Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, and our Form 10-K for the year ended December 31, 2025.

Certain information in this Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. You can identify these forward-looking statements by the words "believes," "intends," "expects," "might," "may," "will," "should," "plans," "projects," "contemplates," "intends," "budgets," "potential," "predicts," "estimates," "anticipates," "future," "goal," and variations of such words or similar expressions. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates and projections will result or be achieved, and actual future results may differ materially from what is expressed in or indicated by the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A, under the heading "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on March 31, 2026, and under "Part II, Item 1A., Risk Factors" in this Quarterly Report on Form 10-Q, if and as such risk factors may be updated from time to time in our periodic filings with the SEC. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and a reader, whether investing in our common stock or not, should not place undue reliance on these forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

Overview

Axe Compute Inc. provides customers with access to GPU compute capacity for AI and other high-performance computing workloads through a distributed network model, including infrastructure made available through the Aethir network. We operate a digital asset treasury (the "Treasury Strategy") focused on ATH, the native utility token of the Aethir network. Collectively, these activities are referred to as the Compute Services and Treasury Management operating segment within our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. We have operated this segment since late 2025 when it undertook a significant strategic shift by adopting the Treasury Strategy and began expanding our business strategy to include the GPU compute business.

We maintain our legacy oncology drug discovery solutions business, which was previously conducted under the Predictive Oncology Inc. name. Current operations in this business are limited, and the Company is exploring strategic alternatives, including a potential sale or other disposition, although no definitive plan has been approved. Historically, this business applied AI to support the discovery and development of cancer therapies, with the objective of improving treatment effectiveness and patient outcomes. The business leveraged AI capabilities to provide actionable insights about drug compounds to improve the drug discovery process and increase the probability of drug compound success. In February 2026, the Company announced that it is exploring strategic alternatives for this oncology drug discovery solutions business, but the Company's Board of Directors has not committed to a specific course of action. Accordingly, the oncology drug discovery solutions business did not meet the criteria under Financial Accounting Standards Board (the "FASB") Accounting Standards Codification ("ASC") 205-20, Discontinued Operations to be classified as discontinued operations and held for sale, and therefore is reflected as continuing operations within the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Aethir Treasury Strategy

On September 29, 2025, the Company announced the launch of its Treasury Strategy focused on ATH. Aethir is a leading decentralized physical infrastructure network developed by DCI, that provides a decentralized GPU network, connecting producers and consumers of GPU compute power at enterprise scale, supporting applications such as artificial intelligence computation, gaming and cloud workloads. ATH functions as a proxy for a unit of GPU compute power and serves as a medium of exchange and unit of incentives for participants in the Aethir network. Participants in the Aethir network can generate yield or other rewards by staking or lending ATH or by otherwise serving as a source of ATH liquidity.

Pursuant to the Treasury Strategy, the Company intends to continue acquiring additional ATH in the open market and to earn yield on its ATH treasury holdings by engaging in ATH staking and other activities. As a holder of ATH, the Company accrues unrealized gains or losses from any appreciation or depreciation, as applicable, in the value of ATH tokens, which trade on various cryptocurrency exchanges.

The Company's management is focusing its resources on the Treasury Strategy, and a significant portion of the Company's balance sheet will be allocated to holding ATH pursuant to its Treasury Strategy.

Currently, the Treasury Strategy is primarily dedicated to ATH, and the Company does not intend to allocate treasury assets to other digital assets in the near term. As a result, the Company's assets will be highly concentrated in a single digital asset. Adverse developments specific to ATH, its protocol, or its network could have a disproportionate impact on the Company's financial condition and results of operations.

The Company's Treasury Strategy is intended to bring value to its stockholders through the following:

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utilizing proceeds from equity and debt financing to purchase and hold ATH;

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staking the majority of the ATH in our treasury to earn a staking yield and turn the treasury into a productive asset;

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purchasing locked ATH at a discount to the current spot price; and

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selling our ATH holdings, whether on the open market, through block trades, or other negotiated transactions, for various reasons and at various times, including, in order to fund our working capital and general corporate needs.

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entering into arrangements with customers as a GPU compute services provider where the Company procures GPU compute capacity and resells that capacity to downstream customers.

There can be no assurance that the value of ATH will increase, and investors should carefully consider the risks associated with digital assets.

Recent Developments

On February 6, 2026, our Board voted to terminate, without cause, the employment of Raymond F. Vennare as Chief Executive Officer, effective February 9, 2026. Mr. Vennare also resigned as Chairman and a member of the Board effective the same date. In connection with his termination, Mr. Vennare entered into a separation agreement providing for severance and other benefits. The Board appointed Chuck Nuzum, an existing member of the Board, as Chairman effective February 9, 2026. In addition, the Board appointed Christopher Miglino as Chief Executive Officer and as a member of the Board effective February 9, 2026. In connection with his appointment, we entered into an employment agreement with Mr. Miglino and granted him stock options to purchase 500,000 shares of our common stock as an inducement award.

On February 24, 2026, we announced that we engaged Cardiff Advisory LLC to assist in exploring strategic alternatives for our Legacy Business. The strategic review process, which is being conducted under the oversight of our Board, may include a potential sale, partnership, licensing arrangement, joint venture or other transaction involving the Company's biobank platform and related operations. The review reflects our continued focus on advancing our artificial intelligence compute infrastructure strategy while evaluating opportunities to maximize value from non-core legacy assets. There can be no assurance that the strategic review process will result in any transaction.

On March 3, 2026, we announced that our Board appointed Dr. Theodore Zhu and Thorsten Dirks as members of the Board.

On April 1, 2026, the Board appointed Kyle Okamoto as President and the Company entered into an employment agreement with Mr. Okamoto, which provides for, among other things, an annual base salary equal to $360,000, and at the discretion of the Compensation Committee, grants of stock options or other equity awards. Mr. Okamoto will also be eligible to participate in the Company's (i) bonus program with annual cash bonus of up to 150% of his salary or a higher percentage based on performance, (ii) long-term incentive plan to be adopted and maintained by the Compensation Committee, and (iii) standard employee benefit plans.

Additionally, on April 1, 2026, as a material inducement to Mr. Okamoto's appointment as President, the Company granted Mr. Okamoto stock options to purchase 300,000 shares of the Company's common stock at an exercise price of $1.62, pursuant to a Stock Option Inducement Award Agreement between Mr. Okamoto and the Company. One-third of the options granted to Mr. Okamoto will vest on the first anniversary of April 1, 2026, with the remaining two-thirds of the options vesting in equal monthly installments over the following twenty-four months, in each case subject to Mr. Okamoto's continued employment with or service to the Company through each applicable vesting date.

On April 10, 2026, Josh Blacher advised the Company of his intention to resign from his position as Chief Financial Officer of the Company, effective May 18, 2026. Mr. Blacher's resignation was not due to any disagreement with the Company on any matter relating to the Company's operations, policies, or practices.

On April 16, 2026, the Board appointed Jeremy Yaukey-Witter to serve as Co-Chief Financial Officer of the Company alongside Mr. Blacher from April 16, 2026 through May 18, 2026, and to serve as the sole Chief Financial Officer of the Company after May 18, 2026. The Company entered into an employment agreement with Mr. Yaukey-Witter, which provides for, among other things, an annual base salary equal to $280,000, and at the discretion of the Compensation Committee, grants of stock options or other equity awards. Mr. Yaukey-Witter will also be eligible to participate in the Company's (i) bonus program with annual cash bonus of up to 40% of his salary or a higher percentage based performance, (ii) long-term incentive plan to be adopted and maintained by the Compensation Committee, and (iii) standard employee benefit plans.

Additionally, on April 16, 2026, as a material inducement to Mr. Yaukey-Witter's appointment as Co-Chief Financial Officer, the Company granted Mr. Yaukey-Witter stock options to purchase 225,000 shares of the Company's common stock at an exercise price of $3.51, pursuant to a Stock Option Inducement Award Agreement between Mr. Yaukey-Witter and the Company. One-third of the options granted to Mr. Yaukey-Witter will vest on the first anniversary of April 16, 2026, with the remaining two-thirds of the options vesting in equal monthly installments over the following twenty-four months, in each case subject to Mr. Yaukey-Witter's continued employment with or service to the Company through each applicable vesting date.

On April 22, 2026, the Company announced its entry into a 36-month enterprise infrastructure contract with an enterprise customer (the "April Agreement"). The April Agreement has an aggregate contract value of approximately $260 million. Under the April Agreement, the Company will deliver a dedicated cluster of 2,304 NVIDIA B300 GPUs and AI-focused high-speed storage infrastructure from a single U.S. Tier 3 data center facility. The cluster is intended to support large-scale AI model training, fine-tuning, and high-throughput inference workloads. The infrastructure will maintain NVIDIA reference architecture throughout the contract period. The initial term of the Agreement is 36 months, with targeted deployment commencing in the third quarter of 2026. The Agreement includes options to renew for additional years beyond the initial term. The payment structure under the April Agreement consists of a deposit, prepayment, and monthly payments made in advance on a take-or-pay basis. The agreement includes enterprise-grade service levels.

Capital Requirements

Since inception, the Company has incurred recurring losses and has not generated sufficient revenues to fund its operations. Historically, the Company has financed its activities through a combination of debt and equity financings. Since 2023, the Company has monetized certain assets and reduced operating expenses. In September 2025, the Company adopted its Treasury Strategy, which introduced both new sources of capital and additional capital requirements. See "Liquidity and Capital Resources-Liquidity and Plan of Financing" and "Liquidity and Capital Resources-Financing Transactions" below.

As of March 31, 2026, the Company had approximately $6.9 million in cash and cash equivalents. Additionally, the Company also holds significant ATH digital assets, which may serve as an additional source of liquidity. However, the market price of ATH has exhibited significant volatility over recent periods and remains subject to rapid fluctuations driven by factors such as market sentiment, regulatory developments, network adoption, governance decisions of the Aethir Foundation, and broader crypto-asset market conditions.

Additional sources of liquidity include the Company's at-the-market ("ATM") facility, under which approximately $18.3 million remained available as of the prospectus supplement filed with the SEC on October 29, 2025, as well as a standby equity purchase agreement ("SEPA") that allows the Company to sell up to $10.0 million of its common stock, in each case subject to the terms, conditions, and limitations of the respective arrangements.

The Company's future cash requirements and the adequacy of its available resources will depend on its ability to generate revenue from its compute services and Treasury Strategy, as well as its ability to access additional financing. Management expects operating losses to continue in the near term as the Company scales these initiatives. Given the Company's recent strategic shift, its future operating results are inherently uncertain, and period-to-period comparisons may not be indicative of future performance.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

		2026				2025				Difference
Revenue		$	35,311			$	110,310			$	(74,999	)
Gains (losses) on digital assets			(4,296,268	)			-				(4,296,268	)
Cost of revenues			2,856				45,118				(42,262	)
General and administrative expenses			2,909,036				1,828,200				1,080,836
Research and development			547,445				520,406				27,039
Sales and marketing expenses			8,387				3,633				4,754
Total operating gain (loss)			(7,728,681	)			(2,287,047	)			(5,441,634	)
Other income (expense)			19,738				1,631				18,107
Income (loss) from continuing operations			(7,708,943	)			(2,285,416	)			(5,423,527	)
Income (loss) from discontinued operations			-				(157,457	)			157,457
Net income (loss)		$	(7,708,943	)		$	(2,442,873	)		$	(5,266,070	)

Revenue. We recorded revenue of $35,311 and $110,310 in the three months ended March 31, 2026 and 2025, respectively. Revenue in the three months ended March 31, 2026, decreased from the prior year due to a reduced amount of revenue generating activities within the Drug Discovery Services segment.

Gains (losses) on digital assets. We recorded a loss on digital assets of $4,296,268 in the three months ended in March 31, 2026, with no such losses recorded in the comparative period. The losses in the 2026 period primarily represents the change in fair value of the Company's ATH holdings, which were not present in the comparative period.

Cost of revenues. Cost of revenues was $2,856 and $45,118 in the three months ended March 31, 2026 and 2025, respectively. Similarly to revenue, cost of revenues decreased due to a reduced amount of activity within the Drug Discovery Services segment.

General and administrative expenses. General and administrative ("G&A") expenses primarily consist of management salaries, professional fees, consulting fees, administrative fees, and general office expenses. G&A expenses increased by $1,080,836 to $2,909,036 in the three months ending March 31, 2026, compared to $1,828,200 in the comparable period in 2025. The increase was primarily due to the severance expense to the prior CEO and an increase in payroll expenses due to salary increases for existing employees and stock based compensation expense in the three months ending March 31, 2026.

Research and development expenses. Research and development expenses primarily consist of expenses related to product development, prototyping, and testing. Research and development expenses increased by $27,039 to $547,445 in the three months ended March 31, 2026, compared to $520,406 in the comparable period in 2025. The increase was primarily due to increases in cloud computing costs and other lab supplies.

Sales and marketing expenses. Sales and marketing expenses consist of expenses required to market and sell our products and services. Sales and marketing expenses increased by $4,754 to $8,387 in the three months ended March 31, 2026, compared to $3,633 in the comparable period in 2025. Sales and marketing expenses were relatively stable year over year.

Other income. We recognized other income of $20,628 during the three months ended March 31, 2026, compared to $3,428 in the comparable period in 2025. Other income increased due to dividend payments received.

Liquidity and Capital Resources

Cash Flows

On March 31, 2026, we had $6,925,244 in cash and cash equivalents. Cash and cash equivalents from continuing operations decreased by $3,865,606 from December 31, 2025, due to the following factors.

Net cash used in operating activities of continuing operations was $3,746,423 in the three months ended March 31, 2026, compared to $985,840 in the three months ended March 31, 2025. Cash used in operating activities of continuing operations increased due to increased cash used in working capital and increased cash operating expenses. Cash used in working capital reflected payments of accounts payable and accrued expenses outstanding at the start of the period. Increased cash operating expenses primarily reflected cash payments for additional professional services resulting from the Company's adoption of the Treasury Strategy such as asset management and accounting advisory services.

The Company used $21,000 in investing activities of continuing operations in the three months ended March 31, 2026, to acquire property and equipment. No cash was used in investing activities of continuing operations in the three months ended March 31, 2025.

Net cash used in financing activities of continuing operations was $98,183 in the three months ended March 31, 2026, compared to $2,499,687 provided by financing activities of continuing operations in three months ended March 31, 2025. Cash provided by financing activities of continuing operations in the 2025 period was primarily related to proceeds from the issuance of common stock and warrants.

Net cash provided by discontinued operations was $0 in the three months ended March 31, 2026, compared to $854,494 provided by discontinued operations in the three months ended March 31, 2025. Net cash provided by operating activities and investing activities of discontinued operations was $229,494 and $625,000, respectively. for the three months ended March 31, 2025. The cash provided in the 2025 period related to proceeds from the sale of Eagan assets pursuant to the asset purchase agreement executed with DeRoyal in March 2025.

Liquidity and Plan of Financing

Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. We have incurred significant and recurring losses from operations for the past several years. As of March 31, 2026, and December 31, 2025, we had cash and cash equivalents of $6,925,244 and $10,790,850, respectively, and working capital of $33,365,078 and $38,503,051, respectively, and accumulated deficit of $421,230,417 and $413,521,474, respectively.

To meet its short-term liquidity needs in the next twelve months, which are primarily comprised of working capital requirements, the Company has access to various sources of short-term liquidity including cash and cash equivalents and ATH tokens in its treasury. These include approximately 3.2 billion ATH tokens held as of March 31, 2026, and an additional 1.6 billion ATH tokens expected to vest over the subsequent twelve-month period. Although we do not anticipate needing to use our ATH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ATH to meet such needs. Additional sources of liquidity could include the Company's ATM facility and the SEPA facility, subject to certain limitations and conditions associated with the respective facilities.

Management considers the ATM facility to be a viable source of incremental liquidity during fiscal year 2026, subject to market conditions. Management does not assume immediate or full utilization of the ATM facility in its base-case liquidity forecast. Rather, ATM proceeds are considered a discretionary funding source that could be accessed opportunistically during periods of sufficient market liquidity and pricing stability. Based on current market conditions, management believes that any ATM issuances, if undertaken, would likely have potential to occur in fiscal year 2026.

Beyond the next twelve months, our long-term liquidity needs are primarily for obligations related to working capital requirements. Our ability to meet these needs and the adequacy of available funds depend on our ability to generate income from our compute services and Treasury Strategy, and the availability of future financing to fulfill our business plans. The Company will also have access to an additional 1.5 billion ATH tokens expected to be vested beyond twelve months from March 31, 2026.

Management notes that a significant portion of the Company's liquidity is held in ATH, a digital asset, which has exhibited substantial price volatility over recent trailing 3-, 6-, and 9-month periods. The Company acknowledges that ATH prices are subject to rapid fluctuations due to factors including market sentiment, regulatory developments, network adoption, governance decisions of the Aethir Foundation, and broader crypto-asset market conditions.

Management has considered downside price scenarios in which the market price of ATH declines materially over the 12-month period following the balance sheet date. Under these scenarios, the U.S. dollar value of the Company's ATH holdings available for liquidity purposes would be reduced, which has the potential to pressure the Company's ability to fund operating expenses.

Management has incorporated these possible scenarios when determining the Company's liquidity, however, management believes the Company has access to sufficient alternative liquidity sources, as noted above, to weather adverse ATH market price conditions.

Financing Transactions

We have primarily funded our operations through a combination of debt and equity instruments including short-term borrowings, and a variety of debt and equity offerings. We have no off-balance sheet transactions.

Registered Direct Offering

On February 18, 2025, we entered into a Securities Purchase Agreement (the "Purchase Agreement") with several institutional and accredited investors for the sale by us of 24,223 shares (the "Registered Direct Offering Shares") of our common stock, par value $0.01 per share, at a purchase price of $22.50 per share, in a registered direct offering. The offering closed on February 19, 2025. Our gross proceeds from the offering were approximately $545,000, before deducting the placement agent's fees and other offering expenses. We offered and sold the Registered Direct Offering Shares pursuant to an effective shelf registration statement on Form S-3, which was filed with the SEC on May 21, 2024, and subsequently declared effective on May 21, 2024 (File No. 333-279123), and a related prospectus supplement filed on February 19, 2025.

We agreed to pay Wainwright, as placement agent, an aggregate fee equal to 7.0% of the gross proceeds we received from the sale of the securities in the offering as well as a management fee equal to 1.0% of such gross proceeds, and $15,000 for fees and expenses of legal counsel. We also issued to Wainwright, or its designees, warrants to purchase up to 7.0% of the aggregate number of shares of our common stock sold in the transactions, or warrants to purchase up to an aggregate of 1,698 shares of our common stock (the "Registered Direct Offering Placement Agent Warrants"). The Registered Direct Offering Placement Agent Warrants are exercisable for five years from the commencement of sales in the offering and have an exercise price equal to 125% of the purchase price of shares of our common stock sold in the offering, or $28.13 per share. The Registered Direct Offering Placement Agent Warrants and the shares issuable upon exercise of the Registered Direct Offering Placement Agent Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws.

Renovaro Subscription Agreement

On March 13, 2025, we executed a share subscription agreement with Renovaro, pursuant to the Extension Agreement dated February 28, 2025, that amended the previous LOI between the parties. Pursuant to the share subscription agreement, Renovaro subscribed to purchase and we agreed to sell 31,153 unregistered shares of our common stock at a price of $16.05 per share for a total purchase price of $500,000. The closing of this share issuance occurred on March 17, 2025.

At The Market Offering

On May 3, 2024, we entered into an ATM Sales Agreement (the "Sales Agreement") with Wainwright, pursuant to which we may offer and sell, from time to time, through Wainwright, shares of our common stock through an "at the market offering" program pursuant to which Wainwright will act as sales agent. Subject to the terms and conditions of the Sales Agreement, Wainwright is permitted to sell the shares by methods deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Sales Agreement provides that Wainwright will be entitled to compensation for its services of 3.0% of the gross sales price of all shares sold through Wainwright under the Sales Agreement. We are subject to certain restrictions on our ability to offer and sell shares of our common stock under the Sales Agreement.

On May 6, 2024, following execution of the Sales Agreement, we filed with the SEC a shelf registration statement on Form S-3 (the "May 2024 Shelf Registration Statement"). The May 2024 Shelf Registration Statement, as amended, was declared effective by the SEC on May 21, 2024 and included a prospectus supplement (the "Initial ATM Prospectus Supplement") to the base prospectus related to the offering of up to $3,696,000 of shares of our common stock under the Sales Agreement. As of May 31, 2024, we had offered and sold 107,140 shares of common stock under the Initial ATM Prospectus Supplement for gross proceeds of approximately $3,696,000. The net proceeds from the shares offered and sold in May 2024, after deducting commissions and offering expenses, were approximately $3,122,000.

On April 18, 2025, in accordance with the terms of the Sales Agreement, we filed a prospectus supplement to the May 2024 Shelf Registration Statement relating to the offer and sale of up to an additional $1,491,000 of shares of our common stock.

On June 2, 2025, in accordance with the terms of the Sales Agreement, we determined to further increase the number of shares it may sell under the Sales Agreement, from the approximately $1,352,000 remaining as of May 31, 2025 up to an aggregate of $3,398,000, and we filed an additional prospectus supplement with the SEC on June 2, 2025.

On October 29, 2025, in accordance with the terms of the Sales Agreement, we determined to further increase the number of shares we may sell under the Sales Agreement, from the approximately $2,292,000 remaining as of September 30, 2025 up to an aggregate of $18,330,000, and we filed an additional prospectus supplement with the SEC on October 29, 2025.

As of March 31, 2026, and December 31, 2025, approximately $18,330,000 remained available to us for sales of our common stock under the Sales Agreement.

During the year ended December 31, 2025, we issued and sold 139,680 shares of common stock under the Sales Agreement resulting in net proceeds to the Company of approximately $1,530,000 after deducting approximately $342,000 in issuance costs.

During the three months ended March 31, 2026, there were no shares of common stock issued or sold under the Sales Agreement.

Standby Equity Purchase Agreement

On July 1, 2025, the Company entered into a standby equity purchase agreement (the "SEPA") with YA II PN, LTD., a Cayman Islands exempt limited company ("Yorkville"). Pursuant to the SEPA, the Company has the right to sell to Yorkville up to $10 million in shares of its common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of common stock to Yorkville under the SEPA, and the timing of any such sales, are at the Company's option, and the Company is under no obligation to sell any shares of common stock to Yorkville under the SEPA. In connection with the execution of the SEPA, the Company issued 8,033 shares of its common stock to Yorkville as consideration for its commitment to purchase the Company's common stock pursuant to the SEPA.

The Company has the right, but not the obligation, from time to time at its discretion until the first day of the month following the 36-month period after the date of the SEPA, to direct Yorkville to purchase a specified number of shares of the Company's common stock (each such sale, an "Advance") by delivering written notice to Yorkville (each, an "Advance Notice"). The per share purchase price for the shares of common stock, if any, that the Company elects to sell to Yorkville in an Advance pursuant to the SEPA will be determined by reference to the volume weighted average price of the Company's common stock (the "VWAP") and calculated in accordance with the SEPA, less a discount of 4.0%. The Company filed a registration statement on Form S-1 for the resale of up to 128,114 shares by Yorkville on July 18, 2025, which was declared effective by the SEC on July 28, 2025.

On September 19, 2025, the Company received approval from its stockholders to issue shares of its common stock to Yorkville under the SEPA in excess of 19.99% of the number of shares of common stock outstanding as of the date of the SEPA (the "Exchange Cap"). Yorkville is not obligated to purchase or acquire, and shall not purchase or acquire, any shares of common stock under the SEPA which, when aggregated with all other shares of the Company's common stock then beneficially owned by Yorkville and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by Yorkville and its affiliates exceeding 4.99% of the then outstanding voting power or number of shares of the Company's common stock.

As of March 31, 2026, the Company had sold no shares pursuant to the SEPA.

September 2025 Private Placements

On September 29, 2025, we entered into two securities purchase agreements, as further described above under "Recent Developments - September 2025 Private Placements."

In the Cash PIPE Offering, we sold an aggregate of 4,366,703 shares of our common stock (or pre-funded warrants at a nominal $0.01 exercise price per share to purchase shares of common stock, in lieu thereof) to certain accredited investors for $11.6265 per share. Aggregate Cash PIPE Offering proceeds were $50.8 million before issuance fees and expenses.

In the Crypto PIPE, we sold the Crypto PIPE Warrants to purchase up to 14,903,393 shares of our common stock at a nominal $0.01 exercise price per share. As consideration for the Crypto PIPE Warrants, we received ATH from purchasers, including Locked ATH, with an aggregate notional value and discounted value of $292.7 million and $173.3 million, respectively.

Recent Accounting Developments

See "Recent Accounting Pronouncements" and "Recently Adopted Accounting Standards" under Note 2 - Summary of Significant Accounting Policies to the unaudited condensed financial statements of this Quarterly Report on Form 10-Q for further details.