Terawulf Inc.: Form 10-Q for the period ended Mar 31, 2026

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with a review of the other Items included in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. All figures presented below represent results from continuing operations, unless otherwise specified. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the consolidated financial statements. Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company,” “TeraWulf,” “we,” “us” or “our” refers to TeraWulf Inc. and its consolidated subsidiaries, unless otherwise indicated. Certain statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations may be deemed forward-looking statements. See “Forward-Looking Statements.”

Overview

We are a vertically integrated owner, developer, and operator of digital infrastructure assets in the United States, purpose-built to support HPC workloads, including AI, machine learning, and advanced cloud applications.

During the three months ended March 31, 2026, HPC leasing revenue represented a majority of total revenue for the first time, reflecting the continued ramp of long-term contracted capacity at the Lake Mariner Data Campus.

The Company has undergone a deliberate strategic transition toward HPC hosting as its primary business. While TeraWulf historically operated bitcoin mining facilities and leveraged flexible compute loads to support early infrastructure development, the Company has begun to curtail and repurpose portions of this infrastructure to support HPC development, and going forward capital allocation, development activities, and operating focus are centered on HPC data center development, long-term hosting arrangements, and infrastructure supporting AI-driven compute workloads.

Our strategy is grounded in controlling infrastructure at utility scale and pairing compute-optimized facilities with reliable, long-duration power resources. By controlling land use through ownership or long-term ground leases, together with interconnection rights, electrical and cooling infrastructure, and, where appropriate, on-site generation, the Company delivers resilient, cost-efficient capacity to hyperscale and enterprise customers under multi-year hosting arrangements. These hosting arrangements are typically structured as long-term data center leases, generally ranging from 10 to 25 years, and in certain cases benefit from investment-grade credit support, enhancing the durability and finance ability of contracted revenues. These arrangements are expected to provide long-term revenue visibility and support project-level financing as the platform scales.

This infrastructure-first approach enables TeraWulf to serve Tier-1 counterparties while maintaining operational control, development flexibility, and disciplined capital allocation.

The Company’s platform is differentiated by long-term control of utility-scale infrastructure, deep in-house power and grid expertise, and a scalable development model supported by long-term, credit-enhanced customer contracts.

Strategy Execution and Capital Allocation

Management’s execution of the Company’s strategy is focused on converting advantaged infrastructure positions into long-dated, contracted HPC capacity. This includes the phased conversion of existing infrastructure, where appropriate, to support HPC workloads. This execution model emphasizes vertical integration, long-duration customer contracts supported by credit enhancement, and phased development aligned with customer deployment schedules and power availability.

A core element of this approach is infrastructure control. By retaining control over land use, interconnection rights, electrical and cooling systems, and on-site generation where appropriate, the Company is able to manage development risk, optimize capital deployment, and maintain operational oversight throughout the lifecycle of its facilities. Management believes this approach reduces execution risk relative to third-party development models and supports infrastructure-style returns.

The Company’s contracting strategy prioritizes multi-year hosting arrangements with credit-supported counterparties, which reduces exposure to commodity-driven revenue streams, including bitcoin price volatility, as the Company’s revenue mix continues to shift toward contracted HPC leasing. These arrangements provide long-dated revenue visibility, support project-level financing, and reduce cash flow volatility as the platform scales. Credit enhancement associated with certain customer contracts has been a key factor in accelerating development timelines and enabling third-party financing.

Each campus is designed for modular, multi-phase expansion. Initial phases deliver near-term contracted capacity, while subsequent phases are aligned with customer deployment schedules and infrastructure readiness, including power availability and interconnection timing. Management believes this phased approach allows the Company to scale efficiently while maintaining capital discipline.

While the Company currently derives a significant portion of its revenue from bitcoin mining, HPC hosting is now the Company’s primary growth driver and operating focus.

Strategic Transactions

Acquisition of Beowulf E&D

On May 21, 2025 (the “Acquisition Date”), the Company acquired 100% of the membership interests in Beowulf Electricity & Data LLC, Beowulf E&D (NY) LLC and Beowulf E&D (MD) LLC (collectively, “Beowulf E&D”). Additional detail regarding the consideration paid and contingent consideration associated with the Beowulf E&D acquisition is included in Note 3 to the condensed consolidated financial statements.

The acquisition materially expanded the Company’s internal capabilities across power infrastructure development, site operations, engineering, and project execution. Approximately 94 employees transitioned to the Company as part of the transaction. Management believes this acquisition strengthened operational integration and execution capability as the Company scales its HPC platform.

Cayuga Site Ground Lease

On August 12, 2025, the Company entered into a long-term ground lease for approximately 183 acres in Lansing, New York. Upon completion of permitting and site development, the Cayuga Site has the potential for up to 400 MW of gross capacity, supporting approximately 320 MW of critical IT load. The Cayuga Site provides an additional anchor location with existing interconnection and supporting infrastructure and represents a key component of the Company’s forward development pipeline.

Abernathy Joint Venture

On October 27, 2025, the Company entered into an amended and restated limited liability company agreement governing the Abernathy Joint Venture. The Company holds a 50.1% equity interest in the joint venture. The Abernathy HPC Campus is designed for 168 MW of critical IT load, representing the full build-out of the site. The campus is 100% pre-leased to Fluidstack under a 25-year data center sublease with contractual rent escalators and options for term contraction. Lease obligations are supported by investment-grade credit enhancement provided by Google, materially strengthening the credit profile of the contracted revenues and facilitating third-party debt financing.

Management believes the Abernathy Joint Venture reflects the extension of the Company’s commercial relationship with Fluidstack, supported by continued credit enhancement from Google, to an additional site.

Hawesville Site

In February 2026, the Company entered into an Agreement of Purchase and Sale for a former industrial site in Hawesville, Kentucky (the “Hawesville Site”). The Hawesville Site is a strategically located brownfield infrastructure site which includes more than 250 buildable acres with immediate access to power infrastructure, including multiple high-voltage transmission lines, an on-site energized substation, and a direct connection to the regional transmission network. We plan on constructing and operating a HPC/AI data center on the Hawesville Site and are in discussions with potential customers for the site. The Hawesville Site has up to 480 MW of gross power availability; construction is expected to commence in 2026, with a phased buildout extending through 2027, subject to site planning and permitting approvals. Hawesville is expected to further diversify the Company’s geographic footprint and support future HPC customer demand.

Operations Overview

Lake Mariner Data Campus

The Lake Mariner Data Campus is TeraWulf’s flagship HPC campus and a core component of the Company’s contracted HPC platform. The Lake Mariner Data Campus is located in Barker, New York on the site of a former coal-fired power plant that was retired and repurposed into a modern digital infrastructure campus with operations that commenced in March 2022. The site benefits from substantial existing transmission infrastructure and is designed for scalable expansion.

As of March 31, 2026, the Lake Mariner Data Campus operated 145 MW of legacy bitcoin mining capacity and had 60 MW of critical IT HPC capacity. The campus is undergoing phased expansion to support additional HPC contracted deployments with gross capacity of approximately 500 MW in the near term,a and with potential expansion to approximately 750 MW, subject to additional approvals from the NYISO. During the quarter, certain mining facilities were curtailed or repurposed to support HPC development, consistent with the Company’s strategic transition.

The Lake Mariner Data Campus sources power from the NYISO Zone A grid, which is characterized by low-cost, low-carbon energy. Of the campus’s total power needs, 90 MW is allocated under an agreement with the New York Power Authority (“NYPA”) executed in February 2022, providing high-load factor power under a ten-year term commencing with NYPA’s initial power delivery.

The Lake Mariner Data Campus is designed to support multiple hyperscale and enterprise tenants through modular, phased development and incorporates advanced liquid-cooling systems, redundant electrical architectures, and scalable mechanical and network infrastructure optimized for high-density GPU deployments.

TeraWulf operates the Lake Mariner Data Campus through its subsidiaries La Lupa Data LLC (“La Lupa”) and Akela Data LLC (“Akela”). Collectively, La Lupa and Akela represent 438 MW of contracted critical IT HPC capacity at the Lake Mariner Data Campus, with some deliveries having commenced in 2025 and others extending into 2026.

La Lupa

In December 2024, La Lupa entered into long-term data center lease agreements with Core42 (the “Core42 Leases”), pursuant to which we committed to deliver 60 MW of critical IT load. The Core42 Leases have an initial ten-year term with two five-year renewal options and include customary provisions governing operating standards, service levels, and expansion rights. Construction commenced in 2024 and continued into 2025 and 2026; commissioning activities commenced in 2025 with phased deliveries aligned to meet Core42’s deployment schedule. Operationally, we continue to execute on our buildout. As of March 31, 2026, we had fully delivered CB-2, representing the full contracted capacity under the Core42 Leases currently in service.

Akela

In August 2025, Akela entered into three data center lease agreements (the “Akela Fluidstack Leases”) with Fluidstack USA I Inc. (together with its affiliates, “Fluidstack”), a leading AI cloud platform. Under the Akela Fluidstack Leases, we will provide 378 MW of critical IT load at the Lake Mariner Data Campus, which represents the majority of the remaining contracted HPC capacity at the Lake Mariner Data Campus. The Akela facilities are being developed in multiple phases, with construction having commenced in 2025 and delivery expected in 2026.

The Akela Fluidstack Leases benefit from substantial credit support provided by Google, which supports Fluidstack’s payment and performance obligations under the leases and materially enhances the credit quality and bankability of our contracted lease revenues. This credit support was a key factor in enabling efficient financing and phased development of the Akela facilities.

Abernathy HPC Campus

The Abernathy HPC Campus reflects the extension of our relationship with Fluidstack, also supported by credit enhancement from Google, to an additional site in Texas. The campus is being developed through a joint venture in which we hold a 50.1% ownership interest.

In October 2025, we entered into an amended and restated limited liability company agreement (the “Abernathy Joint Venture Agreement”) with Fluidstack CS I Inc. (the “Fluidstack Member”) to govern the terms of operation of FS CS 1 LLC (the “Abernathy Joint Venture”), which will develop, lease and operate the Abernathy HPC Campus.

The Abernathy HPC Campus is designed for 168 MW critical IT load, representing the full build-out of the site. This capacity is fully pre-leased to Fluidstack USA III under a 25-year data center lease with built-in rent escalators and options for term contraction (the “Abernathy Fluidstack Lease” and, together with the Akela Fluidstack Leases, the “Fluidstack Leases”). Construction is proceeding in phases, with completion and delivery currently targeted for the second half of 2026.

Similar to Akela, the Abernathy Fluidstack Lease benefits from credit support from Google, which provides financial support for Fluidstack’s obligations under the sublease, materially strengthening the risk profile of our contracted revenues and facilitating third-party financing.

Regional Diversification and Platform Resilience

The development of the Abernathy HPC Campus through the Abernathy Joint Venture and the Hawesville Site provide the Company with meaningful regional diversification. By expanding its HPC platform beyond New York into the Southwest Power Pool and Mid-continent Independent System Operator regions, the Company reduces concentration risk related to power markets, regulatory frameworks, weather events, construction timelines, and operational disruptions.

Geographic diversification also helps mitigate the potential impact of localized physical security incidents, natural disasters, and certain cyber events by distributing infrastructure across multiple regions and operating environments. Management believes this diversification enhances overall platform resilience, supports customer deployment flexibility, and strengthens the Company’s ability to maintain continuity of operations across its portfolio.

Power Strategy

The Company’s power strategy emphasizes reliability, efficiency, and responsible integration with regional electric grids. The Company’s campuses are designed to operate with long-duration, cost-competitive power resources that support both customer uptime requirements and broader grid stability.

The Company’s development and operations team brings deep experience in power generation, transmission, interconnection, and large-scale energy infrastructure, which informs site selection, facility design, and day-to-day operations. This expertise enables the Company to evaluate and develop complex, power-intensive sites efficiently and to structure infrastructure solutions that support high-density, mission-critical compute. The Company believes this power and infrastructure experience provides meaningful differentiation relative to many data center developers that do not have comparable in-house energy expertise.

As part of this strategy, the Company expects to acquire and develop sites that may include on-site generation, battery storage, and other dispatchable resources, primarily to enhance reliability for mission-critical compute and to support grid operations where appropriate. These assets are intended to improve operational resilience, enable participation in ancillary services, and and support stable, long-duration power supply for compute workloads. Rather than relying on a singular energy narrative, the Company focuses on responsible facility design, efficient power utilization, and long-term infrastructure stewardship.

Liquidity and Capital Resources

The Company’s primary sources of liquidity include cash on hand, cash generated from operations, sale proceeds from bitcoin, equity issuances, debt financing, and project-level financing arrangements. As of March 31, 2026, the Company had approximately $3.1 billion of cash, cash equivalents, and restricted cash. Capital requirements are driven primarily by HPC data center development, including significant capital expenditures associated with site development, electrical and mechanical infrastructure, and customer-specific fit-out.

Management expects future capital deployment to be focused on contracted HPC projects and disciplined expansion of the Company’s development pipeline, and believes its current liquidity position, together with access to capital markets and project-level financing, provides sufficient resources to fund near-term development activities. The Company continues to evaluate financing alternatives to support growth while managing balance sheet risk.

Outlook

The Company expects future results to be increasingly influenced by the development and operation of its HPC data center platform. As contracted HPC capacity is delivered and energized under existing hosting arrangements, and legacy mining operations are further reduced or repurposed, management expects the Company’s revenue mix to continue shifting toward HPC leasing and away from legacy bitcoin mining operations.

Future performance will depend on the timing of construction, commissioning, customer deployment schedules, access to power and interconnection, and the availability of project-level financing. Management expects capital deployment in future periods to be focused primarily on contracted HPC projects and disciplined expansion of the Company’s development pipeline.

The table below presents the lease and nonlease components of HPC lease revenue for the three months ended March 31, 2026 and 2025:

(1) All of the Core42 Leases have commenced which comprised 60 critical IT MW HPC lease capacity as of March 31, 2026.

(2) Cost of revenue (exclusive of depreciation) represents power costs which are passed through to the customer without markup and are included on a gross basis in HPC lease revenue as well as includes costs incurred by the Company in connection with its fit-out services under the HPC Leases.

Bitcoin Mining Operations

As of March 31, 2026, we owned approximately 54,100 miners, with approximately 35,500 operational at our bitcoin mining facilities on the Lake Mariner Data Campus (the “LMD Bitcoin Mining Facilities”) and the remainder undergoing maintenance, awaiting disposal or on standby to replace miners under repair. These miners were comprised as follows:

As of March 31, 2026, our fleet of miners ranged in age from 0.9 years to 3.8 years with an average age of approximately 1.6 years. We do not have scheduled downtime for our miners and while we periodically perform unscheduled maintenance on our miners, such downtime has not been significant historically. When performing unscheduled maintenance, depending on the length of estimated repair time, we may replace a miner with a substitute miner to limit overall downtime. As of March 31, 2026, our fleet of miners at the LMD Bitcoin Mining Facilities had a range of energy efficiency from 15.0 to 23.0 joules per terahash (“j/th”) and has an average energy efficiency of 17.2 j/th.

Bitcoin Mining - Share of Global Hashrate

Several factors influence our ability to mine bitcoin profitably, including bitcoin’s USD value, mining difficulty, global hashrate, power costs, fleet energy efficiency, and overall data center efficiency. Among these, energy efficiency is a critical driver of profitability, as power costs represent the most significant direct expense in bitcoin mining. We believe we operate a highly efficient mining fleet, optimized to maximize output while minimizing energy consumption. To assess operational performance and effectiveness, the Company tracks key metrics, which we believe are also valuable to investors for evaluating our progress and benchmarking against industry peers.

The table below presents our miner efficiency and computing power as compared to the global computing power as of March 31, 2026 and 2025:

(1) Total global hashrate obtained from YCHARTS (https://ycharts.com/indicators/bitcoin\_network\_hash\_rate).

(2) Joules of energy required to produce each terahash of processing power

(3) While nameplate at the LMD Bitcoin Mining Facilities was 10.9 EH/s and 12.2 EH/s as of March 31, 2026 and 2025, respectively, actual operational hashrate depends on a variety of factors, including (but not limited to) performance tuning to increase efficiency and maximize margin, scheduled outages (scopes to improve reliability or performance), unscheduled outages, curtailment due to participation in various cash generating demand response programs, derate of ASICS due to adverse weather and ASIC maintenance and repair.

As of March 31, 2026, our operational hashrate represented approximately 0.9% of the total global hashrate, aligning with our share of global blockchain rewards. As of that date, this translated to approximately 1 bitcoin mined per day. To maintain profitably, we focus on optimizing operational efficiency and cost management, ensuring that our mining rewards consistently cover direct operating expenses.

Bitcoin Mining - Average Cost of Bitcoin Mined

The table below presents the average cost of mining each bitcoin, including bitcoin mined at the LMD Bitcoin Mining Facilities for the three months ended March 31, 2026 and 2025 and the total energy cost per kWh utilized within the facilities.

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(1) “Cost to mine one bitcoin” is a cash cost metric and does not include depreciation. Although the Company recognizes depreciation with respect to its mining assets, it does not consider depreciation in determining whether it is economical to operate its mining equipment. As a result, the Company does not consider the sunk costs or depreciation of past capital investments in its historical or forecasted breakeven analysis. If depreciation of our miner fleet were factored into the above cost of mining analysis, it would add $79,845 and $37,316 for the three months ended March 31, 2026 and 2025 respectively, bringing the total “cost to mine one bitcoin” to $79,464 and $103,472 for the three months ended March 31, 2026 and 2025, respectively.

(2) Computed as the weighted-average opening price of bitcoin on each respective day the mined bitcoin is earned.

Power costs are the most significant expense in our bitcoin mining operations. During the three months ended March 31, 2026 and 2025, the Company incurred gross power costs of $14.0 million and $27.4 million, respectively. In addition, during the three months ended March 31, 2026 and 2025, the Company curtailed operations at the LMD Bitcoin Mining Facilities in response to weather events, energy price spikes, and participation in demand response programs. The Company records expected payments to be received for demand response programs as a reduction in cost of revenue, which amounted to $14.1 million and $2.8 million for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026, there were significant curtailment periods for the Company’s bitcoin mining operations due to sustained low temperatures throughout the Northeastern United States which led to significantly reduced power consumption and significantly higher demand response proceeds for the Lake Mariner Data facility resulting in a net negative realized cost of power for the period.

Energy prices are highly volatile, influenced by global events that can drive nationwide fluctuations in power costs. At the LMD Bitcoin Mining Facilities, power costs are subject to variable market rates, which can change hourly based on wholesale electricity pricing. While this introduces some unpredictability, it also provides us with the flexibility to actively manage our energy consumption, optimizing for profitability and efficiency. Energy prices are also highly sensitive to weather conditions, such as winter storms and polar vortices, which can increase regional power demand and drive up costs. During such events, we may curtail operations to avoid consuming power at peak rates, or we may be curtailed under demand response programs in which we participate. The average aggregate realized power prices at the LMD Bitcoin Mining Facilities were $(0.001) and $0.081 per kilowatt hour during the three months ended March 31, 2026 and 2025, respectively.

Our management team continuously monitors market conditions to determine when and for how long to curtail operations. If curtailment is not mandated under demand response programs, we make real-time decisions to curtail mining whenever power prices exceed the value of the fixed bitcoin reward. As a result, curtailment increases when bitcoin’s value declines or energy prices rise, and decreases when bitcoin’s value appreciates or energy costs fall. These decisions are actively managed on an hour-by-hour basis to optimize profitability.

The Company has purchased all miners with cash, without relying on limited recourse equipment financing for miner acquisitions. To support operations and purchase miners and other fixed assets, we have raised capital through both equity issuances and corporate-level debt. Costs related to these capital raises are not included in this analysis.

Miner acquisition costs, or capital expenditures, are not factored into the cost of mining analysis, as they do not impact the marginal cost of producing one bitcoin. Instead, these costs are recorded as property, plant, and equipment in the condensed consolidated balance sheets. Depreciation of property, plant, and equipment is calculated using the straight-line method, with estimated useful lives of four years for miners and five years for computer equipment.

During the three months ended March 31, 2026, the Company recorded accelerated depreciation expense of $11.9 million related to a certain miner building and related miners of which the Company shortened their useful lives based on expected shutdown of operations for purposes of supporting the HPC operations. The Company did not recorded accelerated depreciation expense during the three months ended March 31, 2025. While our standard depreciation period for miners is four years, historically low power costs may allow for a longer actual useful life in certain cases. However, if depreciation were included in the cost of mining analysis, it would add $79,845 and $37,316 per bitcoin mined for the three months ended March 31, 2026 and 2025, respectively.

Estimating asset useful lives requires management judgment, particularly given the rapid evolution of next-generation mining rigs in industrial-scale bitcoin mining. Depreciation schedules may be adjusted if events, regulatory changes, or shifts in operating conditions indicate a need for revision. Management continuously evaluates factors such as future energy market conditions, operating costs, maintenance practices, and capital investment needs to ensure depreciation assumptions remain reasonable. When an asset’s estimated useful life is adjusted—either shortened or extended—depreciation provisions are updated accordingly, which could have a material impact on future financial results.

Recent Developments

Subsequent to March 31, 2026 and through to May 8, 2026, the Company sold, pursuant to the ATM Program, 10,326,000 shares of Common Stock for gross proceeds of $190.9 million and no amounts remained available for sale under the ATM Program.

On April 16, 2026, the Company closed a stock offering of 54,510,000 shares of Common Stock at a public offering price of $19.00 per share, resulting in gross proceeds of approximately $1,035.7 million, before deducting underwriting discounts and commissions and other offering expenses.

On April 16, 2026, the Company repaid the outstanding $100.0 million principal amount under the Bridge Credit Agreement, together with $0.4 million of accrued interest and accrued agency fees, and terminated the Bridge Credit Agreement as a result of the Company’s public offering of 54,510,000 shares (see Note 18). In connection with the termination of the Bridge Credit Agreement, the Company will write off the remaining unamortized debt issuance costs and recognize a loss on extinguishment of debt of $7.3 million in the second quarter of 2026.

In April 2026, the 2031 Convertible Notes became convertible at the option of the holder based on the achievement of the 2031 Sale Price Conversion Event.

On May 7, 2026, the Company entered into a revolving credit agreement (the “Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, which provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) with aggregate commitments of $250.0 million. The Revolving Credit Facility matures on May 7, 2030, subject to a springing maturity date of 91 days prior to the maturity date of the 2030 Convertible Notes if certain conditions exist.

From the closing date to the earliest commencement date to occur under the Fluidstack HPC Leases (the “First Commencement Date”), borrowings under the Revolving Credit Facility will bear interest at a rate equal to, at the Company’s option, either (i) a Term SOFR determined by reference to the secured overnight financing rate published by an administrator therefor, plus a margin of 1.75% per annum or (ii) the ABR (as defined) plus a margin of 0.75% per annum. Thereafter, the applicable margin may range from 1.25% to 1.75% for Term SOFR loans and 0.25% to 0.75% for ABR loans based on the Company’s consolidated total debt to market capitalization ratio (as defined). The obligations under the Revolving Credit Facility are secured by substantially all assets of the Company and certain assets of certain of the Company’s subsidiaries, in each case, subject to certain excluded assets (as defined). The Credit Agreement contains customary restrictive covenants, as well as a minimum liquidity covenant.

Results of Operations

The Company generates revenue in the form of bitcoin by providing hash computation services to a mining pool operator to mine bitcoin and validate transactions on the global bitcoin network using miners owned by the Company. The earned bitcoin are routinely sold for U.S. dollars.

In July 2025, the Company commenced its HPC leasing operations. HPC lease revenue is generated by leasing datacenter space and providing related services to our HPC customers. These leasing agreements include lease components related to the right to use datacenter space and nonlease components for power delivery, physical security, and maintenance services. HPC power costs are passed through to the customer without markup and are included on a gross basis in HPC lease revenue.

The Company’s business strategy centers on maximizing revenue and profitability of our bitcoin mining fleet while expanding our datacenter infrastructure to support HPC leasing activities. We plan to operate infrastructure necessary for profitable bitcoin mining while pursuing high-value HPC leasing opportunities that leverage our power utilization and digital infrastructure. We are confident our expertise in power infrastructure and digital asset mining can be favorably applied to the design, development, and operation of large-scale datacenters. These datacenters are optimized for high-value applications such as cloud computing, machine learning, and artificial intelligence. We are actively seeking opportunities to expand into these areas using our knowledge, expertise, and existing infrastructure wherever favorable market opportunities arise.

Revenue

The following table presents revenue (in thousands):

Total revenue for the three months ended March 31, 2026 and 2025 was $34.0 million and $34.4 million, respectively, representing a decrease of $0.4 million. These changes were a result of the factors described below.

Digital asset revenue for the three months ended March 31, 2026 and 2025 was $13.0 million and $34.4 million, respectively, a decrease of $21.4 million. During the three months ended March 31, 2026, two miner buildings were repurposed or placed out of service to support the HPC development at the Lake Mariner Data Campus and the Company significantly curtailed its bitcoin operations resulting in total bitcoin mined of 168 bitcoin during the three months ended March 31, 2026 as compared to 372 bitcoin mined during the same period in the prior year. Additionally, the average price of bitcoin during the three months ended March 31, 2026 decreased to $77,739 as compared to $93,522 during the three months ended March 31, 2025.

HPC lease revenue for the three month ended March 31, 2026 was $21.0 million. In July 2025, the Company commenced its HPC leasing operations and as of March 31, 2026, had energized 60 critical IT MW of HPC leasing capacity at the Lake Mariner Data Campus.

Costs and Expenses

The following table presents cost of revenue (exclusive of depreciation) (in thousands):

Cost of revenue (excluding depreciation) for the three months ended March 31, 2026 and 2025 was $2.4 million and $24.6 million, respectively, representing a decrease of $22.2 million. Cost of revenues is primarily comprised of power expense which decreased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. During the three months ended March 31, 2026 and 2025, the Company incurred gross power costs of $14.0 million and $27.4 million, respectively.

In addition, during the three months ended March 31, 2026, the Company significantly curtailed operations at the LMD Bitcoin Mining Facilities due to sustained low temperatures in upstate New York which led to significantly lower gross power costs and significantly higher demand response proceeds resulting in a net negative realized cost of power for the period. Proceeds from participation in demand response programs are recorded as a reduction in cost of revenue in the period in which the underlying program occurs. These proceeds totaled $14.1 million and $2.8 million during the three months ended March 31, 2026 and 2025, respectively. The Company is actively expanding its enrollment in such available programs in New York State.

During the three months ended March 31, 2026, cost of revenue related to HPC leasing was $2.5 million primarily comprised of $1.1 million of power costs and $1.4 million of costs incurred by the Company in connection with its fit-out services under the HPC Leases.

The following table presents operating expenses (in thousands):

Operating expenses for the three months ended March 31, 2026 and 2025, were $9.0 million and $1.1 million, respectively, an increase of $7.9 million. Operating expenses increased primarily due to (i) $1.4 million of miner repair costs, (ii) $1.1 million of security. (iii) $2.2 million of equipment and other rental costs, and (iv) $1.6 million of labor costs (of which $0.8 million was previously recorded in operating expenses — related party prior to the acquisition of Beowulf E&D and the termination of the Services Agreement).

Operating expenses — related party for the three months ended March 31, 2026 and 2025, were $2.2 million and $1.7 million, respectively, an increase of $0.5 million. Operating expenses — related party increased primarily due to increases in lease amortization of $0.7 million and $0.5 million of additional rent related to the Cayuga Lease which commenced in August 2025, partially offset by $0.8 million of labor costs which were previously recorded in operating expenses — related party prior to the acquisition of Beowulf E&D and the termination of the Services Agreement.

The following table presents selling, general and administrative expenses (in thousands):

Selling, general and administrative expenses (including related party expenses) for the three months ended March 31, 2026 and 2025 were $127.8 million and $50.1 million, respectively, a net increase of $77.7 million.

Selling, general and administrative expenses increased by $81.0 million during the three months ended March 31, 2026 as compared to the same period in the prior year primarily due to of (i) a $62.7 million increase in stock-based compensation primarily related to PSU grants issued during the current-year period, (ii) an $11.8 million increase in employee compensation and benefits, including an $8.8 million increase in accrued bonuses and higher compensation costs associated with increased headcount following the acquisition of Beowulf E&D in May 2025, (iii) a $1.4 million increase in travel expenses and (iv) a $0.9 million increase in information technology, legal and other professional fees.

Selling, general and administrative expenses – related party decreased $3.4 million primarily due to costs incurred pursuant to the Services Agreement with Beowulf E&D during three months ended March 31, 2025 prior to the acquisition of Beowulf E&D and the termination of the Services Agreement in May 2025.

Depreciation for the three months ended March 31, 2026 and 2025 was $28.5 million and $15.6 million, respectively, an increase of $12.9 million. The increase was primarily due to mining and HPC infrastructure constructed and placed in service during 2025 at the Lake Mariner Data Campus. Additionally, during the three months ended March 31, 2026 the Company recorded accelerated depreciation expense of $11.9 million related to a certain miner building and related miners of which the Company shortened their useful life based on expected shutdown of operations for purposes of supporting the HPC operations.

Loss on fair value of digital assets, net during the three months ended March 31, 2026 and 2025 was $0.7 million and $0.9 million due to the volatility in the price of bitcoin during the three months ended March 31, 2026 as compared to decreases in the price of bitcoin during three months ended March 31, 2025.

Impairment of property, plant, and equipment during the three months ended March 31, 2026 primarily due to $16.8 million impairment charge related to asset retirement costs assumed in connection with the Hawesville Site acquisition. The Company assumed an asset retirement obligation as part of the acquisition and recorded the related asset retirement cost in property, plant and equipment, net. Because the related acquired assets were not expected to provide future economic benefit, the capitalized asset retirement cost was fully impaired during the period. The increase was also driven by $8.9 million impairment charges related to the shutdown of a mining facility and the cessation of related bitcoin mining operations to support the Company’s transition to HPC operations.

Interest expense during the three months ended March 31, 2026 and 2025 was $67.1 million and $4.0 million, respectively, an increase of $63.1 million. The increase is primarily attributed to increases in stated interest of $50.5 million and increase in amortization of debt issuance costs of $12.6 million related to the 2030 Secured Notes, 2031 Convertible Notes and 2032 Convertible Notes which were issued in 2025.

Change in fair value of warrants during the three months ended March 31, 2026 was $(216.3) million related to the Google Warrants driven by the increase in the Company’s stock price..

Interest income during the three months ended March 31, 2026 and 2025 was $29.4 million and $2.3 million, respectively, an increase of $27.1 million due to increase higher average cash balances during the period.

Income tax provision was $28,000 and $0 for the three months ended March 31, 2026 and 2025, respectively. Based upon the level of historical U.S. losses and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of the remaining deductible temporary differences, and as a result the Company has recorded a full valuation allowance against its net deferred tax assets as of March 31, 2026 and December 31, 2025, except for a $104,000 and $76,000 deferred tax liability as of March 31, 2026 and December 31, 2025, respectively, arising from indefinite-lived assets (e.g., tax-deductible goodwill related to the acquisition of Beowulf E&D) that cannot be used as a source of taxable income to support the realization of deferred tax assets when a full valuation allowance is in place.

Equity in net loss of investee, net of tax was $11.5 million and $0 for the three months ended March 31, 2026 and 2025,which represents TeraWulf’s proportional share of net loss of the Abernathy Joint Venture which was formed in October 2025 and has not yet commenced operations.

Non-GAAP Measure

To provide investors with additional information in connection with our results as determined in accordance with generally accepted accounting principals in the United States (“U.S. GAAP”), we disclose Adjusted EBITDA as a non-GAAP measure. This measure is not a financial measure calculated in accordance with U.S. GAAP, and it should not be considered as a substitute for net loss, operating loss, or any other measure calculated in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies.

We define Adjusted EBITDA as net loss adjusted for (i) impacts of interest, taxes, depreciation and amortization; (ii) stock-based compensation expense, amortization of right-of-use asset and accretion of asset retirement obligations, which are non-cash items that the Company believes are not reflective of its general business performance, and for which the accounting requires management judgment, and the resulting expenses could vary significantly in comparison to other companies; (iii) equity in net loss of investee, net of tax, related to the Abernathy Joint Venture; (iv) interest income for which management believes is not reflective of the Company’s ongoing operating activities; (v) change in fair value of warrant liabilities, and impairment of property, plant and equipment, net, which are not reflective of the Company’s general business performance; and (vi) acquisition-related transaction costs which management believes are not reflective of the Company’s ongoing operating activities.

Management believes that providing this non-GAAP financial measure allows for meaningful comparisons between the Company's core business operating results and those of other companies, and provides the Company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time. In addition to management's internal use of non-GAAP Adjusted EBITDA, management believes that Adjusted EBITDA is also useful to investors and analysts in comparing the Company’s performance across reporting periods on a consistent basis. Management believes the foregoing to be the case even though some of the excluded items involve cash outlays and some of them recur on a regular basis (although management does not believe any of such items are normal operating expenses necessary to generate the Company’s revenues). For example, the Company expects that share-based compensation expense, which is excluded from Adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, directors and consultants.

The Company’s Adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in the Company’s industry, as other companies in the Company’s industry may calculate non-GAAP financial results differently. The Company's Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to net loss or any other measure of performance derived in accordance with U.S. GAAP. Although management utilizes internally and presents Adjusted EBITDA, the Company only utilizes that measure supplementally and does not consider it to be a substitute for, or superior to, the information provided by U.S. GAAP financial results. Accordingly, Adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in the Company’s condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP.

The following table is a reconciliation of the Company’s Adjusted EBITDA to its most directly comparable U.S. GAAP measure (i.e., net loss) for the periods indicated (in thousands):

Liquidity and Capital Resources

The principal uses of cash are for the operation and buildout of datacenter facilities, debt service and general corporate activities. Cash flow information is as follows (in thousands):

59

Cash (used in) provided by operating activities was $(17.6) million and $56.5 million for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026, HPC operations resulted in segment profit of $10.2 million as the Company began HPC operations during the third quarter of 2025. In addition the Company continued to profitably mine bitcoin during the three months ended March 31, 2026, the Company reported $3.3 million higher digital asset segment profit as compared to the prior year primarily due to lower cost of revenue resulting from demand response programs as the Company significantly curtailed operations at the Lake Mariner Data Campus during the three months ended March 31, 2026. Additionally, during the three months ended March 31, 2026 the Company reported increased interest income of $27.2 million partially offset by selling, general and administrative expenses (including related party, but exclusive of noncash stock based compensation) of $14.4 million and interest paid of $5.3 million. During the three months ended March 31, 2025, the Company also received inflows from prepaid rent from customers of $90.0 million (ii) interest income proceeds net of interest paid of $2.3 million.

Cash used in investing activities was $712.8 million and $61.1 million for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used in investing activities is primarily attributed to an increase in purchases of plant and equipment of $429.3 million related to infrastructure intended to support expansion into HPC leasing operations and $201.4 million cash payment related to the Hawesville Site acquisition.

Cash provided by (used in) financing activities was $100.4 million and $(51.3) million for the three months ended March 31, 2026 and 2025, respectively. The increase in cash provided by financing activities is primarily attributed to (i) $92.8 million of net proceeds from borrowings under the Bridge Credit Agreement, net of debt issuance costs paid, and (ii) $9.0 million of net proceeds from sales of Common Stock under the ATM Program. During the three months ended March 31, 2025, the Company repurchased $33.3 million of treasury stock under the Share Repurchase Program and paid $18.0 million in taxes related to net share settlements of stock-based compensation awards.

Financial Condition

The Company incurred a net loss of $427.7 million and reported cash provided by operating activities of $17.6 million for three months ended March 31, 2026. As of March 31, 2026, the Company had cash and cash equivalents of $2,630.0 million, a working capital balance of $482.6 million, total TeraWulf stockholders’ deficit of $78.8 million and an accumulated deficit of $1,421.3 million. During 2025, the Company leveraged its strategic transition toward HPC leasing and execution of long-term lease agreements with Fluidstack, which benefit from substantial credit support provided by Google, to enable efficient financing and funding of the phased development of the La Lupa and Akela facilities. Prior to these developments, the Company historically relied primarily on proceeds from sales of digital assets, both self-mined and distributed from the joint venture which owned the Nautilus Cryptomine Facility, and its issuances of debt and equity to fund its principal operations.

Critical Accounting Estimates

The above discussion and analysis of the Company’s financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

See Note 2 of the Notes to Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q and Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a summary of the Company’s significant accounting policies.

HPC Leasing

In December 2024, the Company entered into long-term datacenter lease agreements (the “HPC Leases”) with a customer for specified datacenter infrastructure at the Lake Mariner Data Campus to support the customer’s HPC operations. In accordance with ASC 842, Leases, the Company determined at contract inception that these agreements contained a lease, comprising lease components related to the right to use datacenter space and nonlease components for power delivery, physical security, and maintenance services. Certain of the HPC Leases commenced in 2025 and the remainder of the HPC Leases are expected to commence in 2026.

The Company has elected the practical expedient available under ASC 842, Leases, to combine the nonlease revenue components that have the same pattern of transfer as the related operating lease components into a single combined component. The single combined component is accounted for under ASC 842 as an operating lease if the lease components are the predominant components and is accounted for under ASC 606 if the nonlease components are the predominant components. The lease components are the predominant components in the Company’s long term lease agreements and the single combined component in these arrangements are accounted for under the operating lease guidance of ASC 842. Recognition of HPC lease revenue begins when the Company determines the asset has been made available for the customer’s use.

The Company has concluded that it is probable that substantially all of the payments will be collected over the term of the arrangements and recognize the total combined fixed payments under the agreements on a straight-line basis over the noncancellable term. The Company recognizes the difference between straight-line revenue recognized during the period and the lease payments due pursuant to the underlying arrangement as deferred rent liability or accrued rent receivable in the consolidated balance sheets. Certain arrangements include options to extend the term. These extension options are not reasonably certain to be exercised and are excluded from the lease term and calculation of lease payments at lease commencement.

Payments for physical security and other routine maintenance services are included in the fixed lease payments. The lease agreements provide for variable payments for power delivery. Power delivery services represent a stand-ready obligation to make power available to the customer over the coterminous lease term and have the same pattern of transfer as the related operating lease components. Customers are charged monthly for actual power costs incurred at current utility rates. These payments from customers for power delivery are recognized as variable lease payments in accordance with the practical expedient elected. Variable lease payments are presented on a gross basis and are included in HPC lease revenue in the condensed consolidated statements of operations.

The lease agreements also provide for variable payments for certain fit-out services as requested by the customer and the Company recognizes revenues as performance obligations are satisfied. In the course of providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its customers. These costs are passed through to the customers, generally with a mark-up, and, in accordance with U.S. GAAP, are included in the Company’s HPC lease revenue.

Digital assets

Digital assets consists of bitcoin earned as noncash consideration for providing hash computation services to a mining pool in accordance with the Company’s revenue recognition policy. Digital assets is classified as a current asset in the condensed consolidated balance sheets as it is highly liquid and the Company expects to sell it within the next twelve months to support operations.

The Company measures digital assets at fair value each reporting period in accordance with ASC 820, *Fair Value Measurement (“*ASC 820”). Fair value is determined using Level 1 inputs based on quoted prices from the active trading platform on which the Company regularly transacts, which is considered its principal market for bitcoin. Because bitcoin is continuously traded, the Company uses the midnight UTC price to align with its revenue recognition policy. Gains and losses from remeasurement are included within “loss (gain) on fair value of digital assets, net” in the condensed consolidated statements of operations.

For bitcoin sales, gains and losses are calculated as the difference between cash proceeds and the cost basis, using a first-in, first-out (FIFO) method. These gains and losses are also included within “loss (gain) on fair value of digital assets, net” in the condensed consolidated statements of operations. During the three months ended March 31, 2026 and 2025, the Company recorded loss on fair value of digital assets, net of $0.7 million and $0.9 million, respectively.

Bitcoin earned through mining activities is recorded as an adjustment in the condensed consolidated statements of cash flows, reconciling net loss to cash flows from operating activities. Bitcoin received as distributions-in-kind from equity investees is disclosed in supplemental noncash investing activities.

Prior to July 2024, proceeds from sales of digital currency were included within cash flows from operating activities in the condensed consolidated statements of cash flows as bitcoin was converted nearly immediately into cash during that period. Starting in July 2024, the Company no longer converts bitcoin into cash immediately and accordingly, proceeds from sales of digital assets are included within cash flows from investing activities in the condensed consolidated statements of cash flows.

Long-lived Assets

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Judgment is necessary in estimating the Company’s various assets’ useful lives. This includes evaluating the Company’s own usage experience with its currently owned assets, the quality of materials used in construction-related projects and, for its miners, the rate of technological advancement and market-related factors such as the price of bitcoin and the bitcoin network hashrate, which impact the value of the miners. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (generally 2 to 5 years for computer equipment and 4 years for miners, 2 to 14 years for electrical equipment, 5 to 20 years for building and improvements, 2 years for office furniture and fixtures, and 2 years for vehicles). Leasehold improvements are depreciated over the shorter of their estimated useful lives or the lease term. Changes in depreciation and amortization, generally accelerated depreciation, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change.

The Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted cash flows expected to be generated by the asset. Significant judgment is used when estimating future cash flows, particularly the price of bitcoin and the network hashrate. Any impairment loss recorded is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. Should our estimates of useful lives, undiscounted cash flows, or asset fair values change, additional and potentially material impairments may be required, which could have a material impact on our reported financial results.

Stock-based compensation

The Company measures stock-based compensation cost related to share-based payment awards at the grant date of the award, based on the estimated fair value of the award. For restricted stock units (“RSUs”) with time-based vesting, the fair value is determined by the Company’s common stock price on the date of the grant. For RSUs with vesting based on market conditions (“PSUs”), the effect of the market condition is considered in the determination of fair value on the grant date using a Monte Carlo simulation model. Stock-based compensation expense for PSUs is recorded over the derived service period unless the market condition is satisfied in advance of the derived service period, in which case a cumulative catch-up is recognized as of the date of achievement. Stock-based compensation for PSUs is recorded regardless of whether the market conditions are met unless the service conditions are not met. The Company accounts for forfeitures as they occur. The Company uses significant judgment in determining the likelihood of meeting milestones and market conditions. Inputs into valuation models such as Monte Carlo simulations include both the Company’s and guideline public company historical and expected annual volatility and, depending on the inputs selected, the Company could calculate significantly different estimated grant date fair values, materially impacting the valuation of our stock-based awards and the stock-based compensation expense we recognize in future periods.

Income Taxes

The Company accounts for income taxes pursuant to ASC 740, Income Taxes (“ASC 740”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax asset will not be realized. The Company follows the provision of ASC 740 related to accounting for uncertain income tax positions. When tax returns are filed, it is more likely than not that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely that not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the Company’s balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The most critical estimate for income taxes is the determination of whether to record a valuation allowance for any net deferred tax asset, including net loss carryforwards, whereby management must estimate whether it is more likely than not that the deferred tax asset would be realized.

Assets Acquired and Liabilities Assumed in a Business Combination

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions,estimates and judgments. Any purchase consideration in excess of the estimated fair values of net assets acquired is recorded as goodwill.

Asset Acquisition

In an asset acquisition, the Company recognizes the assets acquired and liabilities assumed based on the cost of acquiring the assets, which generally includes the transaction costs of the asset acquisition and no gain or loss is recognized as of the date of acquisition unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s books. If the consideration given includes noncash consideration in the form of noncash assets, liabilities assumed or equity interests issued, the Company measures the cost of acquiring the assets based on either the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values.

Goodwill Impairment

Goodwill is not subject to amortization, and instead, assessed for impairment annually, or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350.

The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in our forward-looking statements. For more information regarding the forward-looking statements used in this section and elsewhere in this Quarterly Report, see the “Cautionary Note Regarding Forward-Looking Statements” at the forepart of this Quarterly Report.

Risk Regarding the Price of Bitcoin and Energy

Our business and development strategy is focused on maximizing revenue and profitability of our bitcoin mining fleet. As of March 31, 2026, our digital asset balance was comprised of 18 bitcoin recorded at its fair value of $1,237,000, all of which were produced from our bitcoin mining operations.

We cannot predict the future market price of bitcoin, the future value of which will affect revenue from our operations, and any future declines in the fair value of the bitcoin we mine and hold for our account would be reported in our financial statements and results of operations as a charge against net income, which could have a material adverse effect on the market price for our securities.

A 10% increase or decrease in both the price of bitcoin produced during the three months ended March 31, 2026 and the fair value of bitcoin as of March 31, 2026 would have increased or decreased net loss by approximately $1.3 million.

A 10% increase or decrease in power prices during the three months ended March 31, 2026 would have increased or decreased net loss by approximately $0.2 million.

Disclosure Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of such period, are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act are:

• Recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and
• Accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Our business faces many risks. Before deciding whether to invest in our Common Stock, in addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which is incorporated herein by reference. If any of the risks or uncertainties described therein actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected. This could cause the trading price of our Common Stock to decline, resulting in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones facing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations.

There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and our Quarterly Reports on Form 10-Q.