u>"). Following the closing of the Transaction, the Former Sponsor has certain continuing rights, including a right of first refusal to repurchase the Transferred Securities in certain circumstances as set forth in the Agreement and the right to invest up to 25% of certain financings. The Transaction was consummated on June 28, 2023.

***Termination of Status as a SPAC.***

Roth CH originally extended the time that it had to complete an initial business combination by depositing an aggregate of $540,000 into the trust account for a total of nine Monthly Deposits. On April 29, 2024, Roth CH held an extraordinary general meeting at which shareholders approved a proposal to amend and restate Roth CH's Articles of to remove the provisions applicable to special purpose acquisition companies including the requirement to redeem and cancel 100% of the Roth Class A Ordinary Shares sold in Roth CH's initial public offering following distribution of the funds held in Roth CH's Trust Account (the "<u>Amendment Proposal</u>"). The purpose of the Amendment Proposal was to remove the provisions contained in the Articles that are applicable to special purpose acquisition companies ("<u>SPACs</u>"), including the requirement to redeem and cancel 100% of Roth CH's public shares following distribution of the funds held in Roth CH's Trust Account established in connection with the IPO and revise the provisions to allow shareholders of Roth CH to obtain their pro rata distribution of funds remaining in the Trust Account and also retain ten (10%) percent of their shares upon liquidation of the Trust Account. Shareholders approved the Amendment Proposal on April 29, 2024. As a result, the Trust Account was liquidated.

***Merger Sub***

Roth CH Merger Sub, Inc., was a wholly-owned subsidiary of Roth CH incorporated in the State of Delaware on December 30, 2024, to consummate the Business Combination. Merger Sub merged with and into Sharon upon the consummation of the Business Combination, with SharonAI surviving the merger as a wholly-owned subsidiary of Roth CH Holdings, Inc.

***Pubco***

Roth CH Holdings, Inc., was a wholly-owned subsidiary of Roth CH incorporated in the State of Delaware on December 30, 2024, to consummate the Business Combination. Roth CH merged with and into Pubco immediately prior to the consummation of the Business Combination, with Pubco as the surviving corporation of the merger. In connection with such merger Roth CH Holdings, Inc. changed its name to SharonAI Holdings Inc.

***SharonAI***

SharonAI is a corporation formed in Delaware on February 15, 2024, with the intent to act as a holding company to acquire various assets focused on or in the High-Performance Computing ("<u>HPC</u>") industry and the Artificial Intelligence ("<u>AI</u>") field of technology, and currently one of Australia's leading Neoclouds, a cloud infrastructure provider that focuses on specialized, high-performance compute—especially GPU-heavy workloads for AI, machine learning, and HPC. HPC is a computing technology that uses clusters of processors or processor cores working in parallel to solve advanced computational problems across a wide range of scientific, engineering, finance, business and other fields. SharonAI is specifically focused on infrastructure and technology associated with the development and delivery of these HPC/AI services to users and applications which require both large amounts of Graphic Processing Units ("<u>GPU</u>") and Central Processing Units ("<u>CPU</u>"), combined with data storage. CPUs are general purpose processors while GPUs are optimized for parallel processing and were originally used for computer graphics. Data storage is used to store the large data sets common in HPC/AI and to back up information. SharonAI's two main business lines are an AI/HPC cloud platform, which is based in Australia, and the development of data center assets, which is based in the U.S., each as described further below.

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In March of 2024, SharonAI formed two new wholly owned subsidiaries in Delaware, SharonAI Operations LLC, which is intended to be used for U.S. based operational activities as its operations expand to the U.S., and SharonAI Hosting LLC, which is intended to be used to hold assets that are acquired in the future and based in the U.S.

In April of 2024, SharonAI acquired 100% of the issued capital of Alternative Asset Management Pty Ltd ACN 645 215 194, an Australian company that was renamed SharonAI Pty Ltd ("<u>SAIPL</u>") and which has a business operating distributed data storage a type of cloud storage that utilizes Web 3 technology to provide decentralized networks of independent nodes to securely store and retrieve data, ensuring redundancy, fault tolerance, and resistance to censorship while incentivizing storage providers with blockchain-based rewards. This acquisition was part of a transaction in which SAIPL also obtained certain assets from Digital Income Fund Pty Ltd ACN 643 155 328 as trustee for the Digital Income Fund ABN 12 771 427 247 ("<u>DIF</u>"), an Australian company which had storage servers and ancillary equipment for the operation of the distributed storage operations. In addition to these assets, SAIPL had acquired a Tier 3 designed modular data center, although it had not fully paid for the equipment at the time of acquisition.

In June of 2024, SharonAI acquired over 96% of the issued capital of Distributed Storage Solutions Limited ACN 646 979 222 ("<u>DSS</u>") via direct agreement with individual shareholders. DSS is an Australian company that operates distributed data storage and HPC/AI equipment. In the period from June 2024 to December 2024, SharonAI continued with further acquisitions of the issued capital of DSS ending 2024 with over 99% of outstanding stock in DSS. The acquisitions of SAIPL and DSS provided SharonAI with a substantial amount of storage capacity, GPUs and CPUs, a core operational team including its current chief operating officer and strategic relationships with suppliers including Lenovo and NEXTDC. Both SAIPL and DSS continue as SharonAI's main operating subsidiaries in Australia.

SharonAI acquired a fleet of GPU / CPU and storage servers and currently operates out of three third-party co-location data centers in Australia. As of September 30, 2025:

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| | |
|:---|:---|
|  | **Existing<br>Operations<br>Online** |
| Total GPU's operating | 432 |
| Total CPU's operating | 195 |
| Total Storage Capacity (PB) | Over 51 |

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In January of 2025, SharonAI formed a 50:50 joint venture with New Era Helium, Inc., named Texas Critical Data Centers LLC ("<u>TCDC</u>"), to fund, develop, and construct a planned 250 Mega Watt ("<u>MW</u>") sustainable data center site project behind the meter with a natural gas-fired power plant within the Permian Basin in Western Texas. See additional information about TCDC below.

SharonAI continues to conduct research and development into its systems, and is actively testing several configurations and locations to determine the best configuration and architecture for including both GPU systems and traditional CPU based computing systems.

**The Business Combination and the Business Combination Agreement**

**<u>Business Combination Agreement</u>**

On January 28, 2025, Roth CH Acquisition Co., a Cayman Islands exempted company ("<u>Roth CH</u>"), entered into that certain Business Combination Agreement (as amended, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>"), by and among the Roth CH, Roth CH Holdings, Inc., a Delaware corporation and previously a direct, wholly owned subsidiary of Roth CH (the "<u>Domestication Sub</u>" or "<u>Pubco</u>"), Roth CH Merger Sub, Inc., a Delaware corporation and previously a direct, wholly owned subsidiary of Roth CH ("<u>Merger Sub</u>"), and SharonAI Inc., a Delaware corporation (the "<u>SharonAI</u>"). Following consummation of the Business Combination, Roth CH, Domestication Sub and SharonAI are now referred to as the "<u>Company</u>".

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SharonAI is a holding company formed to acquire various assets focused on or in the high performance computing ("<u>HPC</u>") industry, specifically the artificial intelligence field of technology, and on the acquisition of the infrastructure and technology associated with the development and delivery of HPC services to users and applications which require both large amounts of graphic processing units and central processing units combined with expertise in data storage.

*The Mergers* 

The Business Combination Agreement provided that, among other things and upon the terms and subject to the conditions thereof, the following transactions occurred (together with the other agreements and transactions contemplated by the Business Combination Agreement, the "<u>Business Combination</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) On December 16, 2025, Roth CH continued out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation by means of a merger (the " <u>Domestication Merger</u> ") of Roth CH with and into Domestication Sub, with the Domestication Sub as the surviving company (the " <u>Domesticated Parent</u> ") pursuant to the Companies Act (As Revised) of the Cayman Islands and the applicable provisions of the Delaware General Corporation Law, as amended. Upon the Domestication Merger, Domesticated Parent changed its name to "SharonAI Holdings Inc.", and, thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) (a) the Merger Sub was merged with and into SharonAI, (b) the separate corporate existence of Merger Sub ceased, and Sharon was the Surviving Corporation, and (c) the Surviving Corporation became a wholly-owned Subsidiary of the Domesticated Parent (the " <u>Acquisition Merger</u> ").

*Merger Consideration*

The Aggregate Merger Consideration is 11,216,673 shares of Common Stock of the Domesticated Parent issued on December 17, 2025 at the closing of the Business Combination.

**<u>Recent Developments</u>**

***Amendment to Yorkville Agreements***

On December 15, 2025, SharonAI entered into an Amendment (the "<u>YA Amendment</u>") to Convertible Promissory Notes and Note Purchase Agreement (the "<u>YA Agreement</u>") with YA II PN, Ltd ("<u>YA</u>"). Under the terms of the YA Amendment, during the period starting on December 15, 2025 and ending on January 20, 2026, (the "<u>Suspension Period</u>"), (A) the following obligations of the Company are suspended: (i) the obligation to assign the notes issued by SharonAI to YA (collectively, the "<u>YA Notes</u>") the Company, (ii) the obligation to cause the Company to assume the Note or enter the Standby Equity Purchase Agreement ("<u>SEPA</u>"), and (iii) the obligation to make any payments to the YA under the YA Notes, and (B) YA shall not: (i) convert either YA Note into shares of Class A Ordinary Common Stock, or (ii) have any obligations to make any further Pre-Paid Advances; in each such case provided that SharonAI strictly complies with the covenants set forth in the Amendment. SharonAI agreed that upon the expiration or termination of the Suspension Period (unless the YA Notes are repaid in full as provided in the Amendment), the suspension of the obligations and payments due to be performed under any of the Agreements that may have arose during the Suspension Period shall be in full force and effect upon the termination of the Suspension Period.

In connection with the YA Amendment, SharonAI agreed to pay YA (i) an initial payment within 4 business days of the date of the YA Amendment of $350,000, which is comprised of (a) $263,636 of principal of the promissory note dated October 21, 2025; (b) a Redemption Premium (as defined in the YA Notes) in respect of such principal in the amount of $26,364; and (c) $60,000 of accrued and unpaid interest on the YA Notes (representing all accrued and unpaid interest as of December 11, 2025); and (ii) a final payment on or before the expiration of the Suspension Period in an amount equal to the aggregate of the following as of the date of such payment: (a) the outstanding principal of each YA Note; (b) a Redemption Premium (as defined in the YA Notes) in respect of such Principal amount; (c) the accrued and unpaid Interest of each YA Note; and (d) a $250,000 fee, which aggregate payment shall be in complete payment and satisfaction of all amounts owed and other obligations under all of the YA Agreements and the YA Agreements shall terminate and be of no further effect upon SharonAI making such payment and none of the parties, nor any of their respective successors in interest or permitted assigns, shall have any further rights or obligations or any continuing liability under the Agreements after such payment is made by SharonAI.

As of the date hereof, all amounts due under the YA Amendment have been paid and all agreements with YA are of no further force and effect.

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***Convertible Notes***

On December 17, 2025, the Company entered into 10% convertible promissory notes (the "<u>December 2025 Convertible Notes</u>") with three accredited investors pursuant to which the Company issued convertible promissory notes in the amount of $2,250,000 to the investor in consideration of $2,250,000. The December 2025 Convertible Notes accrue interest at a rate of 10% per annum and had a maturity date of December 17, 2026. The unpaid and outstanding principal amount and accrued interest automatically converted into shares of the Company's Class A Ordinary Common Stock at a conversion price of $6.00 on December 17, 2025. As soon as practicable (and in any event within 30-calendar days of the closing of the Business Combination Agreement, the Company agreed to file a registration statement on Form S-1 providing for the resale of the shares of Class A Ordinary Common Stock issuable upon conversion of the December 2025 Convertible Notes. The proceeds from the issuance of the December 2025 Convertible Notes were used for working capital and general corporate purposes.

***TCDC Property Purchase***

On December 19, 2025, TCDC completed its acquisition of approximately 203 acres of real property located in Block 41, T-2-S, T&P RR Co. Survey, Ector County, Texas (the "<u>Additional 203 Acres</u>") pursuant to a Contract to Purchase dated November 21, 2025 (the <u>"203 Acre Agreement</u>"), between TCDC and Odessa Industrial Development Corporation d/b/a Grow Odessa ("<u>Grow Odessa</u>"), from whom TCDC previously purchased a contiguous 235 acres of land from on July 25, 2025. The total price for the Additional 203 Acres was $5,100,000. The intent is for a third-party to build gas-fired power generation on-site.

The description of the 203 Acre Agreement is only a summary and is qualified in its entirety by reference to the full text of such document, which is filed as an exhibit to this Prospectus and is incorporated herein by reference.

**New Convertible Note Financing**

On December 19, 2025 SharonAI and SharonAI Pty Ltd, each a subsidiary of the Company, entered into a Convertible Note Agreement (the "<u>New Financing Agreement</u>") with certain investors (the "<u>Convertible Noteholders</u>"), pursuant to which the Noteholders agreed to provide financing in the aggregate principal amount of approximately US$103,000,000 of unsecured, redeemable, convertible notes (the "<u>AU Convertible Notes</u>"). Canaccord Genuity Australia served as the sole lead manager for the transaction.

Promptly after entering into the New Financing Agreement, SharonAI Inc. assigned, and the Company assumed, the obligations and responsibilities of SharonAI Inc. in connection with and arising out of the New Financing Agreement and the AU Convertible Notes.

The AU Convertible Notes bear interest at a rate of 12% per annum from April 19, 2026, through December 18, 2026, and 15% per annum on and from the December 19, 2026 until the AU Convertible Notes are redeemed, cancelled or converted. The AU Convertible Notes mature on December 19, 2027 (the "<u>Maturity Date</u>"), unless earlier converted or redeemed.

Under the terms of the New Financing Agreement, the AU Convertible Notes may be converted into shares of Class A Ordinary Common Stock of the Company in certain circumstances, including by the Company prior to a Corporate Event (as defined in the New Financing Agreement), upon completion of an initial public offering on the Australian Securities Exchange or other securities exchange (subject to additional terms) or at maturity. Upon conversion, the number of shares issuable is calculated based on the sum of principal and accrued interest divided by the lower of a discounted transaction price or a predetermined valuation cap or maturity conversion price. Conversion and issuance of securities pursuant to the AU Convertible Notes are subject to compliance with the rules of the Nasdaq Stock Market LLC or prior stockholder approval.

Redemption rights are available to the Convertible Noteholders on the Maturity Date or upon the occurrence of an event of default (if not converted), in which case the redemption price includes both principal and accrued but unpaid interest.

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The proceeds from the offering are expected to be used primarily to accelerate the deployment of high density computing power in the form of NVIDIA GPUs, including B200's, B300's and GB300's.

The foregoing description of the New Financing Agreement and the AU Convertible Notes does not purport to be complete and are subject to and qualified in its entirety by the full text of the New Financing Agreement and the AU Convertible Note, copies of which is filed as exhibits hereto and is incorporated herein by reference.

**Reverse Stock Split and Authorized Common Stock Reduction**

On December 23, 2025, the Company filed a certificate of amendment to its certificate of incorporation with the Delaware Secretary of State, which by its terms becomes effective at 9:30am ET on December 24, 2025, to (i) effectuate a 1-for-50 reverse stock split of its outstanding common stock, including both shares of its Class A Ordinary Common Stock and Class B Super Common Stock, and (ii) reduce its authorized common stock to 100,136,341 shares, being 100,000,000 shares of Class A Ordinary Common Stock and 136,341 shares of Class B Super Common Stock. In addition to reducing the shares of common stock outstanding, the reverse stock split will effect a reduction in the number of shares of common stock issuable upon the exercise of stock options, warrants and unit purchase options and conversion of convertible notes outstanding immediately prior to the reverse stock split, with a proportional increase in the respective exercise/conversion prices.

 **Sale of Interest in Texas Critical Data Centers**

On January 16, 2026, SharonAI Inc., a subsidiary the Company entered into a Membership Interest Purchase Agreement ("<u>Purchase Agreement</u>") for, and closed the sale of, the Company's sale of 100% of its 50% interest ("<u>Membership Interests</u>") in Texas Critical Data Centers LLC ("<u>TCDC</u>") to New Era Energy & Digital Inc. ("<u>NUAI"</u>).

The consideration NUAI will pay the Company for the Membership Interests will be an aggregate of $70,000,000, of which, (a) $10,000,000 will be payable in cash, with (i) $150,000 paid in December of 2025 as non-refundable deposit, and (ii) $9,850,000 payable upon the occurrence of certain events, but no later than March 31, 2026; (b) $10,000,000 will be payable in common stock or other units of NUAI upon the occurrence of certain events, but no later than March 31, 2026; and (c) $50,000,000 will be payable by issuance of a senior secured convertible promissory note ("<u>Secured Note</u>").

The Secured Note matures and is due June 30, 2026. It provides for an interest rate of 10% per annum (payable at maturity) and the right of the Company to convert up to $10,000,000 into common stock of NUAI at a conversion price equal to the 30-day VWAP of NUAI common stock prior to conversion, provided that such conversion price will not be less than 20% of the Nasdaq Official Closing Price. The Secured Note contains customary events of default and affirmative and negative covenants of NUAI.

In connection with the Purchase Agreement and the Secured Note, TCDC and SharonAI have entered into a Guaranty dated January 16, 2026 ("<u>Guaranty</u>"), pursuant to which TCDC has guaranteed the obligations of NUAI under the Secured Note. The obligations under the Secured Note and the Guaranty are secured by the Security and Pledge Agreement dated January 16, 2026, entered into between SharonAI, NUAI and TCDC (the "<u>Security Agreement</u>"), pursuant to which NUAI pledged all of the membership interests of TCDC to the Company and TCDC granted a security interest in substantially all of its assets to the Company, and also by the Deed of Trust and Security Agreement dated January 16, 2026, entered into between the Company and TCDC (the "Deed of Trust"), pursuant to which TCDC has conveyed certain real estate in trust to secure the obligations under the Secured Note.

The descriptions of the Purchase Agreement, Secured Note, Guaranty, Security Agreement and Deed of Trust are only a summary and are qualified in its entirety by reference to the full text of such document, each of which is filed as an exhibit to Registration Statement and which is incorporated herein by reference.

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 **Resignation of Chief Executive Officer**

On January 22, 2026, Mr. Wolfgang Schubert, a member of the Board of Directors ("<u>the Board</u>") of the Company, and the Chief Executive Officer of the Company, resigned as the Company's Chief Executive Officer and from the Board, and also terminated the Employment Agreement between himself and the Company's subsidiary, SharonAI Operations LLC ("<u>SharonAI Operations</u>"), dated June 5, 2024, as amended May 10, 2025 (the "Schubert Employment Agreement"), all in accordance with a Separation Agreement dated January 22, 2026, entered into between Mr. Schubert and SharonAI Operations ("<u>Schubert Separation Agreement</u>"). Pursuant to the Separation Agreement, Mr. Schubert received 318,240 restricted stock units. Mr. Schubert will continue with the Company as a consultant pursuant to a Consulting Agreement dated January 22, 2026, entered into between Mr. Schubert and SharonAI Operations ("<u>Schubert Consulting Agreement</u>"), pursuant to which Mr. Schubert will receive a one-time grant of $50,000 of restricted stock units and will receive $8,334 per month. Mr. Schubert's resignation was not the result of any dispute or disagreement with the Company or management and is not a reflection on the Company's results of operations.

 **Appointment of Chief Executive Officer**

In connection with Mr. Schubert's resignation as Chief Executive Officer of the Company, on January 22, 2026, the Board appointed James Manning, Non-Executive Chairman, director and greater than 10% stockholder of the Company, as Chief Executive Officer. In connection with Mr. Manning's appointment as Chief Executive Officer, Mr. Manning entered into an Employment Offer Letter dated January 22, 2026, with the Company's subsidiary, SharonAI Pty Ltd (the "<u>New Manning Agreement</u>"). Pursuant to the New Manning Agreement, Mr. Manning will receive an additional annual base salary of AUD$200,000 and will be eligible to participate the Company's discretionary bonus scheme and in the Company's discretionary share scheme, as well as superannuation contributions in line with the minimum compulsory contribution rate required to be paid.

 **Announcement of Potential Financing and Strategic Partnership**

On January 19, 2026, the Company announced a potential investment from Digital Alpha of up to $200 million and a strategic technology partnership with Cisco, subject to execution of definitive documentation which is expected to enable the Company to further accelerate customer deployments and expand our cloud infrastructure for enterprise AI and high-performance compute in Australia and Asia Pacific.

 **Announcement of Proposed Debt Facility**

On January 22, 2026, the Company announced that USD.AI has approved a debt facility of up to US$500 million for Sharon AI, a subsidiary of the Company, subject to execution of definitive documentation.

The facility is expected to enable Sharon AI to access asset-backed, non-recourse financing through USD.AI's on-chain credit system, which is expected to allow approved GPU deployments to be financed with stablecoin liquidity. The structure is designed to support capital-efficient expansion of AI infrastructure while reducing reliance on traditional bank and private credit markets.

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**Summary Risk Factors**

The Company believes it is important to communicate its expectations to its security holders. However, there may be events in the future that Company is able to predict accurately or over which they have control. The section in this prospectus entitled "Risk Factors" and the other cautionary language discussed in this prospectus provide examples of certain risks, uncertainties and events that may cause actual results to differ materially from the expectations described by the Company in such forward-looking statements. Set forth below is only a summary of certain principal risks associated with an investment in the Company's Class A Ordinary Common Stock. You should carefully consider the following discussion of risks, as well as the discussion of risks included elsewhere in this prospectus, including those described under "Risk Factors."

● We have a limited operating history and have incurred operating losses since our inception and anticipate that we will continue to incur losses in the foreseeable future, which could adversely impact our operations, strategy and financial performance.

● We may be unable to raise additional capital needed to grow our business.

● The cost of obtaining new and replacement compute and storage servers and ancillary equipment, parts and other data center related equipment has historically been capital-intensive and is likely to continue being capital-intensive, which could materially and adversely affect our business, financial condition, and results of operations.

● Our business has and is expected to continue to have significant customer concentration.

● Our industry has significant competition and technological change.

● We may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect our business.

● The Company or our suppliers may not be able to procure or repair hardware that is required in our operations.

● Supply chain and logistics issues for us, our contractors or our suppliers may delay our expansion plans or increase the cost of constructing our infrastructure.

● Any long-term outage or limitation of the internet and network connections at our sites could materially impact our operations and financial performance.

● Access to reliable electricity sources at reasonable prices, developed land and co-location arrangements are critical to our growth and profitability.

● Serial defects in our GPUs and other equipment may result in failure or underperformance relative to expectations and impact our operations and financial performance.

● Cyber-security threats pose a challenge to our business and a risk of reputational damage.

● Cyberattacks and security breaches of cloud services, or those impacting our third parties, could adversely impact our brand and reputation and our business, operating results, and financial condition.

● Global climate change and related environmental regulations may have an adverse effect on our business operations and financial position.

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● Our operations could be negatively impacted by import tariffs and/or other government mandates.

● We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.

● Our results of operations may suffer if the Company is not able to successfully manage our exposure to foreign exchange rate risks.

● Our international operations subjects us to international operational, financial, legal, political and public health risks which could harm our operating results.

● We use certain open-source technology in our business. We may face claims from open-source licensors claiming ownership of, or demanding the release of, the technology and any other intellectual property that the Company developed using or derived from such open-source technology.

● Impact of advancements in artificial intelligence on demand for AI and HPC data centers may reduce the need for HPC and AI-specific data center infrastructure, which could have an adverse effect on our business, results of operations, and financial condition.

● Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the digital asset exchange markets.

● We cannot assure the completion of our joint venture's data center site project, and even after such completions, we may not be able to generate adequate revenue to operate profitably and/or to continue as a going concern.

● Our business depends upon the demand for data centers.

● Our business is expected to have significant customer concentration.

● If we incorrectly estimate our hosting capacity requirements and related capital expenditures, our results of operations could be adversely affected.

● HPC/AI and data center activities are energy-intensive, which may restrict the geographic locations of our activities to locations with renewable sources of power. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to HPC and data center operators, including us.

● Regulatory restrictions that target AI, including, but not limited to, export restrictions may have a material adverse impact on our intended operations.

● The holders of shares of Class B Super Common Stock will own a significant voting percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

● The Selling Shareholders may choose to sell the Shares and Private Warrant Shares at prices below the current market price.

● A large number of shares of the Company's Class A Ordinary Common Stock may be sold in the market following this offering, which may significantly depress the market price of the Company's Class A Ordinary Common Stock.

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**ABOUT THIS OFFERING**

 The number of shares of our common stock to be outstanding immediately before and after this offering is based on 11,968,505 share of Common Stock outstanding as of February 6, 2026 and excludes as of such date:

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**RISK FACTORS**

*Any investment in the Company's Class A Ordinary Common Stock involves a high degree of risk. Before deciding whether to purchase the Company's Class A Ordinary Common Stock, investors should carefully consider the risks described below. Our business, financial condition, operating results and prospects are subject to the following material risks. Additional risks and uncertainties not presently foreseeable to us may also impair our business operations. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, the trading price of the Company's Class A Ordinary Common Stock could decline, and our stockholders may lose all or part of their investment in the shares of the Company's Class A Ordinary Common Stock. If any of these risks actually occur, our business, financial condition, results of operations or cash flow could be adversely effected. This could cause the trading price of the Company's Class A Ordinary Common Stock to decline, resulting in a loss of all or part of your investment. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently see as immaterial, may also harm our business. Please also read carefully the section above entitled "Special Note Regarding Forward-Looking Statements." References to "we," "us," or "our" in this section refer to the Company.*

**<u>Risks Related to SharonAI's Business in General</u>**

***We have a limited operating history and have incurred operating losses since our inception and anticipate that the Company will continue to incur losses in the foreseeable future, which could adversely impact our operations, strategy and financial performance.***

During the short time the we have operated it has incurred net losses. We expect to continue to incur losses for the near future, and these losses may increase as we pursue our growth strategy. With the expansion of our two main businesses, our HPC/AI cloud platform and the development of data center assets, no certainty exists that we will become profitable and, even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. The future expansion of our business likely requires substantial capital costs and expenses and there can be no assurance that subsequent operational objectives will be achieved. If we do not achieve our operational objectives, and if we do not generate cash flow and income, our financial performance and long-term viability may be materially and adversely affected. Our inability to achieve and then maintain profitability would negatively affect our business, financial condition, results of operations and cash flows.

***We have an evolving business model and strategy.***

We expect our business model and strategy to continue to evolve in the future. As artificial intelligence and high-performance computing become more widely available, and as the needs of data centers increase, we expect related services and products to evolve. In order to stay current with our industry, our business model will also need to evolve. Our ability to retain, increase, and engage our user base and to increase our revenue depends heavily on our ability to continue to evolve our existing services and to create successful new services, both independently and in conjunction with developers or other third parties. As a result, from time to time, we may modify aspects of our business model relating to our strategy. Our growth strategy includes exploring the expansion and diversification of our revenue sources into new markets. We cannot offer any assurance that these or any other modifications to our business model and strategy will be successful or will not result in harm to our business. Such modifications may increase the complexity of our business and place significant strain on our management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions. Moreover, we may not be able to manage growth effectively, which could damage our reputation, limit our growth and adversely affect our operating results. Further, we cannot provide any assurance that we will successfully identify all emerging trends and growth opportunities within our industry or other markets we seek to expand into, and we may lose out on such opportunities. These efforts, including the introduction of new services or changes to existing services, may also result in new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications that could adversely affect our business, reputation, or financial results. If our new or changed services fail to engage users or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, and our business may be adversely affected.

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***Our results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business.***

Our results of operations, including the levels of our net revenues, expenses, net loss and other key metrics, may vary significantly in the future due to a variety of factors, some of which are outside of our control, and period-to-period comparisons of our operating results may not be meaningful, especially given our limited operating history.

The results for any one quarter are not necessarily an indication of future performance. Fluctuations in quarterly results may adversely affect the market price of the Company's Class A Ordinary Common Stock. Factors that may cause fluctuations in our annual financial results include:

● the amount and timing of operating expenses related to our new business operations and infrastructure; and

● general economic, industry and market conditions.

***We may be unable to raise additional capital needed to grow our business.***

At least until our business strategy is implemented there may be a need to raise additional capital to expand our operations and pursue our growth strategies, including potential acquisitions of complementary businesses, and to respond to competitive pressures or unanticipated working capital requirements. We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect our existing operations. If we raise additional funds through one or more equity financings, our stockholders may experience significant dilution of their ownership interests, and the per share value of the Company's Class A Ordinary Common Stock could decline. Furthermore, if we engage in additional debt financing, the holders of debt likely would have priority over the holders of common stock on order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions including terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.

***The cost of obtaining new and replacement compute and storage servers and ancillary equipment, parts and other data center related equipment has historically been capital-intensive and is likely to continue being capital-intensive, which could materially and adversely affect our business, financial condition, and results of operations.***

Our operations require significant capital investment to purchase and maintain the property and equipment required to provide our services. Our operations can only be profitable if the costs, inclusive of hardware and electricity costs, associated with high-performance computing and data center operations are lower than the reward or fee for service received. Our business, financial condition, and results of operations are dependent on our ability to operate with greater revenue than costs. As the cost of obtaining new equipment increases, the cost of operating also increases. This requires a corresponding increase in the price of services for us to maintain profitability. We experience ordinary wear and tear from operation and may also face more significant malfunctions caused by factors which may be beyond our control. Additionally, as technology evolves, we may acquire newer models of equipment to remain competitive in the market. Consequently, we will rely on capital markets, as sources of liquidity for capital requirements for growth. If we are unable to access capital at competitive rates, the ability to implement business plans, make capital expenditures or pursue acquisitions we would otherwise rely on for future growth may be adversely affected. Market disruptions may increase the cost of borrowing or adversely affect our ability to access one or more financial markets. Such market disruptions could include:

● A significant economic downturn;

● The financial distress of unrelated industry leaders in the same line of business;

● Deterioration in capital market conditions;

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● Turmoil in the financial services industry;

● Volatility in GPU prices;

● Terrorist attacks;

● Trade tariff or restrictions

● War; and/or

● Cyberattacks.

***Our business has and is expected to continue to have significant customer concentration.***

We generate a large portion of our revenue (around 99% in 2024) from a small number of customers (3 customers in 2024). There are inherent risks whenever a large percentage of total revenue is concentrated with a limited number of customers. If we were to lose one or more of our customers, our operating results could be materially adversely affected.

We expect that the limited number of customers will continue to account for a high percentage of our revenue for the foreseeable future. In addition, demand for our services generated by these customers may fluctuate significantly from quarter to quarter. The concentration of our customer base increases risks related to the financial condition of our customers, and the deterioration in the financial condition of a single customer or the failure of a single customer to perform its obligations could have a material adverse effect on our results of operations and cash flow. In the event that any of our customers experience a decline in their equipment usage for any reason, or decide to discontinue the use of our services, we may be compelled to lower our prices or risk losing a significant customer. Such developments could adversely affect our profit margins and financial position, leading to a negative impact on our revenue and operational results.

***We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.***

Our ability to compete in the highly competitive digital infrastructure industry, including HPC/AI cloud services and data center development, depends upon our ability to attract and retain highly qualified personnel. The responsibility of the direction and operation of our business relies heavily on a small number of key people, including CEO James Manning. If any of our key employees or service providers cease their involvement in our business or, in the unfortunate situation one or more of them are seriously injured or dies, this loss would have a significant and likely adverse impact on us.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided equity awards that vest over time. The value to employees of equity awards that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management team may terminate their employment with us on short notice. Although we have employment agreements with some of our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. We do not maintain "key man" insurance policies on the lives of these individuals or the lives of any of our other employees.

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***We may not have, or be able to obtain or maintain, relevant business insurance.***

Due to the industry in which we operate, we may not be able to obtain or maintain some types of insurance that operators of similar businesses would usually obtain, on commercially viable premiums, or at all. Currently, we do not have any business liability or disruption insurance to cover our operations, other than director's and officer's liability insurance. We have determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.

***Failure to effectively manage our growth could place strains on our managerial, operational, and financial resources and could adversely affect our business and operating results.***

As our infrastructure operations grow, the administrative demands upon us will grow, and our success will depend upon our ability to meet those demands. We are organized as a holding company, with numerous subsidiaries. Both the parent company and each of our subsidiaries require certain financial, managerial, and other resources, which could create challenges to our ability to successfully manage our subsidiaries and operations and impact our ability to assure compliance with our policies, practices, and procedures. These demands include, but are not limited to, increased executive, accounting, management, legal services, staff support, and general office services. We may need to hire additional qualified personnel to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control. Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and our failure to do so could adversely affect our business and operating results.

***We have potential risks in connection with growth and acquisitions.***

Our future growth may depend in part on our ability to acquire patented technologies or potential target companies that have synergies with our business activities. Such acquisitions are subject to numerous risks, including, but not limited to the following:

● our inability to enter into a definitive agreement with respect to any potential acquisition, or if we are able to enter into such agreement, our inability to consummate the potential acquisition;

● difficulty integrating the operations, technology, and personnel of the acquired entity including achieving anticipated synergies;

● our inability to achieve the anticipated financial and other benefits of the specific acquisition;

● difficulty in maintaining controls, procedures, and policies during the transition and monetization process;

● diversion of our management's attention from other business concerns; and

● failure of our due diligence process to identify significant issues, including issues with respect to patented technologies and other legal, tax, and financial contingencies.

If we are unable to manage these risks effectively as part of any acquisition, our business could be adversely affected.

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***We may acquire other businesses, form joint ventures or acquire other companies or businesses that could negatively affect our operating results, dilute our stockholders' ownership, increase our debt or cause us to incur significant expense; notwithstanding the foregoing, our growth may depend on our success in uncovering and completing such transactions.***

We cannot offer any assurance that acquisitions of businesses, assets, and/or entering into strategic alliances or joint ventures will be successful. We may not be able to find suitable partners or acquisition candidates and may not be able to complete such transactions on favorable terms, if at all. If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing infrastructure. In addition, in the event we acquire any existing businesses we could assume unknown or contingent liabilities.

Any future acquisitions also could result in the issuance of shares, the incurrence of debt, contingent liabilities, or future write-offs of intangible assets or goodwill, any of which could have a negative impact on our cash flows, financial condition, and results of operations. Integration of an acquired company may also disrupt ongoing operations and require management resources that otherwise would be focused on developing and expanding our existing business. We may experience losses related to potential investments in other companies, which could harm our financial condition and results of operations. Further, we may not realize the anticipated benefits of any acquisition, strategic alliance, or joint venture if such investments do not materialize.

To finance any acquisitions or joint ventures, we may choose to issue common shares, preferred shares, or a combination of debt and equity as consideration, which could significantly dilute the ownership of our existing stockholders or provide rights to such preferred stockholders in priority over our common shareholders. Additional funds may not be available on terms that are favorable to us, or at all. If the price of our stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using shares as consideration.

***Our future results will suffer if we do not effectively manage our expanded operations.***

The size of our business is forecast to increase significantly beyond the size of our historical businesses on a stand-alone basis. Our future success depends, in part, upon our ability to manage this expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurance that we will be successful or that we will realize the expected operating efficiencies, cost savings, revenue enhancements, and other benefits anticipated from the growth.

***Our industry has significant competition and technological change***

The markets in which we operate are highly competitive, we expect that competition will continue to be intense due to rapid technological changes, frequent product introductions and improvements used by our competitors, or new competitors of our services that may provide. Our competition through these changes may offer better performance that may include additional features that render our products comparatively less competitive. We may also face aggressive pricing by competitors, especially during challenging economic times. In addition, our competitors may have significant marketing and sales resources which could increase the competitive environment in a declining market or during challenging economic times, leading to lower prices and margins. Some competitors may have greater access or rights to complementary technologies or supplies for improved equipment.

The market for high-performance computing and cloud services is driven in large part by demand for server clusters, specialized or high-performance applications, and hosted software solutions which require fast and efficient data processing and is characterized by rapid advances in technologies. It is difficult to predict the development of demand for high-performance computing and cloud services, the size and growth rate for this market, the entry of competitive products, or the success of any existing or future products that may compete with any high-performance computing and cloud services we may develop. There has been an increasing number of competitors providing high-performance computing and cloud services, which has resulted in increasing competition and pricing pressure that may cause us to reduce our pricing in order to remain competitive. Meanwhile, if there is a reduction in demand for any high-performance computing and cloud services, whether caused by a lack of customer acceptance, a slowdown in demand for computational power, an overabundance of unused computational power, advancements in technology, technological challenges, competing technologies, and solutions, decreases in corporate and customer spending, weakening economic conditions or otherwise, it could result in reduced customer orders, early order cancellations, the loss of customers, or decreased sales, any of which would adversely affect our business, results of operations and financial condition.

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The market for large-scale data center developments is driven by large enterprise customers. Access to sufficient and reliable power is a key factor for the success of such a development project. Developing data center projects is a complex process with many stakeholders and considerations, including permitting and fiber connectivity, and we are competing with more established competitors.

Our existing and potential competitors may have various competitive advantages over us, such as:

● greater name recognition, longer operating histories, and larger market shares;

● more established marketing, banking, and compliance relationships;

● more efficient hardware;

● greater data center capabilities (for example, through adoption of proprietary technology);

● more developed sales and customer management capabilities;

● more developed technical capabilities;

● more timely introduction of new technologies;

● preferred relationships with suppliers, including of compute servers and other equipment;

● better access to more competitively priced power;

● greater reliability in electricity supply, whether as a result of a greater number of backup sources of power or otherwise;

● greater financial resources and access to capital to acquire new hardware, businesses, and capabilities to enable growth;

● more reliable network connections as a result of the location of their data centers to key interconnect points and internet connections;

● lower labor, compliance, risk mitigation, and research and development costs;

● larger and more mature intellectual property portfolios;

● greater number of applicable licenses or similar authorizations;

● fewer regulatory restrictions, including with respect to energy supply;

● established core business models outside of high-performance computing, allowing them to operate on lesser margins or at a loss;

● operations in certain jurisdictions with lower compliance costs and greater flexibility to explore new product offerings; and

● substantially greater financial, technical, and other resources.

If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results, and financial condition could be adversely affected.

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***We may not adequately respond to price fluctuations and rapidly changing technology, which may negatively affect our business.***

Competitive conditions within our industry require that we use sophisticated technology in the operation of our business. The digital infrastructure industry, including HPC/AI computing and the development of data center assets, is characterized by rapid technological changes, new product introductions, enhancements, and evolving industry standards. New technologies, techniques, or products could emerge that might offer better performance than the software and other technologies we currently utilize, and we may have to manage transitions to these new technologies to remain competitive. We may not be successful, generally or relative to our competitors, in timely implementing new technology into our systems, or doing so in a cost-effective manner. During the implementation of any such new technology into our operations, we may experience system interruptions and failures during such implementation. Furthermore, there can be no assurances that we will recognize, in a timely manner or at all, the benefits that we may expect as a result of implementing new technology into our operations. As a result, our business and operations may suffer, and there may be adverse effects on the value of the Company's Class A Ordinary Common Stock.

***We or our suppliers may not be able to procure or repair hardware that is required in our operations.***

Geo-political events in recent times have caused multiple supply chain disruptions for companies globally. Our business relies on certain hardware such as the compute and storage and ancillary equipment, equipment related to data center and power infrastructure, and other digital infrastructure technologies. If we are unable to procure such equipment, or replacement parts (at commercial prices or at all), or they are delayed, our operations may be adversely affected which would likely have a material adverse effect on our business, financial condition, results of operations and prospects. If the manufacturers of such hardware are unable to obtain materials or components themselves, they may experience manufacturing delays or have to cease manufacturing altogether. Supply chain disruptions may also occur from time to time due to a range of factors beyond our control, including, but not limited to, increased costs of labor, freight costs and raw material prices along with a shortage of qualified workers.

There are a small number of major suppliers of GPUs and the equipment we require globally, and manufacturing related to our business is concentrated in a limited number of countries. If we were unable to source compute, storage, and ancillary equipment from those suppliers (for example due to overwhelming global demand for servers with appropriate GPUs) at a commercial price, or at all, this would have a materially adverse impact on our business, financial condition, results of operations and prospects. Even if the suppliers have agreed to supply us with equipment, they may fail to supply the equipment due to their inability to manufacture a sufficient amount of the required equipment due to a shortage of components or resources such as semiconductors, a default, insolvency, a change in control, or change of laws (including export/import restrictions, quotas or tariffs).

The trade policies of the U.S., on one hand, and foreign countries on the other hand, are dynamic at the moment, and trade policies such as export/import restrictions, quotas, or tariffs, changing with either of these countries, or others, may reduce the ability of our suppliers to supply us with the equipment we need, or create a shortage or lack of components necessary for their manufacture.

Uncertainties due to evolving laws and regulations could also impede the ability of a foreign-based company, to obtain or maintain permits or licenses required to conduct business in various markets. Changes in any of these policies, laws and regulations, or the interpretations thereof, as they relate to the digital infrastructure hardware suppliers, could have a negative impact on our business.

Additionally, if our electricity suppliers are negatively affected by the international supply chain issues they may not be able to maintain or grow their facilities, and may breach their commitments to supply us or our colocation data center providers with the contracted power, or we may be unable to source extra power in the future to enable our growth. This would likely have a material adverse effect on our business, financial condition, results of operations and prospects.

Such supply chain disruptions have the potential to cause material impacts to our operating performance and financial position if the delivery of equipment for our facilities is delayed.

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***Supply chain and logistics issues for us, our contractors or our suppliers may delay our expansion plans or increase the cost of constructing our infrastructure.***

The equipment used in our operations is generally manufactured by third parties using a large amount of commodity inputs (for example, steel, copper, aluminum). Many manufacturing businesses globally are currently experiencing supply chain issues and increased costs with respect to such commodities and other materials and labor used in their production processes, which is due to a complex array of factors including increased demand which can occur from time to time. Procurement from suppliers which manufacture equipment outside of North America is also exposed to additional risks such as regulatory changes (for example, a tariff or ban on equipment imported or exported from certain jurisdictions) and global freight disruptions. Additionally, shortages in global semiconductor chip supply may impact procurement timelines for equipment. Such issues may cause delays in the delivery of, or increases in the cost of, the equipment used in our operations, which could materially impact our operating results and may delay our expansion plans.

In addition, public health crises, including an outbreak of an infectious disease (such as COVID-19), terrorist acts, and political or military conflict, such as the conflict in Ukraine, have increased the risks and costs of doing business abroad. Many of the manufacturers of our equipment are located outside of the jurisdictions in which we have facilities and sites, necessitating international shipping to enable us to incorporate the equipment into our facilities. Political and economic instability have caused many businesses to experience logistics issues in the past resulting in delayed deliveries of equipment, which could occur again in the future. Supply chain disruptions may also occur from time to time due to a range of factors beyond our control, including, but not limited to, climate change, seasonal and unseasonal weather events, shipping constraints (for example, blocked shipping canals or closure of shipyards), increased costs of labor, inflationary pressure, freight costs, industrial disputes, political or military blockades and raw material prices along with a shortage of qualified workers. Such supply chain disruptions can potentially cause material impacts to our operating performance and financial position if delivery of equipment for our facilities is delayed.

***Any long-term outage or limitation of the internet and network connections at our sites could materially impact our operations and financial performance.***

A secure, reliable and fast internet connection is required for our customers to effectively interact with our compute and storage servers. Any extended downtime, bandwidth limitations or other constraints may reduce our ability to generate income, including reputational risk for our business. We may not have backup network connections at our operations, and any backup connections may not be sufficient to support all of our, or our customers, needs in an affected location for the duration of the outage, limitations or constraints to the primary network connection. The effects of any such events could have a material adverse effect on our operating results and financial condition.

Moreover, network outages or disruptions can lead to loss of connectivity to critical network services and applications necessary for our operations. This includes potential impacts on remote monitoring and management tools, which are essential for maintaining optimal performance and responding to issues in real-time. Any delay in identifying and resolving problems can lead to prolonged downtime and further financial losses.

Furthermore, the reliability of our network connections is crucial for maintaining the security of our operations. Interruptions or limitations in connectivity can expose us to increased risk of cyberattacks or unauthorized access, as certain security measures may be compromised during periods of reduced connectivity. In the event of a network outage or limitations in connectivity, our ability to maintain regular business operations could be severely impacted, potentially leading to decreased revenue, increased operational costs, and damage to our reputation. The reliability of our internet connections could also negatively affect our customers who rely on our high performance computing and cloud services and the reliability of such solutions, leading to potential loss of business and long-term financial repercussions. Moreover, network outages, or the perception that our cloud platform may be exposed to the risk of network outages where we have limited or no backup connections at all, could adversely impact our ability to compete in the market for high performance computing and cloud services.

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***Access to reliable electricity sources at reasonable prices, developed land and co-location arrangements are critical to our growth and profitability.***

Data centers consume electricity primarily to power compute and storage servers and cooling equipment, therefore electricity costs are an important factor affecting our profitability and viability. If we are unable to source and enter into agreements for the supply and purchase of electricity, or if we are unable to continue to receive the electricity supplies we have already secured (for example we are unable to re-contract an expiring arrangement), this will reduce our capacity to conduct and grow the number of compute and storage servers we can operate, and therefore the amount of revenue we can generate.

Certain economic, environmental, and regulatory events or changes beyond our control, including acts of God such as natural disasters, climate change, wars, sabotage, epidemics, riots, loss or malfunctions of utilities, labor disputes, which may be transitory or chronic, could occur to restrict our access to electricity, or drive up the costs of electricity to a point that some or all of our planned, future or existing operations are uncommercial, which may lead to us being unable to grow our operations, or reducing, suspending or ceasing our data processing operations. The price of electricity available in the market more generally is dependent on numerous factors such as the types of generation, regulatory environment, electricity market structure, and supply/demand balances.

Our data centers development business requires land suitable to the construction of power generation, or close to reasonably priced electricity sources. If we are unable to acquire rights to use such land, or lose the rights to land we currently occupy, this would likely mean that we would lose access to the relevant supply of electricity. A lack of access to the electricity or ability to generate electricity would significantly impact the profitability and viability of this business.

Our co-located operations, including our AI/HPC cloud platform business, require sophisticated infrastructure, land and reasonably priced electricity. If we are unable to obtain additional contracts on acceptable terms or renew current agreements for these services on acceptable rates, this would significantly impact the profitability of our business.

***We face risks related to system interruption and lack of redundancy.***

We experience occasional system interruptions and delays that make our services unavailable or slow to respond and prevent us from efficiently accepting or fulfilling orders or providing services to customers and third parties, which may reduce our net sales and the attractiveness of our products and services. Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results.

Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, operational failures (including from energy shortages), and similar events or disruptions. Any of these events could cause system interruption, delays, and loss of critical data, and could prevent us from accepting and fulfilling customer orders and providing services, which could make our product and service offerings less attractive and subject us to liability. Our systems are not fully redundant and our disaster recovery planning may not be sufficient. In addition, our insurance may not provide sufficient coverage to compensate for related losses. Any of these events could damage our reputation and be expensive to remedy.

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***Any critical failure of key electrical or data center equipment may result in material impacts to our operations and financial performance.***

Certain key pieces of electrical or data center equipment may represent single points of failure for some or all of the power capacity at our operating sites. Any failure or imminent risk of failure of such equipment may result in our inability to utilize some or all of our equipment in an affected location for the duration of time it takes to repair or remediate equipment, or procure and install replacement parts.

Due to the long-lead times required to acquire some of the equipment used in our operations, the failure of certain parts could result in lengthy outages at an affected location, and could materially impact our operations, financial results and financial condition.

***Serial defects in our GPUs and other equipment may result in failure or underperformance relative to expectations and impact our operations and financial performance.***

Our operations contain certain items of equipment that have a high concentration from one manufacturer (for example, our high performance computing hardware). Additionally, the equipment we rely on may experience defects in workmanship or performance on arrival or throughout its operational life. If such defects are widespread across equipment we use, we could suffer material outages or underperformance compared to expectations. Such circumstances could adversely affect our business, prospects, financial condition and operating results and could result in a substantial decrease in our customers choosing to use another provider and may adversely impact the competitiveness of our services. Such circumstances could adversely affect our business, prospects, financial condition and operating results.

***A loss of confidence in our security system, or a breach of our security system, may adversely affect our business.***

We will take measures to protect our self and our digital and physical assets from unauthorized access, damage or theft; however, it is possible that the security system may not prevent the improper access to, or damage or theft of our assets. A security breach could harm our reputation or result in the loss of some or all of our assets. A resulting perception that our measures do not adequately protect our assets could adversely affect our business, financial condition, results of operations and prospects.

***Cyber-security threats pose a challenge to our business and a risk of reputational damage.***

Any breach of our digital infrastructure, or potentially the digital infrastructure of trusted third parties, could result in damage to our reputation which could adversely affect our business, financial condition, results of operations and prospects.

The security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee, or otherwise, and, as a result, an unauthorized party may obtain access to our private keys and/or data. Additionally, outside parties may attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of our security system could be harmed, which could adversely affect our business, financial condition, results of operations and prospects. In the event of a security breach, we may also be forced to cease operations, or suffer a reduction in assets, the occurrence of each of which could adversely affect us.

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***Cyberattacks and security breaches of cloud services, or those impacting our third parties, could adversely impact our brand and reputation and our business, operating results, and financial condition.***

Our cloud services involve the collection, storage, processing, and transmission of confidential information, employee, service provider, and other personal data. We have built our cloud services on the premise that we maintain a secure way to secure, store, and transact in cloud services. As a result, any actual or perceived security breach of us or our third-party partners may:

● harm our reputation and brand;

● result in our cloud services being unavailable and interrupt our operations;

● result in improper disclosure of data and violations of applicable privacy and other laws;

● result in significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, and financial exposure;

● cause us to incur significant remediation costs;

● divert the attention of management from the operation of our business; and

● adversely affect our business and operating results.

Further, any actual or perceived breach or cybersecurity attack, whether or not we are directly impacted, could lead to a general loss of customer confidence in the digital infrastructure industry or in the use of technology used in our industry, which could negatively impact us, including the market perception of the effectiveness of our security measures and technology infrastructure.

An increasing number of organizations, including large merchants, businesses, technology companies, and financial institutions, as well as government institutions, have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile applications, and infrastructure.

Attacks upon systems across a variety of industries, including cloud services, are increasing in their frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including customers and partners' personal data, AI algorithms, disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our cloud services or those of our third-party service providers or partners. Certain types of cyberattacks could harm us even if our systems are left undisturbed. For example, attacks may be designed to deceive employees and service providers into releasing control of our systems to a hacker, while others may aim to introduce computer viruses or malware into our cloud services with a view to stealing confidential or proprietary data. Additionally, certain threats are designed to remain dormant or undetectable until launched against a target and we may not be able to implement adequate preventative measures.

Although we have developed systems and processes designed to protect the data we manage, prevent data loss and other security breaches, effectively respond to known and potential risks, and expect to continue to expend significant resources to bolster these protections, there can be no assurance that these security measures will provide absolute security or prevent breaches or attacks. We have experienced from time to time, and may experience in the future, breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities, or other irregularities. Unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our systems and facilities, as well as those of our customers, partners, and third-party service providers, through various means, including hacking, social engineering, phishing, and attempting to fraudulently induce individuals (including employees, service providers, and our customers) into disclosing usernames, passwords, payment card information, or other sensitive information, which may, in turn, be used to access our cloud services. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. Certain threat actors may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect. As a result, our costs and the resources we devote to protecting against these advanced threats and their consequences may continue to increase over time.

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***We may be subject to material litigation, investigations or enforcement actions by regulators and governmental authorities.***

We may become subject to certain claims, legal proceedings (including individual and class actions) and government investigations or enforcement actions, including in the ordinary course of business. Agreements we enter sometimes include indemnification provisions which can subject us to costs and damages in the event of a claim against an indemnified third party. Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming, disruptive to operations and distracting to management. If we are unable to successfully defend against such claims then we may become liable to make substantial payments to satisfy judgments, fines or penalties, or alter, delay, limit or cease some or all its business practices. We also may suffer damage to our brand and reputation.

***Global climate change and related environmental regulations may have an adverse effect on our business operations and financial position.***

Changes in climate and its effect on the environment such as changes in rainfall, weather patterns, water supplies and shortages, sea level and changing temperatures could have an adverse effect on our operations and financial performance. We operate in a variety of environments, and the potential physical effects of climate change on our operations, if any, are highly uncertain.

Extreme weather events may:

● cause damage to one or more of our co-location facilities and therefore reduce our ability to maximize the performance of the compute and storage servers;

● affect the delivery times of equipment ordered from our manufacturers and therefore impact our financial forecasts; and/or

● cause power disruptions or cuts to our facilities, reducing operating times and the performance of the compute and storage servers.

***Changes in tax law may negatively affect our business.***

Changes to federal, state, local and foreign tax laws have the ability to benefit or adversely affect our earnings and our customer costs. Significant changes to corporate tax rates could result in the impairment of deferred tax assets that are established based on existing law at the time of deferral. A number of factors may increase our future effective income tax rate, including:

● Governmental authorities increasing taxes or eliminating deductions;

● The jurisdictions in which earnings are taxed;

● The resolution of issues arising from tax audits with various tax authorities;

● Changes in the valuation of our deferred tax assets and liabilities;

● Adjustments to estimated taxes upon finalization of various tax returns;

● Changes in available tax credits;

● Changes in stock-based compensation;

● Other changes in tax laws; and/or

● The interpretation of tax laws and/or administrative practices.

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***Our operations could be negatively impacted by import tariffs and/or other government mandates.***

We operate in or provide services to capital-intensive industries in which federal trade policies could significantly impact the availability and cost of materials. Imposed and proposed tariffs by the Trump administration could significantly increase the prices and delivery lead times on equipment that is critical to us and our customers. We face competition from source providers both in the U.S. and around the world. Prolonged lead times on the delivery of equipment and further tariff increases could adversely affect our business, financial condition and results of operations.

***We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.***

We regularly maintain domestic cash deposits in Federal Deposit Insurance Corporation ("<u>FDIC</u>") insured banks that exceed the FDIC insurance limits. Bank failures, events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints. For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the FDIC. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, could adversely impact our liquidity and financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S., or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.

***Our cash balances are held at a number of financial institutions that expose us to their credit risk***

We maintain our cash and cash equivalents at financial or other intermediary institutions. The combined account balances at each institution located in the United States typically exceed FDIC insurance coverage of $250,000 per depositor. The combined account balances at each institution located in Australia typically exceed the deposit guarantee schemes of the equivalent of 250,000AUD per depositor. As a result, there is a concentration of credit risk related to amounts on deposit in excess of the deposit insurance coverage amounts. At September 30, 2025, substantially all of our cash and cash equivalent balances held at financial institutions exceeded deposit insured limits. While we did not have any direct exposure to Silicon Valley Bank, Signature Bank, or First Republic, which suffered severe liquidity losses during 2023, if other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability, and the ability of our customers, clients and vendors, to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities, may be threatened and could have a material adverse effect on our business and financial condition.

***Our results of operations may suffer if we are not able to successfully manage our exposure to foreign exchange rate risks.***

A substantial majority of our sales and cost of components are denominated in U.S. dollars. As our business grows, more of our sales and production costs may be denominated in other currencies. Where such sales or production costs are denominated in other currencies, they are converted to U.S. dollars for the purpose of calculating any sales or costs to us. Our sales may decrease as a result of any appreciation of the U.S. dollar against these other currencies.

Most of our current expenditures are incurred in U.S. dollars and many of our components come from countries that currently base their currency against the U.S. dollar. If the exchange rates change adversely or are allowed to increase, then additional U.S. dollars will be required to fund our purchases of these components.

Although we do not currently enter into currency option contracts or engage in other hedging activities, we may do so in the future. There is no assurance that we will undertake any such hedging activities or that, if we do so, they will be successful in reducing the risks associated with our exposure to foreign currency fluctuations.

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***Our international operations subjects us to international operational, financial, legal, political and public health risks which could harm our operating results.***

A substantial part of our operations, including all of our colocation sites, are outside of the United States and many of our customers and suppliers have some or all of their operations in countries other than the United States. Risks associated with conducting business outside of the United States include:

● compliance burdens and costs associated with a wide variety of foreign laws and regulations, particularly labor and environmental, that govern our operations in those countries;

● legal uncertainties regarding foreign taxes, tariffs, border taxes, quotas, and export controls,

● export licenses, import controls and other trade barriers;

● economic instability and high levels of inflation in certain countries where our suppliers are located and

● customers, particularly in the Asia-Pacific region, causing delays or reductions in orders for their products and therefore our sales;

● political or public health instability, including global pandemics, in the countries in which our suppliers operate;

● changes or volatility in currency exchange rates;

● difficulties in collecting accounts receivable and longer accounts receivable payment cycles; and

● Any of these factors could harm our own, our suppliers' and our customers' international operations and businesses and impair our and/or their ability to continue expanding into international markets.

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**<u>Risks Related to SharonAI's AI/HPC Cloud Platform Business</u>**

***If we fail to succeed in the high performance computing and cloud services market, our revenues, growth prospects, and financial condition could be materially and adversely affected.***

The future revenue growth of our digital infrastructure business, including HPC/AI cloud services, will depend largely on our ability to successfully expand our business to more customers who are requiring HPC/AI cloud services. We cannot predict how or to what extent the demand for our products in the digital infrastructure market will develop going forward. If we fail to obtain the necessary equipment or fail to effectively utilize this equipment, or if the digital infrastructure market does not develop as we currently anticipate based on the expected growth of HPC/AI, our revenues, growth prospects, and financial condition could be materially and adversely affected.

***Our high performance computing and cloud services technology and infrastructure may not operate properly or as we expect them to, which could cause us to incur fines and monetary penalties, adversely affecting our business, results of operations, and financial condition.***

The continuous development, maintenance, and operation of our high performance computing and cloud services technology and infrastructure is expensive and complex and may involve unforeseen difficulties, including material performance problems, undetected defects, or errors, particularly with new capabilities and system integrations. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our technology and systems from operating properly. If our high performance computing and cloud services do not function reliably, we may incur fines and monetary penalties, as well as regulatory orders requiring remedial, injunctive, or other corrective actions.

Regulators may limit our ability to develop or implement our high performance computing and cloud services technology and infrastructure and/or may eliminate or restrict the confidentiality of our technology, which could have a material adverse effect on our business, financial condition and results of operations.

Our future success depends on our ability to continue to develop and implement our high performance computing and cloud services technology and to maintain the confidentiality of this technology. Changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology or require that we disclose our technology to our competitors, which could impair our competitive position and result in a material adverse effect on our business, results of operations, and financial condition.

***We use certain open source technology in our business. We may face claims from open source licensors claiming ownership of, or demanding the release of, the technology and any other intellectual property that we developed using or derived from such open-source technology.***

We utilize a combination of open-source and licensed third-party technologies in the development and operation of our high performance computing and cloud services. While open-source technologies enable rapid development and cost efficiencies, they also pose potential risks, such as security vulnerabilities, lack of long-term support, and legal risks related to licensing terms. Similarly, reliance on licensed third-party technologies may expose us to risks associated with changes in licensing terms, costs, or discontinuation of the licensed products.

We will continue to use open-source technology in the future. There is a risk that open-source technology licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to offer our products. Open source licensors may also decide to change the conditions on which they make their open-source technology available for our use. Additionally, we may face claims from open-source licensors claiming ownership of, or demanding the public release or free license of, the technology and any other intellectual property that it developed using or derived from such open source technology. The terms of many open source licenses have not been interpreted by United States courts. There is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our services. These claims could result in litigation and could require that we make our technology freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant technology and product development resources, and we may not be able to complete the process successfully. Failure to adequately manage these risks could result in operational disruptions, legal liabilities, and adverse impacts on our business, results of operations, and financial condition.

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***Impact of advancements in artificial intelligence on demand for AI and HPC data centers may reduce the need for HPC and AI-specific data center infrastructure, which could have an adverse effect on our business, results of operations, and financial condition.***

The AI industry is rapidly evolving, with continuous improvements in algorithms, software efficiencies, and hardware capabilities. Emerging AI technologies, such as demonstrated by DeepSeek, may allow for complex AI operations to be executed with significantly less computing power than is currently required. This reduction in computational intensity could decrease the demand for specialized compute and HPC data center services. If AI developers are able to achieve the same or better performance outcomes with more energy-efficient, cost-effective, or less resource-intensive technologies, they may adjust their need for large-scale, high capacity data center solutions. This shift could have an adverse effect on our business, results of operations, and financial condition. We continuously monitor industry trends and invest in innovation to mitigate these risks. However, there is no assurance that we will be able to anticipate or respond effectively to such changes, which could have an adverse effect on our business, results of operations, and financial condition.

***AI technologies are constantly evolving, and any flaws in or misuse of AI, even if committed by other third parties, could have a negative impact on our business, reputation, brands, and the general acceptance of Artificial Intelligence solutions by society.***

AI technologies are still in a preliminary stage of development and are constantly evolving. As with many disruptive innovations, AI presents risks and challenges that could affect user perception and its adoption. Any flaws in or insufficiencies of AI, and any inappropriate or premature usage thereof, whether actual or perceived, and whether by us or by other third parties, may dissuade prospective customers from adopting AI solutions, and may impair the general acceptance of AI by broader society. Moreover, AI is covered extensively, and in many instances critically, by various news media across the world. There is no assurance that any of the products or services we may develop for use with AI will not be misused or applied in a way that is inconsistent with public expectations. Any misuse of our products or services, whether actual or perceived, and whether by us or by other third parties, could negatively impact our brands and reputation, and in turn our business, financial condition, and results of operation.

***Our cloud services business is subject to complex and evolving U.S. and foreign laws and regulations regarding AI, machine learning, and automated decision making.***

In recent years the use of machine learning, AI and automated decision making, has come under increased regulatory scrutiny, and governments and regulators in the United States, European Union, and other places have announced the need for greater regulation regarding the use of machine learning and AI generally. New laws, guidance, and decisions in this area may limit our high performance computing and cloud services business, or require us to make changes to our high performance computing and cloud services technology and infrastructure and our operations that may decrease our operational efficiency, result in an increase to operating costs and/or hinder our ability to improve our cloud services.

For example, certain global privacy laws regulate the use of automated decision making and may require that the existence of automated decision making be disclosed to the data subject with a meaningful explanation of the logic used in such decision making in certain circumstances, and that safeguards must be implemented to safeguard individual rights, including the right to obtain human intervention and to contest any decision. Other global privacy laws allow individuals the right to opt out of certain automated processing of personal data and create other requirements that impact automated decision-making. At the federal level, the President of the United States recently issued an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which charges multiple agencies, including The National Institute of Standards and Technology, with producing guidelines in connection with the development and use of AI. In the European Union, there was political agreement on the EU AI Act, which establishes a comprehensive, risk-based governance framework for AI in the EU market. The EU AI Act entered in force on August 1, 2024, and the majority of the substantive requirements will apply two years later (beginning 2026). The EU AI Act will apply to companies that develop, use and/or provide AI in the European Union and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI and foundation models, and proposes fines for breach of up to 7% of worldwide annual turnover (revenue). Additionally, in September of 2022, the European Commission proposed two Directives seeking to establish a harmonized civil liability regime for AI in the European Union, in order to facilitate civil claims in respect of harm caused by AI and to include AI-enabled products within the scope of the European Union's existing strict liability regime. Once fully applicable, the EU AI Act will have a material impact on the way AI is regulated in the European Union, and together with developing guidance and/or decisions in this area, may affect our use of AI and our ability to provide, improve, or commercialize our cloud services, and could require additional compliance measures and changes to our operations and processes.

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Moreover, the intellectual property ownership and license rights, including copyright, surrounding AI technologies has not been fully addressed by courts or laws or regulations, and the use or adoption of AI technologies into our offerings may result in exposure to claims of copyright infringement or other intellectual property misappropriation. As the legal and regulatory framework for AI and automated decision making evolves, we may not always be able to anticipate how to respond to these laws or regulations, and compliance may adversely impact our operations and involve significant expenditure and resources. Any failure by us to comply may result in significant liability, potential increases in civil claims against us, negative publicity, an erosion of trust, and/or increased regulation and could materially adversely affect our business, results of operations, and financial condition.

***Regulatory restrictions that target AI, including, but not limited to, export restrictions may have a material adverse impact on our intended operations.***

The increasing focus on the strategic importance of AI technologies has already resulted in regulatory restrictions that target products and services capable of enabling or facilitating AI, and may in the future result in additional restrictions impacting some or all of our service offerings. Such restrictions could include additional unilateral or multilateral export controls on certain products or technology, including, but not limited to, cloud service technologies. As geopolitical tensions have increased, semiconductors associated with AI, including GPUs and associated products, are increasingly the focus of export control restrictions proposed by stakeholders in the U.S. and its allies, and it is likely that additional unilateral or multilateral controls will be adopted. Such controls may be very broad in scope and application, prohibit us from exporting our services to any or all customers in one or more markets or could impose other conditions that limit our ability to serve demand abroad and could negatively and materially impact our business, revenue, and financial results. Export controls targeting GPUs and semiconductors associated with AI, which are increasingly likely, would restrict our ability to export our technology, services even though competitors may not be subject to similar restrictions, creating a competitive disadvantage for us and negatively impacting our business and financial results. Increasing use of economic sanctions may also impact demand for our services, negatively impacting our business and financial results. Additional unilateral or multilateral controls are also likely to include deemed export control limitations that negatively impact the ability of our research and development teams to execute our roadmap or other objectives in a timely manner. Additional export restrictions may not only impact our ability to serve overseas markets, but also provoke responses from foreign governments, including China, that negatively impact our ability to provide our services to customers in all markets worldwide, which could also substantially reduce our revenue.

Management of the requirements of the supply chain is complicated and time consuming. Our results and competitive position may be harmed if we are restricted in offering our services, if customers purchase services from competitors, if customers develop their own cloud services, if we are unable to provide contractual warranty or other extended service obligations.

***Issues in the development and use of AI may result in reputational or competitive harm or liability.***

We continue to incorporate AI into our cloud services and infrastructure, and we are also providing computing power for our customers to use in solutions that they build. We are providing supporting/computing power to clients, including our strategic partners who develop AI systems. We expect this integration of AI into our offerings and our business in general to grow. AI presents risks and challenges that could affect its adoption, and therefore our business. AI algorithms or training methodologies may be flawed. Datasets may be overbroad, insufficient, or contain biased information. Content generated by AI systems may be offensive, illegal, or otherwise harmful. Ineffective or inadequate AI development or deployment practices by others could result in incidents that impair the acceptance of AI solutions or cause harm to individuals, customers, or society, or result in our services not working as intended. Human review of certain outputs may be required. As a result of these and other challenges associated with innovative technologies, our implementation of cloud services could subject us to competitive harm, regulatory action, legal liability, including under new proposed legislation regulating AI in jurisdictions, new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm. Some AI scenarios present ethical issues or may have broad impacts on society. If we provide supporting/cloud services that have unintended consequences, unintended usage or customization by our customers and partners, or are controversial because of their impact on human rights, privacy, employment, or other social, economic, or political issues, we may experience brand or reputational harm, adversely affecting our business and consolidated financial statements.

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**<u>Risks Related to SharonAI's Development of Data Center Assets</u>**

***We are at an early stage of development of our business, currently have limited sources of revenue, and may not become profitable in the future.***

We are subject to the risks and uncertainties of a new business and have not generated any revenues from this business segment to date.

As we grow and develop as a business, we will attempt to reduce the impact of variability on our revenue and colocation costs by entering into long-term contracts at each site. Given that we have only a limited history of developing data center assets, the long-term profitability of these contracts cannot be presently determined. If we are unable to successfully implement our development plan or to increase our generation of revenue, we will not remain profitable in the future.

We intend to continue scaling our company to increase our customer base and implement initiatives, including new business lines and global expansion. These efforts may prove more expensive than we currently anticipate and may not result in increased revenue or profitability in the short term or at all. We will also incur increased compliance costs associated with growth, expanding our customer base, and being a public company. Our efforts to grow our business may be costlier than we expect, or the revenue growth rate may be slower than we expect. There can be no assurance that we will operate profitably in the future.

***We may be unable to access sufficient additional capital needed to grow our business.***

We expect to need to raise substantial additional capital to expand our data center operations, pursue our growth strategies and to respond to competitive pressures or unanticipated working capital requirements. However, market conditions may limit our ability to raise funds in a timely manner, in sufficient quantities, or on terms acceptable to us, if at all, which could impair our growth and adversely affect our existing operations. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our ordinary shares could decline. Furthermore, if we engage in debt financing, the holders of debt would have priority over the holders of our ordinary shares on order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness, pay dividends to our shareholders, or take other actions. We may also be required to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders. If we are unable to raise the additional capital needed to execute our future strategic growth initiatives, we may be less competitive in our industry and the results of these provisions could make investing in the Company's Class A Ordinary Common Stock less attractive to investors and could limit our ability to obtain adequate financing on a timely basis or on acceptable terms in the future, which could have significant harmful effects on our financial condition and business and could include substantial limitations on our ability to continue to conduct operations.

***We are subject to a highly evolving regulatory landscape and any adverse changes to or our failure to comply with any laws or regulations could adversely affect our business, prospects or operations.***

Our customers' businesses are subject to extensive laws, rules, regulations, policies and legal and regulatory guidance, including those governing securities, commodities, exchange and transfer, data governance, data protection, cybersecurity and tax. Many of these legal and regulatory regimes were adopted prior to the advent of the Internet, mobile technologies, AI and related technologies, cloud services and data center operations. As a result, they do not contemplate or address unique issues associated with AI, are subject to significant uncertainty, and vary widely across the U.S. and Australia. These legal and regulatory regimes, including the laws, rules and regulations thereunder, evolve frequently and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another.

Moreover, the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of AI, requires us to exercise our judgment as to whether certain laws, rules and regulations apply to us or our customers, and it is possible that governmental bodies and regulators may disagree with our or our customers' conclusions. To the extent we or our customers have not complied with such laws, rules and regulations, we could be subject to significant fines and other regulatory consequences, which could adversely affect our business, prospects or financial condition.

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Ongoing and future regulatory actions could effectively prevent our customers' and our ongoing or planned co-hosting operations, limiting or preventing future revenue generation by us or rendering our operations obsolete. Such actions could severely impact our ability to continue to operate and our ability to continue as a going concern or to pursue our strategy at all, which would have a material adverse effect on our business, prospects or financial condition.

***Our business depends upon the demand for data centers.***

We intend to be in the business of owning, acquiring, developing and operating data centers and assets used in data centers. A reduction in the demand for data center assets, power or connectivity would have a greater adverse effect on our business and financial condition than if our assets were devoted to a less specialized use. Our substantial development activities make us particularly susceptible to general economic slowdowns, as well as adverse developments in the data center, Internet, AI and data communications and broader technology industries. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers. Any such slowdown or adverse development could lead to reduced corporate IT spending or reduced demand for data center assets. Changes in industry practice or in technology could reduce demand for the physical data center assets we provide. In addition, our customers may choose to develop new data centers or expand their own existing data centers or consolidate into data centers that we do not own or operate, which could reduce demand for our newly developed data centers or result in the loss of one or more key customers. If any of our potential key customers were to do so, it could result in a loss of business to us or put pressure on our pricing. Mergers or consolidations of technology companies could reduce further the number of our potential customers and make us more dependent on a more limited number of potential customers. If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our data centers in the future. Our financial condition, results of operations, cash flow, cash available for distribution and ability to satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.

***Our business is expected to have significant customer concentration.***

We expect to generate a large portion of our revenue from a small number of customers. There are inherent risks whenever a large percentage of total revenue is concentrated with a limited number of customers. If we were to lose one or more of our potential customers, our operating results could be materially adversely affected.

We expect that the limited number of our potential customers will account for a high percentage of our revenue for the foreseeable future. In addition, demand for our services generated by these customers may fluctuate significantly from quarter to quarter. The expected concentration of our customer base could increase risks related to the financial condition of our customers, and the deterioration in financial condition of a single customer or the failure of a single customer to perform its obligations could have a material adverse effect on our results of operations and cash flow. In the event that any of our potential customers experience a decline in their equipment usage for any reason, or decide to discontinue the use of our facilities, we may be compelled to lower our prices or risk losing a significant customer. Such developments could adversely affect our profit margins and financial position, leading to a negative impact on our revenue and operational results.

***Failure to attract, grow and retain a diverse and balanced customer base, could adversely affect our business and operating results.***

Our ability to attract, grow and retain a diverse and balanced customer base, consisting of enterprises, cloud service providers, network service providers, and digital economy customers, may affect our ability to grow our business. Our ability to attract customers to our data centers will depend on a variety of factors, including our product offerings, the presence of carriers, the overall mix of customers, the presence of key customers attracting business through ecosystems, the data center's operating reliability and security and our ability to effectively market our product offerings. Our inability to develop, provide or effectively execute any of these factors may adversely affect the development, growth and retention of a diverse and balanced customer base and adversely affect our business, financial condition and results of operations.

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***Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect our business.***

Our ability to retain, increase, and engage our customer base and to increase our revenue depends heavily on our ability to continue to evolve our existing services and to create successful new services, both independently and in conjunction with developers or other third parties. We may introduce significant changes to our existing services or acquire or introduce new and unproven services, including using technologies with which we have little or no prior development or operating experience. These efforts, including the introduction of new services or changes to existing services, may result in new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications that could adversely affect our business, reputation, or financial results. If our new services fail to engage users or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, and our business may be adversely affected.

***We intend to depend upon third-party suppliers for power, and we are vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market.***

We intend to rely on third parties to provide power to our data centers, and we cannot ensure that these third parties will deliver such power in adequate quantities or on a consistent basis. We may also be reliant on third parties to deliver additional power capacity to support the growth of our business. If the amount of power available to us is inadequate to support customer requirements, we may be unable to satisfy our obligations to our customers or grow our business. In addition, our data centers may be susceptible to power shortages and planned or unplanned power outages caused by these shortages. Power outages may last beyond our backup and alternative power arrangements, which would harm our customers and our business. Any loss of services or equipment damage could adversely affect both our ability to generate revenues and our operating results, harm our reputation and potentially lead to customer disputes or litigation.

In addition, we may be subject to risks and unanticipated costs associated with obtaining power from various utility companies. Utilities that serve our data centers may be dependent on, and sensitive to price increases for, a particular type of fuel, including hydroelectric. In addition, the total cost of delivered electricity could increase as a result of: regulations intended to regulate carbon emissions and other pollutants, ratepayer surcharges related to recovering the cost of extreme weather events and natural disasters, geopolitical conflicts, military conflicts, grid modernization charges, as well as other charges borne by ratepayers. Increases in the cost of power at any of our data centers could put those locations at a competitive disadvantage relative to data centers that are supplied power at a lower price.

***We will depend on third parties to provide network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely affect our operating results and cash flow.***

We are not a telecommunications carrier. We believe that the availability of carrier capacity will directly affect our ability to achieve our projected results. Any carrier may elect not to offer its services within our data centers. Any carrier that has decided to provide network connectivity to our data centers may not continue to do so for any period of time. Further, some carriers are experiencing business difficulties or have announced consolidations. As a result, some carriers may be forced to downsize or terminate connectivity within our data centers, which could have an adverse effect on the business of our customers and, in turn, our own operating results.

Our data centers may require construction and operation of a sophisticated redundant fiber network. The construction required to connect multiple carrier facilities to data centers is complex and involves factors outside of our control, including regulatory requirements and the availability of construction resources. We intend to obtain the right to use network resources owned by other companies, in order to attract telecommunications carriers and customers to our portfolio. If the establishment of highly diverse network connectivity to our data centers does not occur, is materially delayed or is discontinued, or is subject to failure, our operating results and cash flow may be materially adversely affected. Additionally, any hardware or fiber failures on this network may result in significant loss of connectivity to our data centers. This could negatively affect our ability to attract new customers or retain existing customers, which could have an adverse effect on our business, financial condition and results of operations.

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***Any delays or unexpected costs in the development of any new properties acquired for development may delay and harm our growth prospects, future operating results and financial condition.***

We intend to build out additional data centers in the future based on signed letters of intent at significant cost. Our successful development of this and future projects is subject to many risks, including those associated with:

● delays in construction, or changes to the plans or specifications;

● budget overruns, increased prices for raw materials or building supplies, or lack of availability and/or increased costs for specialized data center components, including long lead time items such as generators;

● construction site accidents and other casualties;

● financing availability, including our ability to obtain construction financing and permanent financing, or increases in interest rates or credit spreads;

● labor availability, costs, disputes and work stoppages with contractors, subcontractors or others that are constructing the project;

● failure of contractors to perform on a timely basis or at all, or other misconduct on the part of contractors

● access to sufficient power and related costs of providing such power to our customers;

● environmental issues;

● supply chain constraints;

● fire, flooding, earthquakes and other natural disasters;

● pandemics;

● geological, construction, excavation and equipment problems; and

● delays or denials of entitlements or permits, including zoning and related permits, or other delays resulting from requirements of public agencies and utility companies.

In addition, development activities, regardless of whether they are ultimately successful, also typically require a substantial portion of our management's time and attention. This may distract our management from focusing on other operational activities of our business. If we are unable to complete development projects successfully and on a timely basis, our business may be adversely affected.

***If we incorrectly estimate our hosting capacity requirements and related capital expenditures, our results of operations could be adversely affected.***

We will be continuously evaluating our capacity requirements in order to effectively manage our capital expenditures and operating results. However, we may be unable to accurately project our future capacity needs or sufficiently allocate resources to address such needs. If we underestimate these requirements, we may not be able to provide sufficient service to existing customers or may be required to limit new customer acquisition, both of which may materially and adversely impair our results of operations.

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***Certain natural disasters or other external events, including climate change or mechanical failures, could harm our business, financial condition, results of operations, cash flows, and prospects.***

We may also experience disruptions due to mechanical failure, human error, physical or electronic security breaches, war, terrorism, fire, earthquake, pandemics, hurricane, flood and other natural disasters, sabotage and vandalism. Our systems may be susceptible to damage, interference, or interruption from modifications or upgrades, power loss, telecommunications failures, computer viruses, ransomware attacks, computer denial of service attacks, phishing schemes, or other attempts to harm or access our systems. Such disruptions could materially and adversely affect our business and our financial condition, operating results, cash flows, and prospects.

In addition, there continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty for our business. With the energy demand of our business, we may become a target for future environmental and energy regulation. New legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Further, any future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.

Given the political significance and uncertainty around the impact of climate change and how it should be addressed, and energy disclosure and use regulations, we cannot predict how legislation and regulation will affect our financial condition and results of operations in the future in the U.S. and Australia. Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change or energy use by us or other companies in our industry could harm our reputation. Any of the foregoing could result in a material adverse effect on our business and financial condition.

***Should we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power.***

As our future customers increase their power footprint in our data centers over time, the corresponding reduction in available power could limit our ability to increase occupancy rates or network density within our existing or future data centers. Furthermore, our aggregate maximum contractual obligation to provide power and cooling to our customers may exceed the physical capacity at such data centers if customers were to quickly increase their demand for power and cooling. Should his occur and we are not able to increase the available power and/or cooling or move the customer to another location within our data centers with sufficient power and cooling to meet such demand, we could lose the customer as well as be exposed to liability under our customer agreements. In addition, our power and cooling systems will be difficult and expensive to upgrade. Accordingly, we may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs that we may not be able to pass on to our customers. Any such material loss of customers, liability or additional costs could adversely affect our business, financial condition and results of operations.

***Increased scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance ("<u>ESG</u>") practices and the impacts of climate change may result in additional costs or risks.***

Companies across many industries are facing increasing scrutiny related to their ESG practices. Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments. Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, has resulted and may continue to result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away from our operations and towards responding to such scrutiny and reassuring our employees.

We intend to embrace the sustainability of our data centers and will look to have our data centers running on carbon-free renewable energy wherever possible. The SEC has proposed rule changes that would require companies to include certain climate-related disclosures such as climate-related risks that are reasonably likely to have a material impact on business, results of operations, or financial conditions. Should such proposed rules be adopted, increased public scrutiny of our business may affect our operations, competitive position, and financial condition.

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In addition, the physical risks of climate change may impact the availability and cost of materials and natural resources, sources and supply of energy, could increase our insurance and other operating costs, including, potentially, to repair damage incurred as a result of extreme weather events or to renovate or retrofit facilities to better withstand extreme weather events. If environmental laws or regulations or industry standards in the U.S. or Australia are either changed or adopted and impose significant operational restrictions and compliance requirements on our operations, or if our operations are disrupted due to the physical impacts of climate change, our business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted.

***Cancellation or withdrawal of required operating and other permits and license.***

We must obtain various permits, approvals and/or licenses in order to construct and operate our planned data center facilities. If such permits, approvals and/or licenses are not granted, or if they are lost, suspended, terminated or revoked, it may result in delays in construction of our facilities, require us to halt all or part of our operations, or cause us to be exposed to financial or other penalties at the affected locations. Such circumstances could have a material adverse effect on our business, financial condition and operating results.

***Our operations are subject to environmental laws and regulations that may increase costs of operations, impact or limit business plans, or expose us to environmental liabilities.***

As we develop data center assets, we may become subject to environmental laws and regulations affecting many aspects of our operations, including those affecting the development of data center assets. These laws and regulations can increase capital, operating and other costs; cause delays as a result of litigation and administrative proceedings; and create environmental compliance, remediation, containment, monitoring and reporting obligations for construction materials facilities. Environmental laws and regulations can also require us to install pollution control equipment at facilities we may someday operate, and correct environmental hazards, including payment of all or part of the cost to remediate sites where activities of other parties, caused environmental contamination. These laws and regulations generally require us to obtain and comply with a variety of environmental licenses, permits, inspections and other approvals. Although we intend to strive to comply with all applicable environmental laws and regulations, public and private entities and private individuals may interpret our legal or regulatory requirements differently and seek injunctive relief or other remedies against us. We cannot predict the outcome, financial or operational, of any such litigation or administrative proceedings.

Existing environmental laws and regulations may be revised and new laws and regulations seeking to protect the environment may be adopted or become applicable to us. These laws and regulations could require us to limit the use or output of certain facilities; prohibit or restrict new or existing services; retire and replace certain facilities; install pollution controls; remediate environmental impacts; remove or reduce environmental hazards; or forego or limit the development of resources and certain facilities where it operates. Revised or new laws and regulations that increase compliance and disclosure costs and/or restrict operations could adversely affect our results of operations, financial conditions and cash flows.

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**<u>Risks Relating to Laws, Regulatory Frameworks, and Legal Action affecting SharonAI</u>**

***Our business and financial condition may be materially adversely affected by changes to and/or increased regulation of energy sources.***

***HPC/AI and data center activities are energy-intensive, which may restrict the geographic locations of our activities to locations with renewable sources of power. Government regulators may potentially restrict the ability of electricity suppliers to provide electricity to HPC and data center operators, including us.***

HPC/AI cloud services and data centers require significant amounts of electrical power, and electricity costs are expected to continue to account for a material portion of our operating costs. There has been a substantial increase in the demand for and cost of electricity for computing purposes, and this has had varying levels of impact on local electricity supply. The availability and cost of electricity will impact the geographic locations in which we choose to locate our compute and storage servers and our data center development projects, and the availability and cost of electricity in the geographic locations in which our equipment facilities are located will impact our business, cash flows, results of operations and financial condition.

Should our operations require more electricity than can be supplied or generated in the areas where our compute and storage servers and our data center development project are located or should the electrical transmission grid and distribution or generation systems be unable to provide the regular supply of electricity required, we may have to limit or suspend activities or reduce the speed of our proposed expansion, either voluntarily or as a result of either quotas or restrictions imposed by energy companies or governments, or increased prices for certain users (such as us). If we are unable to procure or generate electricity at a suitable price, as applicable, we may have to shut down our operations in that particular jurisdiction either temporarily or permanently. Additionally, our HPC/AI cloud services equipment and systems and our data center development projects would be materially adversely affected by power outages including outages affecting power generation at our data center development sites, as applicable. Given the power requirement, it may not be feasible to run HPC/AI cloud services on back-up power generators in the event of a government restriction on electricity or a power outage, which may be caused by climate change, weather, acts of God, wild fires, pandemics, falling trees, falling distribution poles and transmission towers, transmission and distribution cable cuts, failure of power generation at our planned data center development site, including failures in fuel supply, other natural and man-made disasters, other force majeure events in the electricity market and/or the negligence or malfeasance of others. If we are unable to receive adequate power supply and we are forced to reduce our operations due to the lack of availability or cost of electrical power, our business could experience materially adverse impacts.

***We are subject to governmental regulation and other legal obligations related to data privacy, data protection and information security. If we are unable to comply with these, we may be subject to governmental enforcement actions, litigation, fines and penalties or adverse publicity.***

We collect and process data, including personal, financial and confidential information about individuals, including our employees and business partners; however, not of any customers or other third parties. The collection, use and processing of such data about individuals are governed by data privacy laws and regulations enacted in the U.S. (federal and state), and other jurisdictions around the world. These data privacy laws and regulations are complex, continue to evolve, and on occasion may be inconsistent between jurisdictions leading to uncertainty in interpreting such laws and it is possible that these laws, regulations and requirements may be interpreted and applied in a manner that is inconsistent with our existing information processing practices, and many of these laws are significantly litigated and/or subject to regulatory enforcement. The implication of this includes that various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning data privacy, data retention, data transfer, and data protection. Such laws may continue to restrict or dictate how we collect, maintain, combine and disseminate information and could have a material adverse effect on our business, results of operations, financial condition and prospects.

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In the United States, there are numerous federal and state laws and regulations that could apply to our operations or the operations of our partners, including data breach notification laws, financial information and other data privacy laws, and consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of personal information.

***Failure to comply with anti-corruption and anti-money laundering laws, including the Foreign Corrupt Practices Act (the "<u>FCPA</u>") and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.***

We operate an international business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We are subject to the FCPA, and other applicable anti-corruption and anti-money laundering laws in certain countries in which we conduct activities. The FCPA prohibits providing, offering, promising, or authorizing, directly or indirectly, anything of value to government officials, political parties, or political candidates for the purpose of obtaining or retaining business or securing any improper business advantage.

In many foreign countries, including countries in which we may conduct business, it may be a local custom that businesses engage in practices that are prohibited by the FCPA, or other applicable laws and regulations. We face significant risks if we or any of our directors, officers, employees, contractors, agents or other partners or representatives fail to comply with these laws and governmental authorities in the United States and elsewhere could seek to impose substantial civil and/or criminal fines and penalties which could have a material adverse effect on our business, reputation, operating results, prospects and financial condition.

Any violation of applicable anti-corruption laws, anti-money laundering laws or the FCPA could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on our reputation, business, operating results, prospects and financial condition. In addition, responding to any enforcement action or internal investigation related to alleged misconduct may result in a significant diversion of management's attention and resources and significant defense costs and other professional fees.

***Regulatory restrictions that target AI, including, but not limited to, export restrictions may have a material adverse impact on our intended operations.***

The increasing focus on the strategic importance of AI technologies has already resulted in regulatory restrictions that target products and services capable of enabling or facilitating AI, and may in the future result in additional restrictions impacting some or all of our service offerings. Such restrictions could include additional unilateral or multilateral export controls on certain products or technology, including, but not limited to, AI technologies. As geopolitical tensions have increased, semiconductors associated with AI, including GPUs and associated products, are increasingly the focus of export control restrictions proposed by stakeholders in the U.S. and its allies, and it is likely that additional unilateral or multilateral controls will be adopted. Such controls may be very broad in scope and application, prohibit us from exporting our services to any or all customers in one or more markets or could impose other conditions that limit our ability to serve demand abroad and could negatively and materially impact our business, revenue, and financial results. Export controls targeting GPUs and semiconductors associated with AI, which are increasingly likely, would restrict our ability to export our technology, services even though competitors may not be subject to similar restrictions, creating a competitive disadvantage for us and negatively impacting our business and financial results. Increasing use of economic sanctions may also impact demand for our services, negatively impacting our business and financial results. Additional unilateral or multilateral controls are also likely to include deemed export control limitations that negatively impact the ability of our research and development teams to execute our roadmap or other objectives in a timely manner. Additional export restrictions may not only impact our ability to serve overseas markets, but also provoke responses from foreign governments, including China, that negatively impact our ability to provide our services to customers in all markets worldwide, which could also substantially reduce our revenue.

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During the third quarter of fiscal year 2023, the U.S. government announced new export restrictions and export licensing requirements targeting China's semiconductor and supercomputing industries. These restrictions impact exports of certain chips, as well as software, hardware, equipment, and technology used to develop, produce, and manufacture certain chips, to China (including Hong Kong and Macau) and Russia. The new license requirements also apply to any future NVIDIA integrated circuit achieving certain peak performance and chip-to-chip I/O performance thresholds, as well as any system or board that includes those circuits. There are also now licensing requirements to export a wide array of products, including networking products, destined for certain end users and for certain end uses in China.

Management of these new license and other requirements is complicated and time consuming. Our results and competitive position may be harmed if we are restricted in offering our services, if customers purchase services from competitors, if customers develop their own internal solution, if we are unable to provide contractual warranty or other extended service obligations, if the U.S. government does not grant licenses in a timely manner or denies licenses to significant customers, or if we incur significant transition costs. Even if the U.S. government grants any requested licenses, the licenses may be temporary or impose burdensome conditions that we cannot or choose not to fulfill. The new requirements may benefit certain of our competitors, as the licensing process will make our pre-sale and post-sale technical support efforts more cumbersome and less certain, and encourage customers to pursue alternatives to our services.

***Issues in the development and use of AI may result in reputational or competitive harm or liability****.*

We are beginning to build AI into our infrastructure services, and we are also providing computing power for AI available for our customers to use in solutions that they build. We are providing supporting/computing power to clients, including our strategic partners who develop AI systems. We expect this integration of AI into our offerings and our business in general to grow. AI presents risks and challenges that could affect its adoption, and therefore our business. AI algorithms or training methodologies may be flawed. Datasets may be overbroad, insufficient, or contain biased information. Content generated by AI systems may be offensive, illegal, or otherwise harmful. Ineffective or inadequate AI development or deployment practices by us or others could result in incidents that impair the acceptance of AI solutions or cause harm to individuals, customers, or society, or result in our products and services not working as intended. Human review of certain outputs may be required. As a result of these and other challenges associated with innovative technologies, our implementation of AI systems could subject us to competitive harm, regulatory action, legal liability, including under new proposed legislation regulating AI in jurisdictions, new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm. Some AI scenarios present ethical issues or may have broad impacts on society. If we provide supporting/computing AI services that have unintended consequences, unintended usage or customization by our customers and partners, or are controversial because of their impact on human rights, privacy, employment, or other social, economic, or political issues, we may experience brand or reputational harm, adversely affecting our business and consolidated financial statements.

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**<u>Risks Related to Ownership of the Company's Securities</u>**

***The price of the Company's Class A Ordinary Common Stock may be volatile.***

If a public trading market does develop for the Company's Class A Ordinary Common Stock, its market price is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

● the concentration of the ownership of our shares by a limited number of affiliated stockholders may limit interest in our securities;

● limited "public float" with a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for the Company's Class A Ordinary Common Stock;

● additions or departures of key personnel;

● loss of a strategic relationship;

● variations in operating results from the expectations of securities analysts or investors;

● announcements of new products or services by us or our competitors;

● reductions in the market share of our products;

● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

● investor perception of our industry or prospects;

● insider selling or buying;

● investors entering into short sale contracts;

● regulatory developments affecting our industry;

● changes in our industry;

● competitive pricing pressures;

● our ability to obtain working capital financing;

● sales of the Company's Class A Ordinary Common Stock;

● our ability to execute our business plan;

● operating results that fall below expectations;

● revisions in securities analysts' estimates or reductions in security analysts' coverage; and

● economic and other external factors.

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Many of these factors are beyond our control and may decrease the market price of the Company's Class A Ordinary Common Stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for the Company's Class A Ordinary Common Stock will be at any time, including as to whether the Company's Class A Ordinary Common Stock will sustain current market prices, or as to what effect that the sale of shares or the availability of the Company's Class A Ordinary Common Stock for sale at any time will have on the prevailing market price.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company's Class A Ordinary Common Stock.

***We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.***

Our management will have broad discretion in the application of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our securities. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline.

***There is currently a limited U.S. public market for our Class A Ordinary Common Stock, the stock price of our Class A Ordinary Common Stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your Class A Ordinary Common Stock at or above the price you acquired such Class A Ordinary Common Stock.***

Since there is a limited U.S. public market for our Class A Ordinary Common Stock, the stock price of our Class A Ordinary Common Stock may be volatile or may decline regardless of our operating performance. Due to the limited U.S. public market for our Class A Ordinary Common Stock you may not be able to resell your Class A Ordinary Common Stock at or above the price you acquired such Class A Ordinary Common Stock.

Further, having a limited trading market in the United States may also impair our ability to raise capital by selling our Class A Ordinary Common Stock and may impair our ability to enter into strategic collaborations or acquire companies or products by using our Class A Ordinary Common Stock as consideration.

***The Company's Class A Ordinary Common Stock s thinly traded, and investors may be unable to sell some or all of their shares at the price they would like, or at all, and sales of large blocks of shares may depress the price of the Company's Class A Ordinary Common Stock.***

The Company's Class A Ordinary Common Stock has historically been sporadically or "thinly-traded," meaning that the number of persons interested in purchasing shares of the Company's Class A Ordinary Common Stock at prevailing prices at any given time may be relatively small or nonexistent. As a consequence, there may be periods of several days or more when trading activity in shares of the Company's Class A Ordinary Common Stock is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. This could lead to wide fluctuations in our share price. Investors may be unable to sell their common stock at or above their purchase price, which may result in substantial losses. Also, as a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our stockholders may disproportionately influence the price of shares of the Company's Class A Ordinary Common Stock in either direction. The price of shares of the Company's Class A Ordinary Common Stock could, for example, decline precipitously in the event a large number of share of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price.

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***The Company's Class A Ordinary Common Stock is considered to be a "penny stock" and, as such, the market for the Company's Class A Ordinary Common Stock may be further limited by certain SEC rules applicable to penny stocks.***

As long as the price of the Company's Class A Ordinary Common Stock remains below $5 per share or we have net tangible assets of $2,000,000 or less, our shares of common stock are likely to be subject to certain "penny stock" rules promulgated by the SEC. Those rules impose certain sales practice requirements on brokers who sell penny stock to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000). For transactions covered by the penny stock rules, the broker must make a special suitability determination for the purchaser and receive the purchaser's written consent to the transaction prior to the sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices and disclosure of the compensation to the brokerage firm and disclosure of the sales person working for the brokerage firm. These rules and regulations make it more difficult for brokers to sell our shares of the Company's Class A Ordinary Common Stock and limit the liquidity of our securities.

***The Company's Class A Ordinary Common Stock may never be listed on a major stock exchange.***

We currently do not satisfy the initial listing standards of a national or other securities exchange and cannot ensure that we will ever satisfy such listing standards or that the Company's Class A Ordinary Common Stock will be accepted for listing on any such exchange. Should we fail to satisfy the initial listing standards of such exchanges, or the Company's Class A Ordinary Common Stock is otherwise rejected for listing, the trading price of the Company's Class A Ordinary Common Stock could suffer, the trading market for the Company's Class A Ordinary Common Stock may continue to be less liquid and the price may be subject to increased volatility.

***There are limitations in connection with the availability of quotes and order information on the OTC Markets.***

Trades and quotations on the OTC Markets involve a manual process and the market information for such securities cannot be guaranteed. In addition, quote information, or even firm quotes, may not be available. The manual execution process may delay order processing and intervening price fluctuations may result in the failure of a limit order to execute or the execution of a market order at a significantly different price. Execution of trades, execution reporting and the delivery of legal trade confirmation may be delayed significantly. Consequently, one may not be able to sell shares of the Company's Class A Ordinary Common Stock at the optimum trading prices.

***There are delays in order communication on the OTC Markets.***

Electronic processing of orders is not available for securities traded on the OTC Marketplace and high order volume and communication risks may prevent or delay the execution of one's OTC Marketplace trading orders. This lack of automated order processing may affect the timeliness of order execution reporting and the availability of firm quotes for shares of the Company's Class A Ordinary Common Stock. Heavy market volume may lead to a delay in the processing of OTC Marketplace security orders for shares of the Company's Class A Ordinary Common Stock, due to the manual nature of the market. Consequently, one may not able to sell shares of the Company's Class A Ordinary Common Stock at the optimum trading prices.

***There is a risk of market fraud on the OTC Marketplace***

OTC Marketplace securities are frequent targets of fraud or market manipulation. Not only because of their generally low price, but also because the OTC Markets reporting requirements for these securities are less stringent than for listed or NASDAQ traded securities, and no exchange requirements are imposed. Dealers may dominate the market and set prices that are not based on competitive forces. Individuals or groups may create fraudulent markets and control the sudden, sharp increase of price and trading volume and the equally sudden collapse of the market price for shares of the Company's Class A Ordinary Common Stock.

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***There is a limitation in connection with the editing and canceling of orders on the OTC Markets.***

Orders for OTC Markets securities may be canceled or edited like orders for other securities. All requests to change or cancel an order must be submitted to, received and processed by the OTC Markets. Due to the manual order processing involved in handling OTC Markets trades, order processing and reporting may be delayed, and one may not be able to cancel or edit one's order. Consequently, one may not be able to sell its shares of the Company's Class A Ordinary Common Stock at the optimum trading prices.

***Increased dealer compensation could adversely affect our stock price.***

The dealer's spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller of shares of the Company's Class A Ordinary Common Stock on the OTC Markets if the stock must be sold immediately. Further, purchasers of shares of the Company's Class A Ordinary Common Stock may incur an immediate "paper" loss due to the price spread. Moreover, dealers trading on the OTC Markets may not have a bid price for shares of the Company's Class A Ordinary Common Stock on the OTC Markets. Due to the foregoing, demand for shares of the Company's Class A Ordinary Common Stock on the OTC Markets may be decreased or eliminated.

***There is no assurance that an investment in our securities will earn any positive return.***

There is no assurance that an investment in our securities will earn any positive return. An investment in our securities involves a high degree of risk and should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. An investment in our securities is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.

***The holders of shares of Class B Super Common Stock will own a significant voting percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.***

All 136,341 shares of our Class B Super Common Stock are held by three stockholders. Each share of Class B Super Common Stock has one hundred and sixty (160) votes on any matter brought before the stockholders for a vote, which means that the three stockholders who own all of the Class B Super Common Stock will have, collectively, 21,814,560 votes on any matter subject to stockholder approval. There are currently 11,832,164 shares of Class A Ordinary Common Stock outstanding, and each such share only has one (1) vote on any matter brought before the stockholders for a vote. Thus, the three holders of shares of Class B Super Common Stock may together be able to determine all matters requiring stockholder approval. For example, these three stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for the Company's stock that you may feel are in your best interest as one of our stockholders. The Company's Certificate of Incorporation only authorizes 100,000,000 shares of Class A Ordinary Common Stock, which means that even if every authorized share of authorized Class A Ordinary Common Stock was issued and outstanding, the three holders of shares of Class B Super Common Stock would have significant voting capacity. Further information is available in the Security ownership of certain beneficial owners and management section on page 134.

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***The requirements of being a public company may strain our resources and distract management and we will incur substantial costs as a result of being a public company.***

We are be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These rules, regulations and requirements are extensive. Our securities may be subject to additional regulatory scrutiny because we became public through a SPAC transaction. We will incur significant costs associated with our public company corporate governance and reporting requirements. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more corporate employees to comply with these requirements or engage outside consultants, which would increase our costs and expenses. This may divert management's attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations. These applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board or as executive officers.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

As a result of disclosure of information in this prospectus and in the filings that we are required to make as a public company, our business, operating results and financial condition have become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If any such claims are successful, our business, operating results and financial condition could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, operating results and financial condition.

***A decline in the price of the Company's Class A Ordinary Common Stock could affect the Company's ability to raise working capital and adversely impact the Company's ability to continue operations.***

A prolonged decline in the price of the Company's Class A Ordinary Common Stock could result in a reduction in the liquidity of the common stock and a reduction in our ability to raise capital. A decline in the price of the Company's Class A Ordinary Common Stock could be especially detrimental to our liquidity, operations and strategic plans. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new products and services and continue current operations. If the Company's Class A Ordinary Common Stock's price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

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***We do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in the Company's capital stock must come from increases in the fair market value and trading price of the capital stock.***

We have not paid any cash dividends on the Company's Class A Ordinary Common Stock and do not intend to pay cash dividends on the Company's Class A Ordinary Common Stock in the foreseeable future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, capital requirements and any other factors that our Board decides is relevant. Therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.

***Future sales and issuances of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.***

We expect that significant additional capital will be needed in the future to continue our planned operations, including research and development, increased marketing, hiring new personnel, commercializing our products, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell Class A Ordinary Common Stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell Class A Ordinary Common Stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

***Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our business.***

There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect our business operations. Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs. and we cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future. Tariffs, or the threat of tariffs or increased tariffs, could have a significant negative impact on our businesses (either due to our reliance on imported goods or dependence on access to foreign markets).

Among other things, historical financial performance of companies affected by trade policies and/or tariffs may not provide useful guidance as to the future performance of such companies, because future financial performance of those companies may be materially affected by new U.S. tariffs or foreign retaliatory tariffs, or other changes to trade policies. We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, our business may be negatively impacted.

***Inflationary pressures and persistently high prices and uncertain availability of inputs used by us and our suppliers, or instability in logistics and related costs, could negatively impact our profitability. Pending tariffs proposed by the Trump Administration, may also negatively impact the cost structure of our supply chain, and ECD may not be able to pass these price increases on to its customers.***

Increases in prices, including because of inflation and rising interest rates, for inputs that we and our suppliers use in manufacturing products, systems, components and parts, or increases in logistics and related costs, have led in the past and may lead in the future to higher production costs for parts, components and vehicles. Geopolitical risks, fluctuations in supply and demand, fluctuations in interest rates, any weakening of the U.S. dollar in comparison with other currencies, and other economic and political factors have created and may continue to create pricing pressure for our inputs. These inflationary pressures could, in turn, negatively impact our profitability because we may not be able to pass all of those costs on to our customers or require our suppliers to absorb such costs.

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***Changes to United States tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations.***

The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations.

***If the price of the Company's Class A Ordinary Common Stock fluctuates after the this offering, you could lose a significant part of your investment.***

The market price of the Company's Class A Ordinary Common Stock could be subject to wide fluctuations in response to, among other things, the risk factors described in this prospectus, and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, the occurrence of natural disasters, pandemics, geopolitical tensions (particularly those relating to the People's Republic of China), military conflicts, recessions, inflation, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.

***The Warrants are exercisable for the Company's Class A Ordinary Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.***

As of February 6, 2026, we had outstanding Warrants to purchase an aggregate of up to 444,982 shares of the Company's Class A Ordinary Common Stock, including Public Warrants to purchase up to 230,000 shares of Class A Ordinary Common Stock and Private Warrants to purchase up to 214,982 shares of Class A Ordinary Common Stock are exercisable in accordance with the terms of the Warrant Agreement governing those securities. These warrants became exercisable on December 16, 2025. The exercise price of these warrants will be $575.00 per share. However, there is no guarantee that our Warrants will ever be "in the money" prior to their expiration, and, as such, our Warrants may expire worthless. See "- *The Warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Private Warrants and Public Warrants, respectively, approve of such amendment for their respective warrants*."

To the extent our Warrants are exercised, additional shares of the Company's Class A Ordinary Common Stock will be issued, which will result in dilution to the holders of the Company's Class A Ordinary Common Stock and increase the number of shares eligible for resale in the public market. The dilution, as a percentage of outstanding shares, caused by the exercise of our Warrants will increase if a large number of Roth CH shareholders elect to redeem their shares in connection with the Business Combination. We cannot predict the ultimate value of the Public Warrants following consummation of the Business Combination. Sales of substantial numbers of shares issued upon the exercise of our Warrants in the public market or the potential that such warrants may be exercised could also adversely affect the market price of the Company's Class A Ordinary Common Stock.

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***The Warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Private Warrants and Public Warrants, respectively approve of such amendment to their respective warrants.***

The exercise price for the outstanding Warrants is $575.00 per share of Class A Ordinary Common Stock. There can be no assurance that the Warrants will be in the money following the time they become exercisable and prior to their expiration and as such, the Warrants may expire worthless.

The Public Warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Roth CH. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change that increases the exercise price or shortens the exercise period of the Public Warrants.

Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment. Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of the Company's Class A Ordinary Common Stock purchasable upon exercise of a warrant.

***We may redeem your Public Warrants prior to their exercise which may result in warrant holders receiving little or no value for their warrants thereby making your Public Warrants worthless.***

We have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the shares of the Company's Class A Ordinary Common Stock equals or exceeds $900.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty (30) trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrants holders and provided certain other conditions are met. We will not redeem the Public Warrants unless an effective registration statement under the Securities Act covering the shares issuable upon exercise of the warrants is effective and a current prospectus relating to those shares is available throughout the thirty (30)-day redemption period, except if we elect to require the warrants to be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. If we elect to redeem the outstanding Public Warrants, holders would be forced to either exercise their warrants and pay the exercise price at a time when it may be disadvantageous to do so, sell the warrants at the then-current market price, or accept the nominal redemptional price. Any such redemption could occur at a time when the warrants are worthless. None of the Private Placement Warrants will be redeemable by us so long as they are held by the Sponsor or any of its permitted transferees. As of the date of this prospectus, the Company's Class A Common Stock has never traded above $95.00 per share, therefore neither current nor recent share prices meet or exceed the threshold that would allow us to redeem Public Warrants.

In addition, we have the ability to redeem the outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant upon a minimum of 30 days' prior written notice of redemption if the closing price of the Company's Class A Ordinary Common Stock equals or exceeds $900.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty (30) day trading-day period ending on the third day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants on a cashless basis prior to redemption for a number of shares of the Company's Class A Ordinary Common Stock determined based on the redemption date and fair market value of the Company's Class A Ordinary Common Stock. The value received upon exercise of the warrants may be less than the value the holders would have received if they had been able to exercise their warrants at a later time at which the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.00722 shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants. In addition, such redemptions may occur at a time when our Warrants are "out-of-the-money," in which case holders thereof would lose any potential embedded value from a subsequent increase in the value of the Company's Class A Ordinary Common Stock had such Public Warrants remained outstanding. If the price of the Company's Class A Ordinary Common Stock is less than $900.00 and we seek redemption of the Public Warrants, we must call the Private Placement Warrants for redemption on the same terms.

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In the event that we determine to redeem the Public Warrants when the closing price of the shares of the Company's Class A Ordinary Common Stock equals or exceeds $900.00 per share, pursuant to Section 6.2 of the Warrant Agreement, respectively, we will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by us not less than thirty (30) days prior to the redemption date to the registered holders of the Public Warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner herein provided will be conclusively presumed to have been duly given whether or not the registered holder received such notice.

***Public Warrant holders will only be able to exercise their Public Warrants on a "cashless basis" under certain circumstances, and if they do so, they will receive fewer shares of the Company's Class A Ordinary Common Stock from such exercise than if such warrants were exercised for cash.***

The Public Warrants generally may not be exercised on a "cashless basis", except as described below. In contrast, the Private Placement Warrants, for so long as they are held by the Sponsor and certain permitted transferees, may be exercised on a "cashless basis". The reason that Roth CH agreed that the Private Placement Warrants will be exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees is because it was not known at the time of Roth CH's IPO whether the Sponsor would be affiliated with us following a business combination. If the Sponsor remains affiliated with us, its ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike Public Shareholders who could exercise their Public Warrants and sell the shares received upon such exercise freely in the open market in order to recoup the cost of such exercise, the Insiders could be significantly restricted from selling such securities.

The Warrant Agreement provides that in the following circumstances holders of Public Warrants who seek to exercise their Public Warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Company's Class A Ordinary Common Stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the Company's Class A Ordinary Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of "covered securities" under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the Public Warrants for redemption. If you exercise your Public Warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of the Company's Class A Ordinary Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of the Company's Class A Ordinary Common Stock underlying the Public Warrants, multiplied by the excess of the "fair market value" of the shares of the Company's Class A Ordinary Common Stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The "fair market value" is the average reported closing price of the shares of the Company's Class A Ordinary Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, a holder of Public Warrants would receive fewer shares of the Company's Class A Ordinary Common Stock from such exercise than if such warrants were exercised for cash.

***The Warrant Agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of the warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes.***

The Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

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This choice-of-forum provision may limit a warrant holder's ability to bring a claim in a judicial forum that it finds favorable for disputes, which may discourage such lawsuits and result in increased costs to warrant holders to bring a lawsuit. Alternatively, if a court were to find this provision of our Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board.

***We are be a "smaller reporting company" and "emerging growth company" under the U.S. federal securities laws, and the reduced reporting requirements applicable to smaller reporting companies and emerging growth companies could make the Company's Class A Ordinary Common Stock less attractive to investors.***

We are a "smaller reporting company" and an "emerging growth company" under U.S. federal securities laws. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Furthermore, as an emerging growth company, we intend to take advantage of exemptions from certain reporting requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and exemptions from the requirements of holding a non- binding advisory vote on executive compensation. Investors may not find the Company's Class A Ordinary Common Stock attractive because we may rely on these exemptions and reduced disclosures. If some investors find the Company's Class A Ordinary Common Stock less attractive as a result, there may be a less active trading market for the Company's Class A Ordinary Common Stock and our stock price may be more volatile.

We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of the Company's Class A Ordinary Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of the Company's Class A Ordinary Common Stock held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Roth CH's IPO, (b) in which we have total annual gross revenue of at least $1.23 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year's second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.

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**Risks Related to the Resale of the Shares and Private Warrant Shares**

***The Selling Shareholders may choose to sell the Shares and/or Private Warrant Shares at prices below the current market price.***

The Selling Shareholders are not restricted as to the prices at which they may sell or otherwise dispose of the Shares and/or Warrant Shares covered by this prospectus. Sales or other dispositions of the Shares and/or Private Warrant Shares below the then-current market prices could adversely affect the market price of the Company's Class A Ordinary Common Stock.

***A large number of shares of Common Stock may be sold in the market following this offering, which may significantly depress the market price of the Company's Class A Ordinary Common Stock.***

The Shares and Private Warrant Shares sold in the offering will be freely tradable without restriction or further registration under the Securities Act. As a result, a substantial number of shares of Common Stock may be sold in the public market following this offering. If there are significantly more shares of Common Stock offered for sale than buyers are willing to purchase, then the market price of the Company's Class A Ordinary Common Stock may decline to a market price at which buyers are willing to purchase the offered Common Stock and sellers remain willing to sell Common Stock.

***Neither we nor the Selling Shareholders have authorized any other party to provide you with information concerning us or this offering.***

You should carefully evaluate all of the information in this prospectus. We may receive media coverage regarding our Company, including coverage that is not directly attributable to statements made by our officers, that incorrectly reports on statements made by our officers or employees, or that is misleading as a result of omitting information provided by us, our officers or employees. Neither we nor the Selling Shareholders have authorized any other party to provide you with information concerning us or this offering, and recipients should not rely on this information.

***You may experience future dilution as a result of issuance of the Shares, the Warrant Shares, future equity offerings by us and other issuances of the Company's Class A Ordinary Common Stock or other securities. In addition, the issuance of the Shares and future equity offerings and other issuances of the Company's Class A Ordinary Common Stock or other securities may adversely affect the Company's Class A Ordinary Common Stock price.***

In order to raise additional capital, we may in the future offer additional shares of the Company's Class A Ordinary Common Stock or other securities convertible into or exchangeable for the Company's Class A Ordinary Common Stock at prices that may not be the same as the price per share as prior issuances of Common Stock. We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share previously paid by investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of the Company's Class A Ordinary Common Stock or securities convertible into Common Stock in future transactions may be higher or lower than the prices per share per share. ln addition, the exercise price of the Warrants for the Warrant Shares may be or greater than the price per share previously paid by certain investors. You will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of Common Stock under our stock incentive programs. In addition, the issuance of the Shares and any future sales of a substantial number of shares of the Company's Class A Ordinary Common Stock in the public market, or the perception that such sales may occur, could adversely affect the price of the Company's Class A Ordinary Common Stock. We cannot predict the effect, if any, that market sales of those shares of Common Stock or the availability of those shares for sale will have on the market price of the Company's Class A Ordinary Common Stock.

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**SELLING SHAREHOLDERS**

The shares of the Company's Class A Ordinary Common Stock being offered by the Selling Shareholders are those to be issued to the Selling Shareholders in connection with the consummation of the Business Combination, including shares of the Company's Class A Ordinary Stock issued upon exercise of the Private Warrants issued in the Business Combination. We are registering the shares of Sharon AI Holdings' Class A Ordinary Common Stock, including shares of the Company's Class A Ordinary Stock to be issued upon exercise of the Private Warrants issued in the Business Combination in order to permit the Selling Shareholders to offer the shares the Company's Class A Ordinary Common Stock for resale from time to time. Except for (x) the ownership of the shares of Common Stock, as applicable, (y) service as executive officers and/or directors of Roth CH, Roth CH Holdings, Inc., SharonAI, or Sharon AI Holdings', as applicable, and (z) as described under "*Certain Relationships and Related Party Transactions,*" the Selling Shareholders have not had any material relationship with us within the past three years.

The table below lists the Selling Shareholders and other information regarding the beneficial ownership of the shares of the Company's Common Stock by each of the Selling Shareholders. The number of shares owned and the percentage of beneficial ownership and voting control of the Company after this offering set forth in these columns are based on 12,413,487 shares of Common Stock, which includes 11,968,505 shares of Common Stock outstanding as of February 6, 2026 and assumes full cash exercise of the Warrants that are exercisable for the 444,982 Warrant Shares offered hereby. Further, each holder of shares of Common Stock shall be entitled to one (1) vote for each share of Class A Ordinary Common Stock held and one hundred and sixty (160) votes for each share of Class B Super Common Stock held.

Because the officers and directors of the Company that are Selling Shareholders may offer all or some of the Shares pursuant to this offering, we cannot estimate the number of shares of Class A Ordinary Common Stock that will be held by the Selling Shareholders after completion of the offering. However, for purposes of this table, we have assumed that, after completion of the offering, all of the shares of Class A Ordinary Common Stock covered by this prospectus will be sold by the Selling Shareholders and that the Selling Shareholders do not acquire beneficial ownership of any additional shares.

The second column lists the number of shares of the Company's Common Stock beneficially owned by each Selling Shareholder, based on its ownership of the shares of the Company's Class B Super Common Stock and Class A Ordinary Common Stock, as of February 6, 2026.

The third column lists the number of shares of the Company's Class A Ordinary Common Stock being offered by this prospectus by each of the Selling Shareholders.

The fourth column lists the number of shares of the Company's Common Stock owned by each of the Selling Shareholders following the sale of the maximum number of shares of the Company's Class A Ordinary Common Stock listed in the third column by such Selling Shareholders.

Unless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.

The Selling Shareholders may sell all, some or none of their shares in this offering. See "*Plan of Distribution*."

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name of Selling Shareholder<sup>(1)</sup>** | **Number of<br> Shares of<br> Sharon AI Holdings'<br> Common Stock<br> Owned Prior** <br> **to the Offering**  | **Maximum Number of<br> Shares of<br> Sharon AI Holdings'<br> Class A Ordinary<br> Common Stock<br> To Be Sold<br> Pursuant to<br> this Prospectus** | **Number of<br> Shares Of<br> Sharon AI Holdings'<br> Common Stock<br> Owned After<br> the Offering** | **Percent of<br> Common Stock<br> After Offering<sup>(2)</sup>** | **Percent of** <br> **Voting Control<br> After Offering<sup>(2)</sup>**  |
| CR Financial Holdings, Inc<sup>(2)</sup> | 523719 | 523719 |  |  |  |
| John Lipman<sup>(3)</sup> | 465343 | 465343 |  |  |  |
| Craig-Hallum Capital Group LLC<sup>(4)</sup> | 31882 | 31882 |  |  |  |
| William F. Hartfiel III<sup>(5)</sup> | 30128 | 31128 |  |  |  |
| Kevin Harris<sup>(6)</sup> | 30128 | 31128 |  |  |  |
| Steve Dyer<sup>(7)</sup> | 31128 | 31128 |  |  |  |
| Brad Baker<sup>(8)</sup> | 31128 | 31128 |  |  |  |
| Jim Zavoral<sup>(9)</sup> | 31128 | 31128 |  |  |  |
| Donald Hultsrand<sup>(10)</sup> | 31129 | 31129 |  |  |  |
| Adam Rothstein<sup>(11)</sup> | 10798 | 10798 |  |  |  |
| John Demarais<sup>(12)</sup> | 2650 | 2650 |  |  |  |
| Sam Chawla<sup>(13)</sup> | 10798 | 10798 |  |  |  |
| Jack O'Brien<sup>(14)</sup> | 10463 | 10463 |  |  |  |
| Christopher Bradley<sup>(15)</sup> | 10598 | 10598 |  |  |  |
| Andrew Leece<sup>(17)</sup> | 1444803 | 1399356 | 45447 | 12.07% | 25.61%<sup>(22)</sup> |
| James Manning<sup>(18)</sup> | 1450103 | 1333324 | 114243 | 12.11% | 25.66%<sup>(22)</sup> |
| Timothy Broadfoot<sup>(19)</sup> | 88375 | 88375 |  |  |  |
| Wolfgang Schubert <sup>(20)</sup> | 22905 | 22905 |  |  |  |
| Nicholas Hughes Jones<sup>(20)</sup> | 1205919 | 1160472 | 45447 | 10.08% | 24.92%<sup>(22)</sup> |
| 4133 Capital LLC<sup>(21)</sup> | 5448 | 3798 | 1650 | \* | \*<sup>(23)</sup> |
| ACM ASOF VII (Cayman) Holdco LP<sup>(21)</sup> | 8257 | 1254 | 7003 | \* | \*<sup>(24)</sup> |
| Alan & Sophie Alpert Trust<sup>(21)</sup> | 375 | 255 | 120 | \* | \*<sup>(25)</sup> |
| Apollo A-N Credit Fund (Delaware) LP<sup>(21)</sup> | 1254 | 1254 |  |  |  |
| Apollo Atlas Master Fund LLC<sup>(21)</sup> | 1395 | 908 | 487 | \* | \*<sup>(26)</sup> |
| Apollo SPAC Fund LP<sup>(21)</sup> | 2455 | 1599 | 856 | \* | \*<sup>(27)</sup> |
| Angela Blatteis<sup>(21)</sup> | 10237 | 6973 | 3264 | \* | \*<sup>(28)</sup> |
| Blue Owl Alternative Credit Special Purpose Investment Fund II LP<sup>(21)</sup> | 5984 | 908 | 5076 | \* | \*<sup>(29)</sup> |
| Blue Owl Alternative Credit Alameda Special Purpose Investment Fund II LP<sup>(21)</sup> | 10534 | 1599 | 8935 | \* | \*<sup>(30)</sup> |
| Bohrs LLC<sup>(21)</sup> | 3833 | 3832 |  |  |  |
| CPC Sponsor Opportunities I, LP <sup>(21)</sup> | 3371 | 2196 | 1175 | \* | \*<sup>(31)</sup> |
| CPC Sponsor Opportunities I (Parallel), LP<sup>(21)</sup> | 2814 | 1833 | 981 | \* | \*<sup>(32)</sup> |
| Daly Family Trust u/t/d dated December 14, 2000<sup>(21)</sup> | 1873 | 1277 | 596 | \* | \*<sup>(33)</sup> |
| Digital Cloud Partners LLC<sup>(21)</sup> | 10237 | 6973 | 3264 | \* | \*<sup>(34)</sup> |
| Frank H Levinson Living Trust<sup>(21)</sup> | 2747 | 1788 | 959 | \* | \*<sup>(35)</sup> |
| Michael H Herson<sup>(21)</sup> | 840 | 146 | 694 | \* | \*<sup>(36)</sup> |
| Irrevocable Indenture of Trust of Frank H & Wynnette L. Levinson Trustee<sup>(21)</sup> | 1999 | 1022 | 977 | \* | \*<sup>(37)</sup> |
| Gregory Klein<sup>(21)</sup> | 10187 | 6973 | 3214 | \* | \*<sup>(38)</sup> |
| Bernard T Marren<sup>(21)</sup> | 1873 | 1277 | 596 | \* | \*<sup>(29)</sup> |
| Ryan O'Hara<sup>(21)</sup> | 1749 | 766 | 983 | \* | \*<sup>(40)</sup> |
| Benjamin Poh<sup>(21)</sup> | 855 | 511 | 354 | \* | \*<sup>(41)</sup> |
| Soo Boon Quek<sup>(21)</sup> | 1077 | 734 | 343 | \* | \*<sup>(42)</sup> |
| Radcliffe SPAC Opportunity Fund LP<sup>(21)</sup> | 6377 | 4154 | 2223 | \* | \*<sup>(43)</sup> |
| Reilly Family Investments LLC<sup>(21)</sup> | 375 | 255 | 120 | \* | \*<sup>(44)</sup> |
| Stradling Yocca Carlson & Rauth Investment Partnership of 1982<sup>(21)</sup> | 539 | 367 | 172 | \* | \*<sup>(45)</sup> |
| Tallac Partners LLC<sup>(21)</sup> | 656 | 447 | 209 | \* | \*<sup>(46)</sup> |
| William R Zerella<sup>(21)</sup> | 1561 | 638 | 923 | \* | \*<sup>(47)</sup> |
| Lucid Capital Markets, LLC <sup>(48)</sup> | 41667 | 41667 |  | \* | \* |
| FECS Holdings Trust<sup>(49)</sup> | 166667 | 166667 |  | \* | \* |

---

\* Represents less than 1%.

<sup>1</sup> Bracketed and highlighted figures in the table and corresponding footnotes are subject to verification upon receipt of selling shareholder questionnaires.

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(1) Unless otherwise noted, the business address of each of the following is c/o SharonAI Holdings Inc., 745 Fifth Avenue, Suite 500, New York, NY 10151.

(2) Consists of 445,513 shares of Class A Ordinary Common Stock and
 78,206 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Byron Roth and Gordon
 Roth have voting and dispositive control over the shares held by CR Financial Holdings, Inc., and may be deemed to be the beneficial
 owners of the shares held by CR Financial Holdings, Inc. Byron Roth through the BR Trust owns 86.6% of the outstanding shares of
 CR Financial Holdings, Inc. Byron Roth served as the Co-Chief Executive Officer and Chairman of the Board of Directors of Roth CH
 prior to the Business Combination.

(3) Consists of 421,384 shares of Class A Ordinary Common Stock and 43,959 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Mr. Lipman served as the Co-Chief Executive Officer and a director of Roth CH and as the sole executive officer and director of the Company prior to the Business Combination.

(4) Consists 27,190 shares of Class A Ordinary Common Stock and 4,692
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(5) Consists of 25,694 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(6) Consists of 25,694 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(7) Consists of 25,694 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(8) Consists of 25,694 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(9) Consists of 25,694 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(10) Consists of 25,695 shares of Class A Ordinary Common Stock and 4,434
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Mr. Hultstrand served as the
 Co-Chief Operating Officer of Roth CH prior to the Business Combination.

(11) Consists of 9,186 shares of Class A Ordinary Common Stock and 1,612
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Mr. Rothstein served as a
 director of Roth CH prior to the Business Combination.

(12) Consists of 1,180 shares of Class A Ordinary Common Stock and 1,470
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(13) Consists of 9,186 shares of Class A Ordinary Common Stock and 1,612
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Mr. Chawla served as a director
 of Roth CH prior to the Business Combination.

(14) Consists of 8,985 shares of Class A Ordinary Common Stock and 1,478
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(15) Consists of 8,986 shares of Class A Ordinary Common Stock and 1,612
 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock. Mr. Bradley served as a director
 of Roth CH prior to the Business Combination.

(16) Holdings include related parties of Andrew Leece being, Strat Cap No.1 Pty Ltd, Strat Capital Pty Ltd ATF AJ Digital Trust and Strat Capital Pty Ltd ATF Alpha Juliett Trust. Holdings include 45,447 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock. Mr. Leece currently serves as Chief Operating Officer of the Company and served as the Chief Operating Officer of SharonAI prior to the Business Combination.

(17) Holdings include related parties of James Manning being, Bare Media Holdings Pty Ltd, Defender Capital Pty Ltd, MCH Equities Pty Ltd ATF MCH Equities Australian Opportunities Fund, DSS AI Pty Ltd, Manning Capital Holdings Pty Ltd ATF The Manning Capital Holdings Unit Trust, Manning Group Pty Ltd ATF MG Office Trust and MG No.1 Pty Ltd. Holdings include 45,447 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock. Also includes 68,797 shares of Class A Ordinary Common Stock issuable pursuant to restricted stock units vesting within 60 days of December 22, 2025. Mr. Manning currently serves as a director of the Company and served as the Non-Executive Chairman of SharonAI prior to the Business Combination.

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(18) Holdings include related parties of Timothy Broadfoot being DSS AI Pty
 Ltd, Broadfoot Group Pty Ltd ATF for Broadfoot Family Trust. Mr. Broadfoot serves as the Chief Financial Officer, Treasurer and
 Corporate Secretary of the Company. Mr. Broadfoot served as the Chief Financial Officer of SharonAI prior to the Business
 Combination.

(19) Mr. Schubert serves as the Chief Executive Officer, President and a director of the Company. Mr. Schubert served as the Chief Executive Officer and a director of SharonAI prior to the Business Combination.

(20) Holdings include related parties of Nicholas Hughes Jones being, Inbocalupo No.1 Pty Ltd and Inbocalupo Pty Ltd ATF Inbocalupo Trust. Holdings include 45,447 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock. Until July 2025, Mr. Hughes Jones was SharonAI's Senior Vice President Business Development

(21) The reported shares to be sold pursuant to this prospectus consist of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock.

(22) Shares held after the offering include 45,447 shares of Class B
 Super Common Stock, and for Mr. Manning also includes 68,796 shares of Class A Ordinary Common Stock issuable pursuant to restricted
 stock units vesting within 60 days of February 6, 2026.

(23) Shares held after the offering include 1,650 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(24) Shares held after the offering include 671 shares of Class A Ordinary Common Stock and 6,332 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Ivan Zinn is a Senior Managing Director of the reporting person and may be deemed to be a beneficial owner of the reported shares.

(25) Shares held after the offering include 120 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Alan Alpert and Sophie Alpert may be deemed to beneficially own the shares owned by the reporting person.

(26) Shares held after the offering include 487 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(27) Shares held after the offering include 856 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(28) Shares held after the offering include 3,264 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(29) Shares held after the offering include 487 shares of Class A Ordinary Common Stock and 4,589 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Ivan Zinn is a Senior Managing Director of the reporting person and may be deemed to be a beneficial owner of the reported shares.

(30) Shares held after the offering include 956 shares of Class A Ordinary Common Stock and 8,079 shares of Class A Ordinary Common Stock underlying warrants to purchase Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Ivan Zinn is a Senior Managing Director of the reporting person and may be deemed to be a beneficial owner of the reported shares.

(31) Shares held after the offering include 1,175 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Carnegie Park Capital LLC (" <u>CPC</u> ") is the investment manager for each of CPC Sponsor Opportunities I, LP and CPC Sponsor Opportunities I (Parallel), LP (collectively, the "CPC Funds"). Mr. Edward T. Chen serves as the Managing Partner of CPC and exercises sole voting and dispositive power over the shares owned by the CPC Funds. Accordingly, Mr. Chen may be deemed to beneficially own the shares owned by the CPC Funds. However, Mr. Chen disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest Mr. Chen may have therein, directly or indirectly. The shares and warrants reflected as beneficially owned prior to the offering were received by CPC Sponsor Opportunities I, LP in connection with a liquidating distribution by the Sponsor.

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(32) Shares held after the offering include 981 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. CPC is the investment manager for each of CPC Sponsor Opportunities I, LP and CPC Sponsor Opportunities I (Parallel), LP (collectively, the "CPC Funds"). Mr. Edward T. Chen serves as the Managing Partner of CPC and exercises sole voting and dispositive power over the shares owned by the CPC Funds. Accordingly, Mr. Chen may be deemed to beneficially own the shares owned by the CPC Funds. However, Mr. Chen disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest Mr. Chen may have therein, directly or indirectly. The shares and warrants reflected as beneficially owned prior to the offering were received by CPC Sponsor Opportunities I (Parallel), LP in connection with a liquidating distribution by the Sponsor.

(33) Shares held after the offering include 596 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Timothy Daly may be deemed to beneficially own the shares owned by the reporting person.

(34) Shares held after the offering include 3,254 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(35) Shares held after the offering include 959 shares of Class A Ordinary
 Common Stock held by the reporting person that are not being registered for resale. Frank H. Levinson is also the beneficial owner
 of the securities held by the Irrevocable Indenture of Trust of Frank H & Wynnette L. Levinson Trustee.

(36) Shares held after the offering include 694 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(37) Shares held after the offering include 977 shares of Class A Ordinary
 Common Stock held by the reporting person that are not being registered for resale. Frank H. Levinson and Wynnette L. Levinson may
 be deemed to beneficially own the shares owned by the reporting person. Frank H. Levinson is also the beneficial owner of the securities
 held by the Frank H. Levinson Living Trust.

(38) Shares held after the offering include 3,214 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(39) Shares held after the offering include 596 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(40) Shares held after the offering include 983 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(41) Shares held after the offering include 354 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. The reporting person was a consultant with TKB Capital from October 2021 to July 2023.

(42) Shares held after the offering include 343 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(43) Shares held after the offering include 2,223 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Pursuant to an investment management agreement, Radcliffe Capital Management, L.P. (" <u>RCM</u> ") serves as the investment manager of Radcliffe SPAC Opportunity Fund, L.P. RGC Management Company, LLC (" <u>Management</u> ") is the general partner of RCM. Steve Katznelson and Christopher Hinkel serve as the managing members of Management. Each of RCM, Management and Messrs. Katznelson and Hinkel disclaim beneficial ownership of the securities owned by Radcliffe SPAC Opportunity Fund, L.P.

(44) Shares held after the offering include 120 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Richard Reilly and Christie Reilly may be deemed to beneficially own the shares owned by the reporting person.

(45) Shares held after the offering include 172 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(46) Shares held after the offering include 209 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale. Clark Callander, Elizabeth Callander, John Callander, Kathryn Callander, Bradley Callander, and Grace Callander share voting and dispositive power over the reported securities. Accordingly, each of the foregoing persons may be deemed to beneficially own the shares owned by the reporting person.

(47) Shares held after the offering include 523 shares of Class A Ordinary Common Stock held by the reporting person that are not being registered for resale.

(48) David Rosenberg has voting an investment control over the shares held by Lucid Capital Markets, LLC, and may be deemed to be the beneficial owners of the shares held by Lucid Capital Markets. Lucid Capital Markets is a registered broker-dealer. The shares being registered for resale hereunder were acquired in the ordinary course of business and at such time the selling shareholder had no agreement or understanding, directly or indirectly, with any person to distribute such securities. The selling shareholder entered into an engagement letter with the registrant in December 2025 to serve as its exclusive financial M&A advisor. In addition, in August 2025, the selling shareholder entered into an engagement letter with SharonAI, Inc. to serve as placement agent or underwriter in connection with a public offering in August 2025 which was assumed by the registrant in December 2025. No fees have been earned by the selling shareholder under either engagement.

(49) Christopher Bregenhoj has voting an investment control over the shares held by FECS Holdings Trust, and may be deemed to be the beneficial owners of the shares held by FECS Holdings Trust.

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**USE OF PROCEEDS**

We will not receive any proceeds from any sale of the Shares and the Private Warrant Shares by the Selling Shareholders. We will receive proceeds in the event that any of the Warrants are exercised at the exercise prices per share for cash which would result in gross proceeds of approximately $256 million if all such Warrants are exercised for cash. Any proceeds that we receive from the exercise of the Warrants will be used for working capital, capital expenditures, product development, and other general corporate purposes, including investments in sales and marketing in the United States and internationally.

The Selling Shareholders will pay any agent's commissions and expenses they incur for brokerage, accounting, tax or legal services or any other expenses that they incur in disposing of the shares of Common Stock. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares of Common Stock covered by this prospectus and any prospectus supplement. These may include, without limitation, all registration and filing fees, SEC filing fees and expenses of compliance with state securities or "blue sky" laws.

We cannot predict when or if the Warrants will be exercised, and it is possible that the Warrants may expire and never be exercised. In addition, the Public Warrants generally may not be exercised on a "cashless basis", except as described below. In contrast, the Private Placement Warrants, for so long as they are held by the Sponsor and certain permitted transferees, may be exercised on a "cashless basis". As a result, we may never receive meaningful, or any, cash proceeds from the exercise of the Warrants, and we cannot plan on any specific uses of any proceeds we may receive beyond the purposes described herein.

See "Plan of Distribution" elsewhere in this prospectus for more information.

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**DIVIDEND POLICY**

We have never declared or paid any dividends on the Company's Class A Ordinary Common Stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business and, therefore, we do not anticipate declaring or paying dividends in the foreseeable future. The payment of dividends will be at the discretion of our Board and will depend on our results of operations, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our future debt agreements, and other factors that our Board may deem relevant.

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 **UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION**

 **UNAUDITED PRO FORMA COMBINED BALANCE SHEET**

 **AS OF SEPTEMBER 30, 2025**

(in US dollars (US$))

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** |
|  | **SharonAI Inc.<br> As Reported** | **Roth CH<br> Acquisition Co. As Reclassified <br> (Note 5)** | **Transaction<br> Accounting<br> Adjustments** | **Note** | **Membership<br> Interest Sale Adjustments** | **Note** | **Convertible** <br> **Note**  | **Note** | **Pro Forma<br> Combined** |
| **ASSETS** |  |  |  |  |  |  |  |  |  |
| Current assets: |  |  |  |  |  |  |  |  |  |
| Cash and cash equivalents | 1364550 | 16083 | (193917) | **2(a)** | 150000 | **2(i)** | 103385372 | **2(j)** | 100485431 |
|  |  |  | (48686) | **2(b)** |  |  | (6203122) | **2(j)** |  |
|  |  |  | (234849) | **2(c)** |  |  |  |  |  |
|  |  |  | 2250000 | **2(h)** |  |  |  |  |  |
| Trade and other receivables | 305542 |  |  |  |  |  |  |  | 305542 |
| Assets held for sale | 1124083 |  |  |  |  |  |  |  | 1124083 |
| Other current assets | 140598 | 5208 |  |  | 69850000 | **2(i)** |  |  | 69995806 |
| **Total current assets** | **2934773** | **21291** | **1772548** |  | **70000000** |  | **97182250** |  | **171910862** |
| Property and equipment, net | 3777613 |  |  |  |  |  |  |  | 3777613 |
| Right of use asset, net | 7476827 |  |  |  |  |  |  |  | 7476827 |
| Goodwill | 18044215 |  |  |  |  |  |  |  | 18044215 |
| Certificates of deposits | 906201 |  |  |  |  |  |  |  | 906201 |
| Other long-term assets | 850000 | - |  |  | (850000) | **2(i)** |  |  | - |
| **Total assets** | **33989629** | **21291** | **1772548** |  | **69150000** |  | **97182250** |  | **202115718** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |  |  |  |  |  |  |  |
| Current liabilities: |  |  |  |  |  |  |  |  |  |
| Trade and other payables | 562156 | 1551314 | (234849) | **2(c)** | 2388788 | **2(i)** |  |  | 4267409 |
| Advances from related party |  | 256636 | (256636) | **2(g)** |  |  |  |  |  |
| Warrant liabilities |  | 1335000 |  |  |  |  |  |  | 1335000 |
| Finance lease liabilities, current portion | 3542831 |  |  |  |  |  |  |  | 3542831 |
| Borrowings | 516405 |  |  |  |  |  |  |  | 516405 |
| Income Tax Payable | - | - |  |  | 22031200 | **2(i)** |  |  | 22031200 |
| **Total current liabilities** | **4621392** | **3142950** | **(491485)** |  | **24419988** |  | **-** |  | **31692845** |
| Finance lease liabilities, net of current portion | 4108328 | **-** |  |  |  |  |  |  | 4108328 |
| Convertible Notes | - | **-** | - |  | - |  | 103385372 | **2(j)** | 103385372 |
| **Total liabilities** | **8729720** | **3142950** | **(491485)** |  | **24419988** |  | **103385372** |  | **139186545** |
| Stockholders' equity (deficit): |  |  |  |  |  |  |  |  |  |
| Series A Preferred Stock | 2 |  | (2) | **2(d)** |  |  |  |  |  |
| Series B Convertible Preferred Stock | 3 |  | (3) | **2(d)** |  |  |  |  |  |
| Common stock | 107 |  | 52425 | **2(d)** |  |  |  |  | 59160 |
|  |  |  | 4528 | **2(e)** |  |  |  |  |  |
|  |  |  | 225 | **2(g)** |  |  |  |  |  |
|  |  |  | 1875 | **2(h)** |  |  |  |  |  |
| Super Common Stock |  |  | 682 | **2(d)** |  |  |  |  | 682 |
| Class A ordinary shares |  | 4521 | (4521) | **2(e)** |  |  |  |  |  |
| Class B ordinary shares |  | 7 | (7) | **2(e)** |  |  |  |  |  |
| Additional paid-in capital | 34750473 | 7769174 | (7769174) | **2(f)** |  |  |  |  | 37255009 |
|  |  |  | 256411 | **2(g)** |  |  |  |  |  |
|  |  |  | 2248125 | **2(h)** |  |  |  |  |  |
| Accumulated deficit | (9541918) | (10895361) | (193917) | **2(a)** |  |  |  |  | 25563080 |
|  |  |  | (48686) | **2(b)** |  |  |  |  |  |
|  |  |  | (53102) | **2(d)** |  |  |  |  |  |
|  |  |  | 7769174 | **2(f)** |  |  |  |  |  |
|  |  |  |  |  | 44730012 | **2(i)** | (6203122) |  |  |
| Noncontrolling interest | 56813 |  |  |  |  |  |  |  | 56813 |
| Accumulated other comprehensive income (AOCI) | (5571) | - | - |  | - |  |  |  | (5571) |
| **Total stockholders' equity (deficit)** | **25259909** | **(3121659)** | **2264033** |  | **44730012** |  | **(6203122)** |  | **62929173** |
| **Total liabilities and stockholders' equity (deficit)** | **33989629** | **21291** | **1772548** |  | **69150000** |  | **97182250** |  | **202115718** |

---

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**Unaudited Pro Forma Combined Statement of Operations**

**For the Nine Months Ended September 30, 2025**

(in US dollars (US$))

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** | **Pro Forma** |
|  | **SharonAI Inc.<br> As Reported** | **Roth CH<br> Acquisition Co. As Reclassified <br> (Note 5)** | **Transaction<br> Accounting<br> Adjustments** | **Membership<br> Interest Sale Adjustments** | **Note** | **Convertible Note** | **Note** | **Pro Forma<br> Combined** |
| Revenue | 1208824 |  |  |  |  |  |  | 1208824 |
| Cost of revenue | (1083426) | - |  | - |  | - |  | (1083426) |
| **Gross profit** | **125398** | **-** |  | **-** |  | **-** |  | **125398** |
| Shared based compensation | (1446312) |  |  |  |  |  |  | (1446312) |
| Selling, general, and administrative expenses | (2970874) | (945973) |  | (674356) | **2(i)** | (6203122) | **2(i)** | (10794325) |
| Other expenses | (2019907) |  |  |  |  |  |  | (2019907) |
| Other income | 961713 | - |  | 70000000 | **2(i)** | - | **2(i)** | 70961713 |
| **Loss from operations** | **(5349982)** | **(945973)** |  | **69325644** |  | **(6203122)** |  | **56826567** |
| Change in fair value of digital assets | (406345) |  |  |  |  |  |  | (406345) |
| Change in fair value of warrant liabilities |  | (1112500) |  |  |  |  |  | (1112500) |
| Interest expense, net | (127430) | - |  | - |  | - |  | (127430) |
| **Profit/(Loss) before income taxes** | **(5883757)** | **(2058473)** |  | **69325644** |  | **(6203122)** |  | **55180292** |
| Income tax benefit | 219935 | - |  | (22031200) | **2(i)** | - | **2(i)** | (21811265) |
| **Net gain/(loss)** | **(5663822)** | **(2058473)** |  | **47294444** |  | **(6203122)** |  | **33369027** |
| Net loss attributable to noncontrolling interest | (27185) | - |  | - |  | - |  | (27185) |
| **Net gain/(loss) Attributable to owners of the Company** | **(5636637)** | **(2058473)** |  | **47294444** |  | **(6203122)** |  | **33396212** |
| Weighted average shares outstanding of Class A common stock – basic and diluted | 1067213 | 41817414 |  |  |  |  |  | 11968505 |
| Basic and diluted net income (loss) per share attributable to common stockholders | (5.282) | (0.049) |  |  |  |  |  | 2.788 |

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**Unaudited Pro Forma Combined Statement of Operations**

**For the Year Ended December 31, 2024**

(in US dollars (US$))

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Historical** | **Historical** | **Pro Forma** | **Pro Forma** | **Pro Forma** |
|  | **SharonAI Inc.<br> As Adjusted<br> (Note 6)** | **Roth CH<br> Acquisition Co.<br> As Reclassified<br> (Note 5)** | **Transaction<br> Accounting<br> Adjustments** | **Note** | **Pro Forma<br> Combined** |
| Revenue | 1170923 |  |  |  | 1170923 |
| Cost of revenue | (1474395) | - | - |  | (1474395) |
| **Gross loss** | **(303472)** | **-** | **-** |  | **(303472)** |
| Shared based compensation | (3266895) |  |  |  | (3266895) |
| Selling, general, and administrative expenses | (3420966) | (650122) | (193917) | **3(a)** | (4265005) |
| Other expenses | (2201728) | - | - |  | (2201728) |
| **Loss from operations** | **(9193061)** | **(650122)** | **(193917)** |  | **(10037100)** |
| Change in fair value of digital assets | 600423 |  |  |  | 600423 |
| Change in fair value of warrant liabilities |  | 333750 |  |  | 333750 |
| Other income | 1272955 |  |  |  | 1272955 |
| Interest expense, net | (147483) | 435437 | (435437) | **3(b)** | (147483) |
| **Profit/(Loss) before income taxes** | **(7467166)** | **119065** | **(629354)** |  | **(7977455)** |
| Income tax expense | (74077) | - | - |  | (74077) |
| **Net income/(loss)** | **(7541243)** | **119065** | **(629354)** |  | **(8051532)** |
| Net loss attributable to noncontrolling interest | (18717) | - | - |  | (18717) |
| **Net loss Attributable to owners of the Company** | **(7522526)** | **119065** | **(629354)** |  | **(8032815)** |
| Weighted average shares outstanding of Class A common stock – basic and diluted | 556356 | 5851522 |  |  | 11968505 |
| Basic and diluted net income (loss) per share attributable to common stockholders | (13.521) | 0.020 |  |  | (0.671) |

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**NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION**

**Note 1 - Basis of Pro Forma Presentation**

The unaudited pro forma combined financial information presents the financial information of SharonAI Holdings Inc. adjusted to give effect to the transactions contemplated by the Business Combination Agreement (the "Business Combination") among SharonAI Holdings Inc., Roth CH Acquisition Co. ("Roth") and SharonAI Inc., as well as the acquisition of Distributed Storage Solutions Ltd ("DSS") completed by SharonAI Inc., to the extent not yet reflected in SharonAI Inc.'s historical financial information (as more fully described in Note 7), and certain other reclassifications adjustments completed by Roth, to the extent not yet reflected in Roth's historical financial information (as more fully described in Note 5), as well as the disposal of membership interest in Texas Critical Data Centers LLC ("TCDC") completed by SharonAI Inc. The following unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, SEC Release No. 33-10786 "Amendments to Financial Disclosures About Acquired and Disposed Businesses". SharonAI Inc. has not had any historical relationship with SharonAI Holdings Inc. or Roth prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The DSS acquisition was accounted for using the acquisition method of accounting for business combinations under the provisions of Financial Accounting Standards Board ("**FASB**") Accounting Standard Codification ("**ASC**") Topic 805, *Business Combinations* ("**ASC 805**").

The Business Combination will be accounted for as a reverse recapitalization, in accordance with US GAAP. Under this method of accounting, SharonAI Holdings Inc. and Roth will be treated as the "acquired" companies for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of SharonAI Inc. issuing shares at the closing for the net assets or liabilities, as relevant, of SharonAI Holdings Inc. and Roth as of the closing date, accompanied by a recapitalization. The net assets or liabilities, as relevant, of SharonAI Holdings Inc. and Roth will be stated at historical costs, with no goodwill or other intangible assets recorded.

SharonAI Inc. has been determined to be the accounting acquirer based on the following:

● SharonAI Inc.'s current majority shareholder will have the largest voting interest;

● Original shareholders of SharonAI Inc. have the ability to nominate the majority of the members of the board of directors;

● The existing senior management of SharonAI Inc. will continue to be the senior management following the Business Combination;

● The business of SharonAI Inc. will comprise the ongoing operations following the Business Combination; and

● SharonAI Inc. is the larger entity, both in terms of substantive operations and number of employees.

The unaudited pro forma combined balance sheet as of September 30, 2025 combines:

● the historical unaudited condensed consolidated balance sheet of SharonAI Inc. as of September 30, 2025; and

● the historical unaudited condensed consolidated balance sheet of Roth as of September 30, 2025.

● Pro forma adjustments have been included to reflect the impact of the sale of SharonAI's membership interests in TCDC, the issuance and conversion of a Convertible note and the issuance of Convertible notes in SharonAI Pty Ltd, as if such events had occurred on the relevant pro forma reference date, in order to present the combined financial information on a consistent and comparable basis.

The unaudited pro forma combined balance sheet has been prepared to give effect to the Business Combination and other material transactions as if it had been consummated on September 30, 2025.

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The unaudited pro forma combined statement of operations for the nine months ended September 30, 2025 combines:

● the historical unaudited condensed consolidated statement of operations of SharonAI Inc. for the nine months ended September 30, 2025; and

● the historical unaudited condensed consolidated statement of operations of Roth for the nine months ended September 30, 2025.

● Pro forma adjustments have been included to reflect the impact of the sale of SharonAI's membership interests in TCDC, the issuance and conversion of a Convertible note and the issuance of Convertible notes in SharonAI Pty Ltd, as if such events had occurred on the relevant pro forma reference date, in order to present the combined financial information on a consistent and comparable basis.

The unaudited pro forma combined statement of operations for the twelve months ended December 31, 2024 combines:

● the historical audited consolidated statement of operations of SharonAI Inc. for the twelve months ended December 31, 2024;

● the historical audited statement of operations of Roth for the twelve months ended December 31, 2024; and

● the historical audited statement of operations of DSS for the six months ended June 30, 2024.

The unaudited pro forma combined statement of operations has been prepared to give effect to the Business Combination and related transactions and the DSS Acquisition summarized below as if they had been consummated on January 1, 2024, the beginning of the earliest period presented. These periods are presented on the basis that SharonAI is the accounting acquirer.

The unaudited pro forma combined balance sheet as of September 30, 2025 has been prepared using, and should be read in conjunction with:

● SharonAI Holdings Inc.'s unaudited condensed balance sheet as of September 30, 2025 and the related notes thereto included herein;

● SharonAI Inc.'s unaudited condensed consolidated balance sheet as of September 30, 2025 and the related notes thereto included herein;

● Roth's unaudited condensed consolidated balance sheet as of September 30, 2025 and the related notes thereto included in Roth's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2025 and incorporated herein by reference.

The unaudited pro forma combined statement of operations for the nine months ended September 30, 2025 has been prepared using, and should be read in conjunction with:

● SharonAI Holdings Inc.'s unaudited condensed statement of operations for the nine months ended September 30, 2025 and the related notes thereto included herein;

● SharonAI Inc.'s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2025 and the related notes thereto included herein;

● Roth's unaudited condensed consolidated statement of operations for the nine months ended September 30, 2025 and the related notes thereto included in Roth's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2025 and incorporated herein by reference;

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The unaudited pro forma combined statement of operations for the year ended December 31, 2024 has been prepared using, and should be read in conjunction with:

● SharonAI Holdings Inc.'s audited statement of operations for the period from December 30, 2024 (Inception) to December 31, 2024 and the related notes thereto included in SharonAI Holdings Inc.'s Registration Statement on Form S-4 filed on October 21, 2025, as amended;

● SharonAI Inc.'s audited consolidated statement of operations for the year ended December 31, 2024 and the related notes thereto included in SharonAI Holdings Inc.'s Registration Statement on Form S-4 filed on October 21, 2025, as amended;

● Roth's audited consolidated statement of operations for the year ended December 31, 2024 and the related notes thereto included in Roth's Annual Report on Form 10-K filed with the SEC on March 28, 2025 and incorporated herein by reference;

● DSS's audited consolidated statement of operations for the six-month period ended June 30, 2024 and the related notes thereto included in SharonAI Holdings Inc.'s Registration Statement on Form S-4 filed on October 21, 2025, as amended;

The historical financial statements of SharonAI Holdings Inc., SharonAI Inc., Roth and DSS were prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

The adjustments presented in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an understanding of SharonAI Inc. upon consummation of the Business Combination and the disposal of membership interest in TCDC. The pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information and certain assumptions and methodologies that SharonAI Holdings Inc. believes are reasonable under the circumstances. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible that the difference may be material. SharonAI Holdings Inc. management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma combined financial information.

**Note 2 - Adjustments to unaudited pro forma combined balance sheet as of September 30, 2025.**

The adjustments included in the unaudited proforma combined balance sheet as of September 30, 2025 are as follows:

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| | |
|:---|:---|
| **2(a)** | Reflects remaining estimated transaction costs expected to be incurred by SharonAI Inc. of approximately $193,917, for legal, accounting and advisory services in connection with the Business Combination and related transactions. None of these fees have been accrued as of the pro forma balance sheet date. The amount of $193,917 is reflected as an adjustment to accumulated losses. |
| **2(b)** | Reflects remaining estimated transaction costs expected to be incurred by Roth of approximately $48,686, for legal, accounting and advisory services in connection with the Business Combination and related transactions. None of these fees have been accrued as of the pro forma balance sheet date. The amount of $48,686 is reflected as an adjustment to accumulated losses. The Roth estimated transaction costs excludes the deferred legal fees included in note 2(c). |
| **2(c)** | Reflects the payment of deferred legal fees incurred by Roth that will become due following the Closing. |

---

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| | |
|:---|:---|
| **2(d)** | Reflects the recapitalization of SharonAI Inc. through the contribution of all outstanding SharonAI Inc. Common Stock, SharonAI Inc. Series A Preferred Stock and SharonAI Series B Convertible Preferred Stock of SharonAI to Roth and the issuance of 10.5 million and 0.13 million of SharonAI Holdings Inc. Class A Ordinary Common Stock and SharonAI Holdings Inc. Class B Super Common Stock, respectively. As a result of the recapitalization, the carrying value of (i) SharonAI Inc. Series A Preferred Stock of US$2, (ii) SharonAI Inc. Series B Convertible Preferred Stock of US$3, and (iii) SharonAI Inc. Common Stock of US$107 were derecognized. |

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| | |
|:---|:---|
| **2(e)** | Reflects the conversion of 45,203,220 Roth Class A ordinary shares and 75,000 Roth Class B ordinary shares into 905,566 SharonAI Holdings Inc. Class A Ordinary Common stock. |
| **2(f)** | Reflects the elimination of Roth's historical additional paid-in capital balance. |
| **2(g)** | Reflects the conversion of $269,999.70 of related party debt converted in 2,249,999 Roth Class A ordinary shares and subsequently into 45,000 SharonAI Holdings Inc. Class A Ordinary Common stock |
| **2(h)** | Reflects the issuance and immediate conversion on closing of $2,250,000 of convertible note instruments converted in to 375,001 Class A ordinary shares |
| **2(i)** | Reflects the sale of Membership interest in Texas Critical Data Centers LLC on December 19 2025 for $70m via binding Term Sheet, subsequently closing on January 16 2026. |

---

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| | |
|:---|:---|
| Estimated Sale proceeds receivable | $70000000 |
| Contributed Funds at end of period | $(850000) |
| Contributed Funds post period end | $(2564432) |
| Advisory fees | $(674356) |
| Gain on Sale | $66761212 |
| Expected taxation\* | $(22031200) |
| Net Gain | $44730012 |

---

\* The pretax gain is subject to income taxes at a blended statutory rate of approximately 33% (U.S. federal income tax at 21% and other income taxes at 12%). The tax rates are estimates and may change in conjunction with full taxation analysis.

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| | |
|:---|:---|
| **2(j)** | Reflects the $103m convertible notes issued on December 19 2025 by SharonAI Pty Ltd at the current estimated fair value. The initial accounting for these transactions is not complete and estimated amounts are subject to change upon the receipt of the final fair value. The adjustments are including fees associated with the issuance of 6% of proceeds or $6.2m. |

---

 **Note 3 - Adjustments to unaudited pro forma combined statement of operations for the year ended December 31, 2024.**

The adjustments to the unaudited pro forma combined statement of operations for the year ended December 31, 2024 in relation to the Business Combination are as follows:

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| | |
|:---|:---|
| **3(a)** | Reflects remaining estimated transaction costs expected to be incurred by SharonAI Inc. of approximately $193,917, for legal, accounting and advisory services in connection with the Business Combination and related transactions. None of these fees have been accrued as of the pro forma balance sheet date. The amount of $193,917 is reflected as an adjustment to accumulated losses. |
| **3(b)** | Reflects the elimination of interest earned on the investments held in the Trust Account. |

---

**Note 4 - Loss per Share**

Represents the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025. As the Business Combination is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted earnings per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire period presented.

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**Note 5 - Roth Reclassifications Adjustments**

During the preparation of the unaudited pro forma combined financial information, SharonAI Inc. performed a preliminary analysis to identify differences in SharonAI Inc.'s and the historical financial statement presentation and significant accounting policies of Roth. Based on its initial analysis, SharonAI Inc. did not identify any differences in accounting policies that would have a material impact on the unaudited pro forma combined financial information. However, certain reclassification adjustments have been made to conform Roth's historical financial statement captions to SharonAI Inc.'s financial statement captions in the unaudited pro forma combined financial information. These reclassifications have no effect on previously reported total assets, total liabilities, stockholders' equity/deficit, total revenues, total expenses, or net income of Roth.

Following the completion of the merger, or as more information becomes available, SharonAI Inc. will finalize its comprehensive review of financial statement presentation and accounting policies. Therefore, the pro forma financial information may not reflect all reclassifications necessary to conform Roth's presentation to that of SharonAI Inc. due to limitations on the availability of information as of the date of this information statement and proxy statement/prospectus. Accounting policy differences and additional reclassification adjustments may be identified as more information becomes available.

The following sets forth the reclassification adjustments made to conform Roth's presentation to SharonAI Inc.'s presentation in the unaudited pro forma combined balance sheet as of September 30, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
| <br> **Roth caption** | <br> **SharonAI caption** | **Roth<br> As Reported** | **Reclassification<br> Adjustments** | **Note** | **Roth <br> As Reclassified** |
| **ASSETS** | **ASSETS** |  |  |  |  |
| Current Assets: | Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Cash | &nbsp;&nbsp;&nbsp; Cash and cash equivalents | 16083 |  |  | 16083 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses |  | 1875 | (1875) | **5(a)** |  |
| &nbsp;&nbsp;&nbsp; Short-term prepaid insurance |  | 3333 | (3333) | **5(a)** |  |
|  | &nbsp;&nbsp;&nbsp; Other current assets |  | 5208 | **5(a)** | 5208 |
|  | **Total current assets** | **21291** | **-** |  | **21291** |
|  | **Total assets** | **21291** | **-** |  | **21291** |
| **LIABILITIES AND SHAREHOLDERS' DEFICIT** | **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |  |  |
| Current Liabilities: | Current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses |  | 1551314 | (1551314) | **5(b)** |  |
|  | &nbsp;&nbsp;&nbsp; Trade and other payables |  | 1551314 | **5(b)** | 1551314 |
| &nbsp;&nbsp;&nbsp; Advances from related party |  | 256636 |  |  | 256636 |
|  | &nbsp;&nbsp;&nbsp; Trade and other payables |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Warrant liabilities | &nbsp;&nbsp;&nbsp; Warrant liabilities | 1335000 | - |  | 1335000 |
|  | **Total liabilities** | **3142950** | **-** |  | **3142950** |
| Shareholders' Deficit: | Shareholders' equity (deficit) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Class A ordinary shares | &nbsp;&nbsp;&nbsp; Class A ordinary shares | 4521 |  |  | 4521 |
| &nbsp;&nbsp;&nbsp; Class B ordinary shares | &nbsp;&nbsp;&nbsp; Class B ordinary shares | 7 |  |  | 7 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | &nbsp;&nbsp;&nbsp; Additional paid-in capital | 7769174 |  |  | 7769174 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | &nbsp;&nbsp;&nbsp; Accumulated deficit | (10895361) | - |  | (10895361) |
|  | **Total stockholders' equity (deficit)** | **(3121659)** | **-** |  | **(3121659)** |
|  | **Total liabilities and stockholders' equity (deficit)** | **21291** | **-** |  | **21291** |

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| | |
|:---|:---|
| **5(a)** | Represents the reclassification of "Prepaid" on Roth's balance sheet into "Other current assets" to conform to SharonAI Inc.'s balance sheet presentation. |
| **5(b)** | Represents the reclassification of "Accounts payable and accrued expenses" on Roth's balance sheet into "Trade and other payables" to conform to SharonAI Inc.'s balance sheet presentation. |

---

The following sets forth the reclassification adjustments made to conform Roth's presentation to SharonAI Inc.'s presentation in the unaudited pro forma condensed combined statement of profit for the nine months ended September 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **For the Nine Months Ended<br> September 30, 2025** | **For the Nine Months Ended<br> September 30, 2025** | **For the Nine Months Ended<br> September 30, 2025** | **For the Nine Months Ended<br> September 30, 2025** |
| <br> **Roth caption** | <br> **SharonAI caption** | **Roth <br> As Reported** | **Reclassification<br> Adjustments** | **Note** | **Roth<br> As Reclassified** |
| Formation and operating costs |  | (945973) | 945973 | **5(d)** |  |
|  | Selling, general, and administrative expenses |  | (945973) | **5(d)** | (945973) |
| **Loss from operations** | **Loss from operations** | **(945973)** | **-** |  | **(945973)** |
| Change in fair value of warrant liabilities | Change in fair value of warrant liabilities | (1112500) | - |  | (1112500) |
| **Net income/(loss)** | **Net loss** | **(2058473)** | **-** |  | **(2058473)** |

---

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| | |
|:---|:---|
| **5(d)** | Represents the reclassification of "Formation and operating costs" on Roth's statement of profit or loss into "Selling, general, and administrative expenses" to conform to SharonAI's statement of operations presentation. |

---

The following sets forth the reclassification adjustments made to conform Roth's presentation to SharonAI Inc.'s presentation in the unaudited pro forma condensed combined statement of profit for the year ended December 31, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** |
| <br> **Roth caption** | <br> **SharonAI caption** | **Roth <br> As Reported** | **Reclassification<br> Adjustments** | **Note** | **Roth <br> As Reclassified** |
| General and administrative expenses |  | (650122) | 650122 | **5(e)** |  |
|  | Selling, general, and administrative expenses |  | (650122) | **5(e)** | (650122) |
| **Loss from operations** | **Loss from operations** | **(650122)** | **-** |  | **(650122)** |
| Change in fair value of warrant liabilities | Change in fair value of warrant liabilities | 333750 |  |  | 333750 |
| Interest income on cash and marketable securities held in Trust Account |  | 435437 | (435437) | **5(f)** |  |
|  | Interest expense, net |  | 435437 | **5(f)** | 435437 |
| **Net income/(loss)** | **Net income/(loss)** | **119065** | **-** |  | **119065** |

---

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| | |
|:---|:---|
| **5(e)** | Represents the reclassification of "Formation and operating costs" on Roth's statement of profit or loss into "Selling, general, and administrative expenses" to conform to SharonAI Inc.'s statement of operations presentation. |
| **5(f)** | Represents the reclassification of "Interest income on cash and marketable securities held in Trust Account" on Roth's statement of profit or loss into "Interest income, net" to conform to SharonAI Inc.'s statement of operations presentation. |

---

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**Note 6 - Pro Forma Adjustments for DSS Acquisition**

Certain transaction accounting adjustments have been made in the historical presentation of SharonAI Inc.'s statement of operations for the year ended December 31, 2024 to present the effects of the DSS acquisition. SharonAI Inc. (as adjusted) presented in the combined statements of operations for the year ended December 31, 2024 reflects the effects of the DSS acquisition as if the acquisition had been consummated on January 1, 2024, the beginning of the earliest period presented.

The results of DSS are included in the historical financial information of SharonAI Inc. from July 1, 2024. Accordingly, no adjustments have been made to the historical financial information for SharonAI Inc. as presented in the unaudited pro forma combined balance sheet as of June 30, 2025 for the DSS acquisition. Adjustments have been made to the historical financial information for SharonAI Inc. as presented in the unaudited pro forma combined statement of operations for the year ended December 31, 2024 to include the results of DSS from January 1, 2024 to June 30, 2024.

The adjustments to reflect the effects of the DSS acquisition on SharonAI Inc.'s historical audited consolidated statement of operations for the year ended December 31, 2024 are summarized as follows.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Historical** | | | | |
|  | **SharonAI<br> As Reported** | **DSS**<br>**As Reclassified<br> (Note 7)**  | **DSS<br> Acquisition<br> Transaction**<br> **Accounting<br> Adjustments** | <br> **Note** |<br> **SharonAI <br> As Adjusted**  |
| Revenue | 438292 | 732631 |  |  | 1170923 |
| Cost of revenue | (719993) | (754402) |  |  | (1474395) |
| **Gross loss** | **(281701)** | **(21771)** | **-** |  | **(303472)** |
| Shared based compensation | (253728) | (3013167) |  |  | (3266895) |
| Selling, general, and administrative expenses | (2368745) | (502221) | (550000) | **6(a)** | (3420966) |
| Other expenses | (2047133) | (154595) |  |  | (2201728) |
| **Loss from operations** | **(4951307)** | **(3691754)** | **(550000)** |  | **(9193061)** |
| Change in fair value of digital assets | 157923 | 442500 |  |  | 600423 |
| Other income | 921322 | 351633 |  |  | 1272955 |
| Interest expense, net | (19028) | (128455) |  |  | (147483) |
| **Loss before income taxes** | **(3891090)** | **(3026076)** | **(550000)** |  | **(7467166)** |
| Income tax expense | (32908) | (41169) | - | **6(b)** | (74077) |
| **Net income/(loss)** | **(3923998)** | **(3067245)** | **(550000)** |  | **(7541243)** |
| Net loss attributable to noncontrolling interest | (18717) | - |  |  | (18717) |
| **Net loss attributable to SharonAI Inc.** | **(3905281)** | **(3067245)** | **(550000)** |  | **(7522526)** |

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| | |
|:---|:---|
| **6(a)** | Reflects the incremental amortization expense related to the intangible assets acquired by SharonAI Inc. for the period from January 1, 2024 to June 30, 2024. Amortization is calculated assuming a straight-line method of amortization based on the estimated fair value and useful lives of each intangible asset as of the closing of the DSS Acquisition. The intangible asset acquired by SharonAI Inc. include the technology and was determined to have weighted average useful lives of approximately 2 years. The following summarizes the pro forma adjustment to record the incremental amortization expense resulting from SharonAI Inc.'s acquisition of DSS. |

---

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| | |
|:---|:---|
|  | **Period from<br> January 1,<br> 2024 to<br> June 30,<br> 2024** |
| Selling, general, and administrative expenses | (550000) |

---

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| | |
|:---|:---|
| **6(b)** | Reflects the estimated income tax impact of the pro forma transaction accounting adjustments for the DSS Acquisition as described herein, using the statutory tax rate in the United States of 21%, net of valuation allowances. |

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**Note 7 - DSS Reclassifications Adjustments**

For purposes of preparing SharonAI Inc. (as adjusted), presented in the pro forma combined statement of operations for the year ended December 31, 2024, certain reclassifications have been made to confirm the historical presentation of DSS's statement of profit or loss to conform to the historical presentation of SharonAI Inc.'s statement of operations used in the unaudited pro forma combined statement of operations.

The following sets forth the pre-acquisition adjustments and reclassifications made to conform DSS's statement of profit or presentation to SharonAI Inc.'s statement of operations presentation for the year ended December 31, 2024:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Period from<br> January 1, 2024 to June 30, 2024** | **Period from<br> January 1, 2024 to June 30, 2024** | **Period from<br> January 1, 2024 to June 30, 2024** | **Period from<br> January 1, 2024 to June 30, 2024** |
| <br> **DSS caption** | <br> **SharonAI caption** | **DSS<br> As Reported** | **Reclassification<br> Adjustments** | **Note** | **DSS<br> As Reclassified** |
| Revenue | Revenue | 732631 |  |  | 732631 |
| Cost of revenue | Cost of revenue | (754402) | - |  | (754402) |
| **Gross profit/(loss)** | **Gross loss** | **(21771)** | **-** |  | **(21771)** |
| Shared based compensation | Shared based compensation | (3013167) |  |  | (3013167) |
| Selling, general, and administrative expenses | Selling, general, and administrative expenses | (502221) |  |  | (502221) |
| Other expenses | Other expenses | (154595) | - |  | (154595) |
| **Profit/(Loss) from operations** | **Loss from operations** | **(3691754)** | **-** |  | **(3691754)** |
| Gain on sale of intangible assets |  | 73425 | (73425) | **7(a)** |  |
|  | Other income |  | 73425 | **7(a)** | 73425 |
| Fair value gain on revaluation of digital assets |  | 442500 | (442500) | **7(b)** |  |
|  | Change in fair value of digital assets |  | 442500 | **7(b)** | 442500 |
| Other income | Other income | 278208 |  |  | 278208 |
| Interest expense, net | Interest expense, net | (128455) | - |  | (128455) |
| **Profit/(Loss) before income taxes** | **Loss before income taxes** | **(3026076)** | **-** |  | **(3026076)** |
| Income tax expense | Income tax expense | (41169) | - |  | (41169) |
| **Net income/(loss)** | **Net loss** | **(3067245)** | **-** |  | **(3067245)** |

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| | |
|:---|:---|
| **7(a)** | Represents the reclassification of "Gain on sale of intangible assets" on DSS's statement of profit or loss into "Other income" to conform to SharonAI Inc.'s statement of operations presentation. |
| **7(b)** | Represents the reclassification of "Fair value gain on revaluation of digital assets" on DSS's statement of profit or loss into "Change in fair value of digital assets" to conform to SharonAI Inc.'s statement of operations presentation. |

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ROTH CH**

References to "Roth," "our," "us" or "we" refer to Roth CH Acquisition Co. The following discussion and analysis of Roth's financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this prospectus.

**Overview**

We are a blank check company incorporated on April 20, 2021 under the name "TKB Critical Technologies 1", as a Cayman Islands exempted company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to throughout this Annual Report as our initial business combination. Effective September 7, 2023, shareholders approved a change in the Company's name to Roth CH Acquisition Co.

**Recent Developments – Business Combination Agreement**

On January 28, 2025, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>"), by and among the Company, Roth CH Holdings, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (the "<u>Domestication Sub</u>"), Roth CH Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company ("<u>Merger Sub</u>"), and SharonAI Inc., a Delaware corporation ("<u>SharonAI Inc</u>."). On May 23, 2025, the parties to the Business Combination Agreement entered into an Amendment to the Business Combination Agreement, pursuant to which the Outside Date was extended to October 31, 2025, and then on October 14, 2025, the parties entered into a Second Amendment to the Business Combination Agreement, pursuant to which the Outside Date was extended to December 31, 2025. The Business Combination Agreement and the Amendment are attached to this prospectus as Exhibits 2.1, 2.2 and 2.3.

SharonAI Inc. is a holding company formed to acquire various assets focused on or in the high performance computing ("<u>HPC</u>") industry, specifically the artificial intelligence field of technology, and on the acquisition of the infrastructure and technology associated with the development and delivery of HPC services to users and applications which require both large amounts of graphic processing units and central processing units combined with expertise in data storage.

The Business Combination Agreement provided that, among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions contemplated by the Business Combination Agreement, the "<u>Business Combination</u>"):

(1) On December 16, 2025, the Company continued out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation by means of a merger (the "<u>Domestication Merger</u>") of the Company with and into Domestication Sub, with the Domestication Sub as the surviving company (the "<u>Domesticated Parent</u>") pursuant to the Companies Act (As Revised) of the Cayman Islands and the applicable provisions of the Delaware General Corporation Law, as amended. Upon the Domestication Merger, Domesticated Parent changed its name to "SharonAI Holdings Inc.", and, thereafter (2) (a) the Merger Sub merged with and into SharonAI, (b) the separate corporate existence of Merger Sub ceased, and SharonAI shall be the Surviving Corporation, and (c) the Surviving Corporation became a wholly-owned Subsidiary of the Domesticated Parent (the "<u>Acquisition Merger</u>").

The Aggregate Merger Consideration was approximately 11,216,713 shares of Common Stock of the Domesticated Parent to be issued at the closing of the Business Combination. Completion of the Business Combination is subject to the satisfaction or waiver, where permissible, of various conditions to closing.

The Business Combination was consummated on December 17, 2025.

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**Issuance of Class A Ordinary Common Stock**

On December 17, 2025, we issued 2,249,999 shares of Class A Ordinary Common Stock in consideration of cancellation of approximately $270,000 of outstanding indebtedness.

**Corporate History**

***Formation and Initial Public Offering.*** On October 29, 2021, we consummated our initial public offering of 23,000,000 units (the "<u>Units</u>"), including 3,000,000 Units that were issued pursuant to the underwriters' exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds of $230,000,000. Each Unit consists of one Class A Ordinary Share, par value $0.0001 per share (the "<u>Roth Class A Shares</u>") and one-half of one warrant to purchase a Roth Class A Share (the "<u>Public Warrants</u>"). Simultaneously with the closing of our initial public offering, we consummated the sale of 10,750,000 private placement warrants (the "<u>Private Warrants</u>") at a price of $1.00 per Private Warrant in a private placement to our former sponsor, TKB Sponsor I, LLC, (the "<u>Former Sponsor</u>") generating proceeds of $10,750,000.

A total of $234,600,000 of the proceeds from the initial public offering and the sale of the Private Warrants was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee (the "<u>Trust Account</u>").

Our Units commenced public trading on October 27, 2021 on the Nasdaq Stock Market LLC, and our Roth Class A Shares and Public Warrants commenced separate public trading on December 17, 2021. On April 25, 2024, the Company voluntarily delisted its securities from Nasdaq and they began being quoted on the OTC Markets. Our Roth Class A Shares and Public Warrants are each quoted on the OTC Markets under the symbols "USCTF," and "USTWF," respectively.

***Securities Transfer Agreement and Name Change***. On June 25, 2023, the Company, the Former Sponsor, each independent director of the Company, and affiliates of Roth Capital Partners and Craig-Hallum Capital Group LLC (the "<u>New Sponsor</u>") entered into a Securities Transfer Agreement (the "<u>Agreement</u>") pursuant to which the Former Sponsor and the former directors of the Company sold to the Buyers, an aggregate of 4,312,500 Ordinary Shares consisting of 4,237,500 Roth Class A Shares and 75,000 Roth Class B Shares and 8,062,500 private placement warrants (together, the "Transferred Securities") for an aggregate purchase price (the "<u>Purchase Price</u>") of $1.00 (the "<u>Transaction</u>"). Following the closing of the Transaction, the Former Sponsor has certain continuing rights, including a right of first refusal to repurchase the Transferred Securities in certain circumstances as set forth in the Agreement and the right to invest up to 25% of certain financings. The Transaction was consummated on June 28, 2023.

***Termination of Status as a SPAC.***

The Company originally extended the time that it had to complete an initial business combination by depositing an aggregate of $540,000 into the trust account for a total of nine Monthly Deposits, On April 29, 2024, the Company held an extraordinary general meeting at which shareholders approved a proposal to amend and restate the Company's Articles of to remove the provisions applicable to special purpose acquisition companies including the requirement to redeem and cancel 100% of the Roth Class A Ordinary Shares sold in the Company's initial public offering following distribution of the funds held in the Company's Trust Account (the "<u>Amendment Proposal</u>"). The purpose of the Amendment Proposal was to remove the provisions contained in the Articles that are applicable to special purpose acquisition companies ("<u>SPACs</u>"), including the requirement to redeem and cancel 100% of the Company's public shares following distribution of the funds held in the Company's Trust Account established in connection with the IPO and revise the provisions to allow shareholders of the Company to obtain their pro rata distribution of funds remaining in the Trust Account and also retain ten (10%) percent of their shares upon liquidation of the Trust Account. Shareholders approved the Amendment Proposal on April 29, 2024. As a result, the Trust Account was liquidated.

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**Results of Operations**

We have neither engaged in any operations nor generated any revenues to date. Our only activities to date were organizational activities, those necessary to prepare for the Initial Public Offering described below, and subsequent to the Initial Public Offering, identifying a target company for an initial business combination. We will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents. Our expenses have increased substantially after the closing of our initial public offering as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

*<u>For the nine-months ended September 30, 2025</u>*

For the three months ended September 30, 2025, we had net loss of $707,953 which consists of the change in fair value of warrant liabilities of $467,250 and operational costs of $240,703.

For the nine months ended September 30, 2025, we had net loss of $2,058,473 which consists of the change in fair value of warrant liabilities of $1,112,500 and operational costs of $945,973.

For the three months ended September 30, 2024, we had net loss of $59,858 which consists of operational costs.

For the nine months ended September 30, 2024, we had net income of $450,355 which consists of interest earned on marketable securities held in the Trust Account of $435,437 and the change in fair value of warrant liabilities of $529,550, offset by operational costs of $514,632.

*<u>For the year ended December 31, 2024</u>*

For the year ended December 31, 2024, we had net income of $119,065 which consists of interest earned on marketable securities held in the Trust Account of $435,437 and the change in fair value of warrant liabilities of $333,750, partially offset by operational costs of $650,122.

**Liquidity, Capital Resources and Going Concern** 

For the nine months ended September 30, 2025, net cash used in operating activities was $318,879. Net loss of $2,058,473 was adjusted by a $1,112,500 change in fair value of warrant liabilities. Changes in operating assets and liabilities provided $627,094 of cash for operating activities.

For the year ended December 31, 2024, net cash used in operating activities was $353,921. Net income of $119,065 was adjusted by $435,437 of interest income on marketable securities held in trust and a $333,750 change in fair value of warrant liabilities. Changes in operating assets and liabilities provided $296,201 of cash for operating activities.

As of September 30, 2025, we had cash of $16,083. We intend to use the funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

As of December 31, 2024, we had cash of $6,738. We intend to use the funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

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On July 1, 2023 the Company entered into a promissory note with the Buyers for up to an aggregate of $1,000,000 (the "<u>2023 Promissory Note</u>"). The 2023 Promissory Note is non-interest bearing and payable upon the earlier of the date on which the Company consummates an initial business combination, the liquidation of the Company, or October 29, 2024. The Note does not bear any interest. On August 8, 2024, the Company amended the terms of the 2023 Promissory Note to increase the aggregate principal amount that may be borrowed to $2,000,000 and to extend the maturity to June 30, 2025.

On January 24, 2025, the Company amended and restated its 2023 promissory note (the "<u>Convertible Note</u>") in favor of certain shareholders of the Company to permit its conversion into Class A ordinary shares of Company, at any time, at the option of the representative of the noteholders based upon the current trading price. Subsequent to the execution of the Convertible Note, on January 24, 2025, the representative provided notice that it intended to convert the existing principal balance of the Convertible Note in the amount of $1,181,000 into 39,366,667 Class A ordinary shares of the Company.

We expect that we will need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. We expect to incur significant costs related to identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of time within one year from the date that the condensed financial statements are issued. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we will repay such loaned amounts. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds.

The Company assessed going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Codification ("<u>ASC</u>") Topic 205-40, "Basis of Presentation – Going Concern". Management has determined that the liquidity condition raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities.

**Off-Balance Sheet Financing Arrangements**

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

**Contractual Obligations**

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities, other than described below.

**Critical Accounting Policies**

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. Significant estimates include the fair value of warrant liabilities, which requires a Black-Scholes model to fair value the warrants. We have identified the following critical accounting policies:

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*Warrant Liabilities*

The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("<u>ASC 480</u>") and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. See Note 7 to the Notes to Financial Statements for the valuation methodology of warrants.

*Recent Accounting Standards*

*Recently Adopted Accounting Pronouncements*

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting-Improvements to Reportable Segment Disclosures (Topic 280) ("<u>ASU 2023-07</u>"), which requires an enhanced disclosure of segments on an annual and interim basis, including the title of the chief operating decision maker, significant segment expenses, and the composition of other segment items for each segment's reported profit or loss. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a material impact on the consolidated financial statements.

*Recently Issued Accounting Pronouncements Not Yet Adopted*

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the impacts of adoption of this ASU.

The Company's management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SHARONAI INC**

*The following discussion and analysis provides information which SharonAI's management believes is relevant to an assessment and understanding of SharonAI's results of operations and financial condition. This discussion and analysis should be read together with SharonAI's audited financial statements as of and for the years ended December 31, 2024 and 2023 and the related notes and the and the unaudited financial statements as of and for the periods ended September 30, 2025 and 2024 and related notes included elsewhere in this registration statement. This discussion and analysis should also be read together with the unaudited pro forma combined financial information as of and for the year ended December 31, 2024 in the section titled "Unaudited Pro Forma Combined Financial Information". This discussion and analysis may contain forward-looking statements based upon current expectations that are subject to known and unknown risks, uncertainties and assumptions. SharonAI's actual results may differ significantly from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" or in other parts of this registration statement. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations of SharonAI" to "we", "us", "our", and "the Company" are intended to mean the business and operations of SharonAI.*

**Basis of Presentation**

SharonAI is a corporation formed in Delaware on February 15, 2024, with the intent to act as a holding company to acquire various assets focused on or in the High Performance Computing ("<u>HPC</u>") industry and the Artificial Intelligence ("<u>AI</u>") field of technology, and currently one of Australia's leading Neoclouds, a cloud infrastructure provider that focuses on specialized, high-performance compute—especially GPU-heavy workloads for AI, machine learning, and HPC. HPC is a computing technology that uses clusters of processors or processor cores working in parallel to solve advanced computational problems across a wide range of scientific, engineering, finance, business and other fields. We are specifically focused on infrastructure and technology associated with the development and delivery of these HPC/AI services to users and applications which require both large amounts of Graphic Processing Units ("<u>GPU</u>") and Central Processing Units ("<u>CPU</u>"), combined with data storage. CPUs are general purpose processors while GPUs are optimized for parallel processing and were originally used for computer graphics. Data storage is used to store the large data sets common in HPC/AI and to back up information. Our two main business lines are an AI/HPC cloud platform, which is based in Australia, and the development of power and data center assets, which is based in the U.S.

In March of 2024, we formed two new wholly owned subsidiaries in Delaware, SharonAI Operations LLC, which we intend to use for U.S. based operational activities as our operations expand to the U.S., and SharonAI Hosting LLC, which we intend to use to hold assets that are acquired in the future and based in the U.S.

In April of 2024, we acquired 100% of the issued capital of Alternative Asset Management Pty Ltd ACN 645 215 194 (AAM), an Australian company that we renamed SharonAI Pty Ltd ("<u>SAIPL</u>") and which has a business operating distributed data storage a type of cloud storage that utilizes Web 3 technology to provide decentralized networks of independent nodes to securely store and retrieve data, ensuring redundancy, fault tolerance, and resistance to censorship while incentivizing storage providers with blockchain-based rewards. This acquisition was part of a transaction in which SAIPL also obtained certain assets from Digital Income Fund Pty Ltd ACN 643 155 328 as trustee for the Digital Income Fund ABN 12 771 427 247 ("<u>DIF</u>"), an Australian company which it acquired storage servers and ancillary equipment for the operation of the distributed storage operations. In addition to these assets AAM had acquired a Tier 3 designed modular data center.

In June of 2024, we acquired over 95% of the issued capital of Distributed Storage Solutions Limited ACN 646 979 222 ("<u>DSS</u>") via direct agreement with individual shareholders, an Australian company that operates distributed data storage and HPC/AI equipment. In the period from June 2024 to December 2024, we continued with further acquisitions of the issued capital ending 2024 with over 99% of outstanding stock in DSS. The acquisitions of SAIPL and DSS provided us with a substantial amount of storage capacity, GPUs and CPUs, a core operational team including our current chief operating officer and strategic relationships with suppliers including Lenovo and NEXTDC. Both SAIPL and DSS continue as our main operating subsidiaries in Australia.

In January of 2025, we formed a 50:50 joint venture with New Era Energy and Digital, Inc., named TCDC, to fund, develop, and construct a planned 250MW sustainable data center site project behind the meter with a natural gas-fired power plant within the Permian Basin in Western Texas.

On January 30, 2025, the Company entered into a Business Combination Agreement (the "<u>BCA</u>") with Roth CH Acquisition Co. ("<u>Roth CH</u>") and subsequently on May 14 2025, filed an S-4 registration statement in participation with Roth with the Securities and Exchange Commission ("<u>SEC</u>").

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On June 9, 2025, the Company made a strategic decision to cease its participation in the operations associated with the Filecoin ecosystem in order to focus its resources and efforts on the continued growth of its high-performance GPU-as-a-Service (GPUaaS) business. This decision aligns with the Company's long-term strategy to concentrate on providing scalable, on-demand computing infrastructure for artificial intelligence, research, and other data-intensive applications.

On June 30, 2025, all activities related to the Company's prior Filecoin-related operations had been fully wound down. This transition reflects a broader shift toward infrastructure services with more predictable and scalable revenue opportunities and supports the Company's goal of building a focused, capital-efficient technology services platform.

**Key Factors Affecting Operating Results**

The Company's operating results for the quarter were primarily influenced by continued strategic activity following corporate transactions completed in 2024. A significant portion of the quarter was dedicated to advancing the planned merger, both from a corporate governance and regulatory standpoint, and through operational integration efforts. Concurrently, the Company invested heavily in the development and deployment of new proprietary operating software and cloud computing platforms. While these initiatives did not materially improve financial performance in Q1, they represent foundational work aimed at enabling future scalability, improved product offerings, and enhanced customer engagement. These investments are expected to support the acquisition of higher quality customers, deliver operational efficiencies, and position the business for long-term revenue growth and profitability. The Company views these developments as critical to its forward strategy, despite their limited impact on short-term results.

The third quarter of 2025 showed a loss of $1,636 thousand and the first nine months of 2025 showed a loss of $7,541 thousand.

**Industry Trends**

During the period, the Company has strategically continued to shift 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.

The market for GPU Cloud services has shown strong theoretical demand, with significant interest from AI developers, research institutions, and enterprises seeking cost-effective, scalable compute resources. 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.

However, the Company operates in a highly dynamic and competitive landscape, with several key challenges that could impact its ability to scale efficiently. Access to essential GPU hardware remains constrained, with supply chain limitations, geopolitical restrictions, and high demand from hyperscalers and AI-focused enterprises driving longer lead times and increased acquisition costs. The evolving nature of AI and high-performance computing technologies also presents a risk of obsolescence, requiring continuous adaptation and investment in next-generation infrastructure.

Additionally, rising operational costs, particularly for power, colocation services, and network infrastructure, are increasing the cost base for GPU Cloud services. These inputs are critical to the Company's ability to deliver competitive pricing and maintain sustainable margins in a market where efficiency and performance optimization are key differentiators.

The Company is actively working to optimize its deployment strategies, secure long-term supplier agreements, and refine its orchestration technology to enhance scalability, utilization, and cost efficiency. As the GPU Cloud platform reaches full-scale deployment, the Company expects to capitalize on the strong demand for AI and HPC compute resources while mitigating the impact of rising costs and supply chain constraints.

**Critical Accounting Polices and Estimates**

SharonAI believes that the following critical policies affect it's more significant judgments and estimates used in preparation of the Company's consolidated financial statements.

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*Goodwill*

Goodwill represents the excess of purchase price of acquisitions over the acquisition date fair value of the net assets of businesses acquired. Goodwill is not amortized and is tested at least annually for impairment. We perform our annual analysis during the beginning of the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill is evaluated for impairment by comparing our estimate of the fair value of the reporting unit, or operating segment, with the reporting unit's carrying value, including goodwill. Given the Company's reporting and operating structure as a single operating segment — the provision of high-performance computing services — and the integration of the acquired entity into group-wide operations, goodwill is tested at the reporting unit level, defined as the consolidated Group.

During 2024 management first assessed goodwill for impairment by evaluating qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount including goodwill. Management evaluated macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and various entity specific events to determine that an impairment indicator was not present and an additional quantitative impairment test was not required. The use of alternate judgments and/or assumptions could result in a different conclusion which would require a quantitative impairment test and the recognition of different levels of impairment charges in the consolidated financial statements.

We did not record a goodwill impairment charge for the year ended December 31, 2024. In addition, we are implementing strategic plans as discussed in Recent Business Developments to help prevent impairment charges in the future.

As of June 30, 2025, the Company performed an interim impairment test for goodwill in accordance with ASC 350-20, due to a triggering event. In June 2025, the Board approved the closure of the Company's distributed storage operations, which were part of a business acquired in June 2024. The shutdown represented a significant change in strategic direction and constituted a triggering event requiring impairment testing.

Goodwill arising from the acquisition amounted to $18.0 million and is allocated to the Group's sole reporting unit, which is also the Group's single operating segment-provision of high-performance computing services. The acquired operations were fully integrated into the Group and do not represent a standalone reporting unit.

A quantitative impairment test was performed using a discounted cash flow (DCF) model, with the following key assumptions:

● Projection period: FY2025 to FY2028

● Discount rate (WACC): 19.8%

● Terminal growth rate: 2%

● Tax rate: 23%

The fair value of the reporting unit was estimated at $28 million, compared to the carrying amount of $26.3 million, resulting in headroom of $1.7 million. Accordingly, no goodwill impairment was recognized.

A sensitivity analysis was also conducted to assess the impact of adverse changes in key assumptions. Under scenarios with higher discount rates or lower terminal growth, the fair value declined significantly, with certain cases indicating potential impairment. For example, increasing the discount rate to 21% and reducing the terminal growth rate to 1.5% resulted in a fair value below the carrying amount.

While no impairment is currently required, the narrow headroom indicates that goodwill may be susceptible to future impairment should there be any unfavorable changes in market conditions, adverse changes in key valuation assumptions, or business performance. Although we do not anticipate a future impairment charge, certain events could occur that might adversely affect the reported value of goodwill. Such events could include, but are not limited to, economic or competitive conditions, a significant change in technology, the economic condition of the industries we serve, and failure to successfully implement our strategic plan. If our judgments and assumptions change as a result of the occurrence of any of these events or other events that we do not currently anticipate, our expectations as to future results and our estimate of the implied fair value also may change. Management will continue to monitor relevant indicators and reassess as necessary.

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**Recent Developments**

*BCA Closing* 

On December 17, 2025, the BCA closed and SharonAI became a wholly-owned subsidiary of SharonAI Holdings Inc. (f/k/a Roth CH Holdings, Inc.).

*TCDC Property Purchase*

On December 19, 2025, TCDC completed its acquisition of the Additional 203 Acres pursuant to the 203 Acre Agreement, between TCDC and Grow, from whom TCDC previously purchased a contiguous 235 acres of land from on July 25, 2025. The total price for the Additional 203 Acres was $5,100,000. The intent is for a third-party to build gas-fired power generation on-site.

 *Sale of Interest in TCDC*

On January 16, 2026, SharonAI Inc., a subsidiary the Company entered into the Purchase Agreement for, and closed the sale of, the Company's sale of its Membership Interests in TCDC to NUAI.

The consideration NUAI will pay the Company for the Membership Interests will be an aggregate of $70,000,000, of which, (a) $10,000,000 will be payable in cash, with (i) $150,000 paid in December of 2025 as non-refundable deposit, and (ii) $9,850,000 payable upon the occurrence of certain events, but no later than March 31, 2026; (b) $10,000,000 will be payable in common stock or other units of NUAI upon the occurrence of certain events, but no later than March 31, 2026; and (c) $50,000,000 will be payable by issuance of a the Secured Note.

The Secured Note matures and is due June 30, 2026. It provides for an interest rate of 10% per annum (payable at maturity) and the right of the Company to convert up to $10,000,000 into common stock of NUAI at a conversion price equal to the 30-day VWAP of NUAI common stock prior to conversion, provided that such conversion price will not be less than 20% of the Nasdaq Official Closing Price. The Secured Note contains customary events of default and affirmative and negative covenants of NUAI.

In connection with the Purchase Agreement and the Secured Note, TCDC and SharonAI, Inc. have entered into a the Guaranty, pursuant to which TCDC has guaranteed the obligations of NUAI under the Secured Note. The obligations under the Secured Note and the Guaranty are secured by the Security Agreement, pursuant to which NUAI pledged all of the membership interests of TCDC to the Company and TCDC granted a security interest in substantially all of its assets to the Company, and also by the Deed of Trust, pursuant to which TCDC has conveyed certain real estate in trust to secure the obligations under the Secured Note.

The descriptions of the Purchase Agreement, Secured Note, Guaranty, Security Agreement and Deed of Trust are only a summary and are qualified in its entirety by reference to the full text of such document, each of which is filed as an exhibit to Registration Statement and which is incorporated herein by reference.

 *Announcement of Potential Financing and Strategic Partnership*

On January 19, 2026, the Company announced a potential investment from Digital Alpha of up to $200 million and a strategic technology partnership with Cisco, subject to execution of definitive documentation which is expected to enable the Company to further accelerate customer deployments and expand our cloud infrastructure for enterprise AI and high-performance compute in Australia and Asia Pacific.

 *Announcement of Proposed Debt Facility*

On January 22, 2026, the Company announced that USD.AI has approved a debt facility of up to US$500 million for Sharon AI, a subsidiary of the Company, subject to execution of definitive documentation.

The facility is expected to enable Sharon AI to access asset-backed, non-recourse financing through USD.AI's on-chain credit system, which is expected to allow approved GPU deployments to be financed with stablecoin liquidity. The structure is designed to support capital-efficient expansion of AI infrastructure while reducing reliance on traditional bank and private credit markets.

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**Results of Operations**

***Comparative Results for the three months ended September 30, 2025, and 2024:***

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| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| Revenue | $506747 | $159000 |
| Cost of Revenue | 371778 | 329005 |
| **Gross profit** | **134969** | **(170005)** |
| &nbsp;&nbsp;&nbsp;Share based compensation | 489345 |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | 880351 | 806712 |
| &nbsp;&nbsp;&nbsp;Other expenses | 343775 | 163652 |
| &nbsp;&nbsp;&nbsp;Other income |  | (140938) |
| **Loss from operations** | **(1578502)** | **(999431)** |
| **Non-operating income (expense):** |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of digital assets | (15255) | (95809) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (71528) | (22331) |
| **Loss before income taxes** | **(1665285)** | **(1117571)** |
| &nbsp;&nbsp;&nbsp;Income tax benefit (expense) | 29774 | (20516) |
| **Net Loss** | $**(1635511)** | $**(1138087)** |
| Net loss attributable to non-controlling interest | (7850) | (5463) |
| **Net Loss Attributable to SharonAI Inc.** | $**(1627661)** | $**(1132624)** |
| **Net Loss per share, basic and diluted** | $**(1.53)** | $**(1.16)** |
| **Weighted average number of shares outstanding** | **1067213** | **975475** |

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***Revenue***

Q3 2025: $506 thousand \| Q3 2024: $159 thousand

Total revenue for the three months ended September 30, 2025 and 2024, was $506 thousand and $159 thousand, respectively. The increase was primarily driven by the growth of the Company's GPU cloud services segment, reflecting higher deployment of compute resources and expanding customer adoption across AI and high-performance computing use cases.

***Cost of Revenue***

Q3 2025: $372 thousand \| Q3 2024: $329 thousand

Cost of revenue for the three months ended September 30, 2025 and 2024, was $372 thousand and $329 thousand, respectively, an increase of approximately $43 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.

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***Share-Based Compensation***

Q3 2025: $489 thousand \| Q3 2024: $0

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 Expenses (SG&A)***

Q3 2025: $880 thousand \| Q3 2024: $807 thousand

Selling, general and administrative (SG&A) expenses for the period primarily reflect foundational investments to establish and scale the Company's operations. The increase was mainly driven by employee-related costs and professional fees incurred including legal, consulting, and audit services. SG&A expenses are expected to normalize as the Company transitions from its initial setup and transactional activities to a more stable operating phase.

***Other Expenses***

Q3 2025: $344 thousand \| Q3 2024: $164 thousand

This category includes depreciation and amortization expenses recognized during the period related to both new and existing property, plant, 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 Filecoin and GPU cloud service operations. In addition, 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. Together, these items contribute to the reported net loss but do not impact cash flows from operations and are expected to fluctuate based on the Company's investment activity and foreign currency exposure.

***Change in Fair Value of Digital Assets***

Q3 2025: $15 thousand \| Q3 2024: $96 thousand

The decrease in fair value of digital assets during the period reflects a decline in the market value of cryptocurrency held in connection with the Company's Filecoin data storage operations. This loss is non-operational in nature and does not directly impact the core business activities or underlying operating performance. However, it does reduce reported earnings for the period and may affect short-term financial flexibility depending on market conditions. The Company continues to monitor its digital asset holdings and associated risks as part of its broader treasury and operational strategy.

***Other Income***

Q3 2025: $0 \| Q3 2024: $141 thousand

Other income for the three months ended September 30, 2024, primarily consisted of grant income recognized under a research and development (R&D) support program. Research and development grants are received from the Australian Taxation Office. The grants are recognized as other income once the Group has complied with all the attached conditions, at the estimated amount that will be received for the period.

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***Interest Expense, Net***

Q3 2025: $72 thousand \| Q3 2024: $22 thousand

Net interest expense for the period primarily relates to interest incurred on lease liabilities recognized under right-of-use (ROU) asset arrangements and loans. These expenses reflect the financing component of current loans and long-term lease agreements associated with the Company's operational infrastructure. The overall interest burden was slightly offset by interest income earned on term deposits held as part of the Company's short-term obligations associated with managed service agreements.

***Income Tax Benefit (Expense)***

Q3 2025: $30 thousand \| Q3 2024: ($21) thousand

The Company recorded income tax benefit of $30 thousand for the three months ended September 30, 2025 due to the Company's operating losses. The losses generated are consistent with the early-stage growth of the business and reflect significant investment in product development, infrastructure buildout, and strategic corporate activities. As a result, the Company has accumulated net operating loss (NOL) carry forwards, which may be used to offset future taxable income once profitability is achieved.

***Comparative Results for the Nine Months ended September 30, 2025, and 2024:***

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| | | |
|:---|:---|:---|
|  | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| Revenue | $1208824 | $171800 |
| Cost of Revenue | 1083426 | 336405 |
| **Gross profit** | **125398** | **(164605)** |
| &nbsp;&nbsp;&nbsp;Share based compensation | 1446312 |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | 2970874 | 1065931 |
| &nbsp;&nbsp;&nbsp;Other expenses | 2019907 | 169327 |
| &nbsp;&nbsp;&nbsp;Other income | (961713) | (140938) |
| **Loss from operations** | **(5349982)** | **(1258925)** |
| **Non-operating income (expense):** |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of digital assets | (406345) | (87222) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (127430) | (13803) |
| **Loss before income taxes** | **(5883757)** | **(1359950)** |
| &nbsp;&nbsp;&nbsp;Income tax benefit (expense) | 219935 | (20516) |
| **Net Loss** | $**(5663822)** | $**(1380466)** |
| Net loss attributable to non-controlling interest | (27185) | (5463) |
| **Net Loss Attributable to SharonAI Inc.** | $**(5636637)** | $**(1375003)** |
| **Net Loss per share, basic and diluted** | $**(5.28)** | $**(1.41)** |
| **Weighted average number of shares outstanding** | **1067213** | **975475** |

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***Revenue***

YTD Q3 2025: $1,209 thousand \| YTD Q3 2024: $172 thousand

Total revenue for the nine months ended September 30, 2025 and 2024, was $1,209 thousand and $172 thousand, respectively. The increase was primarily driven by revenues from Filecoin storage services and GPU cloud computing operations during the first half of 2025. Following the Company's decision to discontinue its Filecoin activities in the second quarter of 2025, no Filecoin-related revenue was recognized in the current quarter. Accordingly, total revenue for the third quarter of 2025 was entirely attributable to GPU cloud computing operations, supported by the continued deployment of compute resources and increasing demand from artificial intelligence (AI) and high-performance computing workloads.

***Cost of Revenue***

YTD Q3 2025: $1,083 thousand \| YTD Q3 2024: $336 thousand

Cost of revenue for the nine months ended September 30, 2025 and 2024, was $1,083 thousand and $336 thousand, respectively. The increase was primarily driven by expenses related to the delivery of Filecoin storage services and GPU cloud computing operations during the first half of 2025. Following the Company's decision to discontinue its Filecoin activities in the second quarter of 2025, no Filecoin-related costs were incurred in the current quarter. Accordingly, cost of revenue for the third quarter of 2025 was primarily attributable to GPU cloud computing operations.

***Share-Based Compensation***

YTD Q3 2025: $1,446 thousand \| YTD Q3 2024: $0

This amount represents stock-based compensation expenses related to equity awards granted to employees, executives, and advisors as part of the Company's recruitment and retention strategy. As a newly established organization, the Company utilizes share-based compensation to attract key talent and align leadership incentives with its long-term growth objectives. The recognized expense reflects the portion of share-based awards that have met any applicable performance conditions, amortized on a pro rata basis over the respective time-based vesting period.

***Selling, General, and Administrative Expenses (SG&A)***

YTD Q3 2025: $2,971 thousand \| YTD Q3 2024: $1,066 thousand

For the nine months ended September 30, 2025 and 2024, the Company recognized selling, general and administrative (SG&A) expenses of $2,971 thousand and $1,066 thousand, respectively. The increase was primarily driven by higher employee-related costs and professional fees, including legal, consulting, and audit services, incurred to support regulatory compliance and strategic initiatives. The Company also recognized bad debt expense related to the sale of a fixed asset in the first quarter.

***Other Expenses***

YTD Q3 2025: $2,020 thousand \| YTD Q3 2024: $169 thousand

This category includes depreciation and amortization expenses recognized during the period related to both new and existing property, plant, 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 Filecoin and GPU cloud service operations. In addition, 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. Together, these items contribute to the reported net loss but do not impact cash flows from operations and are expected to fluctuate based on the Company's investment activity and foreign currency exposure.

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***Change in Fair Value of Digital Assets***

YTD Q3 2025: $406 thousand \| YTD Q3 2024: $87 thousand

The decrease in the fair value of digital assets during the period primarily reflects a decline in the market price of cryptocurrency held in connection with the Company's Filecoin-related activities. In accordance with ASC 2023-08, digital assets that meet the scope criteria are measured at fair value, with changes in fair value recognized in net income in the period in which they occur. As such, decreases in market value are reflected as losses in current period earnings, while subsequent increases in fair value are similarly recognized in earnings when they occur. While fair value volatility does not affect the Company's core operating performance, it directly impacts reported net income for the period and may influence short-term financial flexibility depending on market conditions. The Company continues to monitor its digital asset exposures and related risks as part of its broader treasury and risk management strategy.

***Other Income***

YTD Q3 2025: $962 thousand \| YTD Q3 2024: $141

Other income for the nine months ended September 30, 2025, primarily includes gains from the sale of two fixed assets. These transactions reflect the Company's ongoing efforts to optimize its asset base and reallocate resources toward higher-value strategic initiatives.

The first asset sale occurred during the first quarter and involved equipment that was no longer essential to the Company's operations or future direction. The assets were sold at amounts exceeding their carrying values, resulting in a gain recognized in the period. The second asset sale was completed on June 30, 2025, and involved the disposal of storage server assets. These assets were previously classified as property, plant, and equipment and were fully depreciated and no longer in active operational use at the time of sale. As such, the entire sale proceeds were recognized as a gain in the Company's results for the quarter ended June 30, 2025.

These gains are not reflective of the Company's core business operations or recurring revenue streams and are not presented as discontinued operations under ASC 205-20, as the disposals do not represent a strategic shift in the Company's activities.

***Interest Expense, Net***

YTD Q3 2025: $127 thousand \| YTD Q3 2024: $14 thousand

Net interest expense for the period primarily reflects interest incurred on lease liabilities recognized under right-of-use (ROU) asset arrangements and on outstanding loans. These expenses represent the financing component of the Company's current loan facilities and long-term lease agreements supporting its operational infrastructure. The overall interest burden was partially offset by interest income earned on term deposits maintained in connection with the Company's managed service arrangements. Although not material to overall results, the net interest expense reflects the Company's existing capital structure and lease financing commitments.

***Income Tax Benefit (Expense)***

YTD Q3 2025: $220 thousand \| YTD Q3 2024: ($21) thousand

For the nine months ended September 30, 2025, the Company recorded an income tax benefit of $220 thousand, primarily attributable to operating losses incurred during the period. These losses are consistent with the Company's early-stage growth trajectory and reflect continued investment in product development, infrastructure buildout, and strategic corporate initiatives

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***Comparison for the years ended December 31, 2024 and 2023***

The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this registration statement. The following table sets forth our results of operations for the period shown:

**Statement of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024**<br> **($)** | **2023**<br> **($)** | **Movement**<br> **($)** | **Movement**<br> **(%)** |
| Revenue | 438292 |  | 438292 |  |
| Cost of revenue | (719993) |  | (719993) |  |
| **Gross loss** | **(281701)** |  | **(281701)** |  |
| Share based compensation | (253728) |  | (253728) |  |
| Selling, general, and administrative expenses | (2368745) |  | (2368745) |  |
| Other expenses | (2047133) |  | (2047133) |  |
| **Loss from operations** | **(4951307)** |  | **(4951307)** |  |
| Change in fair value of digital assets | 157923 |  | 157923 |  |
| Other income | 921322 |  | 921322 |  |
| Interest income, net | (19028) |  | (19028) |  |
| **Loss before income taxes** | (3891090) |  | (3891090) |  |
| Income tax expense | (32908) |  | (32908) |  |
| **Net loss** | (3923998) |  | (3923998) |  |

---

***Revenue***

2024: $438 thousand \| 2023: $0

We derive the majority of our revenue from the provision of digital data storage and GPU services to our customer via direct interaction and or via GPU online marketplaces, Clients utilize our services to store online data in a Web 3 environment via the Filecoin Network architecture and utilize our fleet of GPU's to run HPC needs such as model training, research projects and inference needs. The Group recognizes revenue in accordance with Accounting Standards Codification ("<u>ASC</u>") Topic 606 Revenue from Contracts with Customers which recognizes the revenue when we have supplied the relevant services. The revenue generated in 2024 signifies the commencement of business operations. The company started monetizing its acquisitions and integrating acquired subsidiaries into its revenue-generating framework. However, the revenue remains relatively low, due to operations still being in the early stages, with limited contribution from newly acquired assets during the period. Future growth is expected as these businesses become fully operational.

***Cost of Revenue***

2024: $72 thousand\| 2023: $0

The cost of revenues reflects the direct costs associated with the operations of the business. The major items categorized as cost or revenues are data center expenses, Filecoin licensing fees, equipment cost provided on a managed service arrangement and costs from intermediaries in the sale of services. The high cost of revenue relative to the revenue figure is a consequence of the company being in the process of optimizing its cost. This is to be attributed to initial inefficiencies and integration costs from acquisitions, and expenses incurred to establish operational capacity. As synergies between acquired businesses develop, the cost of revenue is expected to stabilize and align with revenue growth.

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***Gross Loss***

2024: $282 thousand \| 2023: $0

A negative gross profit is due to the company's early-stage business operations that are not yet covering direct costs. This was particularly due to multiple acquisitions in the period and growth phase of asset expansions. The expectation is that as the business matures and efficiencies improve, gross margins will turn positive.

***Share-Based Compensation***

2024: $254 thousand \| 2023: $0

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. In 2024 SharonAI issued a total of 52,677 RSU's and 4,616 Options to employees and contractors. These have a range of performance metrics for attainments followed by an additional 12 months vesting from attainment. The share-based expense for the period is a reflection of the pro rata expense incurred by the company for awards that have met the performance attainment metric and are in the time based vesting stage of the award. Additionally this figure include warrants issued during the period based on the fair value of the warrants at the time of issuance as determined using the Black Scholes model.

***Selling, General, and Administrative Expenses (SG&A)***

2024: $2.369 thousand \| 2023: $0

The significant SG&A expenses reflect costs associated with setting up business operations, integrating acquired subsidiaries, and establishing corporate functions. These expenses include salaries, office costs, legal fees, consulting fees, audit fees and acquisition-related administrative costs. While high in the initial phase, these expenditures are expected to normalize as the business transitions to operational regularity.

***Other Expenses***

2024: $2.407 thousand \| 2023: $0

This category includes depreciation and amortisation expenses in the period from new and existing plant, property and equipment, acquisition related assets and material unrealised gains/loss from cross currency accounting.

***Loss from Operations***

2024: $4.951 thousand \| 2023: $0

An operating loss was due to having undertaken multiple acquisitions and the business being in a growth preparation phase. The losses indicate that while the company has started generating revenue, operational expenses and integration costs far exceed current income. Over time, operational efficiency improvements and revenue growth will be key to reducing this loss.

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***Change in Fair Value of Digital Assets***

2024: $158 thousand \| 2023: $0

The positive change in fair value of digital assets is due to the company holding cryptocurrency associated with its Filecoin data storage operations which appreciated during the period. This is a non-operational gain and does not impact the core business but contributes to financial flexibility.

***Other Income***

2024: $921 thousand \| 2023: $0

Other income includes non-operational revenues such as government research and development incentives, one-time gains, and gifts of equipment. This figure offsets a portion of the losses from operations, providing temporary financial relief.

***Interest Income, Net***

2024: $19 thousand \| 2023: $0

The small amount of interest income is due to the company holding cash reserves or short-term investments generating limited returns. This reflects prudent cash management but is not a significant contributor to overall performance. This is then offset by the interest expense associated with the Right of use assets accounting.

***Income Tax Expense***

2024: $33 thousand \| 2023: $0

Given the operating losses, no income tax expense has been incurred, however other state and local taxes cause the associated expense. Loss carry forwards may be utilized in the future to offset taxable income once the company reaches profitability.

***Liquidity and Capital Resources***

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditure.

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The Company currently operates without any external debt on its balance sheet, providing a degree of financial flexibility and eliminating the need for interest servicing during this early stage of growth. This structure allows available capital to be directed toward operational expansion, product development, and ongoing corporate initiatives. While the absence of debt reduces near-term financial obligations, the Company continues to evaluate its capital structure and may consider future financing options as strategic needs evolve. Maintaining a debt-free position at this time supports stability while preserving the ability to access external capital in the future, if required.

As of the end of the period ended September 30, 2025, the Company held cash of $1.365 thousand. The Company also has outstanding convertible notes as disclosed in Note 11 Note Payable to the financial statements. These instruments contain terms that may require settlement in cash, conversion into equity, or repayment upon maturity, depending on future events. No material principal repayments are contractually required within the next twelve months; however, the Company continues to monitor its obligations closely in light of operational funding needs and market conditions.

At the end of the year ended December 31, 2024, the Company held a cash balance of $4.425 thousand, which is expected to support ongoing operations and near-term growth initiatives. This reserve provides flexibility to meet working capital requirements and selectively pursue opportunities aligned with the Company's strategic goals. While the current liquidity position appears adequate for the Company's immediate needs, management remains mindful of funding requirements and continues to monitor available resources closely. The Company has previously been successful in raising capital and, if needed, believes it would be able to access additional funding to support future initiatives and maintain operational continuity.

Management continuously evaluates its 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. The Company has historically accessed external capital to fund its growth and believes it will be able to continue doing so as needed.

The Company has incurred operating losses to date and expects to continue investing in scaling its infrastructure and operations. These factors indicate that additional capital will be required to support ongoing activities and meet obligations as they become due.

The Company is currently engaged in active capital raising discussions with existing and prospective investors. Management believes these ongoing capital raising efforts, together with the Company's operational plans, will provide sufficient liquidity to support the Company's continued operations

***Cash flow analysis***

The following table provides a summary of the cash flow statement for the nine months ended September 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **For the<br> Nine Months Ended** | **For the<br> Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2025** | **2024** |
| Net cash provided by (used in) operating activities | $(2356333) | $(1021223) |
| Net cash provided by (used in) investing activities | $(481909) | $(3570991) |
| Net cash used in financing activities | $102813 | $5057320 |

---

***Operating activities***

Net cash used in operating activities was $2,356 thousand for the nine months ended September 30, 2025. Operating cash flows during the period were primarily driven by the Company's Filecoin storage operations and revenue from GPU cloud services. These inflows were offset by operating expenditures, including product development costs, increased equipment-related expenses to support infrastructure expansion, and professional fees associated with strategic corporate activities. The Filecoin operations ceased during the second quarter of 2025. As the GPU cloud business continues to expand, the Company expects higher operating cash flow contributions, supporting improved financial performance and long-term operational sustainability.

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***Investing activities***

Net cash used in investing activities was $482 thousand for the nine months ended September 30, 2025, primarily reflecting the Company's investment in the Texas Critical Data Centers joint venture, partially offset by proceeds from the sale of digital assets and fixed assets.

For the nine months ended September 30, 2024, net cash used in investing activities was $3,571 thousand, mainly related to equipment purchases to support the Company's infrastructure expansion and operational growth.

***Financing activities***

Net cash provided by financing activities was $103 thousand for the nine months ended September 30, 2025, primarily reflecting loan proceeds and payments of lease liabilities under existing lease agreements. This compares to net cash provided by financing activities of $5,057 thousand for the nine months ended September 30, 2024, which primarily resulted from proceeds from a capital raise completed in June 2024.

The following table provides a summary of the cash flow statement for the years ended December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
|  | **2024<br> ($)** | **2023<br> ($)** |
| **Net cash flows used in operating activities** | **(2205993)** | **-** |
| **Net cash flows used in investing activities** | **(3036503)** | **-** |
| **Net cash flows from financing activities** | **10023764** | **204** |
| **Net cash inflow** | **4424601** | **204** |

---

***Operating activities***

Net cash flows used in operating activities was $2.2 million for the year ended December 31, 2024. This was primarily due to operational activities including loss from operations, change in fair values of digital assets, unrealized currency movements, depreciation and amortization and share-based payments.

***Investing activities***

Net cash flows used in investing activities was $3.0 million for the year ended December 31, 2024. This was primarily due to acquisitions of additional equipment for operations during the period.

***Financing activities***

Net cash flows from financing activities was $10.0 million for the year ended December 31, 2024, an increase of $10.0 million compared to the year ended December 2023. This was primarily due to formation capital, 3 capital raises in the period and a conversion of debt to equity with related parties.

***Future cash requirements***

The company is in a position of stable cash balance to continue its intrinsic operations and expansion of products, however, has committed to acquire via 5-year lease further compute related equipment in 2025. The Company also expects to raise further funds to acquire additional equipment and participation in joint venture requirements for further increase in business expansion.

**US Taxes**

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The legislation permanently extends certain expiring provisions of the Tax Cuts and Jobs Act, introduces changes to the international tax framework, and reinstates favorable tax treatment for select business-related provisions. The OBBBA includes multiple effective dates, with some measures applicable beginning in 2025 and others taking effect in subsequent periods. We are currently evaluating the potential impact of the OBBBA on our consolidated financial statements.

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***Research and development, patents, and licenses***

Our research and development, or R&D, program is focused on researching and exploring opportunities to develop proprietary data storage software and system architecture to accelerate storage and retrieval of data across distributed networks and management of complex compute resource demands to enable idle compute to serve multiple purposes. We procure all the necessary hardware and conduct research and development on service management, focusing on enhancing user interfaces, optimizing load management, and improving orchestration for seamless and efficient operations.

We have also commenced research into the software elements of computing and are in the initial stages of researching a range of programs to improve efficiency and accessibility of our products. We are currently only conducting research in Australia under the R&D Tax incentive scheme. We do not operate a separate division or forecast budget for R&D activities instead evaluating expenses occurred through the year on an arrears basis.

The R&D Tax Incentive in Australia is a government program that provides tax offsets to businesses investing in eligible research and development activities. Companies with an annual turnover below AUD$20 million receive a refundable tax offset of their corporate tax rate plus an 18.5% premium, while larger businesses receive a non-refundable offset based on their R&D intensity. To qualify, activities must involve systematic experimentation to generate new knowledge, adhering to scientific principles. Businesses must register their R&D activities with AusIndustry and then claim the offset through the Australian Taxation Office. The incentive is designed to support innovation, technology development, and business growth, but companies must ensure reporting and compliance to be eligible.

***Off-Balance Sheet Arrangements***

As of the reporting date, SharonAI has entered into certain contractual obligations that are not recognized on the balance sheet but may have a material effect on the Company's financial condition, results of operations, or liquidity. These off-balance sheet arrangements primarily consist of data center colocation facility commitments and managed service agreements.

*Colocation Facility Commitments*

The Company has entered into colocation agreements for data center facilities under non-cancellable operating lease arrangements. These agreements are generally structured with five-year terms, with costs that fluctuate based on the quantity of deployed equipment and power usage. The Company's future obligations under these agreements are contingent upon business expansion, changes in IT infrastructure needs, and energy consumption levels.

Although these commitments do not appear as liabilities on the balance sheet under applicable accounting standards, they represent a significant financial obligation that impacts future cash flows. If the Company's colocation needs increase or energy prices rise, the total financial exposure under these agreements could materially increase. Conversely, the Company's ability to reduce these commitments may be limited due to contract terms and renewal obligations.

*Managed Service Agreements*

The Company has multiple agreements for managed service equipment and associated services with third-party vendors. These agreements involve commitments totaling approximately $34,000 per month, with remaining contract durations ranging from 2 to 5 years. The Company's obligations under these contracts include ongoing infrastructure support, equipment maintenance, and service-level agreements (SLAs) that are essential for business continuity.

Although these obligations do not meet the criteria for balance sheet recognition, they represent recurring financial commitments that impact operating expenses and liquidity. If the Company seeks to renegotiate, terminate, or scale these agreements, penalties or additional costs may be incurred.

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*Potential Effects on Liquidity and Financial Condition*

The Company continuously evaluates its off-balance sheet arrangements to assess their impact on liquidity, financial position, and operational flexibility. Factors that could materially affect these commitments include:

● Changes in power costs: Volatility in energy pricing could increase the total cost of colocation facility commitments.

● Scalability of IT infrastructure: Higher-than-expected deployment of new equipment may lead to increased costs under colocation agreements.

● Service provider risks: Changes in vendor pricing, contract renewals, or service disruptions could impact the cost-effectiveness of managed service agreements.

At this time, the Company does not believe that these off-balance sheet arrangements create material risks beyond those disclosed in its financial statements and risk factors. However, the Company will continue to monitor and manage these obligations in alignment with its operational and financial strategies.

SharonAI's significant accounting policies are described in more detail in Note 2 to its financial statements for the year ended December 31, 2024 included elsewhere in this registration statement.

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DSS**

*The following discussion and analysis provides information which DSS's management believes is relevant to an assessment and understanding of DSS's consolidated results of operations and financial condition. This discussion and analysis should be read together with DSS's audited consolidated financial statements as of and for the year ended December 31, 2023 and audited consolidated financial statements as of and for the six-month period ended June 30, 2024, and the related notes included elsewhere in this registration statement. This discussion and analysis should also be read together with the unaudited pro forma combined financial information as of and for the year ended December 31, 2024 in the section titled "Unaudited Pro Forma Combined Financial Information." This discussion and analysis may contain forward-looking statements based upon current expectations that are subject to known and unknown risks, uncertainties and assumptions. DSS's actual results may differ significantly from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" or in other parts of this registration statement. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations of DSS" to "we", "us", "our", and "the Company" are intended to mean the business and operations of DSS.*

**Company Overview**

DSS is an Australian company that operates HPC/AI and distributed storage operations. DSS operates a high-capacity distributed storage business with 51 petabytes (PB) of active storage largely on the Filecoin network, providing scalable, secure, and decentralized data storage solutions. In addition to storage operations, DSS has a small GPU bare-metal service business. DSS was established in 2021 and has been growing its storage operations and capacity whilst researching ways to improve the distributed storage environment.

**Results of Operations**

***For the year ended December 31, 2023***

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this registration statement. The following table sets forth our results of operations for the period shown:

**Consolidated Statement of Operations**

---

| | |
|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2023**<br> **(in $ unless otherwise indicated)** |
| Revenue | 1291446 |
| Cost of revenue | (471040) |
| **Gross profit** | **820406** |
| Selling, general, and administrative expenses | (1890797) |
| Depreciation Expense | (651957) |
| **Loss from operations** | **(1722348)** |
| Impairment loss on digital assets | (150299) |
| Other income | 1267470 |
| Interest expense, net | (202794) |
| **Loss before income taxes** | **(807971)** |
| Income tax expense | (109507) |
| **Net loss** | **(917478)** |

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***Revenue***

Revenue was $1.3 million for the year ended December 31, 2023. This was primarily due to operating revenue from providing storage capacity to the Filecoin Network.

***Cost of revenue***

Cost of revenue was $0.5 million for the year ended December 31, 2023. This was primarily due to costs associated with data center colocation for the company compute equipment and fees associated with operating on the Filecoin Network.

***Selling, general, and administrative expenses***

Selling, general, and administrative expenses was $1.9 million for the year ended December 31, 2023. This was primarily due to managed services on compute equipment, wages, Filecoin license fees and consulting charges for financial preparation and audit in multiple forms (IFRS and GAAP).

***Depreciation Expense***

Depreciation expense was $0.7 million for the year ended December 31, 2023. This was primarily due to depreciation on computer storage equipment.

***Impairment loss on digital assets***

Impairment loss on digital assets was $0.2 million for the year ended December 31, 2023. This was primarily due to impairment of revenue invoices receivable from a third party that entered liquidation.

***Other income***

Other income was $1.3 million for the year ended December 31, 2023. This was primarily due to Research and Development tax incentives in the period that are paid in cash.

***Interest expense, net***

Interest expense, net was $0.2 million for the year ended December 31, 2023. This was primarily due to payment of interest on Capital notes in period.

***Income tax expense***

Income tax expense was $0.1 million for the year ended December 31, 2023. This was primarily due to income tax payable for the periods operations after tax adjustments.

***Net loss***

Net loss was $0.9 million for the year ended December 31, 2023. This was primarily due to significant depreciation, Filecoin license fees and increased corporate expenditure comparative to reduced revenue driven by a low Filecoin price.

***For the six-month period ended June 30, 2024***

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this registration statement. The following table sets forth our results of operations for the period shown:

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**Consolidated Statement of Operations**

---

| | |
|:---|:---|
|  | **For the<br> Six Months Ended<br> June 30,<br> 2024**<br> **(in $ unless otherwise indicated)** |
| Revenue | 732631 |
| Cost of revenue | (754402) |
| **Gross loss** | **(21771)** |
| Shared Based Compensation | (3013167) |
| Selling, general, and administrative expenses | (502221) |
| Other expenses | (154595) |
| **Loss from operations** | **(3691754)** |
| Gain on sale of intangible assets | 73425 |
| Fair value gain on revaluation of digital assets | 442500 |
| Other income | 278208 |
| Interest expense, net | (128455) |
| **Loss before income taxes** | **(3026076)** |
| Income tax expense | (41169) |
| **Net loss** | **(3067245)** |

---

***Revenue***

Revenue was $0.7 million for the six-month period ended June 30, 2024. This was primarily due to the provision of services to Filecoin Network distributed storage operations and GPU bare metal rental.

***Cost of revenue***

Cost of revenue was $0.8 million for the six-month period ended June 30, 2024. This was primarily due to data center colocation expenses, Filecoin license fees and equipment managed services.

***Shared Based Compensation***

Shared based compensation was $3.0 million for the six-month period ended June 30, 2024. This was primarily due to the modification of exercise price from AUD$11.60 to $0.01 and subsequent cashless exercise of outstanding option associated with the acquisition of DSS by SharonAI Inc.

***Selling, general, and administrative expenses***

Selling, general, and administrative expenses was $0.5 million for the six-month period ended June 30, 2024. This was primarily due to wages and accounting and audit consultation.

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***Other expenses***

Other expenses was $0.2 million for the six-month period ended June 30, 2024. This was primarily due to depreciation and amortization during the period.

***Gain on sale of intangible assets***

Gain on sale of intangible assets was $73.4 thousand for the six-month period ended June 30, 2024. This was primarily due to gains made on the sale of Filecoin.

***Fair value gain on revaluation of digital assets***

Fair value gain on revaluation of digital assets was $0.4 million for the six-month period ended June 30, 2024. This was primarily due to revaluation of Filecoin held on balance sheet in the period.

***Other income***

Other income was $0.3 million for the six-month period ended June 30, 2024. This was primarily due to accrual of Research and Development tax incentive grants that are paid in cash.

***Interest expense, net***

Interest expense, net was $0.1 million for the six-month period ended June 30, 2024. This was primarily due to interest expenses in the period on Capital Notes outstanding.

***Income tax expense***

Income tax expense was $41.2 thousand for the six-month period ended June 30, 2024. This was primarily due to income tax payable after tax adjustments for the period.

***Net loss***

Net loss was $3.1 million for the six-month ended June 30, 2024. This was primarily due to significant share based payment expenses and increased cost of goods expenses associated with additional deployments of equipment ion the period.

**Liquidity and Capital Resources**

*Sources of liquidity*

DSS has primarily funded its operations with equity, debt and equity derivatives (SAFE notes). As of June 30, 2024, DSS had cash, restricted cash and cash equivalents of $55.8 thousand and negative working capital of $5.5 million. As of December 31, 2023, DSS had cash, restricted cash and cash equivalents of $0.4 million and negative working capital of $5.2 million. However, the majority of this deficit is associated with now related company SharonAI Inc for the conversion of SAFE securities.

In June 2024, DSS entered a facility agreement with SharonAI Pty Ltd for up to AUD$25 million. The debt incurs an interest rate of 6% per annum with payments available for capitalization or payment in cash with a term of 5 years. With this agreement in place and associated structure changes regarding the acquisition by SharonAI, in its opinion, the working capital is sufficient for the company's present requirements

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*Cash flow analysis*

The following table provides a summary of the consolidated statement of cash flows for the year ended December 31, 2023:

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| | |
|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2023**<br> **(in $ unless otherwise indicated)** |
| **Net cash flows used in operating activities** | **(683435)** |
| **Net cash flows from investing activities** | **236084** |
| **Net cash flows from financing activities** | **628640** |
| **Net cash inflow** | **181289** |

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***Operating activities***

Net cash flows used in operating activities was $0.7 million for the year ended December 31, 2023. This was primarily due depreciation and digital asset revaluation in the period.

***Investing activities***

Net cash flows from investing activities was $0.2 million for the year ended December 31, 2023. This was primarily due to proceeds from the sale of digital assets.

***Financing activities***

Net cash flows from financing activities was $0.6 million for the year ended December 31, 2023. This was primarily due to changes in third party loan balances.

The following table provides a summary of the consolidated statement of cash flows for the six-month period ended June 30, 2024:

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| | |
|:---|:---|
|  | **For the<br> Six Months Ended<br> June 30,<br> 2024**<br> **(in $ unless otherwise indicated)** |
| Net cash flows from operating activities | 93348 |
| Net cash flows used in investing activities | (442223) |
| Net cash outflow | (348875) |

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***Operating activities***

Net cash flows from operating activities was $0.1 million for the six-month ended June 30, 2024. This was primarily due to losses for the period, share based payments and fair value gain and loss of intangible assets.

***Investing activities***

Net cash flows used in investing activities was $0.4 million for the six-month ended June 30, 2024. This was primarily due to additional acquisitions of plant and equipment in the period.

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*Future cash requirements*

The Company forecasts that it will require further injection of cash via loan form related entities in order to operate as intended in the group.

**Research and Development, patents, and licenses**

Our research and development, or R&D, program is focused on researching and exploring opportunities to develop proprietary data storage software and system architecture to accelerate storage and retrieval of data across distributed networks and management of complex compute resource demands to enable idle compute to serve multiple purposes.

The R&D Tax Incentive in Australia is a government program that provides tax offsets to businesses investing in eligible research and development activities. Companies with an annual turnover below AUD$20 million receive a refundable tax offset of their corporate tax rate plus an 18.5% premium, while larger businesses receive a non-refundable offset based on their R&D intensity. To qualify, activities must involve systematic experimentation to generate new knowledge, adhering to scientific principles. Businesses must register their R&D activities with AusIndustry and then claim the offset through the Australian Taxation Office. The incentive is designed to support innovation, technology development, and business growth, but companies must ensure reporting and compliance to be eligible.

**Trend information**

The Company has experienced a decline in profitability in its storage services operating on the Filecoin network, driven by multiple adverse trends affecting both revenue and costs. Filecoin network rewards have been decreasing, leading to lower earnings for storage providers. Additionally, the market price of the Filecoin (FIL) asset has declined, reducing the value of token-based rewards earned by the Company. These revenue pressures have been further compounded by rising costs associated with underlying cost of goods sold (COGS) inputs, including increased expenditures on hardware, power, and network infrastructure required to sustain storage operations.

These trends have placed downward pressure on gross margins, and if current conditions persist, the Company may face continued profitability challenges in its Filecoin-related storage services. The Company is actively evaluating operational efficiencies, pricing strategies, and alternative business models to mitigate the impact of these unfavorable trends. However, future performance will remain dependent on market dynamics, changes in Filecoin network economics, and the Company's ability to optimize costs in response to industry conditions.

**Off-Balance Sheet Arrangements**

As of the reporting date, DSS has entered into certain contractual obligations that are not recognized on the balance sheet but may have a material effect on the Company's financial condition, results of operations, or liquidity. These off-balance sheet arrangements primarily consist of data center colocation facility commitments and managed service agreements.

***Colocation Facility Commitments***

The Company has entered into colocation agreements for data center facilities under non-cancellable operating lease arrangements. These agreements are generally structured with five-year terms, with costs that fluctuate based on the quantity of deployed equipment and power usage. The Company's future obligations under these agreements are contingent upon business expansion, changes in IT infrastructure needs, and energy consumption levels.

Although these commitments do not appear as liabilities on the balance sheet under applicable accounting standards, they represent a significant financial obligation that impacts future cash flows. If the Company's colocation needs increase or energy prices rise, the total financial exposure under these agreements could materially increase. Conversely, the Company's ability to reduce these commitments may be limited due to contract terms and renewal obligations.

***Managed Service Agreements***

The Company has multiple agreements for managed service equipment and associated services with third-party vendors. These agreements involve commitments totaling approximately $90,000 per month, with remaining contract durations ranging from 2 to 5 years. The Company's obligations under these contracts include **ongoing** infrastructure support, equipment maintenance, and service-level agreements (SLAs) that are essential for business continuity.

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Although these obligations do not meet the criteria for balance sheet recognition, they represent recurring financial commitments that impact operating expenses and liquidity. If the Company seeks to renegotiate, terminate, or scale these agreements, penalties or additional costs may be incurred.

***Potential Effects on Liquidity and Financial Condition***

The Company continuously evaluates its off-balance sheet arrangements to assess their impact on liquidity, financial position, and operational flexibility. Factors that could materially affect these commitments include:

● Changes in power costs: Volatility in energy pricing could increase the total cost of colocation facility commitments.

● Scalability of IT infrastructure: Higher-than-expected deployment of new equipment may lead to increased costs under colocation agreements.

● Service provider risks: Changes in vendor pricing, contract renewals, or service disruptions could impact the cost-effectiveness of managed service agreements.

At this time, the Company does not believe that these off-balance sheet arrangements create material risks beyond those disclosed in its financial statements and risk factors. However, the Company will continue to monitor and manage these obligations in alignment with its operational and financial strategies.

**Critical Accounting Policies and Estimates**

Management's discussion and analysis of DSS's financial conditions and results of operations is based on its consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of the consolidated financial statements requires DSS to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. DSS's estimates are based on its historical experience and on various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

While DSS's significant accounting policies are described in more detail in Note 2 to its consolidated financial statements included elsewhere in this registration statement, it believes the following accounting policies and estimates to be most critical to the preparation of its consolidated financial statements.

We consider an accounting estimate to be critical if: (1) it involves a significant level of estimation uncertainty, and (2) impact of the estimates and assumptions on financial condition or operating performance is material.

*Deferred tax assets*

Deferred tax assets relating to tax losses and deductible temporary differences may be recognized where it is probable that there may be future taxable profits against which available tax losses and deductible temporary differences can be utilized in the reasonably foreseeable future given the circumstances of DSS.

Determining the recoverability of deferred tax assets involves significant judgement on the tax treatment of certain transactions and of uncertain future events and circumstances.

Management makes judgments as to the probability of future taxable profits being generated based on budgets, and current and future expected economic conditions and determines whether it is probable that DSS will be able to realize a benefit from its available tax losses and deductible temporary differences within the reasonably foreseeable future.

Please refer to Note 2(f) and Note 5 Income tax expense of DSS's consolidated financial statements as of June 30, 2024, for further information on the accounting of DSS's income tax.

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**BUSINESS OF SHARONAI**

*Unless the context otherwise requires, references in this "Business of SharonAI" to "we", "us", "our", and "the Company" are intended to mean the business and operations of SharonAI*

**<u>Overview</u>**

We are a corporation formed in Delaware on February 15, 2024, with the intent to act as a holding company to acquire various assets focused on or in the High Performance Computing ("<u>HPC</u>") industry and the Artificial Intelligence ("<u>AI</u>") field of technology, and currently one of Australia's leading Neoclouds, a cloud infrastructure provider that focuses on specialized, high-performance compute—especially GPU-heavy workloads for AI, machine learning, and HPC. HPC is a computing technology that uses clusters of processors or processor cores working in parallel to solve advanced computational problems across a wide range of scientific, engineering, finance, business and other fields. We are specifically focused on infrastructure and technology associated with the development and delivery of these HPC/AI services to users and applications which require both large amounts of Graphic Processing Units ("<u>GPU</u>") and Central Processing Units ("<u>CPU</u>"), combined with data storage. CPUs are general purpose processors while GPUs are optimized for parallel processing and were originally used for computer graphics. Data storage is used to store the large data sets common in HPC/AI and to back up information. Our two main business lines are an AI/HPC cloud platform, which is based in Australia, and the development of data center assets, which is based in the U.S., each as described further below.

In March of 2024, we formed two new wholly owned subsidiaries in Delaware, SharonAI Operations LLC, which we intend to use for U.S. based operational activities as our operations expand to the U.S., and SharonAI Hosting LLC, which we intend to use to hold assets that are acquired in the future and based in the U.S.

In April of 2024, we acquired 100% of the issued capital of Alternative Asset Management Pty Ltd ACN 645 215 194, an Australian company that we renamed SharonAI Pty Ltd ("<u>SAIPL</u>") and which has a business operating distributed data storage a type of cloud storage that utilizes Web 3 technology to provide decentralized networks of independent nodes to securely store and retrieve data, ensuring redundancy, fault tolerance, and resistance to censorship while incentivizing storage providers with blockchain-based rewards. This acquisition was part of a transaction in which SAIPL also obtained certain assets from Digital Income Fund Pty Ltd ACN 643 155 328 as trustee for the Digital Income Fund ABN 12 771 427 247 (**"**<u>DIF</u>"), an Australian company which had storage servers and ancillary equipment for the operation of the distributed storage operations. In addition to these assets AAM had acquired a Tier 3 designed modular data center, although it had not fully paid for the equipment at the time of acquisition.

In June of 2024, we acquired over 96% of the issued capital of Distributed Storage Solutions Limited ACN 646 979 222 ("<u>DSS</u>") via direct agreement with individual shareholders, an Australian company that operates distributed data storage and HPC/AI equipment. In the period from June 2024 to December 2024, we continued with further acquisitions of the issued capital ending 2024 with over 99% of outstanding stock in DSS. The acquisitions of SAIPL and DSS provided us with a substantial amount of storage capacity, GPUs and CPUs, a core operational team including our current chief operating officer and strategic relationships with suppliers including Lenovo and NEXTDC. Both SAIPL and DSS continue as our main operating subsidiaries in Australia.

We have acquired a fleet of GPU / CPU and storage servers and currently operate out of three third-party co-location data centers in Australia. As of September 30, 2025:

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| | |
|:---|:---|
|  | **Existing<br>Operations<br>Online** |
| Total GPU's operating | 432 |
| Total CPU's operating | 195 |
| Total Storage Capacity (PB) | Over 51 |

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In January of 2025, we formed a 50:50 joint venture with New Era Energy and Digital, Inc., named Texas Critical Data Centers LLC ("<u>TCDC</u>"), to fund, develop, and construct a planned 250 Mega Watt ("<u>MW</u>") sustainable data center site project behind the meter with a natural gas-fired power plant within the Permian Basin in Western Texas. We sold our interest in TCDC to NUAI on January 2016 as further described under "Recent Developments"TCDC below.

We continue to conduct research and development into our systems, and we are actively testing several configurations and locations to determine the best configuration and architecture for including both GPU systems and traditional CPU based computing systems.

**<u>Our Products and Services</u>**

***High Performance Computing (HPC/AI) and Cloud Services***

Our HPC and AI cloud platform requires GPU, CPU and storage server hardware specific to the requirements of our customers, along with a data center environment to host that hardware under conditions suitable for its operation, including network connectivity, cooling and access to electricity at wholesale pricing. We obtain our hardware from original equipment manufacturer suppliers, including servers, networking and ancillary equipment, and we install and currently operate the hardware in third-party enterprise-grade colocation data centers in Australia. We make our servers available to customers across a full suite of bare metal, virtual servers and containers, including a collection of software tools and applications. Bare metal provides direct access to hardware for the best performance while virtual servers run on top of the hardware and containers are used to package and directly deploy applications, providing customers with a range of options depending on their objectives. We manage the complex operations of this infrastructure, allowing our customers to focus on their software applications. Our cloud platform is designed to support a variety of workloads across generative AI, traditional high performance compute, machine learning, visual effects, and other use cases, by offering a range of GPU models in different configurations. We offer our cloud storage service both as part of the HPC/AI platform for customers to store their application-related data sets, as well as on a stand-alone basis for data backup and archive use cases.

Customers pay us fees for using our HPC/AI cloud platform hardware and software. The fee structure is based on the type and quantity of hardware resources allocated and whether the customer is using the platform on-demand or is reserving capacity for a time period. Each GPU and CPU is generally assigned a different hourly fee which varies over time based on demand and other factors such as variable costs. Storage is assigned a fee per amount and time unit, for example Terabyte/month or Gigabyte/hour, and based on the type of storage. Storage fees vary similar to compute fees. On-demand fees are based on actual usage by customers while fees for reserved capacity are payable for the entire reserved time period on a take-or-pay basis. Our cloud services include supporting public and private cloud compute, high-performance SSD and S3 compatible high-capacity cloud storage solutions.

Revenue is measured at the fair value of the consideration received or receivable for services, net of discounts and sales taxes. Revenue is recognized as the related services are provided to customers. We apply the five step ASC 606 model in determining the appropriate treatment of our various sources of revenue. Our principal sources of revenue and recognition of these revenues are as follows:

● Monthly recurring revenue ("MRR") from our cloud platform services is recognized as service revenue on a ratable basis over the enforceable term of each contract, which typically aligns with the stated contract duration. We fulfill our performance obligations by providing these services continuously over time. This recognition method best represents the transfer of services, as it aligns with industry standards that measure satisfaction based on the passage of time.

● Transaction price is determined as the list price of services (net of discounts) that we deliver to our customers, taking into account the term of each individual contract, and the ability to enforce and collect the consideration.

● Usage revenue (overage and consumption-based services) is recorded as service revenue in the month the usage is incurred/service is consumed by the customer, based on a fixed agreed upon amount per unit consumed.

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● Invoices are typically issued at the end of each month for MRR services and for usage revenue.

● Storage revenues can also be generated in U.S. dollars by storing customer data on Storj on a price per GB per month basis or through bilateral customer contracts.

● Storj data storage revenues represent monthly recurring revenues under a commercial node operator agreement.

We became an NVIDIA Cloud Partner (NCP) in December 2024. NCPs are part of the NVIDIA Partner Network offering hosted hardware and software in a cloud or managed services model to end-user customers leveraging NVIDIA products. Working with NVIDIA and NEXTDC Limited, one of our co-location data center providers, we have started the process of building a cluster of data center GPUs connected through InfiniBand and adhering to the NVIDIA Reference Architecture, which is expected to meet more demanding HPC/AI workloads from our customers. InfiniBand is a high throughput and low latency network communication standard for complex workload requirements. We are planning to include NVIDIA H100 or H200 GPUs, purpose-built for AI and HPC, with a library of large language models (LLMs), tools and resources available in the NVIDIA AI Enterprise (NVAIE) software and our proprietary orchestration platform. NVAIE is a cloud native software platform that streamlines development and deployment of generative AI applications. Our orchestration platform further automates the management of compute workloads and storage across our infrastructure.

As we increase our HPC/AI capacity, we expect our revenue to increase subject to customer demand for our services. Our sales and business development team is based out of Australia and the U.S. and consists of a full time head of sales based in Australia as well as a part time business development person in the U.S. We sell our capacity through our website cloud front-end, direct sales contracts and several active marketplaces for GPU capacity suppliers and customers.

***Data Center Development***

Our data center development business is focused on developing powered-shell data centers for leasing to enterprise customers who operate their own hardware inside the data center. Powered-shell data centers are facilities with completed exterior construction, available power and fiber connectivity, but with the interior space to be utilized by the customer. We are focused on acquiring sites that either have access to power or are suitable for the construction and operation of power generation equipment to supply electricity to the data center. Our plan is to custom develop sites for specific customers once we have acquired the land and the applicable entitlements and permits. We may also sell the electricity to other large power consumers or sell a site or development at any stage in the process.

***Factors Affecting Profitability***

The main factors affecting our profitability are (in no particular order):

● The market pricing and demand for HPC/AI cloud platform services and data storage;

● Changes in the cost of computer hardware required to provide our cloud platform services and data storage;

● The cost of data center colocation services;

● The availability/supply of GPU/CPU/storage and other associated hardware items and equipment;

● The cost and availability of power;

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● The market pricing and demand for our data center development projects;

● The cost of constructing the infrastructure for data center developments including power generation, data center facilities, fiber connectivity and substations, as applicable;

● The availability/supply of the components required for the infrastructure for the data center developments including gas turbines, reciprocating engines, transformers, backup generators and fiber; and

While we take steps to mitigate these risks, they cannot be avoided altogether. In particular:

● The market demand and price for HPC/AI services has not been established for a long period of time. Accordingly, there can be no reliability that future market rates for HPC/AI services will reflect the current prices being offered to us in the market.

● Strong demand for accelerator chips and monopolistic characteristics of the market may push chip prices up over time and affect timelines for deployments.

● Strong demand for data center capacity and low-cost power sites creates a competitive market that may increase the price of hosting our HPC/AI hardware in colocation data centers.

● We currently have a single project as part of our data center development business that is at an early stage.

● Energy markets are exposed to supply and demand conditions that may result in increased power costs or supply limitations.

The following is an illustrative GPU annual revenue analysis showing the annual revenue based on the number of B300 GPUs, multiplied by the rate charged per hour, multiplied by 8,760 hours (per year), multiplied by an assumed utilization of 90%. These assumptions and projections are illustrative only and actual results will vary.

![](img_001.jpg)

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***Research and Development***

Our research and development, or R&D, program is focused on researching and exploring opportunities to develop proprietary data storage software and system architecture to accelerate storage and retrieval of data across distributed networks and management of complex compute resource demands to enable idle compute to serve multiple purposes. We procure all the necessary hardware and conduct research and development on service management, focusing on enhancing user interfaces, optimizing load management, and improving orchestration for seamless and efficient operations.

We have also commenced research into the software elements of computing and are in the initial stages of researching a range of programs to improve efficiency and accessibility of our products. We are currently only conducting research in Australia under the R&D Tax incentive scheme. We do not operate a separate division or forecast budget for R&D activities instead evaluating expenses occurred through the year on an arrears basis.

The R&D Tax Incentive in Australia is a government program that provides tax offsets to businesses investing in eligible research and development activities. Companies with an annual turnover below AUD$20 million receive a refundable tax offset of their corporate tax rate plus an 18.5% premium, while larger businesses receive a non-refundable offset based on their R&D intensity. To qualify, activities must involve systematic experimentation to generate new knowledge, adhering to scientific principles. Businesses must register their R&D activities with AusIndustry and then claim the offset through the Australian Taxation Office. The incentive is designed to support innovation, technology development, and business growth, but companies must ensure reporting and compliance to be eligible.

***Intellectual Property***

We rely on trademark and trade secret laws, as well as employee and third-party non-disclosure, confidentiality and other types of contractual arrangements to establish, maintain and enforce our intellectual property rights, including with respect to our proprietary rights related to our products.

As of the date of this prospectus, we have the following trademark:

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| | | | |
|:---|:---|:---|:---|
| **Trademark** | **Country** | **Date of registration** | **Registration No.** |
| SharonAI | United States of America | September 16, 2025 | 7943687 |
| SharonAI | Australia | April 3, 2025 | 2481068 |

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We believe that the trademarks that we use in our business are important for building our brand image and brand recognition. Therefore, we will develop marketing strategies, including advertising and branding campaigns, accordingly.

***Customers***

Our prospective customers for the HPC/AI cloud platform include start-ups, small-to-medium size enterprises, and larger enterprises, including universities, research institutes, financial services companies, insurance companies and governmental authorities that are or desire to leverage AI and HPC. Our cloud platform allows these customers to pay for compute and storage capacity over time, with flexibility to pay based on consumption. It also allows the customers to outsource the requisition, deployment and operation of the hardware.

Our top 3 customers constituted 99% of our 2024 revenue and were in no particular order:

● Filecoin Network<sup>(1)</sup> – The Filecoin network is a decentralized storage system that allows users to rent out or purchase storage space on a distributed network of nodes. Built on blockchain technology, Filecoin incentivizes storage providers with FIL tokens for securely storing and retrieving data. Unlike traditional cloud storage, it ensures redundancy, security, and censorship resistance by distributing files across multiple independent nodes. Users can verify the integrity of stored data through cryptographic proofs, making Filecoin a trustless and efficient solution for decentralized storage.

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● Vast.ai – A GPU aggregator website which connects users needing high-performance computing power with providers offering GPU resources. These platforms aggregate GPUs from various sources, including data centers and individual owners, and offer them on-demand for AI training, rendering, and other compute-intensive tasks. Users can browse available GPUs, compare pricing and performance, and rent them for specific durations. The platform manages resource allocation, load balancing, and payments and we do not have any direct contact with the underlying customer of the aggregator.

● Runpod.io – A GPU aggregator website which connects users needing high-performance computing power with providers offering GPU resources. These platforms aggregate GPUs from various sources, including data centers and individual owners, and offer them on-demand for AI training, rendering, and other compute-intensive tasks. Users can browse available GPUs, compare pricing and performance, and rent them for specific durations. The platform manages resource allocation, load balancing, and payments and we do not have any direct contact with the underlying customer of the aggregator.

We rely on a limited number of existing GPU aggregator customers which poses significant risks, particularly in terms of revenue stability and business scalability. A concentrated customer base means the loss of even a few key clients could severely impact cash flow and profitability. Additionally, aggregator platforms operate in a competitive and evolving market, where customers may switch providers based on pricing, performance, or service reliability. This dependency also limits negotiation power, making it harder to adjust pricing or service terms. To mitigate this risk, diversifying the customer base and expanding into new markets or industries is crucial for long-term sustainability.

***Suppliers***

We engage a range of suppliers for access to hardware and software required to provide our digital services. This includes the manufacturers of the compute and storage equipment and data center colocation providers. We have obtained our compute and storage equipment primarily from Lenovo. We have agreements for the provision of colocation services with NEXTDC in Melbourne, who host our cloud platform equipment. As an NVIDIA Cloud Partner (NCP) we have a strategic partnership engagement with NVIDIA across multiple products, engineering and sales.

Our top 3 operational suppliers in no particular order were:

● NextDC Limited – NextDC provide data center colocation services to the Company

● ASE Pty Ltd and – ASE is an intermediary that provides Equinix data centre colocation services as well as network and internet services to the Company.

● Lenovo Global Technology (Australia and New Zealand) Pty Limited – Lenovo provide hardware managed services to the Company.

 ***Strategic Partners/Relationships***

We have formed strategic relationships with several other firms in our industry or supplying our industry, including:

● Nvidia – SharonAI is a certified NVIDIA Cloud Partner, 1 of only 3 in the Australian market, operating GPU clusters built on NVIDIA Reference Architectures to support scalable AI training and inference workloads. Nvidia is a world-leader of high-performance compute. SharonAI utilizes NVIDIA infrastructure services for cluster deployment and certification, allowing customers to deploy AI workloads on NVIDIA-validated infrastructure in Australia via SharonAI.

*(1)* *As of June 30, 2025, the Company no longer provides services to this customer, and no revenues have been recognized from this customer subsequent to that date.* 

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● NEXTDC – SharonAI has partnered with NEXTDC to build Australia's Sovereign High Performance AI Infrastructure. NEXTDC has 17 Data Centers, 412MWs of contracted utilisation and a 3GW+ Development Pipeline, including 1K B200 cluster, 1K B300 cluster and GB300 and Vera Rubin deployments planned. SharonAI has access to up to 54MWs of data center capacity with NEXTDC.

● Cisco – Sharon AI has partnered with Cisco for Managed Enterprise Cloud AI Solutions to accelerate and expand Enterprise go-to-market sales opportunities in Asia-Pacific and to design, market and deliver architected enterprise-ready Cloud and AI solutions. SharonAI and Cisco intend to launch Australia's first secure AI factory on NVIDIA B300's. SharonAI and Cisco have together branded AI-ready cloud services that leverage Cisco products and technologies. NVIDIA and Cisco intend to create the blueprint for secure AI – giving enterprises the foundation they need to scale AI.

● World Wide Technology – An Elite NVIDIA AI Partner, WWT collaborates on high-performance Ethernet fabrics and advanced GPU clusters. It has relationships with Dell Technologies, HPE, Intel, Cisco, Microsoft, NetApp, and VMware, and expertise with global supply chains, infrastructure and cloud, AI and cybersecurity. A pillar of WWT's value proposition is its advanced technology center, a $1 billion physical and virtual lab ecosystem. WWT has partnered with SharonAI to provide digital strategy, innovative technology, and supply chain solutions for large-scale HPC/AI infrastructure deployment.

● Lenovo – SharonAI has partnered with Lenovo through the TruScale program to support flexible, consumption-based infrastructure deployments and joint go-to-market initiatives.

● VAST – Sharon AI has partnered with VAST and utilizes its AI Operating System, which unifies storage, database, and runtime, bringing together all the services needed to run AI pipelines at scale.

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● Megaport – Megaport enables Cloud, Enterprise and Research Customers globally in over 1,000 data centers across 26 countries to privately connect to the SharonAI Cloud.

● Dicker Data – Dicker Data supports distribution, procurement and channel enablement. The SharonAI partnership strengthens access to enterprise hardware, networking and infrastructure solutions across key regional markets.

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***Industry Overview***

Cloud computing is at its core the delivery of compute and storage servers and software applications over the internet. It has gained popularity in part due to the flexibility around paying only for what customers need and outsourcing the acquisition and management of the infrastructure. Traditional cloud computing is based on CPUs but more recently, cloud GPU computing, or GPU-as-a-Service, has increased, propelled by demand for high-performance computing across a range of data-intensive and computationally complex applications. Enterprises and researchers increasingly rely on advanced GPUs to power AI, machine learning, data analytics, computer vision, scientific simulations, and other tasks that require large-scale parallel processing. This has led to growth in both the demand and supply of on-demand GPU resources. This combination of increasing workloads that demand parallel processing and evolving consumption models that make GPUs more accessible has caused industry growth, creating specialized GPU-as-a-Service and GPU cloud platforms including the competitors listed below. The AI industry also faces challenges, with concerns including bias and misuse as well as around the environmental impact of the growing data center industry.

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Cloud storage is an integral part of cloud computing which increasingly deals with large data sets. One of the first modern cloud services offered was Amazon Web Services' Simple Storage Service (S3). There are different use cases for storage, including high-performance storage optimized for rapid data access and backup storage for data that is accessed less frequently.

Data centers are used to host the compute and storage servers, providing security, electricity, cooling and network connectivity. According to a research report by CBRE, the rise of AI compute is driving demand for power-intensive infrastructure, including a premium on energy-efficiency capabilities such as liquid cooling over air cooling. In addition, tertiary and rural markets have seen increased deal activity for powered land. The recently announced Project Stargate highlights the strategic importance of data center infrastructure and President Trump announced plans by the government and private industry to invest up to $500 billion over the next four years in the U.S. as part of the project. The demand for data center infrastructure has also created challenges around the supply chain and the procurement of critical components, including on the power generation side.

In 2026, it has been stated that Amazon, Google, Microsoft, Met and Oracle are expected to invest in the aggregate, approximately $434 billion, with Amazon expecting to invest the most at approximately $125 billion, and Oracle the least at approximately $35 billion.

![](img_002.jpg)

The industry is largely driven by scale, both of the opportunity and investment, which are not yet fully appreciated or understood, and the largest AI data center campuses are expected to soon be a fifth the size of Manhattan.

![](img_003.jpg)

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The industry is also driven by the demand for power. Worldwide, data center electricity consumption, as a proxy for AI demand, is expected to grow 2.2x from 500TWh to 1,090TWH, from 2024e to 2030e. US data center electricity consumption is expected to grow 8.9x from 17TWH to 151TWh.

![](img_004.jpg)

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One of the primary drivers of the non-linear growth of expected power consumption, is non-linear growth in the density of power per rack. There is some expectation that an AI server rach in 2027 could be 600KWs, which is ~12x bigger than in 2022 (~50KWs).

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The majority (~2/3rds) of the cumulative compute capacity to-date, even before future NVIDIA product releases, is from NVIDIA's product suite, again implying that scale is important in the industry.

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The Diffusion Act (which is now defunct) limited the sales of high-performance AI chips globally. Within the Asia-Pacific region, Australia was 1 of only 5 Tier 1 / 'Most Permissive' countries. Furthermore Australia's geo-political and geographic attractiveness makes it a highly favorable destination in some people's minds for large scale, long dated infrastructure investment.

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***Competition***

The HPC/AI cloud industry is dynamic and global. Many of the industry participants are larger operators of facilities, with access to both large energy infrastructure and supply of the appropriate compute and storage equipment required to operate cloud platforms at scale. Some of the larger operators of cloud platforms are also developers or owners of data centers besides specialized data center operators.

We will compete with them directly for the acquisition of new compute and storage equipment, access to energy infrastructure and raising capital. Digital infrastructure providers, including us, also compete with more traditional industries, for example, when obtaining the lowest cost of electricity, or access to sites with reliable sources of power. Many digital infrastructure operators are not publicly operated, and therefore data is not readily available.

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Public reporting companies operating cloud platforms and/or data centers used by cloud platforms include:

● Bit Digital, Inc.

● Hive Digital Technologies Ltd.

● IREN Limited

● Applied Digital Corporation

● Core Scientific Inc

● Hut 8 Corp.

● BitDeer Technologies Group

● DigitalOcean Holdings, Inc.

● Nebius Group N.V.

● Amazon.com Inc.

● Alphabet Inc.

● Microsoft Corp.

● Coreweave, Inc.

***Strategy***

Our strategy is to build an HPC/AI infrastructure business that operates cloud services and develops data center infrastructure. Our strategic focus includes:

**Cloud Services for HPC/AI**

● Operate our cloud services in co-location data centers serving small and medium sized businesses, research, enterprises and other customers.

● Offer a range of deployment models, including on-demand and reserved, as well as providing bare-metal, virtual machine and containers, to meet diverse workload requirements.

● Provide high-speed networking, low-latency performance, and integration with AI and HPC workflows.

● While our services can be accessed from other countries, we are focused on Australia because of the more limited availability, compared to the U.S., of cloud infrastructure supporting complex AI compute requirements in Australia at this time.

● We are designing our services for demanding AI requirements, including dedicated resources for non-contending performance.

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**Storage for Secure and Scalable Data Solutions**

● Provide a storage service to support AI datasets, research archives, and enterprise cloud needs.

● We offer both high-performance storage solutions as well as high-capacity backup storage.

**Development and Partnerships**

● Collaborate with hardware manufacturers and develop software to optimize GPU utilization and overall computing performance.

● Develop land and powered-shell data centers for enterprise customers.

We have secured a path to deliver AI factories with up to 54MWs of compute expected to be ready for deployment in 2026 at NEXTDC alone, plus a roadmap to ~1GW of land, power and shell.

![](img_009.jpg)

***Government Regulations and Environment***

Our business is subject to regulation by various federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety and environmental laws, including those related to energy usage and energy efficiency requirements, privacy and data protection laws, AI, financial services laws, anti-bribery laws, sanctions, national security, import and export controls, anti-boycott, federal securities laws, and tax laws and regulations.

For example, governmental authorities have in the past sought to restrict data center development based on environmental considerations and have imposed moratoria on data center development, citing concerns about energy usage, requiring new data centers to meet energy efficiency requirements. We may face higher costs from any laws requiring enhanced energy efficiency measures, changes to cooling systems, caps on energy usage, land use restrictions, limitations on back-up power sources, or other environmental requirements.

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In certain foreign jurisdictions, these regulatory requirements may be more stringent than those in the United States. These laws and regulations are subject to change over time and thus we must continue to monitor and dedicate resources to ensure continued compliance. In particular, the global AI regulatory environment continues to evolve as regulators and lawmakers have started proposing and adopting, or are currently considering, regulations and guidance specifically on the use of AI. Non-compliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions and jail time for responsible employees and managers. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, financial condition, and future prospects could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management's attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results, financial condition, and future prospects.

Our sustainability initiatives, goals, or commitments could be difficult to achieve or costly to implement. Moreover, compliance with recently adopted and potential upcoming ESG requirements, including California legislation that requires various climate-related disclosures, the European Union's Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive, and the United Kingdom's Streamlined Energy and Carbon Reporting framework will require the dedication of significant time and resources. In addition, we may also be required to comply with the SEC's comprehensive climate change disclosure rules, which have been stayed pending judicial review. Additionally, if our competitors' corporate social responsibility performance is perceived to be better than ours, potential, or current investors may elect to invest with our competitors instead. Our business may face increased scrutiny related to these activities and our related disclosures, including from the investment community, and our failure to achieve progress or manage the dynamic public sentiment and legal landscape in these areas on a timely basis, or at all, could adversely affect our reputation, business, and financial performance.

***Human Capital***

Our employees are critical to our success. As of November 11, 2025, we had 14 employees, board members, advisors and contractors based in Australia and the United States. We further rely on the extensive expertise of our external advisers, including legal, audit, financial and compliance consultants, who may be engaged on an hourly basis, or on a project basis.

The table below breaks down our full-time personnel by function as of November 11, 2025:

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| | | |
|:---|:---|:---|
| **Function** | **Number of<br> Employees** | **% of<br> Total** |
| Executive | 4 | 50% |
| General Operations | 4 | 50% |
| **Total** | **8** | **100%** |

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***Legal Proceedings***

From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. We recognize provisions for legal proceedings in our financial statements, in accordance with accounting rules, when we are advised by independent outside counsel that (i) it is probable that an outflow of resources will be required to settle the obligation, and (ii) a reliable estimate can be made of the amount of the obligation. The assessment of the likelihood of loss includes analysis by outside counsel of available evidence, the hierarchy of laws, available case law, recent court rulings and their relevance in the legal system. Our provisions for probable losses arising from these matters are estimated and periodically adjusted by management. In making these adjustments our management relies on the opinions of our external legal advisors. 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.

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***Facilities and Properties***

We lease a shared workspace at 745 Fifth Avenue, Suite 500 New York, NY 10151. The office serves as our principal place of business. The facility is contracted on a short-term rolling commitment with ad hoc charges for the use of working areas.

We lease a shared workspace at L5 24 Campbell Street, Haymarket NSW Australia. The offices are contracted on a short-term rolling commitment and serves as the office for our Australian staff members. We currently have a designated area of approximately 16m2 with 4 desks and associated equipment, the Company currently pays AUD$4,004 per month for these services with the price re-evaluated in line with the rolling commitment every 6 months.

Our operating computer hardware and servers, including GPU's and CPU's, are currently co-located in Australia. The space and cost at the colocation facilities are based on the physical rack space required at any point in time and the power usage capacity required for our infrastructure.

***Corporate Information***

We were incorporated in the state of Delaware on February 15, 2024 under the name SharonAI, and now includes the businesses of DSS, which is 99% owned and AAM which is 100% owned, which date back to 2021. On December 17, 2025, we completed the Business Combination with Roth CH Acquisition Co, in accordance with the terms of the Business Combination Agreement dated January 28, 2025, as amended, by and among us, Roth CH Acquisition Co., and Roth CH Holdings, Inc., Roth CH Merger Sub, Inc. pursuant to which Roth CH Acquisition Co. merged with and into The Company with the Company as the surviving corporation (the Domestication Merger") and Merger Sub has merged with and into SharonAI with the SharonAI as the surviving corporation (the Acquisition Merger" and collectively with the Domestication Merger the "Business Combination").

Our principal executive offices are located at 745 Fifth Avenue, Suite 500 New York, NY 10151. Our contact email is info@sharonai.com, and our website is www.sharonai.com. The information contained on our website is not included in, nor incorporated by reference into, this prospectus. You should not rely on any such information in making your decision whether to purchase our securities.

***Distributed Storage Solutions Limited (DSS) Transaction***

On or around June 3, 2024, we sent offer letters to certain shareholders of DSS offering to purchase their ordinary shares of DSS in exchange for shares of SharonAI common stock, at a ratio of 0.16 shares of SharonAI common stock for each ordinary share of DSS (the "<u>Offer</u>"). In connection with the Offer, our board of directors authorized and approved the purchase of up to 2,423,375 ordinary shares of DSS and the issuance of up to 500,000 shares of SharonAI common stock in connection with this Offer. Our board of directors also authorized and approved the issuance of up to an additional 110,174 shares of SharonAI common stock to holders of Simple Agreements for Future Equity with DSS ("<u>SAFEs</u>") upon the conversion and termination of such SAFEs into shares of SharonAI common stock at a ratio of one (1) share of SharonAI common stock per $50 of Purchase Amount of the SAFE, and also the issuance of warrants to purchase of up to an additional 8,195 shares of SharonAI common stock to holders of Warrant Deeds to purchase DSS shares at a ratio of one (1) share of SharonAI common stock per zero point one six one (0.161) DSS share. As of December 31, 2024, we have purchased ordinary shares of DSS representing 99% of the issued capital of DSS. DSS has one (1) shareholder who did not accept the offer and owns approximately 1% of DSS.

DSS is an Australian company that operates HPC/AI and distributed storage operations. DSS operates a high-capacity distributed storage business with 51 petabytes (PB) of active storage, providing scalable, secure, and decentralized data storage solutions. In addition to storage operations, DSS had a small GPU bare-metal service business. DSS was established in 2021 and has been growing its storage operations and capacity whilst researching ways to improve the distributed storage environment.

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***Alternative Asset Management Pty Ltd/SharonAI Pty Ltd (SAIPL) and Digital Income Fund Pty Ltd (DIF) Transaction***

On or around April of 2024, we acquired all of the outstanding shares of SAIPL from the owners thereof in consideration for issuing an aggregate of 210,000 shares of SharonAI common stock. In connection with the acquisition of SAIPL, we and SAIPL entered into a Business Sale Agreement pursuant to which SAIPL acquired certain assets of DIF, and we issued DIF 55,000 shares of SharonAI common stock in consideration for such assets.

SAIPL is an Australian company that held a Tier 3 designed Modular Data Centre equipment and data storage business (previously utilizing the Filecoin network) utilizing the acquired equipment from DIF. Formed in 202, the business was non-operational until 2024 when it acquired the aforementioned assets.

***2024 Private Offerings***

In 2024, SharonAI conducted 3 private offerings of its common stock in order to raise capital. In June, 2024, Sharon sold 74,906 shares of our common stock in an offering that raised $2,921,334. In August, 2024 SharonAI sold 69,192 shares of its common stock in an offering that raised $2,584,387. In the period between October and December, 2024, SharonAI sold 82,696 shares of its common stock in an offering that raised $5,116,998. The Company engaged DigitalAI Holding Pty Ltd ("<u>DigitalAI</u>") in Australia to facilitate the raises. DigitalAI is an authorized representative of an Australian Financial Services License holder, and was paid $568,223 across the 3 raises.

***Recent Developments***

***Amendment to Yorkville Agreements***

On December 15, 2025, SharonAI entered into the YA Amendment with YA Under the terms of the YA Amendment, during the Suspension Perio, (A) the following obligations of the Company shall be suspended: (a) the obligation to assign the YA notes issued by SharonAI to YA the Company, (b) the obligation to cause the Company to assume the Note or enter the SEPA, and (c) the obligation to make any payments to the YA under the YA Notes, and (B) YA shall not: (a) convert either YA Note into shares of Class A Ordinary Common Stock, or (b) have any obligations to make any further Pre-Paid Advances; in each such case provided that SharonAI strictly complies with the covenants set forth in Section 4 of the YA Amendment. SharonAI agrees that upon the expiration or termination of the Suspension Period (unless the Notes are repaid in full as provided in Section 4 of the YA Amendment), the suspension of the obligations and payments due to be performed under any of the Agreements that may have arose during the Suspension Period shall be in full force and effect upon the termination of the Suspension Period.

In connection with the YA Amendment, SharonAI agreed to pay YA (i) an initial payment within 4 business days of the date of the YAAmendment of $350,000, which is comprised of (a) $263,636 of principal of the promissory note dated October 21, 2025; (b) a Redemption Premium (as defined in the Notes) in respect of such principal in the amount of $26,364; and (c) $60,000 of accrued and unpaid interest on the Notes (representing all accrued and unpaid interest as of December 11, 2025); and (ii) a final payment on or before the expiration of the Suspension Period in an amount equal to the aggregate of the following as of the date of such payment: (a) the outstanding principal of each Note; (b) a Redemption Premium (as defined in the Notes) in respect of such Principal amount; (c) the accrued and unpaid Interest of each YA Note; and (d) a $250,000 fee, which aggregate payment shall be in complete payment and satisfaction of all amounts owed and other obligations under all of the Agreements and the Agreements shall terminate and be of no further effect upon SharonAI making such payment and none of the parties, nor any of their respective successors in interest or permitted assigns, shall have any further rights or obligations or any continuing liability under the Agreements after such payment is made by SharonAI.

As of the date hereof, SharonAI made all payments required under the YA Amendment and accordingly all obligations under any agreements with YA have been terminated.

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***Convertible Notes***

On December 17, 2025 the Company entered the December 2025 Convertible Notes with three accredited investors pursuant to which the Company issued the December 2025 Convertible Notes the amount of $2,250,000 to the investor in consideration of $2,250,000. The December 2025 Convertible Notes accrue interest at a rate of 10% per annum and have a maturity date of December 17, 2026. The unpaid and outstanding principal amount and accrued interest automatically convert into shares of Class A Ordinary Common Stock at a conversion price of $6.00. As soon as practicable (and in any event within 30-calendar days of the closing of the Business Combination Agreement, the Company agreed to file a registration statement on Form S-1 providing for the resale of the shares of Class A Ordinary Common Stock issuable upon conversion of the December 2025 Convertible Notes. The proceeds from the issuance of the December 2025 Convertible Notes were used for working capital and general corporate purposes.

***TCDC Property Purchase***

On December 19, 2025, TCDC completed its acquisition of the Additional 203 Acres pursuant to the 203 Acre Agreement between TCDC and Grow Odessa, from whom TCDC previously purchased a contiguous 235 acres of land from on July 25, 2025. The total price for the Additional 203 Acres was $5,100,000. The intent is for a third-party to build gas-fired power generation on-site.

The description of the 203 Acre Agreement is only a summary and is qualified in its entirety by reference to the full text of such document, which is filed as an exhibit to this Prospectus and is incorporated herein by reference.

**New Convertible Note Financing**

On December 19, 2025 the Company, entered into a New Financing Agreement with Convertible Noteholders, pursuant to which the Convertible Noteholders agreed to provide financing in the aggregate principal amount of approximately US$103,000,000 of AU Convertible Notes. Canaccord Genuity Australia served as the sole lead manager for the transaction.

Promptly after entering into the New Financing Agreement, SharonAI Inc. assigned, and the Company assumed, the obligations and responsibilities of SharonAI Inc. in connection with and arising out of the New Financing Agreement and the AU Convertible Notes.

The AU Convertible Notes bear interest at a rate of 12% per annum from April 19, 2026, through December 18, 2026, and 15% per annum on and from the December 19, 2026 until the AU Convertible Notes are redeemed, cancelled or converted. The AU Convertible Notes mature on the Maturity Date of December 19, 2027, unless earlier converted or redeemed.

Under the terms of the New Financing Agreement, the Notes may be converted into shares of Class A Ordinary Common Stock in certain circumstances, including by the Company prior to a Corporate Event (as defined in the Agreement), upon completion of an initial public offering on the Australian Securities Exchange or other securities exchange (subject to additional terms) or at maturity. Upon conversion, the number of shares issuable is calculated based on the sum of principal and accrued interest divided by the lower of a discounted transaction price or a predetermined valuation cap or maturity conversion price. Conversion and issuance of securities pursuant to the AU Convertible Notes are subject to compliance with the rules of the Nasdaq Stock Market LLC or prior stockholder approval.

Redemption rights are available to the Noteholders on the Maturity Date or upon the occurrence of an event of default (if not converted), in which case the redemption price includes both principal and accrued but unpaid interest.

The proceeds from the offering are expected to be used primarily to accelerate the deployment of high density computing power in the form of NVIDIA GPUs, including B200's, B300's and GB300's.

The foregoing description of the New Financing Agreement and the AU Convertible Notes does not purport to be complete and are subject to and qualified in its entirety by the full text of the New Financing Agreement and the AU Convertible Note, copies of which are filed as an exhibit hereto and is incorporated herein by reference.

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 ***Sale of Interest in TCDC***

On January 16, 2026, SharonAI Inc., a subsidiary the Company entered into the Purchase Agreement for, and closed the sale of, the Company's sale of its Membership Interests in TCDC to NUAI.

The consideration NUAI will pay the Company for the Membership Interests will be an aggregate of $70,000,000, of which, (a) $10,000,000 will be payable in cash, with (i) $150,000 paid in December of 2025 as non-refundable deposit, and (ii) $9,850,000 payable upon the occurrence of certain events, but no later than March 31, 2026; (b) $10,000,000 will be payable in common stock or other units of NUAI upon the occurrence of certain events, but no later than March 31, 2026; and (c) $50,000,000 will be payable by issuance of a the Secured Note.

The Secured Note matures and is due June 30, 2026. It provides for an interest rate of 10% per annum (payable at maturity) and the right of the Company to convert up to $10,000,000 into common stock of NUAI at a conversion price equal to the 30-day VWAP of NUAI common stock prior to conversion, provided that such conversion price will not be less than 20% of the Nasdaq Official Closing Price. The Secured Note contains customary events of default and affirmative and negative covenants of NUAI.

In connection with the Purchase Agreement and the Secured Note, TCDC and SharonAI have entered into a the Guaranty, pursuant to which TCDC has guaranteed the obligations of NUAI under the Secured Note. The obligations under the Secured Note and the Guaranty are secured by the Security Agreement, pursuant to which NUAI pledged all of the membership interests of TCDC to the Company and TCDC granted a security interest in substantially all of its assets to the Company, and also by the Deed of Trust, pursuant to which TCDC has conveyed certain real estate in trust to secure the obligations under the Secured Note.

The descriptions of the Purchase Agreement, Secured Note, Guaranty, Security Agreement and Deed of Trust are only a summary and are qualified in its entirety by reference to the full text of such document, each of which is filed as an exhibit to Registration Statement and which is incorporated herein by reference.

 ***Resignation of Chief Executive Officer***

On January 22, 2026, Mr. Wolfgang Schubert, a member of the Board, and the Chief Executive Officer of the Company, resigned as the Company's Chief Executive Officer and from the Board, and also terminated the Schubert Employment Agreement, all in accordance with the Schubert Separation Agreement. Pursuant to the Separation Agreement, Mr. Schubert received 318,240 restricted stock units. Mr. Schubert will continue with the Company as a consultant pursuant to the Schubert Consulting Agreement, pursuant to which Mr. Schubert will receive a one-time grant of $50,000 of restricted stock units and will receive $8,334 per month. Mr. Schubert's resignation was not the result of any dispute or disagreement with the Company or management and is not a reflection on the Company's results of operations.

 ***Appointment of Chief Executive Officer***

In connection with Mr. Schubert's resignation as Chief Executive Officer of the Company, on January 22, 2026, the Board appointed James Manning, Non-Executive Chairman, director and greater than 10% stockholder of the Company, as Chief Executive Officer. In connection with Mr. Manning's appointment as Chief Executive Officer, Mr. Manning entered into the New Manning Agreement. Pursuant to the New Manning Agreement, Mr. Manning will receive an additional annual base salary of AUD$200,000 and will be eligible to participate the Company's discretionary bonus scheme and in the Company's discretionary share scheme, as well as superannuation contributions in line with the minimum compulsory contribution rate required to be paid.

 ***Announcement of Potential Financing and Strategic Partnership***

On January 19, 2026, the Company announced a potential investment from Digital Alpha of up to $200 million and a strategic technology partnership with Cisco, subject to execution of definitive documentation which is expected to enable the Company to further accelerate customer deployments and expand our cloud infrastructure for enterprise AI and high-performance compute in Australia and Asia Pacific.

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 ***Announcement of Proposed Debt Facility***

On January 22, 2026, the Company announced that USD.AI has approved a debt facility of up to US$500 million for Sharon AI, a subsidiary of the Company, subject to execution of definitive documentation.

The facility is expected to enable Sharon AI to access asset-backed, non-recourse financing through USD.AI's on-chain credit system, which is expected to allow approved GPU deployments to be financed with stablecoin liquidity.

The structure is designed to support capital-efficient expansion of AI infrastructure while reducing reliance on traditional bank and private credit markets.

![](img_010.jpg)

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**MANAGEMENT OF THE COMPANY**

The business and affairs of the Company are managed by or under the direction of the board of directors of the Company. The following persons are serving as executive officers and directors of the Company as of the date hereof.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| James Manning | 40 | Chief Executive Officer, Director |
| Tim Broadfoot | 34 | Chief Financial Officer, Treasurer, Corporate Secretary |
| Andrew Leece | 40 | Chief Operating Officer |
| Daniel Mons | 45 | Chief Technology Officer |
| Nicholas Hughes Jones | 40 | Head of Corporate Development |
| Alastair Cairns | 53 | Director |
| Peter Woodward | 52 | Director |
| Alexander Andrew Kelton | 67 | Director |

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*Executive Officers*

 ***James Manning***

James Manning has served as our Chief Executive Officer since January 22, 2026, a Director and the Chairman of the Company since consummation of the Business Combination and of SharonAI since February 15, 2024. After its acquisition by SharonAI, Mr. Manning has also continued to serve as the Chairman of Distributed Storage Solutions Limited ACN 646 979 222, until September 2024, an Australian company that operates HPC/AI and distributed storage operations, a position he started January 2021, before its acquisition by SharonAI. Mr. Manning has over 20 years' experience across corporate finance, accounting, business, asset management and operations in both public and private companies. He has spent the last 5 years focused on digital asset infrastructure, with a keen focus on the energy requirements for data center development. Mr. Manning currently serves as Managing Director at Vertua Limited, a listed investment company, a position he has held since June 2014. He was the founder and CEO of Mawson Infrastructure Group Inc. (NASDAQ:MIGI), a digital infrastructure platform developer and operator, until May of 2023. He is also the Chairman of Defender Asset Management Pty Ltd, a diversified asset manager, a position he has held since September 2015.

Mr. Manning has a Master of Business (Finance) and a Masters in Property Development from the University of Technology Sydney, as well a Bachelor of Accounting from Australian Catholic University. He is a Fellow of the Institute of Company Directors (FAICD), and a member of Institute of Public Accountants (IPA).

***Tim Broadfoot***

Tim Broadfoot has served as the Chief Financial Officer of the Company since consummation of the Business Combination and of SharonAI since July 1 2024. After its acquisition by SharonAI, Mr. Broadfoot has also continued to serve as the Chief Financial Officer of Distributed Storage Solutions Limited ACN 646 979 222, an Australian company that operates HPC/AI and distributed storage operations, a position he started May 1 2024, before its acquisition by SharonAI. He has over a decade of experience across corporate finance, accounting, business, asset management and operations in both public and private companies. Mr. Broadfoot currently serves as a Responsible Manager for Defender Asset Management Pty Ltd, a diversified asset manager, from 2022. Mr. Broadfoot also previously served as Chief Corporate Officer for Mawson Infrastructure Group Inc. (NASDAQ:MIGI), a digital infrastructure platform developer and operator, from 2020 until 2024, where he was responsible for building and managing over 120MW of data center infrastructure across the USA and Australia. Mr. Broadfoot has a Bachelors of Commerce (Finance) from the University of Western Australia.

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***Andrew Leece***

Andrew Leece has served as Chief Operating Officer of the Company since consummation of the Business Combination and of SharonAI since February 15, 2024. After its acquisition by SharonAI, Mr. Leece has also continued to serve as the Chief Executive Officer of Distributed Storage Solutions Limited ACN 646 979 222, an Australian company that operates HPC/AI and distributed storage operations, a position he started in 2021, before its acquisition by SharonAI. He also served as Chief Executive Officer at AirOne Media, Inc., a digital aircraft sales and finance platform, from 2017 until 2021. He began his career with Macquarie Bank (ASX:MQG), with a tenure spanning 2007 to 2015, where he gained significant experience in Corporate and Asset Finance. He then embarked on various entrepreneurial endeavors including technologies developed for the Aviation industry. Andrew has been a director of ISI Australia, a leading provider of mainframe computing managed services since 2018.

***Daniel Mons***

Daniel Mons has served as the Chief Technology Officer of the Company since consummation of the Business Combination and of SharonAI since May 17, 2025. He has over 20 years experience in high performance computing encompassing infrastructure design, systems architecture, information security and cluster administration. Prior to joining SharonAI, he worked at Queensland State Government's Department of Environment, Science, Energy and Innovation's "ASDI," Cutting Edge, Eyecon and Sunsuper building and managing HPC environments. He is proficient across Linux and open source technologies, security, encryption, networking and virtualization, and has a Bachelor of Science (Computer Science) from the University of Queensland.

 ***Nicholas Hughes-Jones***

Nicholas Hughes-Jones has served as Senior Vice President, Business Development of SharonAI from February 15, 2024 to May 2025. Mr. Hughes-Jones consulted to the Company from July to December 2025 and then rejoined the Company in January 2026 as Head of Corporate Development. He has over 18 years' experience in financial markets and technology industries across corporate finance, funds management and senior executive roles at listed and unlisted energy infrastructure and technology companies. His experience includes serving as Chief Investment Officer of Defender Asset Management Pty Ltd, a diversified asset manager, from 2022 until 2024. He served as the Chief Commercial Officer of Mawson Infrastructure Group Inc. (NASDAQ:MIGI), a digital infrastructure platform developer and operator, from October of 2021 until November of 2022, where he helped build over 100 modular data centers across 200MW of energy infrastructure in the USA and Australia. He also served as Senior Advisor at Bell Financial Group (ASX:BFG), a brokerage and financial advisory services firm, from 2016 until 2021. He also served as Institutional Equities Dealer at Southern Cross Equities, an institutional equities and equity capital markets firm, from 2011 until 2016. Mr. Hughes-Jones has a Commerce Degree (majors in Corporate Finance and Business Law) from the University of Sydney.

*Directors*

 ***James Manning*** *- see biography above under "Executive Officers"*

***Alastair Cairns***

Alastair Cairns has been a Director of the Company since consummation of the Business Combination and of SharonAI since September of 2024. Previously, Mr. Cairns served as the Head of Asset Management, North America, at Linedata, a European listed financial software company, a position he held from July 2024 to November 2025. Previously, he was head of insights and marketplace at Addepar, a provider of reporting and analytics software to wealth managers, from 2017 until 2022. Prior to Addepar, he held executive positions at Credit Suisse from 2007 until 2016 in strategy, product and sales, in asset management and private banking. Alastair began his career at McKinsey & Company, where he rose to partner in the financial services practice. He holds degrees in Physics and Economics from Queen's University in Canada and a Masters in Economics from the University of Chicago.

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***Peter Woodward***

Peter Woodward has been a Director of the Company since consummation of the Business Combination Mr. Woodward is the founder of MHW Capital Management, LLC, a position he has held since September 2005. From 1996 to 2005, Mr. Woodward was the Managing Director for Regan Fund Management, LLC. He served as the President and Chief Executive Officer and Director of Cartesian, Inc. from June 2015 to July 2018, and currently serves as Chairman of the Board and Chairman of the Audit Committee for TSS, Inc., as Chairman of the Board and Chairman of the Audit Committee for Precision Optics Corporation, and as the CEO of Innovative Power, LLC. Prior to founding MHW Capital Management, Mr. Woodward served as an economist for the Council of Economic Advisors at the White House. Mr. Woodward holds a BA in economics from Colgate University and a Masters of International Affairs with a concentration in international economics and finance from Columbia University. He is also a Chartered Financial Analyst.

**Alexander Andrew Kelton**

Alexander Andrew Kelton has been a Director of the Company since January 12, 2026. Mr. Kelton is a global business leader and professional board director with approximately 40 years' experience in the information and communications technology arena. He has held senior roles in the United Kingdom, Europe, India, Australasia and the United States of America. Mr. Kelton currently serves as the Non-Executive Chairman at Leading Edge Data Centres, Non-Executive Chairman of Locate Technologies (ASX:LOC) and Non-Executive Director of Superloop. Mr. Kelton previously served as Chief Executive Officer of Superloop (ASX:SLC), Non-Executive Director of Megaport (ASX:MP1), Executive Vice President of T-Mobile (NASDAQ:TMUS), Managing Director of Telstra International (ASX:TLS) and Senior Vice President of Docusign (NASDAQ:DOCU).

**Board Composition**

The Company's business and affairs are managed under the direction of the Company's board of directors (the "<u>Board</u>"). There are currently four members on the Board in Class I, Class II and Class III directors consisting of James Manning, Peter Woodward, Alastair Cairns, and Alexander Andrew Kelton, with James Manning and Alexander Andrew Kelton to serve as a Class III directors until the 2028 annual meeting and until their successor have been duly elected and qualified or until his earlier resignation, removal or death, with of Peter Woodward to serve as a Class II director until the 2027 annual meeting and until his respective successor has been duly elected and qualified or until his earlier resignation, removal or death, and with Alastair Cairns to serve as a Class I director until the 2026 annual meeting and until his respective successor has been duly elected and qualified or until his earlier resignation, removal or death.

**Role of the Board in Risk Oversight**

Our Board will have extensive involvement in the oversight of risk management related to the Company and its business and will accomplish this oversight through the regular reporting to the Board by the audit committee. The audit committee will represent the Board by periodically reviewing its accounting, reporting and financial practices, including the integrity of its financial statements, the surveillance of administrative and financial controls and its compliance with legal and regulatory requirements. Through its regular meetings with management, including the finance, legal, internal audit and information technology functions, the audit committee will review and discuss all significant areas of our business and summarize for our Board all areas of risk and the appropriate mitigating factors. In addition, our Board will receive periodic detailed operating performance reviews from management.

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**Director Independence**

The Company's securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent. However, the Company has adopted the independence standards of the NASDAQ Capital Market to determine the independence of our directors and those directors serving on any committee. These standards provide that a person will be considered an independent director if he or she is not an officer of the company and is, in the view of the company's board of directors, free of any relationship that would interfere with the exercise of independent judgment.

Alastair Cairns, Peter Woodward and Alexander Andrew Kelton are our independent directors, as defined under the rules promulgated by the NASDAQ. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Any affiliated transactions will be on terms that our Board of Directors will believe are no less favorable to us than could be obtained from independent parties. None of the independent directors has any relationship with us besides serving on our Board of Directors.

The Company has determined that each of the directors is qualified to serve as one of our directors based on a review of the experience, qualifications, attributes and skills of each director. In reaching this determination, we have considered a variety of criteria, including, among other things: character and integrity; ability to review critically, evaluate, question and discuss information provided, to exercise effective business judgment and to interact effectively with the other directors; and willingness and ability to commit the time necessary to perform the duties of a director.

**Board Committees**

The standing committees of the our Board will consist of an audit committee, a compensation committee and a nominating and corporate governance committee. Our Board may from time to time establish other committees.

Our chief executive officer and other executive officers will regularly report to the non-executive directors and the audit, the compensation and the nominating and corporate governance committees to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls. We believe that the leadership structure of our Board will provide appropriate risk oversight of our activities.

***Audit Committee***

We have established an audit committee of the Board of Directors consisting of Peter Woodward, Alastair Cairns, and Alexander Andrew Kelton, who are independent directors under Nasdaq's listing standards.

Peter Woodward is the chairperson of the audit committee. The audit committee's duties, which are specified in our Audit Committee Charter, include, but are not limited to:

● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm's qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm; the appointment, compensation, retention, replacement and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;

● pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;

● setting clear policies for audit partner rotation in compliance with applicable laws and regulations; obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm's internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

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● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations"; reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

● reviewing with management, the independent and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

***Financial Experts on Audit Committee***

Pursuant to Nasdaq rules, the audit committee will at all times be composed exclusively of independent directors who are able to read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement.

In addition, we have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background results in the individual's financial sophistication. The Board of Directors of the Company believes that Peter Woodward qualifies as an "audit committee financial expert," as defined under the rules and regulations of Nasdaq and the SEC.

***Corporate Governance and Nominating Committee***

We have established a corporate governance and nominating committee of the Board of Directors, consisting of Peter Woodward, Alastair Cairns, and Alexander Andrew Kelton. Alastair Cairns is the chairperson of the corporate governance and nominating committee. The corporate governance and nominating committee is responsible for overseeing the selection of persons to be nominated to serve on the Company's Board of Directors. The corporate governance and nominating committee considers persons identified by its members, management, stockholders, investment bankers and others.

***Guidelines for Selecting Director Nominees***

The guidelines for selecting nominees, which are specified in the Corporate Governance and Nominating Committee Charter, generally provide that persons to be nominated:

● should have demonstrated notable or significant achievements in business, education or public service;

● should possess the requisite intelligence, education and experience to make a significant contribution to the Board of Directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

● should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.

The corporate governance and nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person's candidacy for membership on the Board of Directors. The corporate governance and nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The corporate governance and nominating committee does not distinguish among nominees recommended by stockholders and other persons.

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***Compensation Committee***

We have established a compensation committee of its Board of Directors, consisting of Peter Woodward, Alastair Cairns, Alexander Andrew Kelton. Alexander Andrew Kelton is the chairperson of the compensation committee. The compensation committee's duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer's compensation evaluating our Chief Executive Officer's performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

● reviewing and making recommendations to our board of directors with respect to compensation and any incentive compensation and equity-based plans that are subject to board approval of all of our other officers;

● reviewing our executive compensation policies and plans;

● implementing and administering our incentive compensation equity-based remuneration plans;

● assisting management in complying with our proxy statement and annual report disclosure requirements;

● all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

● producing a report on executive compensation to be included in our annual proxy statement; and

● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

**Compensation Committee Interlocks and Insider Participation**

None of the Company's officers will serve, at the time of the Business Combination, or in the year prior to the time of the Business Combination, as a member of the compensation committee of any entity that has one or more officers serving on our Board of Directors.

**Code of Business Conduct**

We have adopted a code of business conduct that applies to all of its directors, officers and employees, including its principal executive officer, principal financial officer and principal accounting officer, which is available on our website. Our code of business conduct is a "code of ethics," as defined in Item 406(b) of Regulation S-K. Please note that our Internet website address is provided as an inactive textual reference only. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of its code of ethics on its Internet website.

**Director and Officer Indemnification Agreements**

The Company has entered into agreements with each of its executive officers and Directors, whereby we will agree to indemnify each of them to the fullest extent permitted by law, for all amounts (including, without limitation, judgments, fines, settlement payments, expenses and reasonable out of pocket attorneys' fees) incurred or paid by any of them in connection with any action, suit, investigation or proceeding, or threatened action, suit, investigation or proceeding, arising out of or relating to their performance of services for us or any of our subsidiaries. Any fees or other necessary expenses incurred by any of them in defending any such action, suit, investigation or proceeding shall be paid by us in advance, subject to our right to seek repayment from them directors shall serve until the next 2025 annual meeting of stockholders.

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**EXECUTIVE COMPENSATION**

The following table provides certain information regarding compensation awarded to, earned by or paid to persons serving as the SharonAI's named executive officers during the year ended December 31, 2025.

**Summary Compensation Table**

***Introduction***

As an emerging growth company, SharonAI has opted to comply with the executive compensation disclosure rules applicable to "smaller reporting companies," as such term is defined in the rules promulgated under the Securities Act. The discussion below sets forth the material components of the executive compensation program for SharonAI's executive officers who were SharonAI's "named executive officers" and are "named executive officers" of the Company following the consummation of the Business Combination.

***Summary Compensation Table***

The following table sets forth compensation that SharonAI's named executive officers earned during the years ended December 31, 2025 and 2024.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and<br> Principal Position** | **Year** | **Salary<sup>(3)(4)(5)</sup>** | **Bonus** | **Stock **<br> Awards<sup>(1)(10)</sup>** | **Non-Equity<br> Incentive Plan Compensation** | **Nonqualified<br> deferred<br> compensation<br> earnings** | **All Other<br> Compensation** | **Total** |
|  |  | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** |
| ***Wolf Schubert*** | 2024 | 129133 | 0 | 313053 | 0 | 0 | 7503<sup>(7)</sup> | 449689 |
| &nbsp;&nbsp;&nbsp;*Chief Executive Officer* | 2025 | 276818 | 25363 |  | 0 | 0 | 0 | 302181 |
| ***Tim Broadfoot*** | 2024 | 105000 | 0 | 419250 | 0 | 0 | 48969<sup>(2)(6)</sup> | 573219 |
| &nbsp;&nbsp;&nbsp;*Chief Financial Officer* | 2025 | 110250 | 25000 |  | 0 | 0 | 85995 | 221245 |
| ***Andrew Leece*** | 2024 | 170100 | 0 | 419250 | 0 | 0 | 33127<sup>(2)(8)</sup> | 622477 |
| &nbsp;&nbsp;&nbsp;*Chief Operation Officer* | 2025 | 169352 | 25000 |  | 0 | 0 | 18879 | 213231 |
| ***Nicholas Hughes-Jones*** | 2024 | 94500 | 0 | 419250 | 0 | 0 | 53914<sup>(2)(6)(8)</sup> | 567664 |
| &nbsp;&nbsp;&nbsp;*SVP Business Development<sup>(9)</sup>* | 2025 | 45676 | 0 |  | 0 | 0 | 1131711 | 1177387 |

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(1) Stock awards are granted and represented at fair value based on the grant date but have not satisfied vesting conditions at the date of this report. Each RSU has a key business performance target that must be met and subsequent to achievement of this metric, vests after 12 months.

(2) Includes Superannuation, a compulsory Australian defined benefit retirement scheme for employees

(3) AUD amounts are displayed in USD at an exchange rate of USD 0.63: AUD 1

(4) Salaries of executives that were employed by DSS prior to the acquisition of DSS are included in this FY24 table.

(5) Please see the section entitled "*Executive Employment Agreements*" below

(6) Amounts that are included in the engagement of the executive but paid under a contracting agreement

(7) Includes amounts reimbursed or paid to US employees towards health fund fees.

(8) Includes additional fees paid to named executive officers and director fees of DSS in the period

(9) 2025 Grants have not been granted at the date of this report

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**Narrative to Summary Compensation Table**

***Executive Employment Agreements***

 *James Manning* 

Since January 22, 2026, Mr. Manning has served as our Chief Executive Officer. In connection with Mr. Manning's appointment as Chief Executive Officer, Mr. Manning entered into a Employment Offer Letter dated January 22, 2026, with the Company's subsidiary, SharonAI Pty Ltd (the "New Manning Agreement"). Pursuant to the New Manning Agreement, Mr. Manning will receive an additional annual base salary of AUD$200,000 and will be eligible to participate the Company's discretionary bonus scheme and in the Company's discretionary share scheme, as well as superannuation contributions in line with the minimum compulsory contribution rate required to be paid. The New Manning Agreement is filed as Exhibit 10.44 to the registration statement of which this prospectus forms a part. In addition to Mr. Manning's employment agreement, SharonAI and Sharon Australia have entered into an independent contractor agreement-corporate with James Manning and Manning Group Pty Ltd ATF MG Office Trust ("Manning Consulting Agreement"). Pursuant to the Manning Consultant Agreement, Mr. Manning, SharonAI's Non-Executive Chairman, director, and key person provides certain services to SharonAI and Sharon Australia relating to commercial opportunity development, discovery of future data center sites, future data center acquisition and construction advisory, transaction advisory services and key relationship introduction and development. In consideration for these services, Manning Group Pty Ltd ATF MG Office Trust is entitled to receive an annual remuneration of AUD$334,500 (approximately $211,000 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Manning Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

*Wolfgang Schubert*

Since the consummation of the Business Combination, Mr. Schubert is our Chief Executive Officer SharonAI Operations LLC, a subsidiary of SharonAI, has entered into an employment agreement with Mr. Schubert, which agreement is expected to be amended upon the closing of the Merger. Pursuant to the amended employment agreement with Mr. Schubert (the "<u>Schubert Employment Agreement</u>"), Mr. Schubert will receive an annual base salary of USD$200,000 with ratcheting mechanisms in place pending future corporate events, the first of which has already been achieved and caused his annual base salary to be increased to USD$220,000. Mr. Schubert also received or was promised four grants of equity awards under SharonAI's Equity Incentive Award Plan which will be granted or will vest upon the satisfaction of certain performance criteria and events and if all such criteria and events are satisfied, will be for a total of five percent (5.00%) of the equity post-money valuation of all classes of equity of the Company. Mr. Schubert is also entitled to participate in prospective bonus plans, benefit programs or other incentive plans if they are approved by the Board of Directors. Pursuant to the Schubert Employment Agreement, if Mr. Schubert is terminated without cause during the term of the agreement, he will be entitled to receive his accrued benefits and a continuation of his salary for nine (9) months. If the Schubert Employment Agreement is not renewed for the second year, then Mr. Schubert will be entitled to receive his accrued benefits and a continuation of his salary for six (6) months. The Schubert Employment Agreement is filed collectively as Exhibits 10.17 and 10.18 to the registration statement of which this prospectus is a part. On January 22, 2026, Mr. Schubert resigned as Chief Executive Officer and accordingly atsuch time his employment agreement was terminated.

*Andrew Leece*

Since the consummation of the Business Combination, Mr. Leece is our Chief Operating Officer. SharonAI Pty Ltd ("<u>Sharon Australia</u>"), an Australian subsidiary of SharonAI, has entered into an employment agreement which appointed him as Chief Operating Officer of SharonAI ("<u>Leece Employment Agreement</u>"). Pursuant to the Leece Employment Agreement, Mr. Leece is entitled to receive an annual base salary of USD$300,000 and the other standard employment benefits given to employees in Australia (such as superannuation, long service leave, personal or carer's leave, compassionate leave and relocation benefits), and annual leave of up to 4 weeks. Mr. Leece is also entitled to participate in SharonAI's prospective bonus plans, share plans or other incentive plans if they are approved by the Board of Directors. Short term incentives will be forfeited if Mr. Leece terminates his employment before the end of the vesting period. If his role changes or a Change of Control event occurs, the short term incentives will be at the discretion of the Board of Directors, or in accordance with their terms.

*Daniel Mons*

Since the consummation off the Business Combination, Mr. Mons is our Chief Technology Officer. Sharon Australia and Mr. Mons entered into an employment agreement which appointed him as CTO of the Company ("<u>CTO Agreement</u>") with an effective date of November 4, 2024, until terminated in accordance with the termination provisions in the CTO Agreement. Pursuant to the CTO Agreement, Mr. Mons is entitled to receive an annual base remuneration of USD$200,000 and the other standard employment benefits given to employees in Australia (such as superannuation, long service leave, personal or carer's leave, compassionate leave and relocation benefits), and annual leave of up to 4 weeks. Mr. Mons is also entitled to participate in SharonAI's prospective bonus plans, share plans or other incentive plans if they are approved by the Board of Directors. Short term incentives will be forfeited if Mr. Mons terminates his employment before the end of the vesting period. If his role changes or a Change of Control event occurs, the short term incentives will be at the discretion of the Board of Directors, or in accordance with their terms.

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*Timothy Broadfoot*

Since the consummation of the Business Combination, Mr. Broadfoot is our Chief Financial Officer. Sharon Australia has entered into an employment agreement and consulting agreement with Mr. Broadfoot and Broadfoot Group Pty Ltd which appointed Mr. Broadfoot as Chief Financial Officer of SharonAI (respectively, the "<u>Broadfoot Employment Agreement</u>" and the "<u>Broadfoot Consulting Agreement</u>"). Pursuant to the Broadfoot Employment Agreement and Broadfoot Consulting agreement, Mr. Broadfoot is entitled to receive an annual base remuneration of USD$300,000 and the other standard employment benefits given to employees in Australia (such as superannuation, long service leave, personal or carer's leave, compassionate leave and relocation benefits), and annual leave of up to 4 weeks. Mr. Broadfoot is also entitled to participate in SharonAI's prospective bonus plans, share plans or other incentive plans if they are approved by the Board of Directors. Short term incentives will be forfeited if Mr. Broadfoot terminates his employment before the end of the vesting period. If his role changes or a Change of Control event occurs, the short term incentives will be at the discretion of the Board of Directors, or in accordance with their terms.

*Nicholas Hughes-Jones*

Since the consummation of the Business Combination, Nicholas Hughes-Jones is the Senior Vice President, Business Development. Sharon Australia and Mr. Hughes Jones and Inbocalupo Consulting Pty Ltd entered into contracting agreements which appointed him as Head of Corporate Development of the Company ("HCD Agreement") with an effective date of 1 March, 2024, until terminated in accordance with the termination provisions in the HCD Agreement. Pursuant to the HDC Agreement, Mr. Hughes-Jones is entitled to receive remuneration based on works performed as agreed by the company from time to time. Mr. Hughes-Jones is also entitled to participate in SharonAI's prospective bonus plans, share plans or other incentive plans if they are approved by the Board of Directors. Short term incentives will be forfeited if Mr. Hughes-Jones terminates his employment before the end of the vesting period. If his role changes or a Change of Control event occurs, the short term incentives will be at the discretion of the Board of Directors, or in accordance with their terms.

**Outstanding Equity Awards at Fiscal Year-End**

The following table sets forth information concerning unexercised options; stock that has not vested; and equity incentive plan awards for each named executive officer of Sharon AI outstanding as of December 31, 2025.

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** | **Stock Awards** |
| <br>**Name** | **Number of securities underlying unexercised options**<br> **(#)<br>exercisable** | **Number of securities**<br> **underlying**<br> **unexercised**<br> **options**<br> **(#)<br>unexercisable** | **Number of<br>securities underlying unexercised options** | **Option<br>exercise<br>price<br>($)** | **Option<br>expiration<br>date** | **Number of Shares, units of stock that have not<br>Vested<br>(#)** | **Market value of Shares, units of stock that have not<br>Vested<br>($)** | **Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other<br>Rights that have<br>Vested<br>(#)** | **Market value of Shares, units of stock that have<br>Vested<br>($)** |
| Wolfgang Schubert |  |  |  |  |  | 72960 | $313053 |  |  |
| Nicholas Hughes-Jones |  |  |  |  |  | 97710 | $419250 |  |  |
| Andrew Leece |  |  |  |  |  | 97710 | $419250 |  |  |
| Timothy Broadfoot |  |  |  |  |  | 97710 | $419250 |  |  |

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**Retirement Benefits**

SharonAI employees that are located in Australia participate in a Superannuation defined benefit scheme. Superannuation is Australia's mandatory retirement savings system, requiring employers to contribute 12% into a regulated fund. Contributions receive concessional tax treatment, with employer payments taxed at 15% within the fund. Superannuation is typically preserved until retirement age (55–60), with limited early access exceptions. Funds are regulated by the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, and the Australian Taxation Office, and offer various investment options, often including insurance coverage. Withdrawals can be taken as a lump sum or income stream, subject to tax rules. Legislative changes may affect contribution limits, taxation, and access conditions.

SharonAI employees located in the USA currently do not have a retirement scheme, however it is intended that the Company implement such a scheme in 2025.

**Separation Payments**

Please see the section entitled "*Executive Compensation - Executive Employment Agreements*" for a description of the material terms of each contract, agreement, plan or arrangement, whether written or unwritten, that provides for payment(s) to a named executive officer of SharonAI at, following, or in connection with the resignation, retirement or other termination of such named executive officer, or a change in control of SharonAI or a change in the named executive officer's responsibilities following a change in control, with respect to each named executive officer.

Pursuant to the Schubert Employment Agreement, if Mr. Schubert is terminated without cause during the term of the agreement, he will be entitled to receive his accrued benefits and a continuation of his salary for nine (9) months. If the Company does not renew the Schubert Employment Agreement for the second year, then Mr. Schubert will be entitled to receive his accrued benefits and a continuation of his salary for six (6) months. The Schubert Employment Agreement is filed as Exhibit 10.19 to the registration statement of which this prospectus is a part.

**Director Compensation**

The following table sets forth information concerning the compensation of the directors of SharonAI for the fiscal year ended December 31, 2025.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and<br> Principal Position** | **Fees earned or <br>paid in cash** | **Stock awards<sup>(2)</sup>** | **Option awards** | **Non-equity<br>incentive plan<br>compensation** | **Nonqualified<br>deferred<br>compensation<br>earnings** | **All Other<br>Compensation** | **Total** |
|  | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** |
| ***James Manning*** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;***Non-Executive Chairman*** |  |  |  |  |  | 210735<sup>(1)</sup> | 210735 |
| ***Alastair Cairns*** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;***Director*** | 25000 |  |  |  |  |  | 25000 |
| ***Brent Lanier*** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;***Director*** | 25000 |  |  |  |  |  | 25000 |
|  ***Wolf Schubert<sup>(3)</sup>*** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; ***Director*** |  |  |  |  |  |  |  |

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(1) Includes consulting contracts with MG Office Trust

(2) Stock awards for 2025 have yet to be granted

(3) Excludes compensation already listed in the executive remuneration table

Please see the section entitled "*-Director and Officer Indemnification Agreements*" for a description of material factors necessary to an understanding of the director compensation disclosed in the table above.

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**Equity Compensation Plan Information**

The following table provides information as of December 31, 2025, about the securities issued, or authorized for future issuance, under our equity compensation plans, consisting of our 2024 and 2025 Equity Incentive Plans.

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| | | | |
|:---|:---|:---|:---|
| **Plan Category** | **Number of securities<br> to be issued upon<br> exercise of outstanding options and restricted<br> stock units** | **Weighted average<br> exercise price of<br> outstanding options<br> and restricted<br> stock units** | **Number of securities<br> remaining available<br> for future issuance<br> under equity<br> compensation plans<br> (excluding securities<br> reflected in column (a))** |
| 2024 Equity compensation plans approved by security holders | 569458 | $0.54 |  |
| 2024 Equity compensation plans not approved by security holders | - | - | - |
| 2025 Equity compensation plans approved by security holders | - | - | 1200000 |
| 2025 Equity compensation plans not approved by security holders | - | - | - |
| Total | 569458 | $0.54 | 1200000 |

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Upon consummation of the Business Combination, all outstanding options to purchase stock of SharonAI under our 2024 Equity Incentive Plan, all outstanding warrants issued by SharonAI, and all other awards issued under our 2024 Equity Incentive Plan, vested or unvested, or any other security convertible into or exchangeable for any such security (each a "SharonAI Stock Right"), will be cancelled, extinguished and converted into a right to acquire (each, a "Converted Stock Right"), subject to substantially the same terms and conditions as were applicable under such SharonAI Stock Right (including expiration date, vesting conditions, and exercise provisions), the number of Company Class A Ordinary Common Stock shares (rounded up to the nearest whole share), determined by multiplying the number of shares of capital stock of SharonAI subject to such SharonAI Stock Right as of immediately prior to the consummation of the Business Combination by the Conversion Ratio (set forth in the Business Combination Agreement), with an exercise price per Company Class A Ordinary Common Stock shares (rounded down to the nearest whole cent), if applicable, equal to the exercise price per share of capital stock of SharonAI of such SharonAI Stock Right divided by the Conversion Ratio, in accordance with, and subject to, the contingencies set forth in the Business Combination Agreement. Upon consummation of the Business Combination, the Company will assume all obligations of SharonAI with respect to each Converted Stock Rights.

*SharonAI Inc. 2025 Omnibus Equity Incentive Plan*

The Company has adopted the SharonAI 2025 Omnibus Equity Incentive Plan (the "<u>2025 Plan</u>").

**Description of 2025 Plan**

The following is a summary of the material features of the 2025 Plan. This summary is qualified in its entirety by the full text of the 2025 Plan, a copy of which is included as Exhibit 10.10 hereto.

*Shares reserved for issuance*. The number of shares of common stock reserved for issuance under the 2025 Plan is 1,200,000 shares.

*Types of Awards*. The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights ("<u>SARs</u>"), restricted stock, restricted stock units ("<u>RSUs</u>"), and other stock-based awards. Items described above in the Section called "Shares Available" are incorporated herein by reference.

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*Administration*. The 2025 Plan will be administered by the Board, or if the Board does not administer the 2025 Plan, a committee or subcommittee of our Board that complies with the applicable requirements of Section 16 of the Exchange Act and any other applicable legal or stock exchange listing requirements (each of the Board or such committee or subcommittee, the "plan administrator"). The plan administrator may interpret the 2025 Plan and may prescribe, amend and rescind rules and make all other determinations necessary or desirable for the administration of the 2025 Plan.

The 2025 Plan permits the plan administrator to select the eligible recipients who will receive awards, to determine the terms and conditions of those awards, including but not limited to the exercise price or other purchase price of an award, the number of shares of common stock or cash or other property subject to an award, the term of an award and the vesting schedule applicable to an award, and to amend the terms and conditions of outstanding awards.

*Restricted Stock and Restricted Stock Units*. Restricted stock and RSUs may be granted under the 2025 Plan. RSUs may be settled in shares of common stock or as a payment of cash equal, with respect to any or all shares of common stock underlying such award, to the fair market value of such share of common stock, in each case, at the end of a specified restricted period (or periods) of time and/or upon attainment of specified performance objectives. The plan administrator will determine the purchase price, vesting schedule and performance goals, if any, and any other conditions that apply to a grant of restricted stock and RSUs. If the restrictions, performance goals or other conditions determined by the plan administrator are not satisfied, the restricted stock and RSUs will be forfeited. Subject to the provisions of the 2025 Plan and the applicable award agreement, the plan administrator has the sole discretion to provide for the lapse of restrictions in installments.

Unless the applicable award agreement provides otherwise, participants with restricted stock will generally have all of the rights of a stockholder; provided that dividends will only be paid if and when (and to the extent) the underlying restricted stock vests. RSUs will not be entitled to dividends prior to vesting, but may be entitled to receive dividend equivalents if the award agreement provides for them. The rights of participants granted restricted stock or RSUs upon the termination of employment or service to us will be set forth in the award agreement.

*Options*. Incentive stock options and non-statutory stock options may be granted under the 2025 Plan. An "incentive stock option" means an option intended to qualify for tax treatment applicable to incentive stock options under Section 422 of the Internal Revenue Code. A "non-statutory stock option" is an option that is not subject to statutory requirements and limitations required for certain tax advantages that are allowed under specific provisions of the Internal Revenue Code. A non-statutory stock option under the 2025 Plan is referred to for federal income tax purposes as a "non-qualified" stock option. Each option granted under the Plan will be designated as a non-qualified stock option or an incentive stock option. At the discretion of the plan administrator, incentive stock options may be granted only to our employees, employees of our "parent corporation" (as such term is defined in Section 424(e) of the Code) or employees of our subsidiaries.

The exercise period of an option may not exceed ten years from the date of grant and the exercise price may not be less than 100% of the fair market value of a share of common stock on the date the option is granted (110% of fair market value in the case of incentive stock options granted to ten percent stockholders). The exercise price for shares of common stock subject to an option may be paid in cash, or as determined by the plan administrator in its sole discretion, (i) through any cashless exercise procedure approved by the plan administrator (including the withholding of shares of common stock otherwise issuable upon exercise), (ii) by tendering unrestricted shares of common stock owned by the participant, (iii) with any other form of consideration approved by the plan administrator and permitted by applicable law or (iv) by any combination of these methods. The option holder will have no rights to dividends or distributions or other rights of a stockholder with respect to the shares of common stock subject to an option until the option holder has given written notice of exercise and paid the exercise price and applicable withholding taxes.

In the event of a participant's termination of employment or service, the participant may exercise his or her option (to the extent vested as of such date of termination) for such period of time as specified in his or her option agreement.

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*Stock Appreciation Rights*. SARs may be granted either alone (a "Free-Standing Right") or in conjunction with all or part of any option granted under the 2025 Plan (a "Related Right"). A Free-Standing Right will entitle its holder to receive, at the time of exercise, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the base price of the Free-Standing Right (which shall be no less than 100% of the fair market value of the related shares of common stock on the date of grant) multiplied by the number of shares in respect of which the SAR is being exercised. A Related Right will entitle its holder to receive, at the time of exercise of the SAR and surrender of the applicable portion of the related option, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the exercise price of the related option multiplied by the number of shares in respect of which the SAR is being exercised. The exercise period of a Free-Standing Right may not exceed ten years from the date of grant. The exercise period of a Related Right will also expire upon the expiration of its related option.

The holder of a SAR will have no rights to dividends or any other rights of a stockholder with respect to the shares of common stock subject to the SAR until the holder has given written notice of exercise and paid the exercise price and applicable withholding taxes.

In the event of an participant's termination of employment or service, the holder of a SAR may exercise his or her SAR (to the extent vested as of such date of termination) for such period of time as specified in his or her SAR agreement.

*Other Stock-Based Awards*. The plan administrator may grant other stock-based awards under the 2025 Plan, valued in whole or in part by reference to, or otherwise based on, shares of common stock. The plan administrator will determine the terms and conditions of these awards, including the number of shares of common stock to be granted pursuant to each award, the manner in which the award will be settled, and the conditions to the vesting and payment of the award (including the achievement of performance goals). The rights of participants granted other stock-based awards upon the termination of employment or service to us will be set forth in the applicable award agreement. In the event that a bonus is granted in the form of shares of common stock, the shares of common stock constituting such bonus shall, as determined by the plan administrator, be evidenced in uncertificated form or by a book entry record or a certificate issued in the name of the participant to whom such grant was made and delivered to such participant as soon as practicable after the date on which such bonus is payable. Any dividend or dividend equivalent award issued hereunder shall be subject to the same restrictions, conditions and risks of forfeiture as apply to the underlying award.

*Equitable Adjustment and Treatment of Outstanding Awards Upon a Change in Control*

*Equitable Adjustments*. In the event of a merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase, reorganization, special or extraordinary dividend or other extraordinary distribution (whether in the form of common stock, cash or other property), combination, exchange of shares, or other change in corporate structure affecting our common stock, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number and kind of securities reserved for issuance under the 2025 Plan; (ii) the kind and number of securities subject to, and the exercise price of, any outstanding options and SARs granted under the 2025 Plan; (iii) the kind, number and purchase price of shares of common stock, or the amount of cash or amount or type of property, subject to outstanding restricted stock, RSUs and other stock-based awards granted under the 2025 Plan; and (iv) the terms and conditions of any outstanding awards (including any applicable performance targets). Equitable substitutions or adjustments other than those listed above may also be made as determined by the plan administrator. In addition, the plan administrator may, subject in all events to the requirements of Section 409A of the Internal Revenue Code, may terminate all outstanding awards for the payment of cash or in-kind consideration having an aggregate fair market value equal to the excess of the fair market value of the shares of common stock, cash or other property covered by such awards over the aggregate exercise price, if any, of such awards, but if the exercise price of any outstanding award is equal to or greater than the fair market value of the shares of common stock, cash or other property covered by such award, the plan administrator may cancel the award without the payment of any consideration to the participant. With respect to awards subject to foreign laws, adjustments will be made in compliance with applicable requirements. Except to the extent determined by the plan administrator, adjustments to ISOs will be made only to the extent not constituting a "modification" within the meaning of Section 424(h)(3) of the Code.

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*Change in Control*. The 2025 Plan provides that, unless otherwise determined by the plan administrator and evidenced in an award agreement, if a "change in control" (as defined below) occurs and a participant is employed by us or any of our affiliates immediately prior to the consummation of the change in control, then the plan administrator, in its sole and absolute discretion, may (i) provide that any unvested or unexercised portion of an award carrying a right to exercise will become fully vested and exercisable; and (ii) cause the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to any award granted under the 2025 Plan to lapse, and the awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved at target performance levels. The plan administrator shall have discretion in connection with such change in control to provide that all outstanding and unexercised options and SARs shall expire upon the consummation of such change in control.

For purposes of the 2025 Plan, a "change in control" means, in summary, the occurrence of any of the following events: (i) a person or entity becomes the beneficial owner of more than 50% of our voting power of Pubco's then outstanding securities; (ii) the date on which individuals who constitute the Board as of the Effective Date and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of Pubco) whose appointment or election by the Board or nomination for election by Pubco's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended cease for any reason to constitute a majority of the number of directors serving on the Board; (iii) a merger or consolidation of us or any of our subsidiaries with any other corporation or entity, other than (A) a merger or consolidation that results in our voting securities continuing to represent 50% or more of the combined voting power of the surviving entity or its parent and our Board immediately prior to the merger or consolidation continuing to represent at least a majority of the board of directors of the surviving entity or its parent or (B) a merger or consolidation effected to implement a recapitalization in which no person is or becomes the beneficial owner of our voting securities representing more than 50% of our combined voting power; or (iv) stockholder approval of a plan of our complete liquidation or dissolution or the consummation of an agreement for the sale or disposition of substantially all of our assets, other than (A) a sale or disposition to an entity, more than 50% of the combined voting power of which is owned by our stockholders in substantially the same proportions as their ownership of us immediately prior to such sale; or (B) a sale or disposition to an entity controlled by the Board. However, a change in control will not be deemed to have occurred as a result of any transaction or series of integrated transactions if its sole purpose is to change the state of Pubco's incorporation or to create a holding company following which our stockholders, immediately prior thereto, hold immediately afterward the same proportionate equity interests in the entity that owns all or substantially all of our assets.

*Tax Withholding*

Each participant will be required to make arrangements satisfactory to the plan administrator regarding payment of up to the maximum statutory tax rates in the participant's applicable jurisdiction with respect to any award granted under the 2025 Plan, as determined by us. We have the right, to the extent permitted by applicable law, to deduct any such taxes from any payment of any kind otherwise due to the participant. With the approval of the plan administrator, the participant may satisfy the foregoing requirement by either electing to have us withhold from delivery of shares of common stock, cash or other property, as applicable, or by delivering already owned unrestricted shares of common stock, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations. We may also use any other method of obtaining the necessary payment or proceeds, as permitted by applicable law, to satisfy our withholding obligation with respect to any award.

*Amendment and Termination of the 2025 Plan*

The 2025 Plan provides the Board with authority to amend, alter or terminate the 2025 Plan, but no such action may impair the rights of any participant with respect to outstanding awards without the participant's consent. The plan administrator may amend an award, prospectively or retroactively, but no such amendment may materially impair the rights of any participant without the participant's consent. Stockholder approval of any such action will be obtained if required to comply with applicable law. The 2025 Plan will terminate on the tenth anniversary of the Effective Date (although awards granted before that time will remain outstanding in accordance with their terms).

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*Clawback*

If we are required to prepare an accounting restatement of our financial statements due to our material noncompliance (whether one occurrence or a series of occurrences of noncompliance) with any financial reporting requirement under the securities laws, then the plan administrator may require any Section 10D-1(d) of the Exchange Act "executive officer" to repay or forfeit to us that part of the cash or equity incentive compensation received by that Section 10D-1(d) executive officer during the preceding three (3) completed fiscal years that the plan administrator determines was in excess of the amount that such Section 10D-1(d) executive officer would have received had such cash or equity incentive compensation been calculated based on the restated amounts reported in the restated financial statement. The plan administrator may take into account any factors it deems reasonable in determining whether to seek recoupment of previously paid cash or equity incentive compensation and how much of such compensation to recoup from each Section 10D-1(d) executive officer (which shall be made irrespective of any fault, misconduct or responsibility of each Section 10D-1(d) executive officer). The amount and form of the incentive compensation to be recouped shall be determined by the plan administrator in its sole and absolute discretion, and calculated on a pre-tax basis. In addition, any award which is subject to recovery under any applicable laws, government regulation or stock exchange listing requirement (or any policy adopted by Pubco pursuant to any such applicable law, government regulation or stock exchange listing requirement) will be subject to such deductions and clawback as may be required to be made pursuant to such applicable law, government regulation or stock exchange listing requirement (or any policy adopted by Pubco pursuant to any such applicable law, government regulation or stock exchange listing requirement).

*Indemnification*

To the extent allowable pursuant to applicable law, each member of our board of directors and the plan administrator and any officer or other employee to whom authority to administer any component of the 2025 Plan is designated shall be indemnified and held harmless by Pubco from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the 2025 Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided, however, that he or she gives Pubco an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled pursuant to Pubco's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that Pubco may have to indemnify them or hold them harmless.

**US Federal Income Tax Consequences**

The following is a summary of certain United States federal income tax consequences of awards under the 2025 Plan. It does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change.

*Non-Qualified Stock Options*

A participant who has been granted a non-qualified stock option will not recognize taxable income upon the grant of a non-qualified stock option. Rather, at the time of exercise of such non-qualified stock option, the participant will recognize ordinary income for income tax purposes in an amount equal to the excess of the fair market value of the shares of common stock purchased over the exercise price. We generally will be entitled to a tax deduction at such time and in the same amount that the participant recognizes ordinary income. If shares of common stock acquired upon exercise of a non-qualified stock option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant.

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*Incentive Stock Options*

In general, no taxable income is realized by a participant upon the grant of an ISO. If shares of common stock are purchased by a participant, or option shares, pursuant to the exercise of an ISO granted under the 2025 Plan and the participant does not dispose of the option shares within the two-year period after the date of grant or within one year after the receipt of such option shares by the participant, such disposition a disqualifying disposition, then, generally (1) the participant will not realize ordinary income upon exercise and (2) upon sale of such option shares, any amount realized in excess of the exercise price paid for the option shares will be taxed to such participant as capital gain (or loss). The amount by which the fair market value of the common stock on the exercise date of an ISO exceeds the purchase price generally will constitute an item which increases the participant's "alternative minimum taxable income." If option shares acquired upon the exercise of an ISO are disposed of in a disqualifying disposition, the participant generally would include in ordinary income in the year of disposition an amount equal to the excess of the fair market value of the option shares at the time of exercise (or, if less, the amount realized on the disposition of the option shares), over the exercise price paid for the option shares. Subject to certain exceptions, an option generally will not be treated as an ISO if it is exercised more than three months following termination of employment. If an ISO is exercised at a time when it no longer qualifies as an ISO, such option will be treated as a nonqualified stock option as discussed above. In general, we will receive an income tax deduction at the same time and in the same amount as the participant recognizes ordinary income.

*Stock Appreciation Rights*

A participant who is granted a SAR generally will not recognize ordinary income upon receipt of the SAR. Rather, at the time of exercise of such SAR, the participant will recognize ordinary income for income tax purposes in an amount equal to the value of any cash received and the fair market value on the date of exercise of any shares of common stock received. We generally will be entitled to a tax deduction at such time and in the same amount, if any, that the participant recognizes as ordinary income. The participant's tax basis in any shares of common stock received upon exercise of a SAR will be the fair market value of the shares of common stock on the date of exercise, and if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant.

*Restricted Stock*

A participant generally will not be taxed upon the grant of restricted stock, but rather will recognize ordinary income in an amount equal to the fair market value of the shares of common stock at the earlier of the time the shares become transferable or are no longer subject to a substantial risk of forfeiture (within the meaning of the Code). We generally will be entitled to a deduction at the time when, and in the amount that, the participant recognizes ordinary income on account of the lapse of the restrictions. A participant's tax basis in the shares of common stock will equal their fair market value at the time the restrictions lapse, and the participant's holding period for capital gains purposes will begin at that time. Any cash dividends paid on the shares of common stock before the restrictions lapse will be taxable to the participant as additional compensation and not as dividend income, unless the individual has made an election under Section 83(b) of the Code. Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the restricted shares are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such stock is subject to restrictions or transfer and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the shares of common stock equal to their fair market value on the date of their award, and the participant's holding period for capital gains purposes will begin at that time. We generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant.

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*Restricted Stock Units*

In general, the grant of RSUs will not result in income for the participant or in a tax deduction for us. Upon the settlement of such an award in cash or shares of common stock, the participant will recognize ordinary income equal to the aggregate value of the payment received, and we generally will be entitled to a tax deduction at the same time and in the same amount.

*Other Awards*

With respect to other stock-based awards, generally when the participant receives payment in respect of the award, the amount of cash and/or the fair market value of any shares of common stock or other property received will be ordinary income to the participant, and we generally will be entitled to a tax deduction at the same time and in the same amount.

 *SharonAI Inc. 2024 Omnibus Equity Incentive Plan* 

The Company has adopted the 2024 SharonAI Omnibus Equity Incentive Plan (the "2024 Plan"). There will be no new awards under the 2024 Plan. All new awards will be made under the 2025 Plan.

**New Plan Benefits**

Future grants under the 2025 Plan will be made at the discretion of the plan administrator and, accordingly, are not yet determinable. Pursuant to that certain Business Combination Agreement, dated January 28, 2025 and as amended on May 23, 2025, by and between Roth CH and SharonAI, Pubco shall assume obligations with respect to outstanding equity awards under the 2024 Omnibus Equity Incentive Plan of SharonAI ("<u>Prior Plan</u>") and such obligations will not be covered under the 2025 Plan. Such outstanding equity awards under the Prior Plan are summarized in the table below.

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| | | |
|:---|:---|:---|
| **2024 Omnibus Equity Incentive Plan of SharonAI** | **2024 Omnibus Equity Incentive Plan of SharonAI** | **2024 Omnibus Equity Incentive Plan of SharonAI** |
| **Name and Position** | **Dollar Value<br> ($)** | **Number of<br> Units** |
| Wolfgang Schubert, Chief Executive Officer\* | $486596.74 | 8027 |
| Tim Broadfoot, Chief Financial Officer | $651665.00 | 10750 |
| Andrew Leece, Chief Operation Officer | $651665.00 | 10750 |
| Nicholas Hughes-Jones, SVP Business Development | $651665.00 | 10750 |
| Daniel Mons, Chief Technology Officer | $30310.00 | 500 |
| Executive Group | $2471901.74 | 40777 |
| Non-Executive Director Group | $900362.44 | 14853 |
| Non-Executive Officer Employee Group | $69713.00 | 1150 |
| Advisors and contractors | $324984 | 5875 |

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\* SharonAI has a contractual obligation to issue an additional 8,724 units to Mr. Schubert with a Dollar Value of $528,848.88, which have not been issued yet and will not be issued until the Business Combination has been completed.

**Internal Revenue Code Section 162(m)**

Section 162(m) of the Code places a limit of $1 million on the amount of compensation that we may deduct in any one fiscal year with respect to certain of our service providers, as provided for in Section 162(m). Therefore, we may not be able to fully deduct certain compensation derived from 2025 Plan awards by such service providers from our taxable income.

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**Pubco Income Tax Effects**

Except as described above, we will generally be entitled to an income tax deduction in connection with an award under the 2025 Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income.

**Accounting Treatment**

As required by Financial Accounting Standards Board Accounting Standards Codification, "Share-Based Payment," upon the grant of options, SARs, restricted shares, RSUs and other stock-based awards pursuant to the 2025 Plan, for financial reporting purposes, we will incur compensation expense that will be recognized over the vesting period of the options, SARs, restricted shares, RSUs or other stock-based award. We are not able at this time to predict whether such compensation expense will be material, on an on-going basis, as that will depend on, among other things, the number of shares for which options, SARs, restricted shares, RSUs or other stock-based awards are granted and the prices of our common stock in the future.

**Director and Officer Indemnification Agreements**

Upon the consummation of the Merger, the Company will enter into agreements with each of its executive officers and Directors, whereby the Company will agree to indemnify each of them to the fullest extent permitted by law, for all amounts (including, without limitation, judgments, fines, settlement payments, expenses and reasonable out of pocket attorneys' fees) incurred or paid by any of them in connection with any action, suit, investigation or proceeding, or threatened action, suit, investigation or proceeding, arising out of or relating to their performance of services for the Company or any subsidiary of the Company. Any fees or other necessary expenses incurred by any of them in defending any such action, suit, investigation or proceeding shall be paid by the Company in advance, subject to the Company's right to seek repayment from them a determination is made that the applicable officer or Director was not entitled to indemnification.

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**BENEFICIAL OWNERSHIP OF SECURITIES**

The following table sets forth information regarding the beneficial ownership of the Company's Common Stock as of January 16, 2026, and as adjusted to reflect the sale of common stock being offered in this offering by:

● each person who is known to be the beneficial owner with more than 5% of voting control of the Company's Common Stock; and

● all executive officers and directors of the Company as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. In computing the number of shares beneficially owned by a person or entity and the percentage ownership of that person or entity in the table below, all shares subject to options, SARs or warrants held by such person or entity were deemed outstanding prior to the Business Combination if such securities are currently exercisable, or exercisable within 60 days of December 22, 2025 and were deemed outstanding post-Business Combination if such securities are exercisable within 60 days of the closing of the Business Combination. These shares were not deemed outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.

The beneficial ownership of the Company's Common Stock is based on 11,968,505 shares of common stock consisting of 11,832,164 shares of Class A Ordinary Common Stock and 136,341 shares of Class B Super Common Stock as of January 16, 2026.

Unless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Shares<br> beneficially<br> owned** | **Percent of<br> Common Stock** | **Percent of<br> Voting Control<sup>(6)</sup>** |
| **Directors, New Director Nominee and Other Named Executive Officers** |  |  |  |
| Alastair Cairns<sup>(5)</sup> | 12366 | \*% | \*% |
| Andrew Leece<sup>(1)</sup> | 1444803 | 12.07% | 25.61%<sup>(7)</sup> |
| James Manning<sup>(2)</sup> | 1450103 | 12.11% | 25.66%<sup>(7)</sup> |
| Timothy Broadfoot<sup>(3)</sup> | 89375 | \*% | \*% |
| Wolfgang Schubert | 22905 | \*% | \*% |
| Peter Woodward |  | \*% | \*% |
| Nicholas Hughes Jones<sup>(4)</sup> | 1205919 | 10.08% | 24.92%<sup>(7)</sup> |
| Alexander Andrew Kelton |  | \*% | \*% |
| **All officers and directors as a group (9 persons)** | 4237837 | 35.41% | 76.60% |
| **5% Holders** |  |  |  |
| None. |  |  |  |

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\* Less than 1%

(1) Holdings include related parties of Andrew Leece being, Strat Cap No.1 Pty Ltd, Strat Capital Pty Ltd ATF AJ Digital Trust and Strat Capital Pty Ltd ATF Alpha Juliett Trust. Holdings include 45.477 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock.

(2) Holdings include related parties of James Manning being, Bare Media Holdings Pty Ltd, Defender Capital Pty Ltd, MCH Equities Pty Ltd ATF MCH Equities Fund, Manning Capital Holdings Pty Ltd ATF The Manning Capital Holdings Unit Trust, Manning Group Pty Ltd ATF MG Office Trust and MG No.1 Pty Ltd. Holdings include 45,477 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock. Also includes 68,796 shares of Class A Ordinary Common Stock issuable pursuant to restricted stock units vesting within 60 days of February 6, 2026

(3) Holdings include related parties of Timothy Broadfoot being Broadfoot Group Pty Ltd ATF for Broadfoot Family Trust and DSS AI Pty Ltd,.

(4) Holdings include related parties of Nicholas Hughes Jones being, Inbocalupo No.1 Pty Ltd and Inbocalupo Pty Ltd ATF Inbocalupo Trust. Holdings include 45,447 shares of Class B Super Common Stock and the remainder of shares held are shares of Class A Ordinary Common Stock.

(5) Includes 12,366 options that are exercisable within 60 days of February 6, 2026

(6) Although shares of Class A Ordinary Common Stock and Class B Common Stock have identical economic rights, each holder of shares of Common Stock shall be entitled to one (1) vote for each share of Class A Ordinary Common Stock held and one hundred and sixty (160) votes for each share of Class B Super Common Stock held, which is why a difference between the percentage of Common Stock and percentage of voting control is shown separately.

(7) Shares hold after the offering includes 45,447 shares of Class B Super Common Stock and for Mr. Manning also includes of 68,796 shares of Class A Ordinary Common Stock issuable pursuant to restricted stock units vesting within 60 days of February 6, 2026.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

**Certain Relationships and Related Transactions Roth CH**

***Founder Shares***

On April 29, 2021, our Former Sponsor paid $25,000 to purchase 5,750,000 founder shares, or approximately $0.004 per share. On May 11, 2021, our Former Sponsor transferred 25,000 founder shares to each of our independent directors. In connection with the IPO, each of the Former Sponsor and our independent directors agreed, subject to limited exceptions, not to transfer, assign, or sell any of their founder shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction after our initial business combination that results in all of our shareholders having the right to exchange their public shares for cash, securities or other property; except to certain permitted transferees and under certain circumstances. Notwithstanding the foregoing, if the closing price of Class A Ordinary Shares exceeds $12.00 per share (as adjusted for share divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares would be released from the lock-up. Our Former Sponsor and independent directors did not receive additional consideration for this lock-up.

Effective as of January 18, 2023, pursuant to the terms of the Articles, the Former Sponsor elected to convert each outstanding Class B ordinary share held by it on a one-for-one basis into Class A Ordinary Shares, with immediate effect.

*Private Placement Warrants*

The Former Sponsor purchased an aggregate of 10,750,000 Private Warrants at a price of $1.00 per warrant, or $10,750,000, in a private placement that closed simultaneously with the closing of the initial public offering. Each Private Warrant entitles the holder to purchase one Class A Share at $575.00 per share. The Private Warrants (including the Class A Ordinary Shares issuable upon exercise of the Private Warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.

In connection with the Transaction, the Former Sponsor sold 8,062,500 Private Warrants to the New Sponsor. The New Sponsor entered into a joinder agreement to the Letter Agreement in which they agreed to be subject to the restrictions therein.

*Agreements with Anchor Investors*

On October 8, 2021, the Former Sponsor entered into agreements with certain funds managed by Apollo Capital Management, L.P. (collectively, "<u>Apollo</u>"), certain funds managed by Atalaya Capital Management, LP ("<u>Atalaya</u>") and Meteora Capital Partners, L.P. and funds affiliated with Meteora Capital Partners, L.P. (collectively "<u>Meteora</u>") (individually and collectively, the "<u>anchor investors</u>"). Each of the anchor investors purchased 9.9% of the Units in the IPO (excluding Units issued in connection with the exercise of the over-allotment option). Each of Apollo and Atalaya agreed to purchase interests in the Former Sponsor representing approximately 7% of the Founder Shares and Private Warrants at approximately the cost of such securities to the Former Sponsor, with the Former Sponsor's obligation to sell some or all of such interests conditioned upon such anchor investor's purchase of the Units.

Meteora entered into a separate agreement with the Former Sponsor pursuant to which it agreed to purchase interests in the Former Sponsor representing approximately 6.4% of the number of Founder Shares that are approximately equal to 3.7% of the cost of the Founder Shares and Private Warrants to the Former Sponsor.

The anchor investors acquired from the Former Sponsor an indirect economic interest in an aggregate of 1,173,000 Founder Shares at the original purchase price that the Former Sponsor paid for the Founder Shares. The Former Sponsor has agreed to distribute the Founder Shares to the anchor investors after the completion of a Business Combination. The anchor investors hold an indirect economic interest in an aggregate of 1,505,000 warrants, reflecting 14% of total Private Warrants.

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We entered into separate forward purchase agreements (the "<u>Forward Purchase Agreements</u>") with Apollo and Atalaya (the "<u>Forward Purchasers</u>") on August 13, 2021 and August 4, 2021, respectively. The Forward Purchase Agreements provide, at our option, for the aggregate purchase of up to 9,600,000 Class A Ordinary Shares and 4,800,000 Public Warrants for an aggregate price of $96.0 million ($10.00 for one Class A Share and one-half of one Public Warrant), in private placements that will close concurrently with the closing of our initial business combination. The forward purchase shares and forward purchase warrants will be identical to the Class A Ordinary Shares and Public Warrants included in the Units sold in the IPO. Each Forward Purchaser's commitment under its Forward Purchase Agreement is subject to certain conditions including investment committee approval.

No compensation of any kind, including finder's and consulting fees, will be paid by Roth CH to our sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.

*Related Party Notes and Advances*

The Former Sponsor entered into an agreement with us to loan funds up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of the public offering. These loans were non-interest bearing, unsecured and were paid in full at the closing of the public offering.

On January 24, 2025, Roth CH amended and restated its existing promissory note (the "<u>Amended Note</u>") in favor of certain shareholders of Roth CH to permit its conversion into Class A ordinary shares of Company, at any time, at the option of the representative of the noteholders based upon the current trading price. Subsequent to the execution of the Amended Note, on January 24, 2025, the representative provided notice that it intended to convert the existing principal balance of the Amended Note in the amount of $1,181,000 into Class A ordinary shares of Roth CH.

*Registration Rights*

We entered into a registration rights agreement with respect to the founder shares, private placement warrants, warrants that may be issued upon conversion of working capital loans and forward purchase securities that may be issued pursuant to the forward purchase agreements (and any Class A Ordinary Shares issuable upon the exercise of the private placement warrants, forward purchase warrants and warrants that may be issued upon conversion of the working capital loans and upon conversion of the Class B Shares), which was amended and restated in connection with the closing of the Business Combination.

**Policy for Approval of Related Party Transactions**

The audit committee of our board adopted a policy setting forth the policies and procedures for its review and approval or ratification of "related party transactions." A "related party transaction" is any consummated or proposed transaction or series of transactions: (i) in which we were or is to be a participant; (ii) the amount of which exceeds (or is reasonably expected to exceed) the lesser of $120,000 or 1% of the average of Roth CH's total assets at year-end for the prior two completed fiscal years in the aggregate over the duration of the transaction (without regard to profit or loss); and (iii) in which a "related party" had, has or will have a direct or indirect material interest. "Related parties" under this policy include: (i) our directors or executive officers; (ii) any record or beneficial owner of more than 5% of any class of our voting securities; (iii) any immediate family member of any of the foregoing if the foregoing person is a natural person; and (iv) any other person who maybe a "related person" pursuant to Item 404 of Regulation S-K under the Exchange Act. Pursuant to the policy, the audit committee of the board will consider (i) the relevant facts and circumstances of each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm's-length dealings with an unrelated third party, (ii) the extent of the related party's interest in the transaction, (iii) whether the transaction contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction to be in the best interests of Roth CH and its shareholders, and (v) the effect that the transaction may have on a director's status as an independent member of the board and on his or her eligibility to serve on the board's committees. Our management will present to the audit committee of the board each proposed related party transaction, including all relevant facts and circumstances relating thereto. Under the policy, we may consummate related party transactions only if the audit committee of the Board approves or ratifies the transaction in accordance with the guidelines set forth in the policy. The policy does not permit any director or executive officer to participate in the discussion of, or decision concerning, a related person transaction in which he or she is the related party.

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***Certain Relationships and Related Person Transactions — SharonAI***

In connection with Mr. Schubert's resignation as Chief Executive Officer of the Company, on January 22, 2026, the Board appointed James Manning, Non-Executive Chairman, director and greater than 10% stockholder of the Company, as Chief Executive Officer. In connection with Mr. Manning's appointment asChief Executive Officer, Mr. Manning entered into an Employment Offer Letter dated January 22, 2026, with the Company's subsidiary, SharonAI Pty Ltd (the"New Manning Agreement"). Pursuant to the New Manning Agreement, Mr. Manning will receive an additional annual base salary of AUD$200,000 and willbe eligible to participate the Company's discretionary bonus scheme and in the Company's discretionary share scheme, as well as superannuation contributionsin line with the minimum compulsory contribution rate required to be paid.

SharonAI and Sharon Australia have entered into an independent contractor agreement-corporate with James Manning and Manning Group Pty Ltd ATF MG Office Trust ("<u>Manning Consulting Agreement</u>"). Pursuant to the Manning Consultant Agreement, Mr. Manning, SharonAI's Non-Executive Chairman, director and greater than 10% stockholder, as the key person, provides certain services to SharonAI and Sharon Australia relating to commercial opportunity development, discovery of future data center sites, future data center acquisition and construction advisory, transaction advisory services and key relationship introduction and development. In consideration for these services, Manning Group Pty Ltd ATF MG Office Trust is entitled to receive an annual remuneration of AUD$334,500 (approximately $211,000 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Manning Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

Sharon Australia has entered into an independent contractor agreement with Nicholas Hughes Jones related entity Inbocalupo Consulting Pty Ltd ("<u>Inbocalupo Consulting Agreement</u>"). Pursuant to the Inbocalupo Consultant Agreement and combined with Mr. Hughes-Jones employment agreement, Mr. Hughes-Jones who until July 2025 was SharonAI's Senior Vice President Business Development and is a currently the Company's Head of Business Development and acurrent greater than 10% stockholder, as the key person, provides certain services to SharonAI and Sharon Australia relating to business development services. In consideration for these services, Inbocalupo Consulting Pty Ltd is entitled to receive an annual remuneration of AUD$133,800 (approximately $84,294 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Inbocalupo Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

Sharon Australia has entered into an independent contractor agreement with Broadfoot Group Pty Ltd ("<u>Broadfoot Consulting Agreement</u>"). Pursuant to the Broadfoot Consultant Agreement, Mr. Broadfoot, SharonAI's Chief Financial Officer, Treasurer, Corporate Secretary, and Mrs. Broadfoot, as the key persons, provides certain services to SharonAI and Sharon Australia relating to Chief Financial Officer support and executive assistant services to the CFO. In consideration for these services, Broadfoot Group Pty Ltd is entitled to receive an annual remuneration of AUD$111,500 (approximately $70,245 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Broadfoot Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

James Manning, Nicholas Hughes-Jones (who until July 2025 was SharonAI's Senior Vice President Business Development) and Andrew Leece were the sole three shareholders of Alternative Asset Management Pty Ltd/SharonAI Pty Ltd ("<u>SAIPL</u>") prior to SharonAI's acquisition of all of the shares of SAIPL on April 29, 2024. In consideration for their shares of SAIPL, each of Messrs. Manning, Hughes-Jones and Leece were issued 70,000 shares of SharonAI common stock at a fair value of $70,000.

James Manning was a unitholder of Digital Income Fund Pty Ltd ("<u>DIF</u>") prior to SAIPL acquiring the assets of DIF on April 29, 2024. In consideration for the assets of DIF, DIF was issued 55,000 shares of SharonAI common stock, 17,600 shares of which were transferred to Mr. Manning upon DIF's liquidation. The 17,600 shares were issued at a fair value of $390,016.

James Manning, Nicholas Hughes-Jones and Andrew Leece were shareholders of Distributed Storage Solutions Limited ACN 646 979 222 ("<u>DSS</u>") prior to SharonAI's acquisition of DSS in June of 2024. In consideration for their shares of DSS, Mr. Manning was issued 49,215 shares of SharonAI common stock at a fair value of $1,919,366, Mr. Hughes-Jones was issued 27,478 shares of SharonAI common stock at a fair value of $1,071,623, and Mr. Leece was issued 43,401 shares of SharonAI common stock at a fair value of $1,692,639.

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During 2024, the Group paid storage services expense to Flynt ICS Pty Ltd ("<u>Flynt</u>"). Flynt is a subsidiary of Vertua Limited and affiliated to the Group through common ownership by James Manning. For the year ended December 31, 2024, the Group paid Flynt $167,638 in services expenses.

Between January, 2024, and May, 2024, the SharonAI received approximately $419,590 in outstanding loans from various entities affiliated with members of SharonAI's management and board of directors, including: (a) Woodville Super Pty Ltd, an affiliate of James Manning, Director; (b) Manning Capital Holdings Pty Ltd, an affiliate of James Manning, Director; (c) Strat Capital Pty Ltd (Alpha Juliett), an affiliate of Andrew Leece, Chief Operating Officer; and (d) Inbocalupo Pty Ltd), an affiliate of Nick Hughes-Jones, the former Senior Vice President Business Development. These debts were converted into equity of SharonAI as part of a private placement conducted by SharonAI at the same price that stock was sold to other investors in the offering. The following chart shows the amount of debt from each lender and the shares into which the debt was converted.

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| | | | |
|:---|:---|:---|:---|
|  | **USD Amount<br>outstanding** | **Subscription <br>price per share** | **Shares received<br>upon conversion** |
| Woodville Super Pty Ltd | $66370.00 | 39.00 | 1702 |
| Manning Capital Holdings Pty Ltd | $84555.00 | 39.00 | 2168 |
| Strat Capital Pty Ltd (Alpha Juliett) | $117740.00 | 39.00 | 3019 |
| Inbocalupo Pty Ltd | $150925.00 | 39.00 | 3870 |
| **Total:** | $419590.00 |  | 10759 |

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**The Company's Relationships and Related Party Transactions**

***Amended and Restated Registration Rights Agreement***

At the Closing, the Company will enter into a registration rights agreement (the "<u>Registration Rights Agreement</u>") with certain existing stockholders of the Company (the "<u>Holders</u>") with respect to their shares of the Company before or pursuant to the Business Combination, and including the shares issuable on conversion of the warrants issued to the Sponsor in connection with the Roth CH's initial public offering and any shares issuable on conversion of preferred stock or loans. Pursuant to the Registration Rights Agreement, within thirty (30) days of the Closing, the Company shall file with the SEC a registration statement for a shelf registration on Form S-1 or a Registration Statement for a Shelf Registration on Form S-3 (the "<u>Shelf</u>"), if the Company is then eligible to use a Form S-3 Shelf, in each case, covering the resale of all the Registrable Securities on a delayed or continuous basis as permitted by Rule 415 under the Securities Act and shall use its reasonable best efforts to have such Shelf declared effective as soon as practicable after the filing thereof, but no later than the seventy-fifth (75<sup>th</sup>) calendar day following the Filing Date; provided that the Company shall have the Shelf declared effective within ten (10) business days after the date the Company is notified by the staff of the SEC that the Shelf will not be reviewed or will not be subject to further review by the SEC. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of such Holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by filing a subsequent shelf registration statement and cause the same to become effective as soon as practicable after such filing and such subsequent shelf registration statement shall be subject to the terms hereof; <u>provided</u>, <u>however</u>, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for each of the Holders. In addition, the Holders will have certain "piggyback" registration rights that require the Company to include such securities in registration statements that the Roth CH otherwise files. The Registration Rights Agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company's securities. the Company will bear the expenses incurred in connection with the filing of any such registration statements.

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 ***Schubert Separation Agreement and Consulting Agreement***

On January 22, 2026, Mr. Wolfgang Schubert resigned as the Company's Chief Executive Officer and as a director. In connection with such resignation, Mr. Schubert entered into the Separation Agreement dated January 22, 2026, with SharonAI Operations. Pursuant to the Separation Agreement, Mr. Schubert willreceive 318,240 restricted stock units. Mr. Schubert will continue with the Company as a consultant pursuant to the Consulting Agreement dated January 22, 2026, pursuant to which Mr. Schubert will receive a one-time grant of $50,000 of restricted stock units and will receive $8,334 per month. Mr. Schubert's resignation is not the result of any dispute or disagreement with the Company or management and is not a reflection on the Company's results of operations.

***Indemnification Agreements***

The Company's Amended and Restated Certificate of Incorporation (the "<u>Charter</u>") contains provisions limiting the liability of the members of the Company's board of directors, and the Company's amended and restated bylaws provide that the Company will indemnify each of the members of the Company's board of directors and officers to the fullest extent permitted under Delaware law. The Company's bylaws also provide the board of directors with discretion to indemnify employees and agents of the Company.

The Company intends to enter into indemnification agreements with each of its directors and executive officers and certain other key employees. The indemnification agreements will provide that the Company will indemnify each of its directors and executive officers and such other key employees against any and all expenses incurred by such director, executive officer or other key employee because of his or her status as one of the Company's directors, executive officers or other key employees, to the fullest extent permitted by Delaware law, the Charter and the Company's amended and restated bylaws. In addition, the indemnification agreements will provide that, to the fullest extent permitted by Delaware law, the Company will advance all expenses incurred by its directors, executive officers and other key employees in connection with a legal proceeding involving his or her status as a director, executive officer or key employee.

***Related Party Transactions Policy***

The Company's board of directors adopted a written policy on transactions with related parties that is in conformity with the requirements for issuers having publicly held common stock that is listed on Nasdaq. Related party transactions are defined as transactions in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (ii) we or any of our subsidiaries is a participant, and (iii) any (x) executive officer, director or nominee for election as a director of the Company or a subsidiary of the Company, (y) greater than 5% beneficial owner of the Company's common stock, or (z) immediate family member of the persons referred to in clauses (x) and (y) has or will have a direct or indirect material interest.

The audit committee, in coordination with the Company's chief financial officer ("Chief Compliance Officer"), will be primarily responsible for developing and implementing processes and procedures to obtain information regarding related parties with respect to potential related party transactions and then determining, based on the facts and circumstances, whether such potential related party transactions do, in fact, constitute related party transactions requiring compliance with the policy. If the Chief Compliance Officer determines that a transaction or relationship is a related party transaction requiring compliance with the policy, the Chief Compliance Officer will be required to present to the audit committee all relevant facts and circumstances relating to the related party transaction for consideration at the next regularly scheduled meeting of the audit committee.

The audit committee will be required to either approve or disapprove the related party transaction based upon a review the relevant facts and circumstances of each related party transaction, including (i) whether the transaction was undertaken in the ordinary course of business of the Company, (ii) whether the related party transaction was initiated by the Company, a subsidiary, or the related party, (iii) whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party, (iv) the purpose of, and the potential benefits to the Company of, the related party transaction, (v) the approximate dollar value of the amount involved in the related party transaction, particularly as it relates to the related party, (vi) the related party's interest in the related party transaction and (vii) any other information regarding the related party transaction or the related party that would be material to investors in light of the circumstances of the particular transaction.

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If the Chief Compliance Officer determines it is impractical or undesirable to wait until an audit committee meeting to consummate a related party transaction, the chairman of the audit committee may review and approve the related party transaction in accordance with the procedures set forth herein. Any such approval (and the rationale for such approval) must be reported to the audit committee at the next regularly scheduled audit committee meeting. If the Company becomes aware of a related party transaction that has not been approved under the policy, the related party transaction shall be reviewed in accordance with the policy and, if the audit committee determines it to be appropriate, ratified at the audit committee's next regularly scheduled meeting. In any case where the audit committee determines not to ratify a related party transaction that has been commenced without approval, the audit committee may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction to make it acceptable for ratification. In addition, the audit committee shall examine the facts and circumstances regarding the failure to report a related party transaction for approval under the policy and shall take any action it deems appropriate as a result.

If a related party transaction will be ongoing, the audit committee may establish guidelines for the Company's management to follow in its ongoing dealings with the related party. Thereafter, the audit committee, on at least an annual basis, shall review and assess ongoing relationships with the related party to ensure that they are in compliance with the audit committee's guidelines and that the related party transaction remains appropriate.

If a related party transaction involves a related party who is a director or an immediate family member of a director, such director may not participate in any discussion or vote regarding approval or ratification of approval such transaction. Such director may be counted in determining the presence of a quorum at a meeting of the audit committee that considers such transaction.

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**DESCRIPTION OF CAPITAL STOCK**

*The following summary sets forth the material terms of the Company's securities. The following summary is not intended to be a complete summary of the rights and preferences of such securities, and is qualified by reference to the Charter, a copy of which is filed as an exhibit to the registration statement of which this prospectus forms a part, and the Company's amended and restated bylaws, a copy of which is filed as an exhibit to the registration statement of which this prospectus forms a part. We urge you to read the Charter and the Company's amended and restated bylaws ("<u>Bylaws</u>") in their entirety for a complete description of the rights and preferences of our securities.*

**General**

The Charter authorizes the issuance of up 100,136,141 shares of common stock, par value $0.0001 per share ("<u>Common Stock</u>"), and 1,000,000 shares of preferred stock, par value $0.0001 per share ("<u>Preferred Stock</u>"). 900,000,000 shares of the Common Stock have been designated as Class A Ordinary Common Stock and 136,341 shares of the Common Stock have been designated as Class B Super Common Stock. As of the date hereof, the Company has 11,832,164 shares of Class A Ordinary Common Stock issued and outstanding, 136,341 shares of Class B Super Common Stock issued and outstanding, and no shares of the Preferred Stock issued and outstanding. The following description summarizes all of the material terms of our securities. Because it is only a summary, it may not contain all the information that is important to you. For a complete description you should refer to the Company's Amended and Restated Certificate of Incorporation in the form attached to hereto as Exhibit 3.1.

**Common Stock**

The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Company's Board of Directors upon any issuance of the Preferred Stock of any series. Each holder of shares of Common Stock shall be entitled to one vote for each share of Class A Ordinary Common Stock held and one hundred and sixty votes for each share of Class B Super Common Stock held. Holders of the Company's Common Stock have no cumulative voting rights. Further, holders of the Company's Common Stock have no preemptive or conversion rights or other subscription rights. Upon our liquidation, dissolution or winding-up, holders of the Company's Common Stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation preferences of any of our outstanding shares of Preferred Stock. Subject to the rights of the holders of Preferred Stock, holders of shares of Common Stock are entitled to receive such dividends and distributions and other distributions in cash, stock or property of the corporation when, as and if declared thereon by the Board of Directors from time to time out of assets or funds of the corporation legally available therefor.

At all meetings of stockholders, unless otherwise required by law, the Charter, or the Bylaws, a majority in voting power of the shares of the corporation entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum.

**Preferred Stock**

The Preferred Stock may be issued without stockholder approval, from time to time in one or more series, each series to be appropriately designated by a distinguishing letter or title prior to the issuance of any shares thereof, as determined by the Company's Board of Directors. The Company's Board of Directors may authorize the issuance of Preferred Stock with voting or conversion rights that could harm the voting power or other rights of the holders of the Common Stock. The issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of us and might harm the market price of the Company's Common Stock and the voting and other rights of the holders of the Company's Common Stock.

Preferred stock may be issued from time to time, in one or more series, as authorized by the Board of Directors, without stockholder approval. As of the date of this prospectus, we have no Preferred Stock designated or issued.

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**Certain Anti-Takeover Provisions of Delaware Law, our Certificate of Incorporation and Bylaws**

The provisions of Delaware law, the Charter and the Bylaws of the Company could discourage or make it more difficult to accomplish a proxy contest or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or in our best interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our Board of Directors and in the policies formulated by our Board of Directors and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. Such provisions also may have the effect of preventing changes in our management.

The Charter provides that subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors is divided into three classes, designated Class I, Class II and Class III, with each class being nearly as possible to one third of the total number of directors constituting the entire Board of Directors. Terms for directors are generally three years.

The Company is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a "business combination" with:

● a stockholder who owns 10% or more of our outstanding voting stock (otherwise known as an "interested stockholder");

● an affiliate of an interested stockholder; or

● an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A "business combination" includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

● our Board of Directors approves the transaction that made the stockholder an "interested stockholder," prior to the date of the transaction;

● after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or

● on or subsequent to the date of the transaction, the business combination is approved by our Board of Directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

**Exclusive Forum for Certain Lawsuits**

The Charter provides that unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation's stockholders, (3) any action arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws, or (4) any action asserting a claim governed by the internal affairs doctrine. Unless the corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

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**Special meeting of stockholders**

Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chair of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors or (iv) by the Secretary following receipt of written demand from stockholders holding, at least 25% of the voting power of the outstanding shares of the corporation.

**Stockholder Action by Written Consent**

The Bylaws permit our stockholders to act by written consent.

**Advance notice requirements for stockholder proposals and director nominations**

The Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing, as well as additional information.

These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

**Authorized but unissued shares**

Our authorized but unissued Common Stock and Preferred Stock is available for future issuances without stockholder approval, and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

**Transfer Agent and Registrar**

Our transfer agent and registrar is Continental Stock Transfer & Trust Company, whose address is 1 State Street Plaza, 30th Floor, New York, NY 10004.

**Listing**

Our common stock is quoted on the OTC Markets under the symbol "SHAZ." In addition, we intend to apply to have our shares of common stock approved for listing on the Nasdaq Capital Market under the symbol "SHAZ."

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**PLAN OF DISTRIBUTION**

The Selling Shareholders and any of their respective pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on any trading market, stock exchange or other trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Shareholders may use any one or more of the following methods when selling securities:

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● settlement of short sales;

● in transactions through broker-dealers that agree with the Selling Shareholders to sell a specified number of such securities at a stipulated price per security;

● through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

● a combination of any such methods of sale; or

● any other method permitted pursuant to applicable law.

The Selling Shareholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities covered hereby, the Selling Shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in tum engage in short sales of the securities in the course of hedging the positions they assume. The Selling Shareholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in tum may sell these securities. The Selling Shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

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The Selling Shareholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. We are requesting that each Selling Shareholder inform us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities. We will pay certain fees and expenses incurred by us incident to the registration of the securities.

Because the Selling Shareholders may be deemed to be "underwriters" within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act, including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. We are requesting that each Selling Shareholder confirm that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Shareholder.

We intend to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Shareholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Stock by the Selling Shareholders or any other person. We will make copies of this prospectus available to the Selling Shareholders and are informing the Selling Shareholders of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

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**DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY**

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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**CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

On, and effective as of, January 6, 2026, the Audit Committee (the "<u>Committee</u>") of the Board of Directors of the Company approved the dismissal of CBIZ CPAs P.C. ("<u>CBIZ CPAs</u>") as the Company's independent registered public accounting firm. Also on, and effective as of, January 6, 2026, the Committee approved the engagement of HoganTaylor LLP ("HoganTaylor") as the Company's independent registered public accounting firm for the Company's fiscal year 2025 audit.

As previously disclosed, CBIZ CPAs acquired the attest business of Marcum, LLP ("<u>Marcum</u>"), the Company's prior independent registered public accounting firm, effective November 1, 2024. Marcum continued to serve as the Company's independent registered public accounting firm through May 23, 2025. On May 23, 2025, the Company terminated its relationship with Marcum as the Company's independent registered accounting firm and, with the approval of the Committee, engaged CBIZ CPAs as the Company's independent registered public accounting firm. CBIZ CPAs did not issue any audit report during the period of its engagement.

From May 23, 2025 through January 6, 2026, the date of CBIZ CPAs' dismissal, there were (a) no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and CBIZ CPAs on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of CBIZ CPAs, would have caused CBIZ CPAs to make reference to such disagreement in its reports, if such reports had been issued, and (b) no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions).

During the fiscal year ended December 31, 2024 neither the Company, nor anyone on behalf of the Company, consulted HoganTaylor regarding: (i) the application of accounting principles to a specified transaction (either completed or proposed), or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that HoganTaylor concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a "disagreement" (within the meaning of Item 304(a)(1)(iv) of Regulation S-K) or a "reportable event" (within the meaning of Item 304(a)(1)(v) of Regulation S-K.

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**LEGAL MATTERS**

Sheppard Mullin Richter & Hampton, LLP will pass upon the validity of the securities of offered hereby.

**EXPERTS**

The financial statements of Roth CH Holdings, Inc. as of December 31, 2024 and for the period from December 30, 2024 (inception) through December 31, 2024 included in this Prospectus and in the Registration Statement have been so included in reliance on the reports of Marcum LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The report on the financial statements contains an explanatory paragraph regarding Roth CH Holdings, Inc.'s ability to continue as a going concern.

The financial statements of Roth CH Acquisition Co. as of December 31, 2024 and 2023 and for each of the two years in the period ended December 31, 2024 included in this Prospectus and in the Registration Statement have been so included in reliance on the reports of Marcum LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The report on the financial statements contains an explanatory paragraph regarding Roth CH Acquisition Co.'s ability to continue as a going concern.

The consolidated financial statements of SharonAI Inc. as of December 31, 2024 and 2023, and for each of the two years in the period ended December 31, 2024, included in this prospectus, have been included in reliance on the report of HoganTaylor LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements of Distributed Storage Solutions Limited ACN 646 979 222 as of December 31, 2023 and 2022, and for each of the two years in the period ended December 31, 2023, included in this prospectus, have been included in reliance on the report of Wolf & Company P.C., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

**WHERE YOU CAN FIND MORE INFORMATION**

This prospectus constitutes a part of a registration statement on Form S-1 filed under the Securities Act. As permitted by the SEC's rules, this prospectus and any prospectus supplement, which form a part of the registration statement, do not contain all the information that is included in the registration statement. You will find additional information about us in the registration statement and its exhibits. Any statements made in this prospectus or any prospectus supplement concerning legal documents are not necessarily complete and you should read the documents that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or matter.

You can read our electronic SEC filings, including such registration statement, on the internet at the SEC's website at *www.sec.gov.* We are subject to the information reporting requirements of the Exchange Act, and we file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available at the website of the SEC referred to above. If you would like additional copies of this prospectus, or if you have questions about the Business Combination, you should contact via phone or in writing:

SharonAI Holdings Inc.

745 5th Ave, Suite 500

New York, NY 10151

Tel. No. (347) 212-5075

Attention: James Manning, Chief Executive Officer<br> E-mail: james@sharonai.com

[**Table of Contents**](#toc)

**INDEX TO FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **SharonAI Holdings Inc. Financial Statements** | **Page** |
| [Condensed Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024](#fin1_001) | F-3 |
| [Condensed Statement of Operations for the three and nine months ended September 30, 2025 (unaudited)](#fin1_002) | F-4 |
| [Condensed Statement of Changes in Stockholder's Deficit for the nine months ended September 30, 2025 (unaudited)](#fin1_003) | F-5 |
| [Condensed Statement of Cash Flows for the nine months ended September 30, 2025 (unaudited)](#fin1_004) | F-6 |
| [Notes to Condensed Financial Statements](#fin1_005) | F-7 – F-13 |

---

---

| | |
|:---|:---|
| **Roth CH Holdings, Inc. Audited Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm](#c_001a) | F-14 – F-15 |
| Financial Statements: |  |
| [Balance Sheet as of December 31, 2024](#c_001) | F-16 |
| [Statement of Operations for the period from December 30, 2024 (inception) to December 31, 2024](#c_002) | F-17 |
| [Statement of Changes in Stockholder's Deficit for the period from December 30, 2024 (inception) to December 31, 2024](#c_003) | F-18 |
| [Statement of Cash Flows for the period from December 30, 2024 (inception) to December 31, 2024](#c_004) | F-19 |
| [Notes to Financial Statements](#c_005) | F-20 – F-22 |

---

---

| | |
|:---|:---|
| **Roth CH Acquisition Co. Financial Statements** |  |
| [Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 (audited)](#fin3_001) | F-23 |
| [Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited)](#fin3_002) | F-24 |
| [Condensed Consolidated Statements of Changes in Shareholders' Deficit for the nine months ended September 30, 2025 and 2024 (unaudited)](#fin3_003) | F-25 |
| [Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited)](#fin3_004) | F-26 |
| [Notes to Condensed Consolidated Financial Statements (unaudited)](#fin3_005) | F-27 – F-41 |

---

---

| | |
|:---|:---|
| **Roth CH Acquisition Co. Audited Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 688)](#b_001) | F-42 |
| [Balance Sheets](#b_002) | F-43 |
| [Statements of Operations](#b_003) | F-44 |
| [Statements of Changes in Shareholders' Deficit](#b_004) | F-45 |
| [Statements of Cash Flows](#b_005) | F-46 |
| [Notes to Financial Statements](#b_006) | F-47 – F-67 |

---

---

| | |
|:---|:---|
| **SharonAI Inc. Consolidated Condensed Financial Statements** |  |
| [Consolidated Condensed Balance Sheets (unaudited) as of September 30, 2025 and December 31, 2024](#d_001) | F-68 |
| [Consolidated Condensed Statement of Operations (unaudited) for the three and nine months ended September 30, 2025 and 2024](#d_002) | F-69 |
| [Consolidated Condensed Statements of Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2025 and 2024](#d_003) | F-70 |
| [Consolidated Condensed Statements of Stockholders' Equity (unaudited) for the three and nine months ended September 30, 2025 and 2024](#d_004) | F-71 |
| [Consolidated Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2025 and 2024](#d_005) | F-73 |
| [Notes To Consolidated Condensed Financial Statements (unaudited)](#d_006) | F-74 – F-90 |

---

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---

| | |
|:---|:---|
| **SharonAI Inc. Audited Consolidated Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 483)](#f3_001) | F-91 |
| [Consolidated Balance Sheets](#f3_002) | F-92 |
| [Consolidated Statements of Operations and Comprehensive Loss](#f3_003) | F-93 |
| [Consolidated Statements of Changes in Shareholders' Equity](#f3_004) | F-94 |
| [Consolidated Statements of Cash Flows](#f3_005) | F-95 |
| [Notes to Consolidated Financial Statements](#f3_006) | F-96 – F-118 |

---

---

| | |
|:---|:---|
| **Distributed Storage Solutions Limited ACN 646 979 222 Audited Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 392)](#f4_001) | F-121 – F-122 |
| [Balance Sheets](#f4_002) | F-123 |
| [Statements of Operations](#f4_003) | F-124 |
| [Statements of Changes in Shareholders' Deficit](#f4_004) | F-125 |
| [Statements of Cash Flows](#f4_005) | F-126 |
| [Notes to Financial Statements](#f4_006) | F-127 – F-144 |

---

---

| | |
|:---|:---|
| **Distributed Storage Solutions Limited ACN 646 979 222 Unaudited Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID 392)](#f5_001) | F-147 – F-148 |
| [Balance Sheets as of June 30, 2024](#f5_002) | F-149 |
| [Statements of Operations for the Six Months Ended June 30, 2024](#f5_003) | F-150 |
| [Statements of Comprehensive Income for the Six Month Period Ended June 30, 2024](#f5_004) | F-151 |
| [Statements of Changes in Shareholders' Deficit for the Six Months Ended June 30, 2024](#f5_005) | F-152 |
| [Statements of Cash Flows for the Six Months Ended June 30, 2024](#f5_006) | F-153 |
| [Notes to Financial Statements](#f5_007) | F-154 – F-168 |

---

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)** 

**CONDENSED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(unaudited)** | |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;**Total current assets** | $- | $- |
| **TOTAL ASSETS** | $- | $- |
| **LIABILITIES AND STOCKHOLDER'S EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $17512 | $517 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 1500 |  |
| &nbsp;&nbsp;&nbsp;Due to related party | 54395 | - |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | 73407 | 517 |
| **TOTAL LIABILITIES** | $73407 | $517 |
| **COMMITMENTS AND CONTINGENCIES (NOTE 5)** |  |  |
| **STOCKHOLDER'S DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, 0.0001 par value; 1,000 shares authorized; 1,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (73407) | (517) |
| **Total stockholder's deficit** | (73407) | (517) |
| **TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT** | $- | $- |

---

*The accompanying notes are an integral part of these condensed financial statements.*

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)** 

**CONDENSED STATEMENT OF OPERATIONS**

**FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,<br> 2025** | **For the<br> Nine Months Ended<br> September 30,<br> 2025** |
| Operating expenses |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | $18495 | $72890 |
| Loss from operations | (18495) | (72890) |
| Net loss | $(18495) | $(72890) |
| Weighted average number of shares of common stock outstanding, basic and diluted | 1000 | 1000 |
| Basic and diluted net loss per share of common stock | $(18.50) | $(72.89) |

---

*The accompanying notes are an integral part of these condensed financial statements.*

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)** 

**CONDENSED STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT<br> FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional<br> Paid-in**<br> **Capital** | **Accumulated**<br>**Deficit** | **Total<br> Stockholder's**<br>**Deficit** |
| **Balance, December 31, 2024** | 1000 | $- | $- | $(517) | $(517) |
| Net loss | - | - | - | (5000) | (5000) |
| **Balance, March 31, 2025** | 1000 |  |  | (5517) | (5517) |
| Net loss | - | - | - | (49395) | (49395) |
| **Balance, June 30, 2025** | 1000 |  |  | (54912) | (54912) |
| Net loss | - | - | - | (18495) | (18495) |
| **Balance, September 30, 2025** | 1000 | $- | $- | $(73407) | $(73407) |

---

*The accompanying notes are an integral part of these condensed financial statements.*

 

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)** 

**CONDENSED STATEMENT OF CASH FLOWS**

**FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED)**

---

| | |
|:---|:---|
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |
| Net loss | $(72890) |
| Adjustments to reconcile net income to net cash used in operations: |  |
| Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 16995 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 1500 |
| &nbsp;&nbsp;&nbsp;Due to related party | 54395 |
| **CASH USED IN OPERATING ACTIVITIES** | - |
| **NET CHANGE IN CASH** |  |
| Cash, beginning of period | - |
| **Cash, end of period** | $- |

---

*The accompanying notes are an integral part of these condensed financial statements.*

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)** 

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

**Note 1. Organization**

***Description of Business***

SharonAI Holdings Inc. f/k/a Roth CH Holdings, Inc. (the "<u>Company</u>" or "<u>PubCo</u>") was incorporated in Delaware on December 30, 2024 for the purpose of merging with Roth CH Acquisition Co., a Cayman Islands exempt company ("<u>Roth CH</u>") prior to the transactions contemplated in the Business Combination Agreement (see Note 5), to facilitate the consummation of a business combination. The Company will become the ultimate parent company following the transactions contemplated in the Business Combination Agreement.

On December 30, 2024, Roth CH purchased 1,000 shares of the Company for a consideration of $0.10, which represents 100% ownership of the Company.

**Note 2. Liquidity and Going Concern**

For the nine months ended September 30, 2025, the Company has not generated revenue and reported a net loss of $72,890. As of September 30, 2025, the Company had an aggregate cash of $Nil and a net working capital deficit of $73,407. These conditions cast substantial doubt on the Company's ability to continue as a going concern.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern even though events and conditions exist that when considered in aggregate raise substantial doubt about the Company's ability to continue as going concern. Management plans to complete the proposed Business Combination (see Note 5) by December 31, 2025 (the "<u>Agreement End Date</u>"). Ongoing operations are dependent upon the Company consummating the proposed Business Combination and if the Company is unsuccessful, operations would cease except for the purpose of liquidating.

As a result of the above, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's ("<u>FASB</u>") Accounting Standards Update ("<u>ASU</u>") 2014-15, *Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern*, management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date these financial statements are available to be issued. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3. Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying unaudited condensed financial statements are presented in U.S. dollars which is also the Company's functional currency and have been prepared in accordance with accounting principles generally accepted in the United States of America ("<u>GAAP</u>") and pursuant to the accounting rules and regulations of the SEC. References to GAAP issued by the FASB in these accompanying notes to the unaudited financial statements are to the FASB Accounting Standards Codification ("<u>ASC</u>").

The accompanying unaudited condensed financial statements are presented in accordance with GAAP for interim financial information. In the opinion of management, the unaudited financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected through December 31, 2025 or any future period.

The Company's fiscal year end is December 31.

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

***Emerging Growth Company Status***

The Company is expected to be an "emerging growth company", as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "<u>Securities Act</u>"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "<u>JOBS Act</u>"). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, the Company will not be subject to the same implementation timeline for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of the Company's financial statements to those of other public companies more difficult.

***Use of Estimates***

The preparation of the accompanying financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate is the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

There were no significant estimates for the three and nine months ended September 30, 2025.

***Cash and Cash Equivalents***

The Company considers all short-term investments with an original maturity date of three months or less when purchased to be cash equivalents. The Company did not have any cash or cash equivalents as of September 30, 2025 and December 31, 2024.

***Net Loss Per Share***

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including preferred stock and convertible notes, to the extent dilutive. There were no potential diluted common stock equivalents for the three and nine months ended September 30, 2025.

***Income taxes***

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and the measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

**Note 4. Stockholder's Deficit**

***Common stock –*** The Company is authorized to issue 1,000 shares of common stock with $0.0001 par value. As of September 30, 2025 and December 31, 2024, there were 1,000 shares of common stock issued and outstanding. Each share of common stock entitles the holder to one vote.

**Note 5. Commitments and Contingencies**

On January 28, 2025, Roth CH, the Company, Roth CH Merger Sub, Inc. (the "<u>Merger Sub</u>") and SharonAI Inc, a Delaware Corporation ("<u>SharonAI</u>") entered into the Business Combination Agreement, pursuant to which, subject to the terms and conditions set forth therein, (a) Roth CH shall continue out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation by means of a merger (the "<u>Domestication Merger</u>") of Roth CH with and into the Company, with the Company as the surviving company (the "<u>Domesticated Parent</u>"), (b) upon the Domestication Merger, Domesticated Parent shall change its name to "<u>SharonAI Holdings Inc.</u>" and, thereafter, (c) the Merger Sub shall be merged with and into SharonAI (together, the "<u>Business Combination</u>"), with SharonAI as the surviving company (the "<u>Surviving Corporation</u>"). The Surviving Corporation shall become a wholly-owned subsidiary of the Domesticated Parent.

Pursuant to the terms of the Business Combination Agreement, upon the consummation of the Business Combination on the Closing Date:

● Each share of SharonAI Series A Preferred Stock shall be converted into the right to receive a number of shares of Class B Common Stock equal to the Conversion Ratio.

● Each share of SharonAI Series B Preferred Stock shall, in accordance with SharonAI's charter documents, be converted into the right to receive a number of shares of Roth Class A Ordinary Common Stock equal to: (i) the Conversion Ratio multiplied by (ii) the number of shares of SharonAI Common Stock issuable upon conversion of such share of SharonAI Series B Preferred Stock as of immediately prior to the closing.

● Each SharonAI Stock Right shall be cancelled and converted into a right to acquire, subject to substantially the same terms and conditions as were applicable under such SharonAI Stock Right, the number of shares of Roth Class A Ordinary Common Stock, determined by multiplying the number of shares of SharonAI Common Stock subject to such SharonAI Stock Right as of immediately prior to the effective time by the Conversion Ratio, with an exercise price per share of Roth Class A Ordinary Common Stock, if applicable, equal to (A) the exercise price per share of SharonAI Common Stock of such SharonAI Stock Right divided by (B) the Conversion Ratio (a "Converted Stock Right").

● The "Conversion Ratio" is the quotient obtained by dividing (a) the number of shares constituting the Aggregate Merger Consideration, which is approximately 560,835,633 shares of Roth Common Stock, by (b) the number of shares constituting the "Aggregate Fully Diluted SharonAI Capital Stock", which means: the sum, without duplication, of (a) all shares of SharonAI Common Stock that are issued and outstanding immediately prior to the Effective Time; plus (b) the aggregate number of shares of SharonAI Series A Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (c) the aggregate number of shares of SharonAI Common Stock issuable upon conversion of all shares of SharonAI Series B Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (d) the aggregate number of shares of SharonAI Common Stock issuable upon full conversion, exercise, settlement or exchange of any SharonAI Stock Rights outstanding immediately prior to the effective time directly or indirectly convertible into or exchangeable or exercisable or potentially settled for shares of SharonAI Common Stock.

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

On May 23, 2025, the parties to the Business Combination Agreement entered into an Amendment (the "<u>Amendment</u>") to the Business Combination Agreement, pursuant to which the Outside Date was extended to October 31, 2025.

On October 14, 2025, the parties to the Business Combination Agreement entered into an Amendment (the "<u>Second Amendment</u>") to the Business Combination Agreement, pursuant to which the Closing Date was extended to December 31, 2025.

**Note 6. Subsequent events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial statements are issued. The Company did not identify, other than the below, any subsequent events that would have required adjustment or disclosure in these unaudited financial statements.

On October 14, 2025, the parties to the Business Combination Agreement entered into the Second Amendment to the Business Combination Agreement, pursuant to which the Closing Date was extended to December 31, 2025. On December 2, 2025, Roth CH held an extraordinary general meeting of shareholders (the "Extraordinary General Meeting"). Shareholders approved by way of an ordinary resolution and adopted the Business Combination Agreement, as described in Note 5, approved the proposed amended and restated certificate of incorporation (the "Proposed Charter") and the proposed amended and restated bylaws ("Proposed Bylaws" and, together with the Proposed Charter, the "Proposed Organizational Documents") of Domesticated Parent. Shareholders also approved on an advisory non-binding basis by way of an ordinary resolution the following five (5) separate proposals (collectively, the "Advisory Organizational Documents Proposals"):

A. **Advisory Organizational Documents Proposal 4A (Authorized Shares)** — the amendment and redesignation of the authorized share capital of Roth CH from (a) 200,000,000 Roth CH Class A Ordinary Shares, 20,000,000 Roth CH Class B Ordinary Shares and 1,000,000 preference shares, par value $0.0001 per share, of Roth CH, to (b) 900,000,000 Pubco shares of Class A Ordinary Common Stock, 6,816,948 Pubco shares of Class B Super Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share.

B. **Advisory Organizational Documents Proposal 4B (Exclusive Forum Provision)** — the adoption of Delaware as the exclusive forum for certain stockholder litigation and adopting the federal district courts of the United States as the exclusive forum for resolving complaints asserting a cause of action under the Securities Act of 1933, as amended.

C. **Advisory Organizational Documents Proposal 4C (Required Vote to Amend Charter)** — the inclusion of provisions providing that the affirmative vote of at least 66 and 2/3% of the voting power of all the then outstanding shares of capital stock of Domesticated Parent entitled to vote thereon, voting together as a single class, will be required to amend, alter, repeal or rescind any provision of Article FIFTH, Article SEVENTH, Article EIGHTH, Article TENTH, Article ELEVENTH, and this requirement in Article NINTH of the Proposed Charter.

D. **Advisory Organizational Documents Proposal 4D (Removal of Directors)** — the inclusion of provisions permitting the removal of a director, with or without cause, by the affirmative vote of at least 66 and 2/3% of the outstanding shares entitled to vote generally in the election of directors, voting together as a single class.

E. **Advisory Organizational Documents Proposal 4E (Name Change)** — the change of the name of the Domesticated Parent to "SharonAI Holdings Inc."

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

Additionally shareholders approved the election, effective as of the effective time of the Business Combination, of James Manning, Peter Woodward, Alastair Cairns, Wolfgang Schubert and Brent Lanier as the directors of Domesticated Parent, with James Manning to serve until the 2028 annual meeting and until his successor has been duly elected and qualified or until his earlier resignation, removal or death, with each of Peter Woodward and Alastair Cairns to serve until the 2027 annual meeting and until his respective successor has been duly elected and qualified or until his earlier resignation, removal or death, and with each of Wolfgang Schubert and Brent Lanier to serve until the 2026 annual meeting and until his respective successor has been duly elected and qualified or until his earlier resignation, removal or death. We refer to this proposal as the "Directors Proposal". Shareholders approved, if each of the Business Combination, the Domestication Merger and the Proposed Charter is approved and takes effect, to combine Pubco outstanding shares of Class A Ordinary Common Stock and Class B Super Common Stock following the Business Combination into a lesser number of outstanding shares (the "Reverse Stock Split") and proportionately reduce the number of shares of Class A Ordinary Common Stock and Class B Super Common Stock authorized (the "Capital Stock Reduction"), giving the board of directors of Pubco the sole discretion to effect the Reverse Stock Split and Capital Stock Reduction, if at all, within one (1) year of the date the proposal is approved by stockholders and to fix the specific ratio within a range of one-for-two (1-for-2) to a maximum of a one-for-one hundred and fifty (1-for-150) reverse split. Shareholders approved, if each of the Business Combination, the Domestication Merger and the Proposed Charter is approved and takes effect, the issuance of all shares of Pubco Class A Ordinary Common Stock which may be issuable to YA II PN, Ltd. ("YA") pursuant to certain Convertible Notes and the Standby Equity Purchase Agreement with YA.

On December 17, 2025, the Company consummated the Business Combination and changed its name to SharonAI Holdings Inc., as discussed in Note 5.

**Amendment to Yorkville Agreements**

On December 15, 2025, SharonAI entered into an Amendment (the "YA Amendment") to Convertible Promissory Notes and Note Purchase Agreement with YA II PN, Ltd ("YA") Under the terms of the YA Amendment, during the period starting on December 15, 2025 and ended on January 20, 2026, (the "Suspension Period"), (A) the following obligations of the Company shall be suspended: (a) the obligation to assign the notes issued by SharonAI to YA (collectively, the "Notes") to SharonAI Holding, Inc. ("Holdings"), (b) the obligation to cause Holdings to assume the Note or enter the Standby Equity Purchase Agreement ("SEPA"), and (c) the obligation to make any payments to the YA under the Notes, and (B) YA shall not: (a) convert either Note into shares of Pubco's Class A Ordinary Common Stock, or (b) have any obligations to make any further Pre-Paid Advances; in each such case provided that SharonAI strictly complies with the covenants set forth in Section 4 of this Amendment. SharonAI agrees that upon the expiration or termination of the Suspension Period (unless the Notes are repaid in full as provided in Section 4 of this Amendment), the suspension of the obligations and payments due to be performed under any of the Agreements that may have arose during the Suspension Period shall be in full force and effect upon the termination of the Suspension Period.

In connection with the Amendment, SharonAI agreed to pay YA (i) an initial payment within 4 business days of the date of this Amendment of $350,000, which is comprised of (a) $263,636 of principal of the promissory note dated October 21, 2025; (b) a Redemption Premium (as defined in the Notes) in respect of such principal in the amount of $26,364; and (c) $60,000 of accrued and unpaid interest on the Notes (representing all accrued and unpaid interest as of December 11, 2025); and (ii) a final payment on or before the expiration of the Suspension Period in an amount equal to the aggregate of the following as of the date of such payment: (a) the outstanding principal of each Note; (b) a Redemption Premium (as defined in the Notes) in respect of such Principal amount; (c) the accrued and unpaid Interest of each Note; and (d) a $250,000 fee, which aggregate payment shall be in complete payment and satisfaction of all amounts owed and other obligations under all of the Agreements and the Agreements shall terminate and be of no further effect upon SharonAI making such payment and none of the parties, nor any of their respective successors in interest or permitted assigns, shall have any further rights or obligations or any continuing liability under the Agreements after such payment is made by SharonAI.

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

**Convertible Notes**

On December 17, 2025 Pubco entered into 10% convertible promissory notes (the "December 2025 Convertible Notes") with three accredited investors pursuant to which Pubco issued convertible promissory notes the amount of $2,250,000 to the investor in consideration of $2,250,000. The notes accrue interest at a rate of 10% per annum and have a maturity date of December 17, 2026. The unpaid and outstanding principal amount and accrued interest automatically convert into shares of the Company's Class A Ordinary Common Stock at a conversion price of $0.12. As soon as practicable (and in any event within 30-calendar days of the closing of the Business Combination Agreement, Pubco agreed to file a registration statement on Form S-1 providing for the resale of the shares of Class A Ordinary Common Stock issuable upon conversion of the December 2025 Convertible Notes. The proceeds from the issuance of the December 2025 Convertible Notes were used for working capital and general corporate purposes.

**New Convertible Note Financing**

On December 19, 2025 the Company, entered into a Convertible Note Agreement (the "New Financing Agreement") with certain investors (the "Noteholders"), pursuant to which the Noteholders agreed to provide financing in the aggregate principal amount of approximately $103,000,000 of unsecured, redeemable, convertible notes (the "Notes"). Canaccord Genuity Australia served as the sole lead manager for the transaction.

Promptly after entering into the Agreement, SharonAI assigned, and the Company assumed, the obligations and responsibilities of SharonAI Inc. in connection with and arising out of the Agreement and the Notes.

Pursuant to the Agreement, the Company may accept additional over-subscriptions up to a maximum aggregate total of $200,000,000 until January 15, 2026. The Notes bear interest at a rate of 12% per annum from April 19, 2026, through December 18, 2026, and 15% per annum on and from the December 19, 2026 until the Notes are redeemed, cancelled or converted. The Notes mature on December 19, 2027 (the "Maturity Date"), unless earlier converted or redeemed.

Under the terms of the Agreement, the Notes may be converted into shares of Class A Ordinary Common Stock of the Company in certain circumstances, including by the Company prior to a Corporate Event (as defined in the Agreement), upon completion of an initial public offering on the Australian Securities Exchange or other securities exchange (subject to additional terms) or at maturity. Upon conversion, the number of shares issuable is calculated based on the sum of principal and accrued interest divided by the lower of a discounted transaction price or a predetermined valuation cap or maturity conversion price. Conversion and issuance of securities pursuant to the Notes are subject to compliance with the rules of the Nasdaq Stock Market LLC or prior stockholder approval.

Redemption rights are available to the Noteholders on the Maturity Date or upon the occurrence of an event of default (if not converted), in which case the redemption price includes both principal and accrued but unpaid interest.

The proceeds from the offering are expected to be used primarily to accelerate the deployment of high density computing power in the form of NVIDIA GPUs, including B200's, B300's and GB300's.

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 **SHARONAI HOLDINGS INC. (F/K/A ROTH CH HOLDINGS, INC.)**

**NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2025**

**(UNAUDITED)**

The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and are being offered and sold in reliance on applicable exemptions from registration pursuant to Regulation S or Rule 506(b) of Regulation D, or Section 4(a)(2) of the Securities Act because, among other things, the transaction did not involve a public offering, the investors are accredited investors, the investors are taking the securities for investment and not resale, the Company took appropriate measures to restrict the transfer of the securities and certain of the Noteholders are not US persons in the United States. The securities have not been registered under the Securities Act and may not be sold in the United States absent registration or an exemption from registration. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The Agreement contains representations, warranties and covenants of the Company and the Noteholder that are customary for a transaction of this nature. The Agreement also contains indemnification obligations of the parties thereto.

 **Sale of Interest in Texas Critical Data Centers**

On January 16, 2026, SharonAI Inc., a subsidiary the Company entered into a Membership Interest Purchase Agreement ("Purchase Agreement") for, and closed the sale of, the Company's sale of 100% of its 50% interest ("Membership Interests") in Texas Critical Data Centers LLC ("TCDC") to New Era Energy & Digital Inc. ("NUAI").

The consideration NUAI will pay the Company for the Membership Interests will be an aggregate of $70,000,000, of which, (a) $10,000,000 will be payable in cash, with (i) $150,000 paid in December of 2025 as non-refundable deposit, and (ii) $9,850,000 payable upon the occurrence of certain events, but no later than March 31, 2026; (b) $10,000,000 will be payable in common stock or other units of NUAI upon the occurrence of certain events, but no later than March 31, 2026; and (c) $50,000,000 will be payable by issuance of a senior secured convertible promissory note ("Secured Note").

The Secured Note matures and is due June 30, 2026. It provides for an interest rate of 10% per annum (payable at maturity) and the right of the Company to convert up to $10,000,000 into common stock of NUAI at a conversion price equal to the 30-day VWAP of NUAI common stock prior to conversion, provided that such conversion price will not be less than 20% of the Nasdaq Official Closing Price. The Secured Note contains customary events of default and affirmative and negative covenants of NUAI.

In connection with the Purchase Agreement and the Secured Note, TCDC and the Company have entered into a Guaranty dated January 16, 2026 ("Guaranty"), pursuant to which TCDC has guaranteed the obligations of NUAI under the Secured Note. The obligations under the Secured Note and the Guaranty are secured by the Security and Pledge Agreement dated January 16, 2026, entered into between SharonAI, NUAI and TCDC (the "Security Agreement"), pursuant to which NUAI pledged all of the membership interests of TCDC to the Company and TCDC granted a security interest in substantially all of its assets to the Company, and also by the Deed of Trust and Security Agreement dated January 16, 2026, entered into between the Company and TCDC (the "Deed of Trust"), pursuant to which TCDC has conveyed certain real estate in trust to secure the obligations under the Secured Note.

The descriptions of the Purchase Agreement, Secured Note, Guaranty, Security Agreement and Deed of Trust are only a summary and are qualified in its entirety by reference to the full text of such document, each of which is filed as an exhibit to Registration Statement and which is incorporated herein by reference.

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![](fin_001.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholder and Director of

Roth CH Holdings Inc.

***Opinion on the Financial Statements***

We have audited the accompanying balance sheet of Roth CH Holdings Inc. (the "<u>Company</u>") as of December 31, 2024 the related statements of operations, changes in stockholder's deficit and cash flows for the period from December 30, 2024 (inception) through December 31, 2024 and the related notes (collectively referred to as the "financial statements"). In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the period from December 30, 2024 through December 31, 2024. in conformity with accounting principles generally accepted in the United States of America.

***Explanatory Paragraph – Going Concern***

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***Bases for Opinion***

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("<u>PCAOB</u>") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

**Marcum LLP /** 340 Mount Kemble Ave, Suite 210N **/** Morristown, NJ 07960 **/** **Phone** 973.929.3500 **/** **marcumllp.com**

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We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide**s** a reasonable basis for our opinion.

Marcum LLP

We have served as the Company's auditor since 2025.

![](fin_002.jpg)

Morristown, NJ

April 22, 2025

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**ROTH CH HOLDINGS, INC.**

**BALANCE SHEET**

**December 31, 2024**

---

| | |
|:---|:---|
|  | **December 31,<br> 2024** |
| **ASSETS** |  |
| &nbsp;&nbsp;&nbsp;**Total current assets** | $- |
| **TOTAL ASSETS** | $- |
| **LIABILITIES AND STOCKHOLDER'S EQUITY** |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $517 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | - |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | 517 |
| **TOTAL LIABILITIES** | $517 |
| **STOCKHOLDER'S DEFICIT** |  |
| &nbsp;&nbsp;&nbsp;Common stock, no par value; 1,000 shares authorized; 1,000 issued and outstanding |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital |  |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (517) |
| **Total stockholder's deficit** | (517) |
| **TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT** | $- |

---

*The accompanying notes are an integral part of these financial statements.*

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**ROTH CH HOLDINGS, INC.**

**STATEMENT OF OPERATIONS**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

---

| | |
|:---|:---|
|  | **For the<br> period from<br> December 30, 2024<br> (inception) to<br> December 31,<br> 2024** |
| Operating expenses |  |
| &nbsp;&nbsp;&nbsp;General and administrative | $517 |
| Loss from operations | $(517) |
| Net loss | $(517) |
| Weighted average number of shares of common stock outstanding, basic and diluted | 1000 |
| Basic and diluted net loss per share of common stock | $(0.52) |

---

*The accompanying notes are an integral part of these financial statements.*

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**ROTH CH HOLDINGS, INC.**

**STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Stockholder's**<br>**Deficit** |
| **Balance, December 30, 2024 (inception)** |  | $- | $- | $- | $- |
| Shares issued at inception | 1000 |  |  |  |  |
| Net loss | - | - | - | (517) | (517) |
| **Balance, December 31, 2024** | 1000 | $- | $- | $(517) | $(517) |

---

*The accompanying notes are an integral part of these financial statements.*

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**ROTH CH HOLDINGS, INC.**

**STATEMENT OF CASH FLOWS**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

---

| | |
|:---|:---|
|  | **For the<br> period from<br> December 30, 2024<br> (inception) to<br> December 31,<br> 2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |
| Net loss | $(517) |
| Adjustments to reconcile net income to net cash used in operations: |  |
| Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 517 |
| **CASH USED IN OPERATING ACTIVITIES** | - |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |
| &nbsp;&nbsp;&nbsp;Issuance of common stock | - |
| **CASH USED IN FINANCING ACTIVITIES** | - |
| **NET CHANGE IN CASH** |  |
| **Cash, beginning of period** | - |
| **Cash, end of period** | $- |

---

*The accompanying notes are an integral part of these financial statements.*

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**ROTH CH HOLDINGS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

**Note 1. Organization**

***Description of Business***

Roth CH Holdings, Inc. (the "<u>Company</u>" or "<u>Pubco</u>") was incorporated in Delaware on December 30, 2024 for the purpose of merging with Roth CH Acquisition Co., a Cayman Islands exempt company ("<u>Roth CH</u>") prior to the transactions contemplated in the Business Combination Agreement (see Note 5), to facilitate the consummation of a business combination. The Company will become the ultimate parent company following the transactions contemplated in the Business Combination Agreement.

On December 30, 2024, Roth CH purchased 1,000 shares of the Company for a consideration of $0.10, which represents 100% ownership of the Company.

**Note 2. Liquidity and Going Concern**

For the period from December 30, 2024 (inception) to December 31, 2024, the Company has not generated revenue and reported a net loss of $517. As of December 31, 2024, the Company had an aggregate cash of $Nil and a net working capital deficit of $517. These conditions cast substantial doubt on the Company's ability to continue as a going concern.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern even though events and conditions exist that when considered in aggregate raise substantial doubt about the Company's ability to continue as going concern. Management plans to complete the proposed Business Combination (see Note 5) by June 30, 2025. Ongoing operations are dependent upon the Company consummating the proposes Business Combination and if the Company is unsuccessful, operations would cease except for the purpose of liquidating.

As a result of the above, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's ("<u>FASB</u>") Accounting Standards Update ("<u>ASU</u>") 2014-15, *Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern*, management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date these financial statements are available to be issued. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3. Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying financial statements are presented in U.S. dollars which is also the Company's functional currency and have been prepared in accordance with accounting principles generally accepted in the United States of America ("<u>GAAP</u>") and pursuant to the accounting rules and regulations of the SEC. References to GAAP issued by the FASB in these accompanying notes to the financial statements are to the FASB Accounting Standards Codification ("<u>ASC</u>").

***Emerging Growth Company Status***

The Company is expected to be an "emerging growth company", as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "<u>Securities Act</u>"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "<u>JOBS Act</u>"). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, the Company will not be subject to the same implementation timeline for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of the Company's financial statements to those of other public companies more difficult.

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**ROTH CH HOLDINGS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

***Use of Estimates***

The preparation of the accompanying financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate is the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

There were no significant estimates for the period from December 30, 2024 (inception) to December 31, 2024.

***Cash and Cash Equivalents***

The Company considers all short-term investments with an original maturity date of three months or less when purchased to be cash equivalents. The Company did not have any cash or cash equivalents as of December 31, 2024.

***Net Loss Per Share***

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including preferred stock and convertible notes, to the extent dilutive. There were not potential diluted common stock equivalents for the period from December 30, 2024 (inception) to December 31, 2024.

***Income taxes***

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and the measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

**Note 4. Stockholder's Deficit**

***Common stock –*** The Company is authorized to issue 1,000 shares of common stock with $0.0001 par value. As of December 31, 2024, there was 1,000 shares of common stock issued and outstanding. Each share of common stock entitles the holder to one vote.

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**ROTH CH HOLDINGS, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**FOR THE PERIOD FROM DECEMBER 30, 2024 (INCEPTION) TO DECEMBER 31, 2024**

**Note 5. Subsequent events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial statements are issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in these unaudited financial statements.

On January 28, 2025, the Company, entered into that certain Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>"), by and among the Company, Roth CH, Roth CH Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Roth CH ("<u>Merger Sub</u>"), and SharonAI Inc., a Delaware corporation (the "<u>Target</u>").

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**ROTH CH ACQUISITION CO.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | **(Audited)** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $16083 | $6738 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 1875 | 7500 |
| &nbsp;&nbsp;&nbsp;Short-term prepaid insurance | 3333 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Assets** | 21291 | 14238 |
| **TOTAL ASSETS** | $**21291** | $**14238** |
| **LIABILITIES AND SHAREHOLDERS' DEFICIT** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $1551314 | $926512 |
| &nbsp;&nbsp;&nbsp;Advances from related party | 256636 |  |
| &nbsp;&nbsp;&nbsp;Promissory note - related party | - | 1109412 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Liabilities** | 1807950 | 2035924 |
| &nbsp;&nbsp;&nbsp;Warrant liabilities | 1335000 | 222500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **3142950** | **2258424** |
| **Commitments and Contingencies (Note 6)** |  |  |
| **SHAREHOLDERS' DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Preference shares, $0.0001 par value; 1,000,000 shares authorized; no issued or outstanding | **-** | **-** |
| &nbsp;&nbsp;&nbsp;Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 45,203,220 and 5,836,553 shares issued or outstanding at September 30, 2025 and December 31, 2024, respectively | 4521 | 584 |
| &nbsp;&nbsp;&nbsp;Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 75,000 shares issued and outstanding at September 30, 2025 and December 31, 2024 | 7 | 7 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 7769174 | 6592111 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (10895361) | (8836888) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Deficit** | **(3121659)** | **(2244186)** |
| **LIABILITIES AND SHAREHOLDERS' DEFICIT** | $**21291** | $**14238** |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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**ROTH CH ACQUISITION CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Formation and operating costs | $240703 | $59858 | $945973 | $514632 |
| &nbsp;&nbsp;&nbsp;**Loss from operations** | **(240703)** | **(59858)** | **(945973)** | **(514632)** |
| Other (expense) income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | (467250) |  | (1112500) | 529550 |
| &nbsp;&nbsp;&nbsp;Interest income on cash and marketable securities held in Trust Account | - | - | - | 435437 |
| &nbsp;&nbsp;&nbsp;Other (expense) income, net | (467250) | - | (1112500) | 964987 |
| &nbsp;&nbsp;&nbsp;**Net (loss) income** | $**(707953)** | $**(59858)** | $**(2058473)** | $**450355** |
| Basic and diluted weighted average shares outstanding, Class A redeemable ordinary shares | - | - | - | 1051884 |
| **Basic and diluted net (loss) income per share, Class A redeemable ordinary shares** | $**-** | $**-** | $**-** | $**0.07** |
| Basic and diluted weighted average shares outstanding, Class A and B non-redeemable ordinary shares | 45278220 | 5911553 | 41817414 | 5852352 |
| **Basic and diluted net (loss) income per share, Class A and B non-redeemable ordinary shares** | $**(0.02)** | $**(0.01)** | $**(0.05)** | $**0.07** |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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**ROTH CH ACQUISITION CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT**

**(Unaudited)**

**FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | | | |
|  | **Class A** | **Class A** | **Class B** | **Class B** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Shareholders'**<br>**Deficit** |
| **Balance — December 31, 2024** | **5836553** | $**584** | **75000** | $**7** | $**6592111** | $**(8836888)** | $**(2244186)** |
| Conversion of Note payable (Note 3) | 39366667 | 3937 |  |  | 1177063 |  | 1181000 |
| Net loss | - | - | - | - | - | (1276511) | (1276511) |
| **Balance — March 31, 2025** | **45203220** | **4521** | **75000** | **7** | **7769174** | **(10113399)** | **(2339697)** |
| Net loss | - | - | - | - | - | (74009) | (74009) |
| **Balance — June 30, 2025** | **45203220** | **4521** | **75000** | **7** | **7769174** | **(10187408)** | **(2413706)** |
| Net loss | - | - | - | - | - | (707953) | (707953) |
| **Balance — September 30, 2025** | **45203220** | $**4521** | **75000** | $**7** | $**7769174** | $**(10895361)** | $**(3121659)** |

---

**FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | | | |
|  | **Class A** | **Class A** | **Class B** | **Class B** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Shareholders'**<br>**Deficit** |
| **Balance — December 31, 2023** | **5675000** | $**568** | **75000** | $**7** | $**7107564** | $**(8955953)** | $**(1847814)** |
| Remeasurement of Class A ordinary shares subject to redemption |  |  |  |  | (485713) |  | (485713) |
| Net income | - | - | - | - | - | 279184 | 279184 |
| **Balance — March 31, 2024 (unaudited)** | **5675000** | **568** | **75000** | **7** | **6621851** | **(8676769)** | **(2054343)** |
| Reclassification of Class A Redeemable Shares | 161553 | 16 |  |  | (16) |  |  |
| Remeasurement of Class A ordinary shares subject to redemption |  |  |  |  | (29724) |  | (29724) |
| Net income | - | - | - | - | - | 231029 | 231029 |
| **Balance — June 30, 2024 (unaudited)** | **5836553** | **584** | **75000** | **7** | **6592111** | **(8445740)** | **(1853038)** |
| Net loss | - | - | - | - | - | (59858) | (59858) |
| **Balance — September 30, 2024 (unaudited)** | **5836553** | $**584** | **75000** | $**7** | $**6592111** | $**(8505598)** | $**(1912896)** |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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**ROTH CH ACQUISITION CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| **Cash Flows from Operating Activities:** |  |  |
| Net (loss) income | $(2058473) | $450355 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income on cash and marketable securities held in Trust Account |  | (435437) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | 1112500 | (529550) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 5625 | 31766 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid insurance | (3333) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 624802 | 165792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(318879)** | **(317074)** |
| **Cash Flows from Investing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Investment of cash into Trust Account |  | (327410) |
| &nbsp;&nbsp;&nbsp;Cash withdrawn from Trust Account for working capital |  | 100000 |
| &nbsp;&nbsp;&nbsp;Cash withdrawn from Trust Account in connection with redemption |  | 23994878 |
| &nbsp;&nbsp;&nbsp;Trust receivable | - | 147410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by Investing activities** | **-** | **23914878** |
| **Cash Flows from Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from promissory note – related party | 71588 | 426904 |
| &nbsp;&nbsp;&nbsp;Advances from related party | 256636 |  |
| &nbsp;&nbsp;&nbsp;Redemption of ordinary shares | - | (23994878) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by (used in) financing activities** | **328224** | **(23567974)** |
| **Net Change in Cash** | **9345** | **29830** |
| Cash – Beginning | 6738 | 13755 |
| **Cash – Ending** | $**16083** | $**43585** |
| **Non-cash investing and financing activities** |  |  |
| Re-measurement of Class A ordinary shares subject to possible redemption amount | $- | $515437 |
| Conversion of promissory note – related party | $(1181000) | $- |

---

*The accompanying notes are an integral part of these condensed consolidated financial statements.*

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**ROTH CH ACQUISITION CO.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER 30, 2025**

**(Unaudited)**

**Note 1 — Description of Organization and Business Operations**

Roth CH Acquisition Co. (the "<u>Company</u>") is a blank check company incorporated as a Cayman Islands exempted company on April 20, 2021 with the name TKB Critical Technologies 1. The Company changed its name on September 7, 2023 to Roth CH Acquisition Co. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the "<u>initial business combination</u>"). The Company has two wholly-owned subsidiaries that were created on December 30, 2024, Roth CH Holdings, Inc., a Delaware corporation ("<u>Domestication Sub</u>") and Roth CH Merger Sub Inc., a Delaware corporation ("<u>Merger Sub</u>" and, together with Domestication Sub, the "<u>Merger Subs</u>").

The Company is not limited to a particular industry or geographic location for purposes of consummating an initial business combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2025, the Company had not commenced any operations. All activity for the period from April 20, 2021 (inception) through September 30, 2025, relates to the Company's formation and its initial public offering (the "<u>IPO</u>"), which is described below and, subsequent to the IPO, identifying a target company for an initial business combination. The Company will not generate any operating revenues until after the completion of the initial business combination, at the earliest. The Company generated non-operating income from the marketable securities held in the Trust Account up to the termination of the Trust Account (defined below).

***Liquidity and Going Concern***

As of September 30, 2025, the Company had $16,083 cash and a working capital deficit of $1,786,659. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company expects that it will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors or third parties. The Company's officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company's working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company assessed going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Codification ("<u>ASC</u>") Topic 205-40, "Basis of Presentation – Going Concern". Management has determined that the liquidity condition raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities.

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***Risks and Uncertainties***

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization ("<u>NATO</u>") deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the above-mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Company's search for an initial business combination and any target business with which the Company may ultimately consummate an initial Business Combination.

**Note 2 — Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying unaudited condensed financial statements as of September 30, 2025 have been prepared in accordance with U.S. GAAP for interim financial information and Article 8 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The interim results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the period ending December 31, 2025 or for any future period.

***Emerging Growth Company***

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "<u>JOBS Act</u>"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's condensed financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

***Use of Estimates***

The preparation of the condensed financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available. Accordingly, the actual results could differ significantly from those estimates.

***Cash and Cash Equivalents***

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $16,083 and $6,738 of operating cash as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the Company had no cash equivalents.

***Derivative Financial Instruments***

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging." For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

***Warrant Liabilities***

The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("<u>ASC 480</u>") and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgement, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

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For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. See Note 7 for valuation methodology of warrants.

***Fair Value of Financial Instruments***

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurement" ("<u>ASC 820</u>"), approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature, except warrant liabilities.

***Fair Value Measurements***

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

***Income Taxes***

The Company follows the asset and liability method of accounting for income taxes under ASC 740, "Income Taxes" ("<u>ASC 740</u>"). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the condensed financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2025 and December 31, 2024. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

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There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with federal income tax regulations, income taxes are not levied on the Company, but rather on the individual owners. United States ("<u>U.S.</u>") taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive foreign investment company. Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time.

***Net (Loss) Income Per Ordinary Share***

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net (loss) income per ordinary share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of ordinary shares. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income per share does not consider the effect of the warrants issued in connection with the (i) IPO and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 22,250,000 Class A ordinary shares in the aggregate. As of September 30, 2025 and 2024, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company.

The following table reflects the calculation of basic and diluted net (loss) income per ordinary share (in dollars, except per share amounts):

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** | **2024** | **2024** |
|  | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** |
| Basic and diluted net (loss) income per common share |  |  |  |  |  |  |  |  |
| Numerator: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allocation of net (loss) income, as adjusted | $- | $(707953) | $- | $(59858) | $- | $(2058473) | $68613 | $381742 |
| Denominator: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted weighted average common shares outstanding | - | 45278220 | - | 5911553 | - | 41817414 | 1051884 | 5852352 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted net (loss) income per common share | $- | $(0.02) | $- | $(0.01) | $- | $(0.05) | $0.07 | $0.07 |

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***Related Parties***

Parties, which can be a corporation or an individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

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***Concentration of Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. The Company has not experienced losses on this account.

***Recent Accounting Standards***

*Recently Issued Accounting Pronouncements Not Yet Adopted*

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the impacts of adoption of this ASU.

The Company's management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

**Note 3** — **Related Party Transactions**

***Promissory Note – Related Party***

On July 1, 2023 the Company entered into a promissory note with the Buyers for up to an aggregate of $1,000,000 (the "<u>2023 Promissory Note</u>"). The 2023 Promissory Note is non-interest bearing and payable upon the earlier of the date on which the Company consummates an initial business combination, the liquidation of the Company, or October 29, 2024. The Note does not bear any interest. On August 8, 2024, the Company amended the terms of the 2023 Promissory Note to increase the aggregate principal amount that may be borrowed to $2,000,000 and to extend the maturity to June 30, 2025.

On January 24, 2025, the Company amended and restated its 2023 Promissory Note, (the "<u>Convertible Promissory Note</u>") in favor of certain shareholders of the Company to permit its conversion into Class A ordinary shares of Company, at any time, at the option of the representative of the noteholders based upon the current trading price. Subsequent to the execution of the Convertible Promissory Note, on January 24, 2025, the representative provided notice that it intended to convert the existing principal balance of the Convertible Promissory Note in the amount of $1,181,000 into 39,366,667 Class A ordinary shares of the Company. As of September 30, 2025 and December 31, 2024, there was $0 and $1,109,412 amounts outstanding under the 2023 Promissory Note, respectively.

***Advances from related party***

As of September 30, 2025 and December 31, 2024, the Sponsor advanced the Company $256,636 and $0, respectively included in advances from related party in the accompanying condensed balance sheet.

**Note 4 — Shareholders' Deficit**

**Preference Shares —** The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company's board of directors. At September 30, 2025 and December 31, 2024, there were no preference shares issued or outstanding.

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**Class A Ordinary Shares —** The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company's Class A ordinary shares are entitled to one vote for each share. At September 30, 2025 and December 31, 2024, there were 45,203,220 and 5,836,553 Class A ordinary shares issued and outstanding, respectively.

**Class B Ordinary Shares —** The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. At September 30, 2025 and December 31, 2024, there were 75,000 Class B ordinary shares issued and outstanding.

Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders and holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law; provided that only holders of Class B ordinary shares will have the right to vote on the appointment of directors prior to or in connection with the completion of the initial business combination.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of an initial business combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of an initial business combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the IPO plus all Class A ordinary shares and equity-linked securities issued or deemed issued by the Company in connection with or in relation to the consummation of the initial business combination, excluding any forward purchase securities, any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the Sponsor upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.

**Note 5 — Warrant Liabilities**

The Company accounts for the 22,250,000 warrants that were issued in the IPO (representing 11,500,000 Public Warrants and 10,750,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The warrants do not meet the criteria to be considered indexed to the Company's stock due to settlement provisions that result in holders of warrants receiving variable settlement amounts determined by the reference table. Additionally, an event that is not within the entity's control could require net cash settlement, thus precluding equity classification. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company's statement of operations.

**Warrants** — Public Warrants may only be exercised for a whole number of Class A ordinary shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Accordingly, unless holders purchase at least two Units, they will not be able to receive or trade a whole warrant. The Public Warrants will become exercisable 30 days after the completion of an initial business combination.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrant will be exercisable, and the Company will not be obligated to issue any Class A ordinary shares upon exercise of a Public Warrant unless the Class A ordinary shares issuable upon such Public Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrants.

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The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of an initial business combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement filed in connection with its IPO or a new registration statement covering registration under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of an initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Public Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a "covered security" under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the 60<sup>th</sup> day after the closing of an initial business combination, Public Warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Public Warrants on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

*Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.* Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.01 per warrant;

● upon not less than 30 days' prior written notice of redemption to each warrant holder; and

● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.10 per warrant;

● upon a minimum of 30 days' prior written notice of redemption to each warrant holder; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary share;

● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $10.00 per share (as adjusted per share sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company send the notice of redemption to the warrant holders; and

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● if the last reported sale price of the Class A ordinary share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities (excluding the forward purchase securities) for capital raising purposes in connection with the closing of an initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company's board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the "<u>Newly Issued Price</u>"), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial business combination on the date of the consummation of an initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates an initial business combination (such price, the "<u>Market Value</u>") is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00" and "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00" will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00" will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or saleable until 30 days after the completion of an initial business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder's option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of Class A ordinary shares as described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00"). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.

**Note 6 — Commitments and Contingencies**

***Broker Dealer Agreements***

The Company entered into seven broker dealer agreements through September 30, 2025, for the purposes of identifying a target company ("<u>Target</u>") in connection with the Company's initial business combination. While the terms of these agreements vary, each agreement reflects that the broker dealer (the "<u>Finder</u>") will be entitled to a fee if they identify potential targets with which the Company completes a business combination. As of September 30, 2025 and December 31, 2024, the Company had not accrued any amounts related to any broker dealer agreements. None of the Finders are entitled to any fee.

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***Consulting Agreements***

The Company entered into nineteen consulting agreements through September 30, 2025.

With respect to seventeen of the nineteen consulting agreements, during the term of each agreement, the consultant ("<u>Consultant</u>") will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. Upon closing of an initial business combination, the Company will pay the Consultant a base fee of $350,000. In lieu of, and not in addition to the base fee, the Company will pay a bonus fee of $1,000,000 if the Company and the Consultant mutually determine and agree that the Consultant will provide advice or services that are of a different kind than those contemplated in the agreement. In lieu of and not in addition to the base fee and bonus fee, the Company will pay to the Consultant an additional fee equal to 0.5% of the pre-money equity value of the Target if the Company and the Consultant mutually determine and agree that the Consultant provided, or will provide, material support in connection with the evaluation, negotiation, execution or marketing of an initial business combination that is ultimately consummated by the Company. Payment to the Consultant is dependent upon the closing of an initial business combination.

On August 3, 2022, the Company entered into a consulting agreement. During the term of this agreement, the Consultant will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. As consideration for the services performed by the Consultant during the term of the agreement, upon the closing of an initial business combination, the Company shall pay to the Consultant a fee equal to one percent (1%) of the pre-money equity value of the Target, as stated in the Agreement and Plan of Merger executed between the Company and the Target (which such pre-money equity value shall be determined in a manner consistent with disclosures set forth in the proxy statement/prospectus filed in connection with such initial business combination). Payment to the Consultant is dependent upon the closing of an initial business combination.

On October 25, 2022, the Company entered into a consulting agreement. During the term of this agreement, the consultant ("<u>Consultant</u>") will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. In consideration for the services performed by the Consultant during the term, upon the closing of an initial business combination, the Company shall pay to the Consultant, in shares at close, 100,000 shares of the surviving entity.

As of September 30, 2025 and December 31, 2024, no work has been performed related to any of the aforementioned consulting agreements and thus the Company did not accrue any amounts related to these agreements.

**Business Combination Agreement**

On January 28, 2025, the Company, Roth CH Holdings, Inc. (the "<u>Domestication Sub</u>"), Roth CH Merger Sub, Inc. (the "<u>Merger Sub</u>") and SharonAI Inc, a Delaware Corporation (the "<u>Target</u>") entered into the Business Combination Agreement, pursuant to which, subject to the terms and conditions set forth therein, (a) Roth shall continue out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation by means of a merger (the "<u>Domestication Merger</u>") of Roth with and into Domestication Sub, with the Domestication Sub as the surviving company (the "<u>Domesticated Parent</u>"), (b) upon the Domestication Merger, Domesticated Parent shall change its name to "SharonAI Holdings Inc." and, thereafter, (c) the Merger Sub shall be merged with and into SharonAI (together, the "<u>Business Combination</u>"), with SharonAI as the surviving company (the "<u>Surviving Corporation</u>"). The Surviving Corporation shall become a wholly-owned subsidiary of the Domesticated Parent.

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Pursuant to the terms of the Business Combination Agreement, upon the consummation of the Business Combination on the Closing Date:

● Each share of SharonAI Series A Preferred Stock shall be converted into the right to receive a number of shares of Class B Common Stock equal to the Conversion Ratio.

● Each share of SharonAI Series B Preferred Stock shall, in accordance with SharonAI's charter documents, be converted into the right to receive a number of shares of Roth Class A Ordinary Common Stock equal to: (i) the Conversion Ratio multiplied by (ii) the number of shares of SharonAI Common Stock issuable upon conversion of such share of SharonAI Series B Preferred Stock as of immediately prior to the closing.

● Each SharonAI Stock Right shall be cancelled and converted into a right to acquire, subject to substantially the same terms and conditions as were applicable under such SharonAI Stock Right, the number of shares of Roth Class A Ordinary Common Stock, determined by multiplying the number of shares of SharonAI Common Stock subject to such SharonAI Stock Right as of immediately prior to the effective time by the Conversion Ratio, with an exercise price per share of Roth Class A Ordinary Common Stock, if applicable, equal to (A) the exercise price per share of SharonAI Common Stock of such SharonAI Stock Right divided by (B) the Conversion Ratio (a " <u>Converted Stock Right</u> ").

● The "Conversion Ratio" is the quotient obtained by dividing (a) the number of shares constituting the Aggregate Merger Consideration, which is approximately 560,835,633 shares of Roth Common Stock, by (b) the number of shares constituting the "Aggregate Fully Diluted SharonAI Capital Stock", which means: the sum, without duplication, of (a) all shares of SharonAI Common Stock that are issued and outstanding immediately prior to the Effective Time; plus (b) the aggregate number of shares of SharonAI Series A Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (c) the aggregate number of shares of SharonAI Common Stock issuable upon conversion of all shares of SharonAI Series B Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (d) the aggregate number of shares of SharonAI Common Stock issuable upon full conversion, exercise, settlement or exchange of any SharonAI Stock Rights outstanding immediately prior to the effective time directly or indirectly convertible into or exchangeable or exercisable or potentially settled for shares of SharonAI Common Stock.

On May 23, 2025, the parties to the Business Combination Agreement entered into an Amendment (the "<u>Amendment</u>") to the Business Combination Agreement, pursuant to which the Closing Date was extended from July 31, 2025 to October 31, 2025.

On October 14, 2025, the parties to the Business Combination Agreement entered into an Amendment (the "<u>Second Amendment</u>") to the Business Combination Agreement, pursuant to which the Closing Date was extended to December 31, 2025.

*Sponsor Support Agreement* 

In connection with the execution of the Business Combination Agreement, the Company and the officers and directors of the Company, the Target and the Sponsor entered into a support agreement (the "<u>Sponsor Support Agreement</u>") pursuant to which the Sponsor and the officers and directors of the Company have agreed to vote all shares of the common stock beneficially owned by them, including any additional shares they acquire ownership of or the power to vote: (i) in favor of the Merger and related transactions, (ii) against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions, and (iii) in favor of an extension of the period of time the Company is afforded to consummate an initial business combination.

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*Company Support Agreement* 

In connection with the execution of the Business Combination Agreement, the Company, the Target and certain stockholders of the Target entered into a support agreement, pursuant to which such Target stockholders have agreed to vote all common and preferred stock of the Target beneficially owned by them, including any additional shares of the Target they acquire ownership of or the power to vote, in favor of the Merger and related transactions and against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions.

*Form of Lock-Up Agreement*

In connection with the Closing, certain key Target stockholders will each agree, subject to certain customary exceptions, not to (i) offer, sell contract to sell, pledge or otherwise dispose of, directly or indirectly, any Lockup Shares (as defined below), (ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise or engage in any short sales or other arrangement with respect to the Lock-Up Shares or (iv) publicly announce any intention to effect any transaction specified in clause (i) or (ii): (a) with respect to fifty (50%) percent of the Company Common Shares owned by Holder ninety (90) days after the Closing Date and (b) with respect to the remaining fifty (50%) percent of the Company Common Shares owned by Holder one hundred and eighty (180) days after the Closing Date. The term "Lockup Shares" mean the Company Common Shares owned by such Holder (or to be acquired by such Holder in connection with the Business Combination Agreement) as set forth on Schedule I to the Lock-Up Agreement.

*Form Registration Rights Agreement*

At the Closing, the Company will enter into a registration rights agreement (the "<u>Registration Rights Agreement</u>") with certain existing stockholders of the Company and the Target (the "<u>Holders</u>") with respect to their shares of the Company acquired before or pursuant to the Merger, and including the shares issuable on conversion of the warrants issued to the Sponsor in connection with the Company's initial public offering and any shares issuable on conversion of preferred stock or loans. Pursuant to the Registration Rights Agreement, within thirty (30) days of the Closing, the Company shall file with the SEC a registration statement for a shelf registration on Form S-1 or a Registration Statement for a Shelf Registration on Form S-3 (the "<u>Form S-3 Shelf</u>"), if the Company is then eligible to use a Form S-3 Shelf, in each case, covering the resale of all the Registrable Securities on a delayed or continuous basis as permitted by Rule 415 under the Securities Act and shall use its reasonable best efforts to have such Shelf declared effective as soon as practicable after the filing thereof, but no later than the seventy-fifth (75<sup>th</sup>) calendar day following the Filing Date; provided that the Company shall have the Shelf declared effective within ten (10) business days after the date the Company is notified by the staff of the SEC that the Shelf will not be reviewed or will not be subject to further review by the SEC. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of such Holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by filing a subsequent shelf registration statement and cause the same to become effective as soon as practicable after such filing and such subsequent shelf registration statement shall be subject to the terms hereof; <u>provided</u>, <u>however</u>, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for each of the Holders. In addition, the Holders will have certain "piggyback" registration rights that require the Company to include such securities in registration statements that the Company otherwise files. The Registration Rights Agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company's securities. the Company will bear the expenses incurred in connection with the filing of any such registration statements.

**Deferred Legal Fee**

As of September 30, 2025 and December 31, 2024, the Company had $234,849, in deferred legal fees, which are included in accounts payable and accrued expenses on the Company's accompanying balance sheets.

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**Note 7 — Fair Value Measurements**

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company's financial assets and liabilities reflects management's estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

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| | |
|:---|:---|
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
| Level 3: | Unobservable inputs based on the Company's assessment of the assumptions that market participants would use in pricing the asset or liability. |

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The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

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| | | | |
|:---|:---|:---|:---|
| **Description** | **Level** | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Liabilities: |  |  |  |
| Warrant liability – Public Warrants | 2 | $690000 | $115000 |
| Warrant liability – Private Placement Warrants | 2 | $645000 | $107500 |

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The warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the statements of operations.

As of September 30, 2025, the aggregate values of the Public Warrants and Private Placement Warrants were $690,000 and $645,000, respectively, based on a fair value of $0.06 per warrant. As of December 31, 2024, the aggregate values of the Public Warrants and Private Placement Warrants were $115,000 and $107,500, respectively, based on a fair value of $0.01 per warrant.

The following table presents the changes in the fair value of warrant liabilities:

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| | | | |
|:---|:---|:---|:---|
|  | **Private<br> Placement** | **Public** | **Warrant<br> Liabilities** |
| **Fair value as of January 1, 2025** | $**107500** | $**115000** | $**222500** |
| &nbsp;&nbsp;&nbsp;Change in fair value | 430000 | 460000 | 890000 |
| **Fair value as of March 31, 2025** | **537500** | **575000** | **1112500** |
| &nbsp;&nbsp;&nbsp;Change in fair value | (118250) | (126500) | (244750) |
| **Fair value as of June 30, 2025** | **419250** | **448500** | **867750** |
| &nbsp;&nbsp;&nbsp;Change in fair value | 225750 | 241500 | 467250 |
| **Fair value as of September 30, 2025** | $**645000** | $**690000** | $**1335000** |

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| | | | |
|:---|:---|:---|:---|
|  | **Private<br> Placement** | **Public** | **Warrant<br> Liabilities** |
| **Fair value as of January 1, 2024** | $**268750** | $**287500** | $**556250** |
| &nbsp;&nbsp;&nbsp;Change in fair value | (117175) | (125350) | (242525) |
| **Fair value as of March 31, 2024** | **151575** | **162150** | **313725** |
| &nbsp;&nbsp;&nbsp;Change in fair value | (138675) | (148350) | (287025) |
| **Fair value as of June 30, 2024** | **12900** | **13800** | **26700** |
| &nbsp;&nbsp;&nbsp;**Change in fair value** | **-** | **-** | **-** |
| **Fair value as of September 30, 2024** | $**12900** | $**13800** | $**26700** |

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The Company established the initial fair value for the warrants on October 29, 2021, the date of the consummation of the Company's IPO. The Company used a Black-Scholes model to value the warrants. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant will be used as the fair value as of each reporting period. The subsequent measurements of the Private Placement Warrants are classified as Level 2 due to the use of an observable market quote for a similar asset in an active market under the ticker USCTW. As of September 30, 2025 and December 31, 2024, the Public Warrants have detached from the Units, and the closing price is utilized as the fair value.

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no other transfers to/from Levels 1, 2, and 3 during the period ended September 30, 2025. There was a transfer of $13,800 from level 1 to level 2 during the year ended December 31, 2024 due to insufficient trading volume.

**Note 8 — Segment Information**

ASC Topic 280, "Segment Reporting," establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company's chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company's chief operating decision maker ("<u>CODM</u>") has been identified as the Chief Financial Officer who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company's performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:

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| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Cash | $16083 | $6738 |

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| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,<br> 2025** | **For the<br> Nine Months Ended<br> September 30,<br> 2025** |
| General and administrative expenses | $240703 | $945973 |

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General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.

All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.

**Note 9 — Subsequent Events**

Management has evaluated the impact of subsequent events through the date that the condensed financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

On October 14, 2025, the parties to the Business Combination Agreement entered into an Amendment (the "<u>Second Amendment</u>") to the Business Combination Agreement, pursuant to which the Closing Date was extended to December 31, 2025.

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and Board of Directors of

Roth CH Acquisition Co.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of Roth CH Acquisition Co. (the "<u>Company</u>") as of December 31, 2024 and 2023, the related statements of operations, changes in shareholders' deficit and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph – Going Concern** 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company's business plan is dependent on the completion of a business combination and the Company's cash and working capital as of December 31, 2024 are not sufficient to complete its planned activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("<u>PCAOB</u>") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company's auditor since 2021.

Morristown, NJ<br>March 27, 2025

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**ROTH CH ACQUISITION CO.**

**BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $6738 | $13755 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 7500 | 38141 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Assets** | 14238 | 51896 |
| &nbsp;&nbsp;&nbsp;Trust Account receivable |  | 147410 |
| &nbsp;&nbsp;&nbsp;Cash and marketable securities held in Trust Account | - | 23332031 |
| **TOTAL ASSETS** | $**14238** | $**23531337** |
| **LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $926512 | $660952 |
| &nbsp;&nbsp;&nbsp;Promissory note - related party | 1109412 | 682508 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Liabilities** | 2035924 | 1343460 |
| &nbsp;&nbsp;&nbsp;Warrant liabilities | 222500 | 556250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **2258424** | **1899710** |
| **Commitments and Contingencies (Note 8)** |  |  |
| Class A ordinary shares subject to possible redemption; $0.0001 par value; 200,000,000 shares authorized; 0 and 2,119,236 shares issued and outstanding at redemption value of $0 and $11.08 per share at December 31, 2024 and 2023, respectively |  | 23479441 |
| **SHAREHOLDERS' DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Preference shares, $0.0001 par value; 1,000,000 shares authorized; no issued or outstanding | **-** | **-** |
| &nbsp;&nbsp;&nbsp;Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 5,836,553 and 5,675,000 shares issued or outstanding (excluding 0 and 2,119,236 shares subject to possible redemption) at December 31, 2024 and 2023, respectively | 584 | 568 |
| &nbsp;&nbsp;&nbsp;Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 75,000 shares issued and outstanding at December 31, 2024 and 2023 | 7 | 7 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 6592111 | 7107564 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (8836888) | (8955953) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Deficit** | **(2244186)** | **(1847814)** |
| **LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT** | $**14238** | $**23531337** |

---

*The accompanying notes are an integral part of the financial statements.*

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**ROTH CH ACQUISITION CO.**

**STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Years Ended<br> December 31,** | **For the<br> Years Ended<br> December 31,** |
|  | **2024** | **2023** |
| General and administrative expenses | $650122 | $4416661 |
| &nbsp;&nbsp;&nbsp;**Loss from operations** | **(650122)** | **(4416661)** |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | 333750 | (73425) |
| &nbsp;&nbsp;&nbsp;Interest income on cash and marketable securities held in Trust Account | 435437 | 2509662 |
| &nbsp;&nbsp;&nbsp;Forgiveness of Debt |  | 4692176 |
| &nbsp;&nbsp;&nbsp;Commitment fee | - | (125000) |
| &nbsp;&nbsp;&nbsp;Other income, net | 769187 | 7003413 |
| &nbsp;&nbsp;&nbsp;**Net income** | $**119065** | $**2586752** |
| Basic and diluted weighted average shares outstanding, Class A redeemable ordinary shares | 787476 | 5323369 |
| **Basic and diluted net income per share, Class A redeemable ordinary shares** | $**0.02** | $**0.23** |
| Basic and diluted weighted average shares outstanding, Class A and B non-redeemable ordinary shares | 5851522 | 5750000 |
| **Basic and diluted net income per share, Class A and B non-redeemable ordinary shares** | $**0.02** | $**0.23** |

---

*The accompanying notes are an integral part of the financial statements.*

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**ROTH CH ACQUISITION CO.**

**STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT**

**FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | **Ordinary Shares** | | | |
|  | **Class A** | **Class A** | **Class B** | **Class B** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Shareholders'**<br>**Deficit** |
| **Balance — December 31, 2022** | **-** | $**-** | **5750000** | $**575** | $**-** | $**(10482723)** | $**(10482148)** |
| Conversion of Class B ordinary shares to Class A ordinary shares | 5675000 | 568 | (5675000) | (568) | **-** | **-** | **-** |
| Sale of founder shares and private warrants by sponsor (Note 5) | **-** | **-** | **-** | **-** | 5753 | **-** | 5753 |
| Sale of founder shares and private warrants by sponsor (Note 5) | **-** | **-** | **-** | **-** | (5753) | **-** | (5753) |
| Capital contribution from forgiveness of related party expenses (Note 5) |  |  |  |  | 60556 |  | 60556 |
| Capital contribution from Wejo Assignment and assumption agreement (Note 5) |  |  |  |  | 250000 |  | 250000 |
| Capital contribution from Working Capital Advance (Note 5) | **-** | **-** | **-** | **-** | 250000 | **-** | 250000 |
| Capital contribution from commitment fee (Note 5) |  |  |  |  | 125000 |  | 125000 |
| Reduction of deferred underwriting fee | **-** | **-** | **-** | **-** | 8231688 | **-** | 8231688 |
| Remeasurement of Class A ordinary shares subject to redemption | **-** | **-** | **-** | **-** | (1809680) | (1059982) | (2869662) |
| Net loss | **-** | **-** | **-** | **-** | **-** | 2586752 | 2586752 |
| **Balance — December 31, 2023** | **5675000** | $**568** | **75000** | $**7** | $**7107564** | $**(8955953)** | $**(1847814)** |
| Remeasurement of Class A ordinary shares subject to redemption |  |  |  |  | (515437) |  | (515437) |
| Issuance of Class A ordinary shares | 161553 | 16 |  |  | (16) |  |  |
| Net income | - | - | - | - | **-** | 119065 | 119065 |
| **Balance — December 31, 2024** | **5836553** | $**584** | **75000** | $**7** | $**6592111** | $**(8836888)** | $**(2244186)** |

---

*The accompanying notes are an integral part of the financial statements.*

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**ROTH CH ACQUISITION CO.**

**STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Years Ended<br> December 31,** | **For the<br> Years Ended<br> December 31,** |
|  | **2024** | **2023** |
| **Cash Flows from Operating Activities:** |  |  |
| Net income | $119065 | $2586752 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income on cash and marketable securities held in Trust Account | (435437) | (2509662) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (333750) | 73425 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of debt |  | (4692176) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 125000 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 30641 | 297934 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 265560 | 3263737 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued offering costs | - | (8000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(353921)** | **(862990)** |
| **Cash Flows from Investing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Investment of cash into Trust Account | (327410) | (360000) |
| &nbsp;&nbsp;&nbsp;Cash withdrawn from Trust Account for working capital | 100000 |  |
| &nbsp;&nbsp;&nbsp;Cash withdrawn from Trust Account in connection with redemption | 23994878 | 217525458 |
| &nbsp;&nbsp;&nbsp;Trust receivable | 147410 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by Investing activities** | **23914878** | **217165458** |
| **Cash Flows from Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from promissory note – related party | 426904 | 591508 |
| &nbsp;&nbsp;&nbsp;Advances from related party |  | 341000 |
| &nbsp;&nbsp;&nbsp;Proceeds from Working Capital Advance |  | 250000 |
| &nbsp;&nbsp;&nbsp;Payment of offering costs |  | (70000) |
| &nbsp;&nbsp;&nbsp;Redemption of ordinary shares | (23994878) | (217525458) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | **(23567974)** | **(216412950)** |
| **Net Change in Cash** | **(7017)** | **(110482)** |
| Cash – Beginning | 13755 | 124237 |
| **Cash – Ending** | $**6738** | $**13755** |
| **Non-cash investing and financing activities** |  |  |
| Conversion of advances and short-term promissory notes to long-term promissory notes | $- | $91000 |
| Re-measurement of Class A ordinary shares subject to possible redemption amount | $515437 | $2869662 |
| Deferred underwriting fee payable written-off | $- | $8231688 |
| Forgiveness of debt from related parties | $- | $560556 |

---

*The accompanying notes are an integral part of the financial statements.*

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**ROTH CH ACQUISITION CO.**

**NOTES TO FINANCIAL STATEMENTS**

**DECEMBER 31, 2024**

**Note 1 — Description of Organization and Business Operations**

Roth CH Acquisition Co. (the "<u>Company</u>") is a blank check company incorporated as a Cayman Islands exempted company on April 20, 2021 with the name TKB Critical Technologies 1. The Company changed its name on September 7, 2023 to Roth CH Acquisition Co. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the "<u>initial business combination</u>").

The Company is not limited to a particular industry or geographic location for purposes of consummating an initial business combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2024, the Company had not commenced any operations. All activity for the period from April 20, 2021 (inception) through December 31, 2024, relates to the Company's formation and its initial public offering (the "<u>IPO</u>"), which is described below and, subsequent to the IPO, identifying a target company for an initial business combination. The Company will not generate any operating revenues until after the completion of the initial business combination, at the earliest. The Company generates non-operating income from the marketable securities held in the Trust Account up to the termination of the Trust Account (defined below).

The registration statement for the Company's IPO was declared effective on October 26, 2021 (the "<u>Effective Date</u>"). On October 29, 2021, the Company consummated the IPO of 23,000,000 units (the "<u>Units</u>"), including 3,000,000 Units that were issued pursuant to the underwriters' exercise of their over-allotment option in full, at $10.00 per Unit, generating gross proceeds of $230,000,000, which is discussed in Note 3. Simultaneously with the closing of the IPO, the Company consummated the sale of 10,750,000 Private Placement Warrants (the "<u>Private Placement Warrants</u>") at a price of $1.00 per Private Warrant in a private placement to TKB Sponsor I, LLC (the "<u>Sponsor</u>"), generating proceeds of $10,750,000.

Transaction costs of the IPO amounted to $21,140,059, consisting of $3,850,000 of underwriting discount, $8,800,000 of deferred underwriting discount, $7,748,431 excess fair value of founder shares and $741,628 of offering costs. Of these amounts, $19,774,814 was recorded to additional paid-in capital and $1,365,245 costs related to the warrant liability was expensed immediately using the residual allocation method.

Following the closing of the IPO on October 29, 2021, $234,600,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (the "<u>Trust Account</u>"), located in the United States, which were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of an initial business combination; and (ii) the redemption of any Public Shares (as defined below) properly submitted in connection with a shareholder vote to amend the Company's Amended and Restated Memorandum and Articles of Association ("<u>Articles</u>"); and (iii) the redemption of the Company's Public Shares if the Company is unable to complete the initial business combination by October 29, 2024 (or any extended period of time that the Company may have to consummate an initial business combination as a result of an amendment to its Articles) (the "<u>Combination Period</u>"). On April 29, 2024, pursuant to the Third Amendment, as described below, the Trust Account was voluntarily liquidated and the provisions in the Articles requiring that an initial business combination be completed within the Combination Period and other SPAC-related provisions (collectively, the "SPAC Provisions") were eliminated.

Prior to the effectiveness of the Third Amendment, the Company's management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating an initial business combination. There is no assurance that the Company will be able to complete an initial business combination successfully. Prior to the effectiveness of the Third Amendment, the Company was required to complete an initial business combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company's signing a definitive agreement in connection with its initial business combination and could only complete an initial business combination if the post-transaction company owned or acquired 50% or more of the outstanding voting securities of the target or otherwise acquired an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the "<u>Investment Company Act</u>").

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Prior to the effectiveness of the Third Amendment, the Company was required to provide its holders of the outstanding Public Shares (the "<u>public shareholders</u>") with the opportunity to redeem all or a portion of their Public Shares upon the completion of an initial business combination either (i) in connection with a general meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of an initial business combination or conduct a tender offer will be made by the Company. The public shareholder will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.20 per Public Share initially, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations and which interest shall be net of taxes payable), calculated as of two business days prior to the completion of the initial business combination. There will be no redemption rights upon the completion of an initial business combination with respect to the Company's warrants. In connection with the approval of the Third Amendment to remove the SPAC Provisions, the Company amended the Articles to allow shareholders of the Company to obtain their pro rata distribution of funds held in the Trust Account and also retain ten (10%) percent of their shares upon liquidation of the Trust Account.

On January 10, 2023, the Company, entered into a business combination agreement with Wejo Group Limited, an exempted company limited by shares incorporated under the laws of Bermuda ("<u>Wejo</u>"), and Green Merger Subsidiary Limited, an exempted company incorporated under the laws of the Cayman Islands and a direct, wholly owned subsidiary of Wejo ("<u>Merger Sub 1</u>") and upon execution of a joinder to the business combination agreement, each of Wejo Holdings Limited, an exempted company limited by shares incorporated under the laws of Bermuda and a wholly owned subsidiary of Wejo ("<u>Holdco</u>") and Wejo Acquisition Company Limited, an exempted company limited by shares incorporated under the laws of Bermuda and a wholly owned Subsidiary of Holdco ("<u>Merger Sub 2</u>" and together with Merger Sub 1) (as it may be amended, restated, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>"). On June 25, 2023, the Company, Wejo, Holdco, Merger Sub 1 and Merger Sub 2 entered into that certain Mutual Termination Agreement ("<u>Termination Agreement</u>") pursuant to which the parties mutually agreed to terminate the Business Combination Agreement pursuant to Section 7.1(a) thereof. The Termination Agreement also includes mutual releases of the parties. No party will be required to pay a termination fee as a result of the mutual decision to enter into the Termination Agreement. The termination of the Business Combination Agreement also terminates the Voting Agreement, dated as of January 10, 2023 ("<u>Wejo Voting Agreement</u>") between the Company and certain shareholders of Wejo and the Voting Agreement, dated as of January 10, 2023 (the "<u>Sponsor Voting Agreement</u>") between the Company, Sponsor and Directors, pursuant to the terms of the Wejo Voting Agreement and Sponsor Voting Agreement, respectively.

On January 27, 2023, the Company held an extraordinary general meeting (the "<u>Extraordinary General Meeting</u>"). At the Extraordinary General Meeting, the shareholders approved a proposal (the "<u>Extension Amendment Proposal</u>") to amend the Company's Amended and restated memorandum and articles of association (the "<u>Articles</u>") to extend the date that the Company has to consummate a business combination from January 29, 2023 to June 29, 2023 (the "<u>Extension Amendment</u>"). The shareholders also approved a proposal to amend the Company's Investment Management Trust Agreement, dated as of October 26, 2021, by and between the Company and Continental Stock Transfer & Trust Company as trustee (the "<u>Trust Agreement</u>"), to make a corresponding extension to the date the Company must commence liquidation of the Trust Account from January 29, 2023, to June 29, 2023. In connection with the vote to approve the Extension Amendment Proposal, the holders of 17,533,296 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share, for an aggregate redemption amount of approximately $181.9 million.

On June 25, 2023, the Company, the Sponsor, each independent director of the Company (the "<u>Directors</u>"), and affiliates of Roth Capital Partners and Craig-Hallum Capital Group LLC (the "<u>Buyers</u>") entered into a Securities Transfer Agreement (the "<u>Agreement</u>") pursuant to which Sponsor and the Directors have agreed to sell to Buyers, and Buyers have agreed to purchase from Sponsor and the Directors, an aggregate of 4,312,500 ordinary shares consisting of 4,237,500 Class A ordinary shares and 75,000 Class B ordinary shares and 8,062,500 private placement warrants (together, the "<u>Transferred Securities</u>") for an aggregate purchase price (the "<u>Purchase Price</u>") of $1.00 (the "<u>Transaction</u>"). Following the closing of the Transaction, Sponsor will have certain continuing rights, including a right of first refusal to repurchase the Transferred Securities in certain circumstances as set forth in the Agreement and the right to invest up to 25% of certain financings. The closing of the Transaction is conditioned upon, among other things, (i) the termination of the Business Combination Agreement (as noted above) and the complete release of actual or potential claims or liabilities thereunder, (ii) continued listing of the Company's Class A ordinary shares on Nasdaq, (iii) the waiver by the underwriters of the Company's initial public offering of their rights to deferred underwriting compensation pursuant to the Underwriting Agreement dated as of October 26, 2021, between the Company and Jefferies LLC as representative of the underwriters named therein, and (iv) the occurrence of the Class B Conversion.

On June 26, 2023, the Company entered into a termination agreement (the "<u>Termination Agreement</u>"), pursuant to which the Company terminated the Administrative Services Agreement with Tartavull Klein Blatteis Capital, LLC dated October 26, 2021 and Tartavull Klein Blatteis Capital, LLC forgave and fully discharged all outstanding fees thereunder as of the date of the Closing.

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On June 28, 2023, the Company held an extraordinary general meeting (the "<u>Second Extraordinary General Meeting</u>"). At the Second Extraordinary General Meeting, the shareholders approved a proposal (the "<u>Second Extension Amendment Proposal</u>") to amend the Company's Amended and restated memorandum and articles of association (the "<u>Articles</u>") to extend the date that the Company has to consummate a business combination from June 29, 2023 to October 29, 2024 (the "<u>Extension Amendment</u>"). The shareholders also approved a proposal to amend the Company's Trust Agreement, to make a corresponding extension to the date by which the Trustee is obligated to liquidate the trust account to the later of (A) June 29, 2023 provided that the Company may extend such date, monthly, up to October 29, 2024 (i.e.: 36 months after the closing of the IPO provided that the Sponsor or its designee deposits the Monthly Deposit (as defined below) into the trust account), or (B) such later date as may be approved by the Company's shareholders in accordance with the Company's amended and restated memorandum and articles of association. The term "Monthly Deposit" is defined in the Amendment to mean an amount equal to the lesser of (x) $60,000 or (y) $0.03 per public share multiplied by the number of public shares outstanding. In connection with the vote to approve the Second Extension Amendment Proposal, the holders of 3,347,468 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.64 per share, for an aggregate redemption amount of approximately $35,601,649. These shares were effectively canceled on July 7, 2023.

On each of January 5, 2024, February 6, 2024, and March 6, 2024, the Company deposited an additional $60,000, for an aggregate of $180,000, into the trust extending the date of which the Company has to complete a Business Combination to March 29, 2024.

On February 29, 2024, Gordon Roth resigned as Chief Financial Officer of the Company and the Board appointed Joseph Tonnos as Chief Financial Officer of the Company, effective February 29, 2024. Mr. Roth's decision to resign was not the result of any dispute or disagreement with the Company or any matter relating to the Company's operations, policies or practices.

On April 3, 2024, the Overpayment Amount, as described in Note 8, was deposited back into Trust Account.

On April 15, 2024, Roth CH Acquisition Co. (the "<u>Company</u>") announced that it had notified the Nasdaq Stock Market LLC ("<u>Nasdaq</u>") of its decision to voluntarily delist its Class A Ordinary Shares, Units and Warrants exercisable for one Class A Ordinary Share at an exercise price of $11.50 from the Nasdaq Global Market. The Company filed a Form 25 with the Securities and Exchange Commission (the "<u>SEC</u>") to remove its Class A Ordinary Shares, Units, and Warrants from listing on the Nasdaq Global Market on April 25, 2024 and as a result, the delisting became effective on April 25, 2024. The Company remains subject to the reporting obligations under Sections 13 and 15(d) of the Exchange Act. Following the delisting, the Company has its Class A Ordinary Shares, Units, and Warrants quoted on a market operated by OTC Markets Group Inc. (the "<u>OTC</u>") so that a trading market may continue to exist for such securities.

On April 29, 2024, the shareholders approved the Third Amendment. The Third Amendment reflects the removal of the provisions contained in the Articles that are applicable to special purpose acquisition companies ("SPACs"), including the requirement to redeem and cancel 100% of the Company's Public Shares following distribution of the funds held in the Company's trust account established in connection with the IPO. In connection with the implementation of the Third Amendment, the Company redeemed 90% of the Public Shares and provided each holder their pro rata share of the balance in the Trust Account. The trust liquidation was effective May 15, 2024.

***Liquidity and Going Concern***

As of December 31, 2024, the Company had $6,738 cash and a working capital deficit of $2,021,686. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company expects that it will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors or third parties. The Company's officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company's working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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On April 29, 2024, the shareholders approved the Third Amendment. The Third Amendment reflects the removal of the provisions contained in the Articles that are applicable to SPACs, including the requirement to redeem and cancel 100% of the Company's Public Shares following distribution of the funds held in the Company's trust account established in connection with the IPO. In connection with the implementation of the Third Amendment, the Company redeemed 90% of the Public Shares and provided each holder their pro rata share of the balance in the Trust Account.

The Company assessed going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Codification ("<u>ASC</u>") Topic 205-40, "Basis of Presentation – Going Concern". Management has determined that the liquidity condition raises substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities.

***Risks and Uncertainties***

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization ("<u>NATO</u>") deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the above-mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Company's search for an initial business combination and any target business with which the Company may ultimately consummate an initial Business Combination.

**Note 2 — Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("<u>GAAP</u>") and pursuant to the rules and regulations of the SEC.

***Emerging Growth Company***

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "<u>JOBS Act</u>"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

***Use of Estimates***

The preparation of the financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available. Accordingly, the actual results could differ significantly from those estimates.

***Cash and Cash Equivalents***

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $6,738 and $13,755 of operating cash as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the Company had no cash equivalents.

***Cash and Marketable Securities Held in Trust Account***

Following the closing of the IPO on October 29, 2021, an amount of $234,600,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and may be invested only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Trust Account was intended as a holding place for funds pending the earliest to occur of: (i) the completion of the initial business combination; (ii) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend the Articles (A) to modify the substance or timing of the Company's obligation to redeem 100% of the Public Shares if the Company does not complete the initial business combination within the Combination Period or (B) with respect to any other provision relating to shareholders' rights or pre-initial business combination activity; or (iii) absent an initial business combination within the Combination Period, the return of the funds held in the Trust Account to the public shareholders as part of redemption of the Public Shares. As of December 31, 2024, the Trust account was fully liquidated. As of December 31, 2023, substantially all of the assets held in the money market funds were invested primarily in U.S. Treasury securities.

***Offering Costs Associated with IPO***

Offering costs consisted of legal, accounting and other expenses incurred through the IPO that were directly related to the IPO. Offering costs were allocated to the separable financial instruments issued in the IPO based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred in the statements of operations. Offering costs associated with the Class A ordinary shares issued were initially charged to temporary equity and then accreted to ordinary shares subject to redemption upon the completion of the IPO. Accordingly, on October 29, 2021, offering costs totaled $21,140,059 (consisting of $3,850,000 of underwriting fees, $8,800,000 of deferred underwriting fees, $7,748,431 excess fair value of Founder Shares and $741,628 of actual offering costs, with $1,365,245 included in the statement of operations for the period ending December 31, 2021 as an allocation for the Public Warrants and the Private Placement Warrants, and $19,774,814 included in additional paid-in capital).

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***Derivative Financial Instruments***

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging." For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

***Warrant Liabilities***

The Company accounts for the warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("<u>ASC 480</u>") and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements from equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgement, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. See Note 9 for valuation methodology of warrants.

***Fair Value of Financial Instruments***

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurement" ("<u>ASC 820</u>"), approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature, except warrant liabilities.

***Fair Value Measurements***

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

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***Class A Ordinary Shares Subject to Possible Redemption***

As of December 31, 2024 and 2023, the Company had 5,836,553 and 7,794,236 Class A ordinary shares outstanding, of which zero and 2,119,236 shares are Class A ordinary shares subject to redemption, respectively. The Company accounted for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders' equity. The Company's Class A ordinary shares subject to possible redemption featured certain redemption rights that are considered to be outside of the Company's control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2024 and 2023, zero and 2,119,236 of Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders' deficit section of the Company's balance sheets, respectively.

The Company recognized changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.

As of December 31, 2024 and 2023, the Class A ordinary shares subject to possible redemption, classified as temporary equity in the balance sheets, are reconciled in the following table:

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| | | |
|:---|:---|:---|
|  | **Shares** | **Amount** |
| **Class A ordinary shares subject to possible redemption, December 31, 2022** | **23000000** | $**237987827** |
| **Less:** |  |  |
| &nbsp;&nbsp;&nbsp;Redemptions on January 31, 2023 | (17533296) | (181923809) |
| &nbsp;&nbsp;&nbsp;Redemptions on June 28, 2023 | (3347468) | (35601649) |
| Plus: |  |  |
| &nbsp;&nbsp;&nbsp;Trust Account receivable (Note 8) |  | 147410 |
| &nbsp;&nbsp;&nbsp;Re-measurement of carrying value to redemption value |  | 2869662 |
| **Class A ordinary shares subject to possible redemption at December 31, 2023** | **2119236** | **23479441** |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Redemptions | (1957683) | (23994878) |
| &nbsp;&nbsp;&nbsp;Reclassification of Class A redeemable shares | (161553) |  |
| Plus: |  |  |
| &nbsp;&nbsp;&nbsp;Re-measurement of carrying value to redemption value | - | 515437 |
| **Class A ordinary shares subject to possible redemption at December 31, 2024** | **-** | $**-** |

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***Income Taxes***

The Company follows the asset and liability method of accounting for income taxes under ASC 740, "Income Taxes" ("<u>ASC 740</u>"). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2024 and 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

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There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with federal income tax regulations, income taxes are not levied on the Company, but rather on the individual owners. United States ("<u>U.S.</u>") taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive foreign investment company. Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time.

***Net Income Per Ordinary Share***

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net (loss) income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of ordinary shares. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income per share does not consider the effect of the warrants issued in connection with the (i) IPO and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 22,250,000 Class A ordinary shares in the aggregate. As of December 31, 2024 and 2023, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company.

The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** | **For the Years Ended December 31,** |
|  | **2024** | **2024** | **2023** | **2023** |
|  | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** | **Class A<br> redeemable** | **Class A and B<br> non-redeemable** |
| *Basic and diluted net income per ordinary share* |  |  |  |  |
| Numerator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Allocation of net income, as adjusted | $14123 | $104942 | $1243545 | $1343207 |
| Denominator: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted weighted average ordinary shares outstanding | 787476 | 5851522 | 5323369 | 5750000 |
| Basic and diluted net income per ordinary share | $**0.02** | $**0.02** | $**0.23** | $**0.23** |

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***Related Parties***

Parties, which can be a corporation or an individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

***Concentration of Credit Risk***

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. The Company has not experienced losses on this account.

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***Recent Accounting Standards***

In August 2020, the FASB issued ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("<u>ASU 2020-06</u>"), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company's financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker ("<u>CODM</u>"), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on January 1, 2024. Adoption of the ASU did not impact the Company's financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

**Note 3** — **Initial Public Offering**

In connection with the Company's IPO, on October 29, 2021, the Company sold 23,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share ("<u>Public Shares</u>") and one-half of one warrant ("<u>Public Warrants</u>"). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).

An aggregate of $10.20 per Unit sold in the IPO was held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. As of October 29, 2021, $234,600,000 of the IPO proceeds and proceeds from the sale of the Private Placement Warrants was held in the Trust Account, representing an overfunding of the Trust Account of 102.0% of the IPO size.

Transaction costs as of the IPO date amounted to $21,140,059, consisting of $3,850,000 of underwriting discount, $8,800,000 of deferred underwriting discount, $7,748,431 excess fair value of Founder Shares and $741,628 of offering costs.

**Note 4** — **Private Placement**

Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 10,750,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant ($10,750,000 in the aggregate). Each Private Placement Warrant is exercisable for one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account.

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**Note 5** — **Related Party Transactions**

***Founder Shares***

In April 2021, the Sponsor purchased 5,750,000 shares of the Company's Class B ordinary shares (the "<u>Founder Shares</u>") for an aggregate purchase price of $25,000. The Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters' overallotment option was not exercised in full or in part, so that the number of Founder Shares collectively represents 20% of the Company's issued and outstanding ordinary shares after the IPO. Simultaneously with the closing of the IPO, the underwriters exercised the over-allotment option in full. Accordingly, 750,000 Founder Shares are no longer subject to forfeiture.

The Sponsor agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion of an initial business combination or (B) subsequent to an initial business combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after an initial business combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Company's shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

On October 8, 2021, the Sponsor entered into agreements with certain funds managed by Apollo Capital Management, L.P. (collectively, "<u>Apollo</u>"), certain funds managements by Atalaya Capital Management, LP ("<u>Atalaya</u>") and Meteora Capital Partners, L.P. and funds affiliated with Meteora Capital Partners, L.P. (collectively "<u>Meteora</u>") (individually and collectively, the "<u>anchor investors</u>"). Each of the anchor investors purchased 9.9% of the Units in the IPO (excluding Units issued in connection with the exercise of the over-allotment option). Each of Apollo and Atalaya agreed to purchase interests in the Sponsor representing approximately 7% of the Founder Shares and Private Placement Warrants at approximately the cost of such securities to the Sponsor, with the Sponsor's obligation to sell some or all of such interests conditioned upon such anchor investor's purchase of the Units.

Meteora entered into a separate agreement with the Sponsor pursuant to which it agreed to purchase interests in the Sponsor representing approximately 6.4% of the Founder Shares for approximately 3.7% of the cost of the Founder Shares and Private Placement Warrants to the Sponsor.

The anchor investors acquired from the Sponsor an indirect economic interest in an aggregate of 1,173,000 Founder Shares at the original purchase price that the Sponsor paid for the Founder Shares. The Sponsor has agreed to distribute the Founder Shares to the anchor investors after the completion of an initial business combination. The Company estimates the aggregate fair value of the Founder Shares attributable to the anchor investors to be approximately $7,753,530, or $6.61 per share.

The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, the offering cost was allocated to the separable financial instruments issued in the IPO based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to derivative warrant liabilities were expensed as incurred in the statement of operations. Offering costs allocated to the Public Shares were charged to shareholder's deficit upon the completion of the IPO.

On October 7, 2022, the Company entered into a vendor agreement, as described in Note 8, whereas the Sponsor assigned 23,883 Class B ordinary shares to the vendor, effective upon the completion of a successful initial business combination.

The assignment of the Founder Shares to the vendor is in the scope of FASB ASC Topic 718, "Compensation-Stock Compensation" ("<u>ASC 718</u>"). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Company has hired a valuation firm to assess, using the lattice model, the fair value associated with the Founder Shares granted. The fair value of the 23,883 shares granted to the Company's vendor in October 2022 was $28,946 or $1.212 per share. The Founder Shares were granted subject to a performance condition (i.e., the occurrence of an initial business combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is met under the applicable accounting literature in this circumstance. As of December 31, 2024 and 2023, the Company determined the performance conditions had not been met, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date the performance conditions are met (i.e., upon consummation of an initial business combination) in an amount equal to the number of Founder Shares vested times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares.

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On June 25, 2023, the Company, the Sponsor, each independent director of the Company (the "<u>Directors</u>"), and affiliates of Roth Capital Partners and Craig-Hallum Capital Group LLC (the "<u>Buyers</u>") entered into a Securities Transfer Agreement (the "<u>Agreement</u>") pursuant to which the Buyers purchased from Sponsor and the Directors, an aggregate of 4,312,500 ordinary shares consisting of 4,237,500 Class A ordinary shares and 75,000 Class B ordinary shares and 8,062,500 private placement warrants (together, the "Transferred Securities") for an aggregate purchase price (the "<u>Purchase Price</u>") of $1.00 (the "<u>Transaction</u>").

***Forward Purchase Agreements***

The Company entered into separate forward purchase agreements (the "<u>Forward Purchase Agreements</u>") with Apollo and Atalaya (the "<u>Forward Purchasers</u>") on August 13, 2021, and August 4, 2021, respectively. The Forward Purchase Agreements provide, at the Company's option, for the aggregate purchase of up to 9,600,000 Class A ordinary shares and 4,800,000 warrants to purchase Class A ordinary shares for an aggregate price of $96.0 million ($10.00 for one Class A ordinary share and one half of one warrant), in private placements that will close concurrently with the closing of the initial business combination. The forward purchase shares and forward purchase warrants will be identical to the Class A ordinary shares and Public Warrants included in the Units sold in the IPO. Each Forward Purchaser's commitment under its Forward Purchase Agreement is subject to certain conditions including investment committee approval. The forward purchase agreements were terminated effective October 24, 2023.

***Promissory Note – Related Party***

On July 1, 2023 the Company entered into a promissory note with the Buyers for up to an aggregate of $1,000,000 (the "<u>2023 Promissory Note</u>"). The 2023 Promissory Note is non-interest bearing and payable upon the earlier of the date on which the Company consummates an initial business combination, the liquidation of the Company, or October 29, 2024. The Note does not bear any interest. On August 8, 2024, the Company amended the terms of the 2023 Promissory Note to increase the aggregate principal amount that may be borrowed to $2,000,000 and to extend the maturity to June 30, 2025. As of December 31, 2024 and 2023, there was $1,109,412 and $682,508 amounts outstanding under the 2023 Promissory Note, respectively.

***Administrative Services Agreement***

The Company has entered into an agreement commencing on November 28, 2021, with Tartavull Klein Blatteis Capital, LLC ("<u>TKB Capital</u>"), an affiliate of the Sponsor, pursuant to which the Company agreed to pay TKB Capital a total of $10,000 per month for office space, secretarial and administrative services provided to the Company. For the year ended December 31, 2023, the Company incurred $60,000 of fees for these services. On June 26, 2023, the Company entered into a termination agreement (the "<u>Termination Agreement</u>"), pursuant to which the Company terminated the Administrative Services Agreement with Tartavull Klein Blatteis Capital, LLC dated October 26, 2021 and Tartavull Klein Blatteis Capital, LLC forgave and fully discharged all outstanding fees thereunder as of the date of the Closing. As of December 31, 2024 and 2023, there no amounts included in accrued expenses in the accompanying balance sheets, respectively.

***Related Party Loans***

In order to finance transaction costs in connection with an initial business combination, the Sponsor, certain of the Company's officers, directors or any of their affiliates may, but are not obligated to, loan the Company funds as may be required ("<u>Working Capital Loans</u>"). If the Company completes an initial business combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an initial business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of an initial business combination, without interest, or, at the lender's discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of December 31, 2024 and 2023, no Working Capital Loans were outstanding.

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***Working Capital Advance***

On January 26, 2023, in connection with the proposed Business Combination with Wejo, Sponsor entered into a promissory note (the "<u>Phelan Note</u>") with Daniel Phelan (the "<u>Lender</u>"), which provided for working capital for the Company in an aggregate principal amount of up to $750,000. The Phelan Note was amended and restated on March 9, 2023. As of January 30, 2023, Sponsor had drawn $250,000 under the Phelan Note and subsequently advanced these funds to the Company. The Phelan Note was non-interest bearing and non-convertible. All unpaid principal accrued under the Phelan Note was to be repaid at the closing of the Business Combination or the earlier termination of the Business Combination Agreement in certain circumstances specified in the Phelan Note. In consideration for the Phelan Note, Sponsor agreed to pay to the Lender at the closing of the Business Combination a commitment fee equal to 50% of the then-outstanding principal balance of the Phelan Note up to a maximum of $375,000. If the Business Combination did not close, the commitment fee would not be paid. During 2023, the Sponsor forgave the debt from the Company and the Company recorded a contribution from sponsor of $250,000. In addition, the Company recorded a $125,000 expense and a corresponding increase in additional paid in capital related to the commitment fee that will be paid by the Sponsor upon the closing of the Business Combination.

***Wejo Assignment and Assumption Agreement***

On January 5, 2023, the Sponsor entered into an assignment and assumption agreement with Wejo, which was subsequently amended and restated on March 2, 2023 (the "<u>Wejo Assignment</u>"), pursuant to which Wejo agreed to pay the Sponsor an aggregate of $295,000 to fund the Company's working capital requirements and the Sponsor agreed to assign to Wejo, effective as of the Closing Date or the earlier termination of the Business Combination Agreement in accordance with its terms or otherwise, an aggregate of 83,250 Founder Shares and 250,000 Private Warrants. Wejo paid $250,000 to the Sponsor on January 11, 2023 and $45,000 to the Sponsor on March 2, 2023, for an aggregate payment of $295,000. The warrants and shares, the Company estimated the fair value of the 83,250 Founder Shares and 250,000 Private Warrants was $294,289 and $7,500, respectively, for an aggregate $301,789 on January 5, 2023. The fair value of the Founder Shares was determined using the value of the Class A Units, reduced by the probability of no acquisition and by a discount for a lack of marketability with a volatility of 107.88%, risk-free rate of 4.78% and a stock price of $10.33 as of the valuation date of January 5, 2023. The Private Placement Warrants were valued at $0.03 per warrant, which was the closing price of the Company's public warrants on January 5, 2023. The Company utilized this value as Private Warrants are classified as Level 2 due to the use of an observable market quote for a similar asset in an active market under the ticker USCTW (See Note 9). As a result, there was a loss on the sale of the shares and warrants of $6,789.

The Sponsor subsequently advanced $250,000 in funds to the Company for working capital purposes. The advance was non-interest bearing, unsecured, and payable in cash upon the consummation of the Company's initial business combination. During the year ended December 31, 2023, the Sponsor forgave the debt and the Company recorded a contribution from sponsor of $250,000 and a contribution of capital by Sponsor of $5,753.

***Forgiveness of related party accrued expenses***

In connection with the Securities Transfer Agreement described above, affiliates of the of Sponsor forgave $60,556 of previously accrued expenses, of which $57,335 related to the Administrative Services Agreement described above and $3,221 relates to reimbursable expenses paid by the affiliate on behalf of the Company. As a result, a capital contribution of $60,556 was recorded during the year ended December 31, 2023.

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**Note 6 — Shareholders' Deficit**

**Preference Shares —** The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company's board of directors. At December 31, 2024 and 2023, there were no preference shares issued or outstanding.

**Class A Ordinary Shares —** The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company's Class A ordinary shares are entitled to one vote for each share. At December 31, 2024 and 2023, there were 5,836,553 and 5,675,000 Class A ordinary shares issued and outstanding, excluding zero and 2,119,236 Class A ordinary shares subject to possible redemption as presented in temporary equity, respectively.

**Class B Ordinary Shares —** The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. At December 31, 2024 and 2023, there were 75,000 Class B ordinary shares issued and outstanding.

Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders and holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law; provided that only holders of Class B ordinary shares will have the right to vote on the appointment of directors prior to or in connection with the completion of the initial business combination.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of an initial business combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of an initial business combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the IPO plus all Class A ordinary shares and equity-linked securities issued or deemed issued by the Company in connection with or in relation to the consummation of the initial business combination, excluding any forward purchase securities, any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to the Sponsor upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.

**Conversion of Class B shares**

On January 18, 2023, pursuant to the terms of the Amended and Restated Memorandum and Articles of Association of the Company, the Sponsor, the holder of an aggregate of 5,650,000 of the Company's outstanding Class B ordinary shares, par value $0.0001 per share ("<u>Class B Shares</u>"), elected to convert each outstanding Class B Share held by it on a one-for-one basis into Class A ordinary shares, par value $0.0001 per share ("<u>Class A Ordinary Shares</u>") of the Company, with immediate effect. Following such conversion, as of January 18, 2023, the Company had an aggregate of 28,650,000 Class A Ordinary Shares issued and outstanding and 100,000 Class B Shares issued and outstanding. On June 28, 2023, holders of an aggregate of 25,000 of the remaining outstanding Class B Shares elected to convert their Class B Shares into Class A Ordinary Shares. The Class A ordinary shares issued in connection with the Conversion are subject to the same restrictions as applied to the Class B ordinary shares before the Conversion, including, and among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of a Business Combination as described in the prospectus for the Company's IPO. The Company modified its balance sheet and statements of shareholders equity to reflect the impact of these conversions.

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**Note 7 — Warrant Liabilities**

The Company accounts for the 22,250,000 warrants that were issued in the IPO (representing 11,500,000 Public Warrants and 10,750,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The warrants do not meet the criteria to be considered indexed to the Company's stock due to settlement provisions that result in holders of warrants receiving variable settlement amounts determined by the reference table. Additionally, an event that is not within the entity's control could require net cash settlement, thus precluding equity classification. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company's statement of operations.

**Warrants** — Public Warrants may only be exercised for a whole number of Class A ordinary shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Accordingly, unless holders purchase at least two Units, they will not be able to receive or trade a whole warrant. The Public Warrants will become exercisable 30 days after the completion of an initial business combination.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrant will be exercisable, and the Company will not be obligated to issue any Class A ordinary shares upon exercise of a Public Warrant unless the Class A ordinary shares issuable upon such Public Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrants.

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of an initial business combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement filed in connection with its IPO or a new registration statement covering registration under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of an initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Public Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a "covered security" under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants is not effective by the 60<sup>th</sup> day after the closing of an initial business combination, Public Warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Public Warrants on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

*Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.* Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.01 per warrant;

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● upon not less than 30 days' prior written notice of redemption to each warrant holder; and

● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.10 per warrant;

● upon a minimum of 30 days' prior written notice of redemption to each warrant holder; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A ordinary share;

● if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $10.00 per share (as adjusted per share sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within the 30-trading day period ending three trading days before the Company send the notice of redemption to the warrant holders; and

● if the last reported sale price of the Class A ordinary share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities (excluding the forward purchase securities) for capital raising purposes in connection with the closing of an initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company's board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the "<u>Newly Issued Price</u>"), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial business combination on the date of the consummation of an initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates an initial business combination (such price, the "<u>Market Value</u>") is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00" and "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00" will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00" will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

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The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or saleable until 30 days after the completion of an initial business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder's option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of Class A ordinary shares as described above under "Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00"). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.

**Note 8 — Commitments and Contingencies**

***Registration Rights***

The holders of the Founder Shares, Private Placement Warrants, warrants that may be issued upon conversion of Working Capital Loans and forward purchase securities that may be issued pursuant to the Forward Purchase Agreements (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, forward purchase warrants and warrants that may be issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement that was signed on the effective date of the IPO, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short-form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of an initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

***Underwriting Agreement***

The Company granted the underwriters a 45-day option from the date of the IPO to purchase up to 3,000,000 additional Units to cover over-allotments at the IPO price less the underwriting discount. On October 29, 2021, the underwriters exercised the over-allotment option in full, generating an additional $30,000,000 in gross proceeds. As a result of the over-allotment being exercised in full, the Sponsor did not forfeit any Founder Shares back to the Company. The underwriters were paid a cash-underwriting discount of $3,850,000 in the aggregate at the closing of the IPO. In addition, $0.35 per Unit, or $8,050,000, and $750,000 of deferred underwriting commissions ($8,800,000 in the aggregate) is payable to the underwriters for deferred underwriting commissions. The deferred fee is payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an initial business combination, subject to the terms of the underwriting agreement.

In June 2023, the underwriters agreed to waive its entitlement to the deferred underwriting commission of $8,800,000 to which it became entitled upon completion of the Company's Initial Public Offering, subject to the consummation of the Transaction. As a result, the Company derecognized the deferred underwriting fee payable of $8,800,000.

***Broker Dealer Agreements***

The Company entered into seven broker dealer agreements through December 31, 2024, for the purposes of identifying a target company ("<u>Target</u>") in connection with the Company's initial business combination. While the terms of these agreements vary, each agreement reflects that the broker dealer (the "<u>Finder</u>") will be entitled to a fee if they identify potential targets with which the Company completes a business combination. As of December 31, 2024, the Company had not accrued any amounts related to any broker dealer agreements. None of the Finders are entitled to any fee.

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***Consulting Agreements***

The Company entered into nineteen consulting agreements through December 31, 2024.

With respect to seventeen of the nineteen consulting agreements, during the term of each agreement, the consultant ("<u>Consultant</u>") will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. Upon closing of an initial business combination, the Company will pay the Consultant a base fee of $350,000. In lieu of, and not in addition to the base fee, the Company will pay a bonus fee of $1,000,000 if the Company and the Consultant mutually determine and agree that the Consultant will provide advice or services that are of a different kind than those contemplated in the agreement. In lieu of and not in addition to the base fee and bonus fee, the Company will pay to the Consultant an additional fee equal to 0.5% of the pre-money equity value of the Target if the Company and the Consultant mutually determine and agree that the Consultant provided, or will provide, material support in connection with the evaluation, negotiation, execution or marketing of an initial business combination that is ultimately consummated by the Company. Payment to the Consultant is dependent upon the closing of an initial business combination.

On August 3, 2022, the Company entered into a consulting agreement. During the term of this agreement, the Consultant will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. As consideration for the services performed by the Consultant during the term of the agreement, upon the closing of an initial business combination, the Company shall pay to the Consultant a fee equal to one percent (1%) of the pre-money equity value of the Target, as stated in the Agreement and Plan of Merger executed between the Company and the Target (which such pre-money equity value shall be determined in a manner consistent with disclosures set forth in the proxy statement/prospectus filed in connection with such initial business combination). Payment to the Consultant is dependent upon the closing of an initial business combination.

On October 25, 2022, the Company entered into a consulting agreement. During the term of this agreement, the consultant ("<u>Consultant</u>") will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. In consideration for the services performed by the Consultant during the term, upon the closing of an initial business combination, the Company shall pay to the Consultant, in shares at close, 100,000 shares of the surviving entity.

As of December 31, 2024, no work has been performed related to any of the aforementioned consulting agreements and thus the Company did not accrue any amounts related to these agreements.

***Vendor Agreement***

On August 26, 2021, the Company entered into an agreement with a vendor to provide services and support in connection with finding and completing a successful business combination. In connection with these services, the Company agreed to pay the vendor $250,000 per annum. It is also agreed that the vendor could earn up to 45,000 ordinary shares over the term of the agreement.

On August 16, 2022, the Company amended the agreement whereby it agreed to pay the vendor $125 per hour payable upon the completion of a successful business combination.

On October 7, 2022, the Company terminated the original agreement and entered into a new agreement with the vendor, pursuant to which the Company agreed to pay the vendor $125 per hour and the Sponsor agreed to assign 23,883 Class B ordinary shares to the vendor, effective upon the completion of a successful business combination.

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For the year ended December 31, 2024 and 2023, the Company incurred $0 in fees for these services. As of December 31, 2024 and 2023, the Company had a balance of $0 in accounts payable and accrued expenses related to these services. On July 24, 2023, the Company entered into a waiver agreement with the vendor which resulted in the forgiveness of $42,181 of the outstanding balance.

**Advisory Agreement**

On January 9, 2023, the Company entered into an advisory agreement letter with Jefferies LLC ("<u>Jefferies</u>"), where Jefferies will provide the Company with equity capital markets financial advice and assistance in connection with a possible business combination. In addition, the Jefferies will act as sole and exclusive manager, bookrunner, placement agent, arranger, underwriter and/or initial purchaser, as the case may be, in connection with the sale and/or placement of any debt or equity financing in connection with the Company's pending Business Combination. As consideration for the services performed by Jefferies, the Company agrees to pay Jefferies customary fees and expense reimbursements for such services. Any payment of fees to Jefferies is contingent upon the closing of a debt or equity financing. On June 20, 2023, the advisory agreement letter was terminated, and Jefferies agreed to all fees subject to, and expressly conditioned upon, payment to Jefferies of a minimum of $16,000 contingent upon the closing of a business combination, representing partial reimbursement of expenses owed. As of December 31, 2024 and 2023, the Company had not recorded an expense for the delivery of these services.

**Business Combination Agreement**

On January 10, 2023, the Company, entered into a business combination agreement with Wejo Group Limited, an exempted company limited by shares incorporated under the laws of Bermuda ("<u>Wejo</u>"), and Green Merger Subsidiary Limited, an exempted company incorporated under the laws of the Cayman Islands and a direct, wholly owned subsidiary of Wejo ("<u>Merger Sub 1</u>") and upon execution of a joinder to the business combination agreement, each of Wejo Holdings Limited, an exempted company limited by shares incorporated under the laws of Bermuda and a wholly owned subsidiary of Wejo ("<u>Holdco</u>") and Wejo Acquisition Company Limited, an exempted company limited by shares incorporated under the laws of Bermuda and a wholly owned Subsidiary of Holdco ("<u>Merger Sub 2</u>" and together with Merger Sub 1, the "<u>Merger Subs</u>") (as it may be amended, restated, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>").

On June 25, 2023, the Company, Wejo, Holdco, Merger Sub 1 and Merger Sub 2 entered into that certain Mutual Termination Agreement ("<u>Termination Agreement</u>") pursuant to which the parties mutually agreed to terminate the Business Combination Agreement pursuant to Section 7.1(a) thereof. The Termination Agreement also includes mutual releases of the parties. No party will be required to pay a termination fee as a result of the mutual decision to enter into the Termination Agreement.

The termination of the Business Combination Agreement also terminates the Voting Agreement, dated as of January 10, 2023 ("<u>Wejo Voting Agreement</u>") between the Company and certain shareholders of Wejo and the Voting Agreement, dated as of January 10, 2023 (the "<u>Sponsor Voting Agreement</u>") between the Company, Sponsor and Directors, pursuant to the terms of the Wejo Voting Agreement and Sponsor Voting Agreement, respectively.

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***Deferred Legal Fee***

The Company incurred $0 and $2,657,577 during the year ended December 31, 2024 and 2023, respectively, of deferred legal fees that will be payable upon the consummation of an initial business combination.

On June 20, 2023 and June 21, 2023, the Company entered into waiver agreements which resulted in the forgiveness of $3,730,114 of outstanding deferred legal fees.

As of December 31, 2024 and 2023, the Company had $234,849, in deferred legal fees, which are included in accounts payable and accrued expenses on the Company's accompanying balance sheets.

***Trust Account Receivable***

In connection with the Extension Amendment, as described in Note 1, a clerical error resulted in the redeeming shareholders receiving an overpayment of approximately $0.04 per Class A ordinary share, for an aggregate total overpayment amount of $147,410 (the "<u>Overpayment Amount</u>"). As of December 31, 2024, there was $0 included in Trust Account receivable in the accompanying balance sheet. On April 3, 2024, the Overpayment Amount was deposited back into the Trust Account.

**Note 9 — Fair Value Measurements**

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company's financial assets and liabilities reflects management's estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

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| | |
|:---|:---|
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
| Level 3: | Unobservable inputs based on the Company's assessment of the assumptions that market participants would use in pricing the asset or liability. |

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The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis at December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

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| | | | |
|:---|:---|:---|:---|
| **Description** | **Level** | **December 31,<br>2024** | **December 31,<br>2023** |
| Assets: |  |  |  |
| Cash and marketable securities held in trust account | 1 | $- | $23332031 |
| Liabilities: |  |  |  |
| Warrant liability – Public Warrants | 2 | 115000 | 287500 |
| Warrant liability – Private Placement Warrants | 2 | 107500 | 268750 |

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The warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the statements of operations.

As of December 31, 2024, the aggregate values of the Public Warrants and Private Placement Warrants were $115,000 and $107,500, respectively, based on a fair value of $0.01 per warrant. As of December 31, 2023, the aggregate values of the Public Warrants and Private Placement Warrants were $287,500 and $268,750, respectively, based on a fair value of $0.03 per warrant.

The following table presents the changes in the fair value of warrant liabilities:

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| | | | |
|:---|:---|:---|:---|
|  | **Private<br>Placement** | **Public** | **Warrant<br>Liabilities** |
| **Fair value as of January 1, 2024** | $**268750** | $**287500** | $**556250** |
| &nbsp;&nbsp;&nbsp;Change in fair value | (161250) | (172500) | (333750) |
| **Fair value as of December 31, 2024** | $**107500** | $**115000** | $**222500** |

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| | | | |
|:---|:---|:---|:---|
|  | **Private<br> Placement** | **Public** | **Warrant<br> Liabilities** |
| **Fair value as of January 1, 2023** | $**233275** | $**249550** | $**482825** |
| &nbsp;&nbsp;&nbsp;Change in fair value | 35475 | 37950 | 73425 |
| **Fair value as of December 31, 2023** | $**268750** | $**287500** | $**556250** |

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The Company established the initial fair value for the warrants on October 29, 2021, the date of the consummation of the Company's IPO. The Company used a Black-Scholes model to value the warrants. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant will be used as the fair value as of each reporting period. The subsequent measurements of the Private Placement Warrants are classified as Level 2 due to the use of an observable market quote for a similar asset in an active market under the ticker USCTW. As of December 31, 2024 and 2023, the Public Warrants have detached from the Units, and the closing price is utilized as the fair value.

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There was a transfer of $13,800 from level 1 to level 2 during the year ended December 31, 2024 due to insufficient trading volume. There were no other transfers to/from Levels 1, 2, and 3 during the year ended December 31, 2023.

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**Note 10 — Segment Information**

ASC Topic 280, "Segment Reporting," establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company's chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company's chief operating decision maker ("<u>CODM</u>") has been identified as the Chief Financial Officer who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company's performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2024** | **December 31,**<br>**2023** |
| Trust Account | $- | $23332031 |
| Cash | $6738 | $13755 |

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| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2024** | **For the<br> Year Ended<br> December 31,<br> 2023** |
| General and administrative expenses | $650122 | $4416661 |

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General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.

All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.

**Note 11 — Subsequent Events**

Management has evaluated the impact of subsequent events through the date that the financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

On January 24, 2025, the Company amended and restated its 2023 Promissory Note, as described in Note 5, (the "<u>Amended 2023 Note</u>") in favor of certain shareholders of the Company to permit its conversion into Class A ordinary shares of Company, at any time, at the option of the representative of the noteholders based upon the current trading price. Subsequent to the execution of the Amended 2023 Note, on January 24, 2025, the representative provided notice that it intended to convert the existing principal balance of the Amended 2023 Note in the amount of $1,181,000 into 39,366,667 Class A ordinary shares of the Company.

On January 28, 2025, the Company, entered into that certain Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the "<u>Business Combination Agreement</u>"), by and among the Company, Roth CH Holdings, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (the "<u>Domestication Sub</u>"), Roth CH Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company ("<u>Merger Sub</u>"), and SharonAI Inc., a Delaware corporation (the "<u>Target</u>").

Subsequent to December 31, 2024, an additional $138,618 was drawn on the Promissory Note, as described in Note 5.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED BALANCE SHEETS**

**(Unaudited)**

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| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| **ASSETS** |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1364550 | $4424805 |
| &nbsp;&nbsp;&nbsp;Certificates of deposits |  | 770799 |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | 305542 | 984547 |
| &nbsp;&nbsp;&nbsp;Assets held for sale | 1124083 |  |
| &nbsp;&nbsp;&nbsp;Other current assets | 140598 | 30018 |
| **Total current assets** | **2934773** | **6210169** |
| Property and equipment, net | 3777613 | 4576105 |
| Right of use assets, net | 7476827 | 935336 |
| Digital assets |  | 721664 |
| Intangible assets, net |  | 1658963 |
| Goodwill | 18044215 | 18044215 |
| Certificates of deposits | 906201 |  |
| Other long-term assets | 850000 | - |
| **TOTAL ASSETS** | $**33989629** | $**32146452** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables | $562156 | $957829 |
| &nbsp;&nbsp;&nbsp;Finance lease liabilities, current portion | 3542831 | 186620 |
| &nbsp;&nbsp;&nbsp;Note payable | 516405 | 5435 |
| **Total current liabilities** | **4621392** | **1149885** |
| Finance lease liabilities, net of current portion | 4108328 | 760087 |
| Deferred tax liabilities | - | 327535 |
| **TOTAL LIABILITIES** | **8729720** | **2237506** |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock (15,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024) | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Series B Convertible Preferred Stock (27,000 shares issued and outstanding as September 30, 2025 and December 31, 2024) | 3 | 3 |
| &nbsp;&nbsp;&nbsp;Common Stock (1,067,213 shares issued and outstanding as of September 30, 2025 and December 31, 2024) | 107 | 107 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 34750473 | 33304160 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (9541918) | (3905281) |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest | 56813 | 86096 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) (AOCI) | (5571) | 423858 |
| **TOTAL STOCKHOLDERS' EQUITY** | **25259909** | **29908945** |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $**33989629** | $**32146452** |

---

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS**

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue | $506747 | $159000 | $1208824 | $171800 |
| Cost of Revenue | 371778 | 329005 | 1083426 | 336405 |
| **Gross profit** | **134969** | **(170005)** | **125398** | **(164605)** |
| &nbsp;&nbsp;&nbsp;Share based compensation | 489345 |  | 1446312 |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | 880351 | 806712 | 2970874 | 1065931 |
| &nbsp;&nbsp;&nbsp;Other expenses | 343775 | 163652 | 2019907 | 169327 |
| &nbsp;&nbsp;&nbsp;Other income | - | (140938) | (961713) | (140938) |
| **Loss from operations** | **(1578502)** | **(999431)** | **(5349982)** | **(1258925)** |
| **Non-operating income (expense):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of digital assets | (15255) | (95809) | (406345) | (87222) |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (71528) | (22331) | (127430) | (13803) |
| **Loss before income taxes** | **(1665285)** | **(1117571)** | **(5883757)** | **(1359950)** |
| &nbsp;&nbsp;&nbsp;Income tax benefit (expense) | 29774 | (20516) | 219935 | (20516) |
| **Net Loss** | $**(1635511)** | $**(1138087)** | $**(5663822)** | $**(1380466)** |
| Net loss attributable to non-controlling interest | (7850) | (5463) | (27185) | (5463) |
| **Net Loss Attributable to SharonAI Inc.** | $**(1627661)** | $**(1132624)** | $**(5636637)** | $**(1375003)** |
| **Net Loss per share, basic and diluted** | $**(1.53)** | $**(1.16)** | $**(5.28)** | $**(1.41)** |
| **Weighted average number of shares outstanding** | **1067213** | **975475** | **1067213** | **975475** |

---

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS**

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net Loss | $(1635511) | $(1138087) | $(5663822) | $(1380466) |
| Net Loss attributable to non-controlling interest | (7850) | (5463) | (27185) | (5463) |
| Net Loss attributable to SharonAI Inc. | (1627661) | (1132624) | (5636637) | (1375003) |
| Foreign currency translation adjustments | (82048) | (195602) | (431527) | (197694) |
| **Other comprehensive loss** | **(82048)** | **(195602)** | **(431527)** | **(197694)** |
| Other comprehensive loss attributable to noncontrolling interest | (403) | (943) | (2098) | (943) |
| **Other comprehensive loss attributable to SharonAI Inc.** | **(81645)** | **(194659)** | **(429429)** | **(196751)** |
| **Comprehensive loss attributable to SharonAI Inc.** | $**(1709306)** | $**(1327283)** | $**(6066066)** | $**(1571754)** |

---

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY**

(Unaudited)

**Three Months Ended September 30, 2025**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A<br> Preferred** | **Series B<br> Preferred** | **Series B<br> Preferred** | **Common Stock** | **Common Stock** | **Options Reserve** | **Options Reserve** | |
|  | **#** | $**#** | **#** | $**#** | **#** | $**#** | **#** | **Additional<br> Paid-In<br> Capital**<br>**$** |
| **Balance at June 30, 2025** | **15000** |  | **27000** |  | **1067213** |  | **62654** | **34261128)** |
| Share based compensation |  |  |  |  |  |  |  | 489345 |
| Net loss |  |  |  |  |  |  |  | -) |
| Equity adjustment from Foreign Currency Translation (CTA) | - |  | - |  | - |  | - | **-** |
| **Balance at September 30, 2025** | **15000** |  | **27000** |  | **1067213** |  | **62654** | **34750473** |

---

**Three Months Ended September 30, 2024**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A<br> Preferred** | **Series B<br> Preferred** | **Series B<br> Preferred** | **Common Stock** | **Common Stock** | **Options Reserve** | **Options Reserve** | **Options Reserve** | |
|  | **#** | $**#** | **#** | $**#** | **#** | $**#** | **#** | **$** | **Additional<br> Paid-In<br> Capital**<br>**$** |
| **Balance at June 30, 2024** | **15000** |  | **27000** |  | **370206** |  | **-** | **-))** |  |
| Issuance of common stock |  |  |  |  | 601828 |  |  |  |  |
| Equity reserve account |  |  |  |  |  |  |  | -) |  |
| Capital raise costs |  |  |  |  |  |  |  | -) |  |
| Acquisition of DSS |  |  |  |  |  |  | 8195 |  |  |
| Conversion of SAFE securities |  |  |  |  | 3441 |  |  |  |  |
| Net loss |  |  |  |  |  |  |  | -) |  |
| Equity adjustment from Foreign Currency Translation (CTA) | - |  | - |  | - |  | - | - |  |
| **Balance at September 30, 2024** | **15000** |  | **27000** |  | **975475** |  | **8195** | **-** |  |

---

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY**

(Unaudited)

**Nine Months Ended September 30, 2025**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A<br> Preferred** | **Series B<br> Preferred** | **Series B<br> Preferred** | **Common Stock** | **Common Stock** | **Options Reserve** | **Options Reserve** | |
|  | **#** | $**#** | **#** | $**#** | **#** | $**#** | **#** | **Additional<br> Paid-In<br> Capital**<br>**$** |
| **Balance at December 31, 2024** | **15000** |  | **27000** |  | **1067213** |  | **65489** | **33304160)** |
| Share based compensation expense |  |  |  |  |  |  | (2835) | 1446313 |
| Net loss |  |  |  |  |  |  |  | -) |
| Equity adjustment from Foreign Currency Translation (CTA) | - |  | - |  | - |  | - | **-** |
| **Balance at September 30, 2025** | **15000** |  | **27000** |  | **1067213** |  | **62654** | **34750473** |

---

**Nine Months Ended September 30, 2024**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A<br> Preferred** | **Series B<br> Preferred** | **Series B<br> Preferred** | **Common Stock** | **Common Stock** | **Options Reserve** | **Options Reserve** | **Options Reserve** | |
|  | **#** | $**#** | **#** | $**#** | **#** | $**#** | **#** | **$** | **Additional <br> Paid-In<br> Capital**<br>**$** |
| **Balance at December 31, 2023** | **-** |  | **-** |  | **300** |  | **-** | **-** |  |
| Issuance of Series A preferred stock | 15000 |  |  |  |  |  |  |  |  |
| Issuance of Series B preferred stock |  |  | 27000 |  |  |  |  |  |  |
| Issuance of common stock |  |  |  |  | 174783 |  |  |  |  |
| Capital raising costs |  |  |  |  | -) |  |  |  |  |
| AAM share exchange, net |  |  |  |  | 209700 |  |  | -) |  |
| Acquisition of DIF |  |  |  |  | 55000 |  |  |  |  |
| Acquisition of DSS |  |  |  |  | 532251 |  | 8195 |  |  |
| Conversion of SAFE securities |  |  |  |  | 3441 |  |  |  |  |
| Net loss |  |  |  |  |  |  |  | -) |  |
| Equity adjustment from Foreign Currency Translation (CTA) | - |  | - |  | - |  | - | - |  |
| **Balance at September 30, 2024** | **15000** |  | **27000** |  | **975475** |  | **8195** | **-** |  |

---

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS**

(Unaudited)

---

| | | |
|:---|:---|:---|
|  | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES** |  |  |
| Net loss for the period, including noncontrolling interest | $(5663822) | $(1380466) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 1310377 | 177524 |
| &nbsp;&nbsp;&nbsp;Share based payments | 1446312 |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of digital assets | 406345 | 91754 |
| &nbsp;&nbsp;&nbsp;Intangible assets (FIL) revenue | (131896) | (124129) |
| &nbsp;&nbsp;&nbsp;Intangible assets (FIL) cost of revenue | 139918 | 69615 |
| &nbsp;&nbsp;&nbsp;Amortization of Intangible assets | 1650000 | 275000 |
| &nbsp;&nbsp;&nbsp;Unrealized (gains) losses on foreign currency exchange | (896080) | (254008) |
| &nbsp;&nbsp;&nbsp;Gain on sale of fixed asset | (961713) | **-** |
| &nbsp;&nbsp;&nbsp;Bad debt expense | 76748 | **-** |
| &nbsp;&nbsp;&nbsp;Deferred tax liability | 90242 | **-** |
| &nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 697424 | (260102) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | (103336) | 10937 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other noncurrent assets | 9126 | 8688 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade and other payables | (425979) | 363964 |
| **Net cash flows from/(used in) operating activities** | **(2356333)** | **(1021223)** |
| **CASH FLOWS FROM INVESTING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Payment for the purchase of property and equipment | (37343) | (2890714) |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of digital assets | 336002 | **-** |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of fixed assets | 155388 | **-** |
| &nbsp;&nbsp;&nbsp;Purchase of certificates of deposit | (85956) | (680277) |
| &nbsp;&nbsp;&nbsp;Investment - Texas Critical Data Centers JV | (850000) | **-** |
| **Net cash flows from/(used in) investing activities** | **(481909)** | **(3570991)** |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock, net of issuance costs | **-** | 4894164 |
| &nbsp;&nbsp;&nbsp;Issuance costs related to capital raise | **-** | (298445) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of preferred shares | **-** | 42000 |
| &nbsp;&nbsp;&nbsp;Proceeds from note payable | 510620 | **-** |
| &nbsp;&nbsp;&nbsp;Proceeds from debt issuance with related parties | **-** | 419601 |
| &nbsp;&nbsp;&nbsp;Payment for lease liabilities | (407807) | **-** |
| **Net cash flows from/(used in) financing activities** | **102813** | **5057320** |
| &nbsp;&nbsp;&nbsp;Effect of exchange rates changes on cash and cash equivalents | (324825) | 545424 |
| **Net cash increase/(decreases) in cash and cash equivalents** | **(3060255)** | **1010530** |
| Cash and cash equivalents at beginning of period | 4424805 | 205 |
| **Cash and cash equivalents at end of period** | $**1364550** | $**1010735** |

---

*Refer to Note 16 for the supplemental cash flows information.*

See Accompanying Notes to Condensed Consolidated Financial Statements.

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**SHARONAI INC.**

**NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

**Note 1. Description of Business**

*Unless otherwise stated in this Notes to Consolidated Condensed Financial Statements, references to "we," "us," "our," "Company" or "our Company" are to SharonAI Inc. and its subsidiaries.* 

The consolidated financial statements cover SharonAI Inc. ("the Company" or "SAI") and its controlled entities ("the Group"). SAI is a digital infrastructure provider, incorporated in Delaware, United States on February 15, 2024.

On April 29, 2024, SAI and Alternative Asset Management Pty Ltd ("AAM"), who have identical ownership interest as SAI, completed a share exchange. AAM did not have business operations but owned certain mining assets. Pursuant to the transaction there was no change in relative voting interest amongst the existing shareholders of both entities. See Note 2(b) for additional reporting considerations for the share exchange.

On June 30, 2024, SAI acquired the majority equity interest of Distributed Storage Solutions Limited ("DSS"). DSS is a cloud storage provider providing robust data storage infrastructure in the Filecoin network with additional focus on high performance computers (HPC) and artificial intelligence, which was determined to be a business combination.

In January of 2025, SAI formed a 50:50 joint venture with New Era Helium, Inc., named Texas Critical Data Centers LLC ("TCDC"), to fund, develop, and construct a planned 250MW net-zero energy data center behind the meter with a natural gas-fired power plant within the Permian Basin in Western Texas. New Era Helium, Inc. is a Nasdaq listed company that is focused on digital infrastructure and integrated power assets.

On January 30, 2025, the Company entered into a Business Combination Agreement ("BCA") with Roth CH Acquisition Co. ("Roth") and subsequently on October 21, 2025 filed an S-4 registration statement in participation with Roth with the Securities and Exchange Commission ("SEC").

On June 9, 2025, the Company made a strategic decision to cease its participation in the operations associated with the Filecoin ecosystem in order to focus its resources and efforts on the continued growth of its high-performance GPU-as-a-Service (GPUaaS) business. This decision aligns with the Company's long-term strategy to concentrate on providing scalable, on-demand computing infrastructure for artificial intelligence, research, and other data-intensive applications.

As of June 30, 2025, all activities related to the Company's prior Filecoin-related operations had been fully wound down. This transition reflects a broader shift toward infrastructure services with more predictable and scalable revenue opportunities and supports the Company's goal of building a focused, capital-efficient technology services platform.

**Note 2. Summary of Significant Accounting Policies**

**Basis of presentation**

The accompanying consolidated financial statements include the balances and results of operations of the Company and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission ("SEC") and in conformity with generally accepted accounting principles in the U.S. ("US GAAP").

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which, except for the sale of fixed assets described in the other income section of this note and the accelerated amortization of intangible assets described in the intangible assets sections of this note, are of a normal recurring nature, necessary to present fairly its financial position as of September 30, 2025, and the results of its operations for the nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended December 31, 2024, and the notes thereto. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

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**Principles of consolidation**

Pursuant to the share exchange with the holders of AAM's equity, which had the same ownership structure as SAI before and after the share exchange, the Group financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the AAM share exchange had been completed at the beginning of the earliest reporting period.

The consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of SAI and AAM for the relevant periods include the results and cash flows of SAI and AAM from the earliest date presented.

The consolidated balance sheets as of September 30, 2025 and December 31, 2024 have been prepared to present the assets and liabilities of the subsidiaries using the existing book values from the common shareholders' perspective. No adjustments are made to reflect fair values, or to recognize any new assets or liabilities as a result of the share exchange.

For all business combinations, the Group's consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost. For all periods presented, the consolidated financial statements include the Group.

All inter-company transactions are eliminated in consolidation.

**Use of estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

**Foreign currency translation**

The financial statements of the Group's subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders' equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive (loss) income in stockholders' equity. Foreign currency transaction gains and losses are included in other expenses in the consolidated statements of operations and comprehensive loss. The Company recorded realized foreign currency transaction loss of $2 thousand and an unrealized foreign currency transaction loss of $80 thousand for the quarter ended September 30, 2025 and realized foreign currency transaction loss of $2 thousand and an unrealized foreign currency transaction loss of $430 thousand for the nine months ended September 30, 2025. These are included in other expenses, in the consolidated statements of operations and comprehensive loss.

**Acquisitions**

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the test to determine whether an acquisition is a business combination or an acquisition of assets.

Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

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The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes pre-acquisition direct costs recorded in accrued professional and consulting fees. Goodwill is not recognized in asset acquisitions.

**Revenue recognition**

The Group earns revenues from the provision of data storage to a blockchain network.

The Group recognizes revenue in accordance with Accounting Standards Codification ("ASC") Topic 606 Revenue from Contracts with Customers, which provides a five-step model for recognizing revenue from contracts with customers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;i. identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;ii. identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;iii. determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;iv. allocate the transaction price to the performance obligation in the contract

&nbsp;&nbsp;&nbsp;&nbsp;v. recognize revenue when the entity satisfies a performance obligation.

Below is a discussion of how the Group's revenues are earned and the Group's accounting policies pertaining to revenue recognition under ASC 606 and other required disclosures.

*Digital asset - mining revenue*

The Group provides data storage services in exchange for non-cash consideration in the form of a digital asset.

The Group's performance obligations to provide the data storage services arises in the Filecoin ("FIL") network when a customer in this network digitally requests the service from data storage providers such as the Group.

The Group satisfies this performance obligation when it proves delivery of data storage services on the FIL blockchain by undertaking daily computations that validate the successful delivery of the data storage services to the end FIL customer. Upon selection as the storage provider and successful validation, the Group receives its share of network block rewards, and therefore recognizes revenue at that point in time, for the satisfactory completion of this performance obligation.

The relative share of network block rewards in Filecoin is determined by the amount of "sealed" or proven storage that the Group has in the network. The more data the Group stores the higher the probability of winning block rewards.

Block rewards are deposited into the Group's digital wallets immediately upon completing the validation (WinningPoSt) computations.

In the second quarter of 2025, the Company discontinued its Filecoin-related activities as part of a strategic shift in operations.

*Revenue from provision of GPU Infrastructure*

The Group earns revenues from the provision of GPU Infrastructure as a service to customers via a marketplace. Revenue from provision of GPU Infrastructure for the Group is recognized on a weekly basis as the performance obligation of the supplied GPU IaaS is met. The Group satisfies this performance obligation when it has the required equipment available to the customer for the period.

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**Other income**

*Sale of Fixed Assets*

The sale of fixed asset in first quarter is for the sale of the tier 3 by design modular data center and ancillary infrastructure equipment owned by SharonAI Pty Ltd. The assets were located in Australia and were sold to a private Australian company with proceeds due in May 2025. The assets were sold for a total of $1,257 thousand (AUD$2,000 thousand) including Goods and Service Tax (GST). A gain on sale of $809 thousand was recognized from the sale.

On June 20, 2025, the Company repossessed the Modular Data Centre (MDC) following the buyer default on the previously recognized sale transaction. In accordance with ASC 360, the MDC was re-recognized as an asset held for sale and measured at its fair value less costs to sell (FVLCTS). As of June 30, 2025, management determined the FVLCTS of the modular data centre to be $1,109 thousand (AUD$1,700 thousand), based on a cost approach adjusted for obsolescence, market corroboration from non-binding offers, and consideration of the asset's specialized nature and limited liquidity. In the absence of a completed sale or definitive market valuation prior to year-end, management will perform an updated valuation analysis as of December 31, 2025 to reassess the asset's carrying value.

On June 30, 2025, the Company completed the sale of a set of storage servers for total consideration of $153 thousand (AUD$235 thousand). The assets, which were previously classified as property, plant, and equipment, were fully depreciated and no longer in active use at the time of sale. As a result, the entire sale proceeds were recognized as a gain on disposal in the consolidated statement of operations for the quarter ended June 30, 2025.

**Cost of revenue**

Cost of revenue consists primarily of expenses that are directly related to providing the Group's service to its paying customers. These primarily consist of material costs related to digital currency mining and provision of GPU infrastructure services.

**Income tax benefit (expense)**

The income tax benefit (expense) recognized in the consolidated statements of operations and comprehensive loss comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized.

Tax positions taken or expected to be taken in the course of preparing the Group's tax returns are required to be evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There are no uncertain tax positions that require accrual or disclosure to the financial statements as of September 30, 2025, or December 31, 2024. The Group's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Group had no material accruals for interest or penalties related to income tax matters as of September 30, 2025, or December 31, 2024. Generally, the Group's tax returns are subject to examinations by local Australian tax authorities for tax filings for all years since inception.

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**Cash and cash equivalents**

Cash and cash equivalents comprise cash in bank, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

**Financial instruments**

Financial instruments are recognized initially on the date that the Group becomes party to the contractual provisions of the instrument. The Group's financial instruments consist of cash and cash equivalents, certificates of deposit, other receivables and trade and other payables and borrowings and are carried at cost, which approximates fair value due to the short-term nature of these instruments.

**Goods and services tax (GST)**

Revenue, expenses and assets are recognized net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST.

Cash flows in the consolidated statements of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

**Property and equipment**

Property and equipment is stated at cost, net of accumulated depreciation. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statements of operations and comprehensive loss. The Group provides for depreciation using the straight-line method over the estimated useful lives of the respective assets.

A summary of estimated useful lives is as follows:

---

| | |
|:---|:---|
| **Fixed asset class** | **Useful life** |
| Used Computer Equipment | 1 year |
| Computer Equipment | 2-5 years |
| Other Equipment | 5 years |

---

Other Equipment above includes modular data centres, electrical equipment, cooling infrastructure equipment, telecommunication modules and sundry building and storage. Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred.

**Intangible assets**

Intangible assets are recognized at fair value when acquired, either separately or as part of a business combination, in accordance with ASC 805. Identifiable intangibles are those that are either separable or arise from contractual or legal rights. Internally generated intangible assets, such as brands or customer relationships, are generally expensed as incurred, with the exception of certain software development costs, which may be capitalized once technological feasibility is established, per ASC 350-40.

Finite-lived intangible assets are amortized over their estimated useful lives, typically on a straight-line basis, reflecting the consumption of economic benefits. Useful lives are based on legal, contractual, or economic factors and are generally between 1 to 20 years. Residual values are assumed to be zero unless a third-party commitment exists. Amortization begins when the asset is available for use and any changes in useful life or method are accounted for prospectively.

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Intangible assets with indefinite lives, such as trademarks or perpetual licenses, are not amortized but are tested for impairment at least annually, or more frequently if indicators of impairment arise, in accordance with ASC 350. Goodwill, which arises in business combinations, is also not amortized but tested for impairment annually at the reporting unit level or when triggering events occur. An optional qualitative assessment may be performed before a quantitative test. Intangible assets with indefinite lives and goodwill are evaluated at the beginning of the fourth quarter annually in line with company policy.

Finite-lived intangible assets are assessed for impairment under ASC 360-10 if events suggest their carrying amount may not be recoverable. If undiscounted future cash flows are less than the carrying amount, an impairment loss is recognized as equal to the excess of carrying value over fair value. For indefinite-lived intangibles and goodwill, impairment losses are recorded when the carrying amount exceeds fair value, with goodwill impairment limited to the carrying amount of goodwill.

During the second quarter of 2025, the Company discontinued its Filecoin operations. As a result of this strategic decision, the Company determined that the intangible assets associated with Filecoin-related technology no longer had any future economic benefit. In accordance with ASC 350, Intangibles- Goodwill and Other, the carrying amount of these intangible assets was fully amortized.

**Digital assets**

The Group purchases or mines digital assets or receives digital assets as consideration for the delivery of its services. The Group accounts for all digital assets held as crypto assets, a subset of indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles- Goodwill and Other- Crypto Assets. The Group has ownership of and control over the digital assets and may use third-party custodial services to secure it.

The digital assets are initially recorded at cost if purchased or fair value if received in mining revenue operations and are subsequently remeasured on the consolidated balance sheet at fair value. Cost is determined based on the cash consideration paid net of the transaction costs. The Group remeasures on a monthly basis the fair value of the digital assets determined by observable market rates.

The Group recognized a loss of $15 thousand from the sale of digital assets during the three months ended September 30, 2025. For the three months ended September 30, 2024, the Group recognized a total loss of $96 thousand from the sale and fair value remeasurement of its digital assets. Gains and losses from the remeasurement of crypto assets are included in net income and presented separately from other intangible assets.

At times, the Group may settle various payables and accrued liabilities in digital assets within the normal course of operations. Gains and losses arising from transactions settled with digital assets are included as a component of other income or selling, general, and administrative expenses within the accompanying consolidated statements of operations and comprehensive loss.

The Group's digital assets consist primarily of Filecoin crypto-currency.

**Goodwill Assessment**

As of June 30, 2025, the Group performed an interim impairment test for goodwill in accordance with ASC 350-20, due to a triggering event. In June 2025, the Board approved the closure of the Group's distributed storage operations, which were part of a business acquired in June 2024. The shutdown represented a significant change in strategic direction and constituted a triggering event requiring impairment testing.

Goodwill arising from the acquisition amounted to $18.0 million and is allocated to the Group's sole reporting unit, which is also the Group's single operating segment- provision of high-performance computing services. The acquired operations were fully integrated into the Group and do not represent a standalone reporting unit.

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A quantitative impairment test was performed using a discounted cash flow (DCF) model, with the following key assumptions:

● Projection period: FY2025 to FY2028

● Discount rate (WACC): 19.8%

● Terminal growth rate: 2%

● Tax rate: 23%

The fair value of the reporting unit was estimated at $28 million, compared to the carrying amount of $26.3 million, resulting in headroom of $1.7 million. Accordingly, no goodwill impairment was recognized.

A sensitivity analysis was also conducted to assess the impact of adverse changes in key assumptions. Under scenarios with higher discount rates or lower terminal growth, the fair value declined significantly, with certain cases indicating potential impairment. For example, increasing the discount rate to 21% and reducing the terminal growth rate to 1.5% resulted in a fair value below the carrying amount.

While no impairment is currently required, the narrow headroom indicates that goodwill may be susceptible to future impairment should there be any unfavorable changes in market conditions, adverse changes in key valuation assumptions, or business performance. Management will continue to monitor relevant indicators and reassess as necessary.

**Equity-settled compensation**

The Group follows ASC 718-10, *Compensation-Stock Compensation*. The Group offers equity-settled stock-based compensation employee share and option plans. The fair value of the equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, with a corresponding increase to equity.

Vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of options which are expected to vest. Revisions to the prior period estimates are recognized in profit or loss and equity.

The Group has the following types of equity settled transactions:

*Options*

The Group issues options to board members. The options are measured at fair value based on the Black-Scholes option pricing model on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period.

*Restricted Stock Units*

The Group issues restricted stock units to employees. These units are measured at fair value based on observable market bid prices on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period.

**Recently Adopted Accounting Standards**

The Company's management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

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**Note 3. Revenue and Other Income**

*Revenue from continuing operations*

Revenue is recognized at point in time.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended** | **For the<br> Three Months Ended** | **For the<br> Nine Months Ended** | **For the<br> Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Digital Asset Mining Revenue | $- | $107211 | $128842 | $120011 |
| &nbsp;&nbsp;&nbsp;Provision of GPU Infrastructure services | 506414 | 51789 | 1078658 | 51789 |
| &nbsp;&nbsp;&nbsp;Other revenue | 333 | - | 1324 | - |
| **Total Revenue** | $**506747** | $**159000** | $**1208824** | $**171800** |

---

***Other income***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended** | **For the<br> Three Months Ended** | **For the<br> Nine Months Ended** | **For the<br> Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Other income |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain on Disposal of Fixed Assets | $- | $- | $961713 | $- |
| &nbsp;&nbsp;&nbsp;Research and development Grants | - | 140938 | - | 140938 |
| **Other Income** | $**-** | $**140938** | $**961713** | $**140938** |

---

**Note 4. Income Tax Expense**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended** | **For the<br> Three Months Ended** | **For the<br> Nine Months Ended** | **For the<br> Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Effective income tax rate | 1.5% | (1.1)% | 3.6% | (0.9)% |

---

The Company's effective income tax rate was 1.5% and (1.1)% for the three months ended September 30, 2025 and 2024, respectively, and 3.6% and (0.9)% for the nine months ended September 30, 2025 and 2024, respectively.

The income tax expense (benefit) was ($29) thousand and $20 thousand for the three months ended September 30, 2025 and 2024, respectively, and and the income tax expense (benefit) was ($219) thousand and $20 thousand for the nine months ended September 30, 2025 and 2024, respectively.

The effective income tax rate for the three and nine months ended September 30, 2025 and 2024 differed from the 21.0% federal statutory rate primarily due to the change in valuation allowance maintained against certain deferred tax assets, state income taxes, and the impact of research and development tax incentives.

**Note 5. Certificates of deposits**

At September 30, 2025, the Company held certificates of deposits (CDs) totaling $906 thousand which are restricted due to their use as collateral for bank guarantees issued for equipment managed service contracts. The CDs have either a 6-month or 12-month term and are maintained in a bank account in the Company's name. Interest earned on the CDs is accrued to the Company. Under the terms of the service contracts, the supplier may claim the funds in the event of a material default by the Company in fulfilling its payment obligations. These arrangements do not transfer ownership or control of the CDs but restrict their use for the duration of the CD term. Additionally, in conjunction with the Company's new service contracts in 2025, the supplier required the Company to maintain these CD's throughout the duration of the contract period, or until the supplier agrees to release them. This resulted in a long-term restriction on the CDs.

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**Note 6. Trade and other receivables**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Trade receivables | $57921 | $15799 |
| Research and development grant receivable |  | 891482 |
| GST receivable | 247621 | 57237 |
| **Total trade and other receivables** | $**305542** | $**964518** |

---

**Note 7. Property and Equipment**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| **Computer equipment** |  |  |
| At cost | $5075952 | $4640968 |
| Accumulated Depreciation | (1298339) | (407672) |
| **Total Computer Equipment** | **3777613** | **4233296** |
| **Other equipment** |  |  |
| At cost |  | 380900 |
| Accumulated Depreciation | - | (38089) |
| **Total Office Equipment** | **-** | **342811** |
| **Total property and equipment, net** | $**3777613** | $**4576107** |

---

Depreciation expense related to computer equipment amounted to $506 thousand and $1,310 thousand for the three and nine months ended September 30, 2025, respectively. Foreign currency translation adjustments of $164 thousand and $458 thousand were recognized for the same three and nine-month periods, respectively.

**Note 8. Digital Assets**

The following table provides details of the activities related to our digital assets for the quarter ended September 30, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| **Balance at beginning of the period** | $**721664** | $**-** |
| Acquisitions |  | 637612 |
| Disposals | (351755) | (119268) |
| Earned FIL revenue | 138080 | 219763 |
| FIL cost of revenue | (146478) | (118497) |
| Change in fair value of digital assets | (406345) | 143951 |
| Unrealized gain (loss) on foreign currency translation | 44833 | (41897) |
| **Balance at the end of period** | $**-** | $**721664** |

---

As of September 30, 2025, the Company no longer holds any digital assets. All previously held digital assets were disposed of or sold during the period.

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**Note 9. Intangible Assets**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended** | **For the<br> Three Months Ended** | **For the<br> Nine Months Ended** | **For the<br> Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Finite-Lived Intangible Assets** |  |  |  |  |
| Balance at beginning of the period | $- | $- | $8963 | $- |
| Acquired Definite-Lived Intangible Assets |  |  |  |  |
| Amortization of Definite-Lived Intangible Assets | - | - | (8963) | - |
| **Balance at the end of period** | $**-** | $**-** | $**-** | $**-** |
| **Technology** |  |  |  |  |
| Balance at beginning of the period | $- | $- | $1650000 | $- |
| Technology acquired |  |  |  |  |
| Accumulated amortization | - | - | (1650000) | - |
| **Balance at the end of period** | $**-** | $**-** | $**-** | $**-** |

---

Finite-Lived Intangible Assets

Finite-lived intangible assets include digital asset deals contracts which are paid in Filecoin tokens and are amortized over the life of the contract. As part of the Company's decision to discontinue its Filecoin operations in the second quarter of 2025, the related finite-lived intangible asset was fully amortized during the period.

Technology

The acquired technology relates to the DSS acquisition in June 2024. As part of the Company's decision to discontinue its Filecoin operations in the second quarter of 2025, management evaluated the recoverability of intangible assets related to Filecoin-related technology. Based on this assessment and in accordance with ASC 350, *Intangibles- Goodwill and Other*, the Company concluded that this intangible asset no longer had any future economic benefit. Accordingly, their full carrying amount was fully amortized during the period.

**Note 10. Trade and Other Payables**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Trade payables | $437363 | $404852 |
| Accrued expense | 65485 | 442272 |
| Annual payment provision | 59308 | 50157 |
| Income tax payable |  | 40714 |
| Other payables | - | 19834 |
| **Total trade and other payables** | $**562156** | $**957829** |

---

Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

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**Note 11. Note Payable**

On July 15, 2025, the Company entered into a Convertible Note Agreement with YA II PN, LTD for total proceeds of $500 thousand. The note bears interest at 10% per annum, increasing to 18% upon an event of default, and matures July 15, 2026.

The note includes a contingent conversion feature linked to the closing of the Business Combination Agreement ("BCA"). Prior to the BCA close (expected by December 31, 2025), the conversion price is fixed at $60.62 per share, resulting in a fixed and determinable number of shares. Accordingly, the conversion feature qualifies for the own-equity scope exception under ASC 815-40 and is not separated as a derivative. The instrument is accounted for as a single debt liability at amortized cost under ASU 2020-06.

If the BCA is not completed by December 31, 2025, the conversion terms transition to a volume-weighted average price ("VWAP") - based price, at which point the Company will reassess the feature. If conversion remains possible, a derivative liability will be recognized and measured at fair value through earnings.

Monthly cash payments commence only upon certain triggering events- such as failure to close the BCA by the specified deadline or the occurrence of an amortization event- until the outstanding principal and accrued interest are fully repaid.

**Note 12. Leases**

The Company leases GPU and associated computer and networking equipment under non-cancelable finance lease agreements. Lease terms generally range from 3 to 5 years and may include options to extend or terminate the lease. Lease agreements may contain both lease and non-lease components, which the Company accounts for as a single lease component for all asset classes under a practical expedient election. The Company also elected the short-term lease exemption for all leases with original terms of 12 months or less, whereby such leases are not recognized on the balance sheet.

**Lease cost**

The components of lease cost were as follows:

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,<br> 2025** | **For the<br> Nine Months Ended<br> September 30,<br> 2025** |
| **Description** |  |  |
| Finance lease – interest | $65977 | $136913 |
| Finance lease – amortization | 188626 | 459287 |
| **Total Lease Cost** | $**254602** | $**596200** |

---

**Lease assets and liabilities**

ROU assets and lease liabilities are recorded on the consolidated balance sheet as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| **Description** |  |  |
| Finance lease ROU asset | $7476827 | $935336 |
| Finance lease liability (current) | $3542831 | $186620 |
| Finance lease liability (non-current) | $4108328 | $760087 |

---

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**Maturity analysis of lease liabilities**

Future minimum lease payments as of September 30, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| **Description** |  |  |
| 2025 | $2823578 | $230044 |
| 2026 | 1311473 | 230044 |
| 2027 | 1311473 | 230044 |
| 2028 | 1311473 | 230044 |
| 2029 | 1189073 | 115023 |
| 2030 | 375282 | - |
| **Total** | **8322352** | **1035199** |
| Less: Imputed interest | 671193 | 88492 |
| **Present value of lease liabilities** | $**7651159** | $**946707** |

---

**Other information**

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31,<br> 2024** |
| Weighted-average remaining lease term (years) | 4.1 | 4.5 |
| Weighted-average discount rate: | 5.72% | 5.19% |
| ROU assets obtained in exchange for ROU Liability | $8153736 | $1061831 |
| Operating cash impact of finance leases | $65977 | $- |

---

**Note 13. Share-based compensation**

The Group grants Options and Restricted Stock Units (RSUs) under the 2024 Equity Incentive Plan (the "2024 Plan") to Board Members, Advisory Board Members, Employees and Contractors. The grants have a combination of performance based and time-based hurdles and vesting periods. On January 16, 2025, the Group granted 5,361 options which have a contractual term of 10 years. The options have an exercise price of $61 per share and convert on a 1:1 basis. The Group ascertains the fair value of the Options and RSUs using a Black-Scholes pricing model. The fair value of equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, along with a corresponding increase to equity. As of September 30, 2025, the Group has the following share-based compensation:

*Stock Options*

Share-based compensation expense of $34 thousand has been recognized in the period ending September 30, 2025, for options based on the pro rata expense of the service-based options over the vesting period. As of September 30, 2025, 1900 options had vested.

*Stock Option Activity*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Activity** | **Number of<br> Options** | **Weighted-Average<br> Exercise Price** | **Weighted-Average<br> Remaining Contractual<br> Term (Years)** | **Aggregate<br> Intrinsic Value** |
| Outstanding at December 31, 2024 | 4617 | 61 | 9.25 |  |
| &nbsp;&nbsp;&nbsp;Granted | 5361 | 61 | 9.50 |  |
| &nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited |  |  |  |  |
| Outstanding at September 30, 2025 | 9977 | 61 | 9.38 |  |
| Exercisable at September 30, 2025 | 1900 | 61 | 9.50 |  |

---

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*Restricted Stock Units (RSUs)*

Share-based compensation expense of $455 thousand has been recognized in the period ending September 30, 2025, for the performance-based RSUs based on the portion of hurdles being met and pro rata time-based vesting conditions being satisfied during the period.

---

| | | |
|:---|:---|:---|
| **Activity** | **Performance-Based<br> RSUs** | **Weighted-Average<br> Grant Date<br> Fair Value** |
| Unvested at December 31, 2024 | 52677 | 3193280 |
| &nbsp;&nbsp;&nbsp;Granted<sup>(1)</sup> | 8724 | 528849 |
| &nbsp;&nbsp;&nbsp;Vested<sup>(2)</sup> | (22142) | (956968) |
| &nbsp;&nbsp;&nbsp;Vested in prior periods | (3996) | (242210) |
| &nbsp;&nbsp;&nbsp;Forfeited |  |  |
| **Unvested at September 30, 2025** | **35263** | **2522951** |

---

(1) The company is contractually obligated to issue these RSU's as at 1 January 2025, however, the RSU's have yet to be documented and granted.

(2) RSU's listed as vested are not exercisable but representative of the pro-rata portion of the RSU grant vested in the period

At September 30, 2025, compensation costs related to these unvested stock-based compensation awards not yet recognized in the consolidated statements of operations was $3,012,296.

**Note 14. Employee Benefit Plan** 

The Group's employees that are located in Australia participate in a Superannuation defined benefit scheme. Superannuation is Australia's mandatory retirement savings system, requiring employers to contribute 11.5% of an employee's earnings into a regulated fund. Contributions receive concessional tax treatment, with employer payments taxed at 15% within the fund. Superannuation is typically preserved until retirement age (55–60), with limited early access exceptions. Funds are regulated by Australian Prudential Regulation Authority, Australian Securities and Investments Commission, and the Australian Taxation Office, and offer various investment options, often including insurance coverage. Withdrawals can be taken as a lump sum or income stream, subject to tax rules. Legislative changes may affect contribution limits, taxation, and access conditions.

The Group's employees located in the USA currently do not have a retirement scheme, however it is intended the Company implement such a scheme in 2025.

**Note 15. Fair Value Measurement**

The Group measures the following assets and liabilities at fair value on a recurring basis:

Intangible assets – Indefinite-lived Digital Assets held at fair value.

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*Fair value hierarchy*

ASC Topic 820, Fair Value Measurement and Disclosures ("ASC Topic 820") requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The table below shows the assigned level for each asset and liability held at fair value by the Group:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair value hierarchy** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| As of September 30, 2025 |  |  |  |  |
| **Recurring fair value measurements** |  |  |  |  |
| Intangible assets - Indefinite-lived Digital Assets |  |  |  |  |
| As of December 31, 2024 |  |  |  |  |
| **Recurring fair value measurements** |  |  |  |  |
| Intangible assets - Indefinite-lived Digital Assets | $721664 |  |  | $721664 |

---

The Group's assets held at fair value comprise of indefinite lived cryptocurrency (digital assets) classified at level 1. See Note 10 for support. The Group did not make any transfer between the levels of the fair value hierarchy during the first three quarters of 2025.

**Note 16. Supplemental disclosure of cash flow information**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| **Supplemental information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $136913 | $**-** |
| Non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;DIF acquisition | **-** | 1256046 |
| &nbsp;&nbsp;&nbsp;Equity consideration issued in acquisition of DSS | **-** | 20909267 |
| &nbsp;&nbsp;&nbsp;Purchase of Alternate Asset Management (Sharon AI Pty Ltd) | **-** | 210000 |
| &nbsp;&nbsp;&nbsp;Gain on sale of modular data centre (MDC) | 808513 | **-** |
| &nbsp;&nbsp;&nbsp;Assets held for Sale- rerecognize MDC | 1105000 | **-** |
| &nbsp;&nbsp;&nbsp;Bad debt expense related to MDC sale | (1180620) | **-** |
| &nbsp;&nbsp;&nbsp;ROU assets obtained in exchange for ROU Liability | 8153736 | 1061831 |
| &nbsp;&nbsp;&nbsp;Debt issuance converted to stock | $**-** | $419601 |

---

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**Note 17. Contingent Liabilities**

Unconditional Purchase Obligation

In connection with the termination of its data center services arrangement under the Digital Storage Solutions (DSS) agreement, the Company entered into a contractual commitment with Andrew Sjoquist Enterprises (ASE), a managed service provider. Under the termination arrangement, the Company is required to utilize services from ASE totaling approximately AUD$400 thousand over the next five years.

The commitment is noncancelable and qualifies as an Unconditional Purchase Obligation under ASC 440-10-50. As of September 30, 2025, no liability has been recognized, as the obligation represents future purchases of services expected to benefit the Company. The Company will disclose in future periods any material changes or if the commitment becomes onerous.

Other than the obligation described above, the Group did not have any significant commitments or contingencies as of September 30, 2025.

**Note 18. Net Loss per Share**

Basic net income (loss) per share is computed by dividing net income (loss) applicable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of securities that could share in the earnings of an entity using the treasury method or the if-converted method, if applicable. The calculation of diluted net income (loss) per share gives effect to common share equivalents; however, potential common shares are excluded if their effect is anti-dilutive. Convertible Series B Preferred Stock issued and outstanding, and share-based options are considered common share equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.

The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive:

● Stock options and RSU's: 62,654 shares

● Warrants: 8,195 shares

● Convertible preferred stock: 27,000 shares

A reconciliation of the numerators and denominators is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Numerator:** |  |  |  |  |
| Net loss available to common shareholders | $(1635511) | $(1138087) | $(5663822) | $(1380466) |
| Less: Net loss attributable to the noncontrolling interest | (7850) | (5463) | (27185) | (5463) |
| Net loss attributable to common shareholders | $**(1627661)** | $**(1132624)** | $**(5636637)** | $**(1375003)** |
| **Denominator:** |  |  |  |  |
| Basic and diluted weighted average number of common shares outstanding | 1067213 | 975475 | 1067213 | 975475 |
| **Basic and diluted net loss per common share outstanding** | $**(1.53)** | $**(1.16)** | $**(5.28)** | $**(1.41)** |

---

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**Note 19. Segment Information**

The Company operates in one operating segment, and therefore one reportable segment, focused on the provision of High Performance Compute Services (HPC). The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Group's chief operating decision maker ("CODM"), who is the Chief Executive Officer.

The Group's method for measuring profitability on a reportable segment basis is operating profit or loss, which the CODM uses to assess performance for the Group and in deciding how to allocate resources. The CODM does not review disaggregated assets by segment. The Group adopted ASU 2023-07 in December 2024. The most significant provision was for the Group to disclose significant segment expenses that are regularly provided to the CODM. The Group's CODM periodically reviews cost of revenues and selling, general and administrative expenses, excluding share-based compensation, by segment and treats them as significant segment expenses.

The following table presents segment expenses, other segment items, and segment operating loss for the period:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Three Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** | **For the<br> Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenue | $506747 | $159000 | $1208824 | $171800 |
| Less: Segment Expenses |  |  |  |  |
| Costs of revenue | 371778 | 329005 | 1083426 | 336405 |
| Selling, general and administrative expenses | 880351 | 806712 | 2970874 | 1065931 |
| Other segment items<sup>(1)</sup> | 833120 | 163652 | 3466219 | 169327 |
| Loss (gain) on sale/exchange of equipment | - | (140938) | (961713) | (140938) |
| Segment expenses | 2085249 | 1158431 | 6558806 | 1430725 |
| **Segment loss from operations** | $**(1578502)** | $**(999431)** | $**(5349982)** | $**(1258925)** |

---

(1) Other segment items for the reportable segment include share-based compensation and other expenses.

**Note 20. Transactions with related parties**

Sharon Australia have entered into an independent contractor agreement-corporate with James Manning and Manning Group Pty Ltd ATF MG Office Trust ("Manning Consulting Agreement"). Pursuant to the Manning Consultant Agreement, Mr. Manning, as the key person, provides certain services to SharonAI and Sharon Australia relating to commercial opportunity development, discovery of future data center sites, future data center acquisition and construction advisory, transaction advisory services and key relationship introduction and development. In consideration for these services, Manning Group Pty Ltd ATF MG Office Trust is entitled to receive an annual remuneration of AUD$334,500 (approximately $211,000 based on a conversion rate of AUD$1.00 to USD$0.63), exclusive of Australian goods and services taxes. The Manning Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

Sharon Australia has entered into an independent contractor agreement with Nicholas Hughes Jones related entity Inbocalupo Consulting Pty Ltd ("Inbocalupo Consulting Agreement"). Pursuant to the Inbocalupo Consultant Agreement and combined with Mr Hughes-Jones employment agreement, Mr. Hughes-Jones, as the key person, provides certain services to SharonAI and Sharon Australia relating to business development services. In consideration for these services, Inbocalupo Consulting Pty Ltd is entitled to receive an annual remuneration of AUD$133.8 thousand (approximately $84,294 based on a conversion rate of AUD$1.00 to USD$0.63), exclusive of Australian goods and services taxes. The Inbocalupo Consulting Agreement was modified on June 9, 2025 for consulting work to be on an hourly as needed basis.

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Sharon Australia has entered into an independent contractor agreement with Broadfoot Group Pty Ltd ("Broadfoot Consulting Agreement"). Pursuant to the Broadfoot Consultant Agreement, Mr. Broadfoot and Mrs Broadfoot, as the key persons, provides certain services to SharonAI and Sharon Australia relating to Chief Financial Officer support and executive assistant services to the CFO. In consideration for these services, Broadfoot Group Pty Ltd is entitled to receive an annual remuneration of AUD$111.5 thousand (approximately $70,245 based on a conversion rate of AUD$1.00 to USD$0.63), exclusive of Australian goods and services taxes. The Broadfoot Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

**Note 21. Subsequent Events** 

Subsequent to the quarter ended September 30, 2025, the following events occurred:

On October 1, 2025, the Company drew down $2.0 million under its existing convertible note facility with YA II PN, Ltd. The proceeds are intended to be used for general corporate and working capital purposes in accordance with the terms of the facility agreement.

On October 10, 2025, the Company established a new wholly owned subsidiary, SharonAI NZ Limited, incorporated in New Zealand. SharonAI NZ Limited is 100% owned by SharonAI Pty Ltd, a subsidiary of the Company, and was formed to support the Company's expansion of operations in the region.

On October 26, 2025, the Company entered into a mandate letter with Canaccord Genuity (Australia) Limited to act as lead manager for the Company's planned pre-IPO equity raising. Under the engagement, Canaccord will manage and coordinate the offering of convertible notes with terms to be finalized. The offering is targeting approximately USD $40 million (net of fees).

On November 3, 2025, the Company signed a capacity expansion agreement with NextDC Limited to secure up to an additional 50 megawatts (MW) of data center space. The agreement provides the Company with access to additional capacity to support anticipated growth in its GPU infrastructure requirements.

On December 17, 2025, the BCA closed and SharonAI became a wholly-owned subsidiary of SharonAI Holdings Inc. (f/k/a Roth CH Holdings, Inc.).

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

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**SharonAI Inc.**

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders and Board of Directors of

SharonAI Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of SharonAI Inc. and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company's auditor since 2025.

/s/ HoganTaylor LLP

Tulsa, Oklahoma

April 25, 2025

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**SharonAI Inc.**

**Consolidated Balance Sheets**

**As of December 31, 2024 and 2023**

---

| | | | |
|:---|:---|:---|:---|
|  | <br>**Note** | **December 31,<br> 2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| **ASSETS** |  |  |  |
| Current assets: |  |  |  |
| Cash and cash equivalents |  |  | **204** |
| Certificates of deposit | **7** |  |  |
| Trade and other receivables | **8** |  | **-** |
| Other current assets | **9** |  | **-** |
| **Total current assets** |  |  | **204** |
| Property and equipment, net | **10** |  | **-** |
| Right of use assets, net | **14** |  |  |
| Digital assets | **11** |  | **-** |
| Intangible assets, net | **12** |  | **-** |
| Goodwill |  |  | **-** |
| **Total assets** |  |  | **204** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |  |
| Current liabilities: |  |  |  |
| Trade and other payables | **13** |  | **-** |
| Finance lease liability – current portion | **14** |  | **-** |
| Borrowings |  |  | **-** |
| **Total current liabilities** |  |  | **-** |
| Finance lease liability, net of current portion | **14** |  | **-** |
| Deferred tax liabilities | **6** |  | **-** |
| **Total liabilities** |  |  | **204** |
| Stockholders' equity: |  |  |  |
| Series A Preferred Stock (15,000 and 0 par value shares issued and outstanding as of December 31, 2024 and 2023, respectively) | **15** |  | **-** |
| Series B Convertible Preferred Stock (27,000 and 0 par value shares issued and outstanding as of December 31, 2024 and 2023, respectively) |  |  | **-** |
| Common Stock (1,067,213 and 300 par value shares issued and outstanding as of December 31, 2024 and 2023, respectively) |  |  | **204** |
| Additional paid-in capital |  |  | **-** |
| Accumulated deficit |  |  | **-** |
| Noncontrolling interest |  |  | **-** |
| Accumulated other comprehensive income (AOCI) |  |  | **-** |
| **Total stockholders' equity** |  |  | **204** |
| **Total liabilities and stockholders' equity** |  |  | **204** |

---

The accompanying notes are an integral part of the consolidated financial statements.

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**SharonAI Inc.**

**Consolidated Statements of Operations and Comprehensive Loss**

**For the Years Ended December 31, 2024 and 2023**

---

| | | | |
|:---|:---|:---|:---|
|  | **Note** | **2024**<br> **$** | **2023**<br> **$** |
| Revenue | **5** | **438292** | **-** |
| Cost of revenue |  | **(719993)** | **-** |
| Gross loss |  | **(281701)** | **-** |
| Share based compensation | **16** | **(253728)** | **-** |
| Selling, general, and administrative expenses |  | **(2368745)** | **-** |
| Other expenses |  | **(2047133)** | **-** |
| **Loss from operations** |  | **(4951307)** | **-** |
| Change in fair value of digital assets |  | **157923** | **-** |
| Other income | **5** | **921322** | **-** |
| Interest expense, net |  | **(19028)** | **-** |
| **Loss before income taxes** |  | **(3891090)** | **-** |
| Income tax expense | **6** | **(32908)** | **-** |
| **Net loss** |  | **(3923998)** | **-** |
| Net loss attributable to noncontrolling interest |  | **(18717)** | **-** |
| **Net loss attributable to SharonAI Inc.** |  | **(3905281)** | **-** |
| **Other comprehensive income:** |  |  |  |
| Foreign currency translation adjustments |  | **423858** | **-** |
| **Other comprehensive income** |  | **423858** | **-** |
| Other comprehensive income attributable to noncontrolling interest |  | **1025** | **-** |
| **Other comprehensive income attributable to SharonAI Inc.** |  | **424883** | **-** |
| **Comprehensive loss attributable to SharonAI Inc.** |  | **(3480398)** | **-** |
| **Loss per share of common stock** |  |  |  |
| Basic and diluted |  | **(7.02)** | **-** |
| **Weighted-average shares of common stock outstanding** |  |  |  |
| Basic and diluted |  | **556356** | **300** |

---

The accompanying notes are an integral part of the consolidated financial statements.

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**SharonAI Inc.**

**Consolidated Statements of Changes in Stockholders' Equity**

**For the Year Ended December 31, 2024 and 2023**

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series A<br> Preferred Stock** | **Series B<br> Convertible<br> Preferred Stock** | **Series B<br> Convertible<br> Preferred Stock** | **Common Stock** | **Common Stock** | **Options Reserve** | **Options Reserve** | | | | | | |
|  | **#** | $**#** | **#** | $**#** | **#** | $**#** | **#** | **Additional Paid-In Capital**<br>**$** | **Accumulated deficit**<br>**$** | **Accumulated Comprehensive Income (AOCI)**<br>**$** | **Total SharonAI Inc.'s Equity**<br>**$** | **Non-controlling Interest**<br>**$** | **Total Stockholders Equity**<br>**$** |
| **Balance at December 31, 2022** | **-** |  | **-** |  | **-** |  | **-** |  |  | **-** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of AAM common stock | - |  | - |  | 300 |  | - |  |  | - |  |  |  |
| **Balance at December 31, 2023** | **-** |  | **-** |  | **300** |  | - |  |  | **-** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of Series A preferred stock | 15000 |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of Series B preferred stock |  |  | 27000 |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock |  |  |  |  | 257179 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital raising costs |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;AAM share exchange, net |  |  |  |  | 209700 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition of DIF |  |  |  |  | 55000 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition of DSS |  |  |  |  | 532251 |  | 8195 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion of SAFE securities |  |  |  |  | 3441 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of noncontrolling interest |  |  |  |  | 9342 |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share based compensation |  |  |  |  |  |  | 57294 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity Adjustment from Foreign Currency Translation (CTA) | - |  | - |  | - |  | - |  |  | 423858 |  |  |  |
| **Balance at December 31, 2024** | **15000** |  | **27000** |  | **1067213** |  | **65489** |  |  | **423858** |  |  |  |

---

The accompanying notes are an integral part of the consolidated financial statements.

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**SharonAI Inc.**

**Consolidated Statements of Cash Flows**

**For the Years Ended December 31, 2024 and 2023**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024**<br>**$** | **December 31,<br> 2023**<br>**$** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Loss for the period, including noncontrolling interest |  | **-** |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| Depreciation |  | **-** |
| Share based payments |  | **-** |
| Change in fair value of digital assets |  | **-** |
| Digital assets revenue |  | **-** |
| Digital assets cost of revenue |  | **-** |
| Amortization of intangible assets |  | **-** |
| Income tax expense |  | **-** |
| Unrealized loss on foreign currency exchange |  | **-** |
| Gain on the receipt of equipment |  | **-** |
| (Increase) in trade and other receivables |  | **-** |
| Decrease in other current assets |  | **-** |
| Increase in trade and other payables |  | **-** |
| **Net cash flows used in operating activities** |  | **-** |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  | **-** |
| Cash received from DSS acquisition |  | **-** |
| Purchase of certificates of deposit |  | **-** |
| Payment for the purchase of property and equipment |  | **-** |
| Proceeds from sales of digital assets |  | **-** |
| **Net cash flows used in investing activities** |  | **-** |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from issuance of common stock, net of issuance costs |  | **204** |
| Issuance costs related to capital raise |  | **-** |
| Proceeds from debt issuance with related parties |  | **-** |
| Proceeds from issuance of preferred shares |  | **-** |
| **Net cash flows from financing activities** |  | **204** |
| Effect of exchange rates changes on cash and cash equivalents |  | **-** |
| **Net cash increase in cash and cash equivalents** |  | **204** |
| Cash, restricted cash and cash equivalents at beginning of period |  | **-** |
| **Cash, restricted cash and cash equivalents at end of period** |  | **204** |

---

Refer to Note 21 for the supplemental cash flows information.

The accompanying notes are an integral part of the consolidated financial statements.

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**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **1** | **Description of Business** |

---

The consolidated financial statements cover SharonAI Inc. ("<u>SAI</u>") and its controlled entities (the "<u>Company</u>" or the "<u>Group</u>"). SAI is a digital infrastructure provider, incorporated in the state of Delaware in the United States of America on February 15, 2024. The Group's principal activities are the provision of decentralized data storage solutions and infrastructure in the Filecoin network with revenue generating operations exclusively in Australia to date.

On April 29, 2024, SAI and Alternative Asset Management Pty Ltd ("<u>AAM</u>" or "<u>Sharon Australia</u>"), who have identical ownership as SAI, completed a share exchange. AAM did not have business operations but owned certain mining assets. Pursuant to the transaction there was no change in relative voting interest amongst the existing shareholders of both entities. See Note 2(b) for additional reporting considerations for the share exchange.

Also on April 29, 2024, SAI acquired certain assets from Digital Income Fund Pty Ltd as trustee for Distributed Income Fund ("<u>DIF</u>"), which the Company concluded was an asset acquisition under Accounting Standards Codification (ASC) 805-50 in exchange for SAI equity. See Note 4 for additional information on the DIF asset acquisition.

On June 30, 2024, SAI acquired the majority equity interest of Distributed Storage Solutions Limited ("<u>DSS</u>"). DSS is a cloud storage provider providing robust data storage infrastructure in the Filecoin network with additional focus on high performance computers (HPC) and artificial intelligence, which was determined to be a business combination. See Note 4 for additional information on the DSS business combination.

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Basis of presentation** 

The accompanying consolidated financial statements include the balances and results of operations of the Company and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission ("<u>SEC</u>") and in conformity with generally accepted accounting principles in the U.S. ("<u>US GAAP</u>").

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Principles of consolidation** 

Pursuant to the share exchange with the holders of AAM's equity, which had the same ownership structure as SAI before and after the share exchange, the Group financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the AAM share exchange had been completed at the beginning of the earliest reporting period.

The consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of SAI and AAM for the relevant periods include the results and cash flows of SAI and AAM from the earliest date presented.

The consolidated balance sheets as of December 31, 2024 and 2023 have been prepared to present the assets and liabilities of the subsidiaries using the existing book values from the common shareholders' perspective. No adjustments are made to reflect fair values, or to recognize any new assets or liabilities as a result of the share exchange.

For all business combinations, the Group's consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost. For all periods presented, the consolidated financial statements include the Group.

All inter-company transactions are eliminated in consolidation.

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**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Use of estimates** 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Foreign currency translation** 

The financial statements of the Group's subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders' equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive (loss) income in stockholders' equity. Foreign currency transaction gains and losses are included in other expenses in the consolidated statements of operations and comprehensive loss. The Company recorded realized foreign currency transaction gain of $39,979 and an unrealized foreign currency transaction loss of $970,745 for the year ended December 31, 2024, which is included in other expenses, in the consolidated statements of operations and comprehensive loss.

&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Acquisitions** 

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the test to determine whether an acquisition is a business combination or an acquisition of assets.

Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes pre-acquisition direct costs recorded in accrued professional and consulting fees. Goodwill is not recognized in asset acquisitions. Refer to Note 4, *Acquisitions* for specific acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Revenue recognition** 

The Group earns revenues from the provision of data storage to a blockchain network.

The Group recognizes revenue in accordance with Accounting Standards Codification ("<u>ASC</u>") Topic 606 *Revenue from Contracts with Customers*, which provides a five-step model for recognizing revenue from contracts with customers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) identify the performance obligations in the contract;

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**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) allocate the transaction price to the performance obligation in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) recognize revenue when the entity satisfies a performance obligation.

Below is a discussion of how the Group's revenues are earned and the Group's accounting policies pertaining to revenue recognition under ASC 606 and other required disclosures.

*Digital asset - mining revenue*

The Group provides data storage services in exchange for non-cash consideration in the form of a digital asset.

The Group's performance obligations to provide the data storage services arises in the Filecoin ("<u>FIL</u>") network when a customer in this network digitally requests the service from data storage providers such as the Group.

The Group satisfies this performance obligation when it proves delivery of data storage services on the FIL blockchain by undertaking daily computations that validate the successful delivery of the data storage services to the end FIL customer. Upon selection as the storage provider and successful validation, the Group receives its share of network block rewards, and therefore recognizes revenue at that point in time, for the satisfactory completion of this performance obligation.

The relative share of network block rewards in Filecoin is determined by the amount of "sealed" or proven storage that the Group has in the network. The more data the Group stores the higher the probability of winning block rewards.

Block rewards are deposited into the Group's digital wallets immediately upon completing the validation (WinningPoSt) computations.

*Revenue from provision of Graphics Processing Unit (GPU) Infrastructure*

The Group earns revenues from the provision of GPU Infrastructure as a service to customers via a marketplace. Revenue from provision of GPU Infrastructure for the Group is recognized on a weekly basis as the performance obligation of the supplied GPU IaaS is met. The Group satisfies this performance obligation when it makes the required equipment available to the customer for the period.

&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Other income** 

*Research and development grants*

Research and development grants are received from the Australian Taxation Office. The grants are recognized as other income once the Group has complied with all the attached conditions, at the estimated amount that will be received for the period.

*Fixed assets promotional gift*

Fixed assets income relates to the receipt of a server from an infrastructure supplier as a promotional opportunity for the Company to promote the server technology and capabilities with its business. The contribution was recognized in income at its fair value upon receipt and are included in property and equipment in the consolidated balance sheets.

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**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Cost of revenue** 

Cost of revenue consists primarily of expenses that are directly related to providing the Group's service to its paying customers. These primarily consist of material costs related to digital currency mining.

&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Income tax** 

The tax expense recognized in the consolidated statements of operations and comprehensive loss comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted by the end of the reporting period.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized.

Tax positions taken or expected to be taken in the course of preparing the Group's tax returns are required to be evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There are no uncertain tax positions that require accrual or disclosure to the financial statements as of December 31, 2024, or 2023. The Group's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Group had no material accruals for interest or penalties related to income tax matters as of December 31, 2024, or 2023. Generally, the Group's tax returns are subject to examinations by local Australian tax authorities for tax filings for all years since inception.

&nbsp;&nbsp;&nbsp;&nbsp;**(j)** **Comprehensive loss** 

A separate consolidated statements of operations and comprehensive loss is required under Account Standards Update ("<u>ASU</u>") 2011-05, *Comprehensive Income*. Net loss and foreign currency translation adjustments are the components of comprehensive loss for the Group and are included as a separate consolidated statements of operations and comprehensive loss.

&nbsp;&nbsp;&nbsp;&nbsp;**(k)** **Cash and cash equivalents** 

Cash and cash equivalents comprise of cash in bank, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Financial Instruments** 

Financial instruments are recognized initially on the date that the Group becomes party to the contractual provisions of the instrument. The Group's financial instruments consist of cash and cash equivalents, certificates of deposit, other receivables and trade and other payables and borrowings and are carried at cost, which approximates fair value due to the short-term nature of these instruments.

&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Goods and services tax (GST)** 

Revenue, expenses and assets are recognized net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST.

Cash flows in the consolidated statements of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Property and equipment** 

Property and equipment is stated at cost, net of accumulated depreciation. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statements of operations and comprehensive loss. The Group provides for depreciation using the straight-line method over the estimated useful lives of the respective assets.

The Company reviews the carrying value of long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable in accordance with ASC 360-10. If such indicators are present, the Company compares the expected undiscounted future cash flows of the asset group to its carrying amount. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized equal to the amount by which the carrying value exceeds its fair value.

A summary of estimated useful lives is as follows:

---

| | |
|:---|:---|
| **Fixed asset class** | **Useful life** |
| Computer Equipment | 1 - 2 years |
| Other Equipment | 5 years |

---

Other Equipment above includes modular data centers, electrical equipment, cooling infrastructure equipment, telecommunication modules and sundry building and storage. Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred.

&nbsp;&nbsp;&nbsp;&nbsp;**(o)** **Intangible assets** 

Intangible assets are recognized at fair value when acquired, either separately or as part of a business combination, in accordance with ASC 805. Identifiable intangibles are those that are either separable or arise from contractual or legal rights. Internally generated intangible assets, such as brands or customer relationships, are generally expensed as incurred, with the exception of certain software development costs, which may be capitalized once technological feasibility is established, per ASC 350-40.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

Finite-lived intangible assets are amortized over their estimated useful lives, typically on a straight-line basis, reflecting the consumption of economic benefits. Useful lives are based on legal, contractual, or economic factors and are generally between 1 to 20 years. Residual values are assumed to be zero unless a third-party commitment exists. Amortization begins when the asset is available for use and any changes in useful life or method are accounted for prospectively.

Intangible assets with indefinite lives, such as trademarks or perpetual licenses, are not amortized but are tested for impairment at least annually, or more frequently if indicators of impairment arise, in accordance with ASC 350. Goodwill, which arises in business combinations, is also not amortized but tested for impairment annually at the reporting unit level or when triggering events occur. An optional qualitative assessment may be performed before a quantitative test. Intangible assets are evaluated at the beginning of the fourth quarter annually in line with company policy.

Finite-lived intangible assets are assessed for impairment under ASC 360-10 if events suggest their carrying amount may not be recoverable. If undiscounted future cash flows are less than the carrying amount, an impairment loss is recognized equal to the excess of carrying value over fair value. For indefinite-lived intangibles and goodwill, impairment losses are recorded when the carrying amount exceeds fair value, with goodwill impairment limited to the carrying amount of goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Digital Assets** 

The Group purchases or mines digital assets or receives digital assets as consideration for the delivery of its services. The Group accounts for all digital assets held as crypto assets, a subset of indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles - Goodwill and Other - Crypto Assets. The Group has ownership of and control over the digital assets and may use third-party custodial services to secure it.

The digital assets are initially recorded at cost if purchased or fair value if received in mining revenue operations and are subsequently remeasured on the consolidated balance sheet at fair value. Cost is determined based on the cash consideration paid net of the transaction costs. The Group remeasures on a monthly basis the fair value of the digital assets determined by observable market rates.

Gains and losses from the remeasurement of crypto assets shall be included in net income and presented separately from changes in carrying amounts of other intangible assets. The Group recognized a gain of $157,923 for the fair value measurement of its digital assets during the twelve months ended December 31, 2024.

At times, the Group may settle various payables and accrued liabilities in digital assets within the normal course of operations. Gains and losses arising from transactions settled with digital assets are included as a component of other income or selling, general, and administrative expenses within the accompanying consolidated statements of operations and comprehensive loss.

The Group's digital assets consists primarily of Filecoin crypto-currency.

&nbsp;&nbsp;&nbsp;&nbsp;**(q)** **Equity-settled compensation** 

The Group follows ASC 718-10, *Compensation-Stock Compensation*. The Group offers equity-settled stock-based compensation employee share and option plans. The fair value of the equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, with a corresponding increase to equity.

Vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of options which are expected to vest. Revisions to the prior period estimates are recognized in profit or loss and equity.

The Group has the following types of equity settled transactions:

**Options**

The Group issues options to board members. The options are measured at fair value based on the Black-Scholes option pricing model on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

**Restricted Stock Units**

The Group issues restricted stock units to employees. These units are measured at fair based on observable market bid prices on the grant date and are expensed immediately where there are no conditions attached, or over the vesting period.

&nbsp;&nbsp;&nbsp;&nbsp;**(r)** **Foreign currency transactions and balances** 

Foreign currency transactions are recorded at the spot rate on the date of the transaction. The Group has determined the functional currency is the U.S. Dollar for the Group. Transactions or assets and liabilities denominated in a foreign currency are translated into U.S. dollars as follows: monetary assets and liabilities, at the rate of exchange in effect at the balance sheet date; non-monetary assets and liabilities, at the exchange rate prevailing at the time of the acquisition of the assets or assumption of the liabilities; and revenues and expenses (excluding amortization, which is translated at the same rate as the related asset), at the average rate of exchange for the year. Gains and losses arising from foreign currency transactions are included in net loss.

&nbsp;&nbsp;&nbsp;&nbsp;**(s)** **Legal and other contingencies** 

The Group accounts for its contingent liabilities in accordance with ASC 450, *Contingencies*. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs incurred in connection with loss contingencies are expensed as incurred.

The Group may be subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, there was not a reasonable possibility that the Group may have a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of any future legal proceedings is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Group in a reporting period for amounts in excess of management's expectations, the Group's consolidated financial statements for that reporting period could be materially adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;**(t)** **Recently Adopted Accounting Standards** 

In November 2023. the Financial Accounting Standards Board ("<u>FASB</u>"), issued Accounting Standards Update ("<u>ASU</u>") No. 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," intended to improve reportable segment disclosure requirements, primarily through enhanced annual disclosures about significant segment expenses*. SAI opted to early adopt the ASU as of December 15, 2024. See Note 24 in the notes to the consolidated financial statements for further details.

In December 2023, the FASB issued ASU No. 2023-08, *Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets* ("<u>ASU 2023-08</u>"). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The Group adopted this guidance early on January 1, 2024. See Note 2(p) in the notes to the consolidated financial statements for further details.

---

| | |
|:---|:---|
| **3** | **Critical Accounting Estimates and Judgements** |

---

The Group makes estimates and judgements during the preparation of these consolidated financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **4** | **Acquisitions** |

---

*DIF*

On April 29, 2024, SAI acquired certain assets of DIF in exchange for 55,000 shares of common stock of SAI. The Company considered whether the DIF asset acquisition should be defined as a business under ASC 805. ASC 805-10-55-5A through 55-5C describe a screen test to determine whether an acquired set of assets and activities is not a business. The Company determined that substantially all (greater than 90%) of the fair value of the assets acquired were concentrated in a single asset, property and equipment. Accordingly, the Company treated the DIF asset acquisition as an asset acquisition for accounting purposes.

The Company determined the fair value of the consideration paid was $1,256,046. The assets acquired were assumed at cost and comprised of $1.1 million in property and equipment and $0.1 million in digital assets paid for in share-based consideration by the Company.

*DSS*

On June 30, 2024, SAI acquired 96.44% of the outstanding shares of DSS for 532,251 shares of common stock of SAI. The purpose of the acquisition was to expand the Company's digital mining business and to gain exposure and knowledge of the GPU services business. The Company engaged a third-party valuation firm to assist with the valuation of the business acquired.

The fair value of the equity consideration was determined to be $20,865,167. Under the acquisition method of accounting, the assets acquired, and liabilities assumed of DSS were recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. The excess of purchase price over the identifiable intangible and net tangible assets is allocated to goodwill. The portion of non-controlling interest was then derived from the pro-rata of the business acquired.

The acquisition-date values of the assets acquired, and liabilities assumed are as follows:

---

| |
|:---|
| Cash |
| Certificates of deposit |
| Trade and other receivables |
| Prepaid expenses & other current assets |
| Property & equipment, net |
| Digital assets |
| Intangible assets |
| Accounts payable, accrued expenses, & other current liabilities**)** |
| Deferred tax liabilities**)** |
| Other long-term liabilities |
| Total identifiable net assets (liabilities) assumed |
| Noncontrolling interest**)** |
| Goodwill |
| **Total purchase price** |

---

The intangible assets acquired related to technology and had an estimated useful life of 1.5 – 2 years.

Goodwill reflects the synergistic nature of SAI's identifiable assets that, when employed in combination, generate value in excess of their individual values. As a result, SAI has recorded goodwill in connection with the acquisition. Goodwill is not deductible for tax purposes.

The results of operations related to the acquisition of DSS have been included in the Group's consolidated statements of operations and comprehensive loss from the acquisition date.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

Following the acquisition of DSS, on December 1, 2024, SAI acquired 3.08% of the noncontrolling interest of DSS through the exchange of 9,342 shares of common stock, bringing SAI's ownership percentage to 99.52% and noncontrolling interests down to 0.48%, as detailed at the consolidated statements of changes in stockholders' equity.

**Proforma financial information:**

The unaudited financial information in the table below summarizes the combined results of operations of SharonAI Inc. and DSS for the years ended December 31, 2024 and 2023, on a pro forma basis, as though the companies had been combined as of January 1, 2023. The pro forma earnings for the years ended December 31, 2024 and 2023 were adjusted to include intangible amortization expense of $550,000 and $1,100,000, respectively. The unaudited pro forma financial information does not purport to be indicative of the Company's combined results of operations which would actually have been obtained had the acquisition taken place on January 1, 2023 nor should it be taken as indicative of future consolidated results of operations.

---

| | | |
|:---|:---|:---|
|  | **Proforma<br> SharonAI As<br> Adjusted<br>2024**<br>**$** | **Proforma<br> SharonAI As<br> Adjusted<br>2023**<br>**$** |
| Revenue |  |  |
| **Loss from operations** |  |  |
| **Net loss** |  |  |

---

---

| | |
|:---|:---|
| **5** | **Revenue and Other Income** |

---

**Revenue from continuing operations**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| Revenue |  |  |
| &nbsp;&nbsp;&nbsp;Digital asset mining revenue | **232510** |  |
| &nbsp;&nbsp;&nbsp;Provision of GPU Infrastructure services | **205043** |  |
| &nbsp;&nbsp;&nbsp;Other revenue | **739** |  |
| **Total other income** | **438292** |  |

---

Revenue is recognized at point in time when services are provided.

**Other income**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| Other income |  |  |
| &nbsp;&nbsp;&nbsp;Research and development grants | **648049** |  |
| &nbsp;&nbsp;&nbsp;Fixed assets promotional gift | **273273** |  |
| **Total other income** | **921322** |  |

---

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **6** | **Income Tax Expense** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Income (loss) before income taxes consists of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| Domestic and foreign income before provision for income tax |  |  |
| &nbsp;&nbsp;&nbsp;Domestic |  |  |
| &nbsp;&nbsp;&nbsp;Foreign |  |  |
| **Total income before income taxes** |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** The Group is subject to income taxes in U.S. federal, state, and foreign jurisdictions. The provision for income taxes in the accompanying consolidated financial statements is comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| Current |  |  |
| &nbsp;&nbsp;&nbsp;Federal |  |  |
| &nbsp;&nbsp;&nbsp;State |  |  |
| &nbsp;&nbsp;&nbsp;Foreign |  |  |
| Total Current |  |  |
| Deferred |  |  |
| &nbsp;&nbsp;&nbsp;Federal |  |  |
| &nbsp;&nbsp;&nbsp;State |  |  |
| &nbsp;&nbsp;&nbsp;Foreign |  |  |
| Total Deferred |  |  |
| **Total Provision** |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** A reconciliation of the income tax expense computed using the United States federal statutory rate to the Group's effective tax rate is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024** | **December 31,**<br> **2023** |
| Federal tax expense (benefit) at the statutory rate | **21%** | **-%** |
| State income taxes, net of federal benefit | **5%** | **-%** |
| Impact of non-U.S. earnings | **1%** | **-%** |
| Change in valuation allowance | **(19)%** | **-%** |
| Permanent differences | **(3)%** | **-%** |
| Research and development tax incentive | **(5)%** | **-%** |
| **Tax on Income** | **(0)%** | **-%** |

---

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

As of December 31, 2024, the Group had $845,627 of federal and $1,609,826 of state net operating loss carryforwards. The federal net operating losses have an indefinite life and can be utilized to offset 80% of future taxable income, while the state net operating losses will begin to expire in 2044. As of December 31, 2024, the Company had Australian net operating loss carryforwards of $93,194 that can be carried forward indefinitely.

As of December 31, 2024 and 2023, the Group had no recorded liabilities for uncertain tax positions. As of December 31, 2024 and 2023, the Group had no accrued interest or penalties related to uncertain tax positions. The Group's accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.

The Group files income tax returns in the United States, various state jurisdictions, and Australia. The Group is not currently under examination by the Internal Revenue Service or any other jurisdiction. All tax years remain open to tax examination. To the extent the Group has tax attribute carryforwards, the tax years in which the attribute was generated may be adjusted upon examination by the Internal Revenue Service or other tax authorities to the extent utilized in a future period.

The Group has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries, as such amounts are considered to be indefinitely reinvested. Any accumulated earnings in foreign subsidiaries are primarily utilized to fund working capital requirements as the Group continues to expand operations. The amount of any unrecognized deferred tax liability related to undistributed foreign earnings is immaterial.

Deferred taxes are recognized for net operating loss carryovers and temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Group's deferred tax assets and liabilities as of December 31, 2024 and 2023 are comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024**<br>**$** | **December 31,<br> 2023**<br>**$** |
| Net operating loss carryforward |  |  |
| Unrealized gain (loss) |  |  |
| Capitalized transaction costs |  |  |
| Accrued expenses |  |  |
| Stock based compensation |  |  |
| Total deferred tax assets |  |  |
| Less valuation allowance |  |  |
| Net deferred tax asset |  |  |
| Intangibles |  |  |
| Total deferred tax liabilities |  |  |
| Net deferred tax liability |  |  |
| Net change in valuation allowance |  |  |

---

The Group's valuation allowance increased by $733,310, primarily as a result of current year losses, unrealized losses, and an increase in the deferral of various expenses against which a valuation allowance is maintained during the year ended December 31, 2024. In assessing the ability to realize the Group's net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income projections to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Based on the negative evidence, including the worldwide cumulative losses that the Group has incurred, 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 after consideration of the reversals of existing taxable temporary differences.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **7** | **Certificates of deposit** |

---

As at 31 December 2024, the Company held certificates of deposit totaling $770,799, which are restricted due to their use as collateral for bank guarantees issued for equipment managed service contracts. The CDs have a 12-month term and are maintained in a bank account in the Company's name. Interest earned on the CDs is accrued to the Company. Under the terms of the service contracts, the supplier may claim the funds in the event of a material default by the Company in fulfilling its payment obligations. These arrangements do not transfer ownership or control of the CDs but restrict their use for the duration of the CD term.

---

| | |
|:---|:---|
| **8** | **Trade and other receivables** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| Trade receivables | **15799** |  |
| GST receivable | **77266** |  |
| Research and development grant receivable | **891482** |  |
| **Total trade and other receivables** | **984547** |  |

---

---

| | |
|:---|:---|
| **9** | **Other Current Assets** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br> **$** | **December 31,**<br> **2023**<br> **$** |
| Prepaid network fee | **1941** |  |
| Other prepayments | **28013** |  |
| Other current assets | **64** |  |
| **Total other current assets** | **30018** |  |

---

---

| | |
|:---|:---|
| **10** | **Property and Equipment** |

---

---

| | |
|:---|:---|
|  | **December 31,**<br> **2023**<br>**$** |
| **Computer equipment** |  |
| At cost |  |
| Accumulated depreciation |  |
| Total computer equipment |  |
| **Other equipment** |  |
| At cost |  |
| Accumulated depreciation |  |
| Total other equipment |  |
| **Total property and equipment, net** |  |

---

Depreciation expense of $460,469 and foreign currency translation adjustments of $14,707, have been recognized for the twelve months ended December 31, 2024.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **11** | **Digital Assets** |

---

The following table provides details of the activities related to our digital assets for the year ended December 31, 2024:

---

| |
|:---|
| Balance as of December 31, 2023 |
| Acquisitions |
| Disposals**)** |
| Earned FIL revenue |
| FIL cost of revenue**)** |
| Change in fair value of digital assets |
| Unrealized gain on foreign currency translation |
| **Balance as of December 31, 2024** |

---

As of December 31, 2024, the Company held the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Asset** | **Units Held**<br> **#** | **Cost Basis**<br> **$** | **Fair Value**<br> **$** | **Change in<br> Fair Value**<br> **$** |
| Filecoin | 144224 | 563741 | 721664 | $157923 |

---

Digital assets disclosed above include Filecoin tokens which are pledged as collateral and is required by the Filecoin blockchain for the Group's ongoing mining operations. Pledged Filecoin is committed for the full life of a storage sector (18 months) and is restricted from use. The Group had pledged $86,690 and $0 as collateral to storage sectors with maturities ranging from 1-540 days at December 31, 2024 and 2023, respectively.

---

| | |
|:---|:---|
| **12** | **Intangible Assets** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Finite-Lived Intangible Assets** 

---

| |
|:---|
| Balance as of December 31, 2023 |
| Acquired finite-lived intangible assets |
| Amortization of finite-lived intangible asset |
| **Balance as of December 31, 2024** |

---

Finite-Lived Intangible Assets include digital asset deals contracts which are paid in Filecoin tokens and are amortized over the life of the contract. The digital asset deals contracts include an 18-month storage period, which is used as the life of the contract. Amortization expense of $14,671 and foreign currency translation adjustment of $735 related to finite-lived intangible assets has been recognized as an expense in the consolidated statements of operations and comprehensive loss for the twelve months ended December 31, 2024 and 2023, respectively.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Technology** 

---

| |
|:---|
| Balance as of December 31, 2023 |
| Acquired technology |
| Accumulated amortization |
| **Balance as of December 31, 2024** |

---

The acquired technology relates to the DSS acquisition described in Note 4. Amortization expense of $550,000 and $0 related to technology has been recognized as an expense in the consolidated statements of operations and comprehensive loss for the twelve months ended December 31, 2024 and 2023, respectively. Amortization expense is expected to be $1,108,963, and $550,000, for the years ending December 31, 2025 and 2026, respectively.

---

| | |
|:---|:---|
| **13** | **Trade and Other Payables** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br> **2024**<br>**$** | **December 31,**<br> **2023**<br>**$** |
| &nbsp;&nbsp;&nbsp;Trade payables | **404852** |  |
| &nbsp;&nbsp;&nbsp;Accrued expense | **442272** |  |
| &nbsp;&nbsp;&nbsp;Annual payment provision | **50157** |  |
| &nbsp;&nbsp;&nbsp;Income tax payable | **40714** |  |
| &nbsp;&nbsp;&nbsp;Other payables | **19834** |  |
| **Total trade and other payables** | **957829** |  |

---

Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

---

| | |
|:---|:---|
| **14** | **Leases** |

---

The Company leases GPU and associated computer and networking equipment under non-cancelable finance lease agreements. Lease terms generally range from 3 to 5 years and may include options to extend or terminate the lease. Lease agreements may contain both lease and non-lease components, which the Company accounts for as a single lease component for all asset classes under a practical expedient election. The Company also elected the short-term lease exemption for all leases with original terms of 12 months or less, whereby such leases are not recognized on the balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Lease cost** 

The components of lease cost were as follows:

---

| | |
|:---|:---|
| **Description** | **Year Ended<br> December 31,**<br> **2024**<br> **$** |
| Finance lease - interest | **25275** |
| Finance lease - amortization | **89748** |
| **Total lease cost** | **115023** |

---

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Lease assets and liabilities** 

ROU assets and lease liabilities are recorded on the consolidated balance sheet as follows:

---

| | |
|:---|:---|
| **Description** | **December 31,<br> 2024<br> $** |
| Finance lease ROU asset | **935336** |
| Finance lease liability (current) | **186620** |
| Finance lease liability (non-current) | **760087** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**c)** **Maturity analysis of lease liabilities** 

Future minimum lease payments as of December 31, 2024, are as follows:

---

| | |
|:---|:---|
| **Year** | **Finance leases**<br> **$** |
| 2025 | **230044** |
| 2026 | **230044** |
| 2027 | **230044** |
| 2028 | **230044** |
| 2029 | **115022** |
| **Total** | **1035199** |
| Less: Imputed interest | **(88492)** |
| **Present value of lease liabilities** | **946707** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**d)** **Other information** 

---

| | |
|:---|:---|
| Weighted-average remaining lease term | **4.5 years** |
| Weighted-average discount rate: | **5.19%** |
| Right-of-use assets obtained in exchange for Right-of use Liability | $**1057779** |
| Operating cash impact of finance leases | $**26847** |

---

---

| | |
|:---|:---|
| **15** | **Shareholders' Equity** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Preferred Stock** 

There are two separate classes of preferred stock, each with its own rights and preferences. The Group is authorized to issue 84,000 shares of preferred stock, at a par value of $0.0001 per share.

***Series A Preferred Stock***

On February 20, 2024, the Group issued a Certificate of Designation of Series A Preferred Stock, whereby the Board authorized the issuance of up to 15,000 shares of Series A Preferred Stock, par value $0.0001 per share. The Group issued the 15,000 shares at $1.00 per share.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

***Series B Preferred Stock***

On February 20, 2024, the Group issued a Certificate of Designation of Series B Preferred Stock, whereby the Board authorized the issuance of up to 27,000 shares of Series B Preferred Stock, par value $0.0001 per share. The Group issued the 27,000 shares at $1.00 per share.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Common Stock** 

There is one class of common stock, of which the Group is authorized to issue 2,958,000 shares at a par value of $0.0001 per share. As of December 31, 2024, there were 1,067,213 shares issued.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Warrants** 

During June 2024, the Company issued warrants to purchase 8,195 shares of SharonAI's common stock for $62.50 per share to certain former shareholders of DSS as consideration for the acquisition of the business. The warrants are vested and expire May 4, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Voting** 

Series A Preferred Stock, Series B Preferred Stock and Common Stock are entitled to vote with respect to any and all matters presented to the stockholders of the Group. In any such vote, each Share of Series A Preferred Stock shall be entitled to cast 160 votes for each Share held, each Share of Series B Preferred Stock shall be entitled to cast 25 votes for each Share held, and each Share of Common Stock shall be entitled to cast one vote for each Share held.

&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Dividends** 

Series A Preferred Stock does not have dividend features. Cumulative dividends accrue on Series B Preferred Stock on a quarterly basis in arrears at the rate of 3% of the Group's earnings before interest, taxes, depreciation and amortization, which are in preference and priority to declaration or any payment of any dividend or distribution on Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Liquidation Preference** 

Series A and Series B Preferred Stock shall, with respect to rights on voting, liquidation, winding up and dissolution, rank *pari passu* to the Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Conversion** 

Series A Preferred Stock does not contain any conversion features. Series B Preferred Stock is convertible to Common Stock at any time at the option of the holder or from time to time on or after a Change in Control Notice into that number of shares of Common Stock equal to the liquidation value ($1.00) of the Series B Preferred Stock divided by the conversion price subject to such conversion, which is initially one-third of the liquidation value of such share.

&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Noncontrolling Interest** 

On December 1, 2024, the Group acquired 3.08% of DSS through the exchange of 9,342 shares of Common Stock in the Group for interests in DSS, reducing the noncontrolling interest in DSS from 3.56% to 0.48%. As of December 31, 2024, the Group held 99.52% of controlling interest in DSS.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **16** | **Share-based compensation** |

---

The Group grants Options and Restricted Stock Units (RSUs) under the 2024 Equity Incentive Plan to Board Members, Advisory Board Members, Employees and Contractors. The grants have a combination of performance based and time-based hurdles and vesting periods. On October 23, 2024, the Group granted 4,617 Options and 52,677 Restricted Stock Units (RSUs) which have a contractual term of 10 years. The Options have an exercise price of $61 per share and convert on a 1:1 basis. The Group ascertains the fair value of the Options using a Black-Scholes pricing model and RSUs were valued based on market bid prices. The fair value of equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, along with a corresponding increase to equity. As of December 31, 2024, the Group has the following share-based compensation:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Stock Options** 

Share-based compensation expense of $11,518 has been recognized in the period ending December 31, 2024, for Options based on the pro rata expense of the service-based options over the vesting period. As of December 31, 2024 190 options had vested.

The following assumptions were used to estimate the fair value of options granted during the year ended December 31, 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Expected term: 10 years

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Expected volatility: 250%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Risk-free interest rate: 4.24%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Expected dividend yield: 0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) Estimated fair value of options at grant date: $279,856

**Stock Option Activity**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Activity** | **Number of<br> Options** | **Weighted-Average<br> Exercise Price** | **Weighted-Average Remaining Contractual<br> Term (Years)** | **Aggregate<br> Intrinsic Value** |
| Outstanding at January 1, 2024 |  | $0 |  | $0 |
| Granted | 4617 | $61 | 9.75 | $0 |
| Exercised |  |  |  |  |
| Forfeited | - | - | - | - |
| **Outstanding at December 31, 2024** | **4617** | $**61** | **9.75** | $**0** |
| **Exercisable at December 31, 2024** | **190** | $**61** | **9.75** | $**0** |

---

At December 31, 2024, compensation costs related to these unvested stock options not yet recognized in the consolidated statements of operations was approximately $268,000 which will be fully amortized by 2026.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Restricted Stock Units (RSUs)** 

Share-based compensation expense of $242,210 has been recognized in the period ending December 31, 2024, for the performance-based RSUs based on the portion of hurdles being met and pro rata time-based vesting conditions being satisfied during the period.

---

| | | |
|:---|:---|:---|
| **Activity** | **Performance-Based<br> RSUs** | **Weighted-Average<br> Grant Date<br> Fair Value** |
| Unvested at January 1, 2024 |  |  |
| Granted | 52677 | $3193280 |
| Vested\* | (3996) | $242210 |
| Forfeited | - | - |
| **Unvested at December 31, 2024** | **48681** | $**2951070** |

---

 <br> *\** *RSU's listed as vested are not exercisable but representative of the pro-rata portion of the RSU grant vested in the period*

At December 31, 2024, compensation costs related to these unvested stock-based compensation awards not yet recognized in the consolidated statements of operations was $2,951,070.

---

| | |
|:---|:---|
| **17** | **Employee Benefit Plan** |

---

The Group's employees that are located in Australia participate in a Superannuation defined benefit scheme. Superannuation is Australia's mandatory retirement savings system, requiring employers to contribute 11.5% of an employee's earnings (increasing to 12% by 2025) into a regulated fund. Contributions receive concessional tax treatment, with employer payments taxed at 15% within the fund. Superannuation is typically preserved until retirement age (55–60), with limited early access exceptions. Funds are regulated by Australian Prudential Regulation Authority, Australian Securities and Investments Commission, and the Australian Taxation Office, and offer various investment options, often including insurance coverage. Withdrawals can be taken as a lump sum or income stream, subject to tax rules. Legislative changes may affect contribution limits, taxation, and access conditions.

The Group's employees located in the USA currently do not have a retirement scheme, however it is intended the Company implement such a scheme in 2025.

---

| | |
|:---|:---|
| **18** | **Fair Value Measurement** |

---

The Group measures the following assets and liabilities at fair value on a recurring basis:

● Intangible assets – Indefinite-lived Digital Assets held at fair value.

**Fair value hierarchy**

ASC Topic 820, *Fair Value Measurement and Disclosures* ("<u>ASC Topic 820</u>") requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| Level 2 | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |

---

Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The table below shows the assigned level for each asset and liability held at fair value by the Group:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair value hierarchy** | **Level 1**<br> **$** | **Level 2**<br> **$** | **Level 3**<br> **$** | **Total**<br> **$** |
| As of December 31, 2024 |  |  |  |  |
| **Recurring fair value measurements** |  |  |  |  |
| Intangible assets – Indefinite-lived Digital Assets | 721664 |  |  | 721664 |

---

The Group's assets held at fair value comprise of cryptocurrency (digital assets) classified at level 1. See Note 11 for support. The Group did not make any transfer between the levels of the fair value hierarchy during 2024 or 2023.

---

| | |
|:---|:---|
| **19** | **Supplemental disclosure of cash flow information** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024**<br>**$** | **December 31,<br> 2023**<br>**$** |
| **Supplemental cash flows information:** |  |  |
| Cash paid for interest | **2827** |  |
| **Noncash financing activities:** |  |  |
| Director issued common stock upon termination | **15000** |  |
| Acquisition of a business through the issuance of common stock and warrants | **20865167** |  |
| Settlement of related party notes payable with the issuance of common stock | **419601** |  |
| Settlement of liabilities through the issuance of common stock | **176999** |  |
| Acquisition of assets through the issuance of common stock | **1256040** |  |

---

---

| | |
|:---|:---|
| **20** | **Contingent Liabilities** |

---

The Group had the following contingent liabilities at the end of the reporting period:

● The Group is required to provide a guarantee in the form of Filecoin with third party providers of Filecoin tokens to be used to support the growth of its storage operations, in accordance with agreed terms. This guarantee is to insure no loss is incurred by third party providers throughout the day-to-day operations by the Group. The potential loss that could be incurred by the Group relates to slashing fees and early termination of storage sectors. Management estimates this to be a maximum of $86,690 as of December 31, 2024.

The Group did not have any commitments or any other contingencies as of December 31, 2024.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **21** | **Net Loss per Share** |

---

Basic net income (loss) per share is computed by dividing net income (loss) applicable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of securities that could share in the earnings of an entity using the treasury method or the if-converted method, if applicable. The calculation of diluted net income (loss) per share gives effect to common share equivalents; however, potential common shares are excluded if their effect is anti-dilutive. Convertible Series B Preferred Stock issued and outstanding, and share-based options are considered common share equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.

The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Stock options and RSU's: 57,293 shares

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Warrants: 8,195 shares

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Convertible preferred stock: 27,000 shares

A reconciliation of the numerators and denominators is as follows:

---

| | |
|:---|:---|
|  | **December 31,<br> 2023**<br>**$** |
| **Numerator:** |  |
| Net loss available to common shareholders**)** | **-** |
| Less: Net loss attributable to the noncontrolling interest | **-** |
| Net loss attributable to common shareholders**)** | **-** |
| **Denominator:** |  |
| Basic and diluted weighted average number of common shares outstanding | **300** |
| **Basic and diluted net loss per common share outstanding)** | **-** |

---

---

| | |
|:---|:---|
| **22** | **Segment Information** |

---

The Company operates in one operating segment, and therefore one reportable segment, focused on the provision of High Performance Compute Services (HPC). The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Group's chief operating decision maker ("<u>CODM</u>"), who is the Chief Executive Officer.

The Group's method for measuring profitability on a reportable segment basis is operating profit or loss, which the CODM uses to assess performance for the Group and in deciding how to allocate resources. The CODM does not review disaggregated assets by segment. The Group adopted ASU 2023-07 in December 2024. The most significant provision was for the Group to disclose significant segment expenses that are regularly provided to the CODM. The Group's CODM periodically reviews cost of revenues and selling, general and administrative expenses, excluding share-based compensation, by segment and treats them as significant segment expenses.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

The following table presents segment expenses, other segment items, and segment operating loss for the period:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024<br> $** | **December 31,<br> 2023<br> $** |
| Revenue | **438292** |  |
| Less: Segment Expenses |  |  |
| &nbsp;&nbsp;&nbsp;Costs of revenue | **719993** |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | **2368745** |  |
| &nbsp;&nbsp;&nbsp;Other segment items<sup>(1)</sup> | **2300861** |  |
| Segment expenses | **5389599** |  |
| **Segment loss from operations** | **(4951307)** |  |
| Reconciliation of net loss: |  |  |
| &nbsp;&nbsp;&nbsp;Adjustments and reconciling items | **-** |  |
| **Loss from operations** | **(4951307)** |  |

---

 <br> <sup>(1)</sup> Other segment items for the reportable segment include share based compensation and other expenses.

---

| | |
|:---|:---|
| **23** | **Transactions with related parties** |

---

SharonAI and Sharon Australia have entered into an independent contractor agreement-corporate with James Manning and Manning Group Pty Ltd ATF MG Office Trust ("<u>Manning Consulting Agreement</u>"). Pursuant to the Manning Consultant Agreement, Mr. Manning, as the key person, provides certain services to SharonAI and Sharon Australia relating to commercial opportunity development, discovery of future data center sites, future data center acquisition and construction advisory, transaction advisory services and key relationship introduction and development. In consideration for these services, Manning Group Pty Ltd ATF MG Office Trust is entitled to receive an annual remuneration of AUD$334,500 (approximately $211,000 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Manning Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

Sharon Australia has entered into an independent contractor agreement with Nicholas Hughes Jones related entity Inbocalupo Consulting Pty Ltd ("<u>Inbocalupo Consulting Agreement</u>"). Pursuant to the Inbocalupo Consultant Agreement and combined with Mr. Hughes-Jones employment agreement, Mr. Hughes-Jones, as the key person, provides certain services to SharonAI and Sharon Australia relating to business development services. In consideration for these services, Inbocalupo Consulting Pty Ltd is entitled to receive an annual remuneration of AUD$133,800 (approximately $84,294 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Inbocalupo Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

Sharon Australia has entered into an independent contractor agreement with Broadfoot Group Pty Ltd ("<u>Broadfoot Consulting Agreement</u>"). Pursuant to the Broadfoot Consultant Agreement, Mr. Broadfoot and Mrs. Broadfoot, as the key persons, provides certain services to SharonAI and Sharon Australia relating to Chief Financial Officer support and executive assistant services to the CFO. In consideration for these services, Broadfoot Group Pty Ltd is entitled to receive an annual remuneration of AUD$111,500 (approximately $70,245 based on a conversion rate of $1.00AUD to $0.63USD), exclusive of Australian goods and services taxes. The Broadfoot Consulting Agreement has an ongoing term that can be terminated by either side upon three (3) months' notice.

AAM, with which SAI consummated its business combination with on April 29, 2024, had sole identical ownership interests by James Manning, Nicholas Hughes-Jones and Andrew Leece. Through the acquisition, each individual was issued 70,000 common shares at a value of $70,000.

DIF, with which SAI consummated an asset acquisition on April 29, 2024, had common ownership interest by James Manning. Through the acquisition, Mr. Manning was issued 17,600 common shares at a fair value of $390,016.

DSS, with which SAI consummated it business combination with on June 30, 2024, had common ownership interest by James Manning, Nicholas Hughes-Jones and Andrew Leece. Through the acquisition Mr. Manning was issued 49,215 common shares at a fair value of $1,919,366, Mr. Hughes-Jones was issued 27,478 common shares at a fair value of $1,071,623, and Mr. Leece was issued 43,401 common shares at a fair value of $1,692,639.

During 2024, the Group paid storage services expense to Flynt ICS Pty Ltd ("<u>Flynt</u>"). Flynt is a subsidiary of Vertua Limited and affiliated to the Group through common ownership by James Manning. For the year ended December 31, 2024, the Group paid Flynt $167,638 in services expenses.

The Group received approximately $419,590 in loans from various entities affiliated with members of SharonAI's management and board of directors, including: (a) Woodville Super Pty Ltd, an affiliate of James Manning, Director; (b) Manning Capital Holdings Pty Ltd, an affiliate of James Manning, Director; (c) Strat Capital Pty Ltd (Alpha Juliett), an affiliate of Andrew Leece, Chief Operating Officer; and (d) Inbocalupo Pty Ltd), an affiliate of Nick Hughes-Jones, the former Senior Vice President Business Development. These debts were converted into equity of SharonAI as part of a private placement conducted by SharonAI at the same price that stock was sold to other investors in the offering. The following chart shows the amount of debt from each lender and the shares into which the debt was converted.

---

| | | | |
|:---|:---|:---|:---|
|  | **Amount<br> outstanding<br> $** | **Subscription price<br> per share<br> $** | **Shares received<br> upon conversion<br> #** |
| Woodville Super Pty Ltd | **66370** | **39.00** | **1702** |
| Manning Capital Holdings Pty Ltd | **84555** | **39.00** | **2168** |
| Strat Capital Pty Ltd (Alpha Juliett) | **117740** | **39.00** | **3019** |
| Inbocalupo Pty Ltd | **150925** | **39.00** | **3870** |
| **Total** | **419590** |  | **10759** |

---

[**Table of Contents**](#toc)

**SharonAI Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2024 and 2023**

---

| | |
|:---|:---|
| **24** | **Subsequent Events** |

---

Subsequent to the year ended December 31, 2024, the following events occurred:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** On January 22, 2025, the Company entered into a JV agreement with New Era Helium.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** On January 30, 2025, the Company entered into a definitive business combination agreement with Roth CH Acquisition Co. (Roth)., an OTC-listed entity that had previously completed a de-SPAC transaction. Although the public entity maintains a listing on the OTC Markets, it currently has no active operations or significant assets. The agreement contemplates a reverse acquisition whereby the Company will be the accounting and legal surviving entity, and upon completion of the transaction, will become a publicly traded company through the listed vehicle.

The transaction remains subject to customary conditions, including regulatory approvals and shareholder consent. The Company is currently preparing the required documentation for the proposed combination.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** On 12 March 2025, the Company entered a scope of work agreement with Lenovo Global Financial Services (Australia and New Zealand) Pty Limited for the provision of AUD$7.4m computer and networking equipment on a lease over 5 years.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Contents**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
|  | **Page** |
| **Consolidated Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm](#f4_001) | F-121 – F-122 |
| [Consolidated Balance Sheets](#f4_002) | F-123 |
| [Consolidated Statements of Operations](#f4_003) | F-124 |
| [Consolidated Statements of Changes in Stockholders' Equity (Deficit)](#f4_004) | F-125 |
| [Consolidated Statements of Cash Flows](#f4_005) | F-126 |
| [Notes to the Consolidated Financial Statements](#f4_006) | F-127 – F-144 |

---

[**Table of Contents**](#toc)

![](fin_003.jpg)

Independent Auditor's Report

To the Stockholders and the Board of Directors of Distributed Storage Solutions Limited:

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of Distributed Storage Solutions Limited (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for each of the years in the period ended December 31, 2023 and 2022, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the period ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

***Basis for Opinion***

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

***Emphasis of Matter***

As discussed in Note 2 to the financial statements, the Company expects to rely on financial support from its majority shareholder to meet its operating, investing and financing activities through the end of the going concern assessment period. The majority shareholder has indicated its intent and ability to provide such support. The support is a significant factor in management's assessment of the Company's ability to continue as a going concern. Our opinion is not modified with respect to this matter emphasized.

***Critical Audit Matters***

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

![](fin_005.jpg)

[**Table of Contents**](#toc)

*<u>Existence and Valuation of Digital Assets and Transactions Denominated in Digital Assets</u>*

Description of the Matter:

As described in Note 2, digital assets are non-financial assets. They lack physical substance and are built on blockchain technology. The Company elected to not early adopt the Financial Accounting Standards Board Update *2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60)*. Therefore, digital assets are classified as indefinite-lived intangible assets and recorded at cost, less impairment charges, if any. Cost is determined using the first-in-first-out method of accounting. Management tests digital currencies for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired.

At times, the Company may settle various accounts payable and accrued liabilities in digital currencies within the normal course of operations. Gains and losses arising from transactions settled in digital currencies are included in selling, general and administrative expenses within the accompanying consolidated statements of operations.

The principal considerations for our determination that performing procedures relating to the valuation of digital currencies and transactions denominated in digital currencies is a critical audit matter are (i) price volatility of digital currencies and potential impairment, (ii) reliability of third-party exchange pricing data and (iii) lack of physical substance of digital currencies.

How We Addressed the Matter in Our Audit:

We performed the following procedures:

● Performed testing over existence of digital currencies including:

○ Confirmation with third-party custodians.

○ Export of transaction activity for each wallet for the fiscal year from public Filecoin block explorers.

○ Used specialized software to verify a sample of the Company's on-chain transactions.

● Performed testing over the valuation of digital currencies recorded on the consolidated balance sheet, including the following:

○ Reviewed and tested the Company's impairment analysis. Compared the value of each unit of digital currency to the lowest intra-day price of the respective digital currency during the reporting period.

● Utilized pricing data from a variety of third-party exchange-data pricing sources and a specialized software tool when performing audit procedures over digital currency transactions. Investigated any significant differences between data, if any.

We have served as the Company's auditor since 2023.

![](fin_004.jpg)

Boston, Massachusetts

February 26, 2025

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited<br> ABN: 87 646 979 222**

**Consolidated Balance Sheets**

**As of December 31, 2023 and 2022**

---

| | | |
|:---|:---|:---|
|  | **2023<br> **$** | **2022<br> **$** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| Cash, restricted cash and cash equivalents | **404711** | 223422 |
| Trade and other receivables, net | **1120954** | 1201588 |
| Other current assets | **54781** | 48260 |
| **Total current assets** | **1580446** | 1473270 |
| Property and equipment, net | **25429** | 672411 |
| Deferred tax assets | **62372** |  |
| Intangible Assets | **740944** | 380374 |
| **Total assets** | **2409191** | 2526055 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| Trade and other payables | **395071** | 260894 |
| Employee benefits | **28097** | 23681 |
| Borrowings | **6386175** | - |
| **Total current liabilities** | **6809343** | 284575 |
| Borrowings | - | 5757535 |
| **Total liabilities** | **6809343** | 6042110 |
| Stockholders' equity (deficit): |  |  |
| Ordinary Shares (Issued Capital) (2,423,375 no par value shares issued and outstanding as of December 31, 2023, and 2022, respectively) | **6683854** | 6649830 |
| Accumulated deficit | **(11084006)** | (10165885) |
| **Total stockholders' equity (deficit)** | **(4400152)** | (3516055) |
| **Total liabilities and stockholders' equity (deficit)** | **2409191** | 2526055 |

---

The accompanying notes are an integral part of the consolidated financial statements.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Operations**

**For the Years Ended December 31, 2023 and 2022**

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Revenue | **1291446** | 1077221 |
| Cost of revenue | **(471040)** | (365177) |
| Gross profit | **820406** | 712044 |
| Selling, general, and administrative expenses | **(1890797)** | (1070366) |
| Depreciation Expense | **(651957)** | (1328117) |
| **Loss from operations** | **(1722348)** | (1686439) |
| Impairment loss on digital assets | **(150299)** | (2189105) |
| Other income | **1267470** | 1227649 |
| Interest expense, net | **(202794)** | (554168) |
| **Loss before income taxes** | **(807971)** | (3202063) |
| Income tax expense | **(109507)** | (34637) |
| **Net loss** | **(917478)** | (3236700) |

---

The accompanying notes are an integral part of the consolidated financial statements.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Changes in Stockholders' Equity (Deficit)**

**For the Years Ended December 31, 2023 and 2022**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Ordinary Shares<br> #** | **Ordinary Shares<br> $** | **Accumulated<br> deficit**<br> **$** | **Total**<br> **$** |
| **Balance at December 31, 2021** | **2223375** | **6475000** | **(6929185)** | **(454185)** |
| Net loss |  |  | (3236700) | (3236700) |
| Stock-based compensation: EIP | 200000 | 97000 |  | 97000 |
| Stock-based compensation: Options | - | 77830 | - | 77830 |
| **Balance at December 31, 2022** | **2423375** | **6649830** | **(10165885)** | **(3516055)** |
| Net loss |  |  | (917478) | (917478) |
| Stock-based compensation: Options |  | 34024 |  | 34024 |
| Foreign Exchange | - | - | (643) | (643) |
| **Balance at December 31, 2023** | **2423375** | **6683854** | **(11084006)** | **(4400152)** |

---

The accompanying notes are an integral part of the consolidated financial statements.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Cash Flows**

**For the Years Ended December 31, 2023 and 2022**

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Loss for the period | **(917478)** | (3236700) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| Depreciation | **651957** | 1328117 |
| Share based payments | **34024** | 174830 |
| Unrealized (gains) losses on foreign currency exchange | **(611855)** | (349630) |
| Impairment loss on intangible assets | **150299** | 2189105 |
| Gain on sale of digital assets | **(140715)** |  |
| Income Tax Expense | **109507** | 34637 |
| (Increase) in trade and other receivables | **(91247)** | (438318) |
| (Increase) decrease in other assets | **(6521)** | 78999 |
| Increase in trade and other payables | **134179** | 47528 |
| Increase (decrease) in employee benefits | **4415** | (11507) |
| **Net cash flows from/(used in) operating activities** | **(683435)** | (182939) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| Proceeds from sales of property and equipment | **-** | 90655 |
| Payment for the purchase of property and equipment | **(4974)** | (25041) |
| Proceeds from sales of digital assets | **241058** | 752638 |
| Payment for the purchase of digital assets | **-** | (1132571) |
| **Net cash flows from/(used in) investing activities** | **236084** | (314319) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from third party loan | **868611** | 239971 |
| Repayment of third-party loan | **(239971)** | - |
| **Net cash flows from/ (used in) financing activities** | **628640** | 239971 |
| **Net cash increase/(decrease) in cash and cash equivalents** | **181289** | (257287) |
| Cash, restricted cash and cash equivalents at beginning of period | **223422** | 480709 |
| **Cash, restricted cash and cash equivalents at end of period** | **404711** | 223422 |

---

Refer to Note 16 for the supplemental cash flows information

The accompanying notes are an integral part of the consolidated financial statements.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

**Nature of Operations**

The consolidated financial report covers Distributed Storage Solutions Limited ('the Company' or 'DSS') and its controlled entities ('the Group'). Distributed Storage Solutions Limited is a for-profit company limited by shares, incorporated and domiciled in Australia.

The principal activities of the Group were the provision of decentralized data storage solutions and infrastructure in the Filecoin Network.

Each of the entities within the Group prepare their financial statements based on the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in United States Dollars which is the Company's functional and reporting currency.

**Risks and Uncertainties**

As a result of the Group's involvement in the digital asset market, the Group is subject to market risk, liquidity risk, and concentration risk. The digital asset market may be volatile and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the Group's operations.

The digital asset market is subject to a high degree of risk from external factors such as price fluctuation, cyber theft from online wallet providers, market acceptance and user adoption, regulation of access to and operation of digital asset networks, legislative changes, and changes in consumer preferences or perceptions of digital currencies. Such factors could have a material adverse effect on the Group's business and operations.

There is also uncertainty regarding the current and future accounting, tax and legal treatment, as well as regulatory requirements relating to digital assets or transactions utilizing digital assets. Governmental regulations, or any adverse accounting, tax, legal or regulatory treatment of digital assets or transactions could materially and adversely affect the manner in which the Group conducts its business and could result in heightened regulation, oversight, increased costs and potential litigation.

---

| | |
|:---|:---|
| **1** | **Basis of Presentation** |

---

The accompanying consolidated financial statements have been presented in conformity with accounting principles generally accepted by the United States (US GAAP) and include the operations of the Company and its wholly owned subsidiary.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Principles of consolidation** 

The consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost. For all periods presented, the consolidated financial statements include the Company's wholly owned subsidiary, Distributed Storage Fund.

All inter-company transactions are eliminated in consolidation.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Principles of consolidation (continued)** 

*Subsidiaries*

Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to or has the right to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Going concern uncertainty** 

As of December 31, 2023, and 2022, the Group incurred a loss after tax of $917,478 and $3,236,700, respectively and net operating cash outflows of $683,435 and $182,939, respectively. As of December 31, 2023, and 2022, the Group's total liabilities exceeded its total assets by $4,400,152 and $3,516,055, respectively and its current liabilities exceeded current assets by $5,228,897 and current assets exceeded current liabilities by $1,188,695, respectively. The Group's cash position as of December 31, 2023, and 2022 was $404,711 and $223,422, respectively. These conditions give rise to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

Based on internally prepared forecast cash flows, combined with the existing loan facility of $25 million dollars from the new majority shareholder (refer to note 20), Management believes that the Group will have adequate cash reserves to enable the Group to meet its obligations for at least 12 months from the date the consolidated financial statements were available to be issued to be in accordance with GAAP. Accordingly, the Management have concluded it is appropriate to prepare the financial statements on a going concern basis.

In preparing these forecasts, Management and Directors have had regard for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. as of December 31, 2022 the consolidated group had Capital Notes on issue amounting to $5,517,564 which it restructured effective March 31, 2023, converting $4,950,740 to a Simple Agreement for Future Equity (SAFE);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. anticipated expansion of new revenue opportunities introduced in 2023, in Q4 2023, DSS commenced business operations in the AI computing sector leveraging its existing infrastructure and fixed price energy contracts to generate additional revenue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. projected growth in FIL revenue resulting from an increase in data stored within the Group's committed Filecoin infrastructure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. in Q4 2023 DSS renegotiated its third-party Filecoin (FIL) terms from a fixed interest/use fee to a revenue share model to protect against any decline in block reward ratio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. DSS continues to strengthen its long-standing relationship with Lenovo to provide infrastructure as a service on an as needed basis which enables DSS to scale in a capital efficient manner enabling it to meet customer demand on a just in time basis. DSS is actively scaling its storage operations with customer demand expected to grow which is expected to lead to increasing revenue potential;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. DSS has signed a new commercial storage agreement which commenced in March 2024 enabling DSS to reduce reliance on revenues generated in digital tokens and shifting its storage operations to USD denominated earnings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. DSS has a standing working capital facility from third parties of up to $1.8M of which the whole amount is available as at the date of this report; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. the Group is pursuing future capital raising opportunities.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Going concern uncertainty (continued)** 

The Directors are of the opinion that the Group can continue to access debt and equity funding to meet its working capital requirements. Accordingly, the Directors consider that it is appropriate to prepare the Group's financial statements on a going concern basis. Should the Group be unable to source sufficient funding through the factors noted above, the Group may not be able to realize assets at their recognized values and extinguish its liabilities in the normal course of business at the amounts stated in the consolidated financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Group be unable to continue as a going concern and meet its debts as and when they fall due.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Revenue recognition** 

The Group earns revenues from the provision of data storage to a blockchain network.

The Company recognizes revenue in accordance with Accounting Standards Codification ('ASC') Topic 606 *Revenue from Contracts with Customers*, which provides a five-step model for recognizing revenue from contracts with customers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) allocate the transaction price to the performance obligation in the contract and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) recognize revenue when the entity satisfies a performance obligation.

Below is a discussion of how the Company's revenues are earned and the Company's accounting policies pertaining to revenue recognition under ASC 606 and other required disclosures.

*Digital asset - mining revenue*

The Company provides data storage services in exchange for non-cash consideration in the form of a digital asset.

The Group's performance obligations to provide the data storage services arises in the Filecoin (FIL) network when a customer in this network digitally requests the service from data storage providers such as the Group.

The Group satisfies this performance obligation when it proves delivery of data storage services on the FIL blockchain by undertaking daily computations that validate the successful delivery of the data storage services to the end FIL customer. Upon selection as the storage provider and successful validation, the Group receives its share of network block rewards, and therefore recognizes revenue at point in time, for the satisfactory completion of this performance obligation.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Revenue recognition (continued)** 

The relative share of network block rewards in Filecoin is determined by the amount of "sealed" or proven storage that DSS has in the network. The more data DSS stores the higher the probability of winning block rewards. Block rewards are deposited into the Group's digital wallets immediately upon completing the validation (WinningPoSt) computations.

*Revenue from provision of Graphics Processing Units "GPU" Infrastructure*

The Group earns revenues from the provision of GPU Infrastructure as a service to customers via a marketplace. Revenue from provision of GPU Infrastructure for the Group is recognized on a weekly basis as the performance obligation of the supplied GPU Infrastructure as a Service ("<u>GPU IaaS</u>") is met. The Group satisfies this performance obligation when it has the required equipment available to the customer for the period.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Other income** 

*Research and development grants*

Research and development grants are received from the government. The grants are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Cost of revenue** 

Cost of revenue consists primarily of expenses that are directly related to providing the Group's service to its paying customers. These primarily consist of material costs related to digital currency mining.

&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Income tax** 

The tax expense recognized in the consolidated statements of operations comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized.

Tax positions taken or expected to be taken in the course of preparing the Group's tax returns are required to be evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There are no uncertain tax positions that require accrual or disclosure to the financial statements as of December 31, 2023, and 2022. The Group's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Group had no material accruals for interest or penalties related to income tax matters as of December 31, 2023 or 2022. Generally, the Group's tax returns are subject to examinations by local Australian tax authorities for tax filings for all years since inception.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Comprehensive Loss** 

A separate statement of comprehensive income is required under Account Standards Update ("<u>ASU</u>") 2011-05, Comprehensive Income, however, as net loss is the only component of comprehensive loss, the Company has elected not to include a separate Statement of Comprehensive Loss because it would not be meaningful to the users of the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Cash, restricted cash and cash equivalents** 

Cash and cash equivalents comprise of cash in bank, demand deposits and short-term investments generally having original maturities of three months or less which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Restricted cash is subject to regulatory restrictions and are therefore not available for general use by the other entities within the group.

&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Financial instruments** 

Financial instruments are recognized initially on the date that the Group becomes party to the contractual provisions of the instrument. The Group's financial instruments consist of cash and cash equivalents, other receivables and trade and other payables and borrowings and are carried at cost, which approximates fair value due to the short-term nature of these instruments.

&nbsp;&nbsp;&nbsp;&nbsp;**(j)** **Goods and services tax (GST)** 

Revenue, expenses and assets are recognized net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST.

Cash flows in the consolidated statements of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;**(k)** **Property and equipment** 

Property and equipment is stated at cost, net of accumulated depreciation. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statements of operations. The Group provides for depreciation using the straight-line method over the estimated useful lives of the respective assets.

A summary of estimated useful lives is as follows:

---

| | |
|:---|:---|
| **Fixed asset class** | **Useful life** |
| Office Equipment | 1 year |
| Computer Equipment | 1 - 2 years |

---

Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Digital Assets** 

The Group purchases or mines digital assets or receives digital assets as consideration for the delivery of its services as described in Note 2(c).

Digital assets are non-financial assets. They lack physical substance and are built on blockchain technology. Accordingly, digital assets are classified as indefinite-lived intangible assets and are recorded at cost, less impairment charges, if any. Cost is determined based on the cash consideration paid net of the transaction costs.

An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. The Group assesses digital assets for impairment on a monthly basis. Where the lowest intra-day trading price (fair value) is less than the carrying value of the respective digital asset holding, that digital asset holding is deemed to be impaired and the carrying value will be adjusted downwards (impaired) to the lowest intra-day trading price and recognized in the statement of operations. Impairment charges of $150,299 were recorded during the year ended December 31, 2023, and $2,189,105 during the year ended December 31, 2022.

At times, the Group may settle various payables and accrued liabilities in digital assets within the normal course of operations. Gains and losses arising from transactions settled with digital assets are included as a component of selling, general, and administrative expenses within the accompanying statements of operations.

The Group's digital asset inventory consists primarily of Filecoin digital assets. DSS held 204,174 units of Filecoin at a cost of $3.24 per unit and 127,016 units of Filecoin at cost of $2.61 per unit as of December 31, 2023 and 2022, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Stockholders' equity** 

**Common stock**

Common stock represents shares which are classified as equity. Incremental costs directly attributable to the issue of shares and share options which vest immediately are recognized as a deduction from equity, net of any tax effects.

**Rights and Preferences**

The holders of shares are entitled to participate in dividends and the proceeds on winding up of the Group. Each holder of shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote.

&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Equity-settled compensation** 

The Group follows ASC 718-10, "*Compensation-Stock Compensation"*. The Group operates equity-settled stock-based compensation employee share and option plans. The fair value of the equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, with a corresponding increase to equity.

The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing model.

Vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of options which are expected to vest. Revisions to the prior period estimates are recognized in profit or loss and equity.

The Group has the following types of equity settled transactions:

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Equity-settled compensation (continued)** 

**Equity incentive plan (EIP)**

The Group operates an equity incentive plan (EIP) where share issuances are funded by non-recourse loans and are treated for accounting purposes as grants of share options and accounted for as equity settled stock-based compensation. The fair value of the stock option is recognized over the requisite service period (not the term of the non-recourse loans) through a charge to compensation cost.

**Options**

The Group issues options to third parties. The options are measured at fair value based on the Black-Scholes option pricing model on grant date and are expensed immediately where there are no conditions attached.

&nbsp;&nbsp;&nbsp;&nbsp;**(o)** **Foreign currency transactions and balances** 

Foreign currency transactions are recorded at the spot rate on the date of the transaction. The Group has determined the functional currency is the U.S. Dollar for the Group. Transactions or assets and liabilities denominated in a foreign currency are translated into U.S. dollars as follows: monetary assets and liabilities, at the rate of exchange in effect at the balance sheet date; non-monetary assets and liabilities, at the exchange rate prevailing at the time of the acquisition of the assets or assumption of the liabilities; and revenues and expenses (excluding amortization, which is translated at the same rate as the related asset), at the average rate of exchange for the year. Gains and losses arising from foreign currency transactions are included in net loss.

&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Legal and other contingencies** 

The Group accounts for its contingent liabilities in accordance with ASC 450 "*Contingencies"*. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs incurred in connection with loss contingencies are expensed as incurred.

The Group is subject to the various legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, there was not at least a reasonable possibility the Group may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of legal proceedings and claims brought against the Group is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Group in a reporting period for amounts in excess of management's expectations, the Group's consolidated financial statements for that reporting period could be materially adversely affected.

---

| | |
|:---|:---|
| **3** | **Critical Accounting Estimates and Judgements** |

---

The Group makes estimates and judgements during the preparation of these consolidated financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **3** | **Critical Accounting Estimates and Judgements (continued)** |

---

The significant estimates and judgements made have been described below:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Deferred tax assets** 

Deferred tax assets relating to tax losses and deductible temporary differences may be recognized where it is probable that there may be future taxable profits against which available tax losses and deductible temporary differences can be utilized in the reasonably foreseeable future given the circumstances of the Group.

Determining the recoverability of deferred tax assets involves significant judgement on the tax treatment of certain transactions and of uncertain future events and circumstances.

Management makes judgments as to the probability of future taxable profits being generated based on budgets, and current and future expected economic conditions and determines whether it is probable that the Group will be able to realize a benefit from its available tax losses and deductible temporary differences within the reasonably foreseeable future.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Accounting for digital assets** 

The Group has had regard for ASC 350-60 "*Intangibles Goodwill and Other – Crypto Assets"* and supporting publication ASU 2023-08 *"Accounting for and Disclosure of Crypto Assets"* which confirms the accounting treatment and disclosure requirements for digital assets through the application of the current US GAAP framework. This guidance confirmed that digital assets meet the definition of an intangible asset.

The accounting policy and the resulting recognition and measurement of digital assets in the consolidated balance sheets and consolidated statements of operations and other comprehensive income, have therefore been determined by Management based on the purpose and utility of digital assets held, being for staking to continue operations. Refer to Note 2(l) for further details.

This is a significant judgement due to the lack of guidance and the materiality of the amounts involved.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Impairment assessment of intangible assets** 

The Group has intangible assets comprising digital assets and definite-lived intangible assets that require an assessment performed of circumstances or factors which may exist that indicate the value of these assets is lower than as carried in the books of the Group (i.e. impaired). These factors or circumstances may be general economic conditions or group specific. Management judgement is required to assess whether the circumstances or factors indicate an impairment of the assets and actual value of the impairment. This is a significant judgement due to the potential materiality of the amounts involved.

---

| | |
|:---|:---|
| **4** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Revenue and Other Income** |

---

**Revenue from continuing operations**

---

| | | |
|:---|:---|:---|
| | **2023<br> $** | **2022<br> $** |
| Revenue |  |  |
| - Provision of services | **1110912** | 1030611 |
| - Other revenue | **180534** | 46610 |
| **Total Revenue** | **1291446** | 1077221 |

---

Revenue is recognized at point in time.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **4** | **Revenue and Other Income (continued)** |

---

**Other income**

---

| | | |
|:---|:---|:---|
| | **2023<br> $** | **2022<br> $** |
| Other income |  |  |
| - Research and development Grants | **1267470** | 1227649 |
| **Total Other Income** | **1267470** | 1227649 |

---

---

| | |
|:---|:---|
| **5** | **Income Tax Expense** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** The major components of tax expense comprise:

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Current tax expense |  |  |
| &nbsp;&nbsp;&nbsp;Local income tax - current period | **171879** | 34637 |
| Deferred tax benefit (increase in deferred tax asset) | **(62372)** | - |
| **Total income tax expense** | **109507** | 34637 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Income tax expense differed from the amount computed by applying the income tax rate of 25% to pretax loss for 2023 and 2022 as a result of the following reconciling items:

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Loss before income tax | **(807971)** | (3202063) |
| Tax | **25.00%** | 25.00% |
|  | **(201993)** | (800516) |
| Add: |  |  |
| Tax effect of: |  |  |
| - non-deductible research and development expenses | **728431** | 705545 |
| - temporary differences not brought into account | **-** | 387926 |
| - stock-based compensation | **8506** | 43707 |
| - sundry items | **-** | 4887 |
| Less: |  |  |
| Tax effect of: |  |  |
| - recognition of deferred tax previously not recognized | **(21019)** |  |
| - research and development tax credit | **(316867)** | (306912) |
| - sundry items | **(87551)** | - |
| Income tax expense | **109507** | 34637 |
| Weighted average effective tax rate | **(14)%** | (1)% |

---

There was no change in the weighted average effective consolidated tax rate for 2023.

The Group did not have any imputation credits at December 31, 2023 and 2022.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **6** | **Cash and cash equivalents** |

---

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Cash at bank and in hand | **404711** | 89146 |
| Deposits at call | **-** | 156 |
| Restricted cash | **-** | 134120 |
| **Total cash and cash equivalents** | **404711** | 223422 |

---

Restricted cash is subject to regulatory restrictions and is therefore not available for general use by the other entities within the Group.

---

| | |
|:---|:---|
| **7** | **Trade and Other Receivables** |

---

---

| | | |
|:---|:---|:---|
|  | **2023**<br> **$** | **2022**<br> **$** |
| Trade receivables | **94930** | 14269 |
| Allowance for credit losses – trade receivables | **(91930)** |  |
| Goods and Services Tax (GST) receivable | **22363** | 18301 |
| Government subsidies receivable | **1095591** | 1169018 |
| **Total current trade and other receivables** | **1120954** | 1201588 |

---

The Australian Government's Research and Development Tax Incentive program provides a refundable tax offset for up to 43.5% of eligible research and development expenditures by Australian companies with an "aggregated turnover" of less than A$20.0 million. Grants under the program have been available for our research and development activities in Australia, as well as certain activities conducted overseas that are approved by the Australian Government. Grants are calculated at the end of the fiscal year to which they relate, based on the expenses incurred in such fiscal year and included in such fiscal year's Australian income tax return after registration of the research and development activities with the relevant authorities.

---

| | |
|:---|:---|
| **8** | **Property and Equipment** |

---

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| **Computer equipment** |  |  |
| At cost | **2702323** | 2703080 |
| Accumulated depreciation | **(2677486)** | (2031118) |
| Total computer equipment | **24837** | 671962 |
| **Office equipment** |  |  |
| At cost | **11736** | 9907 |
| Accumulated depreciation | **(11144)** | (9458) |
| Total office equipment | **592** | 449 |
| **Property and equipment, net** | **25429** | 672411 |

---

Depreciation expense of $651,957 and $1,328,117 has been recognized as an expense in the Statements of Operations for 2023 and 2022, respectively.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **9** | **Intangible Assets** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Digital Assets** 

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Cost | **811400** | 2520924 |
| Impairment loss on digital assets | **(150299)** | (2189105) |
| **Net carrying value** | **661101** | 331819 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Definite-Lived Intangible Assets** 

---

| |
|:---|
| Balance as of January 1, 2022 |
| Acquired Definite-Lived Intangible Assets |
| Amortization of Definite-Lived Intangible Asset |
| Balance as of December 31, 2022 |
| Acquired Definite-Lived Intangible Assets |
| Amortization of Definite-Lived Intangible Asset |
| **Balance as of December 31, 2023** |

---

Definite-Lived Intangible Assets include digital asset deal transaction costs which are paid in Filecoin tokens at commencement of the contract and are amortized over the life of the contract. The digital asset deal contracts include an 18-month storage period, which is used as the life of the contract.

**Restricted digital assets**

Digital assets disclosed above include Filecoin tokens which are pledged as collateral to support the Group's operations. Pledged Filecoin is committed for the full life of a storage sector (18 months) and is restricted from use. As of December 31, 2023, and 2022, the Group had pledged $261,781 and $262,759, respectively as collateral to storage sectors with maturities ranging from 1-540 days.

---

| | |
|:---|:---|
| **10** | **Trade and Other Payables** |

---

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| &nbsp;&nbsp;&nbsp;Trade payables | **74086** | 59795 |
| &nbsp;&nbsp;&nbsp;Accrued expense | **287611** | 132953 |
| &nbsp;&nbsp;&nbsp;Other payables | **33374** | 68146 |
| **Total current trade and other payables** | **395071** | 260894 |

---

Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **11** | **Borrowings** |

---

---

| | |
|:---|:---|
|  | **2023<br> $** |
| CURRENT |  |
| Unsecured liabilities: |  |
| Capital notes | **565672** |
| SAFE Securities | **5878346** |
| SAFE Securities capitalized transaction costs | **(57843)** |
| **Total current borrowings** | **6386175** |

---

---

| | |
|:---|:---|
|  | **2022<br> $** |
| NON-CURRENT |  |
| Unsecured liabilities: |  |
| Capital notes | 5517564 |
| Other loans | 239971 |
| **Total non-current borrowings** | 5757535 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Capital notes** 

During the previous financial year, on April 22, 2022, the Group issued AUD$8,092,500 capital notes. These capital notes carry a coupon rate of 10% per annum, which is payable quarterly, and are set to mature on June 30, 2024. During the current financial year, on March 31, 2023, the Group reorganized its capital structure, converting AUD$7,261,250 of these notes, valued at $4,950,740, into a Simple Agreement for Future Equity (SAFE) instrument. For additional details, refer to note 11(b).

As of December 31, 2023, there are 831,250 capital notes on issue valued at $565,672 and at December 31, 2022 there were 8,092,500 capital notes on issue valued at $5,517,564.

Interest expense for the year ended December 31, 2023, and 2022 amounted to $194,281 and $552,831, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **SAFE Securities** 

During the year, DSS entered into agreements with the majority of its capital note investors to reorganize and exchange capital notes for Simple Agreements for Future Equity ("<u>SAFE</u>") securities. In accordance with the terms of the agreements, on March 31, 2023, the Group cancelled AUD$7,261,250 capital notes valued at $4,950,740 and issued $4,950,740 in SAFE securities to the respective investors plus an additional $927,606 to new investors.

The SAFE securities are convertible to equity in the event of a capital transaction (such as an IPO, backdoor listing, or exit sale) or are redeemable in the event of insolvency. The SAFE securities do not carry any specific terms of interest. Until shares are issued, the investors do not have any voting rights. If an insolvency event occurs before the termination date, DSS is obligated to pay the investor a cash amount equal to the purchase amount immediately prior to or concurrent with the completion of the insolvency event.

As of December 31, 2023, $5,878,346 in SAFE securities are outstanding. These SAFE securities have been classified as a current liability on the assumption that, in the event of liquidation, these securities will be settled within the year. The occurrence of these events is not within the control of DSS.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **11** | **Borrowings (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Other loans** 

On April 7, 2022, the Group executed a cash advance facility agreement with a third party, enabling it to periodically withdraw up to an aggregate amount not exceeding $1,234,137. The facility is repayable 24 months after the initial advance date and accrues interest at a rate of 12% per annum.

As of December 31, 2022, the Group had drawn down $239,971. This amount was repaid on April 14, 2023, and there have been zero drawdowns as of December 31, 2023. Zero-balance outstanding as of December 31, 2023. The facility expired in April 2024.

Interest expense for the year ended December 31, 2023, and 2022 amounted to $10,712 and $1,337, respectively.

---

| | |
|:---|:---|
| **12** | **Stock-based Compensation** |

---

As of December 31, 2023, the Group has the following stock-based compensation:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Equity incentive plan (EIP)** 

The Group resolved to offer shares to its employees and consultants, or their nominated entities, as part of the Group's incentivization and remuneration arrangements. The EIP is administered by Distributed Storage Holdings Pty Ltd (the trustee). Under the plan, shares granted to employees are subject to a vesting condition such that employees remain continuously employed for a period of 3 years from the grant date and/or that specified operational performance conditions are met. Shares granted to consultants are not subject to any vesting conditions. Participation in the plan is at the board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Shares are granted under the plan for no consideration as the Trustee will enter into a non-recourse loan agreement with each participant and will lend an amount equal to the issue price for the shares.

A summary of the share activity for the year ended December 31, 2023 is as follows:

---

| | | |
|:---|:---|:---|
|  | **No.**<br> **EIP Shares**<br> **#** | **Weighted-<br> average<br> Grant Date<br> Fair Value<br> per EIP share<br> $** |
| Unvested as of December 31, 2022 | **460000** | 0.5847 |
| Granted | **-** |  |
| Vested | **(460000)** | 0.5847 |
| Forfeited or expired | **-** | **-** |
| **Unvested as of December 31, 2023** | **-** | - |

---

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **12** | **Stock-based Compensation (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Equity incentive plan (EIP) (continued)** 

A summary of the share activity for the year ended December 31, 2022 is as follows:

---

| | | |
|:---|:---|:---|
|  | **No.<br> EIP Shares<br> #** | **Weighted-<br> average<br> Grant Date<br> Fair Value<br> per EIP share<br> $** |
| Unvested as of January 1, 2022 | **260000** | 0.6613 |
| Granted | **200000** | 0.4850 |
| Vested | **-** |  |
| Forfeited or expired | **-** | - |
| **Unvested as of December 31, 2022** | **460000** | 0.5847 |

---

Interest free non-recourse loans totaling $1,666,050 (AUD $2,293,800) have been provided to employees to acquire shares in the Group. The non-recourse loans are repayable at the earlier of 10 business day after the borrower no longer holds subscription shares in the Group or 9 years and 11 months from the date of the grant.

Where share purchases are funded by non-recourse loans, they are treated for accounting purposes as grants of share options and accounted for as equity settled share-based payments. The shares issued under the EIP are fair valued on the date they are granted and amortized as an expense in the profit or loss over the vesting period. The total fair value of the EIP Shares granted in 2022 and 2021 is $268,940.

As the share purchases are funded by non-recourse loans, they are treated for accounting purposes as a grant of an option, as the substance is similar to the grant of an option. The exercise price of this share option is the principal and interest due on the non-recourse loan. There was no interest due on the non-recourse loans. The fair value of the stock option is recognized as an expense over the requisite service period (not the term of the non-recourse loans).

Share-based payment expenses recognized during 2023 and 2022 were $0 and $97,000, respectively within the Consolidated Statements of Operations as administrative expenses (employee benefits expenses).

The shares were valued independently using the Black-Scholes Model that uses the assumptions noted in the following table.

---

| | | |
|:---|:---|:---|
|  | **2022<br> Grants** | **2021<br> Grants** |
| Expected life of options (in years) | 9.90 | 9.90 |
| Estimated annualized volatility | 90% | 90% |
| Dividend yield | 0% | 0% |
| Risk-free rate | 2.50% | 1.90% |

---

Expected volatility was estimated using historical volatility of comparable companies. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **12** | **Stock-based Compensation (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Options** 

On March 31, 2023, the Group granted 134,766 options to a third-party lender in accordance with the loan agreement. The options are exercisable for common stock at a ratio of 1 to 1 with an AUD$11.60 exercise price.

The options granted are not subject to vesting conditions. The options shall expire in 10 years from the grant date, which is April 1, 2033. The share options are fair valued on the date they are granted and are fully expensed on the date of grant within the Statements of Operations.

On December 15, 2022, the Group granted 155,172 options to a third-party lender in accordance with the loan agreement. The options are exercisable for common stock at a ratio of 1 to 1 with an exercise price of AUD$11.60.

The options granted are not subject to vesting conditions. The options shall expire in 9.3 years from the grant date, March 15, 2032. The share options are fair valued on the date they are granted and are fully expensed on the date of grant within the Statements of Operations.

The fair value of the options as at grant date was assessed to be $34,024 in 2023 and $77,830 in 2022.

Stock-based compensation of $34,024 and $77,830 has been recognized as an expense in the Statements of Operations for 2023 and 2022, respectively.

No options were exercised during the year ended December 31, 2023, and 2022.

The options were valued independently using the Black-Scholes Model that uses the assumptions noted in the following table.

---

| | | |
|:---|:---|:---|
|  | **2023<br> Tranche** | **2022<br> Tranche** |
| Expected life of options (in years) | 10.0 | 9.3 |
| Estimated annualized volatility | 90% | 90% |
| Dividend yield | 0% | 0% |
| Risk-free rate | 3.40% | 3.50% |

---

Expected volatility was estimated using historical volatility of comparable companies. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

---

| | |
|:---|:---|
| **13** | **Financial Risk Management** |

---

---

| | | |
|:---|:---|:---|
|  | **2023** | **2022** |
|  | **$** | **$** |
| **Financial assets** |  |  |
| Held at amortized cost |  |  |
| &nbsp;&nbsp;&nbsp;Cash, restricted cash and cash equivalents | **404711** | 223422 |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | **1120954** | 1201588 |
| **Total financial assets** | **1525665** | 1425010 |
| Held at amortized cost |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables | **395071** | 260894 |
| &nbsp;&nbsp;&nbsp;Borrowings | **6386175** | 5757535 |
| **Total financial liabilities** | **6781246** | 6018429 |

---

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **14** | **Tax Assets and Liabilities** |

---

Deferred tax assets have been recognized in respect of the following:

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Assets |  |  |
| Impairment loss on digital assets | **1826363** | 1859998 |
| Accrued liabilities | **10083** | 5919 |
| Employee provisions | **7024** | 13130 |
| **Total deferred tax assets** | **1843470** | 1879047 |
| Liabilities |  |  |
| Others | **45265** | (45265) |
| **Total deferred tax liabilities** | **45265** | (45265) |
| Valuation allowance | **(1826363)** | (1833782) |
| **Net deferred tax asset** | **62372** | - |

---

---

| | |
|:---|:---|
| **15** | **Supplemental disclosure of cash flows information** |

---

**Supplemental disclosure of cash flow information**

---

| | | |
|:---|:---|:---|
|  | **2023<br> $** | **2022<br> $** |
| Cash paid for interest | **204993** | 555671 |

---

---

| | |
|:---|:---|
| **16** | **Interest in Subsidiaries** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Composition of the Group** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Principal place of business/country of incorporation** | **Percentage<br> Owned (%)\*** | **Percentage<br> Owned (%)\*** |
|  |  | **2023** | **2022** |
| **Subsidiaries** |  |  |  |
| Distributed Storage Fund (Unit Trust) | Australia | 100 | 100 |

---

\* The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **17** | **Contingent Liabilities** |

---

The Group had the following contingent liabilities at the end of the reporting period:

● The Group is required to provide a guarantee in the form of Filecoin with third party providers of Filecoin tokens to be used to support the growth of its storage operations, in accordance with agreed terms. This guarantee is to ensure no loss is incurred by third party providers throughout the day-to-day operations by the Group. The potential loss that could be incurred by the Group relates to slashing fees and early termination of storage sectors. Management estimates this to be a maximum of $327,052 and $92,406 as of December 31, 2023, and 2022, respectively.

The Group did not have any commitments or any other contingencies as of December 31, 2023, and 2022, respectively.

---

| | |
|:---|:---|
| **18** | **Related Parties** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **The Group's main related parties are as follows:** 

● Key management personnel

● Subsidiaries

● Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Transactions with related parties** 

Transactions between related parties are on normal commercial terms and conditions no more favorable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | | **Balance outstanding** | **Balance outstanding** |
|  | **2023<br> $** | **2022<br> $** | **2023<br> $** | **2022<br> $** |
| **Entities controlled by key management personnel** |  |  |  |  |
| Rental of an office building | 1032 | 1778 |  |  |
| Purchase of professional services | 166 |  |  |  |

---

During the fiscal year, the Group issued 290,291 SAFE securities for $195,602 to entities controlled by key management personnel. These were outstanding as of December 31, 2023. Terms and conditions were on the same basis and at arm's length.

---

| | |
|:---|:---|
| **19** | **Subsequent events** |

---

Subsequent to the year ended December 31, 2023, the following events occurred:

&nbsp;&nbsp;&nbsp;&nbsp;a. The Group's Chief Financial Officer and Company Secretary, Mr. Ariel Sivikofsky, resigned on February 28, 2024 and has subsequently been replaced by Timothy Broadfoot as Chief Financial Officer on May 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;b. The Group signed a new commercial storage agreement which commenced in March 2024 enabling the Group to reduce reliance on revenues generated in digital tokens and shifting its storage operations to USD denominated earnings. An estimate of the financial effect cannot be made at the date of this report.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**Notes to the Consolidated Financial Statements**

**For the Years Ended December 31, 2023 and 2022**

---

| | |
|:---|:---|
| **19** | **Subsequent events (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;c. On March 28, 2024, the Group entered into new data center agreement with NextDC in Melbourne, further diversifying the Group's geographical locations and deploying the Group's first dedicated AI cluster. The deployment of the AI Cluster was completed in June 2024, with commercial operation beginning on June 28, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;d. On April 4, 2024, Distributed Storage Fund (DSF), a controlled entity of the company entered into voluntary administration. As a result of the administration process, the entity's liabilities, including remaining capital notes amounting to US $535,900, will be reduced, although the full financial impact on the Group's financial position due to this event cannot reliably measured at the date of this report.

&nbsp;&nbsp;&nbsp;&nbsp;e. The Group lodged its Income Tax Return for the financial year ended December 31, 2023 which included a R&D tax claim amounting to $1,048,820. The R&D tax claim was successfully received in full on April 23, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;f. On April 24, 2024, the Group entered into a services agreement with Lenovo to accelerate AI operations growth and corresponding revenue. The financial impact of this event cannot accurately be estimated at the date of this report.

&nbsp;&nbsp;&nbsp;&nbsp;g. On April 27, 2024, the Group acquired computer equipment amounting to $1,104,149. This acquisition is anticipated to expand the Group's AI computing capacity and lead to increased revenues.

&nbsp;&nbsp;&nbsp;&nbsp;h. On June 18, 2024, Sharon AI has provided a loan facility of $25 million to DSS with an interest rate of 6% p.a. and a maturity of 5 years from the effective date of the respective loan tranches.

&nbsp;&nbsp;&nbsp;&nbsp;i. On June 26, 2024, DSS options fully vested and were converted into ordinary shares on a cashless basis, resulting in the issuance of 289,657 additional shares.

&nbsp;&nbsp;&nbsp;&nbsp;j. On June 27, 2024, the majority of the Group's SAFE holders assigned their holdings to Sharon AI, Inc, a USA based company, in exchange for shares in Sharon AI. The remaining SAFE holders who did not accept the proposal will continue as SAFE holders of DSS, and it is unlikely that another event will occur causing their SAFE notes to convert to ordinary shares. Subsequently, DSS and Sharon AI agreed to effectively exercise the redemption clause and convert these to a loan under the loan facility established on June 18, 2024, converting US $5,908,118 in SAFE liabilities to current loan liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;k. On June 28, 2024, Sharon AI acquired 95% of the shareholding in DSS, obtaining control and becoming the ultimate holding company. In exchange, DSS shareholders received shares in Sharon AI. Further to the acquisition, Sharon AI has the intention of calling an Extraordinary General Meeting in due course to resolve to convert DSS from a public company to a private company.

&nbsp;&nbsp;&nbsp;&nbsp;l. On July 1, 2024, DSS transferred all employee to Sharon AI Pty Ltd, including leave balances.

&nbsp;&nbsp;&nbsp;&nbsp;m. On July 18, 2024, the Group acquired computer equipment amounting to $2,651,022. This acquisition is anticipated to expand the Group's AI computing capacity and lead to increased revenues.

&nbsp;&nbsp;&nbsp;&nbsp;n. On September 9, 2024, Distributed Storage Solutions became a private company, changing its name from Distributed Storage Solutions Limited to Distributed Storage Solutions Pty Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;o. In October 2024, the directors of DSS changed with the removal of Nick Hughes-Jones and James Manning and the addition of Wolfgang Schubert.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Audited Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

[**Table of Contents**](#toc)

**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Contents**

---

| | |
|:---|:---|
|  | **Page** |
| **Consolidated Financial Statements** |  |
| [Report of Independent Registered Public Accounting Firm](#f5_001) | F-147 – F-148 |
| [Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023](#f5_002) | F-149 |
| [Consolidated Statements of Operations for the six-month period ended June 30, 2024](#f5_003) | F-150 |
| [Consolidated Statements of Comprehensive Income for the six-month period ended June 30, 2024](#f5_004) | F-151 |
| [Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the six-month period ended June 30, 2024](#f5_005) | F-152 |
| [Consolidated Statements of Cash Flows for the six-month period ended June 30, 2024](#f5_006) | F-153 |
| [Notes to the Consolidated Financial Statements](#f5_007) | F-154 – F-168 |

---

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Independent Auditor's Report

To the Stockholders and the Board of Directors of Distributed Storage Solutions Limited:

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets of Distributed Storage Solutions Limited (the Company) as of June 30, 2024 and December 31, 2023, the related consolidated statements of operations, comprehensive income, changes in stockholders' equity (deficit), and cash flows for the six-month period ended June 30, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and December 31, 2023, and the results of its operations and its cash flows for the six-month period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

***Basis for Opinion***

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

***Emphasis of Matter***

As discussed in Note 2 to the financial statements, the Company expects to rely on financial support from its majority shareholder to meet its operating, investing and financing activities through the end of the going concern assessment period. The majority shareholder has indicated its intent and ability to provide such support. The support is a significant factor in management's assessment of the Company's ability to continue as a going concern. Our opinion is not modified with respect to this matter emphasized.

***Critical Audit Matters***

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

![](fin_005.jpg)

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*<u>Existence and Valuation of Digital Assets and Transactions Denominated in Digital Assets</u>*

Description of the Matter:

As described in Note 2, digital assets are non-financial assets. They lack physical substance and are built on blockchain technology. The Company elected to adopt the Financial Accounting Standards Board Update *2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60)* as of January 1, 2024. The Company determines the cost basis which is based on the cash consideration paid net of the transaction costs. The Company remeasures on a monthly basis the fair value of the digital assets determined by observable market rates with gains and losses from changes in the fair value of the digital assets recognized in net income (loss) each reporting period.

At times, the Company may settle various accounts payable and accrued liabilities in digital currencies within the normal course of operations. Gains and losses arising from transactions settled in digital currencies are included in selling, general and administrative expenses within the accompanying consolidated statements of operations.

The principal considerations for our determination that performing procedures relating to the valuation of digital currencies and transactions denominated in digital currencies is a critical audit matter are (i) price volatility of digital currencies, (ii) reliability of third-party exchange pricing data and (iii) lack of physical substance of digital currencies.

How We Addressed the Matter in Our Audit:

We performed the following procedures:

● Performed testing over existence of digital currencies including:

○ Confirmation with third-party custodians.

○ Export of transaction activity for each wallet for the fiscal year from public Filecoin block explorers.

○ Used specialized software to verify a sample of the Company's on-chain transactions.

● Performed testing over the valuation of digital currencies recorded on the consolidated balance sheet, including the following:

○ Reviewed and tested the Company's fair value calculations. Compared the Company's reported fair value to independent sources, such as market prices or third-party exchange-data pricing sources.

● Utilized pricing data from a variety of third-party exchange-data pricing sources and a specialized software tool when performing audit procedures over digital currency transactions. Investigated any significant differences between data, if any.

We have served as the Company's auditor since 2023.

![](fin_004.jpg)

Boston, Massachusetts

February 26, 2025

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Balance Sheets**

**As of June 30, 2024 and December 31, 2023**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2024<br> $** | **December 31,**<br> **2023<br> $** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| Cash, restricted cash and cash equivalents | **55836** | 404711 |
| Trade and other receivables | **412176** | 1120954 |
| Deposits | **245236** |  |
| Other current assets | **59082** | 54781 |
| **Total current assets** | **772330** | 1580446 |
| Property and equipment, net | **1082968** | 25429 |
| Deferred tax assets | **60712** | 62372 |
| Intangible Assets | **559962** | 740944 |
| **Total assets** | **2475972** | 2409191 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| Trade and other payables | **425804** | 395071 |
| Employee benefits | **-** | 28097 |
| Borrowings | **5817146** | 6386175 |
| **Total liabilities** | **6242950** | 6809343 |
| Stockholders' equity (deficit): |  |  |
| Common stock (2,713,032 and 2,423,375 no par value shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively) | **10267187** | 6683854 |
| Accumulated deficit | **(14151251)** | (11084006) |
| Equity adjustment from Foreign Currency Translation ("<u>CTA</u>") | **117086** | **-** |
| **Total stockholders' equity (deficit)** | **(3766978)** | (4400152) |
| **Total liabilities and stockholders' equity (deficit)** | **2475972** | 2409191 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Operations**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
|  | **2024**<br> **$** |
| Revenue | **732631** |
| Cost of revenue | **(754402)** |
| Gross profit | **(21771)** |
| Shared Based Compensation | **(3013167)** |
| Selling, general, and administrative expenses | **(502221)** |
| Other expenses | **(154595)** |
| **Loss from operations** | **(3691754)** |
| Gain on sale of intangible assets | **73425** |
| Fair value gain on revaluation of digital assets | **442500** |
| Other income | **278208** |
| Interest expense, net | **(128455)** |
| **Loss before income taxes** | **(3026076)** |
| Income tax expense | **(41169)** |
| **Net loss** | **(3067245)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Comprehensive Income**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
|  | **2024**<br> **$** |
| Net loss | **(3067245)** |
| Other Comprehensive Income |  |
| &nbsp;&nbsp;&nbsp;Cumulative Translation Adjustment | **117086** |
| **Total Other Comprehensive Income** | **117086** |
| **Comprehensive Income** | **(2950159)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Changes in Stockholders' Equity (Deficit)**

**For the Six-Month Period Ended June 30, 2024**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock**<br> **#** | **Common Stock**<br> **$** | **DOCA**<br> **$** | **Accumulated deficit**<br> **$** | **AOCI**<br> **(CTA)**<br> **$** | **Total**<br> **$** |
| **Balance at December 31, 2023** | **2423375** | **6683854** | **-** | **(11084006)** | **-** | **(4400152)** |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  | **(3067245)** |  | **(3067245)** |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock, Option Conversion net | **289657** | **3046286** |  |  |  | **3046286** |
| &nbsp;&nbsp;&nbsp;Forfeiture of Warrants |  | **(33119)** |  |  |  | **(33119)** |
| &nbsp;&nbsp;&nbsp;DOCA – Administration |  |  | **570166** |  |  | **570166** |
| &nbsp;&nbsp;&nbsp;Equity Adjustment from Foreign Currency Translation (CTA) |  |  |  |  | **117086** | **117086** |
| **Balance at June 30, 2024** | **2713032** | **9697021** | **570166** | **(14151251)** | **117086** | **(3766978)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Consolidated Statements of Cash Flows**

**For the Six-Month Period Ended June 30, 2024**

---

| |
|:---|
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |
| Loss for the period**)** |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
| Depreciation |
| Share based compensation |
| Gain on sale of intangible assets (FIL)**)** |
| Fair value gain on revaluation of intangible assets**)** |
| Amortization of file deal investments |
| Provision for credit losses**)** |
| Unrealized (gains) losses on foreign currency exchange |
| Income Tax Expense |
| Decrease in trade and other receivables |
| (Increase) in deposits**)** |
| (Increase) in other current assets**)** |
| Decrease in other assets |
| (Decrease) in trade and other payables**)** |
| (Decrease) in employee benefits |
| **Net cash flows from/(used in) operating activities** |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |
| Payment for the purchase of property and equipment**)** |
| Proceeds from sales of intangible assets |
| Payment for the purchase of digital assets |
| **Net cash flows from/(used in) investing activities** |
| **Net cash increase/(decrease) in cash and cash equivalents)** |
| Cash, restricted cash and cash equivalents at beginning of period |
| **Cash, restricted cash and cash equivalents at end of period** |

---

Refer to Note 18 for the supplemental cash flows information

The accompanying notes are an integral part of these consolidated financial statements.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

**Nature of Operations**

The consolidated financial report covers Distributed Storage Solutions Limited ('the Company' or 'DSS') and its controlled entities ('the Group'). Distributed Storage Solutions Limited is a for-profit company limited by shares, incorporated and domiciled in Australia.

The principal activities of the Group were the provision of decentralized data storage solutions and infrastructure in the Filecoin Network.

Each of the entities within the Group prepare their financial statements based on the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in United States Dollars which is the Company's functional and reporting currency.

**Risks and Uncertainties**

As a result of the Group's involvement in the digital asset market, the Group is subject to market risk, liquidity risk, and concentration risk. The digital asset market may be volatile and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the Group's operations.

The digital asset market is subject to a high degree of risk from external factors such as price fluctuation, cyber theft from online wallet providers, market acceptance and user adoption, regulation of access to and operation of digital asset networks, legislative changes, and changes in consumer preferences or perceptions of digital currencies. Such factors could have a material adverse effect on the Group's business and operations.

There is also uncertainty regarding the current and future accounting, tax and legal treatment, as well as regulatory requirements relating to digital assets or transactions utilizing digital assets. There is currently no authoritative guidance on accounting for digital assets. Governmental regulations, or any adverse accounting, tax, legal or regulatory treatment of digital assets or transactions could materially and adversely affect the manner in which the Group conducts its business and could result in heightened regulation, oversight, increased costs and potential litigation.

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| | |
|:---|:---|
| **1** | **Basis of Presentation** |

---

The accompanying consolidated financial statements have been presented in conformity with accounting principles generally accepted by the United States (US GAAP) and include the operations of the Company and its wholly owned subsidiary, Distributed Storage Fund.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Principles of consolidation** 

The consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost. For all periods presented, the consolidated financial statements include the Company's wholly owned subsidiary, Distributed Storage Fund.

All inter-company transactions are eliminated in consolidation.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Principles of consolidation (continued)** 

*Subsidiaries*

Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to or has the right to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Going concern uncertainty** 

For the six months ending June 30, 2024, the Group incurred a loss before income taxes of $3.0 million, and net operating cash inflows of $93.0 thousand. As of June 30, 2024, the Group's total liabilities exceeded its total assets by $3.7 million and its current liabilities exceeded current assets by $5.4 million. The Group's cash position as of June 30, 2024, was $56.0 thousand. These conditions give rise to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

Based on internally prepared forecast cash flows, combined with the existing loan facility of $25 million dollars from the new majority shareholder Sharon AI. Management believes that the Group, with the help of the majority shareholder as of June 30, 2024, will have adequate cash reserves to enable the Group to meet its obligations for at least 12 months from the date the consolidated financial statements were available to be issued. Accordingly, the Management have concluded it is appropriate to prepare the financial statements on a going concern basis.

In preparing these forecasts, Management and Directors have had regard for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Projected profitability by January 2025 based on continuation of existing contracts, business expansion plans to pivot the main operations of the business to AI Graphics Processing Unit Infrastructure as a Service (" <u>GPU IaaS</u> "), and projected increases in revenue from expanding AI computer and data storage assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. DSS continues to strengthen its long-standing relationship with Lenovo to provide infrastructure as a service on an as needed basis which enables DSS to scale in a capital efficient manner enabling it to meet customer demand on a just in time basis. DSS is actively scaling its storage operations with customer demand expected to grow which is expected to lead to increasing revenue potential;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. DSS has signed a new commercial storage agreement which commenced in March 2024 enabling DSS to reduce reliance on revenues generated in digital tokens and shifting its storage operations to USD denominated earnings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. DSS was majority acquired on June 30, 2024 subsequently joining a larger consolidated group, giving the Group access to additional liquidity support.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. DSS and its majority acquiror, together, have raised approximately $5.0 million in equity in Q3 2024 with the potential to market and raise additional $10.0 to $15.0 million in additional capital before the end of 2024.

The Directors are of the opinion that the Group can continue to access debt and equity funding to meet its working capital requirements. Accordingly, the Directors consider that it is appropriate to prepare the Group's financial statements on a going concern basis. Should the Group be unable to source sufficient funding through the factors noted above, the Group may not be able to realize assets at their recognized values and extinguish its liabilities in the normal course of business at the amounts stated in the consolidated financial statement.

The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Group be unable to continue as a going concern and meet its debts as and when they fall due.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Revenue recognition** 

The Group earns revenues from the provision of data storage to a blockchain network.

The Group recognizes revenue in accordance with Accounting Standards Codification ('ASC') Topic 606 *Revenue from Contracts with Customers*, which provides a five-step model for recognizing revenue from contracts with customers as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) allocate the transaction price to the performance obligation in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) recognize revenue when the entity satisfies a performance obligation.

Below is a discussion of how the Group's revenues are earned and the Group's accounting policies pertaining to revenue recognition under ASC 606 and other required disclosures.

*Digital asset - mining revenue*

The Group provides data storage services in exchange for non-cash consideration in the form of a digital asset.

The Group's performance obligations to provide the data storage services arises in the Filecoin (FIL) network when a customer in this network digitally requests the service from data storage providers such as the Group.

The Group satisfies this performance obligation when it proves delivery of data storage services on the FIL blockchain by undertaking daily computations that validate the successful delivery of the data storage services to the end FIL customer. Upon selection as the storage provider and successful validation, the Group receives its share of network block rewards, and therefore recognizes revenue at point in time, for the satisfactory completion of this performance obligation.

The relative share of network block rewards in Filecoin is determined by the amount of "sealed" or proven storage that DSS has in the network. The more data DSS stores the higher the probability of winning block rewards.

Block rewards are deposited into the Group's digital wallets immediately upon completing the validation (WinningPoSt) computations.

*Revenue from provision of GPU Infrastructure*

The Group earns revenues from the provision of GPU Infrastructure as a service to customers via a marketplace. Revenue from provision of GPU Infrastructure for the Group is recognized on a weekly basis as the performance obligation of the supplied GPU IaaS is met. The Group satisfies this performance obligation when it has the required equipment available to the customer for the period.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Other income** 

*Research and development grants*

Research and development grants are received from the government. The grants are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Cost of revenue** 

Cost of revenue consists primarily of expenses that are directly related to providing the Group's service to its paying customers. These primarily consist of material costs related to digital currency mining.

&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Income tax** 

The tax expense recognized in the consolidated statements of operations comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized.

Tax positions taken or expected to be taken in the course of preparing the Group's tax returns are required to be evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. There are no uncertain tax positions that require accrual or disclosure to the financial statements as of June 30, 2024, or December 31, 2023. The Group's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Group had no material accruals for interest or penalties related to income tax matters as of June 30, 2024, or December 31, 2023. Generally, the Group's tax returns are subject to examinations by local Australian tax authorities for tax filings for all years since inception.

&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Comprehensive Loss** 

A separate statement of comprehensive income is required under Account Standards Update ("<u>ASU</u>") 2011-05, The only component of comprehensive loss is Cumulative Translation Adjustments (CTA). The resulting translation adjustments are recorded as a component of Other Comprehensive Income (OCI) and included in Accumulated Other Comprehensive Income (AOCI) within stockholders' equity. For the period ended June 30, 2024, the Company recorded a Cumulative Translation Adjustment of $117,086.

&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Cash, restricted cash and cash equivalents** 

Cash and cash equivalents comprise of cash in bank, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Restricted cash is subject to regulatory restrictions and is therefore not available for general use by the other entities within the group.

&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Deposits** 

Deposits comprise of bank guarantees in the form of term deposits, which are not available for general use. The term deposits are designated in cash which are subject to an insignificant risk of a change in value.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

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| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(j)** **Financial Instruments** 

Financial instruments are recognized initially on the date that the Group becomes party to the contractual provisions of the instrument. The Group's financial instruments consist of cash and cash equivalents, other receivables and trade and other payables and borrowings and are carried at cost, which approximates fair value due to the short-term nature of these instruments.

&nbsp;&nbsp;&nbsp;&nbsp;**(k)** **Goods and services tax (GST)** 

Revenue, expenses and assets are recognized net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST.

Cash flows in the consolidated statements of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Property and equipment** 

Property and equipment is stated at cost, net of accumulated depreciation. When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the consolidated statements of income (loss). The Group provides for depreciation using the straight-line method over the estimated useful lives of the respective assets.

A summary of estimated useful lives is as follows:

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| | |
|:---|:---|
| **Fixed asset class** | **Useful life** |
| Office Equipment | 1 year |
| Computer Equipment | 1 - 2 years |

---

Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred.

&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Digital Assets** 

The Group purchases or mines digital assets or receives digital assets as consideration for the delivery of its services as described in Note 2(c).

In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("<u>ASU 2023-08</u>"). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. The Group has opted to adopt this guidance early on January 1, 2024. Cost is determined based on the cash consideration paid net of the transaction costs. The Group remeasures on a monthly basis the fair value of the digital assets determined by observable market rates.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Digital Assets (continued)** 

Gains and losses from the remeasurement of crypto assets shall be included in net income and presented separately from changes in carrying amounts of other intangible assets. The Group recognized a gain of $442,500 for the fair value measurement of its digital assets during the six months ended June 30, 2024 of which $188,772 was from revaluation of opening balances upon adoption of ASU 2023-08.

At times, the Group may settle various payables and accrued liabilities in digital assets within the normal course of operations. Gains and losses arising from transactions settled with digital assets are included as a component of selling, general, and administrative expenses within the accompanying statements of operations. The Group's digital asset inventory consists primarily of Filecoin digital assets. DSS held 118,517 units of Filecoin at $4.52 per unit as of June 30, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Stockholders' equity** 

**Common stock**

Common stock represents shares which are classified as equity. Incremental costs directly attributable to the issue of shares and share options which vest immediately are recognized as a deduction from equity, net of any tax effects.

**Rights and Preferences**

The holders of shares are entitled to participate in dividends and the proceeds on winding up of the Group. Each holder of shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote.

&nbsp;&nbsp;&nbsp;&nbsp;**(o)** **Equity-settled compensation** 

The Group follows ASC 718-10, "*Compensation-Stock Compensation"*. The Group operates equity-settled stock-based compensation employee share and option plans. The fair value of the equity to which employees become entitled is measured at grant date and recognized as an expense over the vesting period, with a corresponding increase to equity.

The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing model.

Vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of options which are expected to vest. Revisions to the prior period estimates are recognized in profit or loss and equity.

The Group has the following types of equity settled transactions:

**Options**

The Group issues options to third parties. The options are measured at fair value based on the Black-Scholes option pricing model on grant date and are expensed immediately where there are no conditions attached.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **2** | **Summary of Significant Accounting Policies (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Foreign currency transactions and balances** 

Foreign currency transactions are recorded at the spot rate on the date of the transaction. The Group has determined the functional currency is the U.S. Dollar for the Group. Transactions or assets and liabilities denominated in a foreign currency are translated into U.S. dollars as follows: monetary assets and liabilities, at the rate of exchange in effect at the balance sheet date; non-monetary assets and liabilities, at the exchange rate prevailing at the time of the acquisition of the assets or assumption of the liabilities; and revenues and expenses (excluding amortization, which is translated at the same rate as the related asset), at the average rate of exchange for the year. Gains and losses arising from foreign currency transactions are included in net loss and translation adjustments are recorded as Cumulative Translation Adjustments (CTA) in APIC.

&nbsp;&nbsp;&nbsp;&nbsp;**(q)** **Legal and other contingencies** 

The Group accounts for its contingent liabilities in accordance with ASC 450 "*Contingencies"*. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs incurred in connection with loss contingencies are expensed as incurred.

The Group is subject to the various legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, there was not at least a reasonable possibility the Group may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of legal proceedings and claims brought against the Group is subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Group in a reporting period for amounts in excess of management's expectations, the Group's consolidated financial statements for that reporting period could be materially adversely affected.

---

| | |
|:---|:---|
| **3** | **Critical Accounting Estimates and Judgements** |

---

The Group makes estimates and judgements during the preparation of these consolidated financial statements regarding assumptions about current and future events affecting transactions and balances.

The significant estimates and judgements made have been described below:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Deferred tax assets** 

Deferred tax assets relating to tax losses and deductible temporary differences may be recognized where it is probable that there may be future taxable profits against which available tax losses and deductible temporary differences can be utilized in the reasonably foreseeable future given the circumstances of the Group.

Determining the recoverability of deferred tax assets involves significant judgement on the tax treatment of certain transactions and of uncertain future events and circumstances.

Management makes judgments as to the probability of future taxable profits being generated based on budgets, and current and future expected economic conditions and determines whether it is probable that the Group will be able to realize a benefit from its available tax losses and deductible temporary differences within the reasonably foreseeable future.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **4** | **Revenue and Other Income** |

---

**Revenue from continuing operations**

---

| | |
|:---|:---|
| | **June 30,**<br> **2024**<br> **$** |
| Revenue |  |
| - Provision of services | **602764** |
| - Other revenue | **129867** |
| **Total Revenue** | **732631** |

---

Revenue is recognized at point in time.

**Other income**

---

| | |
|:---|:---|
| | **June 30,**<br> **2024<br> $** |
| Other income |  |
| - Research and development Grants | **278208** |
| Total other income | **278208** |

---

---

| | |
|:---|:---|
| **5** | **Income Tax Expense** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** The major components of tax expense comprise:

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| Current tax expense |  |
| &nbsp;&nbsp;&nbsp;Local income tax - current period | **41169** |
| **Total income tax expense** | **41169** |

---

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **5** | **Income Tax Expense (continued)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Income tax expense differed from the amount computed by applying the income tax rate of 25% to pretax loss for the six months ended June 30, 2024, as a result of the following reconciling items:

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024**<br> **$** |
| Loss before income tax | **(3026076)** |
| Tax | **25.00%** |
|  | **(756519)** |
| Add: |  |
| Tax effect of: |  |
| - non-deductible research and development expenses | **149574** |
| - stock-based compensation | **753292** |
| Less: |  |
| Tax effect of: |  |
| - research and development tax credit | **(69552)** |
| - temporary differences not brought into account | **(35626)** |
| Income tax expense | **41169** |
| Weighted average effective tax rate | **(1)%** |

---

The Group did not have any imputation credits at June 30, 2024.

---

| | |
|:---|:---|
| **6** | **Cash and cash equivalents** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| Cash at bank and in hand | **55836** |
| Total cash and cash equivalents | **55836** |

---

---

| | |
|:---|:---|
| **7** | **Deposits** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| Lenovo contract bank guarantees | **245236** |
| Total deposits | **245236** |

---

Deposits represent amounts held as bank guarantees in term deposits and are therefore not available for general use.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **8** | **Trade and Other Receivables** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024**<br> **$** |
| Trade receivables, net | **4249** |
| GST receivable | **129719** |
| Government subsidies receivable | **278208** |
| **Total current trade and other receivables** | **412176** |

---

---

| | |
|:---|:---|
| **9** | **Other Current Assets** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024**<br> **$** |
| Prepaid network fee | **22046** |
| Other current assets | **37036** |
| **Total other current assets** | **59082** |

---

---

| | |
|:---|:---|
| **10** | **Property and Equipment** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| **Computer equipment** |  |
| At cost | **3728810** |
| Accumulated depreciation | **(2645842)** |
| Total computer equipment | **1082968** |
| **Office equipment** |  |
| At cost | **11424** |
| Accumulated depreciation | **(11424)** |
| Total office equipment | - |
| **Property and equipment, net** | **1082968** |

---

Depreciation expense of $40,179 has been recognized as an expense in the Statements of Operations for six months ended June 30, 2024.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **11** | **Intangible Assets** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Digital Assets** 

---

| | |
|:---|:---|
|  | **$** |
| Balance as of December 31, 2023, as previously reported |  |
| Revaluation of opening balance adjustment |  |
| Balance as of January 1, 2024, as adjusted |  |
| Acquisitions |  |
| Sales**)** |  |
| Fair value gain on remeasurement |  |
| Gain on sale of digital assets |  |
| Unrealized gains on foreign currency |  |
| **Balance as of June 30, 2024** |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Definite-Lived Intangible Assets** 

---

| |
|:---|
| Balance as of December 31, 2023 |
| Acquired Definite-Lived Intangible Assets |
| Amortization of Definite-Lived Intangible Asset |
| **Balance as of June 30, 2024** |

---

Definite-Lived Intangible Assets include digital asset deals which are paid in Filecoin tokens and are amortized over the life of the contract. The digital asset deals contracts include an 18-month storage period, which is used as the life of the contract.

**Restricted digital assets**

Digital assets disclosed above include Filecoin tokens which are pledged as collateral to support the Group's operations. Pledged Filecoin is committed for the full life of a storage sector (18 months) and is restricted from use. As of the six-months ended June 30, 2024, the Group had pledged $118,467 as collateral to storage sectors with maturities ranging from 1-540 days.

---

| | |
|:---|:---|
| **12** | **Trade and Other Payables** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| &nbsp;&nbsp;&nbsp;Trade payables | **32100** |
| &nbsp;&nbsp;&nbsp;Accrued expense | **331402** |
| &nbsp;&nbsp;&nbsp;Other payables | **25657** |
| **Total trade and other payables** | **389159** |

---

Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **13** | **Borrowings** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| Unsecured liabilities: |  |
| SAFE Securities | **185472** |
| Sharon AI Loans | **5631674** |
| **Total current borrowings** | **5817146** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Simple Agreement for Future Equity (" <u>SAFE</u> ") Securities/Sharon AI Loans** 

On June 27, 2024, the majority of the Group's SAFE holders assigned their holdings to Sharon AI, Inc, a USA based company, in exchange for shares in Sharon AI. Subsequently, DSS and Sharon AI agreed to effectively exercise the redemption clause and convert these to a loan under the loan facility established on June 18, 2024, converting SAFE liabilities to current loan liabilities, in which Sharon AI is considered to be the creditor, and the Group is the debtor. As of June 30, 2024, there is $5,631,674 of Sharon AI Loans outstanding as of June 30, 2024.

The remaining SAFE holders who did not accept the proposal will continue as SAFE holders of DSS, and it is unlikely that another event will occur causing their SAFE notes to convert to ordinary shares. The SAFE securities do not carry any specific terms of interest. As of June 30, 2024, $185,472 in SAFE securities are outstanding. These SAFE securities have been classified as a current liability on the assumption that, in the event of liquidation, these securities will be settled within the year. The occurrence of these events is not within the control of DSS.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Capital notes** 

On April 4, 2024, Distributed Storage Fund ("<u>DSF</u>") entered into voluntary administration and as a result of the administration process, the entity's liabilities, including the remaining capital notes, were reduced to a zero ($0) balance. In line with the executed Deed of Company Arrangement ("<u>DOCA</u>"), the Capital Notes were to be settled with the available balance of the DOCA after administration costs, as this amount was insufficient to cover the capital notes balance, the entirety of the balance was reduced in voluntary administration and treated as capital contribution in equity. DSS regained sufficient voting rights and decision-making power and regained control of DSF on May 17, 2024.

Interest expense on Capital Loans for the six-month period ended June 30, 2024, amounted to $134,220.

---

| | |
|:---|:---|
| **14** | **Stock-based Compensation** |

---

As of June 30, 2024, the Group has the following stock-based compensation:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Options** 

On December 15, 2022, the Group granted 155,172 option shares to a third-party lender in accordance with the loan agreement. On March 31, 2023, the Group granted 134,766 option shares to a third-party lender in accordance with the loan agreement for a total of 289,938 granted options between both grants.

On June 26, 2024, the Group's option shares fully vested as pursuant to the Option Exercise Deed and were converted into ordinary shares on a cashless exercise basis, resulting in the exercising of the 289,938 options by issuing 289,657 ordinary shares to option holders. The options were exercised at a value of $10.32 per share in accordance with the Option Exercise Deed.

Share based payments expense of $3,013,167 has been recognized in the period ending June 30, 2024, primarily due modification of the initial option terms to reduce the exercise price to $0.01, modification to allow cashless exercise and settlement associated with DSS acquisition by SharonAI and surrender of warrant expense due to the new warrant arrangement with Sharon AI.

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **15** | **Financial Risk Management** |

---

---

| | |
|:---|:---|
|  | **June 30,**<br> **2024<br> $** |
| **Financial assets** | |
| Held at amortized cost |  |
| &nbsp;&nbsp;&nbsp;Cash, restricted cash and cash equivalents | **55836** |
| &nbsp;&nbsp;&nbsp;Deposits | **245236** |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | **412176** |
| **Total financial assets** | **713248** |
| Held at amortized cost |  |
| &nbsp;&nbsp;&nbsp;Trade and other payables | **389159** |
| &nbsp;&nbsp;&nbsp;Borrowings | **5817146** |
| **Total financial liabilities** | **6206305** |

---

---

| | |
|:---|:---|
| **16** | **Tax Assets and Liabilities** |

---

Deferred tax assets have been recognized in respect of the following:

---

| | |
|:---|:---|
|  | **June 30,<br> 2024<br> $** |
| Assets |  |
| Impairment loss on digital assets | **1714808** |
| Accrued liabilities | **80060** |
| **Total deferred tax assets** | **1794868** |
| Liabilities |  |
| Others | **56581** |
| **Total deferred tax liabilities** | **56581** |
| Valuation allowance | **(1790737)** |
| **Net deferred tax asset** | **62372** |

---

Certain deferred tax assets have not been recognized in respect of unrealized valuation adjustment items because it is not probable that future taxable profit will be available against which the Group can utilize the benefits therein.

---

| | |
|:---|:---|
| **17** | **Fair Value Measurement** |

---

The Group measures the following assets and liabilities at fair value on a recurring basis:

● Intangible assets

**Fair value hierarchy**

ASC Topic 820, *Fair Value Measurement and Disclosures* ("<u>ASC Topic 820</u>") requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 established a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 prioritizes the inputs into three levels that may be used to measure fair value:

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **17** | **Fair Value Measurement (continued)** |

---

---

| | |
|:---|:---|
| Level 1 | Level 1 applies to assts or liabilities for which there are quoted prices in active markets for identical assets or liabilities. the inputs into three levels that may be used to measure fair value: |
| Level 2 | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
| Level 3 | Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |

---

The table below shows the assigned level for each asset and liability held at fair value by the Group:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fair value hierarchy** | **Level 1**<br> **$** | **Level 2**<br> **$** | **Level 3**<br> **$** | **Total**<br> **$** |
| As of June 30, 2024 |  |  |  |  |
| **Recurring fair value measurements** |  |  |  |  |
| Intangible assets | 535697 |  |  | 535697 |

---

The Group's assets held at fair value comprise of cryptocurrency (digital assets) are classified as level 1. The Group did not make any transfer between levels of the fair value hierarchy during 2024.

---

| | |
|:---|:---|
| **18** | **Supplemental disclosure of cash flows information** |

---

**Supplemental disclosure of cash flow information**

---

| | |
|:---|:---|
|  | **June 30,<br> 2024**<br>**$** |
| Cash paid for interest | **136777** |

---

---

| | |
|:---|:---|
| **19** | **Interest in Subsidiaries** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Composition of the Group** 

---

| | | |
|:---|:---|:---|
|  | **Principal place of<br> business/country of<br> incorporation**  | **Percentage<br> Owned (%)\*** |
|  |  | **2024** |
| **Subsidiaries** |  |  |
| Distributed Storage Fund (Unit Trust) | Australia | 100 |

---

\* The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries

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**Distributed Storage Solutions Limited**

**ABN: 87 646 979 222**

**Notes to the Consolidated Financial Statements**

**For the Six-Month Period Ended June 30, 2024**

---

| | |
|:---|:---|
| **20** | **Contingent Liabilities** |

---

The Group had the following contingent liabilities at the end of the reporting period:

● The Group is required to provide a guarantee in the form of Filecoin with third party providers of Filecoin tokens to be used to support the growth of its storage operations, in accordance with agreed terms. This guarantee is to ensure no loss is incurred by third party providers throughout the day-to-day operations by the Group. The potential loss that could be incurred by the Group relates to slashing fees and early termination of storage sectors. Management estimates this to be a maximum of $118,467 as of June 30, 2024.

The Group did not have any commitments or any other contingencies as of June 30, 2024.

---

| | |
|:---|:---|
| **21** | **Transactions with related parties** |

---

During the fiscal year ending December 31, 2023, the Group issued 290,291 SAFE securities for $195,602 to entities controlled by key management personnel. There were $0 outstanding as of June 30, 2024. Terms and conditions were on the same basis and at arm's length.

---

| | |
|:---|:---|
| **22** | **Subsequent events** |

---

Subsequent to the year ended June 30, 2024, the following events occurred:

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** On July 1, 2024, DSS transferred all employee to Sharon AI Pty Ltd, including leave balances.

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** On July 18, 2024, the Group acquired computer equipment amounting to $2,651,022. This acquisition is anticipated to expand the Group's AI computing capacity and lead to increased revenues.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** On September 9, 2024, Distributed Storage Solutions became a private company, changing its name from Distributed Storage Solutions Limited to Distributed Storage Solutions Pty Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** In October 2024, the directors of DSS changed with the removal of Nick Hughes-Jones and James Manning and the addition of Wolfgang Schubert.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

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**SHARONAI HOLDINGS INC.**

 **5,302,072 Shares of Class A Ordinary Common Stock**

**Up to 214,982 Shares of Class A Ordinary Common Stock Upon Exercise of Certain Private Warrants**

**Up to 230,000 Shares of Common Stock Underlying Public Warrants**

**PROSPECTUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**, 2026.**

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**PART II - INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution.**

The following table sets forth an estimate of the fees and expenses relating to the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions, all of which shall be borne by the registrant. All of such fees and expenses, except for the SEC registration fee, are estimated:

---

| | |
|:---|:---|
| SEC registration fee | $1499.71 |
| Transfer agent and registrar fees and expenses | $5000.00 |
| Legal fees and expenses | $50000.00 |
| Printing fees and expenses | $10000.00 |
| Accounting fees and expenses | $25000.00 |
| Miscellaneous fees and expenses | $5000.00 |
| Total | $96499.71 |

---

**Item 14. Indemnification of Officers and Directors.**

The registrant a Delaware corporation. Section 145 of the Delaware General Corporation Law ("<u>DGCL</u>") provides, in general, that a corporation may indemnify any person who was or is a party (or is threatened to be made a party) to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. A Delaware corporation may also indemnify directors, officers, employees and other agents of such corporation in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the person to be indemnified has been adjudged to be liable to the corporation. The DGCL provides that Section 145 of the DGCL is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

The registrant's Bylaws each contain provisions that require it to indemnify any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person, or a person for whom such person is the legal representative, is or was a director or officer of such entity or, while a director or officer of such entity, is or was serving at the request of such as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such person, to the fullest extent permitted by the DGCL, as it may be amended from time to time.

In addition, the registrant's Certificate of Incorporation (contains provisions requiring such entity to indemnify and advance expenses to any director incurred in defending or otherwise participating in any proceeding in advance of its final disposition, provided that such director presents to such entity a written undertaking to repay such amount if it shall ultimately be determined that such director is not entitled to be indemnified by such entity

As permitted by Section 102(b)(7) of the DGCL, and the registrant's Certificate of Incorporation contains provisions eliminating the personal liability of directors to such entity or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted under the DGCL.

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The registrant expects to maintain standard policies of insurance under which coverage is provided (a) to its directors and officers against losses arising from claims made by reason of breach of duty or other wrongful act by such persons in their respective capacities as officers and directors, and (b) to the registrant with respect to payments which may be made by the registrant to such officers and directors pursuant to the above indemnification provision or otherwise as a matter of law.

See "Item 17. Undertakings" for a description of the SEC's position regarding such indemnification provisions.

**Item 15. Recent Sales of Unregistered Securities.**

Set forth below is information regarding shares of capital stock issued by us within the past three years. Also included is the consideration received by us for such shares and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed.

On December 17, 2025, the registrant issued 3,502,677 shares of Class A Ordinary Common Stock to James Manning, a former director of SharonAI and a director of the registrant on December 17, 2025 as part of this consideration under the BCA. The issuance of the shares of Class A Ordinary Stock was made in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated hereunder.

On December 17, 2025 the registrant issued convertible promissory notes to three accredited investors pursuant to which it issued convertible promissory notes in the aggregate amount of $2,250,000 to the investors in consideration of $2,250,000. The notes accrue interest at a rate of 10% per annum, starting 30 days after issuance, and have a maturity date of December 17, 2026. The unpaid and outstanding principal amount and accrued interest automatically convert into shares of the Company's Class A Ordinary Common Stock at a conversion price of $6.00 per share on the first day after the closing of the BCA,. The proceeds from the issuance of these notes were used for working capital and general corporate purposes, including the payment of expenses in connection with the closing of the Business Combination. The issuance of the shares of Class A Ordinary Stock was made in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder.

On December 17, 2025, the Company issued 2,249,000 shares of its Class A Ordinary Common Stock to certain former stockholders of Roth CH in consideration of cancellation of indebtedness held by them. the Company did not receive any proceeds upon issuance of these shares. The issuance of the shares of Class A Ordinary Stock was made in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) of the Securities Act.

On December 18, 2025, the Company issued 18,749,999 shares of its Class A Ordinary Common Stock upon the automatic conversion of the December 2025 Convertible Notes. the Company did not receive any proceeds upon issuance of these shares. The issuance of the shares of Class A Ordinary Stock was made in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) of the Securities Act and/or Section 3(a)(9) thereof.

On December 19, 2025 SharonAI and SharonAI Pty Ltd, each a subsidiary of the Comppany, entered into a Convertible Note Agreement (the "<u>New Financing Agreement</u>") with certain investors (the "<u>Convertible Noteholders</u>"), pursuant to which the Noteholders agreed to provide financing in the aggregate principal amount of approximately US$100,000,000 of unsecured, redeemable, convertible notes (the "AU <u>Convertible Notes</u>"). Promptly after entering into the New Financing Agreement, SharonAI Inc. assigned, and the Company assumed, the obligations and responsibilities of SharonAI Inc. in connection with and arising out of the New Financing Agreement and the AU Convertible Notes. The AU Convertible Notes bear interest at a rate of 12% per annum from April 19, 2026, through December 18, 2026, and 15% per annum on and from the December 19, 2026 until the Notes are redeemed, cancelled or converted. The AU Convertible Notes mature on December 19, 2027 (the "Maturity Date"), unless earlier converted or redeemed. The AU Convertible Notes were issued in reliance on the exemption from registration afforded by Regulation S of the Securities Act.

**Item 16. Exhibits.**

The list of exhibits in the Exhibit Index to this registration statement is incorporated herein by reference.

[**Table of Contents**](#toc)

**Item 17. Undertakings.**

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;

&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

provided, however, that the undertakings set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial *bona fide* offering thereof;

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

(4) That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;(i) Each prospectus filed by the registrant pursuant to Rule 424 (b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in this registration statement; and

&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each prospectus required to be filed pursuant to Rule 424 (b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(l)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933, as amended, shall be deemed to be part of and included in the registration statement as of the earlier of the date such prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial *bona fide* offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;

[**Table of Contents**](#toc)

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933, as amended, to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser;

(6) That, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial *bona fide* offering thereof;

(7) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.

[**Table of Contents**](#toc)

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, New York on the 6<sup>th</sup> day of February, 2026.

---

| | |
|:---|:---|
| **SharonAI Holdings Inc.** | **SharonAI Holdings Inc.** |
| By: | /s/ James Manning |
| Name: | James Manning |
| Title: | Chief Executive Officer and Principal Executive Officer |
| By: | /s/ Tim Broadfoot |
| Name: | Tim Broadfoot |
| Title: | Chief Financial Officer and Principal Financial Officer |

---

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ James Manning | Chief Executive Officer and Director | February 6, 2026 |
| James Manning |  |  |
| \* | Director | February 6, 2026 |
| Alistair Cairns |  |  |
| \* | Director | February 6, 2026 |
| Peter Woodward |  |  |
| \* | Director | February 6, 2026 |
| Alexander Andrew Kelton |  |  |

---

---

| | |
|:---|:---|
| \*By | /s/ Timothy Broadfoot |
|  | Timothy Broadfoot, Attorney-in-fact |
|  | Date: February 6, 2026 |

---

[**Table of Contents**](#toc)

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 2.1† | [Business Combination Agreement, dated January 28, 2025, by and among Roth CH Acquisition Co., Roth CH Holdings, Inc., Roth CH Merger Sub, Inc. and SharonAI Inc incorporated by reference to Exhibit 2.1 to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on January 29, 2025](https://www.sec.gov/Archives/edgar/data/1860514/000182912625000486/rothchacq_ex2-1.htm) |
| 2.2 | [Amendment, dated May 23, 2025, to the Business Combination Agreement, dated May 23, 2025, by and among Roth CH Acquisition Co., Roth CH Holdings, Inc., Roth CH Merger Sub, Inc. and SharonAI Inc., incorporated by reference to Exhibit 10.1 to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on May 27, 2025](https://www.sec.gov/Archives/edgar/data/1860514/000182912625003979/rothchacq_ex10-1.htm). |
| 2.3 | [Second Amendment, dated October 14, 2025, to the Business Combination Agreement, dated January 28, 2025, by and among Roth CH Acquisition Co., Roth CH Holdings, Inc., Roth CH Merger Sub, Inc. and SharonAI Inc., incorporated by reference to Exhibit 10.1 to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on October 20, 2025.](https://www.sec.gov/Archives/edgar/data/1860514/000182912625008256/rothchacq_ex10-1.htm) |
| 3.1 | [Amended and Restated Certificate of Incorporation of registrant, incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025.](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex3-1.htm) |
| 3.2 | [Amended and Restated Bylaws of the registrant, incorporated by reference to Exhibit 3.2 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex3-2.htm) |
| 3.3 | [Certificate of Merger, incorporated by reference to Exhibit 3.8 to the registrant's Registration Statement on Form S-4 filed with the SEC on October 1, 2025.](https://www.sec.gov/Archives/edgar/data/2068385/000182912625007793/rothchholdings_ex3-8.htm) |
| 3.4 | [Certificate of Amendment to Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the registrant's Current Report on Form 8-K filed with the SEC on December 23, 2025.](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010276/sharonaiholdings_ex3-1.htm) |
| 4.1 | [Form of Warrant Certificate, incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex4-1.htm) |
| 4.2 | [Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant, incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex4-2.htm) |
| 4.3 | [Form of December 2025 Convertible Note, incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex4-3.htm) |
| 5.1\* | [Opinion of Sheppard Mullin Richter & Hampton, LLP](sharonaiholdings_ex5-1.htm) |
| 10.1 | [Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant<sup>(6)</sup>](https://www.sec.gov/Archives/edgar/data/1860514/000182912621013064/tkbcriticaltech1_ex10-2.htm) |
| 10.2 | [Amendment to the Investment Management Trust Agreement, dated January 27, 2023, by and between Continental Stock Transfer & Trust Company and the Registrant<sup>(2)</sup>](https://www.sec.gov/Archives/edgar/data/1860514/000182912623001107/tkbcriticaltech1_ex10-1.htm) |
| 10.3 | [Private Placement Warrants Purchase Agreement between the Registrant and TKB Sponsor I, LLC<sup>(6)</sup>](https://www.sec.gov/Archives/edgar/data/1860514/000182912621013064/tkbcriticaltech1_ex10-4.htm) |
| 10.4 | [Amendment to the Investment Management Trust Agreement, dated June 28, 2023, by and between Continental Stock Transfer & Trust Company and the Registrant<sup>(3)</sup>](https://www.sec.gov/Archives/edgar/data/1860514/000182912623004539/tkbcritical_ex10-1.htm) |
| 10.5 | [Amendment No. 2 to the Investment Management Trust Agreement<sup>(3)</sup>](https://www.sec.gov/Archives/edgar/data/1860514/000182912623004539/tkbcritical_ex10-1.htm) |
| 10.6 | [Form of Lockup Agreement, incorporated by reference to Annex F to the registrant's Registration Statement on Form S-4 filed with the SEC on May 15, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625003670/rothchholdings_s4.htm#annex_f) |
| 10.7 | [Form of Amended and Restated Registration Rights Agreement, incorporated by reference to Exhibit 10.4 to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on January 29, 2025](https://www.sec.gov/Archives/edgar/data/1860514/000182912625000486/rothchacq_ex10-4.htm) |
| 10.8+ | [Employment Agreement with Wolfgang Schubert, incorporated by reference to Exhibit 10.18 to the registrant's Registration Statement on Form S-4 filed with the SEC on May 15, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625003670/rothchholdings_ex10-18.htm) |
| 10.9+ | [First Amendment to Employment Agreement with Wolfgang Schubert, incorporated by reference to Exhibit 10.9 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-9.htm) |
| 10.10+ | [2025 Equity Incentive Plan, incorporated by reference to Exhibit 10.10 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-10.htm) |
| 10.11 | [Note Purchase Agreement dated July 15, 2025 between SharonAI, Inc. and YA II PN, LTD., incorporated by reference to Exhibit 10.11 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-11.htm) |

---

[**Table of Contents**](#toc)

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.12 | [Form of Standby Equity Purchase Agreement by and between YA II PN, LTD., a Cayman Islands exempt limited company (the "Investor"), and SharonAI Holdings Inc. a Delaware Corporation, incorporated by reference to Exhibit 10.12 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-12.htm) |
| 10.13+ | [Employment Agreement between Timothy Broadfoot and SharonAI Pty Ltd, incorporated by reference to Exhibit 10.13 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-13.htm) |
| 10.14+ | [Employment Agreement between Andrew Leece and SharonAI Pty Ltd, incorporated by reference to Exhibit 10.14 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-14.htm) |
| 10.15+ | [Employment Agreement between Daniel Mons and SharonAI Pty Ltd, incorporated by reference to Exhibit 10.15 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-15.htm) |
| 10.16+ | [Independent Contractor Agreement between James Manning and SharonAI Pty Ltd, incorporated by reference to Exhibit 10.16 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-16.htm) |
| 10.17+ | [Consulting Agreement between SharonAI Pty and Timothy Broadfoot, incorporated by reference to Exhibit 10.17 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-17.htm) |
| 10.18 | [Independent Contractor Agreement between Inbocalupa Ptd Ltd and Sharon Pty Ltd, incorporated by reference to Exhibit 10.18 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-18.htm) |
| 10.19 | [Deed of Variation of Independent Contractor Agreement between Inbocalupa Pty Ltd and Sharon Pty Ltd, incorporated by reference to Exhibit 10.19 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-19.htm) |
| 10.20 | [Independent Contractor Agreement between Broadfoot Group Pty Ltd and SharonAI Pty Ltd, incorporated by reference to Exhibit 10.20 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-20.htm) |
| 10.21 | [Convertible Promissory Note in the amount of $500,000 dated July 15, 2025 issued by SharonAI, Inc. to YA II PN Ltd, incorporated by reference to Exhibit 10.21 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-21.htm) |
| 10.22 | [Convertible Promissory Note in the amount of $2 million dated October 1, 2025, incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-22.htm) |
| 10.23 | [First Amendment to Convertible Notes, dated October 21, 2025, incorporated by reference to Exhibit 10.23 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-23.htm) |
| 10.24 | [Limited Liability Company Agreement of Texas Critical Data Centers LLC, dated January 21, 2025, between SharonAI, Inc. and New Era Helium, Inc., incorporated by reference to Exhibit 10.24 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-24.htm) |
| 10.25 | [Contract to Purchase Agreement, dated July 17, 2025, between Odessa Industrial Development Corporation d/b/a Grow Odessa, and Texas Critical Data Centers, LLC, incorporated by reference to Exhibit 10.25 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-25.htm) |
| 10.26 | [Amendment to Convertible Promissory Notes and Note Purchase Agreement., incorporated by reference to Exhibit 10.26 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-26.htm) |
| 10.27 | [Form of Indemnification Agreement, incorporated by reference to Exhibit 10.27 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-27.htm) |
| 10.28 | [Clawback Policy, incorporated by reference to Exhibit 10.28 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex10-28.htm) |
| 10.29 | [Binding Term Sheet for Acquisition of Interest in Texas Critical Data Centers, LLC, dated December 19, 2025 by and between SharonAI, Inc. and New Era Energy & Digital Inc., incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed with the SEC on December 23, 2025.](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010245/sharonaiholdings_ex10-1.htm) |
| 10.30 | [Convertible Note Agreement, dated December 19, 2025, incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010201/sharonaiholdings_ex10-1.htm) |

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[**Table of Contents**](#toc)

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.31\*\*\* | [Contract to Purchase, dated November 21, 2025, by and between Odessa Industrial Development Corporation d/b/a Grow Odessa and Texas Critical Data Centers, LLC](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-31.htm) |
| 10.32 | [Director Appointment Letter by and between Drew Kelton and SharonAI Holdings Inc. dated January 13, 2026, incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed with the SEC on January 14, 2026](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000288/sharonaiholdings_ex10-1.htm) |
| 10.33\*\*\*+ | [SharonAI Inc. 2024 Omnibus Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-33.htm) |
| 10.34\*\*\*+ | [First Amendment to SharonAI Inc. 2024 Omnibus Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-34.htm) |
| 10.35\*\*\*+ | [Second Amendment to SharonAI Inc. 2024 Omnibus Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-35.htm) |
| 10.36\*\*\*+ | [Form of Restricted Stock Unit Agreement - SharonAI Inc. 2024 Omnibus Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-36.htm) |
| 10.37\*\*\*+ | [Form of Option Award Agreement - SharonAI Inc. 2024 Omnibus Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex10-37.htm) |
| 14.1 | [Code of Ethics, incorporated by reference to Exhibit 14.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025.](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex14-1.htm) |
| 16.1 | [Letter from CBIZ CPAs P.C. to the Securities and Exchange Commission, dated as of January 7, 2026, incorporated by reference to the registrant's Current Report on Form 8-K filed with the SEC on January 7, 2026.](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000090/sharonaiholdings_ex16-1.htm) |
| 19.1 | [Insider Trading Policy, incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed with the SEC on December 22, 2025](https://www.sec.gov/Archives/edgar/data/2068385/000182912625010236/sharonaiholdings_ex19-1.htm) |
| 21.1\*\*\* | [Subsidiaries](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_ex21-1.htm) |
| 23.1\* | [Consent of Marcum LLP (SharonAI Holdings, Inc. f/k/a Roth CH Holdings, Inc.)](sharonaiholdings_ex23-1.htm) |
| 23.2\* | [Consent of Marcum LLP (SharonAI Holdings, Inc. f/k/a Roth CH Acquisition Co.)](sharonaiholdings_ex23-2.htm) |
| 23.3\* | [Consent of HoganTaylor LLP](sharonaiholdings_ex23-3.htm) |
| 23.4\* | [Consent of Wolf & Company P.C.](sharonaiholdings_ex23-4.htm) |
| 23.5\* | [Consent of Sheppard Mullin Richter & Hampton, LLP (included as part of Exhibit 5.1 hereto).](sharonaiholdings_ex5-1.htm) |
| 24.1\*\*\* | [Power of Attorney (included on signature page hereto)](https://www.sec.gov/Archives/edgar/data/2068385/000182912626000376/sharonaiholdings_s1.htm#poa) |
| 107\* | [Calculation of Registration Fee Table](sharonaiholdings_ex107.htm) |

---

---

| | |
|:---|:---|
| \* | Filed herewith. |
| \*\* | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
| \*\*\* | Previously filed |
| + | Indicates a management or compensatory plan. |

---

(1) Incorporated by reference to Roth CH Acquisition Co.'s Form S-1, filed with the SEC on October 8, 2021.

(2) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on January 30, 2023.

(3) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on July 3, 2023.

(4) Incorporated by reference to Annex A to the registrant's definitive proxy statement filed with the SEC on September 7, 2023.

(5) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K filed with the SEC on May 3, 2024.

(6) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K, filed with the SEC on October 29, 2021.

(7) Incorporated by reference to Roth CH Acquisition Co.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

(8) Incorporated by reference to Roth CH Acquisition Co.'s Annual Report on Form 10-K filed with the SEC on April 11, 2024.

(9) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K filed with the SEC on January 29, 2025.

(10) Incorporated by reference to Roth CH Acquisition Co.'s Current Report on Form 8-K filed with the SEC on May 27, 2025.

## Exhibit 5.1

**Exhibit 5.1**

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| | |
|:---|:---|
| ![sm_logo_rgb_color](ex5-1_001.jpg) | Sheppard, Mullin, Richter & Hampton LLP<br> 12275 El Camino Real<br> San Diego, CA 92130-4092<br> 858.720.8900 main<br> 858.509.3691 fax<br> www.sheppardmullin.com |

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February 6, 2026

**<u>VIA ELECTRONIC MAIL</u>**

SharonAI Holdings Inc.

745 Fifth Avenue, Suite 500,

New York, NY 10151

<u>Re</u>: <u>Registration Statement on Form S-1</u>

Ladies and Gentlemen:

We have acted as counsel to SharonAI Holdings Inc., a Delaware corporation (the "Company"), in connection with the issuance of this opinion that relates to a Registration Statement on Form S-1 (the "Registration Statement") filed by the Company with the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement covers (i) the resale, by the selling stockholders listed therein (the "Selling Stockholders"), from time to time pursuant to Rule 415 under the Securities Act as set forth in the Registration Statement, of 5,517,054 shares of the Company's Class A common stock, par value $0.0001 per share (the "Class A Common Stock"), which consists of (A) 4,927,071 shares of Class A Common Stock (the "BCA Shares"), (B) 214,982 shares (the "Private Warrant Shares") of Class A Common Ordinary Common Stock issuable upon exercise of certain private warrants (the "Private Warrants") and (C) 375,001 shares (the "Conversion Shares") of Class A Common Ordinary Stock issuable upon conversion of outstanding convertible notes (the "Notes") and (ii) 230,000 shares of Class A Ordinary Common Stock (the "Public Warrant Shares," together with BCA Shares, the Private Warrant Shares and the Conversion Shares, the "Shares") underlying certain public warrants (the "Public Warrants").

This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5)(i) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement.

In connection with the issuance of this opinion letter, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions stated below. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and of public officials.

In our examination, we have assumed: (a) the genuineness of all signatures, including endorsements; (b) the legal capacity and competency of all natural persons; (c) the authenticity of all documents submitted to us as originals; (d) the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies; and (e) the accuracy, completeness and authenticity of certificates of public officials.

Based upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Shares have been duly authorized by all requisite corporate action on the part of the Company under the General Corporation Law of the State of Delaware (the "DGCL") and are validly issued, fully paid, and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Private Warrant Shares have been duly authorized by all requisite corporate action on the part of the Company under the DGCL and, when the Private Warrant Shares are delivered and paid for in accordance with the terms of the Private Warrants and when evidence of the issuance thereof is duly recorded in the Company's books and records, the Private Warrant Shares will be validly issued, fully paid, and non-assessable.

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| | |
|:---|:---|
| ![sm_logo_rgb_color](ex5-1_001.jpg) | Sheppard, Mullin, Richter & Hampton LLP<br> 12275 El Camino Real<br> San Diego, CA 92130-4092<br> 858.720.8900 main<br> 858.509.3691 fax<br> www.sheppardmullin.com |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Conversion Shares have been duly authorized by all requisite corporate action on the part of the Company under the DGCL and, when the Conversion Shares are delivered in accordance with the terms of the Note and when evidence of the issuance thereof is duly recorded in the Company's books and records, the Conversion Shares will be validly issued, fully paid, and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Public Warrant Shares have been duly authorized by all requisite corporate action on the part of the Company under the DGCL and, when the Public Warrant Shares are delivered and paid for in accordance with the terms of the Public Warrants and when evidence of the issuance thereof is duly recorded in the Company's books and records, the Public Warrant Shares will be validly issued, fully paid, and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Each of the Private Warrants, the Public Warrants and the Notes constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

Our opinion set forth in paragraph 5 above is subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

Our opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Shares, the Warrants, the Series A Convertible Preferred Stock, the Warrant Shares or the Conversion Shares or any other agreements or transactions that may be related thereto or contemplated thereby. We are expressing no opinion as to any obligations that parties other than the Company may have under or in respect of the Shares, the Warrant Shares, the Conversion Shares or as to the effect that their performance of such obligations may have upon any of the matters referred to above. No opinion may be implied or inferred beyond the opinion expressly stated above.

The opinion we render herein is limited to those matters governed by the DGCL as of the date hereof and we disclaim any obligation to revise or supplement the opinion rendered herein should the above-referenced laws be changed by legislative or regulatory action, judicial decision, or otherwise. We express no opinion as to whether, or the extent to which, the laws of any particular jurisdiction apply to the subject matter hereof.

This opinion letter is rendered as of the date first written above, and we disclaim any obligation to advise you of facts, circumstances, events, or developments that hereafter may be brought to our attention or that may alter, affect, or modify the opinion expressed herein.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also hereby consent to the reference to our firm under the heading "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations under the Securities Act. It is understood that this opinion is to be used only in connection with the offer and sale of the Shares, the Warrant Shares and the Conversion Shares being registered while the Registration Statement is effective under the Securities Act.

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| |
|:---|
| Respectfully Submitted, |
| /s/ Sheppard, Mullin, Richter & Hampton LLP |
| SHEPPARD, MULLIN, RICHTER & HAMPTON LLP |

---

## Exhibit 23.1

**Exhibit 23.1**

**<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

We consent to the inclusion in this Registration Statement on Form S-1 of our report dated April 22, 2025, with respect to the financial statements of SharonAI Holdings Inc. (formerly known as Roth CH Holdings, Inc.) included in this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Marcum LLP

Morristown, NJ

February 6, 2026

## Exhibit 23.2

**Exhibit 23.2**

**<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

We consent to the inclusion in this Registration Statement on Form S-1 of our report dated March 27, 2025, with respect to the financial statements of Roth CH Acquisition Co. included in this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ Marcum LLP

Morristown, NJ

February 6, 2026

## Exhibit 23.3

**Exhibit 23.3**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the use in this Amendment No. 1 to the Registration Statement No 333-292798 on Form S-1 of SharonAI Holdings Inc. of our report dated April 25, 2025, relating to our audit of the consolidated financial statements of SharonAI Inc. for the years ended December 31, 2024 and 2023, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our firm under the caption "Experts" in such Prospectus.

/s/ HoganTaylor LLP

Tulsa, Oklahoma<br>February 6, 2026

www.hogantaylor.com

## Exhibit 23.4

**Exhibit 23.4**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the use in this Registration Statement on Form S-1 of SharonAI Holdings Inc., of our reports dated February 26, 2025, relating to the consolidated financial statements of Distributed Storage Solutions Limited, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our firm under the caption "Experts" in such Prospectus.

/s/ Wolf & Company, P.C.

Wolf & Company, P.C.

Boston, Massachusetts

February 6, 2026

## Ex-Filing

?xml version='1.0' encoding='ASCII'?

N/A

**Exhibit 107**

333-292798

**Calculation of Filing Fee Tables**

**Form S-1**

(Form Type)

**SharonAI Holdings Inc.**

(Exact Name of Registrant as Specified in its Charter)

Table 1: Newly Registered Securities

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Security<br> Type** | **Security<br> Class Title** | **Fee<br> Calculation<br> or Carry<br> Forward<br> Rule** | **Amount<br> Registered<sup>(2)</sup>** | **Proposed<br> Maximum<br> Offering<br> Price Per<br> Unit** | **Maximum<br> Aggregate<br> Offering<br> Price** | **Fee Rate** | **Amount of<br> Registration<br> Fee** |
| Fees to Be Paid | Equity | Class A Ordinary Common Stock, par value $0.0001 per share | Other (1) | 5747054<sup>(3)</sup> | $1.90 | $10919402.60 | $0.0001381 | $1507.97 |
|  | **Total Offering Amounts** | **Total Offering Amounts** | **Total Offering Amounts** | **Total Offering Amounts** | **Total Offering Amounts** | $10919402.60 |  | $1507.97 |
|  | **Total Fees Previously Paid** | **Total Fees Previously Paid** | **Total Fees Previously Paid** | **Total Fees Previously Paid** | **Total Fees Previously Paid** |  |  | 1499.71 |
|  | **Total Fee Offsets** | **Total Fee Offsets** | **Total Fee Offsets** | **Total Fee Offsets** | **Total Fee Offsets** |  |  | - |
|  | **Net Fee Due** | **Net Fee Due** | **Net Fee Due** | **Net Fee Due** | **Net Fee Due** |  |  | $8.26 |

---

(1) Estimated
 solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as
 amended (the "Securities Act"), based upon the average of the bid and asked price for a share of the registrant's
 Class A Ordinary Common Stock as reported on OTC Markets on February 2, 2026.

(2) Pursuant
 to Rule 416 under the Securities Act, the shares of common stock offered hereby also include an indeterminate number of additional
 shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or
 other similar transactions.

(3) Represents
 (i) the resale of (A) 4,927,071 shares of Class A Ordinary Common Stock; (B) 375,001 shares of Class A Ordinary Common Stock issuable
 upon conversion of convertible notes and (C) 214,982 Shares of Class A Ordinary Common Stock issuable upon exercise of certain private
 warrants and (ii 230,000 Shares of Class A Ordinary Common Stock underlying public warrants.