Core Insights - Mawson Infrastructure Group Inc. has launched a GPU pilot program on a leading decentralized AI network, marking a strategic expansion into advanced computing beyond digital asset mining [1][2] - The pilot aims to establish a scalable framework for Mawson to enhance its role as an AI cloud or infrastructure provider across its U.S. sites, with an initial 100-day plan focused on performance data retrieval and project evaluation [2][3] Company Overview - Mawson is a technology company that provides digital infrastructure platforms for AI, high-performance computing (HPC), and digital assets, optimizing resources for various applications [4] - The company prioritizes the use of carbon-free energy sources, including nuclear energy, to power its digital infrastructure [4]

Core Insights - Mawson Infrastructure Group Inc. has successfully dismissed an involuntary bankruptcy petition, allowing the company to pursue recovery of fees and damages from creditors [1] - The dismissal is expected to alleviate downward pressure on the company's stock price and enhance liquidity, contributing to future growth and shareholder value [2] Company Overview - Mawson is a U.S.-based technology company focused on designing, building, and operating next-generation digital infrastructure platforms, serving sectors such as AI, high-performance computing (HPC), and digital assets including Bitcoin mining [3] - The company operates both self-mining and colocation/hosting services for enterprise customers, utilizing a vertically integrated infrastructure model aimed at scalability and efficiency [3] Strategic Focus - A key aspect of Mawson's strategy involves utilizing carbon-free energy resources, including nuclear power, to support environmentally sustainable operations in the rapidly growing digital economy [4] - Mawson currently has 129 megawatts of capacity operational, with additional capacity under development, positioning itself as a competitive provider of carbon-aware digital infrastructure solutions [4]

Core Insights - Mawson Infrastructure Group Inc. announced preliminary, unaudited financial results for Q3 and the first nine months of 2025, highlighting a decrease in revenue but significant improvements in gross profit and net loss reduction [1][2]. Financial Performance Summary Third Quarter Results - Estimated revenues for Q3 2025 are approximately $11.2 million, a 9% decrease from $12.3 million in Q3 2024 [4]. - Estimated cost of revenues for Q3 2025 is approximately $4.6 million, down 42% from $8.0 million in Q3 2024 [4]. - Estimated gross profit for Q3 2025 is expected to be around $6.6 million, reflecting a 53% increase from $4.3 million in Q3 2024 [5]. - Estimated gross profit margin for Q3 2025 is projected at 59%, compared to 35% in Q3 2024 [5]. - Estimated net loss for Q3 2025 is expected to be approximately $1.5 million, a significant decrease of 88% from $12.2 million in Q3 2024 [6]. Nine Months Results - Estimated revenues for the first nine months of 2025 are approximately $34.5 million, a 22% decrease from $44.2 million in the same period of 2024 [7]. - Estimated cost of revenues for the first nine months of 2025 is approximately $18.1 million, down 37% from $28.6 million in the first nine months of 2024 [7]. - Estimated gross profit for the first nine months of 2025 is expected to be around $16.4 million, a 5% increase from $15.6 million in the same period of 2024 [8]. - Estimated gross profit margin for the first nine months of 2025 is projected at 48%, compared to 35% in the same period of 2024 [8]. - Estimated net loss for the first nine months of 2025 is expected to be approximately $9.8 million, a 76% decrease from $41.8 million in the first nine months of 2024 [9]. Strategic Developments - Mawson's strategy includes utilizing carbon-free energy resources, such as nuclear power, to support its digital infrastructure operations, positioning itself as a competitive provider of sustainable solutions [12]. - The company has 129 megawatts of capacity already online, with more under development, indicating a focus on scalability and efficiency in its operations [12]. Board of Directors Update - At the 2025 Annual Meeting, new directors were elected, including Ryan Costello as Independent Board Chair, Steven G. Soles as Independent Director, and Kathryn Yingling Schellenger as Independent Director, each bringing diverse expertise to the board [10].

[AT THE MARKET OFFERING AGREEMENT](index=1&type=section&id=AT%20THE%20MARKET%20OFFERING%20AGREEMENT) This agreement outlines the terms for the Company's continuous offering and sale of common stock through a designated manager, detailing definitions, sales procedures, representations, and mutual obligations [1. Definitions](index=1&type=section&id=1.%20Definitions) This section defines key terms for consistent interpretation of the At The Market Offering Agreement - The agreement defines various terms, including 'Act' (Securities Act of 1933), 'Commission' (SEC), 'Common Stock', 'Exchange Act' (Securities Exchange Act of 1934), 'GAAP' (Generally Accepted Accounting Principles), 'Material Adverse Effect', 'Prospectus', 'Registration Statement', 'SEC Reports', 'Settlement Date', and 'Trading Market' (Nasdaq Capital Market)[2](index=2&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk)[16](index=16&type=chunk)[20](index=20&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[38](index=38&type=chunk) [2. Sale and Delivery of Shares](index=4&type=section&id=2.%20Sale%20and%20Delivery%20of%20Shares) This chapter outlines terms for the Company's Common Stock issuance and sale through the Manager, acting as agent or principal - The Company proposes to issue and sell shares of its common stock (the "Shares") through or to the Manager, up to a "**Maximum Amount**" limited by registration, authorized but unissued shares, or S-3 eligibility requirements[39](index=39&type=chunk) [2(a) Appointment of Manager as Selling Agent; Terms Agreement](index=4&type=section&id=2(a)%20Appointment%20of%20Manager%20as%20Selling%20Agent%3B%20Terms%20Agreement) The Company appoints the Manager as its exclusive agent for selling Shares, with the Manager agreeing to use commercially reasonable efforts - The Manager is appointed as the exclusive agent to sell Shares, committing to commercially reasonable efforts. Direct sales to the Manager as principal require a separate 'Terms Agreement'[40](index=40&type=chunk) [2(b) Agent Sales](index=5&type=section&id=2(b)%20Agent%20Sales) This section details the mechanics of agent sales, including daily sales instructions, pricing, Manager's compensation, settlement, and the Company's obligations regarding share delivery and affirmations of representations - Shares are sold on a daily basis or as agreed, with the Company providing a 'Sales Notice' specifying the maximum amount and minimum price. The Manager uses commercially reasonable efforts to sell at market price[42](index=42&type=chunk) Manager Compensation for Agent Sales | Item | Detail | | :--- | :--- | | Compensation Rate | 3.0% of gross sales price | | Type of Fee | Placement fee ('Broker Fee') | | Net Proceeds | Gross sales price minus Broker Fee and transaction fees | - Settlement for sales typically occurs on the first Trading Day following the sale (T+1), with the Company electronically transferring shares to the Manager's account at DTC and the Manager delivering Net Proceeds[49](index=49&type=chunk) [2(c) Term Sales](index=7&type=section&id=2(c)%20Term%20Sales) For sales other than agent sales (Placements), the Company notifies the Manager of proposed terms - Placements (sales other than agent sales) are conducted via a 'Terms Agreement' where the Manager acts as principal. This agreement specifies the number of shares, price, and delivery details, and incorporates the main agreement's terms[52](index=52&type=chunk) [2(d) Maximum Number of Shares](index=8&type=section&id=2(d)%20Maximum%20Number%20of%20Shares) The Company is restricted from offering or selling Shares if the aggregate amount exceeds specified limits or at a price lower than the Board-authorized minimum - The Company must not exceed the '**Maximum Amount**' of Shares, the amount available under the Registration Statement, or the Board-authorized amount. Sales below the Board-authorized minimum price are also prohibited[54](index=54&type=chunk) [2(e) Regulation M Notice](index=8&type=section&id=2(e)%20Regulation%20M%20Notice) The Company must provide the Manager with at least one Business Day's prior notice of its intent to sell Shares to ensure compliance with Regulation M - The Company is required to provide at least one Business Day's prior notice to the Manager before selling Shares, to facilitate compliance with Regulation M under the Exchange Act[55](index=55&type=chunk) [3. Representations and Warranties](index=8&type=section&id=3.%20Representations%20and%20Warranties) This chapter details the Company's representations and warranties to the Manager at Execution Time and on subsequent dates - The Company makes comprehensive representations and warranties covering its corporate organization, capitalization, compliance with securities laws (including **S-3 eligibility** and **SEC filings**), financial statements (**GAAP compliance**), absence of **material adverse changes**, litigation, **regulatory permits**, **intellectual property**, and adherence to various other legal and operational standards[56](index=56&type=chunk)[58](index=58&type=chunk)[67](index=67&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) [3(a) Subsidiaries](index=8&type=section&id=3(a)%20Subsidiaries) The Company represents that all direct and indirect subsidiaries are listed in SEC Reports, and it owns all capital stock or equity interests free of liens - All subsidiaries are listed in SEC Reports, and the Company owns their capital stock/equity interests free of liens. Shares are validly issued, fully paid, and non-assessable[57](index=57&type=chunk) [3(b) Organization and Qualification](index=8&type=section&id=3(b)%20Organization%20and%20Qualification) The Company and its Subsidiaries are duly organized, validly existing, and in good standing in their respective jurisdictions, with the necessary power and authority to conduct business - The Company and its Subsidiaries are duly organized, validly existing, and in good standing, possessing requisite power and authority. They are qualified to conduct business in all necessary jurisdictions, with no failures expected to result in a '**Material Adverse Effect**'[58](index=58&type=chunk) [3(c) Authorization and Enforcement](index=9&type=section&id=3(c)%20Authorization%20and%20Enforcement) The Company has the corporate power and authority to enter into and consummate the transactions contemplated by the Agreement, which has been duly authorized and constitutes a valid and binding obligation - The Company has the corporate power and authority to execute and perform the Agreement, which is a valid and binding obligation, subject to general equitable principles and bankruptcy laws[60](index=60&type=chunk) [3(d) No Conflicts](index=9&type=section&id=3(d)%20No%20Conflicts) The execution and performance of the Agreement, and the issuance of Shares, do not conflict with the Company's or Subsidiaries' organizational documents, other agreements, or laws - The Agreement's execution and the Shares' issuance do not conflict with organizational documents, other agreements, or laws, provided such conflicts would not individually or in aggregate lead to a '**Material Adverse Effect**'[61](index=61&type=chunk) [3(e) Filings, Consents and Approvals](index=9&type=section&id=3(e)%20Filings%2C%20Consents%20and%20Approvals) The Company is not required to obtain any consents, waivers, or make filings for the Agreement's execution and performance, other than those specified - Required approvals for the transaction include SEC filings (Prospectus Supplement), Trading Market listing, state securities laws, and FINRA rules[62](index=62&type=chunk) [3(f) Issuance of Shares](index=10&type=section&id=3(f)%20Issuance%20of%20Shares) The Shares are duly authorized, and upon issuance and payment, will be validly issued, fully paid, nonassessable, and freely transferable - The Shares are duly authorized, validly issued, fully paid, nonassessable, and freely transferable. Their issuance is registered under the Act and aligns with the 'Plan of Distribution' in the Registration Statement[64](index=64&type=chunk) [3(g) Capitalization](index=10&type=section&id=3(g)%20Capitalization) The Company's capitalization is as stated in SEC Reports, with no new capital stock issued since the last periodic report (except for employee plans/conversions) and no outstanding rights or agreements that would obligate further equity issuance or adjust security prices - Company capitalization is as per SEC Reports. No new capital stock issued since the last periodic report, except for employee stock options/purchase plans or conversion/exercise of existing 'Common Stock Equivalents'. No outstanding securities with redemption or price adjustment provisions[65](index=65&type=chunk) [3(h) Registration Statement](index=11&type=section&id=3(h)%20Registration%20Statement) The Company meets Form S-3 requirements, has an effective Registration Statement for the Shares, and complies with relevant rules and transaction requirements - The Company meets Form S-3 requirements, has an effective Registration Statement for the Shares, and complies with Rule 415(a)(1)(x) and Form S-3 General Instruction I.B.1 or I.B.6[67](index=67&type=chunk) [3(i) Accuracy of Incorporated Documents](index=11&type=section&id=3(i)%20Accuracy%20of%20Incorporated%20Documents) All Incorporated Documents filed with the Commission conformed to Exchange Act requirements and did not contain any material misstatements or omissions at the time of filing - Incorporated Documents conformed to Exchange Act requirements and were free of material misstatements or omissions when filed. Future incorporated documents will also comply[68](index=68&type=chunk) [3(j) Ineligible Issuer](index=11&type=section&id=3(j)%20Ineligible%20Issuer) The Company is an "ineligible issuer" as defined in Rule 405 under the Act - The Company is classified as an '**ineligible issuer**' under Rule 405 of the Act[69](index=69&type=chunk) [3(k) Free Writing Prospectus](index=12&type=section&id=3(k)%20Free%20Writing%20Prospectus) The Company is eligible to use Issuer Free Writing Prospectuses, subject to Rule 164(e)(2) restrictions, and ensures they do not conflict with the Registration Statement or contain material misstatements - The Company is eligible to use Issuer Free Writing Prospectuses, ensuring they do not conflict with the Registration Statement and comply with filing requirements under Rule 433(d)[71](index=71&type=chunk) [3(l) Proceedings Related to Registration Statement](index=12&type=section&id=3(l)%20Proceedings%20Related%20to%20Registration%20Statement) The Registration Statement is not subject to any pending SEC proceedings or examinations, and the Company has not received notice of any stop-order or suspension of effectiveness - No pending SEC proceedings or examinations exist for the Registration Statement, and no stop-orders or suspensions of effectiveness have been issued or threatened[72](index=72&type=chunk) [3(m) SEC Reports](index=12&type=section&id=3(m)%20SEC%20Reports) The Company has timely filed all required SEC Reports, which complied with applicable laws and did not contain material misstatements or omissions - All SEC Reports were filed timely, complied with the Act and Exchange Act, and contained no material misstatements. Financial statements adhere to GAAP and accurately reflect the Company's financial position and results[73](index=73&type=chunk) [3(o) Material Changes; Undisclosed Events, Liabilities or Developments](index=13&type=section&id=3(o)%20Material%20Changes%3B%20Undisclosed%20Events%2C%20Liabilities%20or%20Developments) Since the latest audited financial statements, there have been no Material Adverse Effects, undisclosed liabilities (beyond ordinary course), accounting changes, dividends, or equity issuances to officers/directors (except existing plans), and no executive resignations, nor any other undisclosed material events - No '**Material Adverse Effect**' or undisclosed liabilities (beyond ordinary course) have occurred since the latest audited financials. No changes in accounting, dividends, or equity issuances to officers/directors (except existing plans) have taken place. No executive officers or Board members have resigned[75](index=75&type=chunk) [3(p) Litigation](index=13&type=section&id=3(p)%20Litigation) Except as disclosed in SEC Reports, there is no pending or threatened litigation that would adversely affect the Agreement or result in a Material Adverse Effect - No undisclosed litigation is pending or threatened that could adversely affect the Agreement or result in a '**Material Adverse Effect**'. No claims of securities law violations or SEC investigations involving the Company or its officers/directors[76](index=76&type=chunk) [3(q) Labor Relations](index=14&type=section&id=3(q)%20Labor%20Relations) No material labor disputes exist or are imminent, and the Company and its Subsidiaries maintain good employee relations, are not party to collective bargaining agreements, and comply with all applicable labor laws - No material labor disputes are imminent, and the Company maintains good employee relations. Compliance with all applicable U.S. federal, state, local, and foreign labor laws is maintained, with no expected '**Material Adverse Effect**' from non-compliance[78](index=78&type=chunk) [3(r) Compliance](index=14&type=section&id=3(r)%20Compliance) Except as disclosed in SEC Reports, the Company and its Subsidiaries are not in default or violation of any agreements, judgments, or governmental regulations (including environmental, health, safety, and tax laws), where such non-compliance would result in a Material Adverse Effect - The Company and its Subsidiaries are in compliance with all agreements, judgments, and governmental regulations (e.g., taxes, environmental, occupational health and safety), with no defaults or violations expected to result in a '**Material Adverse Effect**'[79](index=79&type=chunk) [3(s) Environmental Laws](index=14&type=section&id=3(s)%20Environmental%20Laws) The Company and its Subsidiaries comply with all Environmental Laws, possess all required permits, and adhere to their terms and conditions - The Company and its Subsidiaries comply with all Environmental Laws and possess necessary permits, with no non-compliance expected to have a '**Material Adverse Effect**'[80](index=80&type=chunk) [3(t) Regulatory Permits](index=15&type=section&id=3(t)%20Regulatory%20Permits) The Company and its Subsidiaries hold all necessary regulatory permits ("Material Permits") to conduct their businesses as described in SEC Reports - The Company and its Subsidiaries possess all '**Material Permits**' required for their operations and have not received notice of any revocation or modification proceedings[82](index=82&type=chunk) [3(u) Title to Assets](index=15&type=section&id=3(u)%20Title%20to%20Assets) The Company and its Subsidiaries have good and marketable title to all material real and personal property, free of liens (except minor ones or tax liens with adequate reserves) - The Company and its Subsidiaries hold good and marketable title to all material real and personal property, free of liens (excluding minor ones or tax liens with reserves). They are also in compliance with all leases[83](index=83&type=chunk) [3(v) Intellectual Property](index=15&type=section&id=3(v)%20Intellectual%20Property) The Company and its Subsidiaries possess or have rights to all necessary intellectual property rights ("Intellectual Property Rights"), with no expected expiration or termination, no infringement claims, and reasonable security measures in place - The Company and its Subsidiaries have or have rights to all necessary '**Intellectual Property Rights**', with no expected expiration or termination within two years. No infringement claims have been received, and reasonable security measures are in place[84](index=84&type=chunk) [3(w) Insurance](index=16&type=section&id=3(w)%20Insurance) The Company and its Subsidiaries are adequately insured by recognized insurers against customary losses and risks, including D&O coverage - The Company and its Subsidiaries are insured by financially responsible insurers for customary losses and risks, including D&O coverage, and anticipate renewing coverage without significant cost increases[86](index=86&type=chunk) [3(x) Affiliate Transactions](index=16&type=section&id=3(x)%20Affiliate%20Transactions) Except as disclosed in SEC Reports, there are no material transactions (exceeding $120,000) between the Company/Subsidiaries and their officers, directors, or employees, other than for standard compensation and reimbursements - No material transactions (over **$120,000**) exist between the Company/Subsidiaries and their officers, directors, or employees, other than for standard compensation, reimbursements, and employee benefits, except as disclosed in SEC Reports[87](index=87&type=chunk) [3(y) Sarbanes Oxley Compliance](index=16&type=section&id=3(y)%20Sarbanes%20Oxley%20Compliance) Except as disclosed in SEC Reports, the Company and its Subsidiaries comply with Sarbanes-Oxley, maintain effective internal accounting controls and disclosure controls and procedures - The Company and its Subsidiaries comply with Sarbanes-Oxley, maintain effective internal accounting controls and disclosure controls, and have not had material changes in internal control over financial reporting since the Evaluation Date[88](index=88&type=chunk) [3(z) Certain Fees](index=17&type=section&id=3(z)%20Certain%20Fees) No brokerage or finder's fees or commissions are payable by the Company or any Subsidiary to any third party with respect to the transactions contemplated by this Agreement, other than payments to the Manager - No brokerage or finder's fees are payable by the Company or its Subsidiaries to any third party for these transactions, other than to the Manager[90](index=90&type=chunk) [3(aa) No Other Sales Agency Agreement](index=17&type=section&id=3(aa)%20No%20Other%20Sales%20Agency%20Agreement) The Company has not entered into any other sales agency agreements or similar arrangements for at-the-market offerings of its Shares - The Company has no other sales agency agreements or similar arrangements for at-the-market offerings of its Shares[91](index=91&type=chunk) [3(bb) Investment Company](index=17&type=section&id=3(bb)%20Investment%20Company) The Company is not, and will not become, an "investment company" subject to registration under the Investment Company Act of 1940, as amended - The Company is not, and will not become, an '**investment company**' under the Investment Company Act of 1940[92](index=92&type=chunk) [3(cc) Listing and Maintenance Requirements](index=17&type=section&id=3(cc)%20Listing%20and%20Maintenance%20Requirements) The Common Stock is listed on the Trading Market, and its issuance complies with listing rules - Common Stock is listed on the Trading Market, and its issuance complies with listing rules. The Company is registered under the Exchange Act and complies with all listing and maintenance requirements[93](index=93&type=chunk) [3(dd) Application of Takeover Protections](index=18&type=section&id=3(dd)%20Application%20of%20Takeover%20Protections) The Company and its Board have taken all necessary actions to render inapplicable any anti-takeover provisions that could apply to the Shares - The Company and its Board have taken necessary actions to render anti-takeover provisions inapplicable to the Shares[94](index=94&type=chunk) [3(ee) Solvency](index=18&type=section&id=3(ee)%20Solvency) Based on its consolidated financial condition, the Company is solvent, with assets exceeding liabilities, sufficient capital, and adequate cash flow to pay debts as they mature - The Company is solvent, with assets exceeding liabilities and sufficient capital. Current cash flow and potential liquidation proceeds are adequate to meet debt obligations. No intent to incur unpayable debts or file for bankruptcy within one year[95](index=95&type=chunk) [3(ff) Tax Status](index=19&type=section&id=3(ff)%20Tax%20Status) Except for non-material matters, the Company and its Subsidiaries have filed all required tax returns, paid all material taxes, and set aside adequate provisions for future taxes - The Company and its Subsidiaries have filed all required tax returns, paid all material taxes, and made adequate provisions for future taxes, with no material unpaid taxes claimed[97](index=97&type=chunk) [3(gg) Foreign Corrupt Practices](index=19&type=section&id=3(gg)%20Foreign%20Corrupt%20Practices) Neither the Company nor its Subsidiaries, nor any agent acting on their behalf, has engaged in unlawful contributions, payments to government officials, or materially violated the Foreign Corrupt Practices Act - Neither the Company nor its Subsidiaries, nor their agents, have engaged in unlawful political contributions, payments to officials, or materially violated the Foreign Corrupt Practices Act[98](index=98&type=chunk) [3(hh) Accountants](index=19&type=section&id=3(hh)%20Accountants) The Company's accounting firm is a registered public accounting firm and is expected to express an opinion on the financial statements for the fiscal year ending December 31, 2025 - The Company's accounting firm is a registered public accounting firm and will express an opinion on the financial statements for the fiscal year ending December 31, 2025[99](index=99&type=chunk) [3(ii) Regulation M Compliance](index=19&type=section&id=3(ii)%20Regulation%20M%20Compliance) The Company has not, and to its knowledge no one acting on its behalf has, taken any action to stabilize or manipulate the price of its securities or solicit purchases, other than compensation paid to the Manager for the Shares - The Company has not engaged in market stabilization or manipulation activities to facilitate the sale of Shares, nor solicited purchases, except for compensation paid to the Manager[100](index=100&type=chunk) [3(kk) Stock Option Plans](index=20&type=section&id=3(kk)%20Stock%20Option%20Plans) All stock options granted under the Company's plans were in accordance with terms, had an exercise price at least equal to fair market value on the grant date, and were not backdated or knowingly coordinated with material information releases - Stock options were granted in accordance with plan terms, at fair market value, and were not backdated or coordinated with material information releases[102](index=102&type=chunk) [3(ll) Cybersecurity](index=20&type=section&id=3(ll)%20Cybersecurity) There have been no security breaches or compromises of the Company's IT Systems and Data, and the Company complies with all applicable laws and maintains commercially reasonable safeguards - No security breaches or compromises of IT Systems and Data have occurred. The Company complies with all applicable laws, maintains commercially reasonable safeguards, and has implemented backup and disaster recovery technology[103](index=103&type=chunk) [3(mm) Compliance with Data Privacy Laws](index=20&type=section&id=3(mm)%20Compliance%20with%20Data%20Privacy%20Laws) The Company and its Subsidiaries comply with all applicable data privacy and security laws (including GDPR) and their internal policies, providing accurate notice of privacy practices - The Company and its Subsidiaries comply with all applicable data privacy and security laws (e.g., **GDPR**) and internal policies, providing accurate notice of privacy practices. No notices of actual or potential liability or violations have been received[104](index=104&type=chunk) [3(nn) Office of Foreign Assets Control](index=21&type=section&id=3(nn)%20Office%20of%20Foreign%20Assets%20Control) Neither the Company nor its affiliates, directors, officers, or employees are subject to U.S. or international sanctions, nor will the proceeds from the transactions be used in violation of such sanctions - Neither the Company nor its affiliates, directors, officers, or employees are subject to Sanctions. Proceeds from transactions will not be used in violation of Sanctions[106](index=106&type=chunk) [3(oo) U.S. Real Property Holding Corporation](index=21&type=section&id=3(oo)%20U.S.%20Real%20Property%20Holding%20Corporation) The Company is not and has never been a U.S. real property holding corporation under Section 897 of the Internal Revenue Code - The Company is not and has never been a U.S. real property holding corporation[107](index=107&type=chunk) [3(pp) Bank Holding Company Act](index=21&type=section&id=3(pp)%20Bank%20Holding%20Company%20Act) Neither the Company nor its Subsidiaries or Affiliates are subject to the Bank Holding Company Act of 1956 or regulation by the Federal Reserve - Neither the Company nor its Subsidiaries or Affiliates are subject to the Bank Holding Company Act or Federal Reserve regulation, nor do they control significant interests in regulated entities[108](index=108&type=chunk) [3(qq) Money Laundering](index=21&type=section&id=3(qq)%20Money%20Laundering) The Company and its Subsidiaries' operations comply with applicable Money Laundering Laws, and no related actions or proceedings are pending or threatened - The Company and its Subsidiaries comply with Money Laundering Laws, and no related actions or proceedings are pending or threatened[109](index=109&type=chunk) [3(rr) FINRA Member Shareholders](index=21&type=section&id=3(rr)%20FINRA%20Member%20Shareholders) There are no undisclosed affiliations with any FINRA member firm among the Company's officers, directors, or 5% or greater stockholders - No undisclosed affiliations with FINRA member firms exist among the Company's officers, directors, or **5%+** stockholders[110](index=110&type=chunk) [4. Agreements](index=22&type=section&id=4.%20Agreements) This chapter outlines the Company's ongoing obligations to the Manager for regulatory filings, disclosure, due diligence, and offering operations - The Company agrees to provide the Manager with copies of all amendments and supplements to the Registration Statement and Prospectus for review, and to promptly notify the Manager of any filings, SEC requests, or stop orders[112](index=112&type=chunk) [4(a) Right to Review Amendments and Supplements to Registration Statement and Prospectus](index=22&type=section&id=4(a)%20Right%20to%20Review%20Amendments%20and%20Supplements%20to%20Registration%20Statement%20and%20Prospectus) The Company agrees to provide the Manager with copies of all amendments and supplements to the Registration Statement and Prospectus for review prior to filing - The Company must furnish the Manager with proposed amendments/supplements for review before filing and promptly advise the Manager of filings, SEC requests, or stop orders[112](index=112&type=chunk) [4(b) Subsequent Events](index=22&type=section&id=4(b)%20Subsequent%20Events) If any event occurs before the Settlement Date that would cause the Registration Statement or Prospectus to contain a material misstatement or omission, the Company will promptly notify the Manager and amend or supplement the documents - The Company will promptly notify the Manager and amend the Registration Statement or Prospectus if any event causes a material misstatement or omission before the Settlement Date[113](index=113&type=chunk) [4(c) Notification of Subsequent Filings](index=23&type=section&id=4(c)%20Notification%20of%20Subsequent%20Filings) During the period when a prospectus is required, if any event necessitates an amendment to the Registration Statement or Prospectus to comply with securities laws or correct misstatements, the Company will promptly notify the Manager and file the necessary amendments or supplements - The Company will promptly notify the Manager and file necessary amendments or supplements if any event requires changes to the Registration Statement or Prospectus for compliance or to correct misstatements[115](index=115&type=chunk) [4(d) Earnings Statements](index=23&type=section&id=4(d)%20Earnings%20Statements) The Company will make earnings statements generally available to satisfy Section 11(a) of the Act and Rule 158, with compliance with Exchange Act reporting requirements deemed sufficient - The Company will make earnings statements available to satisfy Section 11(a) of the Act and Rule 158, with Exchange Act reporting deemed sufficient[116](index=116&type=chunk) [4(e) Delivery of Registration Statement](index=23&type=section&id=4(e)%20Delivery%20of%20Registration%20Statement) Upon request, the Company will furnish the Manager and its counsel with signed copies of the Registration Statement and sufficient copies of the Prospectus and any Issuer Free Writing Prospectus, covering all printing expenses - The Company will furnish signed copies of the Registration Statement and sufficient copies of the Prospectus and Issuer Free Writing Prospectus to the Manager upon request, covering all printing expenses[117](index=117&type=chunk) [4(f) Qualification of Shares](index=23&type=section&id=4(f)%20Qualification%20of%20Shares) The Company will arrange for the qualification of Shares for sale in designated jurisdictions and maintain such qualifications, but is not obligated to qualify to do business or be subject to service of process in new jurisdictions - The Company will qualify Shares for sale in designated jurisdictions, but is not obligated to qualify to do business or be subject to service of process in new jurisdictions[118](index=118&type=chunk) [4(g) Free Writing Prospectus](index=24&type=section&id=4(g)%20Free%20Writing%20Prospectus) Both the Company and the Manager agree to obtain prior written consent for any Free Writing Prospectus and to treat any consented-to "Permitted Free Writing Prospectus" as an Issuer Free Writing Prospectus - Both parties must consent to any Free Writing Prospectus, and any '**Permitted Free Writing Prospectus**' must comply with Rules 164 and 433[120](index=120&type=chunk) [4(h) Subsequent Equity Issuances](index=24&type=section&id=4(h)%20Subsequent%20Equity%20Issuances) The Company will not deliver a Sales Notice for two Trading Days prior to any other equity issuance (except for employee plans, conversions, or non-capital raising private transactions), subject to Manager's waiver - The Company must provide **two Trading Days'** notice before other equity issuances, with exceptions for employee equity plans, conversions of existing Common Stock Equivalents, and privately negotiated transactions not for capital raising[121](index=121&type=chunk) [4(i) Market Manipulation](index=24&type=section&id=4(i)%20Market%20Manipulation) Until termination, the Company will not take any action designed to stabilize or manipulate the price of its securities in violation of the Act, Exchange Act, or Regulation M - The Company commits not to engage in market stabilization or manipulation activities in violation of securities laws or Regulation M[122](index=122&type=chunk) [4(j) Notification of Incorrect Certificate](index=24&type=section&id=4(j)%20Notification%20of%20Incorrect%20Certificate) The Company will immediately advise the Manager of any information or fact that would alter or affect any opinion, certificate, or document previously provided - The Company will immediately notify the Manager of any information affecting previously provided opinions, certificates, or documents[123](index=123&type=chunk) [4(k) Certification of Accuracy of Disclosure](index=25&type=section&id=4(k)%20Certification%20of%20Accuracy%20of%20Disclosure) On each "Representation Date" (e.g., filing 10-K/10-Q, amendments), the Company must furnish a certificate confirming the accuracy of disclosures, with certain waivers applicable when no Sales Notice is pending - On each '**Representation Date**' (e.g., filing 10-K, 10-Q, material 8-K, new/amended Registration Statement/Prospectus), the Company must provide a certificate affirming the accuracy of disclosures, with waivers possible if no Sales Notice is pending[125](index=125&type=chunk) [4(l) Bring Down Opinions; Negative Assurance](index=25&type=section&id=4(l)%20Bring%20Down%20Opinions%3B%20Negative%20Assurance) Within five Trading Days of each Representation Date, the Company must furnish a written opinion and negative assurance statement from Company Counsel, subject to certain waivers - Within **five Trading Days** of each '**Representation Date**', the Company must provide a written opinion and negative assurance statement from Company Counsel, with waivers for certain dates unless specifically requested by the Manager[126](index=126&type=chunk) [4(m) Auditor Bring Down "Comfort" Letter](index=26&type=section&id=4(m)%20Auditor%20Bring%20Down%20%22Comfort%22%20Letter) Within five Trading Days of each Representation Date, the Company must cause its auditors to furnish a comfort letter and its CFO to furnish a certificate, subject to certain waivers - Within **five Trading Days** of each '**Representation Date**', the Company must provide an auditor's comfort letter and a CFO certificate, with waivers for certain dates unless specifically requested by the Manager[128](index=128&type=chunk) [4(n) Due Diligence Session](index=26&type=section&id=4(n)%20Due%20Diligence%20Session) The Company will conduct due diligence sessions at the commencement/recommencement of the offering and on each Representation Date, including management, counsel, and accountants, and will reimburse Manager's counsel fees up to $2,500 per session - The Company will conduct due diligence sessions at the start/recommencement of the offering and on each '**Representation Date**', involving management, counsel, and accountants. The Company will reimburse Manager's counsel fees up to **$2,500** per session[129](index=129&type=chunk) [4(o) Acknowledgment of Trading](index=26&type=section&id=4(o)%20Acknowledgment%20of%20Trading) The Company consents to the Manager trading in the Common Stock for its own account and for its clients concurrently with sales of Shares under the Agreement - The Company consents to the Manager trading Common Stock for its own account and clients concurrently with Share sales under the Agreement[130](index=130&type=chunk) [4(p) Disclosure of Shares Sold](index=27&type=section&id=4(p)%20Disclosure%20of%20Shares%20Sold) The Company will disclose the number of Shares sold, Net Proceeds, and Manager compensation in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and more frequently if required by Commission policy - The Company will disclose the number of Shares sold, Net Proceeds, and Manager compensation in its **10-K** and **10-Q** reports, and potentially more frequently via **8-K** or Prospectus Supplement if required[132](index=132&type=chunk) [4(q) Rescission Right](index=27&type=section&id=4(q)%20Rescission%20Right) If the conditions in Section 6 are not satisfied by the Settlement Date, the Company will offer purchasers the right to refuse to purchase and pay for Shares - The Company will offer a rescission right to purchasers if conditions in Section 6 are not met by the Settlement Date[133](index=133&type=chunk) [4(r) Bring Down of Representations and Warranties](index=27&type=section&id=4(r)%20Bring%20Down%20of%20Representations%20and%20Warranties) Each acceptance of an offer or execution of a Terms Agreement is deemed an affirmation that the Company's representations and warranties remain true and correct as of that date and the subsequent Settlement Date/Time of Delivery - Each sale or Terms Agreement execution affirms that the Company's representations and warranties are true and correct as of that date and the Settlement Date/Time of Delivery[134](index=134&type=chunk) [4(s) Reservation of Shares](index=27&type=section&id=4(s)%20Reservation%20of%20Shares) The Company must ensure sufficient authorized shares are reserved for issuance and will use commercially reasonable efforts to list and maintain the listing of Shares on the Trading Market - The Company must reserve sufficient authorized shares for issuance and use commercially reasonable efforts to list and maintain the listing of Shares on the Trading Market[135](index=135&type=chunk) [4(t) Obligation Under Exchange Act](index=28&type=section&id=4(t)%20Obligation%20Under%20Exchange%20Act) During any period when a prospectus is required, the Company will file all documents required by the Exchange Act within the prescribed time periods - The Company will file all required Exchange Act documents within prescribed time periods when a prospectus is required[137](index=137&type=chunk) [4(u) DTC Facility](index=28&type=section&id=4(u)%20DTC%20Facility) The Company will cooperate with the Manager and use reasonable efforts to make the Shares eligible for clearance and settlement through DTC facilities - The Company will cooperate to make Shares eligible for DTC clearance and settlement[138](index=138&type=chunk) [4(v) Use of Proceeds](index=28&type=section&id=4(v)%20Use%20of%20Proceeds) The Company will apply the Net Proceeds from the sale of Shares in the manner specified in the Prospectus - Net Proceeds from Share sales will be used as described in the Prospectus[138](index=138&type=chunk) [4(w) Filing of Prospectus Supplement](index=28&type=section&id=4(w)%20Filing%20of%20Prospectus%20Supplement) For any sales not made in "at the market" offerings (e.g., Placements), the Company will file a Prospectus Supplement detailing the transaction terms, amount of Shares sold, price, and Manager's compensation - For non-'at the market' sales, the Company will file a Prospectus Supplement detailing transaction terms, Shares sold, price, and Manager's compensation[139](index=139&type=chunk) [4(x) Additional Registration Statement](index=28&type=section&id=4(x)%20Additional%20Registration%20Statement) If the current Registration Statement is unavailable for sales, the Company will file a new registration statement for additional shares and cause it to become effective promptly - If the current Registration Statement is unavailable, the Company will file and promptly make effective a new registration statement for additional shares[140](index=140&type=chunk) [5. Payment of Expenses](index=29&type=section&id=5.%20Payment%20of%20Expenses) The Company agrees to cover all costs and expenses related to its obligations under the Agreement, including regulatory, printing, and legal fees - The Company is responsible for all costs and expenses related to the offering, including SEC filing fees, printing, and legal fees. Manager's counsel fees are capped at **$50,000** at Execution Time, plus **$2,500** per Representation Date for due diligence[142](index=142&type=chunk) [6. Conditions to the Obligations of the Manager](index=29&type=section&id=6.%20Conditions%20to%20the%20OBLIGATIONS%20of%20the%20Manager) The Manager's obligations are contingent on the Company's representations, performance, and satisfaction of specific conditions, including regulatory filings and legal opinions - The Manager's obligations are subject to the accuracy of Company representations, Company performance, and specific conditions including timely filing of Prospectus Supplements, delivery of Company Counsel opinions, Officer's Certificates, and Accountants' 'Comfort' Letters[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) [6(a) Filing of Prospectus Supplement](index=29&type=section&id=6(a)%20Filing%20of%20Prospectus%20Supplement) A condition for the Manager's obligations is the timely filing of the Prospectus and any supplements with the Commission, and that no stop order or objection to the Registration Statement's use has been issued or threatened - The Prospectus and supplements must be filed timely, and no stop orders or objections to the Registration Statement's use should be pending or threatened[143](index=143&type=chunk) [6(b) Delivery of Opinion](index=29&type=section&id=6(b)%20Delivery%20of%20Opinion) The Company must cause its counsel to furnish a satisfactory legal opinion and negative assurance statement to the Manager - Company Counsel must provide a satisfactory legal opinion and negative assurance statement to the Manager[144](index=144&type=chunk) [6(c) Delivery of Officer's Certificate](index=30&type=section&id=6(c)%20Delivery%20of%20Officer's%20Certificate) The Company must provide a certificate signed by its CEO/President and principal financial/accounting officer, confirming the accuracy of representations, compliance with agreements, absence of stop orders, and no Material Adverse Effect since the most recent financial statements - A certificate from the CEO/President and CFO/CAO must confirm the accuracy of representations, compliance, absence of stop orders, and no '**Material Adverse Effect**' since the latest financial statements[146](index=146&type=chunk) [6(d) Delivery of Accountants' "Comfort" Letter](index=30&type=section&id=6(d)%20Delivery%20of%20Accountants'%20%22Comfort%22%20Letter) The Company must ensure its independent accountants furnish a satisfactory "comfort" letter to the Manager, confirming their independence and providing customary comfort regarding financial information - The Company's independent accountants must provide a satisfactory '**comfort**' letter, confirming independence and customary comfort on financial information[147](index=147&type=chunk) [6(e) No Material Adverse Event](index=31&type=section&id=6(e)%20No%20Material%20Adverse%20Event) There must be no material adverse change or decrease in financial results or condition of the Company and its subsidiaries since the dates of disclosed information, which, in the Manager's sole judgment, would make the offering impractical - No '**Material Adverse Event**' (change or decrease in financial results or condition) must have occurred since the disclosed information dates, which, in the Manager's sole judgment, would make the offering impractical[149](index=149&type=chunk) [6(f) Payment of All Fees](index=31&type=section&id=6(f)%20Payment%20of%20All%20Fees) The Company must have paid all required Commission filing fees relating to the Shares within the specified timeframes - All required Commission filing fees for the Shares must be paid within the specified timeframes[150](index=150&type=chunk) [6(g) No FINRA Objections](index=31&type=section&id=6(g)%20No%20FINRA%20Objections) FINRA must not have raised any objections regarding the fairness and reasonableness of the Agreement's terms and arrangements - FINRA must not have objected to the fairness and reasonableness of the Agreement's terms[151](index=151&type=chunk) [6(h) Shares Listed on Trading Market](index=31&type=section&id=6(h)%20Shares%20Listed%20on%20Trading%20Market) The Shares must be listed and authorized for trading on the Trading Market, with satisfactory evidence provided to the Manager - The Shares must be listed and authorized for trading on the Trading Market, with evidence provided to the Manager[151](index=151&type=chunk) [6(i) Other Assurances](index=31&type=section&id=6(i)%20Other%20Assurances) Prior to each Settlement Date and Time of Delivery, the Company must furnish any further information, certificates, and documents reasonably requested by the Manager - The Company must provide any additional information, certificates, and documents reasonably requested by the Manager prior to each Settlement Date and Time of Delivery[152](index=152&type=chunk) [7. Indemnification and Contribution](index=32&type=section&id=7.%20Indemnification%20and%20Contribution) This chapter outlines indemnification and contribution obligations between the Company and Manager for losses from misstatements or breaches - The Company indemnifies the Manager for losses from misstatements/omissions in offering documents or breaches of the Agreement, except for information provided by the Manager. The Manager indemnifies the Company for losses from information it provided, capped at the **Broker Fee**[156](index=156&type=chunk)[157](index=157&type=chunk) [7(a) Indemnification by Company](index=32&type=section&id=7(a)%20Indemnification%20by%20Company) The Company agrees to indemnify the Manager and its affiliates against losses, claims, damages, or liabilities arising from untrue statements or omissions in the Registration Statement, Prospectus, or other offering documents, or from any breach of the Agreement - The Company indemnifies the Manager for losses arising from untrue statements or omissions in offering documents or breaches of the Agreement, unless based on information furnished by the Manager[156](index=156&type=chunk) [7(b) Indemnification by Manager](index=32&type=section&id=7(b)%20Indemnification%20by%20Manager) The Manager agrees to indemnify the Company and its affiliates for losses arising from untrue statements or omissions based on written information specifically furnished by the Manager for inclusion in the offering documents - The Manager indemnifies the Company for losses arising from untrue statements or omissions based on information specifically furnished by the Manager, with liability capped at the **Broker Fee**[157](index=157&type=chunk) [7(c) Indemnification Procedures](index=33&type=section&id=7(c)%20Indemnification%20Procedures) This section outlines the procedures for indemnification, including prompt notification of actions, the indemnifying party's right to appoint counsel, and conditions under which the indemnified party may retain separate counsel - Indemnification procedures include prompt notification of actions, the indemnifying party's right to appoint counsel, and conditions for the indemnified party to employ separate counsel (e.g., conflict of interest, different legal defenses)[159](index=159&type=chunk) [7(d) Contribution](index=34&type=section&id=7(d)%20Contribution) If indemnification is unavailable, the Company and Manager agree to contribute to losses based on relative benefits received and relative fault, with the Manager's contribution capped at the Broker Fee - If indemnification is unavailable, contribution to losses is based on relative benefits and fault, with the Manager's contribution capped at the **Broker Fee**. This considers factors like information provision, intent, and knowledge[161](index=161&type=chunk) [8. Termination](index=34&type=section&id=8.%20Termination) This chapter details the conditions and procedures for termination of the Agreement by either party, including notice requirements and surviving sections - Both the Company and the Manager have the right to terminate the Agreement with written notice. Certain sections (**5, 6, 7, 8, 9, 10, 12, 14, 15, 16**) survive termination, and pending sales will settle[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [8(a) Company's Right to Terminate](index=34&type=section&id=8(a)%20Company's%20Right%20to%20Terminate) The Company may terminate the Agreement with ten Business Days' prior written notice, without liability except for pending sales and the survival of specific sections - The Company can terminate with **10 Business Days'** notice, with pending sales and specific sections (**5, 6, 7, 8, 9, 10, 12, 14, 15, 16**) surviving[162](index=162&type=chunk) [8(b) Manager's Right to Terminate](index=35&type=section&id=8(b)%20Manager's%20Right%20to%20Terminate) The Manager may terminate the Agreement at any time by written notice, without liability except for the survival of specific sections - The Manager can terminate at any time, with specific sections (**5, 6, 7, 8, 9, 10, 12, 14, 15, 16**) surviving[163](index=163&type=chunk) [8(c) Mutual Agreement](index=35&type=section&id=8(c)%20Mutual%20Agreement) The Agreement remains in effect until terminated by either party or by mutual agreement, with the same specific sections surviving any mutual termination - The Agreement remains in effect until terminated by either party or mutual agreement, with specific sections (**5, 6, 7, 8, 9, 10, 12, 14, 15, 16**) surviving[164](index=164&type=chunk) [8(d) Effective Date of Termination](index=35&type=section&id=8(d)%20Effective%20Date%20of%20Termination) Termination is effective on the date specified in the notice, but not before the close of business on the date of receipt - Termination is effective on the specified date, but not before the close of business on the notice receipt date. Pending Share sales will settle as per the Agreement[165](index=165&type=chunk) [8(e) Manager's Termination Rights for Principal Purchases](index=35&type=section&id=8(e)%20Manager's%20Termination%20Rights%20for%20Principal%20Purchases) For purchases where the Manager acts as principal (Terms Agreement), the Manager can terminate its obligations if market trading is suspended, a banking moratorium is declared, or a calamity makes the offering impractical - The Manager can terminate principal purchase obligations under a Terms Agreement if market trading is suspended, a banking moratorium is declared, or a calamity makes the offering impractical[166](index=166&type=chunk) [9. Representations and Indemnities to Survive](index=35&type=section&id=9.%20Representations%20and%20Indemnities%20to%20Survive) All representations, warranties, and indemnities made in the Agreement survive the delivery and payment for Shares, remaining in full force - All representations, warranties, and indemnities survive the delivery and payment for Shares, remaining in full force regardless of any investigations[167](index=167&type=chunk) [10. Notices](index=36&type=section&id=10.%20Notices) All communications under the Agreement must be in writing, effective upon receipt, and sent to the specified addresses - All communications must be in writing, effective upon receipt, and sent to the specified addresses of the Company and the Manager[169](index=169&type=chunk) [11. Successors](index=36&type=section&id=11.%20Successors) The Agreement binds the parties, their successors, and related individuals (officers, directors, employees, agents, controlling persons) as specified in Section 7 - The Agreement binds the parties, their successors, and related individuals (officers, directors, employees, agents, controlling persons) as specified in Section 7[170](index=170&type=chunk) [12. No Fiduciary Duty](index=36&type=section&id=12.%20No%20Fiduciary%20Duty) The Company acknowledges an arm's-length transaction, with the Manager acting solely as sales agent/principal, not as a fiduciary - The Company acknowledges an arm's-length transaction, with the Manager acting solely as sales agent/principal, not as a fiduciary. The Company retains responsibility for its own judgments[171](index=171&type=chunk) [13. Integration](index=36&type=section&id=13.%20Integration) This Agreement and any Terms Agreement supersede all prior agreements and understandings between the Company and the Manager - This Agreement and any Terms Agreement supersede all prior agreements and understandings between the Company and the Manager[172](index=172&type=chunk) [14. Amendments; Waivers](index=36&type=section&id=14.%20Amendments%3B%20Waivers) Amendments or waivers require a written instrument signed by both parties; a waiver of one default is not a continuing waiver - Amendments or waivers require a written instrument signed by both parties. A waiver of one default is not a continuing waiver or a waiver of other provisions[173](index=173&type=chunk) [15. Applicable Law](index=37&type=section&id=15.%20Applicable%20Law) The Agreement is governed by New York law, with exclusive jurisdiction in New York courts; prevailing party gets attorney's fees - The Agreement is governed by New York law. Exclusive jurisdiction for legal actions is in New York Supreme Court or the U.S. District Court for the Southern District of New York. The prevailing party in enforcement actions will be reimbursed for attorney's fees[175](index=175&type=chunk) [16. WAIVER OF JURY TRIAL](index=37&type=section&id=16.%20WAIVER%20OF%20JURY%20TRIAL) The Company irrevocably waives its right to a jury trial for any legal proceeding related to this Agreement or its transactions - The Company irrevocably waives its right to a jury trial for any legal proceeding related to this Agreement or its transactions[176](index=176&type=chunk) [17. Counterparts](index=37&type=section&id=17.%20Counterparts) The Agreement can be executed in multiple counterparts, including electronically, with each considered an original - The Agreement can be executed in multiple counterparts, including electronically, with each considered an original[176](index=176&type=chunk) [18. Headings](index=37&type=section&id=18.%20Headings) Section headings are for convenience only and do not affect the Agreement's construction - Section headings are for convenience only and do not affect the Agreement's construction[177](index=177&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section contains the signatures of Mawson Infrastructure Group Inc. and H.C. Wainwright & Co., LLC, confirming agreement to the terms - The Agreement is signed by Kaliste Saloom, Interim Chief Executive Officer, General Counsel and Corporate Secretary for Mawson Infrastructure Group Inc., and Edward D. Silvera, Chief Operating Officer for H.C. Wainwright & Co., LLC[179](index=179&type=chunk)[180](index=180&type=chunk) [ANNEX I: Form of Terms Agreement](index=39&type=section&id=ANNEX%20I%3A%20Form%20of%20Terms%20Agreement) Annex I is a template for a Terms Agreement for direct sales of shares to the Manager as principal, incorporating the main agreement - Annex I is a template for a 'Terms Agreement' for direct sales of 'Purchased Shares' to the Manager as principal. It incorporates the main 'At The Market Offering Agreement' by reference, with representations and warranties deemed made as of the Terms Agreement date[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)

Market Overview - Crypto markets experienced a decline, with global market capitalization decreasing by 3% as traders exited to avoid losses [1] - Despite the slowdown, certain crypto stocks remain attractive to investors due to institutional adoption and ecosystem developments [1] Coinbase (COIN) - Coinbase closed at $312.59, up 1.92%, with institutional adoption news enhancing investor sentiment [2] - Caliber, a diversified real estate and digital asset management platform, selected Coinbase Prime for its Digital Asset Treasury Strategy, providing access to deep liquidity and institutional-grade custody [2] - If buying activity continues, COIN's price could rise towards $329.26, while increased selling pressure may lead to a drop below $293.61 [3][4] Mawson Infrastructure Group Inc. (MIGI) - MIGI closed at $0.50 per share, gaining 8.54% for the day, attracting market attention due to recent operational updates [5] - The company confirmed normal operations across its U.S. facilities and addressed its Nasdaq listing status, securing an extension to regain compliance [6] - If buying momentum builds, MIGI could surpass the $0.53 level, but may retreat to test support near $0.47 if selling pressure increases [6][7] Earlyworks Co., Ltd. (ELWS) - Earlyworks shares ended at $2.63, gaining 8.47%, as traders consider the company's regulatory update [9] - The Nasdaq Hearings Panel granted Earlyworks a final extension until October 29 to regain compliance with listing standards [9] - The company is pursuing equity financing initiatives to meet compliance requirements, with potential delisting if it fails to do so by the deadline [10]

Core Viewpoint - Mawson Infrastructure Group Inc. provides an update on its operations, focusing on its digital infrastructure for high-performance computing and digital assets, while emphasizing its commitment to carbon-free energy sources [1][3]. Company Operations - Mawson continues to operate normally across its U.S. footprint, with its facility in Midland, Pennsylvania being a cornerstone site supported by long-term tenure [6]. - The company has engaged advisors and presented a plan to Nasdaq to regain compliance with its continued listing standards, receiving an extension to maintain its listing [6]. Financial Strategy - Mawson has filed a new shelf registration statement on Form S-3 to maintain financial flexibility, allowing the company to offer and sell securities as needed without indicating immediate issuance of new shares [6]. - The leadership is focused on executing the growth strategy while improving the balance sheet and maintaining operational flexibility [6]. Legal Matters - The company is advancing efforts to resolve certain legacy legal matters as part of a broader program aimed at strengthening its balance sheet [6].

Part I – Financial Information This section details the company's unaudited consolidated financial statements and management's analysis of financial condition and operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Mawson Infrastructure Group Inc.'s unaudited consolidated financial statements and detailed notes [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Balance sheets show decreased total assets and increased stockholders' deficit from December 2024 to June 2025 Consolidated Condensed Balance Sheets | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :--------------------------------- | :-------------------------- | :------------------ | | Cash and cash equivalents | $3,239,632 | $6,089,837 | | Total current assets | $18,991,307 | $26,006,315 | | Total assets | $52,739,764 | $61,440,495 | | Total current liabilities | $59,256,223 | $61,947,418 | | Total liabilities | $61,079,666 | $64,679,332 | | Total stockholders' deficit | $(8,339,902) | $(3,238,837) | [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Total revenues decreased for both three and six months ended June 30, 2025, while net loss improved, driven by mixed segment performance Consolidated Condensed Statements of Operations | Metric (Three Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Digital colocation revenue | $3,660,298 | $8,131,439 | | Energy management revenue | $5,130,712 | $1,732,596 | | Digital assets mining revenue | $742,173 | $3,248,084 | | Total revenues | $9,533,183 | $13,112,119 | | Gross Profit | $3,933,630 | $4,317,477 | | Net Loss | $(8,021,433) | $(9,618,693) | | Net Loss per share, basic & diluted | $(0.40) | $(0.55) | | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Digital colocation revenue | $14,089,171 | $16,365,480 | | Energy management revenue | $8,195,587 | $4,205,101 | | Digital assets mining revenue | $1,062,798 | $10,762,847 | | Total revenues | $23,347,556 | $31,883,428 | | Gross Profit | $9,857,560 | $11,302,618 | | Net Loss | $(8,332,296) | $(29,587,978) | | Net Loss per share, basic & diluted | $(0.43) | $(1.73) | [Consolidated Condensed Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss decreased for both three and six months ended June 30, 2025, influenced by net loss Consolidated Condensed Statements of Comprehensive Loss | Metric (Three Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Net Loss | $(8,021,433) | $(9,618,693) | | Foreign currency translation adj. | $147,296 | $(44,443) | | Comprehensive loss | $(7,874,137) | $(9,663,136) | | Metric (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Net Loss | $(8,332,296) | $(29,587,978) | | Foreign currency translation adj. | $152,466 | $(526,586) | | Comprehensive loss | $(8,179,830) | $(30,114,564) | [Consolidated Condensed Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29) Stockholders' equity (deficit) reflects increased common stock and paid-in capital, but a growing accumulated deficit Consolidated Condensed Statements of Stockholders' Equity (Deficit) | Metric (Six Months Ended June 30, 2025) | Amount | | :-------------------------------------- | :------------ | | Common Stock () | 20,832,116 | | Common Stock ($) | $20,832 | | Additional Paid-in Capital | $228,418,637 | | Accumulated Other Comprehensive Income | $351,091 | | Accumulated Deficit | $(237,130,462)| | Total Stockholders' Deficit | $(8,339,902) | | Metric (Six Months Ended June 30, 2024) | Amount | | :-------------------------------------- | :------------ | | Common Stock () | 17,518,483 | | Common Stock ($) | $17,518 | | Additional Paid-in Capital | $216,302,100 | | Accumulated Other Comprehensive Income | $133,943 | | Accumulated Deficit | $(212,049,357)| | Total Stockholders' Equity | $4,404,204 | [Consolidated Condensed Statements of Cash Flows](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for the six months ended June 30, 2025, significantly decreased from prior year Consolidated Condensed Statements of Cash Flows | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------------------- | :------------ | :------------ | | Net cash (used in) provided by operating | $(2,588,984) | $4,344,563 | | Net cash used in investing activities | $(54,633) | $(1,415,281) | | Net cash used in financing activities | $(206,588) | $(623,478) | | Net (decrease) increase in cash | $(2,850,205) | $2,305,804 | | Cash and cash equivalents at end of period | $3,239,632 | $6,782,143 | [Notes to Consolidated Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide essential context and detailed information for the financial statements, covering operations, policies, and key events [NOTE 1 – GENERAL](index=9&type=section&id=NOTE%201%20%E2%80%93%20GENERAL) Mawson operates digital infrastructure for AI, HPC, and digital assets, facing substantial doubt about its going concern ability - Mawson Infrastructure Group Inc. is a technology company focused on digital infrastructure platforms for AI, HPC, and digital assets, operating in the PJM Energy Market in the United States[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The company incurred a net loss of **($8.3 million)** for the six months ended June 30, 2025, had negative working capital of **($40.3 million)**, total negative net assets of **($8.3 million)**, and an accumulated deficit of **($237.1 million)** as of June 30, 2025[35](index=35&type=chunk) - These conditions raise substantial doubt about the company's ability to continue as a going concern for at least one year from the financial statement issuance date[38](index=38&type=chunk) - Mitigation strategies include expanding digital infrastructure, executing new colocation agreements, engaging with capital providers for equity/debt, assessing strategic transactions, and implementing operational improvements[38](index=38&type=chunk)[43](index=43&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines key accounting policies, including revenue recognition, property, plant and equipment, and stock-based compensation - Revenue is recognized under ASC 606, with distinct performance obligations identified for digital colocation, energy management, digital assets mining, and equipment sales[47](index=47&type=chunk)[48](index=48&type=chunk) - Digital colocation revenue is recognized over time as customers consume benefits, with variable consideration recognized when invoiced[49](index=49&type=chunk)[50](index=50&type=chunk) - Energy management revenue is generated by adapting power usage to grid needs, recognized over the service period based on estimated curtailment or energy available for sale[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Digital assets mining revenue is recognized when digital assets are received, measured at fair market value based on exchange prices[54](index=54&type=chunk)[55](index=55&type=chunk) - The Power Supply Agreement (PSA) for the Midland facility is classified as a Level 3 derivative asset due to significant unobservable inputs in its valuation, with changes in fair value recognized in the statements of operations[67](index=67&type=chunk)[68](index=68&type=chunk) - The company operates as one operating segment, with net income used by the CODM for resource allocation and performance assessment[70](index=70&type=chunk)[71](index=71&type=chunk) - The company adopted ASU 2023-08 on January 1, 2025, for accounting and disclosure of crypto assets, which did not have a material impact due to minimal holding periods for bitcoin[73](index=73&type=chunk) [NOTE 3 – AUSTRALIAN SUBSIDIARIES DECONSOLIDATION](index=18&type=section&id=NOTE%203%20%E2%80%93%20AUSTRALIAN%20SUBSIDIARIES%20DECONSOLIDATION) Mawson deconsolidated its Australian subsidiary, MIG No.1, on March 19, 2024, due to insolvency, resulting in an **$11.9 million** loss - MIG No.1, an Australian entity, was placed into Australian court-appointed liquidation on March 19, 2024, due to insolvency, leading to its deconsolidation from the Company's financial statements[75](index=75&type=chunk) - The deconsolidation resulted in a loss of **$11.9 million** recorded in the consolidated statement of operations[75](index=75&type=chunk) - The Company is a guarantor of the Marshall Loan, which matured in February 2024 with an outstanding balance of **$11.3 million** as of June 30, 2025, and is secured by MIG No.1's assets[77](index=77&type=chunk)[88](index=88&type=chunk) [NOTE 4 – BASIC AND DILUTED NET LOSS PER SHARE](index=18&type=section&id=NOTE%204%20%E2%80%93%20BASIC%20AND%20DILUTED%20NET%20LOSS%20PER%20SHARE) Basic and diluted net loss per share calculations excluded anti-dilutive securities for June 30, 2025, and 2024 Anti-Dilutive Securities | Security Type | As of June 30, 2025 | As of June 30, 2024 | | :-------------------------------- | :------------------ | :------------------ | | Warrants to purchase Common Stock | 4,480,839 | 4,904,016 | | Options to purchase Common Stock | 3,500,000 | 1,750,417 | | RSUs under management equity plan | 12,161,628 | 7,337,651 | | Total Anti-Dilutive Securities | 20,142,467 | 13,992,084 | [NOTE 5 – LEASES](index=19&type=section&id=NOTE%205%20%E2%80%93%20LEASES) Lease costs include operating and finance charges; as of June 30, 2025, total undiscounted operating lease obligations were **$3.6 million** Lease Cost | Lease Cost (Three Months Ended June 30) | 2025 | 2024 | | :-------------------------------------- | :--------- | :--------- | | Operating lease charges | $418,457 | $393,314 | | Finance lease amortization | $102,797 | $39,695 | | Finance lease interest | $15,201 | $10,191 | | Lease Cost (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------------- | :--------- | :--------- | | Operating lease charges | $863,892 | $791,208 | | Finance lease amortization | $205,594 | $47,838 | | Finance lease interest | $33,275 | $11,698 | Lease Liabilities | Lease Liabilities (June 30, 2025) | Operating Leases | Finance Leases | | :-------------------------------------- | :--------------- | :------------- | | Total undiscounted lease obligations | $3,630,775 | $422,854 | | Total present value of lease liabilities| $3,100,674 | $393,160 | | Current portion of lease liabilities | $1,281,944 | $388,447 | | Non-current lease liabilities | $1,818,730 | $4,713 | [NOTE 6 – PROPERTY, PLANT AND EQUIPMENT](index=20&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) PP&E, net, decreased from **$28.1 million** (Dec 2024) to **$25.1 million** (June 2025) due to depreciation Property, Plant and Equipment | PP&E Category | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Total Cost | $121,287,108 | $121,232,475 | | Less: Accumulated depreciation| $(96,155,092) | $(93,161,060) | | PP&E, net | $25,132,016 | $28,071,415 | Depreciation & Amortization Expense | Depreciation & Amortization | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | | Expense | $1.5 million | $4.6 million | | Depreciation & Amortization | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | | Expense | $3.0 million | $12.6 million | - The lower depreciation and amortization expense is attributed to the liquidation and deconsolidation of MIG No. 1 and an increased number of digital asset mining hardware being fully depreciated in prior periods[181](index=181&type=chunk) [NOTE 7 – INCOME TAXES](index=20&type=section&id=NOTE%207%20%E2%80%93%20INCOME%20TAXES) Income tax benefit was **0.22%** for Q2 2025 (vs. **-22.28%** in 2024), with H1 2025 expense at **-1.12%** Effective Income Tax Rate | Effective Income Tax Rate | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Rate | 0.22% | (22.28)% | | Effective Income Tax Rate | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Rate | (1.12)% | (6.12)% | - Management has concluded that it is more likely than not that the Company will not realize the benefits of the net deferred tax assets as of June 30, 2025, leading to a valuation allowance[84](index=84&type=chunk) [NOTE 8 – LOANS](index=21&type=section&id=NOTE%208%20%E2%80%93%20LOANS) The company has several outstanding loans, including Marshall (**$11.3 million**), W Capital (**$1.5 million**), and Celsius (**$10.2 million**) - Marshall Loan: **$11.3 million** outstanding as of June 30, 2025, matured February 2024, **12%** interest (plus **500bps** overdue rate), no principal or interest payments since May 2023. Company is a guarantor[88](index=88&type=chunk) - W Capital Loan: AUD **$2.3 million** (USD **$1.5 million**) drawn down as of June 30, 2025, expired March 2023, **12%** interest (plus **800bps** overdue rate). Company is a guarantor[89](index=89&type=chunk) - Celsius Promissory Note: **$10.2 million** outstanding as of June 30, 2025, matured August 2023, **12%** interest (plus **200bps** overdue rate). Luna Squares (subsidiary) is required to amortize at **15%** per quarter[90](index=90&type=chunk) - Convertible Notes: **$0.1 million** outstanding as of June 30, 2025, matured July 2023, relates to accrued interest after principal repayment. Company is a defendant in a civil suit for unpaid interest[91](index=91&type=chunk) [NOTE 9 – COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=NOTE%209%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in multiple legal disputes, including a Chapter 11 petition and arbitration with Celsius - Marshall Loan and W Capital Loan: Australian entities Marshall and W Capital, along with Rayra, filed an involuntary Chapter 11 petition against the Company, claiming AUD**$13.7 million** (approx. USD**$8.9 million**) in debts. The Company disputes these claims and alleges bad faith[96](index=96&type=chunk)[97](index=97&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Celsius Promissory Note and Digital Colocation Agreement: An arbitrator granted Celsius monetary damages of **$8.1 million** plus interest and attorney fees against Luna Squares, with Celsius also seeking an award against Mawson under a Corporate Guarantee. Mediation is ongoing for a global resolution[106](index=106&type=chunk)[107](index=107&type=chunk) - Consensus Colocation Agreement: CTG filed an arbitration demand for damages after Mawson redirected its miners due to a fee dispute. An order of attachment for **$1.3 million** was granted against Mawson Hosting, LLC[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The Company and its subsidiaries have not fulfilled specific payment obligations related to the Marshall Loan, W Capital Loan, and Celsius Promissory Note, potentially leading to creditors expediting repayment, legal action, or collateral measures[108](index=108&type=chunk) [NOTE 10 – STOCKHOLDERS' EQUITY](index=27&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) Stockholders' equity details common share issuance from RSU settlements, stock-based compensation, and the 2024 Omnibus Equity Plan - During the six months ended June 30, 2025, **2,039,756** shares of Common Stock were issued from vested and outstanding RSUs[117](index=117&type=chunk) - The 2024 Omnibus Equity Plan, approved by stockholders, provides **10,000,000** initial shares for grant and replaced the 2018 and 2021 plans[119](index=119&type=chunk) Stock-Based Compensation | Stock-Based Compensation (Three Months Ended June 30) | 2025 | 2024 | | :---------------------------------------------------- | :--------- | :---------- | | Performance-based restricted stock awards | $0 | $20,173 | | Service-based restricted stock awards | $978,261 | $854,866 | | Option expense | $0 | $178,209 | | Total stock-based compensation | $978,261 | $1,053,248 | | Stock-Based Compensation (Six Months Ended June 30) | 2025 | 2024 | | :---------------------------------------------------- | :--------- | :---------- | | Performance-based restricted stock awards | $0 | $76,155 | | Service-based restricted stock awards | $3,078,765 | $7,035,394 | | Option expense | $0 | $(1,156,818)| | Total stock-based compensation | $3,078,765 | $5,954,731 | - As of June 30, 2025, there was approximately **$9.7 million** of unrecognized compensation cost related to service-based restricted stock awards, expected to be recognized over approximately two years[125](index=125&type=chunk) [NOTE 11 – SUBSEQUENT EVENTS](index=29&type=section&id=NOTE%2011%20%E2%80%93%20SUBSEQUENT%20EVENTS) Subsequent events include Nasdaq delisting notices, CEO termination and lawsuit, and the enactment of the OBBBA - Nasdaq issued delisting notices on July 24, 2025 (MVLS Rule) and August 6, 2025 (Bid Price Rule) for non-compliance. The Company requested a hearing to seek an extension[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - Rahul Mewawalla's employment as CEO and President was terminated for 'Cause' on July 8, 2025, leading to the forfeiture of **4,548,512** unvested RSUs and a lawsuit filed against him for alleged breach of fiduciary duties and fraud[136](index=136&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk) - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law on July 4, 2025, introducing corporate tax changes (e.g., bonus depreciation, R&E expensing). The Company is assessing its financial impact for Q3 2025[140](index=140&type=chunk)[141](index=141&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and operational results for Q2 and H1 2025 [Company Overview](index=34&type=section&id=Company%20Overview) Mawson is a technology company focused on digital infrastructure for AI, HPC, and digital assets, with an energy management business - Mawson is a technology company focused on digital infrastructure platforms for enterprise customers and its own purposes, supporting AI, HPC, and digital assets applications[151](index=151&type=chunk)[152](index=152&type=chunk) - The company also has an energy management business that generates revenue by adapting power usage to the real-time needs of the power grid[152](index=152&type=chunk) - Current operational capacity is approximately **129 MW**, with an additional **24 MW** under development, all located in the PJM Energy Market in the United States, prioritizing carbon-free energy sources[153](index=153&type=chunk)[154](index=154&type=chunk) [Results of Operations – Three months ended June 30, 2025 compared to the three months ended June 30, 2024](index=34&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024) Q2 2025 total revenues decreased **27.3%** to **$9.5 million**, while net loss improved **16.6%** Revenue and Net Loss Comparison (Q2) | Revenue Category | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :--------------------------- | :---------- | :---------- | :--------- | :--------- | | Digital colocation revenue | 3,660,298 | 8,131,439 | (4,471,141)| -55.0% | | Energy management revenue | 5,130,712 | 1,732,596 | 3,398,116 | 196.1% | | Digital assets mining revenue| 742,173 | 3,248,084 | (2,505,911)| -77.1% | | Total revenues | 9,533,183 | 13,112,119 | (3,578,936)| -27.3% | | Net Loss | (8,021,433) | (9,618,693) | 1,597,260 | -16.6% | - Digital colocation revenue decreased due to a decline in both the number and size of customer contracts[156](index=156&type=chunk) - Energy management revenue increased significantly due to enhanced programs, higher energy prices, and increased demand, leading to greater participation in energy programs[157](index=157&type=chunk) - Digital assets mining revenue decreased due to the April 2024 halving event and a higher global network difficulty rate, resulting in lower bitcoin production[158](index=158&type=chunk) - Selling, general and administrative expenses increased by **$2.3 million**, primarily due to higher legal and litigation-related expenses and employee compensation[163](index=163&type=chunk) - Depreciation and amortization decreased by **$3.1 million**, mainly because more digital asset mining hardware was fully depreciated in prior periods[164](index=164&type=chunk) [Results of Operations – Six months ended June 30, 2025 compared to the six months ended June 30, 2024](index=37&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024) H1 2025 total revenues decreased **26.8%** to **$23.3 million**, while net loss significantly improved **71.7%** Revenue and Net Loss Comparison (H1) | Revenue Category | H1 2025 ($) | H1 2024 ($) | Change ($) | Change (%) | | :--------------------------- | :------------ | :------------ | :--------- | :--------- | | Digital colocation revenue | 14,089,171 | 16,365,480 | (2,276,309)| -13.9% | | Energy management revenue | 8,195,587 | 4,205,101 | 3,990,486 | 94.9% | | Digital assets mining revenue| 1,062,798 | 10,762,847 | (9,700,049)| -89.9% | | Equipment sales | 0 | 550,000 | (550,000) | -100.0% | | Total revenues | 23,347,556 | 31,883,428 | (8,535,872)| -26.8% | | Net Loss | (8,332,296) | (29,587,978) | 21,255,682 | -71.7% | - Digital colocation revenue decreased due to a decline in both the number of customers and the size of contracts[172](index=172&type=chunk) - Energy management revenue increased due to enhanced energy management programs, higher energy prices, and demand[173](index=173&type=chunk) - Digital assets mining revenue decreased significantly due to the April 2024 halving event and a higher global network difficulty rate[174](index=174&type=chunk) - Selling, general and administrative expenses increased by **$4.6 million**, primarily due to increased legal and litigation-related expenses, employee compensation, and the write-off of uncollectable customer accounts[179](index=179&type=chunk) - Depreciation and amortization decreased by **$9.6 million**, mainly due to the liquidation and deconsolidation of MIG No. 1 and more digital asset mining hardware being fully depreciated[181](index=181&type=chunk) - The company recognized a **$1.9 million** gain on the fair value of derivative assets in 2025, compared to a **$0.09 million** loss in 2024, due to higher energy price volatility[182](index=182&type=chunk) - A deconsolidation loss of **$12.0 million** was recognized in 2024 due to the liquidation of three Australian subsidiaries, which did not recur in 2025[185](index=185&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is constrained, with cash at **$3.2 million** and negative working capital at **$40.3 million**, needing additional capital - As of June 30, 2025, cash and cash equivalents were **$3.2 million**, down from **$6.1 million** at December 31, 2024[192](index=192&type=chunk) - The company had negative working capital of **$40.3 million** as of June 30, 2025, an increase from **$35.9 million** at December 31, 2024[192](index=192&type=chunk) - Outstanding short-term loans totaled **$23.1 million** as of June 30, 2025, all of which are overdue for repayment and include the Celsius Promissory Note, W Capital Loan, Secured Convertible Promissory Notes, and Marshall Loan[192](index=192&type=chunk) - Net cash used in operating activities was **$2.6 million** for the six months ended June 30, 2025, a significant decrease from **$4.3 million** provided in the prior year[193](index=193&type=chunk)[194](index=194&type=chunk) - The company needs to raise substantial additional capital to continue operations, execute its business strategy, and meet debt service obligations, with potential sources including future operations, existing funds, external debt, and equity issuances[190](index=190&type=chunk)[191](index=191&type=chunk)[205](index=205&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, was **$(0.87) million** for H1 2025, a significant decrease from prior year - Adjusted EBITDA is defined as net loss plus income tax, depreciation and amortization, stock-based compensation, gain/loss on foreign currency, other non-operating income and expenses, change in fair value of derivative asset, provision for doubtful accounts, net of recoveries, and loss on deconsolidation[208](index=208&type=chunk) Non-GAAP Adjusted EBITDA | Metric (Non-GAAP Adjusted EBITDA) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(8,021,433) | $(9,618,693) | | Adjustments | 6,029,755 | 10,294,013 | | EBITDA (non-GAAP) | $(1,991,678) | $675,320 | | Metric (Non-GAAP Adjusted EBITDA) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(8,332,296) | $(29,587,978) | | Adjustments | 7,463,895 | 33,784,839 | | EBITDA (non-GAAP) | $(868,401) | $4,196,861 | [Critical Accounting Estimates](index=43&type=section&id=Critical%20Accounting%20Estimates) No material changes to critical accounting policies and estimates, including going concern assumptions, were reported - No material changes to critical accounting policies and estimates, including going concern assumptions, useful lives of fixed assets, realization of long-lived assets, unrealized tax positions, valuing the derivative asset, and contingent obligations[46](index=46&type=chunk)[211](index=211&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) As a smaller reporting company, Mawson has elected not to provide quantitative and qualitative disclosures about market risks - The Company, as a smaller reporting company, has elected not to provide quantitative and qualitative disclosures about market risks[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses, with remediation ongoing [Evaluation of disclosure controls and procedures](index=44&type=section&id=Evaluation%20of%20disclosure%20controls%20and%20procedures) Disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses - Disclosure controls and procedures were not effective at the reasonable assurance level as of June 30, 2025, due to material weaknesses in internal control over financial reporting[214](index=214&type=chunk) - Identified material weaknesses include inadequate segregation of duties and staff turnover, control deficiencies in the financial statement close and reporting process, issues with IT general controls, and insufficient resources to validate data from third parties and perform physical asset verification[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - Despite these weaknesses, management believes the consolidated condensed financial statements fairly present the financial condition, results of operations, and cash flows[222](index=222&type=chunk) [Remediation](index=45&type=section&id=Remediation) Management is progressing remediation for material weaknesses through risk assessment and policy implementation - Remediation plans include performing a risk assessment, developing and implementing formal policies and procedures, improving processes and control activities (including segregation of duties), and hiring additional finance and other personnel[223](index=223&type=chunk) - Material weaknesses will not be considered remediated until controls have operated for a sufficient period and their effectiveness has been tested and concluded upon[224](index=224&type=chunk) [Changes in internal control over financial reporting](index=45&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) No other material changes in internal control over financial reporting occurred during the fiscal quarter - No other material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter, apart from the described remedial measures[226](index=226&type=chunk) [Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting](index=45&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures%20and%20Internal%20Control%20over%20Financial%20Reporting) Controls and procedures provide only reasonable assurance due to inherent limitations and resource constraints - Controls and procedures, no matter how well designed, can only provide reasonable assurance of achieving desired control objectives due to inherent limitations and resource constraints[227](index=227&type=chunk) Part II – Other Information This section provides other required information, including legal proceedings, risk factors, equity sales, and defaults [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal disputes, including the Mewawalla Action against the former CEO - The Company and its subsidiaries are currently involved in disputes that may lead to litigation, with uncertain outcomes that could materially adversely affect the business[229](index=229&type=chunk) - On July 8, 2025, the Company filed the Mewawalla Action against former CEO Rahul Mewawalla, seeking damages for alleged breach of fiduciary duties and fraud[230](index=230&type=chunk) [Item 1A. Risk Factors](index=46&type=page&id=Item%201A.%20Risk%20Factors) This section updates primary business and securities risks, highlighting management turnover and Nasdaq non-compliance [Risks Related to Our Business](index=46&type=section&id=Risks%20Related%20to%20Our%20Business) The company faces significant risks due to recent management turnover, including CEO appointment and termination - Recent management turnover, including the appointment of an Interim CEO and the departure of the former CEO, creates uncertainties and could adversely affect the business[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Risks Related to our Capital Stock](index=47&type=section&id=Risks%20Related%20to%20our%20Capital%20Stock) The company is non-compliant with Nasdaq's MVLS and Bid Price Rules, facing potential delisting - The Company is not in compliance with Nasdaq's Market Value of Listed Securities (MVLS) Rule (**$35.0 million** minimum) and Bid Price Rule (**$1.00** per share minimum)[237](index=237&type=chunk)[238](index=238&type=chunk) - Delisting notices were received on July 24, 2025 (MVLS) and August 6, 2025 (Bid Price), and the Company has requested a hearing to seek an extension[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Failure to regain compliance could lead to delisting, negatively impacting stock liquidity, market price, ability to raise equity financing, and overall financial condition[242](index=242&type=chunk)[243](index=243&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds occurred during the fiscal quarter ended June 30, 2025 - No unregistered sales of equity securities or use of proceeds occurred during the fiscal quarter ended June 30, 2025[245](index=245&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company is in default on several senior securities, including Celsius, Marshall, and W Capital loans - Celsius Promissory Note: Luna Squares is in default on a **$10.2 million** loan from Celsius Mining LLC, which matured on August 23, 2023[246](index=246&type=chunk) - Marshall Loan: MIG No. 1 (an Australian entity, deconsolidated) is in default on an **$11.3 million** loan, which matured in February 2024, with no principal or interest payments since May 2023. The loan is secured by **5,372** miners and **8** MDCs[247](index=247&type=chunk)[248](index=248&type=chunk) - W Capital Loan: The Company is a guarantor for the W Capital Loan, with AUD **$2.3 million** (USD **$1.5 million**) drawn down, which expired in March 2023 and is in default[249](index=249&type=chunk) - Convertible Note: The Company has a Secured Convertible Promissory Note with W Capital Advisors Pty Ltd with an outstanding balance of **$0.1 million** (interest only), which matured in July 2023. The principal balance of **$0.5 million** was repaid in 2024[250](index=250&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Mawson Infrastructure Group Inc. - This item is not applicable[253](index=253&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section reports no insider trading arrangements and details for the 2025 Annual Meeting of Stockholders - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[254](index=254&type=chunk) - The 2025 Annual Meeting of Stockholders is planned for October 15, 2025, with a record date of August 21, 2025[255](index=255&type=chunk) - New deadlines for stockholder proposals are August 25, 2025 (for inclusion in proxy materials) and August 4, 2025 (for proposals outside Rule 14a-8, including director nominations)[256](index=256&type=chunk)[257](index=257&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - The exhibits include various corporate governance documents (Certificates of Incorporation, Bylaws), certifications under Sarbanes-Oxley Act (Sections 302 and 1350), and Inline XBRL formatted financial data[259](index=259&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report was signed on August 14, 2025, by Kaliste Saloom (Interim CEO) and William Regan (CFO) - The report was signed on August 14, 2025, by Kaliste Saloom (Interim Chief Executive Officer, General Counsel and Corporate Secretary) and William Regan (Chief Financial Officer)[264](index=264&type=chunk)

Core Insights - Mawson Infrastructure Group Inc. reported a 27% year-over-year growth in digital colocation revenue, reaching $10.4 million, and a 24% year-over-year growth in energy management revenue, totaling $3.1 million for Q1 2025 [6][2] - The company executed a new digital colocation customer agreement for approximately 64 MW of compute capacity, which is expected to drive long-term growth in its digital colocation services [2][6] - Mawson continues to focus on enhancing its offerings in artificial intelligence, high-performance computing, and digital assets while prioritizing carbon-free energy sources, including nuclear power [2][5] Financial Performance - Digital colocation revenue increased by 27% year-over-year to $10.4 million in Q1 2025 [6] - Energy management revenue rose by 24% year-over-year to $3.1 million in Q1 2025 [6] - The company achieved a positive income from operations of $0.6 million in Q1 2025, a significant improvement from a loss of $7.7 million in Q1 2024 [6] Operational Highlights - Mawson's total current operational capacity stands at 129 MW, with an additional 24 MW under development, which will increase total operating capacity to 153 MW upon completion [6] - The new customer agreement involves providing digital colocation services for about 17,453 latest-generation ASICs [6] - The company is strategically positioned in the PJM market, one of the largest competitive wholesale electricity markets in North America [6] Future Outlook - Mawson's management expressed confidence in the company's strategic, operational, technological, and financial execution, indicating a strong position to meet the compute capacity needs of enterprise customers [2] - Upcoming conferences and events are planned for further engagement and visibility in the industry [4]

[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Mawson Infrastructure Group Inc.'s unaudited consolidated financial statements for Q1 2025 are presented, detailing financial position, performance, cash flows, and significant accounting notes on operations, loans, and legal matters [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) | Metric | March 31, 2025 | December 31, 2024 | Change | | :----- | :------------- | :---------------- | :----- | | Total assets | $57,863,935 | $61,440,495 | -$3,576,560 | | Total liabilities | $59,307,961 | $64,679,332 | -$5,371,371 | | Total stockholders' deficit | $(1,444,026) | $(3,238,837) | +$1,794,811 | | Cash and cash equivalents | $5,469,661 | $6,089,837 | -$620,176 | | Trade and other receivables, net | $10,893,954 | $15,167,729 | -$4,273,775 | | Derivative asset | $6,944,557 | $2,884,984 | +$4,059,573 | | Trade and other payables | $33,521,524 | $39,398,160 | -$5,876,636 | | Current portion of long-term loans | $21,763,976 | $20,919,754 | +$844,222 | [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Total revenues | $13,814,373 | $18,771,309 | -$4,956,936 | | Digital colocation revenue | $10,428,873 | $8,234,041 | +$2,194,832 | | Energy management revenue | $3,064,875 | $2,472,505 | +$592,370 | | Digital assets mining revenue | $320,625 | $7,514,763 | -$7,194,138 | | Gross profit | $5,923,930 | $6,985,141 | -$1,061,211 | | Income / (Loss) from operations | $576,678 | $(7,693,190) | +$8,269,868 | | Net Loss | $(310,863) | $(19,969,285) | +$19,658,422 | | Net Loss per share, basic and diluted | $(0.02) | $(1.19) | +$1.17 | - **Digital assets mining revenue decreased significantly** due to the April 2024 halving event and higher global network difficulty rate, alongside a strategic reallocation of capacity to digital colocation services[147](index=147&type=chunk) - **Operating expenses decreased** due to lower **stock-based compensation** and **depreciation/amortization**, partially offset by increased selling, general, and administrative expenses[153](index=153&type=chunk)[154](index=154&type=chunk)[151](index=151&type=chunk) [Consolidated Condensed Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Loss) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Net Loss | $(310,863) | $(19,969,285) | +$19,658,422 | | Foreign currency translation adjustment | $5,170 | $(482,143) | +$487,313 | | Comprehensive loss | $(305,693) | $(20,451,428) | +$20,145,735 | [Consolidated Condensed Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Consolidated%20Condensed%20Statements%27%20Equity%20(Deficit)) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :----- | :------------------- | :---------------------- | | Common Stock () | 18,792,360 | 18,792,360 | | Common Stock ($) | $18,792 | $18,792 | | Additional Paid-in Capital | $227,442,416 | $225,341,912 | | Accumulated Other Comprehensive Income | $203,795 | $198,625 | | Accumulated Deficit | $(229,109,029) | $(228,798,166) | | Total Equity (Deficit) | $(1,444,026) | $(3,238,837) | - Stock-based compensation expense for RSUs and stock options contributed **$2,100,504** to additional paid-in capital in Q1 2025[17](index=17&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Net cash (used in) provided by operating activities | $(510,385) | $1,875,647 | -$2,386,032 | | Net cash (used in) provided by investing activities | $(6,496) | $530,640 | -$537,136 | | Net cash used in financing activities | $(103,295) | $(509,544) | +$406,249 | | Net (decrease) increase in cash and cash equivalents | $(620,176) | $1,896,743 | -$2,516,919 | | Cash and cash equivalents at end of period | $5,469,661 | $6,373,082 | -$903,421 | - Operating cash flow shifted from a positive **$1.9 million** in Q1 2024 to a negative **$0.5 million** in Q1 2025, primarily due to changes in operating assets and liabilities, despite a reduced net loss[23](index=23&type=chunk)[165](index=165&type=chunk) [NOTE 1 – GENERAL](index=9&type=section&id=NOTE%201%20%E2%80%93%20GENERAL) - Mawson operates digital infrastructure platforms for AI, HPC, and digital assets, and has an energy management business, prioritizing carbon-free energy sources[26](index=26&type=chunk)[27](index=27&type=chunk) - The company manages **129 MW** of current capacity with an additional **24 MW** under development in the PJM Energy Market in the US, having exited the Australian market[28](index=28&type=chunk)[29](index=29&type=chunk) - Substantial doubt exists about the company's ability to continue as a **going concern** due to a **$0.3 million net loss**, **$36.7 million negative working capital**, **$1.4 million negative net assets**, and **$229.1 million accumulated deficit** as of March 31, 2025[34](index=34&type=chunk)[38](index=38&type=chunk) - Mitigation strategies include expanding digital infrastructure for AI/HPC, securing new colocation agreements, engaging with capital providers for equity/debt, considering ATM transactions, and pursuing operational improvements[43](index=43&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Revenue recognition follows ASC 606, with distinct performance obligations for digital colocation (recognized over time), energy management (recognized over service period), and digital assets mining (recognized when digital asset is received at fair market value)[47](index=47&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Property, plant and equipment are depreciated using straight-line or declining balance methods over estimated useful lives (e.g., miners over **2 years**, modular data centers over **5 years**)[58](index=58&type=chunk) - A power supply agreement (PSA) is classified as a **Level 3 derivative asset**, measured at fair value with changes recognized in operations, due to significant unobservable inputs in its valuation model[66](index=66&type=chunk)[67](index=67&type=chunk) - The company operates as one operating segment, using net income for resource allocation and performance assessment[70](index=70&type=chunk) - Adopted ASU 2023-08 (Crypto Assets) on January 1, 2025, but expects no material impact due to minimal holding periods for bitcoin[72](index=72&type=chunk) [NOTE 3 – AUSTRALIAN SUBSIDIARIES DECONSOLIDATION](index=18&type=section&id=NOTE%203%20%E2%80%93%20AUSTRALIAN%20SUBSIDIARIES%20DECONSOLIDATION) - MIG No.1, an Australian entity, was deconsolidated on March 19, 2024, following its placement into Australian court-appointed liquidation due to insolvency[76](index=76&type=chunk) - The deconsolidation resulted in a **$12.4 million loss** recorded in the consolidated statement of operations[76](index=76&type=chunk) - The company currently operates only in the United States and has no operating sites or assets in Australia[75](index=75&type=chunk)[103](index=103&type=chunk) [NOTE 4 – BASIC AND DILUTED NET LOSS PER SHARE](index=18&type=section&id=NOTE%204%20%E2%80%93%20BASIC%20AND%20DILUTED%20NET%20LOSS%20PER%20SHARE) | Securities Potentially Dilutive | As of March 31, 2025 | As of March 31, 2024 | | :------------------------------ | :------------------- | :------------------- | | Warrants to purchase Common Stock | 4,480,839 | 4,904,016 | | Options to purchase Common Stock | 3,500,417 | 1,750,417 | | RSUs issued under a management equity plan | 15,413,542 | 8,823,321 | | Total | 23,394,798 | 15,477,754 | - Dilutive common stock equivalents were excluded from diluted EPS calculation because their inclusion would be anti-dilutive due to the company's net loss[79](index=79&type=chunk) [NOTE 5 – LEASES](index=19&type=section&id=NOTE%205%20%E2%80%93%20LEASES) | Lease Costs (Q1) | 2025 | 2024 | | :--------------- | :--- | :--- | | Operating lease charges | $445,435 | $397,894 | | Amortization of right-of-use assets | $102,797 | $8,143 | | Interest on finance lease obligations | $18,074 | $1,507 | | Lease Liabilities (as of March 31, 2025) | Operating leases | Finance leases | | :--------------------------------------- | :--------------- | :------------- | | Total undiscounted lease obligations | $4,182,504 | $526,148 | | Total present value of lease liabilities | $3,535,259 | $481,252 | | Current portion of lease liabilities | $1,283,391 | $368,395 | | Non-current lease liabilities | $2,251,867 | $112,858 | [NOTE 6 – PROPERTY, PLANT AND EQUIPMENT](index=20&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) | PP&E (Net) | March 31, 2025 | December 31, 2024 | | :--------- | :------------- | :---------------- | | Total | $121,238,971 | $121,232,475 | | Less: Accumulated depreciation | $(94,688,973) | $(93,161,060) | | Property, plant and equipment, net | $26,549,998 | $28,071,415 | - Depreciation and amortization expense for Q1 2025 was **$1.5 million**, significantly lower than **$8.0 million** in Q1 2024, due to an increased number of digital asset mining hardware being fully depreciated in prior periods[84](index=84&type=chunk)[154](index=154&type=chunk) [NOTE 7 – INCOME TAXES](index=20&type=section&id=NOTE%207%20%E2%80%93%20INCOME%20TAXES) | Effective Income Tax Rate | Q1 2025 | Q1 2024 | | :------------------------ | :------ | :------ | | Effective income tax rate | (54.80)% | 0.30% | - A valuation allowance has been established as management believes it is more likely than not that deferred tax assets will not be recovered[85](index=85&type=chunk) [NOTE 8 – LOANS](index=21&type=section&id=NOTE%208%20%E2%80%93%20LOANS) - The Marshall Loan, with an outstanding balance of **$10.4 million** as of March 31, 2025, matured in February 2024 and has had no principal or interest payments since May 2023, classifying it as a current liability and in **default**[89](index=89&type=chunk) - The W Capital Loan, with an outstanding balance of **AUD $2.2 million (USD $1.3 million)** as of March 31, 2025, expired in March 2023 and is in **default**[90](index=90&type=chunk) - The Celsius Promissory Note, with an outstanding balance of **$9.9 million** as of March 31, 2025, matured in August 2023 and is claimed by Celsius to be in **default**[91](index=91&type=chunk) - Convertible Notes have an outstanding interest balance of **$0.1 million** as of March 31, 2025, with the principal of **$0.5 million** repaid in 2024, but related litigation for unpaid interest exists[92](index=92&type=chunk) [NOTE 9 – COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=NOTE%209%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) - The company is involved in significant litigation regarding the Marshall Loan and W Capital Loan, with an involuntary Chapter 11 petition filed by these creditors in the US and an Australian court order to wind up the company[97](index=97&type=chunk)[98](index=98&type=chunk) - The company is disputing the involuntary Chapter 11 petition and the creditors' debt claims, believing these actions are a bad faith attempt to gain leverage[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - An arbitrator issued a Partial Final Award against Luna Squares for **$8.1 million** plus interest and attorney fees related to the Celsius Promissory Note, and Celsius obtained an award against Mawson under a Corporate Guarantee, though execution is stayed[107](index=107&type=chunk) - The company is also involved in civil suits with Blockware Solutions, CleanSpark, and Vertua Property, and an arbitration demand from Consensus Colocation PA LLC[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) [NOTE 10 – STOCKHOLDERS' EQUITY](index=25&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) - As of March 31, 2025, there were **18,792,360 shares** of common stock outstanding and **4,480,839 stock warrants** outstanding with a weighted average exercise price of **$4.33**[17](index=17&type=chunk)[116](index=116&type=chunk) - The 2024 Omnibus Equity Plan, approved by stockholders, provides **10,000,000 initial shares** for grant, with **11,099,768 shares** allocated and **6,400,232 shares** available as of March 31, 2025[117](index=117&type=chunk)[118](index=118&type=chunk) | Stock-Based Compensation Expense | Q1 2025 | Q1 2024 | Change (YoY) | | :------------------------------- | :------ | :------ | :----------- | | Performance-based restricted stock awards | $0 | $55,983 | -$55,983 | | Service-based restricted stock awards | $2,100,504 | $6,180,528 | -$4,080,024 | | Option expense | $0 | $(1,335,027) | +$1,335,027 | | Total stock-based compensation | $2,100,504 | $4,901,484 | -$2,800,980 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Mawson's Q1 2025 financial condition and results, analyzing revenues, costs, expenses, liquidity, and capital resources, noting reduced net loss despite ongoing challenges [Company Overview](index=31&type=section&id=Company%20Overview) - The company develops and operates digital infrastructure platforms for AI, HPC, digital assets, and other computing applications, and also has an energy management business[139](index=139&type=chunk) - Mawson prioritizes carbon-free energy sources and manages approximately **129 MW** of current capacity with **24 MW** under development in the PJM Energy Market in the US[140](index=140&type=chunk)[141](index=141&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) - Mawson Hosting LLC signed a Master Colocation Agreement with Cantaloupe Digital LLC (Canaan Inc. subsidiary) on March 21, 2025, to provide **~64 MW** of colocation capacity for an initial three-year term[142](index=142&type=chunk) [Results of Operations – Three months Ended March 31, 2025 compared to the three months ended March 31, 2024](index=32&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20months%20Ended%20March%2031%2C%202025%20compared%20to%20the%20three%20months%20ended%20March%2031%2C%202024) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Total revenues | $13,814,373 | $18,771,309 | -$4,956,936 | | Cost of revenues (excluding depreciation) | $7,890,443 | $11,786,168 | -$3,895,725 | | Gross profit | $5,923,930 | $6,985,141 | -$1,061,211 | | Total operating expenses | $5,347,252 | $14,678,331 | -$9,331,079 | | Income / (Loss) from operations | $576,678 | $(7,693,190) | +$8,269,868 | | Total non-operating expense, net | $(777,432) | $(12,335,482) | +$11,558,050 | | Net Loss | $(310,863) | $(19,969,285) | +$19,658,422 | [Revenues](index=33&type=section&id=Revenues) | Revenue Stream | Q1 2025 | Q1 2024 | Change (YoY) | % Change (YoY) | | :------------- | :------ | :------ | :----------- | :------------- | | Digital colocation revenue | $10,428,873 | $8,234,041 | +$2,194,832 | +27% | | Energy management revenue | $3,064,875 | $2,472,505 | +$592,370 | +24% | | Digital assets mining revenue | $320,625 | $7,514,763 | -$7,194,138 | -96% | | Equipment sales | $0 | $550,000 | -$550,000 | -100% | | Total revenues | $13,814,373 | $18,771,309 | -$4,956,936 | -26% | - Digital colocation revenue increased by **27%** due to enhanced capabilities, more customers, and increased machine usage[145](index=145&type=chunk) - Digital assets mining revenue decreased by **$7.2 million (96%)** due to the April 2024 halving, higher global network difficulty, and reallocation of capacity to colocation services[147](index=147&type=chunk) [Cost of revenue](index=33&type=section&id=Cost%20of%20revenue) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Cost of revenues (excluding depreciation) | $7,890,443 | $11,786,168 | -$3,895,725 | - The decrease in cost of revenue was mainly due to lower power costs from reduced mining and co-location equipment operations[148](index=148&type=chunk) [Operating Expenses](index=33&type=section&id=Operating%20Expenses) | Operating Expense | Q1 2025 | Q1 2024 | Change (YoY) | | :---------------- | :------ | :------ | :----------- | | Selling, general and administrative | $5,778,408 | $3,463,923 | +$2,314,485 | | Stock based compensation | $2,100,504 | $4,901,484 | -$2,800,980 | | Depreciation and amortization | $1,527,913 | $7,999,076 | -$6,471,163 | | Change in fair value of derivative asset | $(4,059,573) | $(1,686,152) | -$2,373,421 | | Total operating expenses | $5,347,252 | $14,678,331 | -$9,331,079 | - Selling, general and administrative expenses increased by **$2.3 million** due to higher legal and litigation-related expenses, employee compensation, and provision for doubtful accounts[151](index=151&type=chunk) - Stock-based compensation decreased by **$2.8 million** due to a reduction in new long-term incentive issuances[153](index=153&type=chunk) - Depreciation and amortization decreased by **$6.5 million** as more digital asset mining hardware became fully depreciated[154](index=154&type=chunk) - A gain on the fair value of the derivative asset increased by **$2.4 million**, primarily due to an increase in forward market prices[155](index=155&type=chunk) [Non-operating income (expense)](index=34&type=section&id=Non-operating%20income%20(expense)) | Non-Operating Item | Q1 2025 | Q1 2024 | Change (YoY) | | :----------------- | :------ | :------ | :----------- | | Gain (loss) on foreign currency transactions | $(87,338) | $169,638 | -$256,976 | | Interest expense | $(784,865) | $(734,580) | -$50,285 | | Other income | $104,112 | $165,160 | -$61,048 | | Other expenses | $(9,341) | $(9,792) | +$451 | | Loss on deconsolidation | $0 | $(11,925,908) | +$11,925,908 | | Total non-operating expense, net | $(777,432) | $(12,335,482) | +$11,558,050 | - The absence of the **$11.9 million loss on deconsolidation** (from MIG No.1 in Q1 2024) was the primary driver for the improvement in non-operating expenses[144](index=144&type=chunk) - Interest expense increased by **$0.05 million** due to rising interest rates[156](index=156&type=chunk) - Foreign currency transactions shifted from a **$0.2 million gain** in Q1 2024 to a **$0.09 million loss** in Q1 2025 due to exchange rate movements[157](index=157&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2025, the company had **negative working capital of $36.7 million** and **$21.8 million** in overdue short-term loans[163](index=163&type=chunk)[161](index=161&type=chunk) - The company's cash and cash equivalents decreased from **$6.1 million** (Dec 31, 2024) to **$5.5 million** (March 31, 2025)[163](index=163&type=chunk) - Mawson entered into a Sales Agreement on December 13, 2024, to sell up to **$12 million** of common stock through an "at the market offering" program to enhance liquidity[160](index=160&type=chunk) - The company requires substantial additional capital to continue operations and meet debt obligations, with an inability to raise sufficient capital posing a material adverse effect[162](index=162&type=chunk) [Working Capital and Cash Flows](index=35&type=section&id=Working%20Capital%20and%20Cash%20Flows) | Metric | March 31, 2025 | December 31, 2024 | | :----- | :------------- | :---------------- | | Cash and cash equivalent balance | $5.5 million | $6.1 million | | Trade receivables balance | $10.9 million | $15.2 million | | Outstanding short-term loans | $21.8 million | $20.9 million | | Negative working capital | $36.7 million | $35.9 million | | Cash Flow Activity | Q1 2025 | Q1 2024 | | :----------------- | :------ | :------ | | Net cash (used in) provided by operating activities | $(510,385) | $1,875,647 | | Net cash (used in) provided by investing activities | $(6,496) | $530,640 | | Net cash used in financing activities | $(103,295) | $(509,544) | [Material Cash Requirements](index=36&type=section&id=Material%20Cash%20Requirements) - Marshall Loan: **$10.4 million** outstanding (as of March 31, 2025), matured Feb 2024, no payments since May 2023, in **default**[169](index=169&type=chunk) - W Capital Loan: **AUD $2.2 million (USD $1.3 million)** outstanding (as of March 31, 2025), expired March 2023, in **default**[170](index=170&type=chunk) - Celsius Promissory Note: **$9.9 million** outstanding (as of March 31, 2025), matured Aug 2023, in **default**[171](index=171&type=chunk) - Convertible Notes: **$0.1 million** outstanding interest (as of March 31, 2025), principal repaid in 2024, but related litigation for unpaid interest[172](index=172&type=chunk) [Financial condition](index=37&type=section&id=Financial%20condition) | Financial Metric | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Net current liabilities | $56.9 million | $61.9 million | | Negative net assets | $1.4 million | $3.2 million | | Accumulated deficit | $229.1 million | $228.8 million | | Cash position | $5.5 million | $6.1 million | - Net loss for Q1 2025 was **$0.3 million**, a **$19.7 million decrease** from **$20.0 million** in Q1 2024[174](index=174&type=chunk) - The company needs additional capital to address debt, competitive pressures, and business growth, and an inability to obtain financing could lead to adverse effects or bankruptcy[176](index=176&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) | Adjusted EBITDA Calculation | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Net loss | $(310,863) | $(19,969,285) | | Depreciation and amortization | $1,527,913 | $7,999,076 | | Stock based compensation | $2,100,504 | $4,901,484 | | (Gain) loss on foreign currency transactions | $87,338 | $(169,638) | | Other non-operating income | $(104,112) | $(165,160) | | Other non-operating expenses | $794,206 | $744,372 | | Change in fair value of derivative asset | $(4,059,573) | $(1,686,152) | | Income tax | $110,109 | $(59,387) | | Provision for doubtful accounts, net of recoveries | $977,755 | $0 | | Loss on deconsolidation | $0 | $11,925,908 | | **Adjusted EBITDA (non-GAAP)** | **$1,123,277** | **$3,521,218** | - Adjusted EBITDA for Q1 2025 was **$1.12 million**, a decrease from **$3.52 million** in Q1 2024[181](index=181&type=chunk) [Critical accounting estimates](index=39&type=section&id=Critical%20accounting%20estimates) - No material changes to critical accounting policies and estimates since the 2024 Form 10-K[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) As a smaller reporting company, Mawson Infrastructure Group Inc. has elected not to provide the disclosures required for quantitative and qualitative information about market risks - The company, as a smaller reporting company, has elected not to provide disclosures on quantitative and qualitative market risks[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses in internal control over financial reporting, including inadequate segregation of duties, control deficiencies in the financial statement close process, IT general controls, data validation from third parties, and fixed asset verification - Disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting[184](index=184&type=chunk) - Identified material weaknesses include inadequate segregation of duties, control deficiencies in the financial statement close and reporting process, IT general controls, data validation from third parties, and fixed asset verification[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - Remediation efforts are underway, focusing on risk assessment, formalizing policies, improving processes, and hiring additional finance personnel, but effectiveness testing is not yet concluded[193](index=193&type=chunk)[194](index=194&type=chunk) - Despite weaknesses, management believes the financial statements fairly present the company's financial condition, results of operations, and cash flows[192](index=192&type=chunk) - No other changes in internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect controls[196](index=196&type=chunk) [Part II – Other Information](index=41&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company and its subsidiaries are involved in various legal disputes and claims, the outcomes of which are uncertain and could materially adversely affect the business - The company is involved in various legal proceedings and claims, the outcomes of which are uncertain and could have a material adverse effect on its business[199](index=199&type=chunk) - Details of these legal matters are incorporated by reference from Note 9 – Commitments and Contingencies[199](index=199&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section highlights significant risks, focusing on the involuntary Chapter 11 petition and Australian winding-up order, which threaten the company's going concern ability, operations, and stock value - The company faces substantial risks from an involuntary Chapter 11 petition filed by creditors, which could lead to reorganization or liquidation, raising substantial doubt about its **going concern** ability[202](index=202&type=chunk)[203](index=203&type=chunk) - Operating under Chapter 11 could increase costs, divert management attention, impact liquidity, and potentially lead to delisting from Nasdaq and render common stock worthless[204](index=204&type=chunk)[208](index=208&type=chunk)[213](index=213&type=chunk) - An Australian court has ordered the winding up of the company under Australian law, which, if enforceable in the US, could pose similar risks to a Chapter 11 or 7 bankruptcy[233](index=233&type=chunk)[236](index=236&type=chunk)[238](index=238&type=chunk) - The company is vigorously opposing both the involuntary Chapter 11 petition and the Australian winding-up order, arguing bad faith by creditors and asserting defenses under US law[98](index=98&type=chunk)[101](index=101&type=chunk)[236](index=236&type=chunk) [Risks Associated with the Chapter 11 Involuntary Petition Filed Against Us](index=41&type=section&id=Risks%20Associated%20with%20the%20Chapter%2011%20Involuntary%20Petition%20Filed%20Against%20Us) - The involuntary Chapter 11 petition, if an order for relief is entered, could lead to reorganization or liquidation, raising substantial doubt about the company's ability to continue as a **going concern**[203](index=203&type=chunk) - Risks include increased legal and professional costs, impact on liquidity, potential delisting from Nasdaq, and the significant risk that common stockholders may receive no recovery and their stock could be worthless[204](index=204&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - The proceedings consume substantial management time and attention, potentially leading to employee attrition and adverse effects on business operations[213](index=213&type=chunk) - Inability to raise additional capital due to the petition could materially adversely impact the company[211](index=211&type=chunk) - If a reorganization plan is not confirmed, the company could be forced into Chapter 7 liquidation, making common stock worthless[215](index=215&type=chunk) [Risk Factors Involving Winding Up Proceedings Under Australian Law](index=47&type=section&id=Risk%20Factors%20Involving%20Winding%20Up%20Proceedings%20Under%20Australian%20Law) - An Australian court ordered the winding up of the company under Australian law on February 11, 2025, based on the company no longer carrying on business in Australia[233](index=233&type=chunk) - This order does not pose immediate risk as the company has no assets or operations in Australia and is protected by a US automatic stay from the involuntary Chapter 11 petition[236](index=236&type=chunk) - If the Australian order were made enforceable in the US, it would entail risks similar to a US Chapter 11 or 7 bankruptcy, potentially leading to liquidation and worthless common stock[238](index=238&type=chunk)[237](index=237&type=chunk) - Defending against these proceedings consumes significant management time and attention, potentially harming business operations and employee morale[239](index=239&type=chunk) [Other Risks](index=48&type=section&id=Other%20Risks) - Changes in business strategy or restructuring may increase costs, require asset write-downs, or disrupt relationships with workforce, suppliers, and customers[240](index=240&type=chunk) - The market price of common stock is volatile and may fluctuate significantly due to factors like investor perceptions of the involuntary petition, financial results, and industry prospects[222](index=222&type=chunk)[224](index=224&type=chunk) - The involuntary petition could adversely impact US subsidiary businesses and affiliates, potentially forcing them into insolvency proceedings[223](index=223&type=chunk) - An impairment of goodwill and other indefinite-lived intangible assets could materially impact results of operations and stock price[225](index=225&type=chunk) - The filing of the involuntary petition may constitute defaults or termination events for certain contracts and debt obligations[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the fiscal quarter ended March 31, 2025 - No unregistered sales of equity securities or use of proceeds occurred in Q1 2025[242](index=242&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company is in default on several senior securities, including the Celsius Promissory Note ($9.9 million), Marshall Loan ($10.4 million), and W Capital Loan ($1.3 million), all of which have matured or expired and have outstanding balances - Luna Squares is in **default** on the Celsius Promissory Note (**$9.9 million** outstanding as of March 31, 2025), which matured in August 2023[242](index=242&type=chunk) - MIG No. 1 (an Australian entity) is in **default** on the Marshall Loan (**$10.4 million** outstanding as of March 31, 2025), which matured in February 2024, with no payments since May 2023[243](index=243&type=chunk)[244](index=244&type=chunk) - The company is a guarantor for the W Capital Loan (**AUD $2.2 million (USD $1.3 million)** outstanding as of March 31, 2025), which expired in March 2023 and is in **default**[245](index=245&type=chunk) - The Convertible Note with W Capital Advisors Pty Ltd has an outstanding interest balance of **$0.1 million**, with the principal repaid in 2024[246](index=246&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[248](index=248&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers in Q1 2025[249](index=249&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, key agreements, and certifications from executive officers - The exhibits include corporate governance documents, key agreements like the Master Colocation Agreement with Cantaloupe Digital LLC, and certifications from executive officers[250](index=250&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report is duly signed on behalf of Mawson Infrastructure Group Inc. by Rahul Mewawalla (CEO and President) and William Regan (CFO) on May 15, 2025 - The report was signed by Rahul Mewawalla (CEO and President) and William Regan (CFO) on May 15, 2025[254](index=254&type=chunk)

Financial Performance - Mawson Infrastructure Group Inc. issued an unaudited business and operational update for December 2024 on January 14, 2025[4] - Mawson's future revenue expectations are contingent upon the timely implementation of AI and HPC digital infrastructure[7] Risks and Uncertainties - The company is subject to various risks and uncertainties that may affect its future performance, including the need to raise additional capital and the volatility in cryptocurrency values[7]