FRMI 10-K & 10-Q changes, risk factors and insider trading

An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial conditioncondition, and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:

•We have not yet constructed our facilities orand, other than the TensorWave Lease, we have not entered into any bindinglease contractor other definitive agreement with any other tenants, and there is no guarantee that the TensorWave Lease will commence or that we will be able to doconstruct soour facilities or enter into definitive agreements with additional tenants in the future. Our limited commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounterencounter, and our total potential addressable market. Any delays or setbacks we may experience could have a material adverse effect on our business, financial conditioncondition, and results of operations, and could harm our reputation.

•We will require significant additional capital to construct and complete Project Matador, and we may not be able to secure such financing on time with acceptable terms, or at all, which could cause delays in our construction, lead to inadequate liquidityliquidity, and increase overall costs.

•The termination of our former Chief Executive Officer, Toby Neugebauer, and resignation of our former Chief Financial Officer, Miles Everson, and the resulting leadership transition exposesexpose us to potential delays in our executionability to execute on certain aspects of our business strategy as we searchtransition forto new permanent executive leadership.

•WeOther than the TensorWave Lease, we have not yet secured aadditional tenant,tenants, and we may not achieve tenant adoption at the pace or pricing levels required for financial viability.

•We have incurred substantial additional debt in the first quarter of 2026, including the MUFGTurbine Warehouse Equipment Financing (up to $500.0 million), the KeystoneHigh FacilityVoltage Equipment Financing (equipment-backed advances of up to $120.0 million in aggregate principal, with the potential to increase by an additional $100.0 million subject to lender approval), the Yorkvilleundrawn Promissory Note ($156.3 million, reduced to a maximum of $78.1 million as of June 30, 2026), the Turbine Warehouse II Equipment Financing ($165.0 million), and the Beal Equipment FinancingNotes ($165.0$431.3 million). These obligations contain restrictive covenants, collateral coverage requirements, mandatory prepayment triggers, and in certain cases conditions tied to execution of tenant agreements by December 31, 2026. Our ability to service these obligations and comply with all covenants is subject to significant uncertainty.

•Wars, threats of war, terrorist attacks, cyberattackscyberattacks, and threats may compromise the security, operabilityoperability, or integrity of our power generation and transmission and distribution infrastructure and could have a material adverse effect on our business, financial condition, and results of operations.

•Our use of technologies and systems that use AI or large-scalelarge language models (“LLMs”),models, given the dynamic state of such technologies, may cause inadvertent or unexpected impacts that may introduce new operational, legal, and regulatory risks that could adversely affect our business, financial condition, or results of operations.

•High demand for, constraints on the supply of, and increasing costs for industrial scaleindustrial-scale gas-fired turbines could lead to significant delays or significant increases in capital costs associated with our ability to develop the natural gas-fired power generation infrastructure we will need to achieve our power delivery goals on the schedule we are projecting.

•Westinghouse reactors and small modular reactors (“SMRs”) can be costly and time consumingtime-consuming to construct and commercialize. Delays and cost overruns arising from issues with our procurement, licensinglicensing, and other regulatory approvals, construction and commercialization of nuclear reactors may materially adversely affect our business.

•Our construction, delivery timeline estimates, and costs for our facilities and other equipment may increase due to a number of factors, including the degree of pre-fabrication, standardization, on-site construction, long-lead procurement, contractor performance, facility pre-operational and startup testing, demand for repairsrepairs, and other site-specific considerations.

•If we cannot obtain required permits, licenseslicenses, and regulatory clearance or approvals for Project Matador or our operations, or are unable to maintain such permits, licenseslicenses, or approvals, we may not be able to continue or expand our operations.

•Accidents involving third partythird-party owned and operated nuclear power facilities, including but not limited to events similar to the Three Mile Island or Fukushima Daiichi nuclear accidents, or other high profilehigh-profile events involving radioactive materials, could materially and adversely affect the public perception of the safety of nuclear energy, our customerscustomers, and the markets in which we operate and potentially decrease demand for nuclear energy or facilities, increase regulatory requirements and costscosts, or result in liabilities or claims that could materially and adversely affect our business.

•We are subject to federal environmental review processes, including the NEPA,National Environmental Policy Act (“NEPA”), that may materially delay or restrict project development.

•As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal controlscontrol over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act. We may not complete our analysis of our internal controlscontrol over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

•The Jumpstart Our Business Startups Act (the “JOBS Act”) will allow us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC. We cannot be certain if this reduced disclosure will make our common stock less attractive to investors.

•RisksWe are subject to risks related to the volatility of our common stock,stock and to provisions in our Chartercharter and Bylaws.bylaws.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the periodfiscal fromyear January 10, 2025 (Inception) throughended December 31, 2025 (the “Annual Report”),2025, filed with the Securities and Exchange CommissionSEC on March 30, 2026, and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2026. Except as set forth below, we are not aware of any material changes to the risk factors disclosed in the Annual ReportReport, and the following risk factor updates supplement and should be read in conjunction with the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the periodfiscal fromyear January 10, 2025 (Inception) throughended December 31, 2025.2025, and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2026. These disclosures reflect the Company'sCompany’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Project Matador will require substantial capital investment to achieve commercial operation. As of MarchJune 31,30, 2026, the Company had not generated any revenues, had incurred recurring losses from operations and negative cash flows from operating activities since inception, and had substantial near-term capital expenditure obligations under existing equipment purchase, construction, lease, and other project-related commitments, in addition to recurring operating expenses that must be funded. As of MarchJune 31,30, 2026, the Company had cash on hand of $207.5$62.5 million and restricted cash of $35.8$29.2 million, a portion of which is available to fund defined capital expenditures. When measured against forecasted disbursements under the Company’s current operating plan, these resources are not sufficient to satisfy the Company’s financial obligations as they become due within one year after the date the accompanying unaudited condensed consolidated financial statements are issued.

These factors raise substantial doubt about the Company'sCompany’s ability to continue as a going concern for the next twelve months from the date of issuance of the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report. Management has implemented plans which are disclosed in Note 2, Significant Accounting PoliciesPolicies, to the accompanying unaudited condensed consolidated financial statements. These plans include the application of the net proceeds from the Notes issued in July 2026, as described in Note 9, Subsequent Events. As a result of these actions, management believes that the substantial doubt about the Company'sCompany’s ability to continue as a going concern has been alleviated. There is no guarantee, however, that we will successfully implement the plans described in Note 2. If our planned borrowing draws under existing committed facilities, monetization of unencumbered equipment, sequencing of capital expenditures with the execution of definitive tenant agreements and corresponding project-level financing, or efforts to defer, scale, or renegotiate near-term collateral and credit support obligations are not successful, or if we are unable to identify and execute additional project-level capital arrangements or customer arrangements with strategic counterparties on acceptable terms, we may need to scale back our business plan, reduce our operating costs and headcount, or discontinue or curtail certain of our development activities.

ALitigation proxy contest commenced againstinvolving the Company byand our former Chief Executive Officer, Toby Neugebauer, and certain of his family members and related persons havehas caused and areis expected to continue to cause us to incur substantial costs, divert the attention of the Board of Directors and management, take up management's attention andmanagement’s resources, cause uncertainty about the strategic direction of our businessbusiness, and adversely affect our business, operating resultsresults, and financial condition, and future proxy contests could do so as well.condition.

A proxy contest or other activist campaign and related actions, such as the recentrecently suspended proxy contest by our former President and Chief Executive Officer, Toby Neugebauer, and certain of his family members and related persons could have a material and adverse effect on us for the following reasons:

•In filings with the SEC and press releases, Mr. Neugebauer statespreviously thatsought heand seekscould seek again to install new directors on our Board that,of ifDirectors, successful,which wouldcould result in a change in the control of our Board of Directors and could result in significant changes in the Company'sCompany’s management and strategic direction. In addition, based on statements made by Mr. Neugebauer,Neugebauer ifhas previously indicated that he iswould successful in taking control of our Board of Directors, he and the newly constituted Board and management could undertake incommence an immediate effort to sell the Company at a price that our current Board believes would grossly undervalue the Company should he or his affiliates take control of the Company.

•While the Company welcomes the opinions of all shareholders, responding to proxy contests and related actions by activist investors such as Mr. Neugebauer willhas bebeen, and may in the future be, costly and time-consuming, disruptdisruptive to our operations, and divertdistracting the attention ofto our Board of DirectorsDirectors, senior management, and senioremployees, managementwhich andmay employeesdivert their attention away from their regular duties and the pursuit of business opportunities. In addition, there mayis beongoing litigation in connection with aMr. proxyNeugebauer’s contest,suspended campaign, which wouldmay serve as a further distraction to our Board of Directors, senior managementmanagement, and employees and could require the Company to incur significant additional costs.

•Perceived uncertainties as to our future direction as a result of potential changes in the composition of our Board of Directors and management team that could result from the proxy contest initiated byshould the Neugebauer group resume their proxy contest may lead to concern among potential tenants, existing and future financing counterparties and investors, vendors, contractors, employees, and other important stakeholders regarding the stability of our business, which may be exploited by our competitors, may inhibit potential customers and financing counterparties from transacting with us, may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners. These uncertainties may also negatively impact our ability to enter into additional definitive lease agreements with tenants.

Our former President and Chief Executive Officer, Toby Neugebauer, is involved in additional litigation that could cause negative publicity or perception about us and could divert management’s attention, particularly if he is successful in gaining control of our Board of Directors.

Our• In addition to the matters discussed above, our former President and Chief Executive Officer, Toby Neugebauer, is involved in additional legal proceedings that have garnered in the past, and may in the future,future garnergarner, negative publicity. IfIn light of Mr. Neugebauer is successful in hisNeugebauer’s efforts to take control of our Board of Directors and management, these legal proceedings could adversely affect our Company.

• On January 4, 2023, creditors of Animo Services, LLC (“Animo”), an affiliate of GloriFi (defined below), involuntarily placed Animo in Chapter 7 of Title 11 of the United States Code (“Chapter 7”). On February 7, 2025, the Chapter 7 Trustee in Animo’s bankruptcy proceedings filed a series of adversary proceedings against Mr. Neugebauer, and his related entities, alleging a series of fraudulent transfers and breaches of fiduciary duties (such proceedings, collectively with the ongoing bankruptcy proceedings, the “Animo Proceedings”).

• On February 8, 2023, With Purpose, Inc. (d/b/a GloriFi) (“GloriFi”) filed for bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Texas under Chapter 7. On February 7, 2025, the Chapter 7 Trustee in GloriFi’s bankruptcy proceedings filed a series of adversary proceedings against Mr. Neugebauer, and his related entities, alleging a series of fraudulent transfers and breaches of fiduciary duties (such proceedings, collectively with the ongoing bankruptcy proceedings, the “GloriFi Bankruptcy Proceedings”).

• Similarly, on March 3, 2023, a group of GloriFi investors also filed a lawsuit in the 191st Judicial District of the District Court of Dallas County, Texas, against Mr. Neugebauer, and related entities, alleging (i) fraudulent inducement, (ii) negligent misrepresentation, (iii) breach of fiduciary duty, (iv) unjust enrichment, and (v) exemplary damages (such proceedings, the “GloriFi State Court Proceedings”).

• On May 16, 2024, and on May 17, 2024, Mr. Neugebauer, and related entities, also filed lawsuits in the District of Georgia and District of Delaware, respectively, against certain GloriFi investors alleging, among other things, investor violations under the Racketeer Influenced and Corrupt Organizations Act (RICO) as it relates to GloriFi (such proceedings, the “RICO Proceedings,” and together with the Animo Proceedings, the GloriFi Bankruptcy Proceedings, and the GloriFi State Court Proceedings, the “Animo/GloriFi Proceedings”). The RICO Proceedings have been temporarily stayed in connection with the GloriFi Bankruptcy Proceedings but may be resumed.

• If Mr. Neugebauer is successful in gaining control of our Board of Directors through his attempted proxy contest, the Animo/GloriFi Proceedings may attract negative press coverage and other forms of negative attention to the Company.

Since December 31, 2025, we have incurred substantial additional indebtedness to finance equipment for Project Matador,Matador. includingAs of June 30, 2026, we had the following financing facilities and amounts outstanding under each: (i) a $500.0 million MUFGTurbine Warehouse Equipment Financing facility (entered February 10, 2026),facility, of which $396.6$444.9 million hashad been drawn as of the date hereof; (ii) athe Keystone Master Loan Agreement providing for equipment-backed advances of up to $120.0 million in aggregate principal, with the potential to increase by an additional $100.0 million subject to lender approval (entered February 2026),approval, of which $39.5$77.3 million hashad been drawn; (iii) a $165.0 million BealTurbine Warehouse II Equipment Financing facility (entered March 2026) to fund the purchase of six Siemens Energy SGT-800 industrial gas turbines, of which $3.0$14.7 million hashad been drawn as of the date hereof; and (iv) aan Yorkvilleundrawn Promissory Note with a committed principal amount of $156.3 million (enteredreduced Marchto 30,a 2026maximum of $78.1 million). On July 14, 2026, we issued $431.3 million aggregate principal amount of 5.00% convertible senior notes due 2031, including $56.3 million aggregate principal amount of Notes issued upon the exercise in full by the initial purchasers of their option to purchase additional Notes. Net proceeds from the Offering were approximately $416.8 million, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses.

These facilities contain numerous restrictive covenants and conditions, including: (a) under the MUFGTurbine Warehouse Equipment Financing, loan-to-value requirements whereby an event of default will occur if the LTV ratio exceeds the applicable target for more than thirty consecutive days following an updated appraisal reflecting a value more than 2% below the initial appraisal; (b) under the KeystoneHigh Facility,Voltage Equipment Financing, a minimum liquidity covenant requiring us to maintain at least $20.0 million in liquidity until the facility is repaid or a qualifying customer agreement is executed, and a mandatory prepayment requirement if the Keystone Agent has not received an approved customer agreement by December 31, 2026; (c) under the BealTurbine CreditWarehouse Agreement,II Equipment Financing, an exit fee obligation and restrictions on asset dispositions; and (d) under the YorkvillePromissory Note, mandatory monthly amortization payments beginning thirty days after the first advance, with at least $10.0 million of each payment to be satisfied in shares of common stock.

Our ability to comply with these covenants is subject to uncertainty, particularly given the early stage of our development, the absence of signed definitive tenant agreements as of the date of this filing,filing (other than the TensorWave Lease, which remains subject to conditions to commencement), and leadership transition risk. A breach of any covenant or failure to satisfy any condition could trigger an event of default, acceleration of the applicable debt obligation, and potential cross-default under our other financing arrangements, any of which would have a material adverse effect on our business, financial condition, liquidity, and results of operations.

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (“Form 10-Q”).10-Q. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” “FermiFermi,”, “wewe,”, “usus,”, “ourour,” and “the Company” (i) for periods prior to the Corporate Conversion, refer to Fermi LLC, and, where appropriate, its consolidated subsidiaries and (ii) for periods after the Corporate Conversion, refer to Fermi Inc., and, where appropriate, its consolidated subsidiaries.

Fermi Inc. (“Fermi,” “we,” “us,” or “our”) exists to power the artificial intelligence needs of tomorrow. We are buildingdeveloping a utility-scale and utility-grade privateprivate-grid powerpowered campus for AI-centric customers—developing and leasing large-scale, grid-independent and inter-dependentinterdependent energy generation and high-performance computing facilities purpose-built for the hyperscale era. Our strategy is anchored by Project Matador in the Texas Panhandle, a multi-phased development on a 5,236-acre site held or to be held under a long-term ground lease with the Texas Tech University System that is designed to deliver up to 11 GW of predominantly private power generation capacity supplemented by strong grid interconnections and utility-supplied system power designed to support up to approximately 15 million square feet of AI-ready hyperscale compute infrastructure over a multi-decade timeline. Together with additionaladjacent acreage acquiredacquired, under contract, or under contract adjacentsubject to theoptions leasedto property,purchase, the expanded campus is expected to encompass approximately 7,5708,400 acres,acres in the aggregate, with generation capacity expandable up to approximately 17 GW, subject to the closing of additionalthe optioned and other pending land acquisitions and receipt of incremental Texas Commission on Environmental Quality (“TCEQ”) air permits. We plan to develop and lease private-grid powered shelldata center space supported by an integrated, on-demand energy and site infrastructure platform, including on-site natural gas-fired generation, supplemental grid-supplied power, battery energy storage systems for both enhanced system reliability and to modulate the effects of customer-facing load volatility, solar generation for low-cost, zero carbonzero-carbon energy displacement, and longer-term nuclear baseload supply, all in furtherance of our objective to support large, long-durationlong-duration, and reliability-sensitive hyperscale deployments.

We were formed in January 2025 and have not generated revenue to date. Our efforts to date have focused on advancing site control and infrastructure readiness, engineering and procurement, permitting and regulatory activities, grid interconnection and fuel and water arrangements, and commercial discussions with prospective tenants. We do not expect to generate operating revenues until we executecommence delivery under definitive tenant lease agreementsagreements, andincluding commencethe deliveryTensorWave Lease described below, at Project Matador of leased private-grid powered shelldata center capacity and associated private power and site services provided as an incident of tenancy, at Project Matador, and our ability to execute our plan depends on obtaining required approvals, converting additional tenant discussions into binding agreements, and raising strategic capital. We also intend to elect to qualify as a REIT for U.S. federal income tax purposes commencing with our short taxable year ended December 31, 2025, with such election expected to be made on our initial U.S. federal income tax return on Form 1120-REIT for that taxable year, which we expect to file in the fourth quarter of 2026.

On April 13, 2026, Fermi Mobile Gen LLC, a wholly owned subsidiary of the Company, entered into the First Amendment (the “Amendment”) to the master lease agreement (the “MPS Agreement.Agreement”) with Mobile Power Solutions LLC (“MPS”). Fermi Inc. acknowledged and reaffirmed its guaranty of theFermi Lessee’sMobile Gen LLC’s obligations under the MPS Agreement in connection with the Amendment.

As of MarchJune 31,30, 2026, lease commencement had not occurred for any of the seven units because the contractual preconditions for the Company’s pick-up obligation had not been satisfied. The Amendment was entered into by mutual agreement of the parties to restructure the delivery timeline in light of these circumstances.

In connection with the deferral, the Amendment permits MPS to lease, sublease, or otherwise make the units available to third parties during the extension period. In the event that any unit is not available for pick-up during the amended pick-up dates as a result of third-party use, the applicable pick-up deadline will automatically extend until such time as the unit is made available by MPS. See Note 6, Leases and Note 9, Subsequent Events to our unaudited condensed consolidated financial statements for additional information.

On April 17, 2026, Toby Neugebauer was removed by the Company’s Board of Directors (the “Board”) from the positions of President and Chief Executive Officer of the Company. Mr. Neugebauer remained an employee and a member of the Board. On the same date, the Board established an Interim Office of the CEO, which includes Jacobo Ortiz Blanes, the Company’s Chief Operating Officer, and Anna Bofa, each of whom was appointed as a Co-President of the Company. Mr. Ortiz Blanes and Ms. Bofa shareshared responsibility for the day-to-day operations of the Company while a search for a permanent Chief Executive Officer iswas underway.

Also on April 17, 2026, pursuant to the Director Nomination Agreement, dated September 30, 2025, by and among the Company, TMNN Manager, LLC, Caddis Capital, LLC, and the Melissa A. Neugebauer 2020 Trust, the Melissa A. Neugebauer 2020 Trust exercised its right to nominate Miles Everson to the Board, and the Board appointed him as a director.

On April 29, 2026, the Board appointed Robert L. Masson as Interim Chief Financial Officer and principal financial officer of the CompanyCompany. Mr. Masson served as Interim Chief Financial Officer until ahis appointment as the Company’s permanent successorChief isFinancial named.Officer on July 20, 2026.

On May 4, 2026, pursuant to the Director Nomination Agreement, Vicksburg Equity Holdings, LLC (“Vicksburg”), as assignee from TMNN Manager, LLC,LLC (“TMNN”), exercised the right to nominate Larry Kellerman, the Company’s Head of Power, to the Board, and the Board appointed him as a director to fill the vacancy created by Mr. Neugebauer’s removal from the Board. Vicksburg is controlled by Mr. Neugebauer.