Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides a detailed analysis of our financial condition, results of operations, liquidity, and capital resources. Investors should read this section alongside our unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q, as well as our audited financial statements and related notes included in our prospectus, dated September 30, 2025 filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on September 30, 2025. This analysis includes forward-looking statements, which are subject to various risks and uncertainties. Actual results may differ from projections due to factors beyond our control, as detailed under Part II, Item 1A "Risk Factors." "Fermi", "we", "us", "our" and "the Company" (i) for periods prior to the Corporate Conversion, refer to Fermi LLC, and, where appropriate, its consolidated subsidiaries and (ii) for periods after the Corporate Conversion, refer to Fermi Inc., and, where appropriate, its consolidated subsidiaries. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in "Risk Factors" and "Special Note Regarding Forward-Looking Statements."

Overview

Fermi's mission is to power the artificial intelligence needs of tomorrow. We are an advanced energy and hyperscaler development company purpose-built for the AI era. Our mission is to deliver up to 11 GW of low-carbon, HyperRedundant™, and on-demand power directly to the world's most compute-intensive businesses with 1.1 GW of power projected to be online by the end of 2026. We have secured a 99-year ground lease ("TTU Lease") with Texas Tech University ("TTU") for 5,236 acres of land in Amarillo, Texas, where we plan to develop the Advanced Energy and Intelligence Campus ("Project Matador"), which is large enough to simultaneously house the next three largest data center campuses by square footage currently in existence. In a world in which power is considered a key currency for AI innovation, we believe that Fermi has a unique combination of important advantages that will help propel America's AI economy forward. Fermi offers investors an opportunity to invest in AI growth and grid-independent energy infrastructure through a tax-efficient public REIT structure.

At the heart of our vision is Project Matador, which is a multi-gigawatt energy and data center development campus designed to support the accelerating needs of to be built AI infrastructure. Situated on a 5,236-acre site in Amarillo, Texas, Project Matador is secured by Fermi pursuant to the TTU Lease on land owned by the Texas Tech University System ("TTUS"), which we believe will provide long-term site control and potential efficiencies through a partnership with a public university. We believe our HyperRedundant™ site is strategically located adjacent to one of the largest known natural gas fields in the United States that is (i) within a high-radiance solar corridor, (ii) well-positioned for advanced nuclear development and (iii) supportive of multiple energy pathways including immediate natural gas power development. While Fermi's mission is to expand beyond natural gas-fired generation, we believe our ready access to large volumes of natural gas from adjacent pipeline infrastructure could enable us to scale up to 11 GW of natural gas-fired base load power generation over time. We are currently in discussions with midstream and natural gas providers to enable us to supply up to 11GW of gas-fired power, continuing to pursue our nuclear, solar and other development plans. If we are successful in securing gas supplies sufficient to power 11GW of natural gas power, it would provide us the optionality to increase the total size of the project naturally, though we can provide no assurance in that regard. Beyond natural gas-fired generation, our COL Application for 4 GW of nuclear power has undergone a preliminary review and has been accepted for processing by the NRC, which reinforces Project Matador's readiness for low-carbon baseload generation. With existing water, fiber, and natural gas infrastructure readily accessible, we believe Fermi is uniquely-positioned to deploy an integrated mix of natural gas, nuclear and solar energy power to enable grid-independent, high-density computing power on the Project Matador Site. Through a combination of natural gas turbine purchases, a focus on procuring other long lead-time equipment, and negotiations with SPS, we expect to secure approximately 1.1 GW of power for our operations by the end of 2026 (including 200 MW from our expected contractual arrangement with SPS). We believe this rapid power delivery timeline is a critical differentiator that will allow Fermi to attract tenants that require near term access to large-scale, reliable energy to power their AI data center compute needs. Project Matador is in close proximity to the Pantex Plant, the nation's primary nuclear weapons center employing approximately 4,600 skilled nuclear professionals. Our proximity to the Pantex Plant offers us the opportunity to access a highly experienced workforce steeped in nuclear safety culture and expertise. We believe this proximity to critical United States nuclear and security infrastructure will be highly attractive to our prospective tenants. With key regulatory approvals in progress, growing stakeholder relationships and energy infrastructure readiness, we believe that Project Matador represents unmatched, sector-defining potential to deliver up to 11 GW of power to on-site compute centers by 2038 through a redundant and flexible mix of natural gas, nuclear and solar energy power. Project Matador is expected to be anchored by what we believe would become the nation's second-largest nuclear generation complex that will house up to four Westinghouse Reactors. Through our REIT structure, Fermi offers investors exposure to AI infrastructure growth and long-term, large-scale and reliable energy development in a tax-efficient public vehicle.

Trends and Other Factors Impacting Our Performance

The growth and future success of our business depends on many factors. While these factors present significant opportunities for our business, they also pose risks and challenges, including those discussed below and described in Part II, Item 1A "Risk Factors," that we must successfully address to achieve growth, improve our results of operations, and generate profits.

AI-Driven Demand for Compute and Energy Infrastructure

The rapid adoption and advancement of generative artificial intelligence, high-performance computing, and cloud infrastructure have created unprecedented demand for compute power and associated energy infrastructure. Our ability to attract and retain large-scale AI tenants will depend on our ability to deliver reliable, scalable, and low-latency power directly to data center environments. A decline or slowdown in AI infrastructure deployment, shifts in customer architecture preferences, or market saturation could adversely impact demand for our solutions.

Energy as a Constraint to Digital Expansion

Grid congestion, transmission delays, and utility interconnection bottlenecks have emerged as major constraints on the expansion of hyperscale infrastructure in the U.S. Our model-which delivers behind-the-meter, compute-adjacent power-responds directly to this macro constraint. As traditional grid-tied campuses experience years-long permitting delays, Fermi offers tenants the opportunity to decouple from these risks and achieve accelerated deployment schedules. Nevertheless, the successful deployment of additional nuclear power generation capacity at scale is a long-term endeavor that will be costly and is subject to a number of risks, including political changes, supply chain delays, cost overruns, capital constraints, and other risks that are described more fully described in Part II, Item 1A "Risk Factors."

Nuclear Re-Emergence as Strategic Infrastructure

Amid global efforts to decarbonize and reduce dependence on fossil fuels, nuclear power is being re-evaluated as a critical component of energy security and resilience. We believe we are at the forefront of this shift. Favorable federal support, investor appetite, and policy alignment are accelerating licensing efforts and enabling public-private partnerships for nuclear innovation. Our successful filing of a COL Application for Westinghouse Reactors positions Fermi to capitalize on this trend in the next cycle of U.S. nuclear development. While the current environment for nuclear power in the U.S. and Texas is currently favorable, we can provide no assurance it will continue.

Sovereign Cloud and AI Nationalization

Foreign governments and large enterprises are increasingly seeking full-stack control over their digital infrastructure-from chip to cloud to energy. This shift toward "sovereign compute" and secure, onshore data environments creates new demand for purpose-built campuses like Project Matador. Our site structure, secure energy delivery, and onshore control model are well-aligned with this emerging preference for high-security, mission-critical infrastructure.

Power Generation and Energy Sourcing Strategy

Our behind-the-meter generation strategy relies on a diversified mix of gas, nuclear, and solar energy, with grid connectivity designed to scale selectively as the campus grows. As our development plans move forward, we are retaining the optionality to modify our power mix, including upsizing our gas supply infrastructure to increase our ability to develop additional gas-fired generation. We are currently in discussions to increase our natural gas supply and related infrastructure sufficient to power up to 11GW of natural gas-fired generation while continuing to pursue our nuclear, solar and other development plans. The timely delivery and commissioning of these systems is critical to supporting tenant workloads and achieving planned uptime and redundancy levels. Any underperformance of natural gas assets, delays in nuclear buildout, or variability in solar generation could reduce the availability or reliability of power delivery, impacting tenant satisfaction and lease revenue.

Furthermore, our access to natural gas is enabled by proximity to major reserves and pipeline infrastructure. Supply disruptions, price volatility, or shifts in regulatory treatment of fossil fuel generation could affect both cost and availability of fuel for gas-fired systems.

Technological Change and Industry Evolution

The AI and energy infrastructure sectors are characterized by rapid technological evolution. Advances in chip design, cooling methods, power conversion, or energy storage may influence tenant expectations and infrastructure compatibility. Our long-term success depends on our ability to anticipate and integrate emerging technologies into our platform and adapt our energy delivery models accordingly.

Failure to remain aligned with tenant technology requirements or to offer competitive energy efficiency, latency, or power density could diminish our value proposition.

Environmental and Community Factors

Although the Project Matador Site benefits from strong local support, public perception and environmental stewardship remain critical to long-term viability. Any material change in local sentiment, stakeholder opposition, or perceived environmental risk could lead to reputational damage or permitting disruption. We must manage water use, emissions, noise, and land disturbance in accordance with both regulatory and community expectations.

Additionally, extreme weather, drought, or other climate-related events could affect site operations and infrastructure resilience-particularly in the context of water rights and cooling systems.

Regulatory Approvals and Permitting Processes

Our operations are subject to extensive federal, state, and local regulation-including nuclear licensing by the NRC, air and water permitting by the Texas Commission on Environmental Quality ("TCEQ"), power generation by the PUCT, and environmental approvals under NEPA. Our ability to construct and operate generation facilities, particularly nuclear reactors, depends on our success in obtaining and maintaining these approvals. Regulatory delays, changes in policy, or third-party legal challenges could significantly impact our development timelines and cost structure.

Geopolitical and Policy Dynamics

Energy infrastructure and compute are increasingly viewed through the lens of national security and economic competitiveness. Changes in U.S. energy policy, AI regulation, foreign investment review, export controls, or sovereign data localization requirements may impact both our operations and those of our tenants. Our ability to navigate this evolving policy landscape-especially as it pertains to nuclear energy, grid resilience, and critical infrastructure designation-will affect long-term scalability.

Tenant Acquisition and Retention

Our revenue model is heavily dependent on securing multi-GW scale anchor tenants and maintaining long-term power delivery and leasing agreements. Our ability to attract high-credit-quality tenants-particularly large AI developers, hyperscalers, and sovereign compute platforms-is critical to achieving scale and recurring revenues. Changes in customer requirements, economic conditions, or competitive offerings could hinder tenant growth or increase churn risk. Delays in tenant onboarding or renegotiation of terms due to construction timelines may also impact financial performance.

Significant Developments During the Quarter

Unit Split

On July 2, 2025, we amended the Fermi LLC Agreement to reflect a 150-to-1 forward unit split (the "Unit Split") of our issued Class A Units and Class B Units. As a result of the Unit Split, each record holder of Class A and Class B Units as of July 2, 2025, received 149 additional Units of Class A Units or Class B Units, as applicable, distributed on July 2, 2025.

Series A Convertible Notes

In July of 2025, we issued additional Series A Convertible Notes for an aggregate principal amount of $16.6 million. See "-Liquidity and Capital Resources-Liquidity and Going Concern."

Firebird Acquisition

On May 9, 2025, Fermi entered into the Firebird EPA to acquire the Siemens Contract. On July 29, 2025, Fermi, through its indirect wholly-owned subsidiary Fermi Equipment Holdco, consummated the Firebird Acquisition pursuant to a MIPA with MAD Energy Limited Partnership ("MAD"), acquiring all of the membership interests in Firebird Equipment Holdco, a newly formed subsidiary of MAD, that, following a series of pre-closing restructuring steps involving Firebird and related entities, is a party to the Siemens Contract, effectively subsuming the Firebird EPA. The core asset-a combined cycle gas power plant rated at roughly 400 MW at site elevation-was originally procured by Firebird through a turnkey equipment contract with Siemens. While the equipment has been fully fabricated and is ready for shipment, it remains warehoused at Siemens staging facilities in Germany, Sweden, the Netherlands, Vietnam and China pending final delivery and assembly. In connection with the closing under the MIPA, the parties negotiated an amendment to the Siemens Contract pursuant to which Siemens will deliver the equipment to Free Trade Zone 84 in Houston, Texas. Energization of the unit is expected by the third quarter of 2026. Under the MIPA, the aggregate consideration paid by Fermi for the Firebird Acquisition consisted of:

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A $145 million Series B Convertible Note issued to MAD by Fermi that was converted into Class A Units following the conversion at a price based on a $3 billion pre-money valuation or the price of securities issued in such qualified event. The Series B Convertible Note bore interest at a rate of 11% per annum, payable in kind quarterly in arrears, and was to mature on January 31, 2026. In connection with the Preferred Units Financing, the holder of the Series B Convertible Note elected to convert its Series B Convertible Note into 9,592,340 Class A Units, prior to giving effect to the Corporate Conversion. See "-Convertible Debt Financing."

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A $20 million Secured Promissory Note issued to MAD by Fermi that provides for monthly installment payments by Fermi, which bears simple interest at a rate of 4.5% per annum and matures on December 1, 2025. As of September 30, 2025, the aggregate principal amount outstanding was $5 million.

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The grant of a net profits interest to MAD, entitling MAD to 2.5% of net operating income from the first 1,000 MW of dispatchable generation capacity at Project Matador, up to a net present value cap of $100 million.

As a part of the Firebird Acquisition, the Company indirectly acquired all of the rights and obligations of Firebird Equipment Holdco under the Siemens Contract. Under the Siemens Contract, the Company will owe approximately $134 million in remaining contractual payments plus shipping costs for the Siemens System which are currently estimated to be approximately $23.3 million. The Company will also owe additional amounts related to retrofitting expenses, which are not readily ascertainable as of September 30, 2025. The payments due under the Siemens Contract are denominated in Swedish Kroner and are subject to exchange rate fluctuations.

Equity Awards

On August 2, 2025, the Company engaged in the following equity-related transactions, with such unit figures presented prior to giving effect to the stock split consummated in connection with the Corporate Conversion: (i) granted 6,300,000 Class A restricted equity units to certain executives, subject to performance-based vesting and other customary conditions, including the completion of our IPO and achievement of specific Company milestones, (ii) granted 2,855,000 Class B restricted equity units to certain directors, employees, and other service providers, subject to a combination of service-based, market-based and performance-based vesting conditions, including the completion of our IPO and the achievement of specified valuation thresholds (iii) granted 1,500,000 Class A Units to our Chief Executive Officer, which vested immediately upon grant, (iv) granted 500,000 restricted Class A Units to certain service providers engaged in developing the Company's nuclear reactor, subject to a combination of service-based and performance-based vesting conditions including the completion of the Company's first fully operational nuclear reactor and execution of the Company's first customer contract for nuclear reactor power, and (v) granted 2,500,000 compensatory anti-dilutive Class A restricted equity units to our Chief Executive Officer, which will vest in full on January 1, 2028.

On September 28, 2025, the Company modified certain of the awards described above to revise the market-based and performance-based vesting conditions. These modifications did not change the overall number of awards granted but altered the vesting to require service of varying timeframes after the completion of our IPO.

Also on September 28, 2025, the Company granted 758,000 restricted equity units to certain employees and service providers, subject to a combination of service-based and performance-based vesting conditions, including the completion of our IPO.

Preferred Units Financing

On August 29, 2025, the Company issued approximately $107.6 million of its Preferred Units in the Preferred Units Financing to certain investors in a transaction led by Macquarie. In connection with the IPO and the Corporate Conversion, the Preferred Units converted into 7,586,546 shares of common stock. See "-Liquidity and Capital Resources-Preferred Units Financing."

Macquarie Equipment Financing

On August 29, 2025, Fermi Equipment HoldCo, LLC and Firebird Equipment HoldCo, LLC, (the "Borrowers"), entered into the Macquarie Term Loan with Macquarie for a $100 million senior secured loan, which can be increased to $250 million with Macquarie's approval, to finance the Company's obligations under the Siemens Contract and which is guaranteed by the Company. Immediately following the closing of the Macquarie Term Loan, the Company borrowed $100 million. See "-Liquidity and Capital Resources-Macquarie Equipment Financing."

Tenant LOI

On September 19, 2025, we entered into a letter of intent (the "Tenant LOI") with an investment grade-rated tenant (the "First Tenant") to lease a portion of the Project Matador Site on a triple-net basis for an initial lease term of twenty years, with four renewal terms of five years each. The Tenant LOI provides for phased delivery of over 1 GW of powered shell spread across 12 separate powered shells (each a 'Tenant Facility") to be constructed by the Company. See "-Recent Developments-First Tenant Advance in Aid of Construction Agreement" for a discussion of events occurring after the end of the quarter.

The Tenant LOI is non-binding and subject to a number of terms and conditions, contingencies and uncertainties. There can be no assurance that we will ultimately enter into a binding definitive agreement with the First Tenant or that the terms of such agreement will not differ, possibly materially, from those described here.

Gas Supply Agreements

In September 2025, the Company entered into a gas supply agreement (the "ETC Gas Supply Agreement") and gas purchase agreement (the "ETC Gas Purchase Agreement" and together with the ETC Gas Supply Agreement, the "ETC Gas Agreements") with an affiliate of Energy Transfer, ETC Marketing, Ltd. ("ETC"), pursuant to which the Company granted ETC the exclusive right, for a term of 15 years, to provide a firm supply of natural gas or natural gas services for Project Matador for the first 300,000 MMBtus per day. In the event that the Company requires a gas supply in excess of such amount, the ETC Gas Supply Agreement provides that the Company must provide written notice to ETC of third-party bids for the excess supply demand, provide the material terms of the best third-party bid to ETC, and allow ETC to match the best third-party bid, subject to certain conditions. In addition, the ETC Gas Supply Agreement provides that, if the Company reasonably believes that Project Matador will require at least 300,000 MMBtu per day within the 24-month period from September 5, 2025, ETC will commence development activities with respect to a new natural gas pipeline with a destination point, among others, to the Project Matador Site. Further, if ETC makes a final investment decision with respect to the new pipeline, the ETC Gas Supply Agreement provides the Company with the option to invest in the new pipeline at up to 49% of ETC's actual cost, which investment will be a non-operating interest with minority rights and other terms consistent with similar transactions in the industry.

Pursuant to the ETC Gas Purchase Agreement, during the Delivery Period (defined below), the Company agreed to purchase, and ETC agreed to supply, natural gas to Project Matador to power a portion of its initial phases. Specifically, the ETC Gas Purchase Agreement provides for the delivery, subject to certain adjustments, of a maximum daily contract quantity ("MDCQ") of (i) up to 210,000 MMBtu per day (and not less than 10,000 MMBtu per day) for each month during the one-year period following the Delivery Period Commencement Date (defined below) ("Start-up Phase 1"), (ii) up to 300,000 MMBtu per day (and not less than 210,000 MMBtu per day) for each month during the one-year period following the Start-up Phase 1 ("Start-up Phase 2") and (iii) and amount equal to 300,000 MMBtu per day from the end of Start-up Phase 2 through the end of the Delivery Period.

The delivery period under the ETC Gas Purchase Agreement (the "Delivery Period") commences on the later of (i) March 31, 2026 or the completion of the Transwestern Interconnect (whichever first occurs), (ii) the first day of the month following the receipt of the Company's Opt-In Notice or the Company's Supply Election and fulfillment of all conditions precedent (each term as defined in the ETC Gas Purchase Agreement) and (iii) the first day of the month following the date that ETC notifies the Company in writing that ETC has entered into a binding agreement for the Transportation Capacity (the "Delivery Period Commencement Date"), and ends on the 10-year anniversary of the Delivery Period Commencement Date.

The obligations of ETC to supply gas under the ETC Gas Purchase Agreement are subject to certain conditions on the part of the Company, including providing adequate assurance of performance in the form of (i) cash in the amount of $65,301,194 (the "Assurance Amount"), (ii) a payment demand bond in the amount of the Assurance Amount, (iii) an irrevocable, unconditional standby letter of credit in the amount of the Assurance Amount issued by a qualified financial institution, or (iv) a guaranty in the amount of the Assurance Amount. If the foregoing conditions are not satisfied by January 31, 2026, ETC has the right to terminate the agreement upon five days prior written notice to the Company.

Pursuant to the ETC Gas Purchase Agreement, the Company is required to pay a contract price (the "Contract Price") for each MMBtu of gas based on the Midcon Contract Price for a portion of the gas volumes and the San Juan Contract Price for the remaining portion of the gas volumes (each term as defined in the ETC Gas Purchase Agreement). In addition to the Contract Price, commencing on November 1, 2026, the Company is required to pay a monthly fee for portions of the MDCQ ranging from $0.05 to $0.55 multiplied by the number of days in such month.

The ETC Gas Purchase Agreement contains certain customary default and termination provisions for a transaction of this type.

In addition to the supply agreement we have executed with Energy Transfer, we are in active discussions to increase total available gas supply to our campus, including related pipeline infrastructure, sufficient to power up to 11GW of natural gas-fired generation while continuing to pursue our nuclear, solar and other development plans.

Corporate Conversion and Stock Split

On September 30, 2025, immediately following the U.S. Securities and Exchange Commission declaring the Registration Statement on Form S-11 (File No. 333-290089), initially filed by the Company on September 8, 2025 and thereafter amended (as amended, the "Registration Statement") effective, the Company effected a statutory conversion from a Texas limited liability company to a Texas corporation pursuant to and in accordance with a plan of conversion (the "Corporate Conversion"). In connection with the Corporate Conversion, the Company also effected a 3-for-1 forward stock split of its membership units into shares of common stock (the "September Stock Split").

Recent Developments

Initial Public Offering

On October 2, 2025, in connection with the initial public offering ("IPO"), the Company received net proceeds of $648.4 million after deducting the underwriting discounts and commissions and before deducting offering costs of $14.3 million. Subsequently, in October 2025, the underwriters exercised a portion of their over-allotment option and purchased from the Company an additional 4,875,000 shares of common stock at the IPO price, which resulted in net proceeds to the Company of $97.3 million after deducting the underwriting discounts and commissions.

Mobile Power Solutions Long-term Capital Lease Agreement

On October 22, 2025, Fermi entered into a Master Lease Agreement (the "MPS Agreement") with Mobile Power Solutions LLC ("MPS") for the lease of seven GE TM2500 Gen 4 mobile power generation units with an aggregate base net present value of approximately $148 million. The MPS Agreement expands the Company's natural gas platform, a key component of Project Matador's initial 500 MW of generation capacity, and will provide flexible, dispatchable power as the project integrates multiple energy sources.

The arrangement includes a $10 million initial lease prepayment, monthly base rent payments extending over a 20-year term extending through 2045, and the issuance of 1,190,476 shares of Fermi common stock as partial consideration. The lease also includes a bargain purchase option at the end of the term, allowing Fermi to acquire the units at a nominal price.

The TM2500 units, totaling approximately 135 MW under our expected site conditions, are scheduled for delivery in the fourth quarter of 2025 and are expected to enter commercial operation in early 2026. The MPS Agreement does not provide for termination rights for convenience; however, in the event of early termination or default, the Company would remain obligated for substantially all remaining lease payments based on the cumulative net present value schedule under the agreement.

Hyundai Engineering & Construction FEED Agreement

On October 24, 2025, Fermi Nuclear LLC, a Texas limited liability company and a wholly owned subsidiary of the Company ("Fermi Nuclear") executed a Front-End Engineering Design (FEED) Agreement with Hyundai Engineering & Construction Co., Ltd. ("HDEC"). The FEED scope includes site layout and constructability, cooling-system strategy, logistics and laydown planning, geotechnical and civil design, cost estimating, and project scheduling for the planned deployment of four AP1000 nuclear units.

Per the commercial terms, the contract has a fixed value of $4.7 million, exclusive of value-added tax. Payment terms require an initial $1.0 million payment upon issuance of the purchase order and notice to proceed, with the remaining $3.7 million payable upon delivery and the Company's acceptance of the final FEED deliverables.

The agreement allows either party to terminate upon notice if performance becomes impracticable under certain circumstances, and the Company may also terminate for convenience with written notice. In the event of termination, HDEC is entitled to payment for services performed through the effective date of termination.

Doosan Forging Material Readiness Agreement

On October 25, 2025, Fermi Nuclear LLC entered into a Forging Material Readiness Agreement with Doosan Enerbility Co., Ltd. ("Doosan") with a contract price of $25.0 million. The agreement secures long-lead nuclear forgings, including specialty steel, alloy materials, and tooling required for the manufacture of reactor pressure vessels and steam generators for the Company's four planned AP1000 nuclear units at Project Matador.

Under the contract, Doosan will procure forging materials, fabricate dies and molds, and maintain production readiness through March 2026, with payments denominated in U.S. dollars and tied to milestone completions for material procurement, tooling fabrication, and readiness certification. The Company may terminate or suspend the agreement for its convenience, in whole or in part, at any time by written notice. In the event of such termination, Doosan is entitled to payment for work completed through the date of termination and reimbursement of documented direct costs related to ongoing activities, including material procurement, fabrication, or delivery preparations. The contract specifies a graduated termination fee ranging from 5% of the contract price if terminated by November 30, 2025, to 100% if terminated after April 1, 2026, reflecting the progressive stage of completion.

City of Amarillo and Carson County Development Agreements

On October 29, 2025, the Company announced new partnerships with the City of Amarillo and Carson County, Texas, in connection with the development of Project Matador. Pursuant to the terms of the agreements, the City of Amarillo approved a water-supply arrangement allowing the sale of up to 2.5 million gallons per day ("MGD") to the Company at a rate of two times that charged to Amarillo taxpayers. The arrangements also provides for an opportunity to scale up to 10 MGD under a non-binding memorandum of understanding as the project expands. The Company has agreed to fund the required infrastructure related to the water-supply arrangement.

In addition, Carson County approved a 10-year tax abatement and reinvestment zone associated with the Project Matador campus. The initiative is expected to support long-term regional economic growth and job creation in collaboration with the TTUS.

First Tenant Advance in Aid of Construction Agreement

On November 4, 2025, the Company executed a $150 million AIAC with its first prospective tenant at Project Matador. The AIAC establishes a cost reimbursement framework under which the tenant will fund a portion of shared infrastructure and utility systems in advance of occupancy.

Plan of Operations

We are a development-stage infrastructure and real estate company and have not yet commenced revenue-generating activities. Through September 30, 2025, our activity has been primarily focused on formation, capital planning, environmental assessments and early engagement with commercial and regulatory stakeholders to support the launch of Project Matador. We do not expect to generate operating revenues until we have executed definitive lease agreements with tenants and commenced delivery of infrastructure services, including power and data center capacity. Until then, we may generate limited non-operating income in the form of interest income on cash and cash equivalents held in reserve.

Our revenue model is primarily designed to deliver predictable, stable, long-term cash flows through lease agreements with hyperscaler tenants that are structured based on available power capacity. These long-term contracts are intended to provide predictable cash flows by charging tenants based on their allocated power capacity, desire for suit-to-build or power plus shell buildouts, rather than a purely square footage basis. This approach aligns with the energy-intensive demands of hyperscale computing, ensuring scalability and flexibility for our clients' growing raw compute needs. We expect our tenant base to include leading technology companies, hyperscalers and chipmakers with contracts featuring fixed base rents, annual escalations, and provisions for additional power capacity expansions, fostering strong partnerships and recurring revenue streams. This power-centric leasing model positions us to capitalize on the increasing demand for high-performance data center infrastructure while mitigating the uncertainty inherent to the nation's power markets. Tenants who co-locate on our campus but wish to build their own infrastructure will pay market-based ground lease rent or shell rent (with or without power delivery). We expect this to generate recurring real estate income while preserving site control and tenant optionality.

We have incurred, and expect to continue incurring, significant expenditures related to organizational activities, early-stage project development, and costs associated with becoming and operating as a publicly traded company. These expenditures include, but are not limited to:

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Engineering, permitting, and regulatory activities related to energy infrastructure and nuclear licensing;

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Pre-construction costs and due diligence on tenant commitments and energy asset integration;

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Addressing historical environmental conditions;

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Strategic hiring and consulting fees for real estate, utility, and AI infrastructure operations; and

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Legal, financial reporting, and audit compliance costs associated with becoming a public company.

Project Matador is in the early phase of a multi-year, multi-billion-dollar development cycle. As such, our results of operations will vary significantly from period to period. Our continued progress will depend on our ability to secure sufficient capital to fund infrastructure deployment, tenant onboarding, and regulatory milestones. There can be no assurance that our plans to raise capital, enter into lease agreements, or complete development phases on our anticipated schedule will be successful.

We have designed Project Matador with optimal scalability for data center tenants and hyperscalers who are the focus of our planning process. Over time, Project Matador is designed to deliver up to 11 GW of total generation capacity and approximately 15 million square feet of dedicated space to support tenants' AI and other high-performance computing needs. Development is organized into five main phases, some of which will occur concurrently:

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Phase 0: We have begun establishing critical external infrastructure to prepare the Project Matador site for construction. During the third quarter, the TTUS formally commenced the Project Matador campus lease following Fermi's satisfaction of required conditions precedent. This milestone officially activated the 99-year lease and secured Fermi's long-term control of the first 4,523 acres of the Project Matador site, marking a major step toward full-scale project execution.

Since lease commencement, we have begun on-site geotechnical and civil work, initiating physical development across the Project Matador campus. To date, we have installed 6,500 feet of internal roads for campus access, 34,000 feet of fencing, 9,500 feet of barriers, and 12,000 feet of water lines. Approximately four million square feet have been graded across data center, substation, and generation sites, with additional clearing in progress. These activities are keeping the project on schedule to deliver first power by 2026.

Concurrently, we have been securing critical inputs under Phase 0, including an approximately 200 MW expected power supply from SPS, fiber connections, water services from the City of Amarillo, and large-scale natural gas delivery to support on-site energy needs. The initial 200 MW of expected power supply from SPS is anticipated to include approximately 86 MW of contingent firm power delivered through its 115 kV high-voltage system, with the remaining approximately 114 MW to be secured by the Company, with SPS's assistance, through its mobile generation vendors on a temporary basis. This arrangement will remain in place until SPS's transmission network can support the full 200 MW of grid-based power supply, which is expected to occur no later than October 2027 and is currently anticipated to occur materially earlier. In parallel, we have established a laydown yard for equipment and materials and completed foundational groundwork to support the installation of Siemens turbine units and the initial development of approximately one million square feet of data center capacity. Collectively, these efforts ensure the Project Matador campus is fully equipped to support subsequent construction phases and the long-term operational requirements of our tenants.

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Phase 1: During Phase 1, we intend to develop 2.6 million square feet of data center capacity and deploy 1.1 GW of power by the end of 2026 from owned combined cycle gas projects, SPS grid-supplied power, temporary mobile generation sets and BESS systems, with solar photovoltaic generation for energy displacement. Fermi plans to complete site preparation, tenant acquisition, and early-stage interconnection and development work during this phase, with a target date to commence operations in the beginning of Q2 2026 and a Phase 1 completion target date of December 2026.

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Phase 2: This phase contemplates development of an additional one million square feet of data center capacity, served by an incremental 800 MW of firm power supplies, along with required reserve generation capability in the form of responsive aeroderivative and other peaking and intermediate load power generation, battery energy storage systems and related fast response generation and system control assets. This second phase is designed to be predominantly powered by a Fermi-owned, on-site natural gas fired combined cycle generation fleet in conjunction with additional solar for energy displacement purposes and incremental BESS assets, all operating on an integrated basis with the Phase 1 power supply portfolio.

To secure long lead-time equipment and mitigate supply chain risk, Fermi executed a series of key transactions during 2025 to lock in critical generation assets and advance the Phase 2 schedule. In June and July, the Company acquired nine industrial gas turbines (six Siemens frames and three GE units) totaling more than 580 MW of capacity for 2025 delivery, along with steam turbines and other balance-of-plant equipment. These assets, together with our growing fleet of GE TM2500 mobile units, provide substantial flexibility and redundancy during construction and early operations.

Additionally, Fermi executed a letter of intent with Siemens Energy for the purchase of three F-class SGT6-5000F gas turbine packages and related auxiliaries, capable of producing up to 1.1 GW under combined-cycle operation for 2026 deployment. The Company has executed a memorandum of understanding with SPS providing for the expansion of service to Fermi to 200 MW by October 2027, with completion currently expected ahead of that date.

Taken together - including the Siemens agreement, the previously acquired turbine assets, and additional power generation capacity secured through SPS - Fermi now has approximately 2.2 GW of gas-fired generation either secured or under contract. This surpasses the Company's initial 1.1 GW 2026 target and represents roughly 20 percent of Project Matador's planned 11 GW total capacity, underscoring significant progress toward a diversified and de-risked power portfolio. The completion target for Phase 2 remains the end of the third quarter of 2027.

●

Phase 3: We plan to pursue dual track development of additional tenant-contracted data center capacity, served by a combination of new on-site, owned combined cycle natural gas fired generation and the development/construction of the initial 1 GW Westinghouse Reactor. We anticipate a construction period from the granting of the COLA and any associated regulatory permits and approvals of 60 months per reactor from start of construction to project initial commercial operations. The completion target date of Phase 3 is the end of the third quarter of 2031.

●

Phase 4: Fermi intends to complete expansion of tenant infrastructure, grid-scale interconnection, energy redundancy, and supplemental data center capacity, alongside the staged buildout of additional Westinghouse Reactors-totaling up to five additional reactors across two nuclear islands-and the full energy campus, including non-energy amenities. The completion target date of Phase 4 is the end of 2038.

Components of Results of Operations

General and Administrative

General and administrative expenses consist primarily of non-cash share-based compensation and personnel-related expenses for our employees and service providers, including those supporting our corporate, executive, finance, and administrative functions. These expenses also include costs for outside professional services such as legal, accounting, and audit services, as well as other general corporate expenses such as travel and recruiting.

We expect our general and administrative expenses to increase for the foreseeable future as we continue to scale as a company. We also anticipate incurring additional costs as a result of operating as a public company, including expenses associated with compliance with the rules and regulations of the SEC and applicable securities exchanges, as well as legal, audit, investor relations, insurance, and other administrative and professional services. We expect to incur significant non-cash share-based compensation charges in the fourth quarter of 2025 and recurring share-based compensation charges thereafter.

Interest Income (Expense), Net

Interest income (expense), net consists of contractual interest associated with our debt obligations, the amortization of debt discounts and debt issuance costs. Interest income (expense), net is reflected net of capitalized interest.

Other Income (Expense), Net

Other income (expense), net consists primarily of charitable contribution expense, inducement expense related to financing arrangements, and gains or losses resulting from changes in the fair value of financial instruments, including convertible notes accounted for under the fair value option and embedded derivative liabilities.

Results of Operations

The following table sets forth the components of our statements of operations for the periods presented below:

(in thousands)		For the three months ended September 30, 2025				For the period from January 10, 2025 ("Inception") through September 30, 2025
Expenses:
General and administrative		$	37,776			$	43,463
Total expenses			37,776				43,463
Income (loss) from operations			(37,776	)			(43,463	)
Other income (expense):
Interest income (expense), net			12				(669	)
Other Income (expense)			(309,048	)			(309,048	)
Total other income (expense)			(309,036	)			(309,717	)
Net income (loss)		$	(346,812	)		$	(353,180	)

General and Administrative

(in thousands)		For the three months ended September 30, 2025				For the period from January 10, 2025 ("Inception") through September 30, 2025
General and administrative		$	37,776			$	43,463

General and administrative expense for the three months ended September 30, 2025, totaled $37.8 million. The amount primarily reflects $24.8 million of share-based compensation and personnel-related expenses for employees and service providers supporting corporate, executive, finance, and administrative functions, along with costs for outside professional services such as legal, accounting, and audit, and other general corporate activities including travel and recruiting.

General and administrative expense for the period from January 10, 2025 ("Inception") through September 30, 2025, totaled $43.5 million. The amount primarily reflects $28.4 million of share-based compensation and personnel-related expenses for employees and service providers supporting corporate, executive, finance, and administrative functions, along with costs for outside professional services such as legal, accounting, and audit, and other general corporate activities including travel and recruiting.

Interest Income (Expense),Net

(in thousands)		For the three months ended September 30, 2025				For the period from January 10, 2025 ("Inception") through September 30, 2025
Interest income (expense), net		$	12			$	(669	)

Interest income (expense) for the three months ended September 30, 2025, totaled less than $0.1 million and primarily reflects earnings on the Company's cash and cash equivalents invested in a money market deposit account. All interest expense incurred during the three months ended September 30, 2025, was capitalized to construction in progress and, as a result, no interest expense was recognized during the period.

Interest income (expense), net for the period from January 10, 2025 ("Inception") through September 30, 2025, totaled $0.7 million of non-cash interest expense recognized in connection with paid-in-kind convertible notes.

Other Income (Expense), Net

(in thousands)		For the three months ended September 30, 2025				For the period from January 10, 2025 ("Inception") through September 30, 2025
Other income (expense), net		$	(309,048	)		$	(309,048	)

Other income (expense), net for both the three months ended September 30, 2025, and the period from January 10, 2025 ("Inception") through September 30, 2025, totaled $309.0 million. The amount primarily reflects non-cash charges, including a $173.8 million charitable contribution expense related to the donation of 11,250,000 Class B Units to Dechomai Asset Trust, an unrelated, third party, 501(c)(3) public nonprofit organization, a $61.0 million fair value loss recognized on the Series B Convertible Notes for which the Company elected the fair value option, $46.4 million of fair value losses on embedded derivative liabilities associated with the Preferred Units Financing, a $23.7 million inducement expense recognized in connection with the Preferred Units Financing, and $4.2 million of fair value losses on embedded derivative liabilities associated with the Macquarie Term Loan.

Liquidity and Capital Resources

Liquidity and Going Concern

Under ASC Topic 205-40, Presentation of Financial Statements-Going Concern, we are required to evaluate whether conditions or events raise substantial doubt about our ability to meet future financial obligations as they become due within one year after the consolidated financial statements are issued.

As of September 30, 2025, the Company had not generated any revenues. Tenant revenues are currently expected to commence in 2026; however, such revenues are not expected to be sufficient to fund the Company's full operating and capital requirements until Phase 4 of Project Matador is completed and operating at scale. Project Matador will require substantial capital investment to achieve commercial operation. To finance the construction and development of Project Matador during this period, we intend to raise capital through a combination of equity financings, various debt issuances, and tenant prepayments. These financings are not certain to occur. See "-Sources of Liquidity" and "-Planned Use of Capital" below.

Based on our current operating plan and our available capital, we believe our resources are sufficient to satisfy our financial obligations for at least twelve months following the issuance of these consolidated financial statements. Our anticipated liquidity includes our existing cash balance, the net proceeds from our initial public offering, which closed on October 2, 2025, totaling approximately $731.4 million after deducting underwriting discounts and offering expenses, and planned near term funding sources, including tenant prepayments, project-level debt, and strategic equity capital. Our operating plan for the upcoming year is designed to align with capital sources that are either in hand or reasonably expected to be secured within that timeframe.

Macquarie Equipment Financing

On August 29, 2025, Fermi Equipment HoldCo, LLC and Firebird Equipment HoldCo, LLC (the "Borrowers") entered into the Macquarie Term Loan with Macquarie for a $100.0 million senior secured loan, which can be increased to $250.0 million with Macquarie's approval, to finance the Company's obligations under the Siemens Contract and which is guaranteed by the Company. Immediately following the closing of the Macquarie Term Loan, the Company borrowed $100 million under that facility. From time to time the Borrowers may request to increase commitments under the Macquarie Term Loan up to $250 million in the aggregate, with any such additional commitments in Macquarie's sole discretion. The Macquarie Term Loan is secured by (i) all of the assets of the Borrowers, (ii) an equity pledge of the Borrowers by the Company, (iii) a guarantee provided by the Company, and (iv) deposit account control agreements on the Borrowers' bank account. The Macquarie Term Loan has a term of 12 months and bears interest at 1.00% per annum, payable quarterly in arrears. Macquarie has the right to require the Borrowers to fully redeem the Macquarie Term Loan 150 days after close of our IPO, subject to a 1.50 multiple on invested capital (the "Macquarie Multiple"). Additionally, Macquarie has the right to require the Borrowers, with 30 days' notice, to redeem 25% of the then outstanding drawn balance of the Macquarie Term Loan upon the failure of the Borrowers or the Company to execute at least one 100 MW data center lease with a reasonably creditworthy tenant within nine months after the closing of the Macquarie Term Loan, subject to the Macquarie Multiple. Upon its stated maturity, the Macquarie Term Loan is required to be repaid in full and is subject to the Macquarie Multiple.

Preferred Units Financing

On August 29, 2025, the Company issued and sold approximately $107.6 million of its Preferred Units in a private placement to a consortium of third-party investors led by Macquarie. The holders of Preferred Units received a cumulative in-kind dividend at a rate of 15% per annum, compounding annually. Upon the Company's election, it could satisfy such dividend in cash. Additionally, the holders of the Preferred Units were entitled to receive, on an as-converted basis, the same dividends (as to amount and timing) as any dividends paid by the Company on its Class A Units and Class B Units.

The Preferred Units were convertible into the equity securities issued upon the consummation of an initial public offering of common equity securities by the Company or other transaction with the principal purpose of raising capital for the Company and following which the common equity securities of the Company become registered with the SEC, in either case for aggregate gross proceeds of at least $150,000,000 (excluding all proceeds from the incurrence of indebtedness that is converted into such common equity securities, or otherwise cancelled in consideration for the issuance of such common equity securities) (a "Qualified Financing"). Upon such event, each Preferred Unit would automatically converted into a number of equity securities equal to the quotient of (i) $1,000 plus any accrued and unpaid dividends per Preferred Unit, divided by (ii) the applicable conversion price (the "Qualified Financing Securities"). The conversion price was determined by applying a discount percentage to the price per Qualified Financing Security, which varied based on the timing of the Qualified Financing relative to the issuance of the Preferred Units-68.4% if the Qualified Financing closed within six months of issuance, 61.3% if closed within six to twelve months, and 55.7% if closed thereafter.

In connection with the IPO and Corporate Conversion, the Preferred Units converted into 7,586,546 shares of common stock.

Convertible Debt Financing

We have raised $246.6 million through convertible debt financing as follows:

Series Seed Convertible Notes

In May 2025, we issued the Seed Convertible Notes for an aggregate principal amount of $26.1 million. The Seed Convertible Notes bore 15% interest per annum, which interest was payable in-kind on a quarterly basis, and were to mature five years from the date of their issuance. The Seed Convertible Notes were convertible into Class A Units at a conversion price of $2.67 per unit. In connection with the Preferred Units Financing, the Seed Convertible Notes converted into 10,190,931 Class A Units of the Company, with such unit figures presented prior to giving effect to the Corporate Conversion.

Series A Convertible Notes

In June and July of 2025, we issued Series A Convertible Notes for an aggregate principal amount of $75.5 million. The Series A Convertible Notes bore 15% interest per annum, which interest was payable in-kind on a quarterly basis, and were to mature in five years from the date of their issuance. The Series A Convertible Notes were convertible into Class A Units at a conversion price of $4.00 per unit. In connection with the Preferred Units Financing, the holders of the Series A Convertible Notes elected to convert their Series A Convertible Notes into 19,479,315 Class A Units of the Company, with such unit figures presented prior to giving effect to the Corporate Conversion.

Series B Convertible Note

The Company issued the Series B Convertible Note for an aggregate principal amount of $145.0 million in connection with the closing of the Firebird Acquisition. The Series B Convertible Note bore 11% interest per annum, which interest was payable in-kind on a quarterly basis, and was to mature on January 31, 2026. At any time at MAD's election, the Series B Convertible Note was convertible into Class A Units at a conversion price equal to $3,000,000,000 divided by the Company's fully-diluted capitalization immediately prior to the applicable conversion event, assuming exercise or conversion of all convertible securities of the Company, but excluding any Class A Units issuable upon conversion of the Series B Convertible Note or any of the other Series B Convertible Secured Promissory Notes. In connection with the Preferred Units Financing, the holder of the Series B Convertible Note elected to convert its Series B Convertible Note into 9,592,340 Class A Units of the Company, with such unit figures presented prior to giving effect to the Corporate Conversion.

Dividends and Distributions

U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular federal corporate rates to the extent that it annually distributes less than 100% of its REIT taxable income. As a rapidly growing business with significant anticipated capital investments, including substantial investments in assets on which we will incur large amounts of non-cash depreciation expense that will reduce our net income, we do not expect to generate material amounts of REIT taxable income in the near term. While it is possible that we may elect to pay dividends to our shareholders out of operating cash flow before we begin earning material amounts of REIT taxable income, we do not have any current intention to do so. As we begin to earn REIT taxable income, we will begin to pay dividends in order to satisfy the requirements for us to qualify as a REIT and generally not be subject to U.S. federal income and excise tax. Our policy will be to pay dividends to our shareholders equal to all or substantially all of our REIT taxable income out of assets legally available therefor.

As a result of the REIT distribution requirement, we will be unable to rely on retained earnings to fund our ongoing operations to the same extent that other companies which are not REITs can. We may need to continue to raise capital in the debt and equity markets to fund our working capital needs.

Sources of Liquidity

We expect our liquidity to be supported by a diversified capital strategy designed to fund phased infrastructure development and long-term operations. Our approach combines the net proceeds from our IPO, structured project-level non-recourse debt, monetization of federal energy tax credits, strategic equity investments, government grants, and property tax abatement. In addition, our business model is reinforced by tenant prepayments and a capital-efficient real estate structure. We believe the net proceeds raised in our IPO will support the procurement and timely-delivery of key power generation assets. These assets, when combined with the intrinsic value of the Project Matador Site, we believe should allow us to finance future SPE developments with capital provided by customer prepayments and the SPE's creditors without requiring cash contributions from the Company.

Our principal sources of liquidity are expected to include:

●

Net Proceeds from our IPO: We intend to use a portion of the net proceeds from the IPO to fund early-stage infrastructure investments, including site mobilization, nuclear licensing, turbine procurement, and the initial wave of data center shell construction. These investments support foundational project elements required to unlock additional strategic capital and advance our Project Matador milestones.

●

Tenant Prepayments: We expect a significant portion of our contracted revenue base to come from investment-grade tenants, many of whom are anticipated to provide upfront capital contributions or structured prepayments to support dedicated infrastructure buildout. These prepayments enhance early-stage liquidity and reduce reliance on dilutive equity or bridge financing. For non-investment grade tenants, we intend to require larger upfront prepayments, third-party credit enhancements, or insurance wrappers to mitigate counterparty risk and preserve underwriting standards. This structured approach to tenant capital participation is designed to strengthen our balance sheet, support project-level debt financing, and align tenant incentives with long-term infrastructure utilization. On November 4, 2025, the Company executed a $150 million Advance in Aid of Construction ("AIAC") Agreement with the First Tenant. The AIAC establishes a cost reimbursement framework under which the tenant will fund a portion of shared infrastructure and utility systems in advance of occupancy.

●

Project-Level Debt Financing: We intend to primarily utilize milestone-driven, non-recourse debt raised through project-specific SPEs, each aligned with discrete infrastructure components such as nuclear, natural gas, solar, and battery assets. These financings will be secured by revenue-generating infrastructure, including tenant lease payments, energy generation assets, or renewable infrastructure. See "-Recent Developments" above for a discussion of recent project-level debt financing.

●

Federal Tax Credits: To the extent that tax incentives, such as those under Sections 45J (nuclear production), 45Q (carbon capture), 45V (clean hydrogen production credit), and 48C (advanced manufacturing) of the Code, are available to us, we expect to apply for and monetize such tax incentives.

●

Strategic Equity Capital: We may raise equity capital from infrastructure investors, energy sponsors, or anchor tenants seeking co-investment opportunities in our vertically integrated campus model. In addition, we may opportunistically access the capital markets through follow-on equity offerings, private placements, convertible debt instruments, or bond issuances. All capital raising activities will be evaluated based on market conditions, expected accretion, and alignment with our long-term capital structure and development strategy.

●

Government Grants and Public Incentives: We have submitted or plan to submit applications to federal and state infrastructure programs, including the DOE Loan Programs Office, the Advanced Reactor Demonstration Program, and the Texas HB14 Advanced Nuclear Completion Fund. We are currently in the pre-approval process with the DOE Loan Programs Office. If approved, the DOE loan would provide long-term, low-cost capital to finance key components of our advanced energy infrastructure, significantly reduce our weighted average cost of capital, de-risk private participation, and enable milestone-based funding aligned with regulatory and construction schedules. The DOE loan is expected to support broader investor confidence, catalyze private equity co-investment, and serve as a critical enabler of long-term project viability.

●

Property Tax Abatement: In October 2025, Carson County approved a 10-year property tax abatement and established a reinvestment zone for the Project Matador campus. This agreement provides a framework that encourages local investment, supports regional economic growth, and creates long-term, sustainable jobs while generating new tax revenues for the community. The approved abatement will significantly reduce early-year site tax liabilities, improving free cash flow during the initial construction phase.

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Monetization of Lease Agreements: We plan to monetize long-term lease agreements with hyperscale and industrial tenants through structured financing arrangements, including upfront payments, securitizations, or synthetic sale structures. These agreements-anchored by take-or-pay provisions and long-duration contract terms-are expected to generate predictable, investment-grade cash flows suitable for conversion into near-term liquidity. By monetizing long-term lease agreements, we can unlock non-dilutive capital to fund infrastructure buildout while maintaining operational control of our energy assets. This strategy complements our broader project finance approach and supports capital recycling across phases of campus development.

Although we plan to fund near-term development activity through a combination of proceeds from our IPO, tenant prepayments, project-level debt financing, and strategic equity capital, there can be no assurance that such capital will be available in the amounts required or on favorable terms. Access to financing may be constrained by changes in macroeconomic conditions, increases in interest rates, tenant-specific credit risks, regulatory shifts, or other market factors beyond our control. In addition, if we encounter adverse findings during environmental diligence, engineering assessments, or other aspects of site development that render all or part of the Project Matador campus unsuitable-or impair the use of our real estate assets as collateral for secured financing-then our ability to raise additional debt or equity capital could be significantly limited.

We may also experience delays in construction that extend beyond our estimated development timeline. Prolonged development periods could increase project costs beyond budgeted amounts and reduce the availability of expected tenant contributions or rent payments to fund operations during interim periods. Any such timing misalignments could necessitate additional bridge capital or contingency financing, which may not be available on acceptable terms, or at all. Furthermore, unanticipated events-such as permitting delays, failure to secure required regulatory approvals, evolving tenant demand, or force majeure events-could result in liquidity shortfalls or force us to amend our capital plan.

Market conditions may also affect our ability to raise capital. For example, credit providers or their regulators may shift policy away from funding projects involving nuclear or fossil-based generation assets, or may reduce exposure to long-duration infrastructure development with extended pre-revenue periods. Even if financing is available, we may be required to accept unfavorable terms, including higher cost of capital, restrictive covenants, or equity dilution, all of which could impair our ability to execute our business plan. If we are unable to raise capital in the amounts, timing, or terms we expect, we may be forced to delay capital expenditures, amend or terminate our purchase commitments or surrender assets pledged as collateral under our financing agreements in order to preserve liquidity, which could materially extend our development timeline and delay one or more phases of Project Matador, preventing us from achieving planned operational and financial milestones within the anticipated timeframe.

Planned Use of Capital

We anticipate deploying our capital resources to support the following development activities:

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Civil site preparation, pad grading, utility trenching, and fiber backhaul installation;

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Procurement and installation of mobile and permanent gas-fired and nuclear power infrastructure;

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Address historic environmental conditions;

●

NRC licensing and environmental permitting activities;

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Construction of modular powered shell data center facilities and supporting infrastructure; and

●

Capitalization of early-phase SPEs to enable project-level debt financing.

The Company's long-range capital plan is shaped by a phased infrastructure delivery model, including a roadmap to deploy four Westinghouse Reactors, and a multi-phase gas generation strategy. Our current plan envisions the commissioning of one Westinghouse Reactor unit in each of 2032, 2034, 2035 and 2036. Each unit is expected to be financed through a combination of tenant prepayments, project debt, DOE loan guarantees, state-level incentive programs, and strategic equity.

For our gas-fired assets, we expect to deploy modular TM-2500, GE 6B, Siemens SGT-800, and similarly reliable and efficient industrial frame-class gas turbines operating in combined-cycle mode, as well as aeroderivative turbines used for peaking and reserve capacity. Capital outlays are staged to support construction timelines beginning in Q4 2025, with anticipated fuel consumption for the initial 1 GW of load averaging slightly under 200,000 MMBtu per day, after accounting for approximately 86 MW of SPS grid power. We are actively engaged in procurement and EPC partner selection processes to secure long-lead assets and ensure cost containment.

The capital expenditures we expect to incur as we complete the development of Project Matador will be significant. We currently estimate that the total capital expenditures we will incur to complete the development of Phase 0 and Phase 1 of Project Matador could exceed $2 billion, excluding amounts expected to be financed by our tenants of which approximately $1.2 billion is expected to be incurred in the next twelve months across all phases. These near-term expenditures are expected to be funded through a combination of net proceeds from our IPO, tenant prepayments, project-level debt financing, and strategic equity capital. The required capital expenditures for the remaining phases are difficult to estimate with precision and will depend on final tenant composition, generation mix, supply chain dynamics, and site optimization decisions; however, we currently expect total capital needs across all phases could range from approximately $70 billion to $90 billion, which is dependent on several factors including (i) EPC costs currently being negotiated, (ii) precise configuration of power equipment, which is largely complete for Phase I, but in process for future phases, (iii) whether the nuclear and solar aspects of the project qualify for tax credits, which is dependent on ongoing policy decisions, and (iv) general uncertainties associated with detailed long-term forecasting large-scale projects of this nature.

Liquidity Outlook

We believe the proceeds from our IPO, together with prepayment financing from tenants, the convertible note and preferred unit issuances, the Macquarie Term Loan, and future project-level and strategic equity capital, will provide sufficient liquidity to execute Phase 1 of Project Matador, including delivery of 2.6 million square feet of data center capacity and 1.1 GW of power infrastructure.

Future phases of development will require additional capital. We expect to access capital markets periodically, and in the event of delays in lease execution, permitting, or financing, we may adjust the deployment timeline or pursue interim bridge financing. We actively monitor our capital structure, project execution risk, and market conditions and will modify our funding strategy to ensure long-term flexibility and scalability.

We continuously monitor our capital structure, access to credit markets, and project execution risk, and will adjust our funding strategy as necessary to support long-term development goals while maintaining financial flexibility.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

(in thousands)		For the period from January 10, 2025 ("Inception") through September 30, 2025
Net cash used in operating activities		$	8,291
Net cash used in investing activities			96,321
Net cash provided by financing activities		$	287,605

Cash Flows Used in Operating Activities

For the period from January 10, 2025 ("Inception") through September 30, 2025, net cash used in operating activities was $8.3 million. This reflects a net loss of $353.2 million, which is offset by certain non-cash charges including a $173.8 million charitable contribution of Class B Units to Dechomai Asset Trust, an unrelated, third party, 501(c)(3) public nonprofit organization, a total of $111.6 million of fair value adjustments consisting of $61.0 million of fair value losses on our Series B Convertible Notes accounted for under the fair value option, $46.4 million of fair value losses on embedded derivative liabilities related to the Preferred Units Financing, and $4.2 million of fair value losses on embedded derivative liabilities associated with the Macquarie Term Loan, $28.4 million of share-based compensation expense, and $23.7 million of inducement expense related to the Preferred Units Financing.

Working capital changes also impacted cash flows from operations. Accounts payable and accrued liabilities increased $10.8 million, reflecting growth in vendor activity related to pre-development efforts. This increase was partially offset by a $4.1 million use of cash related to prepaid expenses and other current assets, primarily driven by initial deposits and prepaid rent related to the TTU Lease associated with Project Matador.

Cash Flows Used in Investing Activities

For the period from January 10, 2025 ("Inception") through September 30, 2025, net cash used in investing activities totaled $96.3 million. The primary driver was $89.0 million of investments in construction in progress for early-stage development of Project Matador, including equipment procurement. An additional $7.3 million was associated with the capitalized preacquisition cost. These investments reflect our continued execution of the development roadmap for Phase 0 and Phase 1 of the Project Matador campus.

Cash Flows Provided by Financing Activities

For the period from January 10, 2025 ("Inception") through September 30, 2025, net cash provided by financing activities was $287.6 million. The primary sources of cash were $107.6 million from the issuance of Preferred Units, $100.0 million from the issuance of the Macquarie Term Loan, $75.5 million from the issuance of Series A Convertible Notes, and $26.1 million from the issuance of Seed Convertible Notes.

These inflows were partially offset by a $15.0 million payment of a promissory note, $6.5 million of deferred offering costs, and $1.0 million of debt issuance costs. The proceeds were used to support early operating activities, satisfy financing-related obligations, and advance preconstruction milestones for Project Matador.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires the appropriate application of certain accounting policies, many of which require us to make estimates, judgments and assumptions about future events and their impact on amounts reported in the financial statements and related notes. Since future events and the impact of those events cannot be determined with certainty, the actual results will inevitably differ from our estimates. These differences could be material to the financial statements. We believe our application of accounting policies, and the estimates and assumptions inherently required therein, are reasonable. These accounting policies and estimates are constantly reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, our application of accounting policies has been appropriate, and actual results have not differed materially from those determined using necessary estimates.

The following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

Property, Plant, and Equipment

Construction in Progress

Construction in progress represents the accumulation of development and construction costs related to the Company's capital projects. These costs are reclassified to property, plant, and equipment when the associated project is placed in service. The Company begins capitalizing project costs once acquisition or construction of the relevant asset is considered probable. Interest costs incurred associated with the construction are capitalized as part of construction in progress until the underlying asset is ready for its intended use. Once the asset is placed in service, the capitalized interest is amortized as a component of depreciation expense over the life of the underlying asset. Interest is capitalized on qualifying assets using a weighted average effective interest rate applicable to borrowings outstanding during the period to which it is applied, and limited to interest expense actually incurred.

Share-based Compensation

The Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation. Equity instruments issued to employees and non-employees in exchange for goods or services are measured at fair value on the grant date and recognized over the requisite service period, which is generally the vesting period. The Company has elected to account for forfeitures as they occur.

The Company has granted restricted equity units ("REUs") that vest upon the satisfaction of either a service-based condition only or a combination of service-based, performance-based, and market-based conditions. The grant-date fair value of REUs is generally determined based on the fair value of the Company's units on the grant date. For awards that include a market-based condition, the grant-date fair value is estimated using a Monte-Carlo simulation model that incorporates assumptions such as expected term, expected volatility, and risk-free interest rates. Following the completion of the IPO, the fair value of each share underlying new awards will be based on the closing price of the Company's common stock on the Nasdaq Stock Market on the grant date.

Share-based compensation expense is recognized on a straight-line basis over the requisite service period for awards with only service-based conditions. For awards with performance-based or market-based vesting conditions (or both) compensation expense is recognized using the graded vesting method over the requisite service period. For awards with performance-based conditions, expense recognition begins when the performance condition is deemed probable of achievement, and cumulative expense is recognized for service rendered to date. If the performance condition is not deemed probable, no expense is recognized until such time as it becomes probable.

The determination of grant-date fair value and the timing of expense recognition for awards containing market or performance conditions require significant judgement, including assumptions regarding the likelihood of achieving specific performance targets, the expected volatility of the Company's common units or shares, and the expected term of the awards. These judgements could materially affect the amount and timing of share-based compensation expense recognized in future periods.

Fair Value of Class A and Class B Units

We have issued certain Class A and Class B Units as equity compensation. Each Class A and Class B Unit represents an identical economic interest in the Company. Class B Units are non-voting. For all issuances prior to our IPO, the fair value of the units granted was determined on the applicable grant date by our board of managers, which exercised reasonable judgment in the absence of a public trading market for our equity.

To determine the fair value of the units, our board considered a number of objective and subjective factors and relied on third-party valuations of the Company's equity prepared in accordance with the guidance provided by the American Institute of Certified Public Accountants' 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the "Practice Aid"). Key considerations in determining fair value included, but were not limited to:

●

the prices, rights, preferences, and privileges of the Company's outstanding debt and equity instruments;

●

our business condition, results of operations, and related industry dynamics;

	●	probabilities of success and resulting business enterprise valuation;
	●	the likelihood, timing, and nature of a potential liquidity event;

●

the lack of marketability of our equity;

	●	the Company's cost of borrowing;
	●	the market performance of comparable publicly traded companies; and

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prevailing U.S. and global economic, capital market, and regulatory conditions.

Enterprise Valuation Methodology

Our third-party valuation firm prepares our valuations in accordance with the guidelines in the Practice Aid, which prescribes several valuation approaches for setting the value of an enterprise, such as the cost, income and market approaches, and various methodologies for allocating the value of an enterprise to its common stock. The cost approach establishes the value of an enterprise based on the cost of reproducing or replacing the property less depreciation and functional or economic obsolescence, if present. The income approach establishes the value of an enterprise based on the present value of future cash flows that are reasonably reflective of a company's future operations, discounting to the present value with an appropriate risk adjusted discount rate or capitalization rate. The market approach is based on the assumption that the value of an asset is equal to the value of a substitute asset with the same characteristics. Our third-party valuation firm utilized the income approach to estimate the enterprise value of the Company. Under the income approach, enterprise value is determined using a discounted cash flow analysis that reflects management's projections of future cash flows. These projected cash flows are discounted to present value using weighted average cost of capital, which is informed by market data from guideline public companies with comparable operating and financial characteristics, adjusted to reflect the Company's stage of development, capital structure, and company-specific risk factors. The resulting enterprise value was adjusted by a probability decision tree to derive the value of the Company as of the valuation dates.

Recent Accounting Pronouncements

See Note 2, "Significant Accounting Policies" to our consolidated financial statements for more information about recent accounting pronouncements and the anticipated effects on our consolidated financial statements.

Commitments and Contractual Obligations

Commitments

As of September 30, 2025, we had purchase commitments of approximately $134.0 million related to the Siemens Contract. Under the Siemens Contract, we are obligated to make the remaining contractual payments and related shipping costs pursuant to contract milestones. See Note 5, Acquisitions, for a description of the Firebird Acquisition and the related Siemens Contract.

As of September 30, 2025, the Company had various fixed and variable lease payment obligations associated with the TTU Lease. See Note 8, Leases, for additional information.

Contingencies

In the ordinary course of business, we may become party to various legal actions that are routine in nature and incidental to the operation of the business. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred, and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. As of September 30, 2025, we are not a party to any pending legal proceedings, and no claims have been asserted against us that, individually or in the aggregate, are expected to have a material effect on our financial position or results of operations.

As part of the Firebird Acquisition, the Company also assumed the obligation to pay NPI to the Seller. Under the NPI, the Company is liable to pay a portion of 2.5% of net operating income from the first 1000 MW of installed dispatchable generation capacity at the Company's data center campus. See Note 5, Acquisitions, for more information.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements.