Nscale Limited

“Management identified that the Company’s forecast funding requirements included reliance on uncommitted debt and equity financing, which initially raised substantial doubt about the Company’s ability to continue as a going concern. Management has evaluated its ability to defer, reduce or cancel capital expenditure if such financing is not obtained as forecast and has concluded that this plan is probable of being effectively implemented and, if necessary, would provide sufficient liquidity to alleviate the substantial doubt about the Company’s ability to continue as a going concern” (p. F-7)

The financial statements (pp. F-7 and F-48) say that substantial doubt about the company continuing as a going concern was raised. Management concludes that its contingency plans alleviate that doubt; this does not mean the funding risk has gone. What do those plans rely on, and what would the company do if the funding it expects does not arrive?

“In connection with the audit of our consolidated financial statements as of and for the years ended December 31, 2025 and 2024, we identified deficiencies that we concluded represented material weaknesses in our internal control over financial reporting, as described below” (p. 60); “The implementation of these remediation efforts is in the early stages, may require additional expenditures to implement, and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, and as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain and we may not fully remediate during 2026 and 2027” (p. 60)

The company has identified material weaknesses in internal control over financial reporting: “In connection with the audit of our consolidated financial statements as of and for the years ended December 31, 2025 and 2024, we identified deficiencies that we concluded represented material weaknesses in our internal control over financial reporting, as described below” (p. 60). They are: “We identified material weaknesses in internal control over financial reporting related to the (i) lack of design, formal documentation, and consistent evidence of entity-level controls, business process controls, and information technology general controls (“ITGCs”) and (ii) a lack of sufficient financial reporting and accounting personnel” (p. 60). On remediation it says: “The implementation of these remediation efforts is in the early stages, may require additional expenditures to implement, and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, and as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain and we may not fully remediate during 2026 and 2027” (p. 60). What milestones will show that the controls are operating effectively, and what remains unfinished?

“In July 2025, we entered into a master cloud services agreement with NVIDIA Corporation (the “NVIDIA MSA”), pursuant to which we provide GPU cloud computing services across data center locations in Iceland, the United Kingdom, and Norway... for an aggregate amount of $1.2 billion” (p. F-38)

Related-party customer agreement disclosed: “In July 2025, we entered into a master cloud services agreement with NVIDIA Corporation (the “NVIDIA MSA”), pursuant to which we provide GPU cloud computing services across data center locations in Iceland, the United Kingdom, and Norway... for an aggregate amount of $1.2 billion” (p. F-38). The revenue recognised under it is not quantified in the disclosure reviewed, and a contract value is not annual revenue. How much revenue did it provide in each period, and how were its prices set?

“Net loss attributable to the Company $ (761.8 ) $ (78.2 )” (p. F-4); “Loss on fair value adjustments (527.8 ) (40.2 )” (p. F-4)

The company reported a net loss in both years given. Of the latest year's net loss of $762 million, $528 million came from changes in the fair value of financial instruments, which use no cash; the operating result was -$170 million. What drives the losses, and what does the company say about when it expects that to change?

“As of June 30, 2026, unrecognized share-based compensation expense related to unvested share options and restricted share awards was $193.9 million, which is expected to be recognized over a weighted-average period of 3.2 years” (p. F-59); “As of June 30, 2026, unrecognized share-based compensation expense related to unvested share options and restricted share awards was $193.9 million” (p. F-59)

About $194 million of stock-based pay had not yet been recognised as an expense as of June 30, 2026, 69% of the interim period's revenue scaled to a year (a comparison only, not a forecast). On how it will be recognised, the S-1 says: “As of June 30, 2026, unrecognized share-based compensation expense related to unvested share options and restricted share awards was $193.9 million, which is expected to be recognized over a weighted-average period of 3.2 years” (p. F-59). It also reports these later grants and changes to awards, each with its own date: “The table also excludes share options for which the service inception date has preceded the grant date. These options were granted and vested in the third quarter of 2026” (p. F-61). How do the later grants change the expected expense schedule?

Basis: Stock-based pay not yet recognised, divided by the interim period's revenue scaled to a year. Scaling an interim period's revenue to a year is a comparison convention only: not a revenue forecast and not an annual expense rate.

“Although we source NVIDIA GPUs through multiple third-party suppliers and have diversified our supplier base over time, NVIDIA is currently the primary manufacturer of the GPUs deployed across our infrastructure” (p. 24)

The company states that it depends on a limited number of suppliers for a critical input: “Although we source NVIDIA GPUs through multiple third-party suppliers and have diversified our supplier base over time, NVIDIA is currently the primary manufacturer of the GPUs deployed across our infrastructure” (p. 24). It also says: “For the six months ended June 30, 2026, three main suppliers accounted for 53%, 37% and 10% of total related purchases” (p. 24). What contractual protection does the company have, could it substitute other sources, and how would it continue if a supplier could not deliver?

“BIS issued an interim final rule, effective September 29, 2025, extending Entity List and Military End-User List license requirements to entities owned 50% or more ... BIS issued a final rule staying the Affiliates Rule with effect from November 10, 2025 until November 9, 2026” (p. 32); “BIS issued an interim final rule, effective September 29, 2025, extending Entity List and Military End-User List license requirements to entities owned 50% or more, directly or indirectly ... BIS issued a final rule staying the Affiliates Rule with effect from November 10, 2025 until November 9, 2026” (p. 32)

The S-1 describes rules and restrictions affecting the business or its sector; none is described as action taken against the company: BIS Affiliates Rule (Entity List/MEU License extension): “BIS issued an interim final rule, effective September 29, 2025, extending Entity List and Military End-User List license requirements to entities owned 50% or more, directly or indirectly ... BIS issued a final rule staying the Affiliates Rule with effect from November 10, 2025 until November 9, 2026” (p. 32); New York data center development moratorium/permitting pause: “including the moratorium on the development of data centers using 50 megawatts of power or more in the State of New York that was announced in July 2026... New York has adopted a temporary statewide permitting pause for certain large data centers” (p. 58); Texas data center audit and verification directives: “Texas has imposed audit and verification directives, and a number of other states and localities have considered or adopted moratoria, permitting pauses, or other restrictions” (p. 55); US antidumping/countervailing duty orders on non-oriented electrical steel from China: “Certain inputs used in electrical equipment of Chinese origin are subject to United States antidumping and countervailing duty orders, including the orders on non-oriented electrical steel from China, which the U.S. International Trade Commission voted to continue in May 2026” (p. 31); Executive Order restricting Chinese-origin electrical equipment in US bulk-power system: “electrical equipment of Chinese origin may in addition be restricted from acquisition or installation in the United States bulk-power system under Executive Order” (p. 31); US 2025 tariffs on imports and related litigation: “tariffs announced by the United States in 2025 on imports from most countries... Those tariffs were invalidated by the U.S. Supreme Court in February 2026 and were replaced by measures adopted under different statutory authorities, and the authority, scope, rate and duration of U.S. trade measures have changed repeatedly since that date” (p. 31). Which of them apply to the company's current or planned sites and products, and what would each change?

“during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus (the "Lock-Up Period")” (p. 181); “if (A) at least days have elapsed since the date of this prospectus and (B) the Lock-Up Period is scheduled to end during a Blackout Period (as defined below), the Lock-Up Period shall end trading days prior to the commencement of the Blackout Period (the "Blackout-Related Release")” (p. 181)

The lock-up runs 180 days, with some shares released earlier. Early-release provisions are disclosed; some thresholds and percentages are not yet specified in this draft. What will they be, and how many shares could be released at each stage, and for which holders?