# AXE Compute Inc.: Form 10-Q for the period ended Jun 30, 2026

- Company: [AXE Compute Inc.](/companies/agpu.md) (CIK 1446159)
- Form: 10-Q
- Filed: 2026-08-14
- Accepted by EDGAR: Aug 14, 2026, 17:00 ET
- Period: 2026-06-30
- Accession: 0001171843-26-005556
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1446159/000117184326005556/agpu20260630_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1446159/000117184326005556/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-04-01 to 2026-06-30 | $3.2m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 6 months, 2026-01-01 to 2026-06-30 | $3.3m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2026-04-01 to 2026-06-30 | $3.0m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2026-01-01 to 2026-06-30 | $3.0m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2026-04-01 to 2026-06-30 | −$17.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2026-01-01 to 2026-06-30 | −$25.1m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2026-04-01 to 2026-06-30 | −$17.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2026-01-01 to 2026-06-30 | −$24.9m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2026-04-01 to 2026-06-30 | −$0.87 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2026-01-01 to 2026-06-30 | −$1.45 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-04-01 to 2026-06-30 | 19,685,811 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2026-01-01 to 2026-06-30 | 17,167,696 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2026-01-01 to 2026-06-30 | $17.4m | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 6 months, 2026-01-01 to 2026-06-30 | $17.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-06-30 | $21.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-06-30 | $56.1m | us-gaap:AssetsCurrent |
| Total assets | at 2026-06-30 | $100.4m | us-gaap:Assets |
| Current liabilities | at 2026-06-30 | $38.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-06-30 | $66.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-06-30 | $34.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 26,046 characters.

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026, and our Form 10-K for the year ended December 31, 2025.

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

### Overview

Axe Compute Inc. is a technology company focused on providing high-performance computing infrastructure for artificial intelligence (“AI”) workloads by sourcing large-scale graphics processing unit (“GPU”) capacity from hardware manufacturers and infrastructure suppliers and deploying that capacity for enterprise customers under long-term service agreements. We assist customers across the full GPU infrastructure stack, including hardware procurement, colocation, networking, storage, and financing. We can also immediately access compute capacity through relationships with third party compute providers to provide customers compute capacity that is already online and available for rent. We also continue to evaluate strategic alternatives for our legacy oncology drug discovery business (the “Legacy Business”), including its proprietary biobank of tumor samples and historical drug response data, which is not part of our core compute infrastructure operations.

#### Compute Services

Our principal revenue-generating activity is the provision of GPU compute to customers. We primarily provide compute services under two customer models: (1) designing and deploying customized, large scale compute infrastructure solutions for enterprise clients; and (2) providing immediate access to GPU capacity (in as fast as 24-48 hours) that is already online and available for rent from third parties.

For customers seeking large-scale, long-duration GPU compute capacity, we build and deploy dedicated compute infrastructure solutions. Under this model, customers contract for dedicated AI infrastructure tailored to their compute, performance, geographic, security, and operational requirements. We coordinate with customers to architect deployments that may include GPU compute, high-speed storage, networking, power infrastructure, and related managed services. Deployments are typically hosted in enterprise-grade data center facilities and are operated by us pursuant to service level commitments. We intend to finance and then retain ownership of the deployed hardware and related infrastructure, while providing customers access to the infrastructure through multi-year service agreements. Customer contracts are typically structured with deposits, prepayments, and recurring monthly payments, including take-or-pay provisions intended to provide income visibility throughout the contract term.

For customers that need immediate access to GPU compute capacity, we provide access to high-performance GPU compute infrastructure. Our access to third-party networks encompasses global locations and GPUs capable of supporting a broad range of artificial intelligence, machine learning, and high-performance computing workloads. Compute capacity is delivered to customers through a managed infrastructure model, typically within 48 hours of customer engagement, without requiring customers to make capital investments in physical hardware or data center facilities.

#### Drug Discovery Services / Legacy Business

The provision of compute services is our priority and remains our focus. We also maintain our legacy oncology drug discovery solutions business, which was previously conducted under the Predictive Oncology Inc. name. Current operations in this business are limited, and we are exploring strategic alternatives, including a potential sale or other disposition, although no definitive plan has been approved. Historically, this business applied AI to support the discovery and development of cancer therapies, with the objective of improving treatment effectiveness and patient outcomes. The business leveraged AI capabilities to provide actionable insights about drug compounds to improve the drug discovery process and increase the probability of drug compound success. In February 2026, we announced that we are exploring strategic alternatives for this oncology drug discovery solutions business. However, as of the date of this Quarterly Report on Form 10-Q, our Board of Directors has not yet committed to a specific course of action.

### Strategic Compute Reserve

On September 29, 2025, we adopted a treasury strategy centered on ATH, the native utility token of the Aethir network. Aethir is a decentralized physical infrastructure network developed by DCI Foundation, a Panama foundation company ("DCI"), that aggregates enterprise-grade GPU resources to support artificial intelligence, cloud gaming and other compute-intensive workloads. ATH functions as a proxy for a unit of GPU compute power and serves as the medium of exchange and incentive mechanism for participants in the Aethir network.

Under this strategy, we maintain a Strategic Compute Reserve comprised primarily of ATH, which provides us with immediate access to GPU compute capacity that can be deployed to customers. As a holder of ATH, we accrue unrealized gains or losses from any appreciation or depreciation, as applicable, in the value of ATH tokens, which trade on various cryptocurrency exchanges.

We seek to generate value from our ATH holdings principally by utilizing ATH to procure GPU compute capacity on the Aethir network and reselling that capacity to enterprise, research, and commercial customers. We have not engaged in ATH staking to date and do not currently intend to stake ATH, although we may elect to do so in the future.

Our Strategic Compute Reserve is intended to create value for stockholders through:

- Maintaining access to GPU compute capacity through ownership of ATH;
- Deploying ATH to acquire compute capacity and reselling that capacity to customers;
- Opportunistically purchasing ATH in the open market, including receiving additional ATH incentives under the DCI agreement;
- Earning yield through lending arrangements and other approved treasury activities;
- Holding ATH as a strategic reserve to support future compute demand; and
- Selling ATH from time to time to support working capital requirements, operational needs or other corporate purposes.

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

### Recent Developments

During the quarter ended June 30, 2026, we appointed Kyle Okamoto as President effective April 1, 2026, and appointed Jeremy Yaukey-Witter as Chief Financial Officer effective May 18, 2026.

On April 22, 2026, we announced our entry into a 36-month enterprise infrastructure contract with an enterprise customer (the “April Agreement”). The April Agreement has an aggregate contract value of approximately $260 million. Under the April Agreement, we will deliver a dedicated cluster of 2,304 NVIDIA B300 GPUs and AI-focused high-speed storage infrastructure from a single U.S. Tier 3 data center facility. The cluster is intended to support large-scale AI model training, fine-tuning, and high-throughput inference workloads. The infrastructure will maintain NVIDIA reference architecture throughout the contract period. The initial term of the Agreement is 36 months, with targeted deployment commencing in the third quarter of 2026. The Agreement includes options to renew for additional years beyond the initial term.

In connection with the April Agreement, we purchased technology equipment of $17.1 million in the quarter ended June 30, 2026. This technology equipment consists of GPU cluster infrastructure and is considered construction in progress as of June 30, 2026, and will begin depreciating when placed in service.

On May 15, 2026, in accordance with the terms of the ATM Sales Agreement with Wainwright, we determined to further increase the number of shares we may sell under the Sales Agreement up to an aggregate of $100.0 million, inclusive of approximately $17.0 million of shares previously sold under the Sales Agreement, and we filed an additional prospectus supplement with the SEC on May 15, 2026. The net proceeds from the shares offered and sold pursuant to the ATM Sales Agreement during the three months ended June 30, 2026, after deduction of commissions and offering expenses, were approximately $10.3 million. As of June 30, 2026, approximately $83.0 million remained available for sales under the Sales Agreement.

In July 2026, we secured three new customer contracts with a total contract value of more than $2.8 billion across the United States and Europe. The agreements, secured through the Axe Compute Build program, expand our design-deploy-own-operate model into additional geographies and add significant dedicated, large-scale AI infrastructure capacity to our global footprint.

### Capital Requirements

Since inception, we have incurred recurring losses and have not generated sufficient revenues to fund our operations. Historically, we have financed our activities through a combination of debt and equity financings. Since 2023, we have monetized certain assets and reduced operating expenses. In September 2025, we adopted the aforementioned treasury strategy, which introduced both new sources of capital and additional capital requirements. See “Liquidity and Capital Resources—Liquidity and Plan of Financing” and “Liquidity and Capital Resources—Financing Transactions” below.

As of June 30, 2026, we have approximately $21.9 million in cash and cash equivalents. Additionally, we also hold significant ATH digital assets, which may serve as an additional source of liquidity. However, the market price of ATH has exhibited significant volatility over recent periods and remains subject to rapid fluctuations driven by factors such as market sentiment, regulatory developments, network adoption, governance decisions of the Aethir Foundation, and broader crypto-asset market conditions.

Additional sources of liquidity include our at-the-market (“ATM”) facility, under which approximately $83.0 million remains available as of the prospectus supplement filed with the SEC on May 15, 2026, as well as a standby equity purchase agreement (“SEPA”) that allows us to sell up to $10.0 million of its common stock, in each case subject to the terms, conditions, and limitations of the respective arrangements.

Our future cash requirements and the adequacy of our available resources will depend on our ability to generate revenue from our compute services and treasury strategy, as well as our ability to access additional financing. We expect operating losses to continue in the near term as we scale these initiatives. Given our recent strategic shift, our future operating results are inherently uncertain, and period-to-period comparisons may not be indicative of future performance

### Results of Operations

Comparison of the three months ended June 30, 2026 and 2025:

|  | 2026 | 2025 | Difference |
| --- | ---: | ---: | ---: |
| Revenue | $3,214,992 | $2,682 | $3,212,310 |
| Gains (losses) on digital assets | (13,125,352) | - | (13,125,352) |
| Cost of revenues | 3,013,339 | 18,221 | 2,995,118 |
| General and administrative expenses | 2,735,922 | 1,875,655 | 860,267 |
| Research and development | 492,227 | 499,715 | (7,488) |
| Sales and marketing expenses | 1,176,162 | 268,959 | 907,203 |
| Total operating gain (loss) | (17,328,010) | (2,659,868) | (14,668,142) |
| Other income (expense) | 122,128 | 680,973 | (558,845) |
| Income (loss) from continuing operations | (17,205,882) | (1,978,896) | (15,226,986) |
| Income (loss) from discontinued operations | - | (91,567) | 91,567 |
| Net income (loss) | $(17,205,882) | $(2,070,462) | $(15,135,420) |

27

Comparison of the six months ended June 30, 2026 and 2025

|  | 2026 | 2025 | Difference |
| --- | ---: | ---: | ---: |
| Revenue | $3,250,303 | $112,992 | $3,137,311 |
| Gains (losses) on digital assets | (17,421,620) | - | (17,421,620) |
| Cost of revenues | 3,016,195 | 63,339 | 2,952,856 |
| General and administrative expenses | 5,644,958 | 3,703,855 | 1,941,103 |
| Research and development | 1,039,672 | 1,020,121 | 19,551 |
| Sales and marketing expenses | 1,184,549 | 272,592 | 911,957 |
| Total operating gain (loss) | (25,056,691) | (4,946,915) | (20,109,776) |
| Other income (expense) | 141,866 | 682,604 | (540,738) |
| Income (loss) from continuing operations | (24,914,825) | (4,264,311) | (20,650,514) |
| Income (loss) from discontinued operations | - | (249,024) | 249,024 |
| Net income (loss) | $(24,914,825) | $(4,513,335) | $(20,401,490) |

*Revenue.* We recognized revenue of $3.3 million for the six months ended June 30, 2026, compared to $0.1 million for the six months ended June 30, 2025. The increase was driven by a shift in our operating activities: revenue in the current period was generated primarily by our Compute Services and Treasury Management segment, while revenue in the prior-year period was attributable to our Drug Discovery Services segment.

*Gains (losses) on digital assets.* We recorded a loss on digital assets of $17.4 million in the six months ended June 30, 2026, with no such losses recorded in the comparative period. The losses in the 2026 period primarily represent the change in fair value of the Company’s ATH holdings, which were not present in the comparative period.

*Cost of revenues.* Cost of revenues was $3.0 million and $0.1 million in the six months ended June 30, 2026 and 2025, respectively. Similarly to revenue, cost of revenues increased due to a shift in our operating activities.

*General and administrative expenses.* General and administrative (“G&A”) expenses primarily consist of management salaries, professional fees, consulting fees, administrative fees, and general office expenses. G&A expenses increased by $1.9 million to $5.6 million in the six months ended June 30, 2026, compared to $3.7 million in the comparable period in 2025. The increase was primarily due to severance expense related to the prior Chief Executive Officer, higher payroll expenses resulting from salary increases for existing employees, hiring of additional employees related to the Compute Services and Treasury Management segment, and increased stock-based compensation expense recognized during the six months ended June 30, 2026.

*Research and development expenses.* Research and development expenses primarily consist of expenses related to product development, prototyping, and testing. Research and development expenses were stable at $1 million in the six months ended June 30, 2026, and 2025.

*Sales and marketing expenses.* Sales and marketing expenses consist of expenses required to market and sell our products and services. Sales and marketing expenses increased by $0.9 million to $1.2 million in the six months ended June 30, 2026, compared to $0.3 million in the comparable period in 2025. The increase was primarily due to increased sales and marketing activities to support the expansion of our compute services business.

*Other income.* We recognized other income of $0.1 million during the six months ended June 30, 2026, compared to $0.7 million in the comparable period in 2025. Other income in 2026 consisted of income from the Aethir lending arrangement and other income in 2025 consisted of the write-off of aged accounts payable and related accrued expenses.

### Liquidity and Capital Resources

#### Cash Flows

On June 30, 2026, we had $21.9 million in cash and cash equivalents. Cash and cash equivalents from continuing operations increased by $11.1 million from December 31, 2025, due to the following factors.

Net cash provided by operating activities of continuing operations was $17.3 million in the six months ended June 30, 2026, compared to net cash used in operating activities of continuing operations of $4.3 million in the six months ended June 30, 2025. The cash provided by operating activities in the 2026 period was driven primarily by a $60.6 million increase in contract liabilities reflecting customer prepayments for compute capacity, partially offset by $34.1 million of compute prepayments and a $3.3 million increase in accounts receivable. Our net loss for the period included non-cash losses on digital assets of $17.4 million, which did not affect operating cash flows.

We used cash of $17.1 million in investing activities of continuing operations in the six months ended June 30, 2026, to acquire property and equipment. No cash was used in investing activities of continuing operations in the six months ended June 30, 2025.

Net cash provided by financing activities of continuing operations was $10.9 million in the six months ended June 30, 2026, compared to $3.2 million provided by financing activities of continuing operations in the six months ended June 30, 2025. Cash provided by financing activities of continuing operations in the 2026 period was primarily related to net proceeds of $10.8 million from the issuance of common stock and warrants, including sales under our at-the-market offering program. Cash provided by financing activities of continuing operations in the 2025 period was primarily related to proceeds from the issuance of common stock and warrants.

No cash was used or provided by discontinued operations in the six months ended June 30, 2026, compared to $0.8 million provided by discontinued operations in the six months ended June 30, 2025. The cash provided in the 2025 period related to proceeds from the sale of Eagan assets pursuant to the asset purchase agreement executed with DeRoyal in March 2025

#### Liquidity and Plan of Financing

Liquidity is a measure of our ability to access sufficient cash flows to meet the short-term and long-term cash requirements of our business operations. We have incurred significant and recurring losses from operations for the past several years. As of June 30, 2026, and December 31, 2025, we had cash and cash equivalents of $21.9 million and $10.8 million, respectively, and working capital of $17.4 million and $38.5 million, respectively, and accumulated deficit of $438.4 million and $413.5 million, respectively.

To meet our short-term liquidity needs in the next twelve months, which are primarily comprised of working capital requirements, we have access to various sources of short-term liquidity including cash and cash equivalents and ATH tokens in our treasury. These include approximately 2.7 billion ATH tokens as of June 30, 2026, and an additional 1.6 billion ATH tokens expected to vest over the subsequent twelve-month period. Although we do not anticipate needing to use our ATH to meet our short-term liquidity needs, to the extent necessary, we may seek to use proceeds from the sale of our ATH to meet such needs. Additional sources of liquidity could include our ATM facility and the SEPA facility, subject to certain limitations and conditions associated with the respective facilities.

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

Additionally, subsequent to June 30, 2026, the SEC declared effective our Form S-3 registration statement on July 20, 2026. The registration statement permits us to offer up to $1 billion of securities from time to time. No securities have been issued under the registration statement as of June 30, 2026; however, this registration statement allows for future financing flexibility.

Beyond the next twelve months, our long-term liquidity needs are primarily for obligations related to working capital requirements. Our ability to meet these needs and the adequacy of available funds depend on our ability to generate income from our compute services and treasury strategy, and the availability of future financing to fulfill our business plans. We will also have access to an additional 1.6 billion ATH tokens expected to be vested beyond twelve months from June 30, 2026.

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

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

We have incorporated these possible scenarios when determining the our liquidity, however, we believe we have access to sufficient alternative liquidity sources, as noted above, to weather adverse ATH market price conditions

### Financing Transactions

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

#### At The Market Offering

We maintain an ATM equity offering program pursuant to a Sales Agreement with Wainwright under which we may offer and sell shares of our common stock from time to time. In May 2026, we increased the capacity under the ATM program to an aggregate of $100.0 million. During the three months ended June 30, 2026, we received approximately $10.3 million of net proceeds from sales under the ATM program with the most recent bringdown occurring on April 27, 2026. As of June 30, 2026, approximately $83.0 million remained available for future issuances under the program.

#### Standby Equity Purchase Agreement

In July 2025, we entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, Ltd. that provides us with the ability to sell up to $10.0 million of common stock from time to time, subject to the terms, conditions and limitations set forth in the agreement. The facility may provide an additional source of capital to support our operations and growth initiatives. As of June 30, 2026, we have not issued any shares or received any proceeds under the SEPA.

#### September 2025 Private Placements

In September 2025, we completed private placement transactions consisting of a cash PIPE financing that generated gross proceeds of approximately $50.8 million and a crypto-denominated PIPE transaction for ATH digital assets with a discounted value of approximately $173.3 million. The transactions provided significant capital to support our operational, strategic, and treasury initiatives.

### Recent Accounting Developments

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

## Controls and procedures

As filed, 2,540 characters.

### Evaluation of Disclosure Controls and Procedures

Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), defines the term “disclosure controls and procedures” as those controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of June 30, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of June 30, 2026.

### Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2026, the Company implemented new processes, controls, and procedures related to revenue recognition related to compute services and its digital asset and compute operations. These changes included enhancements to the Company’s policies, people, technologies, and operational processes designed to address the risks associated with digital asset activities as well as preventative and mitigating controls over the acquisition, custody, safeguarding, valuation, and financial reporting of digital assets.

As the Company continues to expand its digital asset and compute operations, management continues to enhance and refine certain processes and controls related to wallet management, custody arrangements, valuation methodologies, and related financial reporting activities in order to support the Company’s evolving operations and reporting requirements. Other than the changes described herein, there were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 23,920 characters.

Except as set forth below, there have been no material changes to our risk factors from those disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “2025 Form 10-K”). On June 9, 2026, we filed a Current Report on Form 8-K furnishing supplemental risk factors that reflect our expansion into the purchase, ownership, and operation of GPU computing infrastructure deployed in data center facilities. The risk factors set forth below supplement and update the risk factors disclosed in the 2025 Form 10-K and should be read together with the risk factors and other information contained in the 2025 Form 10-K and our other filings with the SEC. To the extent the following is inconsistent with the risk factors in the 2025 Form 10-K, the following supersedes those risk factors. Any of the following risks could materially and adversely affect our business, financial condition, results of operations, and prospects, and the trading price of our common stock could decline. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also impair our business operations

### Risks Related to Our Ownership and Operation of GPU Computing Infrastructure

***Our expansion into owning and operating GPU computing infrastructure is capital-intensive and will require substantial and growing capital expenditures, and any inability to obtain capital on acceptable terms may adversely affect our business.***

We have historically pursued an asset-light operating model under which we did not own GPU computing hardware within physical data center facilities and instead provided access to GPU compute capacity primarily through infrastructure made available by the Aethir network. We have now expanded our business to purchase, own, and operate GPU computing hardware. This owned-asset model is substantially more capital-intensive than our prior model and will require significant and growing capital expenditures to procure, deploy, maintain, upgrade, and expand our infrastructure. We expect to fund these expenditures through a combination of customer deposits and prepayments, cash from operations, and equity and debt financing, which may not be available to us on favorable terms, or at all. If adequate financing is not available when required, we may be unable to acquire the hardware and infrastructure necessary to fulfill our customer commitments or execute our growth strategy. If we raise additional funds through equity or convertible securities, our existing stockholders may experience substantial dilution, and any such securities may have rights, preferences, and privileges senior to those of our common stock.

***The GPUs and related infrastructure we will now own are subject to rapid technological obsolescence, and our results of operations depend on our ability to accurately estimate their useful lives and to avoid impairment of these assets.***

Unlike our prior model, in which we did not own the underlying compute hardware, we now bear the full economic risk of the GPUs and related equipment we purchase. GPU technology is advancing rapidly, and newer generations of GPUs that offer materially better performance, efficiency, or total cost of ownership are introduced frequently. As a result, the GPUs and related infrastructure we will now own may become obsolete, decline in value, or generate lower pricing and utilization than we anticipate before the end of their expected useful lives. We must make estimates regarding the useful lives of our computing equipment and our ability to redeploy that equipment beyond the term of any initial customer contract, and we cannot guarantee that these estimates will prove accurate. If our assumptions regarding useful lives, residual values, redeployment, or utilization prove incorrect, or if events or changes in circumstances indicate that the carrying amount of our infrastructure may not be recoverable, we may be required to accelerate depreciation or record material impairment charges, which could materially and adversely affect our reported financial results.

***A substantial portion of our compute revenue is expected to be derived from a limited number of customers and contracts, and the loss of, or non-performance by, any such customer would adversely affect our business.***

We expect that, for the foreseeable future, a substantial portion of our compute revenue will be concentrated among a small number of customers and contracts. This concentration exposes us to heightened counterparty credit risk and to the risk of non-payment or non-performance, including in the event a customer experiences financial difficulty, insolvency, or bankruptcy. Although our contract is structured on a take-or-pay basis and secured with a deposit, prepayment, and monthly in-advance payments, we cannot assure you that a customer will perform its obligations, that the definitive agreement will be enforceable in accordance with its terms, or that a customer will exercise any renewal option. The loss of, a default by, a dispute with, or a significant reduction in spending by any one of our major customers, or our inability to replace such revenue on comparable terms, could have a disproportionate adverse effect on our business, results of operations, and financial condition.

***Our compute business depends on the operation of dedicated data center facilities, including the availability of reliable power and cooling, and operational failures at these facilities could materially disrupt our ability to serve customers.***

Our expanded business depends on deploying and operating owned GPU infrastructure within dedicated data center facilities. The performance, availability, and delivery of our services depend on numerous factors, many of which are outside our control, including the continued availability and functioning of power and cooling systems, the success or failure of redundancy, disaster recovery, and business continuity systems, and decisions or failures by the third-party owners and operators of the facilities in which our infrastructure is installed. Such data centers and associated infrastructure are also subject to risks of damage, interruption, or destruction from power outages, equipment failures, fires, floods, natural disasters, physical or cybersecurity attacks, human error, and other events. Because the deployment under our largest contract to date is concentrated in a single facility, any prolonged outage, capacity constraint, or other disruption affecting that facility could prevent us from meeting contracted service levels, expose us to service credits, penalties, or termination rights, and materially and adversely affect our business.

***Our business could be harmed if we are unable to secure sufficient power, or by increases in the cost of power or the imposition of new regulatory requirements on data center power consumption.***

Operating owned GPU infrastructure requires access to substantial, reliable, and cost-effective electrical power; our largest deployment to date requires 4.8 megawatts of committed power capacity alone. The rapid expansion of AI and large-scale data center development has significantly increased electricity demand in certain markets, and policymakers, utilities, and regulators are increasingly scrutinizing the impact of data centers on ratepayers, grid reliability, and the environment. We may face power outages, shortages, capacity constraints, interconnection delays, or significant increases in the cost of securing power, any of which could limit our ability to operate or expand our infrastructure. In addition, governments may impose new requirements on data center operators, including obligations to fund grid upgrades, procure dedicated generation, enter into long-term capacity arrangements, accept curtailment during periods of grid stress, or satisfy additional permitting, carbon reporting, or cost-allocation requirements, and may restrict, condition, or delay new data center development. The global energy market has experienced significant volatility and inflationary pressure, and we expect power costs to remain volatile and unpredictable. Any of these developments could increase our operating costs, impair our ability to serve customers, delay our growth, and materially and adversely affect our business.

***We depend on a limited number of suppliers, and primarily on NVIDIA, for the GPUs and other hardware we purchase, and any supply disruption, delay, or price increase could impair our ability to deploy infrastructure and fulfill customer commitments.***

Our ability to acquire and deploy owned GPU infrastructure depends on our ability to procure GPUs and related hardware in sufficient quantities, on acceptable terms, and within timeframes consistent with our customer commitments. We source GPU hardware primarily from NVIDIA, which is currently the dominant supplier of GPUs used for AI training and inference, and we do not manufacture any hardware ourselves. Reliance on a limited number of suppliers exposes us to a range of risks, including limited availability of the latest-generation components, lack of control over production costs, delivery, and pricing, extended or unpredictable lead times, the potential for binding price or purchase commitments at above-market rates, supplier prioritization of other customers, and shifts in market-leading technologies away from those offered by our current suppliers. Our suppliers in turn rely on complex networks of third-party suppliers, including semiconductor foundries such as Taiwan Semiconductor Manufacturing Company, and any disruption affecting these upstream suppliers, whether due to geopolitical factors, capacity constraints, or natural disasters, could affect the availability and cost of the hardware we require. The loss of or significant disruption to our access to NVIDIA GPU supply and related hardware, or material price increases or extended delivery lead times, could delay our deployments, including our targeted third-quarter 2026 deployment, reduce our available capacity, and materially and adversely affect our business.

***We may be unable to deploy our owned infrastructure on the timelines we have committed, and delays in deployment could result in penalties, lost revenue, or reputational harm.***

Our largest contract to date contemplates a dedicated cluster purpose-built to the customer's specifications, with a targeted deployment start in the third quarter of 2026. The procurement, integration, configuration, and commissioning of large-scale GPU clusters and associated storage, networking, power, and cooling infrastructure is complex and subject to numerous potential points of failure, including hardware delivery delays, facility readiness, the availability of data center equipment such as switchgear, power distribution units, and cooling equipment, the availability of skilled labor, and dependence on third-party facility operators and contractors. Our forward-looking statements regarding deployment are subject to risks relating to the execution and enforceability of the definitive agreement, hardware supply chain constraints, and facility readiness. If we are unable to deploy contracted infrastructure on the agreed schedule, we may be subject to service credits, penalties, delayed or reduced revenue, customer disputes, termination rights, or reputational harm, any of which could materially and adversely affect our business.

***If customer demand is insufficient to utilize the capacity we build, or if we are unable to redeploy infrastructure following the expiration or termination of a contract, we may not realize the expected returns on our capital investments.***

The owned-asset model requires us to commit substantial capital to acquire and deploy infrastructure, often in advance of, or in reliance upon, specific customer contracts. Our expected returns depend on sustained customer demand and high utilization of the capacity we build. If a customer reduces its usage, does not renew or terminates its contract, or if we are otherwise unable to redeploy or resell capacity on economically attractive terms following the expiration of an initial contract term, we may experience underutilized capacity, stranded assets, reduced margins, or impairment charges. Because our infrastructure is purpose-built and concentrated, and because GPUs are subject to rapid obsolescence, we may be unable to repurpose assets for other customers or workloads without incurring additional cost or delay. Any failure to achieve sufficient utilization of our owned infrastructure could materially and adversely affect our business, results of operations, and financial condition.

***We expect to incur indebtedness and to use secured or asset-backed financing structures to fund our infrastructure, and our leverage could adversely affect our financial condition and flexibility.***

To fund the acquisition of GPU infrastructure, we may incur substantial indebtedness and may pursue secured financing arrangements, including asset-backed, equipment-financing, or other collateralized structures, in which our GPUs and related assets serve as collateral. Companies in our industry carry significant indebtedness and finance GPU purchases through delayed draw term loans, original equipment manufacturer financing arrangements, and similar structures secured by the depreciable cost of GPU servers. A substantial level of indebtedness could require us to dedicate a significant portion of our cash flow to debt service, increase our vulnerability to adverse economic and industry conditions, limit our ability to obtain additional financing, restrict our operational and strategic flexibility through restrictive covenants, and expose us to the risk of acceleration or foreclosure on pledged assets in the event of a default. The management of a more complex capital structure, including multiple layers of secured and unsecured debt with differing covenants, maturities, and priorities, could increase our financial and operational risks and heighten the risk of disputes among creditors. Rising or volatile interest rates would increase the cost of any floating-rate indebtedness, and we may be required to enter into interest rate hedging arrangements that may not be effective.

***We have a limited operating history operating an owned-infrastructure GPU business, which makes it difficult to evaluate our business and prospects.***

We have only recently expanded into purchasing, owning, and operating GPU computing infrastructure, and we have a limited operating history under this business model. Our prior compute model was asset-light and distributed, and the owned-infrastructure model requires different capabilities, including the procurement and lifecycle management of hardware, the operation of dedicated data center deployments, the management of large multi-year take-or-pay contracts, and the management of capital-intensive financing. Our limited experience delivering and managing longer-term, large-scale customer contracts may expose us to cost overruns, underutilized capacity, performance obligations, service-level commitments, and other contractual liabilities. As a result, our historical results are not indicative of our future performance, our future results may be difficult to predict and may fluctuate significantly from period to period, and you should consider our business and prospects in light of the risks and uncertainties frequently encountered by companies operating in new and rapidly evolving capital-intensive markets.

***The energy and environmental demands of data centers and GPU compute infrastructure may constrain the growth of the compute market and result in increased regulatory costs or operational limitations.***

Data centers are significant consumers of electrical power, and this level of energy consumption has attracted increasing scrutiny from regulators, utilities, and environmental groups, which may result in additional restrictions, permitting requirements, carbon reporting obligations, or energy surcharges that increase the cost of GPU compute infrastructure. Because we will now own and operate GPU computing infrastructure deployed in dedicated data center facilities that require substantial committed power, including 4.8 megawatts of dedicated power for our largest deployment to date, constraints on available power capacity, increases in the cost of power, and new regulatory or environmental requirements directly affect our operating costs and our ability to expand. In addition, reputational and environmental, social, and governance concerns relating to the energy and water footprint of AI compute infrastructure could adversely affect our business relationships, our access to capital, and our ability to obtain permits and approvals.

***Geopolitical tensions and trade restrictions, particularly between the United States and China, could disrupt GPU supply chains and limit our addressable market.***

The global GPU compute market depends heavily on complex international supply chains, including semiconductor manufacturing concentrated in Taiwan and South Korea, and geopolitical tensions between the United States and China have already resulted in restrictions on the export of certain advanced semiconductors, including certain NVIDIA GPU products. Because we will now own GPU hardware sourced primarily from NVIDIA, geopolitical tensions, tariffs, economic sanctions, and export controls directly affect the cost, availability, and delivery lead times of the GPUs and related components we acquire. Increasing use of tariffs and export controls has impacted, and may in the future impact, the availability and cost of GPUs and other components, and expansion or reinterpretation of U.S. export controls covering advanced computing hardware could limit the availability of components or require reconfiguration of our deployment plans. Any such disruption could increase our procurement costs, delay our deployments, including our targeted third-quarter 2026 deployment, and materially and adversely affect our compute business and our ability to execute our strategy.

***Demand for GPU compute is highly concentrated, and a slowdown in AI-related spending or the development of excess industry capacity could adversely affect our business.***

A substantial portion of current and projected demand for GPU compute infrastructure is driven by a small number of large technology companies and government-sponsored AI programs, and any significant reduction in their capital expenditures could have a disproportionately negative impact on the broader GPU compute market. In addition, a substantial portion of our own compute revenue is now expected to be derived from a limited number of customers and contracts, including our recently announced approximately $260 million enterprise engagement. A slowdown, deferral, or reprioritization of AI-related customer spending, or the development of excess industry capacity if anticipated AI workloads do not materialize, could result in pricing pressure, reduced utilization, longer sales cycles, contract renegotiations, or impairment charges, any of which could be magnified by the capital-intensive, owned-asset nature of our expanded business.

***Advances in AI model efficiency could reduce demand for GPU compute, adversely affecting the value of our compute business and our owned infrastructure.***

A key driver of demand for GPU compute is the scale required to train and run AI models, and consistent advances in AI model efficiency — such as new architectures, training techniques, or algorithmic improvements that achieve equivalent or superior results using significantly less compute — could substantially reduce demand for raw GPU compute capacity. Because we will own GPU hardware rather than relying solely on a distributed network, a significant and sustained reduction in GPU compute demand could reduce the utilization, pricing, and resale or redeployment value of our owned infrastructure, and could require us to recognize accelerated depreciation or impairment charges, in addition to adversely affecting the value of our ATH treasury holdings.

***Security breaches and other disruptions affecting our infrastructure or the facilities in which it is housed could compromise sensitive information and expose us to liability.***

Our business requires that we collect and store sensitive data, and our information technology and infrastructure are susceptible to attacks by hackers, viruses, employee error, malfeasance, or other activities. In addition, our owned GPU computing infrastructure and the data center facilities in which it is deployed are subject to physical and cybersecurity risks, including attacks by outside parties (whether private or state-backed), human error, malfeasance, insider threats, system vulnerabilities, and inadequate security controls, any of which could result in service outages, unauthorized access to or loss of customer data and workloads, or damage to our infrastructure. Our enterprise customers contract for dedicated infrastructure in part to ensure that their proprietary data remains within a controlled facility boundary, and any physical or cybersecurity incident affecting our infrastructure or the facilities in which it is housed could expose us to service-level penalties, contractual liability, loss of customers, regulatory exposure, and reputational harm.

***If our information technology and communications systems, or the infrastructure and facilities on which our compute business depends, fail or experience a significant interruption, our business could be materially and adversely affected.***

The efficient operation of our business is dependent on information technology and communications systems, the failure of which could disrupt our business and result in decreased revenue and increased overhead costs. Our expanded business further depends on the continuous operation of owned GPU computing infrastructure housed in third-party data center facilities, and the availability and performance of that infrastructure depend on power, cooling, network connectivity, redundancy systems (including N+1 redundant power), and the performance of the third-party operators of the facilities in which our equipment is installed. The failure of any of these systems or services, including any failure of redundancy or disaster recovery measures, could prevent us from meeting contracted service levels and could materially and adversely affect our reputation, business, and results of operations.

***Our expansion into owned GPU infrastructure has materially increased our capital requirements and our dependence on external financing.***

We have a history of negative operating cash flows and have funded our operations in part through at-the-market and private placement equity financings, with a significant portion of our liquidity held in ATH, a digital asset whose market price has exhibited substantial volatility. Our expansion into purchasing and owning GPU computing infrastructure has materially increased our capital expenditure requirements and our dependence on external financing, and our liquidity needs are now driven in part by the substantial upfront and ongoing costs of acquiring, deploying, maintaining, and expanding owned hardware and data center capacity. Although our largest contract to date is supported by a customer deposit, prepayment, and monthly in-advance payments on a take-or-pay basis, these amounts may be insufficient to fund our capital requirements, and our reliance on volatile sources of liquidity, including the price of ATH, may further constrain our ability to fund these commitments.

Filed Aug 14, 2026.
Source: SEC EDGAR, the filing index for accession 0001171843-26-005556. Last ingested by Listed: Nov 2, 2026, 20:18 ET. No prices; not investment advice.