[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]

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]

Core Insights - Mawson Infrastructure Group Inc. reported a significant growth in its digital colocation monthly revenue, which increased by 69% year-over-year to approximately $4.49 million in December 2024, up from $2.66 million in December 2023 [5] - The company’s total current operating hash rate is about 4.98 EH/s, with expectations to grow to approximately 5.10 EH/s due to new developments announced in early January 2025 [5][3] - Mawson has signed a new 20 MW digital asset colocation agreement with a NASDAQ-listed enterprise-grade customer, further solidifying its position in the digital infrastructure market [5][2] Financial Performance - Digital colocation monthly revenue rose 69% year-over-year and 8% month-over-month, from $4.18 million in November 2024 [5] - Total monthly revenue increased by 7% month-over-month to about $5.26 million from $4.9 million in November 2024 [5] - Monthly energy management business revenue grew by 25% month-over-month, reaching $0.41 million in December 2024 [5] Operational Developments - Mawson's total operating capacity is currently 129 MW, expected to increase to 153 MW upon the completion of its Ohio facility later in 2025 [5][3] - The company plans to operate and manage approximately 41,500 miners following the completion of its new deployment [5] - Mawson is actively seeking collaborations with companies in the AI and HPC ecosystem to enhance its digital infrastructure offerings [5] Strategic Initiatives - The company has made significant advancements in its technological and operational capabilities throughout 2024 and early 2025, positioning itself as a leader in the digital colocation space [2] - Mawson has expanded its market offerings to include artificial intelligence and high-performance computing, in addition to digital assets [2] - The company has onboarded leaders with expertise from major technology firms, enhancing its operational expertise [2]

Core Insights - Mawson Infrastructure Group Inc. has signed a new digital colocation customer agreement with a NASDAQ-listed company, enhancing its digital infrastructure services [1][2][3] - The agreement involves providing colocation services for 5,880 miners, equating to approximately 20 MW of capacity, with an initial term of 12 months and potential for extension [2][3] - This agreement is part of Mawson's strategy to optimize its digital infrastructure assets and positions the company as a leading provider in the PJM market, North America's largest competitive power market [3][4] Company Growth and Capacity - Following the new agreement, Mawson expects to manage approximately 41,508 miners and achieve a total operating hashrate of about 5.10 exahashes per second (EH/s) across its facilities [4] - The company is developing an additional site in Ohio, which is projected to add 24 MW to its current operating capacity of 129 MW, bringing the total to 153 MW upon completion [5] Business Strategy - Mawson focuses on providing digital infrastructure platforms for AI, high-performance computing (HPC), and digital assets, aiming to accelerate the digital economy [6] - The company prioritizes the use of carbon-free energy sources, including nuclear energy, to power its digital infrastructure [6]