UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-42888

Fermi Inc.

(Exact name of registrant as specified in its charter)

Texas		33-3560468
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

620 S. Taylor St., Suite 301

Amarillo, TX

79101

(Address of principal executive offices)

(Zip Code)

(214) 894-7855

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	FRMI	The Nasdaq Stock Market LLC
Common Stock, $0.001 par value	FRMI	The London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 11, 2025, there were 614,025,378 shares of common stock, par value of $0.001 per share, outstanding.

FERMI INC.

Form 10-Q

Quarter Ended September 30, 2025

		Page
Explanatory Note		2

Special Note Regarding Forward-Looking Statements		3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)		5

Consolidated Balance Sheet (Unaudited)		6

Consolidated Statements of Operations (Unaudited)		7

Consolidated Statements of Stockholders’/Members’ Equity (Unaudited)		8

Consolidated Statement of Cash Flows (Unaudited)		9

Notes to Consolidated Financial Statements (Unaudited)		10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		35

Item 3. Quantitative and Qualitative Disclosures about Market Risk		55

Item 4. Controls and Procedures		55

PART II - OTHER INFORMATION

Item 1. Legal Proceedings		57

Item 1A. Risk Factors		57

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		98

Item 3. Defaults Upon Senior Securities		99

Item 4. Mine Safety Disclosures		99

Item 5. Other Information		99

Item 6. Exhibits		100

Signatures		102

EXPLANATORY NOTE

Fermi Inc. was originally formed as Fermi LLC on January 10, 2025 (“Inception”) as a Texas limited liability company. On September 30, 2025, immediately following the effectiveness of our registration statement on Form S-11, 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”). The purpose of the Corporate Conversion was to reorganize the Company’s corporate structure so that the entity offering its securities to the public in the IPO would be a corporation rather than a limited liability company. References in this Quarterly Report on Form 10-Q to “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.

As a result of the Corporate Conversion, Fermi Inc. succeeded to all of the property and assets of Fermi LLC and succeeded to all debts and obligations of Fermi LLC. Fermi Inc. is governed by a certificate of formation filed with the Texas Secretary of State and bylaws adopted by its board of directors. The consolidated financial statements and footnotes give effect to the Corporate Conversion on a prospective basis as of the conversion date.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In particular, statements pertaining to our business and growth strategies, investment and development activities and trends in our business contain forward-looking statements. When used in this Quarterly Report on Form 10-Q, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “could,” “should,” “would,” “seek,” “position,” “support,” “drive,” “enable,” “optimistic,” “target,” “opportunity,” “approximately” or “plan,” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.

Forward-looking statements involve numerous risks and uncertainties, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all), including with respect to historical environmental conditions at the approximately 5,236 acres of contiguous land held pursuant to a 99-year Ground Lease Agreement on land owned by the Texas Tech University System (the “Lease”) in Carson County, Texas (the “Project Matador Site”), which increases site preparation and timelines. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

●

Our business model is highly dependent on the successful construction, development, leasing, and continued maintenance of the Advanced Energy and Intelligence Campus at Texas Tech University (“Project Matador”).

●

Our ability to access adequate project financing, commercial borrowings, and debt and equity capital markets to fund our significant anticipated capital expenditures.

●

Our ability to construct, operate, and maintain power generation facilities on schedule and at anticipated costs, both of which may be impacted by supply chain disruptions, including labor availability, raw materials and input commodity costs and availability, and manufacturing and transportation.

●

The market for generating nuclear power is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected.

●

General business and economic conditions.

●

Environmental history, remediation, and associated risks.

●

Our ability to obtain and renew leases with our tenants on favorable terms, and to manage our growth, business, financial results, and operations.

●

Our ability to respond to price fluctuations and rapidly changing technology.

●

The impact of tariffs and global trade disruptions on us and our tenants.

●

Changes in political conditions, geopolitical turmoil, political instability, civil disturbances, and restrictive governmental actions.

●

We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us.

●

The degree and nature of our competition.

●

Our failure to generate sufficient cash flows to service indebtedness.

●

Material negative changes in the creditworthiness or ability of our tenants to meet their contractual obligations.

●

Increases and volatility in interest rates.

●

Increased power, labor, equipment procurement, shipping, refurbishment, or construction costs; labor shortages; or our inability to attract and retain talent.

●

Changes in, or failure or inability to comply with, government regulation, including regulation of our facilities’ environmental footprint and the project’s electric generation and storage assets.

●

A failure of our information technology systems, systems conversions and integrations, cybersecurity attacks, or a breach of our information security systems, networks, or processes.

●

Our inability to obtain or maintain necessary government or other required consents or permits.

●

Our failure to qualify as a real estate investment trust (“REIT”) and maintain that qualification for U.S. federal income tax purposes.

●

Changes in, or failure or inability to comply with, local, state, federal, or international laws and regulations, including those related to taxation, real estate, and zoning, and increases in real property tax rates.

●

The impact of any financial, accounting, legal, or regulatory issues or litigation that may affect us.

●

Additional factors discussed in the sections entitled “Business and Properties,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q.

●

Other risks identified in Part II, Item 1A, “Risk Factors,” in this Quarterly Report on Form 10-Q.

New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

		Page
Unaudited Consolidated Financial Statements:

Consolidated Balance Sheet (Unaudited)		6

Consolidated Statements of Operations (Unaudited)		7

Consolidated Statements of Stockholders’/Members’ Equity (Unaudited)		8

Consolidated Statement of Cash Flows (Unaudited)		9

Notes to Consolidated Financial Statements (Unaudited)		10

Fermi Inc.

Consolidated Balance Sheet

(in thousands, except par value amounts and share numbers)

(unaudited)

	As of September 30, 2025
Assets
Construction in progress	$	270,693
Cash and cash equivalents		83,693
Restricted cash		99,300
Prepaid expenses and other assets		24,436
Operating lease right-of-use assets		24,644
Total assets	$	502,766
Liabilities and stockholders’ equity
Debt, net	$	102,831
Accounts payable and accrued liabilities		65,112
Operating lease liabilities		22,610
Other liabilities		9,740
Total liabilities		200,293
Commitments and contingencies (Note 10)
Stockholders’ equity
Common stock, $0.001 par value; 2,400,000,000 shares authorized, 591,274,308 shares issued, and 574,977,840 shares outstanding at September 30, 2025		575
Preferred stock, $0.001 par value; 10,000,000 shares authorized, and no shares issued or outstanding at September 30, 2025		-
Additional paid-in capital		301,898
Accumulated deficit		-
Total stockholders’ equity		302,473
Total liabilities and stockholders’ equity	$	502,766

The accompanying notes are an integral part of these consolidated financial statements.

Fermi Inc.

Consolidated Statements of Operations

(in thousands, except share and per share numbers)

(unaudited)

	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
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 loss	$	(346,812	)	$	(353,180	)
Net loss per share – basic and diluted	$	(0.84	)	$	(0.95	)
Weighted average shares outstanding – basic and diluted		466,493,415			416,237,306

The accompanying notes are an integral part of these consolidated financial statements.

Fermi Inc.

Consolidated Statements of Stockholders’/Members’ Equity

(in thousands, except unit and share numbers)

(unaudited)

	Members’ Equity - Class A						Members’ Equity - Class B						Common Stock				Preferred Stock				Additional Paid-in		Accumulated		Total Stockholders’/ Members’
	Units			Amount			Units			Amount			Shares		Amount		Shares		Amount		Capital		Deficit		Equity
Balance, January 10, 2025 (Inception)		-		$	-			-		$	-			-	$	-		-	$	-	$	-	$	-	$	-
Capital contributions, net of deferred offering costs (Note 3)		367,312,500			498			-			-			-		-		-		-		-		-		498
Net loss		-			(78	)		-			-			-		-		-		-		-		-		(78	)
Balance, March 31, 2025		367,312,500		$	420			-		$	-			-	$	-		-	$	-	$	-	$	-	$	420
Capital contributions, net of deferred offering costs (Note 3)		(8,050,950	)		349			58,764,263			130			-		-		-		-		-		-		479
Share-based compensation expense - related party (Note 9)		-			3,616			-			-			-		-		-		-		-		-		3,616
Net loss		-			(6,079	)		-			(211	)		-		-		-		-		-		-		(6,290	)
Balance, June 30, 2025		359,261,550		$	(1,694	)		58,764,263		$	(81	)		-	$	-		-	$	-	$	-	$	-	$	(1,775	)
Share-based compensation expense (Note 9)		4,500,000			23,304			-			1,509			-		-		-		-		-		-		24,813
Series Seed, A and B Conversion (Note 3)		117,787,762			282,176			-			-			-		-		-		-		-		-		282,176
Induced conversion of Series A and Series B Convertible Notes (Note 3)		-			23,674			-			-			-		-		-		-		-		-		23,674
Share-based charitable contribution expense, including repurchase of unvested Class B Units and subsequent reissuance upon donation (Note 9)		-			-			7,875,000			173,777			-		-		-		-		-		-		173,777
Vesting of Class B Units (Note 9)		-			-			19,202,719			43			-		-		-		-		-		-		43
Net loss		-			(320,810	)		-			(26,002	)		-		-		-		-		-		-		(346,812	)
Issuance of the Preferred Units and effect of the conversion of Preferred Units (Note 3)		-			37,869			-			-			7,586,546		8		-		-		108,700		-		146,577
Effect of the Corporate Conversion		(481,549,312	)		(44,519	)		(85,841,982	)		(149,246	)		567,391,294		567		-		-		193,198		-		-
Balance, September 30, 2025		-		$	-			-		$	-			574,977,840	$	575		-	$	-	$	301,898	$	-	$	302,473

The accompanying notes are an integral part of these consolidated financial statements.

Fermi Inc.

Consolidated Statement of Cash Flows

(in thousands)

(unaudited)

	For the period from January 10, 2025 (Inception) through September 30, 2025
Cash flows used in operating activities:
Net loss	$	(353,180	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense, related party		3,616
Share-based compensation expense		24,814
Share-based charitable contribution expense		173,784
Non-cash interest expense paid-in-kind		680
Change in fair value as a result of fair value remeasurements		111,590
Series A and Series B Convertible Notes inducement expense		23,674
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		10,799
Prepaid expenses and other assets		(4,068	)
Net cash used in operating activities	$	(8,291	)
Cash flows used in investing activities:
Investments in construction in progress		(89,033	)
Capitalized preacquisition costs		(7,288	)
Net cash used in investing activities	$	(96,321	)
Cash flows from financing activities:
Proceeds from issuance of Series A Convertible Notes		75,500
Proceeds from issuance of Seed Convertible Notes		26,124
Proceeds from issuance of Preferred Units		107,552
Proceeds from issuance of Macquarie Term Loan		100,000
Payment of Promissory Note		(15,000	)
Payment of debt issuance costs		(1,012	)
Proceeds from contributions by members, net of issuance costs		922
Repurchase of Class B Units		(25	)
Payment of deferred offering costs		(6,456	)
Net cash provided by financing activities	$	287,605
Change in cash, cash equivalents and restricted cash		182,993
Cash, cash equivalents and restricted cash, beginning of period		-
Cash, cash equivalents and restricted cash, at end of period	$	182,993

Cash, cash equivalents and restricted cash, at end of period:
Cash and cash equivalents		83,693
Restricted cash		99,300
Cash, cash equivalents and restricted cash, at end of period		182,993

The accompanying notes are an integral part of these consolidated financial statements.

Fermi Inc.

Notes to Consolidated Financial Statements

(in thousands, except unit, per unit, share, and per share numbers)

(unaudited)

1. Organization and Description of Business

Organization

In conjunction with the Corporate Conversion, all of Fermi LLC’s membership interests, including outstanding preferred units, were converted into an aggregate of 591,274,308 shares of our issued common stock, of which 574,977,840 shares are outstanding. Prior to the Corporate Conversion, the Company’s outstanding convertible notes had converted into Class A units of Fermi LLC (the “Convertible Notes Conversion”) in connection with the issuance of preferred units (“Preferred Units”) in a private placement to a consortium of investors (the “Preferred Units Financing”). Refer to Note 3, Stockholders’ Equity, for further information regarding the Preferred Units Financing.

As a result of the Corporate Conversion, Fermi Inc. succeeded to all of the property and assets of Fermi LLC and succeeded to all debts and obligations of Fermi LLC. Fermi Inc. is governed by a certificate of formation filed with the Texas Secretary of State and bylaws adopted by its board of directors (the “Bylaws”). The consolidated financial statements and footnotes give effect to the Corporate Conversion on a prospective basis as of the conversion date.

The Company’s mission is to power the intelligence of tomorrow. The Company is in the development process of its first campus, Project Matador, as an approximately 11-gigawatt behind-the-meter energy generation and powered shell data center campus located in Amarillo, Texas. Project Matador is planned to provide hyperscale customers with approximately 15 million square feet of data center space powered by a combination of on-site solar, gas, and nuclear power infrastructure. Preliminary site development commenced in 2025 and vertical construction activities are expected to commence later this year, subject to an executed definitive lease agreement with a prospective tenant, with a target commercial operations date for the first 1-gigawatt of data center capacity ready by year-end 2026. Disclosures of the energy generation and square footage of facilities are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).

We anticipate generating substantially all of our revenue from lease rental income from data center tenants. As of September 30, 2025, we have not yet commenced revenue generating activities. All activity through September 30, 2025, is related to our formation and initial engagement with various commercial parties to facilitate infrastructure procurement, leasing, preliminary site development, and marketing activities for Project Matador. We do not expect to generate operating revenues until data center facilities are delivered to tenants. We may generate non-operating income in the form of interest income on cash. Our fiscal year ends on December 31.

Unit Split and Stock Split

On July 2, 2025, we amended the Fermi LLC’s limited liability company agreement (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 defined below). 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.

On September 30, 2025, in connection with the Corporate Conversion, the Company effected a 3-for-1 forward stock split of its membership units into shares of common stock (the “September Stock Split”).

All unit, per unit, share, and per share amounts presented in the consolidated financial statements have been adjusted retrospectively, where applicable, to reflect the Unit Split and the September Stock Split.

In connection with the Corporate Conversion, the Company filed its certificate of incorporation (the “Charter”), which authorizes a total of 2,400,000,000 shares of common stock and 10,000,000 shares of preferred stock.

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting policies generally accepted in the United States of America (“GAAP”) as established by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC”) including modifications issued under Accounting Standards Updates (“ASUs”). The reporting currency of the Company is the U.S. Dollar. Dollar amounts in the financial statements are presented in thousands, except as otherwise stated. Share, per share, unit and per unit data are presented as whole numbers. The unaudited consolidated financial statements include the accounts of Fermi Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

These unaudited interim consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In management’s opinion, the unaudited interim consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to fairly state the Company’s financial position and results of operations. The interim results are not necessarily indicative of the operating results expected for the full year or any future period.

The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of March 31, 2025, and for the period from January 10 (Inception) through March 31, 2025, included in the Company’s prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on September 30, 2025 (the “Prospectus”).

The Company determines at inception of each arrangement whether an entity in which the Company has made an investment or in which the Company has other variable interests is considered a variable interest entity (“VIE”). Investments that are considered VIEs are evaluated to determine whether the Company is the primary beneficiary of the VIE, in which case it would be required to consolidate the entity. The Company evaluates whether it has (1) the power to direct the activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. If the Company is not the primary beneficiary of the VIE, the investment or other variable interest is accounted for in accordance with applicable U.S. GAAP.

In circumstances where an entity does not have the characteristics of a VIE, it would be considered a voting interest entity (“VOE”). The Company would consolidate a VOE when the Company has a majority equity interest and has control over significant operating, financial, and investing decisions of the entity.

Liquidity, Going Concern and Capital Resources

Under ASC 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.

Project Matador will require substantial capital investment to achieve commercial operation. As of September 30, 2025, the Company had not generated any revenues. To finance the construction and development of Project Matador, we intend to raise capital through a combination of equity financings, various debt issuances, monetization of federal energy credits, strategic equity investments, government grants and tenant prepayments. These financings are not certain to occur. 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.

Through September 30, 2025, we have raised cash of $101,624 through convertible debt financing, $107,552 through preferred units financing, and $100,000 related to the financing arrangement with Macquarie Equipment Capital Inc. (“Macquarie”). Refer to Note 11, Subsequent Events, for further information regarding the consummation of our IPO. 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.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet. Actual results could differ from those estimates. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2025.

Cash and Cash Equivalents

We consider short-term, highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in our checking and saving accounts. We maintain our cash with a regional financial institution located in the United States, which we believe to be creditworthy. While we monitor the credit quality of our banking relationship, our cash balances may, at times, exceed the federally insured limits.

Restricted Cash

Restricted cash represents amounts deposited in a lender-controlled bank account associated with the Macquarie Term Loan, which are required to remain restricted for the duration of the term loan agreement unless released under the agreement’s provisions. The restricted cash can be released for payments under the Siemens Contract and for loan transaction fees and expenses, per the terms documented in the term loan agreement. For the three months ended September 30, 2025, and for the period from January 10 (Inception) to September 30, 2025, no restricted cash was released with $99,300 remaining restricted. Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows.

Income Taxes

The consolidated financial statements have been prepared using the current tax classification of the Company as a partnership for U.S. federal income tax purposes through the date of the Corporate Conversion. On July 1, 2025, Fermi LLC filed an election to be classified as a corporation for U.S. federal income tax purposes on its date of formation, January 10, 2025, via late classification relief sought under Revenue Procedure 2009-41. Fermi LLC adopted a fiscal year end of July 31, 2025 for its initial taxable, non-REIT year. Accordingly, if the election is approved, we will file our U.S. federal income tax return for our initial taxable, non-REIT year as a corporation for U.S. federal income tax purposes.

The election to be classified as a corporation for U.S. federal income tax purposes remains subject to IRS acceptance. As such, in lieu of corporate income taxes, our members would be taxed on their proportionate share of our taxable income through the date of the Corporate Conversion.

Fermi intends to elect to be taxed as a REIT for U.S. federal income tax purposes beginning August 1, 2025, with the filing of its initial Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts. As long as Fermi qualifies as a REIT, it generally will not be subject to U.S. federal income tax at the REIT level on taxable income that is currently distributed to stockholders. Accordingly, no provision or liability has been recognized for U.S. federal income tax purposes in the accompanying consolidated financial statements, as income taxes would be the responsibility of our individual members.

Comprehensive Income (Loss)

For the period from January 10, 2025 (Inception) through September 30, 2025, and for the three months ended September 30, 2025, we had no other comprehensive income (loss) items; therefore, comprehensive income (loss) equaled net income (loss). Accordingly, we have not included separate statements of comprehensive income (loss) as part of these consolidated financial statements.

Segments

All of the Company’s activities relate to our business of building and owning data centers. As of September 30, 2025, operational and strategic decision-making responsibilities were overseen collectively by the Company’s officers, including the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and the Head of Power. This group, functioning collectively in the role of the chief operating decision maker (“CODM”), evaluates performance and allocates resources based on the overall operations and financial results of the Company as a whole. Based on the structure of our operations and the manner in which the CODMs monitor and manage the business, we have concluded that the Company operates as a single operating segment and, accordingly, a single reportable segment for accounting and financial reporting purposes.

The Company’s single reportable segment is expected to earn substantially all of its revenue from lease rental income from data center tenants. The CODMs manage the Company as a single business and use GAAP net income (loss), as presented in the consolidated statements of operations, as the primary financial measure for assessing performance and allocating resources. The CODMs regularly review the consolidated statements of operations, including the various expense and other line items, as presented in the Company’s consolidated financial statements. No significant separate revenue or expense categories are regularly evaluated by the CODMs other than those already reflected in the consolidated statements of operations. Additionally, the CODMs assess segment assets as presented within the Company’s consolidated balance sheet, as there is no distinction between segment assets and total assets. All assets will be located within the United States. Because the Company operates as a single segment, the accounting policies applied are consistent with those described in the accompanying consolidated financial statements.

Share-based Compensation

The Company accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). 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 accounts for forfeitures as they occur.

The Company granted restricted equity units (“REUs”) that vest upon the satisfaction of either a service-based condition only or a combination of service-based, market-based and performance-based conditions. The grant-date fair value of these REUs is the fair value of the Company’s units on the date of grant.

Following the completion of the IPO, the fair value of each share of the underlying common stock will be based on the closing price of our common shares as reported on the Nasdaq Stock Market on the date of the grant. Refer to Note 11, Subsequent Events, for further information regarding our IPO.

For awards that include a market-based condition, the grant-date fair value is estimated using the Monte Carlo simulation method which incorporates the probability that the market-based condition may not be satisfied, and includes assumptions such as expected term, expected volatility, and risk-free interest rates.

The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period for equity awards with only service-based conditions, including those with a graded vesting feature. Share-based compensation expense for equity awards with a service-based condition and a performance-based condition or a market-based condition, or both, will be recognized using the graded vesting method over the requisite service period. For equity awards with a market-based condition, the share-based compensation expense is recognized using the graded vesting method over the requisite service period, regardless of whether the market-based condition is met.

Share-based compensation expense is not recognized for grants that include a performance-based condition until the performance-based condition is deemed probable. A performance-based condition could be the occurrence of a certain event or achievement of a performance goal. In the period in which such an event becomes probable, the Company will record cumulative share-based compensation expense for those REUs for which the service-based condition has been satisfied or partially satisfied. Share-based compensation related to any remaining service-based conditions after the qualifying event-related performance condition is satisfied will be recorded over the remaining requisite service period. Performance conditions that are based on liquidity events, including an initial public offering, are not considered probable until the event occurs.

Fair Value of Class A and Class B Units

Prior to the IPO, as there was no public market for the equity of the Company, the Company utilized a third-party valuation firm to determine estimates of fair value using generally accepted valuation methodologies, specifically income-based methods. Under the income approach, enterprise value was determined using a discounted cash flow analysis that reflects management’s projections of future cash flows. These projected cash flows were discounted to present value using a weighted average cost of capital, which was informed by market data from guideline public companies with comparable operating and financial characteristics and further adjusted to reflect the Company’s stage of development, capital structure, and company-specific risk factors. The resulting enterprise value was then adjusted by a probability-weighted decision tree to derive the estimated fair value of the Company as of each valuation date.

Leases

Lessee arrangements

At contract inception, the Company determines whether an arrangement contains a lease in accordance with ASC 842, Leases (“ASC 842”). Prior to lease commencement, any payments are recorded as prepaid rent and included in prepaid expenses and other assets on the Company’s consolidated balance sheet. The prepaid rent balance is reclassified to the right-of-use asset at lease commencement.

Right-of-use assets and lease liabilities are established on the consolidated balance sheet for leases with an expected term greater than one year. Lease liabilities are recognized at the present value of future lease payments, less any incentives payable to the Company. Right-of-use assets are recognized based on the initial measurement of the lease liability, plus any initial direct costs incurred by the Company and any lease payments made to the landlord at or before lease commencement minus any lease incentives received. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company has elected the practical expedient to not separate lease and non-lease components for its real estate leases in which the Company is the lessee.

The Company recognizes lease expense for operating leases on a straight-line basis over the term of the lease. In determining the lease term, the Company includes any options to extend or terminate the underlying lease when it is reasonably certain that the Company will exercise that extension option or is reasonably certain not to exercise a termination option.

Variable lease payments are recognized as incurred, and leases are remeasured if there is a contingent event outside of the Company’s control that permanently changes the remaining lease payments when the underlying contingency is resolved.

The TTU Lease (defined below) does not include any lessee-controlled options to extend or terminate. The operating lease provides for annual increases to lease payments. Variable lease payments include, but are not limited to, common area charges, rents based on the appraised value of subleased data center facilities and future power or water sales. Refer to Note 8, Leases.

Debt Issuance Costs

Costs incurred in connection with the issuance of debt are deferred and amortized to interest expense over the term of the related debt using the effective-interest method. Debt issuance costs associated with the Company’s convertible unsecured promissory notes (the “Seed Convertible Notes”), convertible secured promissory notes (the “Series A Convertible Notes”), Series B Convertible Secured Promissory Note (“Series B Convertible Note”), secured promissory note (“Promissory Note”), and Macquarie Term Loan are presented as a direct deduction from the carrying amount of the related debt on the consolidated balance sheet. As of September 30, 2025, the Company had deferred $600 of debt issuance costs. See Note 7, Debt, Net for additional details related to outstanding debt and associated debt issuance costs.

Deferred Offering Costs

Deferred offering costs consist of legal, accounting, consulting, and other professional fees that are directly attributable to the Company’s equity capital raises, including our IPO. These costs are capitalized within prepaid expenses and other assets on the consolidated balance sheet. Upon the completion of our IPO on October 2, 2025, deferred offering costs will be reclassified as a reduction to additional paid-in capital as an offset against proceeds. As of September 30, 2025, the Company had capitalized $14,268 of deferred offering costs within prepaid expenses and other assets on the consolidated balance sheet.

Acquisitions

The Company evaluates each acquisition to determine whether it meets the definition of a business under ASC 805, Business Combinations (“ASC 805”). If the acquired set of assets and activities does not meet the definition of a business, the transaction is accounted for as an asset acquisition.

For asset acquisitions, the total cost of the acquisition, including transaction costs, is allocated to the individual assets acquired and liabilities assumed based on their relative fair values. No goodwill is recognized in an asset acquisition. Transaction costs incurred in connection with asset acquisitions are capitalized as part of the cost of the acquired assets. The fair values of tangible and intangible assets acquired are generally determined using a combination of cost, market, and income approaches, which may require management to make significant estimates and assumptions regarding future cash flows, discount rates, and other relevant factors. The allocation of purchase price in asset acquisitions affects the amounts recognized for tangible and intangible assets and liabilities, as well as the related depreciation and amortization expense recognized in future periods.

Contingent Consideration

The Company’s acquisition agreements may include contingent consideration arrangements that provide for additional payments upon the occurrence of specified events or the achievement of certain performance or operational milestones. For business combinations, contingent consideration is measured at fair value as of the acquisition date and recorded as part of the purchase price. Subsequent changes in the fair value of contingent consideration classified as a liability are recognized in earnings in the period in which they occur, while contingent consideration classified as equity is not remeasured.

For asset acquisitions, contingent consideration is recognized only when the contingency is resolved and the consideration is paid or becomes payable, unless the arrangement meets the definition of a derivative, in which case the contingent consideration is recorded at fair value on the acquisition date. Upon recognition, contingent consideration in an asset acquisition is included in the cost of the acquired asset or group of assets.

The determination of the fair value of contingent consideration requires management to make significant estimates and assumptions regarding the probability of achieving specified outcomes, projected cash flows, discount rates, and other relevant factors. Actual results may differ from these estimates, which could have a material impact on the Company’s consolidated financial statements.

Property, Plant, and Equipment

Property, plant and equipment are initially recorded at cost, which includes all expenditures directly attributable to the acquisition or construction of the asset, such as materials, labor, professional fees, and permitting costs. Expenditures for repairs and maintenance are expensed as incurred, while major renewals and improvements that extend the useful life of an asset are capitalized. Once assets are placed in service, depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives and depreciation methods are reviewed periodically to ensure they reflect the expected pattern of economic benefits. As of September 30, 2025, property, plant and equipment consists exclusively of assets for which development or construction is in progress.

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. As of September 30, 2025, $6,057 of interest costs have been capitalized, $138 of which is included within prepaid expenses and other assets within the consolidated balance sheet.

Impairment

We review property, plant and equipment, including construction in progress, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such indicators are present, we compare the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset, including estimate cash outflows needed to prepare the asset for its intended use. If the carrying amount exceeds the estimated future net cash inflows, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset’s fair value. As of September 30, 2025, no impairment indicators existed.

As of September 30, 2025, the Company had no depreciable property, plant, and equipment, and thus no depreciation expense has been recognized. See Note 6, Property, Plant, and Equipment for additional details.

Supplemental Cash Flow Information

The following table shows supplemental cash flow information:

	For the period from January 10, 2025 (Inception) through September 30, 2025
Supplemental cash flow information:
Cash paid for interest, net of capitalized interest	$	28
Noncash investing and financing activities:
Right-of-use asset obtained in exchange for a new operating lease liability	$	24,644
Accrued capitalized preacquisition costs		1,223
Accrued deferred offering costs		14,862
Accrued investments in construction in progress		38,254
Capitalized interest related to investments in construction in process		5,919
Capitalized interest related to preacquisition costs		138
Issuance of Series B Convertible Note in relation to asset acquisition		117,000
Issuance of Promissory Note in relation to asset acquisition		20,000

Other Income (Expense)

Other income (expense) consists primarily of changes in the fair value of embedded derivatives, an inducement expense incurred in connection with the Preferred Unit Financing, and a charitable donation expense. For the nine months ended September 30, 2025, other income (expense) included approximately $111,590 of fair value remeasurements on embedded derivatives, $23,674 of inducement expense, and $173,784 of charitable donation expense.

Fair Value Measurement

The Company follows the guidance in ASC 820, Fair Value Measurement (“ASC 820”) for its fair value measurements. Valuation techniques used to measure fair value require us to utilize observable and unobservable inputs. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial instruments measured at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

●

Level 1: Quoted prices in active markets for identical or assets or liabilities.

●

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

●

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The reported fair values for financial instruments that use Level 2 or Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of any balance sheet dates presented or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement.

The Company’s financial instruments include cash, cash equivalents, accounts payable, accrued liabilities, debt, net and embedded derivatives. Cash and cash equivalents, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Embedded derivatives are remeasured at fair value on a recurring basis and any changes in the fair value of the embedded derivatives are recorded within other income (expense) in the consolidated statements of operations.

ASC 825, Financial Instruments (“ASC 825”), allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date.

As of September 30, 2025, the Company does not have any financial instruments outstanding that are required to be carried at fair value. For the period from January 10 (Inception) through September 30, 2025, the Company issued and derecognized or reclassified certain financial instruments and the fair value of such financial instrument was estimated using Level 3 input. The following table presents changes in the liability balances for financial instruments measured using significant unobservable inputs (Level 3) for the period from January 10 (Inception) through September 30, 2025:

	Series B Convertible Notes *(See Note 7)*			Embedded Derivative in Preferred Units *(See Note 3)*			Embedded Derivative in Macquarie Term Loan *(See Note 7)*
At January 10, 2025 (Inception)	$	-		$	-		$	-
Initial recognition		117,000			31,990			5,500
Remeasurement (gain)/loss		61,000			46,350			4,240
Derecognition/Reclassification¹		(178,000	)		(78,340	)		(9,740	)
At September 30, 2025	$	-		$	-		$	-

The Company reclassified the embedded derivative within the Macquarie Term Loan to other liabilities on September 30, 2025, as the instrument no longer met the definition of an embedded derivative under ASC 815, Derivatives and Hedging (“ASC 815”).

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-30): Clarifying the Effective Date, which clarified the effective date of this standard. The standard requires the disclosure of additional information about specific expense categories in the notes to the consolidated financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The standard allows for adoption on a prospective or retrospective basis. We are currently assessing the impact of adopting ASU 2024-03 on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instrument (“ASU 2024-04”), to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options. The amendments in this ASU are effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. We are currently assessing the impact of adopting ASU 2024-04 on our consolidated financial statements and related disclosures.

3. Stockholders’ Equity

Authorized Equity

Prior to the Corporate Conversion, we issued two classes of common units to members in the form of Class A voting units (“Class A Units”) and Class B non-voting units (“Class B Units”). Class A Units and Class B Units participated pro-rata, on the basis of total outstanding units, in our ordinary and liquidating distributions. The Company retained the right to repurchase both vested and unvested Class B Units at the original $0.0022 per unit purchase price in the event of a breach of fiduciary duty, fraud, disparagement, or other conduct materially detrimental to the Company, as determined by the Board of Managers. Additionally, we issued the Preferred Units in connection with the Preferred Units Financing. 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 may 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 common units. The Preferred Units were convertible into the equity securities issued upon an IPO.

Class B Units were subject to vesting provisions: 25% of Class B Units immediately vested on the date of issuance, and the remaining 75% vest in equal monthly installments over five years. Unvested Class B Units did not participate in distributions. See Note 9, Share-Based Compensation for further discussion of Class B Units issued to service providers.

The Corporate Conversion resulted in the elimination of Fermi LLC’s historical members’ equity accounts and the recognition of 567,391,294 shares of common stock at par value of $0.001 and an increase to additional paid-in capital of $193,198. The Company’s authorized capital stock consists of 2,400,000,000 shares of common stock, $0.001 par value per share, of which 591,274,308 shares are issued and 574,977,840 shares are outstanding and 10,000,000 shares of preferred stock, $0.001 par value per share, of which no shares are issued and outstanding. The outstanding shares of common stock presented on the consolidated balance sheet exclude (i) 16,296,468 shares of restricted common stock, of which 14,796,468 are liability-classified and subject to service-based vesting conditions associated with unvested Class B Units granted to certain of our employees and service providers, as discussed in Note 9, Share-Based Compensation; and (ii) 37,239,000 shares of restricted stock units issued under ASC 718 that are compensatory and subject to service-based and performance-based vesting conditions.

In connection with the Corporate Conversion, all issued Class A Units and Class B Units automatically converted, on a 3-for-1 basis, into 483,049,312 and 100,638,450 shares of common stock, respectively. Concurrently, all issued Preferred Units automatically converted into 7,586,546 shares of common stock at a conversion price of $14.36 per share, which reflects a 31.6% discount to the initial offering price of $21.00 (the “Preferred Units Conversion”). Additionally, we accelerated the vesting of certain Class B Units that were held by certain service providers. The remaining shares of restricted common stock issued from Class B Units continue to be subject to the original service-based vesting provision.

Equity Transactions

For the period from January 10, 2025 (Inception) through September 30, 2025, we issued 359,261,550 Class A Units for cash contributions of $798. On August 2, 2025, the Company issued 4,500,000 Class A Units to an affiliate of the Company’s Co-Founder, President, and Chief Executive Officer in connection with a compensation arrangement. See Note 9, Share-Based Compensation for further discussion.

Additionally, for the period from January 10, 2025 (Inception) through September 30, 2025, we issued 104,716,350 Class B Units for cash contributions of $233. This total includes 12,128,850 Class B Units that were issued during April 2025 in connection with the conversion of an equivalent number of Class A Units, which were subsequently reissued to newly admitted Class B members. In June 2025, the Company repurchased 4,077,900 unvested Class B Units from a service provider following the termination of the service relationship. The units were repurchased at the original purchase price of $0.0022 per unit. In August 2025, the Company repurchased 11,250,000 Class B Units in aggregate from two former service providers following the termination of the service relationships. The units were repurchased by the Company at the original $0.0022. In September 2025, the Company donated the repurchased 11,250,000 Class B Units to Dechomai Asset Trust, an unrelated, third party, 501(c)(3) public nonprofit organization. On September 23, 2025, the Company modified the vesting conditions to accelerate vesting of 16,551,563 Class B Units, which were unvested Class B Units granted to certain employees and service providers, including certain executive officers. See Note 9, Share-Based Compensation for further discussion.

Preferred Unit Financing – Issuance

For the period from January 10, 2025 (Inception) through September 30, 2025, we issued and sold 322,654,500 Preferred Units for $107,552 in cash. For the three months ended September 30, 2025 and for the period from January 10, 2025 (Inception) through September 30, 2025, the Company incurred $7,049 of offering costs directly attributable to this issuance, which were recorded as a reduction to additional paid-in capital.

Preferred Unit Financing – Founder-granted Options

To incentivize the investors to participate in the Preferred Unit Financing, certain founders of the Company granted the investors on August 29, 2025, an aggregate total of 2,868,000 options to purchase Class A Units held by the founders, at a Company valuation of $5,000,000 until June 30, 2026 (the “Preferred Unit Investor Options”). The Company is not a party to these options and as such the options will not exist on the consolidated balance sheet. Consistent with Staff Accounting Bulletin (“SAB”) Topic 5T, because the options were granted by the Company’s founders to facilitate the Preferred Unit Financing, the Company recognized a capital contribution from the founders of $39,292, equal to the fair value of the options, with a corresponding reduction to issuance proceeds from investors.

Separately, to induce the conversion of the Series A Convertible Notes and Series B Convertible Note, certain founders granted the noteholders an aggregate total of 1,728,000 options to purchase Class A Units held by the founders with the same terms as the Preferred Unit Investor Options. The Company is not a party to these options and as such the options will not exist on the consolidated balance sheet. Consistent with SAB Topic 5T, because the options were granted by the Company’s founders to facilitate these voluntary conversions, the Company recognized a capital contribution from the founders of $23,674, equal to the fair value of the options, with a corresponding inducement expense recorded to other income (expense) in the consolidated statements of operations for the three months ended September 30, 2025 and for the period from January 10, 2025 (Inception) through September 30, 2025.

Preferred Unit Financing – Embedded Derivative

In connection with the Preferred Units, the Company bifurcated an embedded derivative related to the premium payable upon share-settlement triggered by an IPO. The bifurcated embedded derivative was measured at fair value using Level 3 inputs and was initially recorded at $31,990 on August 29, 2025. After reflecting the capital contribution described above and the bifurcated embedded derivative, the Preferred Units were initially recorded at $35,993, which is net of $277 of deferred offering costs.

Preferred Unit Financing – Conversion

Upon the Corporate Conversion on September 30, 2025, the Preferred Units automatically converted into common stock of the Company. As a result, the Company derecognized the Preferred Units and the embedded derivative as of September 30, 2025. Prior to derecognition, the Company accreted preferred dividends of $1,423 on Preferred Units and the Company also recognized a change in fair value of the bifurcated embedded derivative of $46,350, which was recorded as an expense within other income (expense) in the consolidated statements of operations.

The excess of the fair value of common stock over the carrying values of the Preferred Units and the embedded derivative is a reduction of income available to common stock within the computation of net income (loss) per share. Refer to Note 4, Net Loss Per Share.

The Preferred Units were classified as mezzanine equity during the period because redemption was outside the Company’s control. The Company has not separately presented the activity between August 29, 2025 (the issuance date) and September 30, 2025 (the conversion date) related to the classification of Preferred Units as mezzanine equity within the consolidated statements of stockholders’/members’ equity. Because the Preferred Units were not outstanding at either the beginning or end of any period presented, the Company determined that such presentation would not be meaningful to the users of these consolidated financial statements.

Convertible Notes Conversion

On August 29, 2025, in connection with the issuance of Preferred Units, the Seed Convertible Notes automatically converted into 30,572,796 Class A units pursuant to the original terms. On the same date, the holders of the Series A Convertible Notes and Series B Convertible Note elected to convert their convertible notes into 87,214,966 Class A units, pursuant to the original terms of the notes. The Company accounted for the conversions by derecognizing the carrying amounts of the respective notes and recognizing the issuance of Class A Units for the same amounts.

Governance and Voting Rights

Prior to the Corporate Conversion, the Company was governed by the Board of Managers (the “Pre-Conversion Board”) who was appointed and can be replaced by the affirmative vote of Class A members holding the Requisite Voting Threshold. Each Class A Unit was entitled to one vote. Pre-Conversion Board decisions required the unanimous consent of all managers. The Pre-Conversion Board had three managers, and Class A members could appoint up to three additional managers. The Pre-Conversion Board could not approve certain business decisions without the affirmative vote of Class A members holding the Requisite Voting Threshold. These decisions included raising external capital, issuing dividends, entering fundamental business transactions, and asset purchases above a specified threshold.

Subsequent to the Corporate Conversion, the Company is governed by the board of directors (the “Board”). In connection with the IPO, we entered into a director nomination agreement (the “Director Nomination Agreement”) which resulted in TMNN Manager LLC (“TMNN”) and Caddis Holdings LLC each designating one nominee to the board. The Melissa A. Neugebauer 2020 Trust has elected not to designate a director as of the date that these financial statements were available to be issued and has certified to the Company that it does not intend to do so for the foreseeable future. Our certificate of incorporation (“Charter”) provides that the number of directors on our Board shall be determined by a majority of our board of directors. Our Charter provides that our Board is divided into three classes as nearly equal in size as practicable, designated Class I, Class II and Class III, until the annual meeting of shareholders to be held in 2029, at which time, a phase-in of a declassified Board shall begin. The term of office of the initial Class I, Class II and Class III directors expires at the first, second and third regularly-scheduled annual meetings of the shareholders following September 30, 2025, respectively. Commencing with the annual meeting of shareholders to be held in 2029, directors succeeding those whose terms are then expired shall be elected to hold office for a term expiring at the annual meeting of shareholders held in the year following the year of their election. In addition, the Company established an audit committee and a compensation committee.

Holders of shares of our common stock are entitled to one vote for each share held of record on all matters on which shareholders are entitled to vote generally, including the election or removal of directors. The holders of our common stock do not have cumulative voting rights in the election of directors. Holders of our common stock are entitled to receive dividends when, as, and if declared by our Board out of funds legally available therefore, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock. The Company’s common stock is neither convertible nor redeemable.

4. Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share. Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted net loss per share reflects the potential dilution that would occur if securities or other contracts to issue shares were exercised, converted, or otherwise settled in shares, unless the effect would be anti-dilutive.

Net Loss Per Share Computation

	For the three months ended September 30, 2025			For the period from January 10, 2025 (Inception) through September 30, 2025
Net loss	$	(346,812	)	$	(353,180	)
Preferred Units dividends and accretion		(43,384	)		(43,384	)
Net loss - basic and diluted		(390,196	)		(396,564	)
Weighted average number of common shares outstanding - basic and diluted		466,493,415			416,237,306
Net loss per common share - basic and diluted	$	(0.84	)	$	(0.95	)

The computation of net loss per share for the three months ended September 30, 2025, and for the period from January 10, 2025 (Inception) through September 30, 2025, excludes 16,296,468 shares of restricted common stock, of which 14,796,468 are classified as a deposit liability, and 37,239,000 shares of restricted stock units, as the Company reported a net loss for both periods and the effect of all potentially dilutive securities outstanding as of September 30, 2025 would have been anti-dilutive.

5. Acquisitions

Firebird Acquisition

On July 29, 2025, the Company completed the acquisition of 100% of the membership interests in Firebird Equipment Holdco from MAD Energy Limited Partnership (the “Seller”) (the “Firebird Acquisition”). The acquisition consideration consisted of the $145,000 Series B Convertible Note, the $20,000 Promissory Note, and Net Profits Interest (“NPI”) granted to the Seller. The NPI entitles the Seller to 2.5% of net operating income from the first 1000 MW of installed dispatchable generation capacity at the Company’s data center campus, subject to a $100,000 cap on a net present value basis, measured as of May 9, 2025 and calculated using a 10.0% discount rate. Net operating income is defined as revenues received in connection with the generation capacity as well as the rents from the data center buildings served by such generation capacity, net of all operating, financing, and carrying costs relating to such generation capacity.

The Company determined that the Firebird Acquisition did not meet the definition of a business under ASC 805 and therefore accounted for the transaction as an asset acquisition. The consideration paid was measured at a total fair value of $137,000 on the acquisition date, which included the Series B Convertible Note valued at $117,000 and the Promissory Note of $20,000. The fair value of the Series B Convertible Note was estimated using an option pricing framework, incorporating assumptions for the Company’s fully operational value, probability of success, volatility, and probability and timing of potential exit events, and risk-free rate. The fair value of the Promissory Note is assumed to be par given the short term to maturity (December 1, 2025) and periodic principal repayments. The NPI is not a derivative and represents contingent consideration and will be recognized when the contingency is resolved and consideration becomes payable with a corresponding increase to the carrying value of the acquired assets. As of closing and as of September 30, 2025, no amount was recorded related to the NPI.

The net assets acquired as part of the Firebird Acquisition consists of an executed contract between Firebird Equipment Holdco and Siemens Energy AB (the “Siemens Contract”) for the supply of power equipment for a combined-cycle power plant, including six gas turbine generator units, six heat recovery steam generator units, and one steam turbine generator unit and certain accounts payable for invoices payable under the Siemens Contract. Under the Siemens Contract, the remaining payments for the equipment plus future storage costs was approximately $134,000, of which $16,943 is recorded within Accounts Payable while the remaining $117,057 is payable once Siemens Energy AB makes the equipment ready for delivery under the Siemens Contract.

The capitalized asset cost of $153,943 reflects the assumption of obligations totaling $16,943, which are recorded separately as liabilities. The capitalized asset cost of the asset acquisition is included in construction in progress within the consolidated balance sheet.

6. Property, Plant, and Equipment

As of September 30, 2025, property, plant and equipment consists exclusively of construction in progress related to ongoing development projects. The Company’s construction in progress activity during the period from January 10 (Inception) through September 30, 2025, is detailed below:

	September 30, 2025
Construction in progress as of beginning of period	$	-
Additions	$	270,693
Construction in progress as of end of period	$	270,693

Interest expense of $5,935 and $6,057 was capitalized to construction in progress during the three months ended September 30, 2025 and for the period from January 10, 2025 (Inception) through September 30, 2025, respectively, $138 of which is included within prepaid expenses and other assets on the consolidated balance sheet as of September 30, 2025.

400 MW Siemens 6x1 SGT-800 Combined Cycle System Purchase

Through the Firebird Acquisition, the Company acquired a Siemens 6x1 SGT-800 Combined Cycle System. The purchase price allocation related to the asset acquisition was allocated entirely to construction in progress, as further described in Note 5, Acquisitions. As of September 30, 2025, construction in progress included $153,943 related to the Siemens 6x1 SGT-800 Combined Cycle System, of which $137,000 related to the consideration transferred by the Company as part of the Firebird Acquisition and $16,943 relates to outstanding payables related outstanding storage and prolongation costs associated with the undelivered equipment.

180 MW GE 6B Purchase

On June 26, 2025, Fermi Equipment Holdco completed the acquisition of three pre-owned GE 6B frame class gas turbine generators and one associated used steam turbine, together with related ancillary systems and equipment, from Bayonne Plant Holding, L.L.C. for a total purchase price of $18,000 that is included within construction in progress in the consolidated balance sheet.

7. Debt, Net

The table below summarizes the Company’s debt as of September 30, 2025:

	As of September 30, 2025
Debt – Promissory Note	$	5,000
Debt – Macquarie Term Loan		148,986
Total debt	$	153,986
Less: Unamortized debt issuance costs and discount		51,155
Total debt, net	$	102,831

As of September 30, 2025, the annual principal maturities of outstanding debt obligations for each of the next five years is as follows:

Remainder of 2025	$	5,000
2026		148,986
2027		-
2028		-
2029		-
2030		-
Thereafter		-
	$	153,986

In May 2025, we issued the Seed Convertible Notes for an aggregate principal amount of $26,124. The Seed Convertible Notes bore 15.0% simple interest, payable in-kind, and matured in five years. At any time at the holder’s election, the Seed Convertible Notes were convertible into Class A Units at a conversion price of $0.89 per unit. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $10,000 through the issuance of equity securities at a pre-money valuation of $1,000,000, or (ii) entered into binding agreements for hyperscaler datacenter development – the Seed Convertible Notes would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit that such equity securities were sold. Holders had voting rights on an as-converted basis. The Seed Convertible Notes were unsecured obligations and ranked equally in right of payment with each other and with all other unsecured debt of the Company, without any preference or priority among them. In connection with the Preferred Units issuance, all outstanding Seed Convertible Notes automatically converted into 30,572,796 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (see Note 3, Stockholders’ Equity).

In June 2025, we issued the Series A Convertible Notes for an aggregate principal amount of $58,900. In July 2025, we issued additional Series A Convertible Notes for an aggregate principal amount of $16,600. The Series A Convertible Notes bore 15.0% simple interest, were payable in-kind, and matured in five years. At any time at the holder’s election, the Series A Convertible Notes were convertible into Class A Units at a conversion price of $1.33 per unit. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $150,000 through the issuance of equity securities at a pre-money valuation of at least $1,000,000, or (ii) entered into binding agreements for hyperscaler datacenter development – the Series A Convertible Notes would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit that such equity securities were sold. Holders had voting rights on an as-converted basis. The Series A Convertible Notes were secured by a first-priority security interest in certain turbines to be purchased by the Company and cash deposits and ranked senior to all unsecured indebtedness of the Company. In connection with the Preferred Units issuance, all holders elected to convert their Series A Convertible Notes into 58,437,945 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (See Note 3, Stockholders’ Equity).

On July 29, 2025, in connection with the Company’s acquisition of Firebird Equipment Holdco, we issued the Series B Convertible Note for an aggregate principal amount of $145,000. The Series B Convertible Note bore 11% simple interest, was payable in-kind quarterly, and matured on January 31, 2026, unless earlier converted pursuant to its terms described herein. At any time at the holder’s election, the Series B Convertible Note was convertible into Class A Units at a conversion price equal to $3,000,000 divided by the Company’s fully diluted capitalization immediately prior to the conversion. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $150,000 through the issuance of equity securities at a pre-money valuation of at least $1,000,000, or (ii) entered into a binding agreement for hyperscaler data development – the Series B Convertible Note would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit at which such equity securities were sold. In the event of a change of control prior to the maturity date, the holder could elect to (i) receive a cash payment equal to 115.0% of the outstanding principal amount or (ii) convert the note into Class A Units at the conversion price, with any unconverted portion paid in cash equal to 15.0% of the principal amount. The holder had voting rights on an as-converted basis. The Series B Convertible Note was secured by a first-priority security interest in certain retained assets, including equipment to be purchased by the Company and ranked pari passu with all other Series B Convertible Note. The note was subordinated to up to $150,000 of senior bank debt incurred in connection with, or following the closing of, the Siemens Contract and ranked senior to all of our unsecured debt. In connection with the Preferred Units Financing, the holder elected to convert the Series B Convertible Note into 28,777,021 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (see Note 3, Stockholders’ Equity). Upon issuance, the Company elected to account for the Series B Convertible Note using the fair value option and initially recognized the Series B Convertible Note at a fair value of $117,000. Prior to their conversion on August 29, 2025, the Series B Convertible Note were remeasured at a fair value of $178,000 and the change in fair value of $61,000 was recorded in other income (expense) within the consolidated statement of operations. The Company measured the fair value of the Series B Convertible Note using an option pricing framework using Level 3 inputs like the Company’s fully operational value, probability of success, volatility, and probability and timing of potential exit events.

On July 29, 2025, in connection with the Company’s acquisition of Firebird Equipment Holdco, we issued the Promissory Note for an aggregate principal amount of $20,000. The Promissory Note bears interest at a rate of 4.5% per annum, calculated on a simple interest basis, and matures on December 1, 2025. The Promissory Note is payable in monthly installments, with the first installment of $5,000 due and paid on July 29, 2025, and subsequent monthly installments of $2,500 each through December 2025. The Promissory Note is secured by a first-priority security interest in certain equipment and related assets, including rights under a contract for the supply of power generation equipment, and rank senior to all unsecured debt of the Company. The Promissory Note may be prepaid at any time without penalty. Upon the occurrence of an event of default, all outstanding principal and accrued interest becomes immediately due and payable. As of September 30, 2025, the Company had $5,000 in principal amount outstanding on the Promissory Note, which is recorded in debt, net in the Company’s consolidated balance sheet.

On August 29, 2025, we entered into a senior secured term loan agreement (the “Macquarie Term Loan”) with Macquarie. Pursuant to the Macquarie Term Loan, the Company received proceeds of $99,342, net of debt issuance costs, with an obligation to repay $148,986 upon maturity. The Macquarie Term Loan bears 1.0% interest, payable quarterly, and matures on August 29, 2026. Obligations under the Macquarie Term Loan are secured on a first-priority basis by equipment owned by the Company. The agreement allows both optional and lender-elected prepayments. Any repayment, whether scheduled, early, or due to acceleration, must include a premium that ensures lenders receive at least 1.50 times their original investment. Prepayments may be required at the lender’s election under certain circumstances, including after an IPO, which must be repaid within 150 days of completion. Prepayment may also be required if the Company makes certain asset sales or incurs debt that is not permitted under the agreement. If the Company defaults, the outstanding amounts accrue interest at a rate equal to the regular interest rate plus an additional 1.5% per month. As of September 30, 2025, the carrying value of the Macquarie Term Loan was $97,831, net of unamortized debt issuance costs.

In addition, the Macquarie Term Loan contains customary events of default that entitle the lenders to cause any indebtedness under the Macquarie Term Loan to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Macquarie Term Loan. Under the Macquarie Term Loan, an event of default will occur if, among other things, the Company fails to make payments

SEC Form 10-Q filed by Fermi Inc.