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

Cautionary Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements”.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS of Boost Run

The following discussion and analysis should be read in conjunction with the financial statements and related notes of Boost Run Holdings, LLC. (“Boost Run,” “we,” “us,” and “our”) included elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

These statements include, among other things, statements concerning our expectations regarding:

• continued growth and market share gains;
• variability in sales in certain product and service categories from year to year;
• expected impact on sales of certain products and services;
• increasing or decreasing inflation or stagflation, and changing interest rates in many geographies and changes in currency exchange rates and currency regulations;
• competition in our markets;
• macroeconomic, geopolitical factors and other disruptions, including the transition in administrations, tariffs or other trade disruptions, public health issues, wars, natural disasters and economic growth;
• government regulation, tariffs and other policies;
• drivers of long-term growth and operating leverage, such as pricing of our products and services, sales productivity, pipeline and capacity, functionality, value and technology improvements in our service offerings;
• growing our solution sales through channel partners to businesses / service providers, our ability to execute these sales and the complexity of providing solutions (including the increased competition and unpredictability of timing associated with sales to larger enterprises), the impact of sales to these organizations on our long-term growth, expansion and operating results, and the effectiveness of our sales organization;
• our ability to successfully anticipate market changes, including those related to cloud-based solutions and to sell, support and meet service level agreements related to cloud-based solutions;
• growth expectations for the secure networking market;
• forecasts of future demand including changing market drivers and demands;
• our ability to hire properly qualified and effective sales, support and engineering employees;
• trends in revenue, cost of revenue and gross margin;
• trends in our operating expense, including cost of revenue, selling, general and administrative expense, depreciation and amortization expense, colocation lease cost, and expectations regarding these expenses;
• expected impact of plans and strategy for the acceleration of our data center footprint and our points of presence deployment;
• expectations that our operating expense will increase year over year during 2026;
• uncertain tax benefits and our effective domestic and global tax rates, the impact of interpretations of, or changes to tax law, and the timing of tax payments;
• expectations regarding spending related to real estate assets, acquisitions and development, including data centers and points of presence, office building and warehouse investments, as well as other capital expenditures and related to the impact on cash flow and expenses;
• estimates of a range of 2026 spending on capital expenditures;
• expansions and other changes to our real property holdings and development;
• expected outcomes and liabilities in alleged claims;
• our intentions regarding the sufficiency of our existing cash, cash equivalents and investments to meet our cash needs, including our debt servicing requirements, for at least the next 12 months;
• other statements regarding our future operations, financial condition and prospects and business strategies; and
• adoption and impact of new accounting standards.

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Business Overview

We are a Delaware limited liability company formed on March 21, 2024, to serve as the parent entity of Boost Run LLC, an Illinois limited liability company originally organized on August 16, 2023. On March 22, 2024, Boost Run LLC and we entered into a contribution agreement under which we acquired 100% of the membership interests of Boost Run LLC, resulting in Boost Run LLC becoming our wholly owned subsidiary (the “Contribution”). The Contribution represents a transfer of ownership interests between entities under common control and is accounted for in accordance with ASC 805-50, Business Combinations—Subtopic 50: Transactions Between Entities Under Common Control. Under this guidance, the assets and liabilities of Boost Run LLC were transferred to us at their carrying amounts as of the date of transfer, with no recognition of goodwill or gain/loss. The Contribution also results in a change in the reporting entity under U.S. GAAP, with us now serving as the ultimate parent company for financial reporting purposes. Accordingly, the accompanying comparative interim condensed consolidated financial statements have been retrospectively adjusted to reflect our financial position and results of operations as if the entities had always been combined.

We own, lease, and operate bare metal GPUs servers housed within top-tier certified data centers. Our compute offerings are generally more affordable than those of major cloud providers, depending on contract duration and model type. Through the Infrastructure as Code (“IaC”) automation, we enable customers to access our services in a simple and secure manner. This makes our platform an ideal solution for organizations seeking to run sophisticated artificial intelligence (“AI”) models, including Large Language Models (“LLMs”), generative models, and other high-performance computing workloads. Whether training massive neural networks, running inference at scale, or executing computationally intensive scientific simulations, our GPU servers deliver the necessary performance at a cost that supports operational efficiency.

Amended and Restated LLC Agreement

In August 2025, we entered into an Amended and Restated Limited Liability Company Agreement, replacing the original agreement dated March 22, 2024. The amended agreement formalizes a multi-class equity structure, including Class A, Class B, and Class C units, each with distinct economic and governance rights. Class A units retain voting rights and priority in distributions, Class B units are structured as profits interests subject to vesting and participation thresholds, and Class C units were issued to a lender in connection with a financing arrangement and are not profits interests and are not subject to vesting but do have participation thresholds. In August 2025, pursuant to the August 2025 Warrant Cancellation Agreement, we issued 128 newly-created Class C units. In September 2025, pursuant to the Amended and Restated LLC Agreement, the board of directors granted 506 Class B units.

Business Combination Agreement

On September 15, 2025, we entered into a Business Combination Agreement with Willow Lane Acquisition Corp. (“Willow Lane”), Boost Run Inc., (“Pubco”), Benchmark Merger Sub I Inc., a wholly-owned subsidiary of Pubco (“SPAC Merger Sub”), Benchmark Merger Sub II LLC, a wholly-owned subsidiary of Pubco (“Company Merger Sub”). The Business Combination Agreement provides for a two-step merger transaction (the “Mergers”), in which, first, SPAC Merger Sub will merge with and into Willow Lane, with Willow Lane surviving as a wholly-owned subsidiary of Pubco, and, immediately thereafter, Company Merger Sub will merge with and into us, with us surviving as a wholly-owned subsidiary of Pubco. By virtue of the consummation of the Mergers, Pubco will become a publicly traded company, with Willow Lane and us as its wholly owned subsidiaries. Prior to the closing of the Mergers, Willow Lane will re-domicile from the Cayman Islands to the State of Delaware.

At Closing, our equity holders will receive total consideration consisting of (i) an $8.5 million installment note, (ii) $441.5 million in Pubco Class A and Class B common stock (based on a $10.00 per share valuation), and (iii) up to 7,875,000 Karos Earnout Shares contingent upon Pubco’s stock performance over a three-year earnout period. Karos Earnout Shares will be issued in three equal tranches if Pubco’s volume-weighted average price meets or exceeds $12.50, $15.00, and $17.50, respectively, for twenty out of thirty consecutive trading days during the earnout period.

The transaction is intended to qualify as an “exchange” within the meaning of Section 351 of the Internal Revenue Code for U.S. federal income tax purposes. Each party to the Business Combination Agreement will be responsible for its own tax liabilities, including any adverse consequences arising from the failure of the transaction to qualify under Section 351.

Upon Closing, Pubco will assume all outstanding Willow Lane securities, which will convert into equivalent Pubco securities.

Business Combination Agreement Amendment

On January 13, 2026, the parties to the Business Combination Agreement entered into Amendment No. 1 to the Business Combination Agreement, which, among other matters, confirms that the post-closing board of directors of Pubco will consist of seven directors—two designated by Willow Lane and five designated by us—and extends the latest date for closing to June 30, 2026.

Simultaneously, and in connection with the previously announced earnout structure, the Pubco, Willow Lane Sponsor, LLC (the “Sponsor”), and Goodrich ILMJS LLC (the “SPV”) entered into an amendment to the earnout agreement providing that the Sponsor may earn up to 1,125,000 newly issued shares of Pubco Class A Common Stock and the SPV may earn up to 1,968,750 newly issued shares of Pubco Class A common stock (3,093,750 shares in total) based on the performance of Pubco Class A Common Stock during the three-year period beginning on and following the Closing, as follows: in the event that the VWAP of Pubco Class A Common Stock equals or exceeds (i) $12.50 per share, the Sponsor will be entitled to 375,000 such shares and the SPV to 656,250 such shares; (ii) $15.00 per share, the Sponsor will be entitled to 375,000 such shares and the SPV to 656,250 such shares; and (iii) $17.50 per share, the Sponsor will be entitled to 375,000 such shares and the SPV to 656,250 such shares (in each case, measured for any 20 trading days within any consecutive 30 trading days during the earnout period).

Pursuant to the Weil Consulting Agreement, dated January 13, 2026, Pubco has agreed to engage B. Luke Weil, Chairman and Chief Executive Officer of Willow Lane, to provide advice as needed with respect to business strategy and corporate governance and to use his reasonable efforts to introduce Pubco to clients and investors, commencing on the first business day following the day of the Closing and agreed to grant in three equal tranches totaling 336,000 shares of Pubco Class A Common Stock, subject to vesting provided that Pubco’s VWAP meets or exceeds $12.00, $14.50 and $17.00, respectively, for 30 trading days within consecutive 45 trading days following the date of the Closing.

Mergers

On May 8, 2026 (the “Closing Date”), the previously disclosed business combination pursuant to the Business Combination Agreement was consummated. In accordance with the terms of the Business Combination Agreement, (i) SPAC Merger Sub merged with and into Willow Lane, with Willow Lane surviving as a wholly owned subsidiary of Pubco, and (ii) immediately thereafter, Company Merger Sub merged with and into us, with us surviving as a wholly owned subsidiary of Pubco. As a result of the Mergers, Pubco became a publicly traded company and Willow Lane and us became its wholly owned subsidiaries.

In connection with the closing of the Mergers, Pubco’s equity holders received aggregate consideration including (i) an installment note with an initial principal amount of $8.5 million and (ii) equity consideration consisting of Pubco Class A and Class B common stock based on a $10.00 per share valuation, together with the potential issuance of up to 7,875,000 earnout shares contingent upon Pubco’s future stock price performance.

The Mergers were accounted for as a reverse recapitalization, with Pubco deemed to be the accounting acquirer. Accordingly, the transaction is equivalent to the issuance of equity by Pubco for the net assets of Willow Lane, accompanied by a recapitalization of Pubco’s consolidated equity structure.

In connection with the closing of the Mergers, we also repaid in full all outstanding borrowings under our bridge loan arrangements, including the August 2025 Bridge Loan and the February 2026 Bridge Loans, as well as amounts outstanding under the related party loan. As a result, we had no outstanding debt obligations related to these arrangements after the Closing Date.

Additionally, all outstanding Willow Lane’s securities converted into equivalent Pubco’s securities, and its Class A common stock and public warrants commenced trading on The Nasdaq Stock Market LLC subsequent to the Closing Date.

Financial Summary for the three months ended March 31, 2026 and 2025

• Total revenue was $10.96 million for the three months ended March 31, 2026, an increase of 165% compared to $4.14 million for the three months ended March 31, 2025.
• Total cost of revenue was $1.58 million for the three months ended March 31, 2026, an increase of 125% compared to $0.70 million for the three months ended March 31, 2025.
• Total selling, general and administrative was $2.66 million for the three months ended March 31, 2026, an increase of 243% compared to $0.77 million for the three months ended March 31, 2025.
• Total depreciation and amortization was $4.72 million for the three months ended March 31, 2026, an increase of 244% compared to $1.37 million for the three months ended March 31, 2025.
• Total colocation lease cost was $4.67 million for the three months ended March 31, 2026, an increase of 476% compared to $0.81 million for the three months ended March 31, 2025.
• Total other expenses, net was $1.45 million for the three months ended March 31, 2026, an increase of 214% compared to $0.46 million for the three months ended March 31, 2025.
• Net loss was $4.12 million for the three months ended March 31, 2026, compared to net income of $0.02 million for the three months ended March 31, 2025.

Impact of Macroeconomic and Geopolitical Developments

Our overall performance depends in part on worldwide economic and geopolitical conditions, such as Gross Domestic Product (“GDP”) growth, the war in Ukraine or tensions between China and Taiwan, and their impact on customer behavior. Worsening economic conditions, including inflation, changing interest rates, tariffs and other trade disruptions, slower growth, any recession, fluctuations in foreign exchange rates and other changes in economic conditions, may result in decreased sales productivity and growth and adversely affect our results of operations and financial performance. We have seen certain impacts on our business, results of operations, financial condition, cash flows, liquidity and capital and financial resources such as longer sales cycles and delayed purchases.

Worsening economic conditions may have a material negative impact on our results in future periods and may negatively impact our billings, revenue and costs, and may decrease growth and profitability. The extent of the impact of economic conditions on our operational and financial performance will depend on ongoing developments, including those discussed above and others identified in the “Risk Factors” section in this Form 10-Q. Given the dynamic nature of these circumstances, the full impact of worsening economic conditions on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources cannot be reasonably estimated at this time.

Business Model

We typically provide compute power via high-performance GPU servers through three primary channels:

• Our Platform – Customers rent GPU compute directly via our proprietary platform. We also utilize excess GPU compute on our platform for blockchain rewards.
• Third-Party Platforms – We supply GPU infrastructure to other AI platforms that lack their own hardware, earning revenue based on GPU usage.
• Brokers – GPU brokers purchase access to our GPU capacity for resale to their customers.

We own GPU infrastructure which is housed across multiple colocation facilities in the U.S., such as Oregon, Washington; Richardson, Texas; Fort Worth, Texas; Chicago, Illinois; Charlotte, North Carolina; Seattle, Washington; and Minneapolis, Minnesota. The colocation facilities provide hosting services—including space, power, connectivity, and physical security—but do not own or supply the GPU hardware.

Regardless of channel, our GPU rental agreements are similar in nature: once servers are provisioned, the customer assumes full control over the equipment, including GPU utilization, workloads executed, and end-user access. We do not retain operating rights after commencement. In addition to the GPU servers, the agreements require us to provide supporting services—such as preparing facilities to host the equipment, supplying reliable and continuous power and internet connectivity, maintaining physical security, configuring the operating system and automation tooling as requested by the lessee, and assisting with deployment or redeployment of the equipment in the event of failure. These ancillary responsibilities are bundled with the server rentals as part of our fulfillment of the obligations. They do not alter the lessee’s control of the GPU servers but ensure the servers remain operational and usable throughout the lease term.

Key Metrics

We monitor several key metrics, including the key financial metrics set forth below, in order to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The following table summarizes revenue, gross profit, gross profit margin and capital expenditure on GPU acquisitions. We discuss revenue below under “Components of Operating Results,” and we discuss gross profit, gross profit margin and capital expenditure on GPU acquisitions immediately below in the following tables for the three months ended March 31, 2026 and 2025.

(in thousands)

Gross profit. We define gross profit as revenue less cost of revenue. Gross profit was $9.38 million for the three months ended March 31, 2026 compared to $3.44 million for the three months ended March 31, 2025, an increase of $5.94 million, or 173%. The increase primarily reflects higher GPU utilization rates, expansion of customer contracts in the enterprise AI vertical, and incremental pricing adjustments. Revenue outpaced cost of revenue as we gained efficiencies in operations period over period.

Gross profit margin. Gross profit as a percentage of revenue, or gross profit margin, has been and will continue to be affected by a variety of factors, including the GPU utilization rates, the number of customer contracts, expansion/contraction of existing customer contracts, and pricing adjustments. Gross profit margin was 85.6% for the three months ended March 31, 2026 compared to 83.0% for the three months ended March 31, 2025, an increase of 2.6%. We attribute the increase in gross profit margin to greater efficiencies in operations.

Capital Expenditure on GPU acquisitions. We define capital expenditure as money spent to acquire, upgrade, or extend the life of our GPU equipment. Capital expenditures on GPU equipment was $8.93 million for the three months ended March 31, 2026 compared to $0.68 million for the three months ended March 31, 2025, an increase of $8.25 million, or 1,211%. We attribute the increase in capital expenditure to larger upfront purchases attributable to certain contracts for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Components of Operating Results

Revenue. We generate income by providing lessees with access to our high-performance GPU servers under GPU rental agreements. We enter into contracts with both end lessees and with third parties who separately contract with their own customers to use our solutions. These agreements contain lease components for the right to use specifically identified GPU servers and related hardware within dedicated data center areas, along with non-lease components for ancillary services which include the provision of power, internet connectivity, security, and lessee support.

Cost of revenue. Cost of revenue primarily consists of data center service fees and building rent, excluding depreciation and amortization, including costs associated with our facilities, such as third-party service fees, business licenses, and other related expenses. Colocation rent (which includes utilities) and depreciation and amortization are reported separately as an operating cost and expense.

Selling, general and administrative. Selling, general and administrative is primarily comprised of payroll costs, legal and accounting services, software and applications, unit-based compensation, travel, taxes paid, office expenses, and finance charges.

Depreciation and amortization. Equipment acquired is recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the respective assets.

Colocation lease cost. Colocation lease costs represent the costs we incur to rent data centers to house our GPUs. The expenses consist of costs such as operating lease expenses related to the data centers and office and equipment, as well as short-term lease cost and variable lease costs.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our interim condensed consolidated financial statements, which have been prepared in accordance with GAAP. These principles require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, cost of revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, internal-use software, unit-based compensation, debt, and income taxes. To the extent that there are material differences between these estimates and our actual results, our future interim condensed consolidated financial statements will be affected. Some of the judgments that we make in applying our accounting estimates in these areas are described in Note 2 to our interim condensed consolidated financial statements section included elsewhere in this Form 10-Q. There have been no material changes to our critical accounting policies and estimates as disclosed in our amendment number 2 to Form S-4 filed on March 11, 2026. The preparation of financial statements in conformity with U.S. GAAP continues to require us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ materially from those estimates.

Known Trends and Uncertainties

We expect continued growth in demand for GPU-based computing and AI-driven infrastructure. However, market conditions remain dynamic. Component supply constraints, power availability, and changes in data-center energy regulation could influence our ability to scale operations or maintain current pricing levels. Additionally, fluctuations in interest rates or macroeconomic slowdowns in our end markets may affect our customers’ spending patterns and project timing.

Results of Operations for the three months ended March 31, 2026 and 2025

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.

(in thousands)

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Three months ended March 31, 2026 compared to the three months ended March 31, 2025

Revenue

(in thousands)

Revenue was $10.96 million for the three months ended March 31, 2026 compared to $4.14 million for the three months ended March 31, 2025 an increase of $6.82 million, or 165%. The increase primarily reflects higher GPU utilization rates, expansion of customer contracts in the enterprise AI vertical, and incremental pricing adjustments. We added seven new lessees which contributed lease income of $3.83 million and seven new customers who contributed blockchain rewards of $0.15 million for the three months ended March 31, 2026. Existing lessees contributed $2.84 million more revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Cost of revenue

(in thousands)

Cost of revenue was $1.58 million for the three months ended March 31, 2026 compared to $0.70 million for the three months ended March 31, 2025. Cost of revenue increased $0.88 million, or 125%. The increase primarily reflects higher GPU utilization rates and expansion of customer contracts in the enterprise AI vertical. The increase in cost of revenue was outpaced by the increase in revenue as we gained efficiencies in operations period over period.

Selling, general and administrative

(in thousands)

Selling, general and administrative expense was $2.66 million for the three months ended March 31, 2026 compared to $0.77 million for the three months ended March 31, 2025. Selling, general and administrative increased $1.89 million, or 243%. The increase primarily reflects higher GPU utilization rates and expansion of customer contracts in the enterprise AI vertical. Of the $1.89 million increase, it is primarily driven by (i) a $0.6 million increase in payroll expense related to six new employees added during the three months ended March 31, 2026, (ii) $0.4 million increase in legal and accounting services, (iii) a $0.4 million increase in contract labor, (iv) a $0.3 million increase in software and application expenses due to our growth, and (v) a $0.1 million increase in travel expenses. The remaining net increase in selling, general and administrative expenses is mostly due to increases in general business expenses, insurance, and office expenses, offset by a decrease in finance charges.

Depreciation and amortization

(in thousands)

Depreciation and amortization expense was $4.72 million for the three months ended March 31, 2026 compared to $1.37 million for the three months ended March 31, 2025, an increase of $3.35 million or 244%. The increase was primarily attributable to (i) $0.6 million of higher depreciation expense on owned assets, primarily driven by approximately $17.0 million of equipment additions during the three months ended March 31, 2026; (ii) $0.7 million of incremental amortization expense related to finance leases executed on a staggered basis in early 2025, which were only partially reflected in the prior-year period; and (iii) $2.1 million of amortization expense associated with finance leases entered into subsequent to March 31, 2025.

Colocation lease cost

(in thousands)

Colocation lease cost was $4.67 million for the three months ended March 31, 2026 compared to $0.81 million for the three months ended March 31, 2025. Colocation lease cost increased $3.86 million, or 476%. The increase was primarily driven by three new colocation facilities that commenced operations subsequent to March 31, 2025 and therefore did not contribute to expense in the prior year period: Durham, North Carolina for $0.7 million, Charlotte, North Carolina for $0.5 million, and Minneapolis, Minnesota for $2.7 million.

Other expenses, net

(in thousands)

38

Total other expenses, net was $1.45 million for the three months ended March 31, 2026 compared to $0.46 million for the three months ended March 31, 2025. The change of $0.99 million, or 214%, in total other expense, net was primarily due to the increase interest expense associated with the Bridge Loans and office and equipment finance leasing agreements, as well as the loss on sale associated with the disposal of hardware equipment during the first three months ended March 31, 2025.

Liquidity and Capital Resources

The accompanying interim condensed consolidated financial statements have been prepared on a going concern basis. As of March 31, 2026, we had cash of $13.24 million, an accumulated deficit of $21.16 million and a working capital deficit of $71.50 million. Subsequent to March 31, 2026, Pubco completed the Mergers that resulted in the net cash receipt of approximately $95.38 million and the repayment of the bridge loans and related party loan. We have evaluated our liquidity position and expected cash flows and believe that, based on our current cash balances, proceeds from the Mergers, and anticipated cash flows from operations, we have sufficient liquidity to meet our obligations as they become due for at least one year from the date these interim condensed consolidated financial statements are issued.

Financing Arrangements

Bridge Loan

On August 11, 2025, we entered into a bridge loan agreement (the “August 2025 Bridge Loan Agreement”) providing for an initial draw of $5.00 million, with up to an additional $20.00 million available at the lender’s discretion. The loan bears interest at the prime rate plus 4.50%, subject to a prime rate floor of 7.5%, with interest-only payments for the first 12 months, followed by monthly amortization of 1.25% of the principal. The loan matures on August 11, 2028, and is secured by substantially all of our assets.

We recorded a total debt discount of $0.14 million and debt issuance costs of $0.05 million at issuance which are being amortized over the contractual term of the loan. As of March 31, 2026, the unamortized debt discount and issuance costs totaled $0.11 million and $0.04 million, respectively, resulting in a carrying amount of $4.85 million. As of March 31, 2026, the outstanding principal balance was $5.00 million, and we were in compliance with all applicable financial and non-financial covenants. We typically pay interest due in advance; accordingly, no accrued interest was recorded in the interim condensed consolidated statements of financial position as of March 31, 2026.

On February 27, 2026, we entered into an amendment and waiver agreement to our August 2025 Bridge Loan Agreement (the “First Amendment and Waiver Agreement”), pursuant to which we issued additional short-term bridge loans totaling $11.00 million (the “February 2026 Bridge Loans”). We received $9.95 million in net proceeds, reflecting a $1.05 million total debt discount. As of March 31, 2026, the unamortized debt discount and debt issuance costs totaled $0.47 million and $0.02 million, respectively, resulting in a net carrying of $10.51 million.

The First Amendment and Waiver Agreement did not modify the contractual cash flows of our existing August 2025 Bridge Loan Agreement, and the February 2026 Bridge Loans were accounted for as newly issued debt. As amended, the aggregate committed borrowings under the agreement increased to $16.00 million, and the agreement permits up to an additional $9.00 million of discretionary borrowings.

The February 2026 Bridge Loans mature on the earlier of April 28, 2026 or the consummation of a permitted SPAC acquisition. The February 2026 Bridge Loans bear no stated interest, and the original issue discount, together with related financing fees, is amortized to interest expense over the contractual term using the effective interest method. As of March 31, 2026, the February 2026 Bridge Loans were classified as current liabilities.

The First Amendment and Waiver Agreement also provides for continued reimbursement of lender expenses, preserves existing mandatory prepayment and make-whole provisions, and includes a waiver of certain existing defaults. The waiver applied only to specified defaults existing as of the amendment date and did not modify our ongoing covenant requirements.

Interest expense related to the bridge loans, substantially all of which represents amortization of original issue discounts and debt issuance costs associated with both the August 2025 bridge loan and the February 2026 Bridge Loans, was $0.72 million for the three months ended March 31, 2026.

The bridge loans were paid off concurrent with the closing of the Mergers. Refer to Notes 9 and 16 to our interim condensed consolidated financial statements section included elsewhere in this Form 10-Q for more information related to our bridge loans.

Related Party Loan

During 2025, we received $1.43 million proceeds from the subordinated loan agreement with our chief executive officer, Andrew Karos (“Related Party Loan”). The loan bears interest at 4.33% per annum and is subordinated to our obligations under its bridge loan. The loan matures on the earlier of August 11, 2028, or 91 days after repayment of the bridge loan. The loan bears interest at 4.33% per annum and is subordinated to the bridge loan. The Related Party Loan was paid off concurrent with the closing of the Mergers.

Post-Combination Capitalization and Liquidity Outlook

On May 8, 2026, we consummated the Mergers, pursuant to which we became a wholly owned subsidiary of Pubco. In connection with the closing of the Mergers, no redemptions were submitted by Willow Lane shareholders.

Upon closing, Pubco’s Class A common stock and public warrants began trading on the Nasdaq Stock Market LLC under the ticker symbols “BRUN” and “BRUNW,” respectively, beginning on May 11, 2026.

The proceeds from the Mergers have strengthened the Company’s liquidity position and are expected to support the expansion of its GPU infrastructure platform and general working capital needs. As of the date of this filing, we believe we have sufficient liquidity to fund our planned operations for at least the next twelve months.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of March 31, 2026 and December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations and Other Commitments

Leases

As of March 31, 2026, we had future operating and finance lease liabilities of $102.13 million and $86.78 million, respectively. Of those amounts, an aggregate of $37.99 million is payable before December 31, 2026.

Bridge Loan

We entered into a $5.0 million Bridge Loan agreement on August 11, 2025. Monthly repayments of the loan are due beginning on September 1, 2026, with a lump sum payment of $3.5 million due at the loan’s maturity on August 11, 2028. As of March 31, 2026 and 2025, we had a loan balance of $4.85 million and zero, respectively, outstanding.

We entered into an $11.0 million Amended August 2025 Bridge Loan Agreement on February 27, 2026. The loan does not bear interest and will be paid in full on April 28, 2026, or at close. As of March 31, 2026 and 2025, we had a loan balance of $10.51 million and zero, respectively, outstanding.

The bridge loans were paid off concurrent with the closing of the Mergers.

Related Party Loan

We entered into a $1.43 million Related Party Loan agreement on November 25, 2025. The loan matures on the earlier of August 11, 2028, or 91 days after repayment of the bridge loan, and the loan bears interest at 4.33% per annum. As of March 31, 2026, the outstanding Related Party Loan principal balance was $1.43 million with accrued interest of $0.02 million. We did not have a Related Party Loan as of March 31, 2025. The Related Party Loan was paid off concurrent with the Mergers.

Cash Flow

The following table summarizes our cash flow data for the three months ended March 31, 2026 and 2025:

(in thousands)

Operating Activities

Cash generated by operating activities is our primary source of liquidity. It is primarily comprised of net income (loss), as adjusted for non-cash items and changes in operating assets and liabilities. Non-cash adjustments consist primarily of depreciation and amortization, unit-based compensation expense, loss (gain) on sale of fixed assets, non-cash lease expense, loss in change of fair value of digital asset receivable, loss in change in fair value of liability-classified warrants, and non-cash interest expense. Changes in operating assets and liabilities consisted of changes in accounts receivable, prepaid expenses, other current assets, accounts payable, operating lease liabilities, credit card payable, and other current liabilities.

Net cash provided by operating activities was $13.24 million for the three months ended March 31, 2026, compared to $1.26 million for the three months ended March 31, 2025, or an increase of $11.98 million or 952%. The increase in operating cash flow was a result of the continued growth of our business, improved profitability and our ability to successfully manage our working capital.

Investing Activities

The changes in cash flows from investing activities primarily relate to purchases and sale of equipment. Historically, in making a lease-versus-ownership decision related to office or data center space, we have considered various factors including financial metrics, expected long-term growth rates, time to market, operating costs and changes in asset values. We may also make cash payments in connection with future business combinations.

Net cash used in investing activities of $15.95 million for the three months ended March 31, 2026 was primarily related to purchases of equipment of $8.93 million, operating lease prepayments of $5.07 million, and finance lease prepayments of $1.95 million.

Net cash provided by investing activities of $0.22 million for the three months ended March 31, 2025 was primarily related to the proceeds from the sale of equipment of $0.92 million, partially offset by purchases of equipment of $0.68 million and intangible assets of $0.02 million.

Financing Activities

The changes in cash flows from financing activities primarily relate to capital contributions, proceeds from the Bridge Loan, net, payments toward deferred transaction costs, proceeds from related party loans, and principal payments on finance lease liabilities.

Net cash provided by financing activities of $6.21 million for the three months ended March 31, 2026 was primarily driven by net proceeds from the Bridge Loan, net of $9.95 million, partially offset by payments of finance lease liabilities of $3.72 million and payments toward deferred transaction costs of $0.02 million.

Net cash used in financing activities of $0.47 million for the three months ended March 31, 2025 was primarily driven by payments of finance lease liabilities of $0.97 million, partially offset by capital contributions from the owners of $0.50 million.

Recent Accounting Pronouncements

Refer to the notes to our interim condensed consolidated financial statements included elsewhere in this Form 10-Q for a full description of recently adopted accounting pronouncements.

Emerging Growth Company Status

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the accompanying interim condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our exposure to market risk from those disclosed in our amendment number 2 to Form S-4 filed on March 11, 2026.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. For additional risks relating to our operations carefully consider the factors discussed in “Risk Factors” of our Prospectus dated April 8, 2026, as may be supplemented from time to time, which could materially affect our business, financial condition or future results. There have been no material changes as of the date of this Report to the risk factors that were included in the Prospectus.