QumulusAI, Inc.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its principal executive officer and principal financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2026. Based upon that evaluation, and as a result of the material weaknesses in the Company’s internal control over financial reporting discussed below, the Company’s principal executive officer and principal financial officer concluded that as of September 30, 2026, the Company’s disclosure controls and procedures were not effective.

Previously Reported Material Weaknesses in Internal Control over Financial Reporting

As previously disclosed, in connection with the audit of the Company’s consolidated financial statements for the fiscal years ended December 31, 2025 and December 31, 2024, the Company identified certain control deficiencies in the design and implementation of its internal control over financial reporting that constituted material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The Company additionally identified significant deficiencies that did not amount to material weaknesses.

The material weaknesses identified were (1) a lack of a formalized control environment and oversight of controls over financial reporting; (2) a lack of proper accounting for significant or non-recurring transactions, including in particular warrant evaluation and equity-related transactions; and (3) a lack of appropriate segregation of duties to permit appropriate review of accounting transactions and/or accounting treatment by multiple qualified individuals and to prevent one individual from being able to override the internal control environment by initiating, authorizing, and completing transactions. These material weaknesses, if not remediated, could result in a material misstatement of one or more disclosures in the Company’s annual or interim financial statements that would not be prevented or detected in a timely manner. In addition to the foregoing material weaknesses, the Company identified significant deficiencies in the Company’s accounting treatment of stock-based compensation expense and its lack of an enterprise resource planning system (“ERP”).

The Company’s management is implementing measures designed to improve its internal control over financial reporting to remediate the identified material weaknesses. The remediation actions the Company is taking, and expects to take, to correct the lack of a formalized control environment and oversight of controls over financial reporting include the following: (1) the Company hired Michael Maniscalco as its Chief Executive Officer, Ryan DiRocco as its Chief Technology Officer, and Stephen Hunton as its Chief Marketing Officer, and appointed Homaira Akbari, Stacy Kenworthy, Michael Mulica, David Rench and Barry Schwartz as independent directors of the Board of Directors (the “Board”) to provide a foundation for a formal approval and control process; and (2) the Company implemented an ERP and an accounts payable payment platform effective February 2026. To correct the lack of proper accounting for significant or non-recurring transactions, the Company implemented Board approval on all warrant issuances and monthly recording of awards based on the latest 409(a) valuation, which policy was updated upon completion of the Company’s direct listing to instead be based on the Company’s stock price as reported by Nasdaq. The remediation actions the Company is taking, and expects to take, to correct the lack of appropriate segregation of duties include the following: (1) in September 2025, the Company hired Andrew Glickler as its SVP, Finance; (2) the Company implemented an ERP and an accounts payable platform effective February 2026; (3) the Company engaged outside consultants to review business process analysis and flow of data to the accounting software platform and financial reporting; and (4) the Company hired a corporate controller in January 2026 to oversee the Company and its subsidiaries. To resolve the significant deficiencies, in addition to the implementation of an ERP and an accounts payable platform, the Chief Financial Officer and SVP, Finance are reviewing option and RSU grants and stock-based compensation with the monthly close.

As management continues to evaluate and work to remediate the material weaknesses and to resolve the significant deficiencies, the Company may determine to take additional measures to address the material weaknesses and significant deficiencies. However, the Company cannot provide assurance that the measures it has taken to date, or that it may take in the future, will be sufficient to remediate the material weaknesses or resolve the significant deficiencies or avoid potential future material weaknesses or significant deficiencies.

Changes in Internal Control over Financial Reporting

Other than the remediation steps described above, there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.