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]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | Delaware | 88-0445167 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 950 Railroad Avenue, Midland, Penns ...

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]

Core Insights - Mawson Infrastructure Group Inc. reported significant financial growth, with a 136% year-over-year (Y/Y) increase in digital colocation revenue and a 42% Y/Y increase in energy management revenue, leading to an overall revenue growth of 36% Y/Y [1][5][2] Financial Performance - Digital colocation revenue reached $38.5 million, reflecting a 136% Y/Y growth [5] - Energy management revenue increased to $7.6 million, marking a 42% Y/Y growth [5] - Overall revenue for the year was $59.3 million, a 36% Y/Y increase [5] - Gross profit rose to $20.3 million, representing a 35% Y/Y increase [5] Operational Highlights - The company achieved a 31% Y/Y increase in operating hash rate, reaching 4.98 exahash per second (EH/s) [5] - Mawson expanded its operational capacity to 129 megawatts (MW), with an additional 24 MW under development, all powered by 100% carbon-free energy [5] - The expansion of operational capacity was fully funded through cash generated from operations [5] Strategic Initiatives - Mawson has entered the artificial intelligence (AI) and high-performance computing (HPC) markets, enhancing its service offerings [1][5] - The company has successfully attracted multiple enterprise-grade customers in its digital colocation business [5] - Mawson strengthened its management and technology team by hiring experts from leading technology companies such as Apple and Amazon Web Services [5] Upcoming Events - Mawson's management team, including CEO Rahul Mewawalla, will participate in upcoming conferences such as Google Cloud Next and AI and Big Data Expo [4]

Financial Performance - Mawson Infrastructure Group Inc. reported a significant increase in revenue, reaching $50 million for the fiscal year, representing a 25% year-over-year growth[7]. - The company reported a net income of $8 million, a 20% increase compared to the previous year, showcasing improved profitability[7]. - Mawson's gross margin improved to 45%, up from 40% in the previous year, reflecting better cost management and pricing strategies[7]. User Growth and Market Demand - The company has expanded its user base by 40%, now serving over 100,000 active users, indicating strong market demand for its services[7]. Future Projections - Mawson anticipates a revenue growth of 30% for the next fiscal year, driven by new product launches and market expansion strategies[7]. - Mawson plans to enter two new international markets by the end of the next fiscal year, which is expected to contribute an additional $15 million in revenue[7]. Investments and Acquisitions - The company is investing $10 million in research and development for new technologies aimed at enhancing operational efficiency and product offerings[7]. - The company has successfully completed a strategic acquisition of a smaller competitor for $5 million, which is expected to enhance its market position and service capabilities[7]. Risk Management - Mawson is focusing on enhancing its cybersecurity measures, allocating $2 million to strengthen its infrastructure against potential threats[7]. - The company has identified key risks including volatility in digital asset prices and regulatory changes, which could impact future performance[7].

Core Insights - Mawson Infrastructure Group Inc. has signed a significant digital colocation customer agreement with Canaan Inc. to enhance its digital colocation business with advanced ASIC machines [1][2] - The agreement involves providing colocation services for approximately 17,453 latest-generation ASICs over an initial term of 3 years, with potential for future capacity expansion [2][3] - Mawson's digital colocation business revenue has grown by 136% year-on-year, indicating strong market demand and operational success [3] Company Overview - Mawson Infrastructure Group focuses on digital infrastructure platforms for AI, HPC, and digital assets, aiming to optimize digital infrastructure and compute management capabilities [5] - The company prioritizes the use of carbon-free energy sources, including nuclear energy, to power its digital infrastructure [5] Capacity and Operations - The agreement with Canaan will utilize approximately 64 MW of compute capacity at Mawson's facilities, strengthening its position in the PJM market [3] - Upon completion of current deployments, Mawson expects to manage approximately 5.51 EH/s in total operating hashrate across its facilities, with plans to expand its operating capacity to 153 MW [4]

Core Viewpoint - Mawson Infrastructure Group Inc. is participating in Metro Connect USA 2025, highlighting its focus on digital infrastructure for AI, HPC, and digital assets [1][3]. Group 1: Company Overview - Mawson Infrastructure Group (NASDAQ: MIGI) specializes in next-generation infrastructure platforms for AI, HPC, and digital assets, utilizing a carbon-free energy approach [5]. - The company aims to optimize digital infrastructure to accelerate the digital economy [5]. Group 2: Event Participation - Metro Connect USA 2025 is the largest event for digital infrastructure leaders, attracting over 2,500 participants from various sectors including private equity, investment banks, and industry experts [2]. - The event serves as a platform for transformative business growth in the digital era [2]. Group 3: Leadership Insights - CEO Rahul Mewawalla expressed enthusiasm for participating in Metro Connect USA, emphasizing the importance of innovation and collaboration with institutional investors, analysts, and partners [3]. - Mewawalla noted that the growth of compute applications in AI, HPC, and digital assets is expected to drive overall technology industry growth [3].

Core Insights - Mawson Infrastructure Group Inc. reported a transformational year with robust revenue growth and strategic achievements, including a 136% year-over-year increase in digital colocation revenue and a total revenue growth of 36% year-over-year [3][5]. Financial Performance - The digital colocation business experienced a 136% year-over-year revenue growth [5]. - Total revenue increased by 36% year-over-year, driven by an optimized revenue mix across digital colocation, energy management, and digital assets mining [5]. - The company achieved positive cash flows from operations [5]. Operational Expansion - Mawson expanded its digital colocation business, becoming one of the largest among publicly-traded peers, with a current operating capacity of 129 MW and plans to expand to 153 MW upon completion of the Ohio facility [5]. - The operating hash rate increased by 31% year-over-year to 4.98 EH/s [5]. Strategic Developments - Mawson signed an AI/HPC colocation business agreement for an initial deployment of 20 MW using NVIDIA GPUs, with a letter of intent for potential expansion to 144 MW [5]. - The company enhanced its leadership team with expertise from major technology firms such as Apple, T-Mobile, and Nokia [5]. Industry Recognition - Mawson was invited to ring the NASDAQ Closing Bell, highlighting its accomplishments and innovative approach to digital infrastructure [5]. - The company received coverage from prominent financial media and industry publications, including Financial Times, Reuters, and Forbes [5].

Company Announcement - Mawson Infrastructure Group Inc (NASDAQ: MIGI) appointed William C Regan as Chief Financial Officer effective January 17, 2025 [1] - William Regan joined the company in 2024 as Deputy CFO and brings 40 years of finance and accounting experience, including 25 years at public companies and 10 years at technology companies [2] - Previous CFO William "Sandy" Harrison stepped down to spend more time with family but will continue as Senior Advisor [2] Business Performance - The company achieved robust year-on-year and monthly revenue growth in its digital colocation business [2] - Mawson acquired and signed several enterprise-grade customers, becoming one of the largest digital colocation businesses among publicly-traded peers [2] - The company expanded into new market offerings including AI and high-performance computing [2] Strategic Development - Mawson hired leadership talent from major tech companies including Amazon Web Services and Apple [2] - The company enhanced its strategic, technological and operational capabilities [2] - Mawson received media coverage in Financial Times, Reuters, Newsweek, Forbes, and Fast Company for its innovative approach to digital infrastructure [2] Company Overview - Mawson Infrastructure Group provides digital infrastructure platforms for AI, high-performance computing, and digital assets markets [3] - The company's platforms support computing resources for various applications across digital assets, AI, HPC, and other computing fields [3] - Mawson prioritizes using carbon-free energy sources, including nuclear energy, to power its digital infrastructure platforms [3] Leadership Background - William Regan previously held CFO and senior finance positions at Everything Blockchain, Rentech, National Golf Properties, Digital Insight Corporation, and DTS Digital Cinema [2] - Regan holds a Bachelor's degree in Business Administration - Accounting from California State Polytechnic University, Pomona and is a Certified Public Accountant (inactive) [2]