SharonAI Holdings Inc. Segments Disclosure
Note 22. Segment Information
The Company operates in one operating segment, and therefore one reportable segment, focused on the provision of High Performance Compute Services (HPC). The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Group’s chief operating decision maker (“CODM”), who is the Chief Executive Officer.
The Group’s method for measuring profitability on a reportable segment basis is operating profit or loss, which the CODM uses to assess performance for the Group and in deciding how to allocate resources. The CODM does not review disaggregated assets by segment. The Group adopted ASU 2023-07 in December 2024. The most significant provision was for the Group to disclose significant segment expenses that are regularly provided to the CODM. The Group’s CODM periodically reviews cost of revenues and selling, general and administrative expenses, excluding share-based compensation, by segment and treats them as significant segment expenses.
The following table presents segment expenses, other segment items, and segment operating loss for the period:
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 1,566,631 | $ | 438,292 | ||||
| Less: Segment Expenses | ||||||||
| Costs of revenue | 1,465,824 | 719,993 | ||||||
| Selling, general and administrative expenses | 12,116,600 | 2,368,745 | ||||||
| Other segment items(1) | 2,785,951 | 2,300,861 | ||||||
| Loss (gain) on sale/ exchange of equipment | (1,015,803 | ) | (921,322 | ) | ||||
| Segment expenses | 15,352,572 | 4,468,277 | ||||||
| Segment loss from operations | $ | (13,785,941 | ) | $ | (4,029,985 | ) | ||
| (1) | Other segment items for the reportable segment include share-based compensation and other expenses. |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.