Axe Compute Inc.

NOTE 1–** COMPANY INFORMATION**

Nature of Operations

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. The Company assists customers across the full GPU infrastructure stack, including hardware procurement, colocation, networking, storage, and financing, and can immediately access compute capacity through relationships with third party compute providers to provide customers compute capacity that is already online and available for rent. The Company also continues to evaluate strategic alternatives for its 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 the Company’s core compute infrastructure operations.

Compute Services

The Company’s principal revenue-generating activity is the provision of GPU compute to customers. The Company primarily provides 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 little 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, the Company builds and deploys dedicated compute infrastructure solutions. Under this model, customers contract for dedicated AI infrastructure tailored to their compute, performance, geographic, security, and operational requirements. The Company coordinates 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 the Company pursuant to service level commitments. The Company intends 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, the Company provides 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 the priority of the Company and remains its focus. The Company also maintains its legacy oncology drug discovery solutions business, which was previously conducted under the Predictive Oncology Inc. name. Current operations in this business are limited, and the Company is 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, the Company announced that it is exploring strategic alternatives for this oncology drug discovery solutions business. However, as of the date of this Quarterly Report on Form 10-Q, the Company’s Board of Directors has not yet committed to a specific course of action.

For further discussion of the Company’s operating segments as of and for the six months ended June 30, 2026, seeNote 14–* Segment Information*.

Strategic Compute Reserve

On September 29, 2025, the Company 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, the Company maintains a Strategic Compute Reserve comprised primarily of ATH, which provides the Company with immediate access to GPU compute capacity that can be deployed to customers. As a holder of ATH, the Company accrues unrealized gains or losses from any appreciation or depreciation, as applicable, in the value of ATH tokens, which trade on various cryptocurrency exchanges.

The Company seeks to generate value from its 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. The Company has not engaged in ATH staking to date and does not currently intend to stake ATH, although it may elect to do so in the future.

The Company's Strategic Compute Reserve is intended to create value for stockholders through:

Refer to "Risks and Uncertainties" below for further discussion regarding risks related to the Company's Strategic Compute Reserve.

Liquidity

Since the adoption of the Company’s treasury strategy based on ATH, the Company has raised capital through private investment in public equity (“PIPE”) transactions and at-the-market (“ATM”) sales of shares of common stock. Additional details regarding these equity offerings are included inNote 11–* Stockholders*’* Equity*. These capital raises have strengthened the Company’s liquidity position, and the $21.9 million of cash and cash equivalents remaining as of June 30, 2026, together with $11.3 million of digital assets, represent readily accessible sources of liquidity. The Company believes its sources of liquidity will be sufficient to allow the Company to fund its planned operations for at least the next twelve months from the date of this Quarterly Report on Form 10-Q.

Reverse Stock Split

On September 19, 2025, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation, as amended, to effect a one-for-fifteen reverse stock split of the Company’s common stock. On September 29, 2025, the Company completed a one-for-fifteen reverse stock split that was effective for trading purposes on September 30, 2025 (the “Reverse Stock Split”). All numbers of shares and per-share amounts in this report have been adjusted to reflect the Reverse Stock Split.

As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were rounded up to the nearest whole share. The Reverse Stock Split did not change the total number of authorized shares of common stock or preferred stock.

NOTE 2–** SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

Basis of Presentation and Principles of Consolidation

The Company has prepared the condensed consolidated financial statements and related unaudited financial information in the notes in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim condensed consolidated financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which in the opinion of management, are necessary to present fairly the Company’s position, the results of its operations, and its cash flows for the interim periods. These interim condensed consolidated financial statements reflect all intercompany eliminations. These interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto contained in the Annual Report on Form 10-K filed with the SEC on March 31, 2026.

As of and for the six months ended June 30, 2026, and 2025, the Company had two wholly owned subsidiaries, Helomics Corporation and Skyline Medical Inc. (“Skyline Medical”). On March 14, 2025, the Company sold the Skyline Medical business pursuant to an asset purchase agreement with DeRoyal Industries, Inc.; however, Skyline Medical remained a wholly owned subsidiary of Axe Compute following the transaction, with its activities limited to wind-down efforts that were substantially completed as of December 31, 2025. The condensed consolidated financial statements include the accounts of the Company and these wholly owned subsidiaries, with all intercompany transactions and balances eliminated, as of and for the six months ended June 30, 2026 and 2025.

Discontinued Operations

In March 2025, the Company disposed of its former Eagan operating segment. Disposal groups that meet the discontinued operations criteria provided in ASC 205-20-45 are classified as discontinued operations. Assets and liabilities of discontinued operations are presented separately in the Company’s condensed consolidated balance sheets and results of discontinued operations are reported as a separate component of net loss in the Company’s condensed consolidated statements of net loss for all periods presented, resulting in changes to the presentation of certain prior period amounts. Results of discontinued operations are excluded from segment results for all periods presented. Cash flows from discontinued operations are also reported separately in the Company’s condensed consolidated statements of cash flows.

Refer toNote 3–* Discontinued Operations* for additional discussion of discontinued operations. All other notes to these condensed consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.

Accounting Policies and Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and during the reporting period. Actual results could materially differ from those estimates. Estimates are used in the following areas, among others: variable consideration associated with revenue recognition, stock-based compensation expense, fair value of derivatives including embedded derivatives, fair value of digital assets, fair value of long-lived assets for impairment analyses, the valuation allowance included in the deferred income tax calculation, accrued expenses, useful lives assigned to property and equipment, and determination of contract commencement dates. The Company bases its estimates on historical experience and assumptions that management considers reasonable. Assumptions are reviewed regularly to ensure they remain relevant and reasonable, particularly in areas of high subjectivity.

Note 2 to the annual consolidated financial statements contained in the Annual Report on Form 10-K filed with the SEC on March 31, 2026, describes the significant accounting policies and estimates used in preparation of the consolidated financial statements. There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2026, with the exception of the items noted below.

Revenues from GPU Compute Services

Revenue from the Company’s GPU compute services segment is generated from subscription-based arrangements with enterprise, research, and commercial customers under master services agreements and related order forms. These arrangements provide customers with continuous access to specified GPU compute resources (including GPU type, quantity, and configuration) at designated data center locations over defined service periods, which may range from month-to-month to multi-year terms. Certain contracts also include ancillary storage services, which are accounted for as separate performance obligations when distinct.

The Company procures GPU compute capacity from third-party node operators and decentralized cloud infrastructure platforms and resells that capacity to its customers. The Company has concluded that it acts as a principal in these arrangements, as it controls the GPU compute services prior to transferring to the customer, including directing the use of, and obtaining substantially all benefits from, the underlying capacity. Additionally, the Company bears inventory risk and has full discretion regarding the pricing of contracts with customers. Accordingly, revenue is recognized on a gross basis.

GPU compute and related storage services are each considered a series of distinct services that are substantially the same and are satisfied over time, as customers simultaneously receive and consume the benefits of these services as they are provided. Revenue is recognized over time using an output method that faithfully depicts the Company’s performance. For fixed-fee arrangements, revenue is recognized on a straight-line basis over the applicable service period, as the customer receives a consistent level of benefit throughout the term. Usage-based fees, including overage charges based on GPU-hours consumed in excess of contractual limits, are recognized as revenue in the period in which the usage occurs.

The transaction price primarily consists of fixed monthly subscription fees, which are generally non-cancellable and non-refundable during the contract term. Arrangements might include usage-based overages; however, for the period ended June 30, 2026, any variable consideration was immaterial. Variable consideration is included in revenue only to the extent it is probable that a significant reversal will not occur. For contracts with multiple performance obligations, such as combined GPU compute and storage services, the transaction price is allocated to performance obligations based on relative standalone selling prices. The Company has concluded that these arrangements do not contain significant financing components.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Construction-in-progress is related to the construction or development of property and equipment that has not yet been placed into service for its intended use. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets.

The estimated useful lives of the Company’s property and equipment are as follows:

Upon retirement or sale of property and equipment, the cost and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is recorded in operations. Expenditures for maintenance and repairs that do not extend the lives of the respective assets are expensed as incurred.

Compute prepayments

The Company enters into agreements with third-party vendors to reserve and obtain GPU compute capacity, related storage, networking, and support services. Under these arrangements, the Company is generally required to make prepayments equal to either (1) a percentage of overall contract value or (2) a value equal to the monthly service payment for a number of months. In addition to these prepayments, the Company has monthly service payments over contract terms ranging from 12 to 36 months.

Upon transferring these prepayments, the Company records a compute prepayment as a prepaid asset. The prepaid balance is subsequently recognized as expense over the period in which the related services are received. For arrangements where the prepayment represents an advance payment for services evenly consumed over the contract term, the prepaid balance is amortized on a straight-line basis over the applicable service period. For arrangements where the prepayment relates to specific months of service, the prepaid balance is relieved and recognized as expense in the months to which the prepayment applies, consistent with the pattern of benefit received. Monthly service payments are recognized as expense as incurred in accordance with the underlying contractual terms. The Company evaluates compute prepayments each reporting period to determine whether the recorded balance remains recoverable and appropriately reflects expected future service consumption.

The timing of service deployment and commencement under certain compute capacity arrangements is dependent on a variety of third-party factors, including original equipment manufacturer (“OEM”) schedules, GPU allocation timing, logistics, and other operational dependencies. As a result, at the time a compute prepayment is made, the exact period over which the prepaid balance will be utilized may not be known with certainty. Management is therefore required to estimate the expected service commencement date and the period over which the related services will be received in order to determine the appropriate classification of compute prepayments between current and non-current assets and to establish the amortization period. These estimates are based on the facts and circumstances known at the reporting date and are reassessed each reporting period. Changes in actual deployment timing or service consumption patterns may result in adjustments to the classification and timing of expense recognition in future periods.

Risks and Uncertainties

Note 2 to the annual consolidated financial statements contained in the Annual Report on Form 10-K filed with the SEC on March 31, 2026, describes certain risks and uncertainties associated with the Company and relevant to the Company’s consolidated financial statements. There have been no additional risks and uncertainties identified by Management in the six months ended June 30, 2026.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires more detailed disclosures related to certain costs and expenses. The guidance requires entities to disclose amounts of certain expense categories included in expense captions presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The disclosure requirements may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.

NOTE 3–** DISCONTINUED OPERATIONS**

On March 14, 2025, the Company entered into an asset purchase agreement (the “APA”) and closed the transactions contemplated therein with DeRoyal Industries, Inc., a Tennessee corporation (“DeRoyal”), to sell and assign to DeRoyal assets and liabilities exclusively related to the business of providing products for automated, direct-to-drain medical fluid disposal, including the Company’s STREAMWAY® product line (the “Eagan Business”). These assets were operated by the Company’s wholly owned subsidiary, Skyline Medical, and were previously reported in the Company’s Eagan operating segment. The purchased assets exclusively related to the Eagan Business included but were not limited to cash, certain accounts receivable, inventories, patents, fixed assets, and real property leased by the Company and exclusively used in connection with the Eagan Business. The total purchase price for the assets was $625,000, plus the assumption of certain liabilities related to the Eagan Business including the lease for the office and warehouse space located at 2915 Commers Drive Suite 900 Eagan, MN 55121, certain accounts payable, and contract liabilities associated with the Eagan Business. The ongoing activities of the former Eagan operating segment are limited to wind down activities. As a result of these developments, the former Eagan operating segments have been reclassified to discontinued operations in these condensed consolidated financial statements for all periods presented.

The balance sheet as of June 30, 2026, does not include any assets and liabilities of discontinued operations. The following table presents a reconciliation of the carrying amounts of the major classes of assets and liabilities to the current assets and liabilities of discontinued operations as presented in the Company’s condensed consolidated balance sheet as of June 30, 2025:

The statement of net loss as of June 30, 2026, does not include any discontinued operation activity. The following table provides details about the major classes of line items constituting the loss from discontinued operations presented in the Company’s condensed consolidated statement of net loss for the three and six months ended June 30, 2025:

The gain on disposal of discontinued operations represents the gain on assets sold and liabilities assumed by DeRoyal.

NOTE 4–** REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS**

Disaggregation of Revenue

The Company primarily generates its revenue through providing GPU compute services for fixed term contracts. Revenue recognized related to fixed term contracts represented substantially all of the revenue for the three and six months ended June 30, 2026.

Contracts with Customers

The following customers accounted for 10% or more of the Company’s revenue for the periods presented:

• Customer did not represent 10% or more of revenue.

Customer A, B, and C accounted for 16%,13%, and 58% of accounts receivable, net, respectively, as of June 30, 2026. All other single customers represent less than 10% of revenue and accounts receivable, net, for the three and six month periods ended and as of June 30, 2026.

The Company monitors the creditworthiness of its customers on an ongoing basis and believes that its credit risk is limited due to the financial strength and payment history of these customers. Management does not expect any material losses from these receivable concentrations and has not recorded an allowance for doubtful accounts, as all receivables are considered highly collectible.

Contract Balances

The Company’s contract balances are comprised of prepayments received from compute services customers. The Company invoices for services in advance and when the Company receives consideration (or has an unconditional right to consideration) before services are fulfilled, the Company recognizes a contract liability for the unfulfilled performance obligation. These prepayments are classified as contract liabilities until the appropriate revenue recognition criteria have been met. As of June 30, 2026, the Company had contract liabilities of $60.7 million primarily related to compute services. As of December 31, 2025, the Company had contract liabilities of $0.1 million which was all related to Drug Discovery Services.

The following table represents a reconciliation of the changes in the Company’s contract balances:

During the six months ended June 30, 2026, an immaterial amount of revenue was recognized relating to the contract liabilities as of December 31, 2025.

The Company had no contract assets as of the periods presented, as the Company’s right to consideration becomes unconditional upon invoicing (which occurs at or before the service period commences) and does not depend on any factor other than passage of time.

As of June 30, 2026, the Company had $60.8 million of remaining performance obligations. The Company expects to recognize revenue associated with these performance obligations as follows:

NOTE 5–** DIGITAL ASSETS**

The Company’s digital assets, as presented on the condensed consolidated balance sheets for the periods indicated, consist primarily of ATH. ATH qualifies for recurring fair-value measurement under ASC 350-60,Intangibles —Goodwill and Other —Accounting for and Disclosure of Crypto Assets, with changes in fair value recognized in earnings in accordance with ASC 820,Fair Value Measurement, based on quoted (unadjusted) prices on the principal market of the Company for ATH (Level 1 inputs). The following table summarizes the number of units held, cost basis, and fair value of ATH as of June 30, 2026 and December 31, 2025:

Cost basis represents the purchase price of digital assets, including transaction fees, if any, at the time of acquisition or upon receipt. Fair value represents quoted prices for the digital assets in the Company’s principal market at 11:59 p.m. Eastern Time on each reporting date in accordance with the Company’s crypto-asset valuation policy.

The following table represents a reconciliation of digital assets held, for ATH specific activity:

As of June 30, 2026, the Company held $0.1 million of non-ATH digital assets.

ATH tokens were utilized primarily for the rental of GPU compute capacity on the Aethir decentralized infrastructure network, supporting the Company's compute-related operations.

During the six months ended June 30, 2026, the Company generated ATH-denominated digital asset lending income through a digital asset lending arrangement. The Company transferred 2.4 billion ATH tokens via the Aethir portal for a defined period of time of 31 calendar days. The lending arrangement accrued interest at a fixed annual rate of 6%, calculated on a simple interest basis. Upon expiration of the term of the digital asset lending arrangement, the principal amount and accrued interest were repaid in full. For the six months ended June 30, 2026, the Company recognized digital asset lending income of $0.1 million. As of June 30, 2026, no digital assets held by the Company were subject to the lending arrangement.

Side Letter

In connection with private placement transactions completed in October 2025 to support the Company’s treasury strategy, the Company entered into a side letter agreement (the “Side Letter”) with DCI, effective October 7, 2025. Pursuant to the Side Letter, for each ATH token purchased by the Company in the open market, whether through centralized or decentralized exchanges operating on the Ethereum Network, DCI will grant the Company additional ATH tokens equal to 20% of the number of tokens purchased (the “Bonus ATH”), to be delivered within 30 days of the related purchase. The Bonus ATH is not subject to restrictions upon receipt.

The Company accounts for the Side Letter as a derivative instrument. As of June 30, 2026 and December 31, 2025, respectively, no derivative asset was recognized, as all Bonus ATH associated with open market purchases made during the period had been received from DCI.

For the six months ended June 30, 2026, the Company did not receive any Bonus ATH as there were no open market purchases of ATH made during the period. The cost basis of the ATH received in prior periods pursuant to the Side Letter and subsequent fair value adjustments thereto are recorded within “Gains (losses) on digital assets” on the condensed consolidated statements of net loss.

Digital asset receivable

A portion of the Company’s ATH holdings consists of contractual rights to receive ATH tokens that are subject to time-based vesting and transfer restrictions (“Locked ATH”). Locked ATH was obtained pursuant to Simple Agreements for Future Tokens (“SAFTs”) and is administered through an on-chain smart contract deployed on the Ethereum mainnet. Prior to vesting and claim, the Company does not have control of the underlying ATH tokens and is not able to transfer, sell, stake, pledge, or otherwise deploy such tokens.

The smart contract enforces the applicable vesting schedules and restricts access to the ATH tokens until the vesting conditions are satisfied. Upon satisfaction of the vesting conditions, the Company must affirmatively claim the unlocked ATH tokens through the smart contract interface, at which point the tokens are released from restriction and transferred to a Company-controlled wallet. Until such claim occurs, the Locked ATH represents a contractual right to receive ATH in the future rather than a digital asset held by the Company.

As of June 30, 2026, the Company held rights to receive ATH tokens that remain subject to vesting and claim requirements. The vesting period for these ATH tokens ranges from less than one month to approximately 3 years. These restrictions are specific to the underlying ATH tokens. Upon vesting and claim, the restrictions lapse and the Company obtains control of the ATH tokens, which may then be held, transferred to custodial accounts, staked, or otherwise deployed in accordance with the Company’s treasury strategy.

As of June 30, 2026, the Company recorded a digital asset receivable of $10.3 million related to the Locked ATH, consisting of a host receivable of $93.4 million, net of an embedded derivative liability measured at fair value of $83.1 million. The change in fair value of the embedded derivative of $5.2 million for the six months ended June 30, 2026, was recognized within “Gains (losses) on digital assets” in the condensed consolidated statements of net loss.

As of December 31, 2025, the Company recorded a digital asset receivable of $15.5 million related to the Locked ATH, consisting of a host receivable of $93.4 million, net of an embedded derivative liability measured at fair value of $77.9 million. The change in fair value of the embedded derivative of $77.9 million for the year ended December 31, 2025, was recognized within “Gains (losses) on digital assets” in the condensed consolidated statements of net loss.

NOTE 6–** FAIR VALUE MEASUREMENTS**

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of June 30, 2026 and December 31, 2025, respectively. Fair value estimates do not necessarily represent the amounts that may be ultimately realized.

Cash equivalents represent the Company’s money market investments. The fair value of these investments is based on the daily market price for identical assets in active markets.

The embedded derivative related to the digital asset receivable must be remeasured at fair value each reporting period in accordance with ASC 815,Derivatives and Hedging. Because there is no directly observable market for illiquid, contractually restricted ATH tokens subject to a time-based vesting schedule, the embedded derivative related to digital asset receivable is classified as Level 3. The key unobservable input is the discount applied to reflect the lack of transferability and control during the restriction period. The discount is determined based on the remaining vesting period from each reporting period to the date on which the tokens become fully vested and available to claim, and is reduced ratably at each subsequent measurement date until it reaches zero at full vesting. As of the six months ended June 30, 2026, applied discounts ranged from approximately 20% to 45%. As of December 31, 2025, applied discounts ranged from approximately 30% to 55%. Changes in fair value of the embedded derivative are recognized in the consolidated statements of net loss within "Gains (losses) on digital assets." There wereno transfers into or out of Level 3 of the fair value hierarchy during the six months ended June 30, 2026, or the year ended December 31, 2025.

NOTE 7–** PROPERTY AND EQUIPMENT, NET**

The Company’s property and equipment, net consisted of the following:

Depreciation expense, recorded within general and administrative expenses of continuing operations, was $25,089 and $31,467 for the three months ended June 30, 2026 and 2025, respectively, and $52,361 and $62,934 for the six months ended June 30, 2026 and 2025, respectively.

During the three months ended June 30, 2026, the Company purchased $17.1 million of technology equipment related to the infrastructure solutions model within the compute services business. As of June 30, 2026, the entirety of the technology equipment balance represents construction in progress.

No impairment charges related to property and equipment held and used in continuing operations were incurred during the three and six months ended June 30, 2026 and 2025.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Commitments

During the three months ended June 30, 2026, the Company entered into several agreements with third-party vendors to reserve and obtain access to GPU compute capacity, related storage, networking, and support services. Management has evaluated these arrangements and concluded that they are service commitments and not leases. Under these arrangements, the Company is generally required to make upfront payments and, following service commencement or operational activation, monthly service payments over contract terms ranging from 12 to 36 months. These arrangements represent total contractual commitments to be paid according to the following schedule:

Litigation

In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. In accordance with ASC 450,Contingencies (“ASC 450”), the Company accrues a liability for legal contingencies when it is probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. If there is at least a reasonable possibility that a loss may be incurred, ASC 450 requires disclosure of a loss contingency.

There have been no material changes to the Company’s contingencies as disclosed in the Form 10-K for the year ended December 31, 2025.

NOTE 9–** LEASES**

The Company’s corporate offices and other offices are located in Pittsburgh, Pennsylvania. The leases are effective through February 29, 2028.

Lease expense under operating lease arrangements, recorded within general and administrative expenses of continuing operations, was $196,169 for the three months ended June 30, 2026 and 2025, and $392,337 and $392,503 for the six months ended June 30, 2026 and 2025, respectively.

The following table summarizes the operating lease asset and liabilities recorded as of June 30, 2026 and December 31, 2025:

The Company’s operating lease obligations as of June 30, 2026, which include expected lease extensions that are reasonably certain of renewal, were as follows:

NOTE 10–** NOTE PAYABLE**

In June 2026, the Company purchased director and officer insurance policies with a policy period ending June 2027 and financed $0.4 million of its total premium by entering into a note payable with a finance provider that requiresten monthly installment payments through April 2027. The note is secured by a first priority lien on the financed policies. The short-term note bears interest at an annual percentage rate of 6.1% over the life of the note. As of June 30, 2026, the outstanding balance of the note was $0.4 million including interest.

In June 2025, the Company purchased director and officer insurance policies with a policy period ending June 2026 and financed $0.3 million of its total premium by entering into a note payable with a finance provider that requiredten monthly installment payments through April 2026. The note was secured by a first priority lien on the financed policies. The short-term note bears interest at an annual percentage rate of 6.6% over the life of the note. As of December 31, 2025, the outstanding balance of the note was $0.1 million including interest.

NOTE 11–** STOCKHOLDERS**’** EQUITY**

At The Market Offering

On May 3, 2024, the Company entered into an at-the-market (“ATM”) sales agreement with Wainwright & Co., LLC (“Wainwright”), under which it may issue and sell shares of its common stock, with Wainwright acting as sales agent and receiving a 3.0% commission on gross proceeds. The Company subsequently filed a shelf registration statement and prospectus supplement.

On April 18, 2025, in accordance with the terms of the Sales Agreement, the Company filed a prospectus supplement to the May 2024 Shelf Registration Statement relating to the offer and sale of up to an additional $1.5 million of shares of the Company’s common stock.

On June 2, 2025, in accordance with the terms of the Sales Agreement, the Company determined to further increase the number of shares it may sell under the Sales Agreement, from the approximately $1.4 million remaining as of May 31, 2025, up to an aggregate of $3.4 million, and the Company filed an additional prospectus supplement with the SEC on June 2, 2025.

On October 29, 2025, in accordance with the terms of the Sales Agreement, the Company determined to further increase the number of shares it may sell under the Sales Agreement, from the approximately $2.3 million remaining as of September 30, 2025, up to an aggregate of $18.3 million, and the Company filed an additional prospectus supplement with the SEC on October 29, 2025.

During April 2026, the company sold 1,063,864 shares of common stock pursuant to the Sales Agreement at an average price of approximately $10.22 per share, resulting in approximately $10.3 million in aggregate net proceeds, after deducting commissions and offering costs.

On May 15, 2026, in accordance with the terms of the Sales Agreement, the Company filed an additional prospectus supplement with the SEC increasing the aggregate amount of common stock that may be offered and sold under the Sales Agreement to up to $100 million, inclusive of approximately $17.0 million of shares previously sold under the Sales Agreement, resulting in approximately $83.0 million remaining available to the Company for future sales thereunder. Since the Company's public float exceeded $75.0 million as of May 15, 2026, the Company is no longer subject to the baby shelf limitations of General Instruction I.B.6 of Form S-3.

As of June 30, 2026, approximately $83.0 million remained available to the Company for sales under the Sales Agreement.

September 2025 Private Placements and Related Agreements

On September 29, 2025, the Company entered into a securities purchase agreement (the “Crypto SPA”) with certain accredited investors pursuant to which the Company agreed to sell and issue to such investors in a private placement (the “Crypto PIPE Offering”) pre-funded warrants (the “Crypto PIPE Warrants”). Also on September 29, 2025, the Company entered into a securities purchase agreement (the “Cash SPA,” and together with the Crypto SPA, the “September SPAs”), pursuant to which it agreed to sell and issue to certain accredited investors, in exchange for cash (the “Cash PIPE Offering,” and together with the Crypto PIPE Offering, the “PIPE Offerings”), the Company’s common stock and warrants (the “Cash PIPE Warrants”). The PIPE Offerings closed October 7, 2025 (the “Closing Date”).

Cash PIPE and Crypto PIPE

In the Cash PIPE Offering, the Company sold an aggregate of 4,366,703 shares of common stock (or pre-funded warrants at a nominal $0.01 exercise price per share to purchase shares of common stock, in lieu thereof) to certain accredited investors for $11.6265 per share. In the Crypto PIPE, the Company issued, to certain accredited investors, Crypto PIPE Warrants to purchase up to 14,903,393 shares of its common stock at a nominal $0.01 exercise price per share.

There were 6,146,671 pre-funded warrants exercised for the six months ended June 30, 2026, and the total number of pre-funded warrants outstanding was 9,972,424 as of June 30, 2026, all of which were vested and exercisable and have no expiration date.

Stock Warrants

The following summarizes transactions for warrants for the period indicated:

There wereno warrants granted for the six months ended June 30, 2026 and 2025, respectively.

NOTE 12–** STOCK-BASED COMPENSATION**

Equity Incentive Plan

On December 30, 2024, the Company’s stockholders approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan allows for the issuance of non-statutory stock options and incentive stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units, and performance awards to employees, directors, and consultants of the Company, where permitted under the plan. Due to the approval of the 2024 Plan, no new awards will be granted under the Company’s Amended and Restated 2012 Stock Incentive Plan. The exercise price for each stock option is determined by the market price on the date of issuance. Vesting requirements are determined by the Board of Directors when granted and currently range from immediate tothree years. Options outstanding under this plan have a contractual life often years.

ASC 718,Compensation–* Stock Compensation*(“ASC 718”), requires that a company that issues equity as compensation record compensation expense that corresponds to the estimated cost of those equity grants. ASC 718 requires companies to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model or other acceptable means.

Restricted Stock Units

On September 9, 2025, the Board of Directors, upon the recommendation of the Compensation Committee of the Board of Directors (the “Compensation Committee”), determined that it was appropriate to award restricted stock units (“RSUs”) as a form of compensation for employees, consultants and directors and approved a form of Restricted Stock Unit Award Agreement, with such awards to be granted under the Company’s 2024 Plan. Consistent with that determination, the Board of Directors approved the grant of 60,101 RSUs on September 9, 2025. Each RSU represented the right to receive one share of the Company’s common stock upon vesting. The RSUs contained a service-based vesting condition requiring continued service through October 31, 2025, at which point the RSUs vested in full. The RSUs were settled on November 28, 2025.

On December 10, 2025, the Company entered into an amendment to the employment agreement with Raymond F. Vennare dated as of November 1, 2022. Pursuant to the amendment and following approval by the Compensation Committee, Mr. Vennare was awarded 20,000 RSUs. The RSUs contained a service-based vesting condition requiring continued service through January 1, 2026, at which point the RSUs vested in full. The RSUs were settled on February 5, 2026.

During the six months ended June 30, 2026,33,330 additional RSUs were granted to employees and consultants under the Company’s 2024 Plan. Each RSU represented the right to receive one share of the Company’s common stock upon vesting. The RSUs vested in full upon the RSU grant date.

The following table summarizes the Company’s RSU activity for the period indicated:

The Company hasno unrecognized stock-based compensation expense related to RSUs that is expected to be recognized in a future period.

Stock Options

The Company determines the grant date fair value of options and warrants using a Black-Scholes option valuation model based upon assumptions regarding risk-free interest rate, expected dividend rate, volatility, and estimated term. There were 1,025,000 stock options granted for the six months ended June 30, 2026. There wereno stock options granted for the six months ended June 30, 2025.

The following table summarizes the Company’s stock option activity for the period indicated:

The fair value of each option grant for the six months ended June 30, 2026 and 2025, was estimated on the grant date using the Black-Scholes option valuation model with the following assumptions:

The Company has $1.9 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over the next approximately three years.

Stock-Based Compensation Expense, Net

Stock-based compensation expense, net of forfeitures, recognized for the three and six months ended June 30, 2026, was $0.6 million and $0.7 million, respectively. There wasno stock-based compensation expense recognized for the three and six months ended June 30, 2025. Such expense is included within general and administrative expenses in the condensed consolidated statements of net loss.

NOTE 13–** NET LOSS PER SHARE**

Earnings per share accounting requires the presentation of both basic and diluted earnings per share on the face of the statements of net loss. The Company calculates basic net loss per share based upon the weighted average number of common shares outstanding during the period, while the calculation of diluted earnings per share includes the dilutive effect of potential common shares outstanding during the period. The calculation of diluted earnings per share excludes all potential common shares, with the exception of pre-funded warrants, if their inclusion would have an anti-dilutive effect. A total of 9,972,424 pre-funded warrants is included in the computation of earnings per share because the exercise price of the pre-funded warrants is nominal and there are no conditions that must be satisfied prior to their exercise.

The following table presents the shares used in the basic and diluted loss per common share computations:

NOTE 14–** SEGMENT INFORMATION**

The Company has determined its operating segments in accordance with ASC 280,Segment Reporting. Factors used to determine the Company’s reportable segments include the availability of separate financial statements, the existence of separate leadership across business lines, the economic factors affecting each segment, and the evaluation of operating results at the segment level. The Company’s Chief Operating Decision Maker (“CODM”), its chief executive officer, allocates the Company’s resources for each of the operating segments and evaluates their relative performance based on losses from operations, operating loss, and net loss. Operating expenses are disaggregated by department for purposes of evaluating each segment’s performance. Each operating segment listed below has separate financial statements and locally based leadership that are evaluated based on the results of their respective segments. It should be noted that the operating segments below have different products and services.

The Company hastwo reportable segments, which have been delineated by business area:

As described inNote 3–* Discontinued Operations*, the Company’s former Eagan operating segment met the criteria to be reported as discontinued operations for the first quarter of 2025. As such, the former Eagan operating segment is excluded from the tables below, which only reflect continuing operations for all periods presented.

See discussion of revenue recognition inNote 2–* Summary of Significant Accounting Policies*for a description of the products and services recognized in each segment. All revenues are earned from external customers.

The table below summarizes the Company’s segment reporting as of the six months ended June 30, 2026, and the year ended December 31, 2025:

The table below provides a reconciliation of segment revenue and loss for the three and six months ended June 30, 2026 and 2025:

NOTE 15–** SUBSEQUENT EVENTS**

Significant Contracts

In July 2026, the Company 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 Axe Compute’s design-deploy-own-operate model into additional geographies and add significant dedicated, large-scale AI infrastructure capacity to its global footprint.

ITEM 2. MANAGEMENT’**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS