Financial Analysis

14. Commitments and contingencies From inception to date, the Company has not been a party to any legal proceedings, claims, or disputes arising in the ordinary course of business. As of June 30, 2026, the Company had no outstanding litigation, and there were no commitments or contingencies that management believes would have a material effect on the consolidated financial statements.

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Schedule of Revenue disaggregated For the Years Ended June 30, 2025 2026 Revenue from intelligent computing power service $ 6,546,249 $ 14,664,937 Revenue from comprehensive data center service 469,263 157,862 Total $ 7,015,512 $ 14,822,799

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4. Fair value measurements As of June 30, 2025 and 2026, information about inputs into the fair value measurement of the Companys assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Schedule of fair value assets and liabilities Fair value measurement at reporting date using Description Fair value as of June 30, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Simple agreements for future equity (1) $ 18,243,885 $ - $ - $ 18,243,885 Other payable related to the equity option (2) 53,333 - - 53,333 Fair value measurement at reporting date using Description Fair value as of June 30, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Simple agreements for future equity (1) $ 29,121,268 $ - $ - $ 29,121,268 Other payable related to the equity option (2) 53,333 - - 53,333 (1) The Company classifies its SAFEs as financial liabilities measured at fair value. The value of these agreements depends significantly on future financing activities, liquidity events, or other material milestones, and their valuation relies on significant inputs that are not observable in the public market. Accordingly, they are classified within Level 3 of the fair value hierarchy. The fa …

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9. Income taxes Exascale Labs Inc. is incorporated in the State of Delaware and is subject to U.S. federal income tax and Delaware corporate income tax, as well as income taxes in other jurisdictions where it conducts business. The statutory corporate income tax rate is 21% for U.S. federal purposes. Delaware imposes a corporate income tax at a rate of 8.7% on corporate taxable income. In addition, the Company is subject to state and local income taxes in other states in which it operates, calculated under applicable state law using apportionment methods (or similar rules) that allocate income among jurisdictions based on factors such as sales. In addition, the Company files income or franchise tax returns in various other U.S. states and is subject to the applicable statutory tax rates in each jurisdiction based on income apportioned to those states. Evana Alpha Pte. Ltd. is incorporated in Singapore and is subject to the statutory corporate income tax rate of 17% . The current and deferred components of income tax expense reflected in the statements of operations and comprehensive loss were nil for the year ended June 30, 2025 and 2026. The following table reconciles the statutory rate to the Companys effective tax rate. The effective tax rate reconciliation is based on the U.S. federal statutory rate of 21%. Schedule of effective tax rate reconciliation For the Years Ended June 30, 2025 2026 US Statutory income tax rate 21 .0 % 21 .0 % State income tax 8.7 % 2.3 % Tax diff …

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gg. Recently accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (ASU 2023-09), which requires entities to make incremental income tax disclosures on an annual basis. The amendments require that public business entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items meeting a quantitative threshold. The amendments also require disclosure of income taxes paid to be disaggregated by jurisdiction, and the disclosure of income tax expense disaggregated by federal, state, and foreign. Amendments are effective for annual periods beginning after December 15, 2025 and thereafter, with early adoption permitted. The Company is currently evaluating the impact of the new accounting pronouncements or guidance on the consolidated financial statements. The Company will adopt this ASU for the fiscal year beginning July 1, 2026. In July 2025, the FASB issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendment provides (1) all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets and (2) entities other than public business entities with an accounting policy election to consider collection activity after the balance sheet date when estimating …

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11. Related party transactions Hoansoo Lee serves as the Companys Chief Executive Officer and Chief Financial Officer. The Company has entered into a consulting services agreement with Hoansoo Lee, pursuant to which Hoansoo Lee provides strategic consulting and advisory services to the Company. For the years ended June 30, 2025 and 2026, the Company incurred consulting service fees of $ 100,150 and $ 27,000 , respectively. As of June 30, 2025 and 2026, there were no outstanding balances payable to Hoansoo Lee as all amounts had been fully settled during the respective periods. …

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13. Segment information The Company manages its business in a centralized manner and operates as a single segment and accordingly has only one operating and reportable segment, the provision of GPU computing platform services. The Companys Chief Executive Officer serves as the CODM. The CODM regularly reviews entity-wide operating results and reviews consolidated revenues and net loss as reported in the statement of operations and comprehensive loss when making decisions about allocating resources and assessing performance of the segment, and hence, the Company has only one reportable segment. The primary measures of segment revenue and profitability for the Companys operating segment are considered to be consolidated revenue and net loss. The CODM uses consolidated revenue to assess market performance and growth, and net loss to evaluate segment profitability and cost management. Both measures are used together to allocate resources, including employee or capital resources. Significant expense categories regularly provided to and reviewed by the CODM include those presented in the statements of operations and comprehensive loss as well as disaggregated expenses of staff costs and employee benefits, professional service expenses, share-based compensation, and other general and administrative expenses. The following table presents the segment information of the Company for the measurement of segment profitability for the years ended June 30, 2025 and 2026: Schedule of segment …

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2. Summary of significant accounting policies a. Going concern As of June 30, 2026, the Company had cash and U.S. Dollar Coin (USDC) of $4.9 2,693,586 million and current liabilities of $31.9 31,885,500 million. For the years ended June 30, 2025 and 2026, the Company used $1.0 (1,010,799) million and $2.8 (2,754,624) million in operating activities. The Company incurred net losses of $7.7 (7,659,667) million and $12.2 (12,162,391) million for these respective periods. Since inception, the Company has incurred recurring net losses from operations and negative cash flows from operating activities. As of June 30, 2026, the Company had an accumulated deficit of $25.4 (25,379,426) million. These factors raised substantial doubt regarding the Companys ability to continue as a going concern within one year of the date these consolidated financial statements were issued. On August 27, 2026, the Company consummated the Business Combination. Upon the closing of the Business Combination, all outstanding SAFEs of the Company were converted into PubCo Class A common stock in accordance with their terms, eliminating SAFE liabilities that totaled approximately $ 29.1 million as of June 30, 2026. In connection with the closing of the Business Combination, the Company obtained access to cash proceeds of approximately $ 11.8 million retained from the Business Combination. In addition, between July 1, 2026 and August 27, 2026, an investor provided the Company with $1.0 million in the form of a …

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15. Subsequent events The Company evaluated all events and transactions that occurred after June 30, 2026, up through September 28, 2026, which is the date that these consolidated financial statements are issued, unless as disclosed elsewhere and below, no other material subsequent events occurred that would require recognition or disclosure in the Companys consolidated financial statements. SAFEs From July 1, 2026 to September 28, 2026, an investor provided $ 1.0 million to the Company in the form of a SAFE. Convertible Loan On July 16, 2026, the Company, as lender, entered into a convertible loan agreement with a third party in the principal amount of approximately $ 1.5 million. The full loan amount was disbursed in July 2026. Business combination and Conversion of SAFEs instruments On August 27, 2026, Exascale Labs Holdings Inc. consummated the transactions contemplated by the Agreement and Plan of Merger dated January 11, 2026, by and among BCAR, PubCo, Merger Sub and the Company (the Business Combination). Prior to the Acquisition Merger, BCAR completed its domestication from the British Virgin Islands to Delaware by merging with and into PubCo, with PubCo surviving as a Delaware corporation. In connection with the Domestication Merger, PubCo changed its name from D. Boral ARC Merger Corporation to Exascale Labs Holdings Inc. Following the Domestication Merger, Merger Sub merged with and into the Company, with the Company surviving as a wholly owned subsidiary of PubCo. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing