The accompanying consolidated financial statements have been prepared in accordance with accounting policies generally accepted in the United States of America (“GAAP”) as established by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC”) including modifications issued under Accounting Standards Updates (“ASUs”). The reporting currency of the Company is the U.S. Dollar. Dollar amounts in the financial statements are presented in thousands, except as otherwise stated. Share, per share, unit and per unit data are presented as whole numbers. The consolidated financial statements include the accounts of Fermi Inc. and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

These consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In management’s opinion, the consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to fairly state the Company’s financial position and results of operations. Results for the period presented are not necessarily indicative of the results that may be expected for any subsequent period.

The Company determines at the inception of each arrangement whether an entity in which the Company has made an investment or in which the Company has other variable interests is considered a variable interest entity (“VIE”). Investments that are considered VIEs are evaluated to determine whether the Company is the primary beneficiary of the VIE, in which case it would be required to consolidate the entity. The Company evaluates whether it has (1) the power to direct the activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. If the Company is not the primary beneficiary of the VIE, the investment or other variable interest is accounted for in accordance with applicable U.S. GAAP.

Project Matador will require substantial capital investment to achieve commercial operation. As of December 31, 2025, the Company had not generated any revenues. To finance the construction and development of Project Matador, we have successfully raised capital and intend to raise additional capital through a combination of equity financings, various debt issuances, monetization of federal energy credits, strategic equity investments, government grants and tenant prepayments. In February 2026, we completed two equipment financings to support the buildout of Project Matador, including an initial draw on a $220,000 facility to accelerate procurement of long-lead high-voltage equipment and a $500,000 non-recourse turbine warehouse facility to fund the acquisition of additional turbine equipment. See Note 11, Subsequent Events, for more information. Additional financings are not certain to occur. If we are unable to raise capital in the amounts, timing, or

terms we expect, we may be forced to delay capital expenditures, amend or terminate our purchase commitments or surrender assets pledged as collateral under our financing agreements in order to preserve liquidity, which could materially extend our development timeline and delay one or more phases of Project Matador, preventing us from achieving planned operational and financial milestones within the anticipated timeframe.

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet. Actual results could differ from those estimates. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2025.

We consider short-term, highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in our checking and saving accounts. Cash is maintained with financial institutions located in the United States that management believes to be creditworthy. While we monitor the credit quality of our banking relationship, our cash balances may, at times, exceed the federally insured limits.

Restricted cash represents amounts deposited in a bank account that are required to remain restricted in accordance with the terms of the related financing agreements. On August 29, 2025, the Company received $99,300 of restricted cash related to the Macquarie Term Loan (as defined in Note 7, Debt, net) for payments under the Siemens Contract (as defined in Note 5, Acquisitions) and for loan transaction fees and expenses. During the period from January 10, 2025 (Inception) through December 31, 2025, the Company used the entirety of the restricted cash for its intended purposes, with no restricted cash balance remaining as of December 31, 2025. When the Company has a restricted cash balance at the beginning or end of a reporting period, restricted cash amounts are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the consolidated statement of cash flows.

On July 1, 2025, Fermi LLC filed an election to be classified as a corporation for U.S. federal income tax purposes effective as of its date of formation, January 10, 2025, via late classification relief sought under Revenue Procedure 2009-41. The election was approved by the IRS. Fermi LLC adopted a fiscal year end of July 31, 2025 for its initial taxable, non-REIT year. Accordingly, the Company will file its U.S. federal income tax return for the short taxable period from January 10, 2025 (Inception) through July 31, 2025 as a corporation for U.S. federal income tax purposes.

Fermi intends to elect to be taxed as a REIT for U.S. federal income tax purposes beginning August 1, 2025, with the filing of its initial Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts for its taxable year ended December 31, 2025. As long as Fermi qualifies as a REIT, it generally will not be subject to U.S. federal income tax at the REIT level on taxable income that is currently distributed to stockholders. Fermi intends to distribute substantially all of its REIT taxable income and therefore does not expect to incur U.S. federal income tax at the REIT level. Fermi may, however, be subject to U.S. federal income tax and excise taxes in certain circumstances, including on undistributed taxable income or if it fails to satisfy REIT requirements. Accordingly, no provision for U.S. federal income taxes has been recognized in the accompanying consolidated financial statements for the periods presented.

All of the Company’s activities relate to our business of building and owning powered shell facilities. As of December 31, 2025, operational and strategic decision-making responsibilities were overseen collectively by the Company’s officers, including the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and the Head of Power. This group, functioning collectively in the role of the chief operating decision maker (“CODM”), evaluates performance and allocates resources based on the overall operations and financial results of the Company as a whole. Based on the structure of our operations and the manner in which the CODMs monitor and manage the business, we have concluded that the Company operates as a single operating segment and, accordingly, a single reportable segment for accounting and financial reporting purposes.

The Company’s single reportable segment is expected to earn substantially all of its revenue from lease rental income from hyperscaler tenants. The CODMs manage the Company as a single business and use GAAP net income (loss), as presented in the consolidated statement of operations, as the primary financial measure for assessing performance and allocating resources. The CODMs regularly review the consolidated statement of operations, including the various expense and other line items, as presented in the Company’s consolidated financial statements. No significant separate revenue or expense categories are regularly evaluated by the CODMs other than those already reflected in the consolidated statement of operations. Additionally, the CODMs assess segment assets as presented within the Company’s consolidated balance sheet, as there is no distinction between segment assets and total assets. All assets will be located within the United States or vendor locations abroad. Because the Company operates as a single segment, the accounting policies applied are consistent with those described in the accompanying consolidated financial statements.

The Company accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). Equity instruments issued to employees and non-employees in exchange for goods or services are measured at fair value on the grant date and recognized over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur.

The Company granted restricted equity units (“REUs”) and restricted stock units (“RSUs”) that vest upon the satisfaction of either a service-based condition only or a combination of service-based, market-based and performance-based conditions. The grant-date fair value of these REUs and RSUs is the fair value of the Company’s units on the date of grant.

The Company recognizes share-based compensation expense on a straight-line basis over the requisite service period for equity awards with only service-based conditions, including those with a graded vesting feature. Share-based compensation expense for equity awards with a service-based condition and a performance-based condition or a market-based condition, or both, will be recognized using the graded vesting method over the requisite service period. For equity awards with a market-based condition, the share-based compensation expense is recognized using the appropriate attribution method over the requisite service period, regardless of whether the market-based condition is met.

Share-based compensation expense for awards with performance conditions is recognized only when achievement of the performance condition is considered probable. Performance conditions may include the occurrence of a specified event or achievement of a performance target. When achievement becomes probable, compensation expense is recognized using the accelerated attribution method and includes a cumulative catch-up adjustment for the portion of the requisite service period rendered to date. Any remaining share-based compensation expense is recognized over the remaining requisite service period once the performance condition is satisfied.

Prior to the IPO, as there was no public market for the equity of the Company, the Company utilized a third-party valuation firm to determine estimates of fair value using generally accepted valuation methodologies, specifically income-based methods. Under the income approach, enterprise value was determined using a discounted cash flow analysis that reflects management’s projections of future cash flows. These projected cash flows were discounted to present value using a weighted average cost of capital, which was informed by market data from guideline public companies with comparable operating and financial characteristics and further adjusted to reflect the Company’s stage of development, capital structure, and company-specific risk factors. The resulting enterprise value was then adjusted by a probability-weighted decision tree to derive the estimated fair value of the Company as of each valuation date.

At contract inception, the Company determines whether an arrangement contains a lease in accordance with ASC 842, Leases (“ASC 842”). Prior to lease commencement, any payments are recorded as prepaid rent and included in prepaid expenses and other assets on the Company’s consolidated balance sheet. The prepaid rent balance is reclassified to the right-of-use (“ROU”) asset at lease commencement.

ROU assets and lease liabilities are established on the consolidated balance sheet for leases with an expected term greater than one year. Lease liabilities are recognized at the present value of future lease payments, less any incentives payable to the Company. ROU assets are recognized based on the initial measurement of the lease liability, plus any initial direct costs incurred by the Company and any lease payments made to the lessor at or before lease commencement minus any lease incentives received. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company recognizes lease expense for operating leases on a straight-line basis over the term of the lease. In determining the lease term, the Company includes any options to extend or terminate the underlying lease when it is reasonably certain that the Company will exercise that extension option or is reasonably certain not to exercise a termination option.

Costs incurred in connection with the issuance of debt are deferred and amortized to interest expense over the term of the related debt using the effective-interest method. Debt issuance costs associated with the Company’s convertible unsecured promissory notes (the “Seed Convertible Notes”), convertible secured promissory notes (the “Series A Convertible Notes”), Series B Convertible Secured Promissory Note (“Series B Convertible Note”), secured promissory note (“Promissory Note”), and Macquarie Term Loan are presented as a direct deduction from the carrying amount of the related debt on the consolidated balance sheet. As of December 31, 2025, the Company had deferred $432 of debt issuance costs. See Note 7, Debt, net for additional details related to outstanding debt and associated debt issuance costs.

Deferred offering costs consisted of legal, accounting, consulting, and other professional fees that were directly attributable to the Company’s IPO and Preferred Units Financing. Offering costs attributable to the IPO were capitalized within prepaid expenses and other assets on the consolidated balance sheet. Upon the completion of our IPO on October 2, 2025, deferred offering costs of $14,160 were reclassified from prepaid expenses and other assets to additional paid-in capital as an offset against proceeds. Offering costs attributable to the Preferred Units Financing of $7,049 were recorded as a reduction to additional paid-in capital.

For asset acquisitions, the total cost of the acquisition, including transaction costs, is allocated to the individual assets acquired and liabilities assumed based on their relative fair values. No goodwill is recognized in an asset acquisition. Transaction costs incurred in connection with asset acquisitions are capitalized as part of the cost of the acquired assets. The fair values of tangible and intangible assets acquired are generally determined using a combination of cost, market, and income approaches, which may require management to make significant estimates and assumptions regarding future cash flows, discount rates, and other relevant factors. The allocation of purchase price in asset acquisitions affects the amounts recognized for tangible and intangible assets and liabilities, as well as the related depreciation and amortization expense recognized in future periods.

The Company’s acquisition agreements may include contingent consideration arrangements that provide for additional payments upon the occurrence of specified events or the achievement of certain performance or operational milestones. For business combinations, contingent consideration is measured at fair value as of the acquisition date and recorded as part of the purchase price. Subsequent changes in the fair value of contingent consideration classified as a liability are recognized in earnings in the period in which they occur, while contingent consideration classified as equity is not remeasured.

For asset acquisitions, contingent consideration is recognized only when the contingency is resolved and the consideration is paid or becomes payable, unless the arrangement meets the definition of a derivative, in which case the contingent consideration is recorded at fair value on the acquisition date. Upon recognition, contingent consideration in an asset acquisition is included in the cost of the acquired asset or group of assets.

The determination of the fair value of contingent consideration requires management to make significant estimates and assumptions regarding the probability of achieving specified outcomes, projected cash flows, discount rates, and other relevant factors. Actual results may differ from these estimates, which could have a material impact on the Company’s consolidated financial statements.

Property, plant, and equipment, net are initially recorded at cost, which includes all expenditures directly attributable to the acquisition or construction of the asset, such as materials, labor, professional fees, permitting costs, lease costs and insurance. Expenditures for repairs and maintenance are expensed as incurred, while major renewals and improvements that extend the useful life of an asset are capitalized. Once assets are placed in service, depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives and depreciation methods are reviewed periodically to ensure they reflect the expected pattern of economic benefits. As of December 31, 2025, property, plant, and equipment, net consists exclusively of land and assets for which development or construction is in progress.

Construction in progress represents the accumulation of development and construction costs related to the Company’s capital projects. These costs are reclassified to depreciable assets within property, plant, and equipment, net when the associated project is placed in service. The Company begins capitalizing project costs once acquisition or construction of the relevant asset is considered probable. As preliminary site development commenced in the fourth quarter of 2025, lease costs incurred during that period that are directly attributable to the construction of qualifying assets were capitalized as part of construction in progress within property, plant, and equipment, net, on the consolidated balance sheet, and will be capitalized with the corresponding asset and depreciated over the remaining life of that asset once placed into service. See Note 8, Leases, for additional information. Interest costs incurred associated with the construction are capitalized as part of construction in progress within property, plant, and equipment, net on the consolidated balance sheet until the underlying asset is ready for its intended use. Once the asset is placed in service, the capitalized interest is amortized as a component of depreciation expense over the life of the underlying asset. Interest is capitalized on qualifying assets using a weighted average effective interest rate applicable to borrowings outstanding during the period to which it is applied and limited to interest expense actually incurred. As of December 31, 2025, $18,354 of interest costs have been capitalized, all of which are included within property, plant, and equipment, net on the consolidated balance sheet. We allocate a portion of payroll

and payroll-related costs, including share-based compensation, to both capitalized cost of construction and to salaries or compensation expense based on the percentage of time certain employees worked in the related areas. We capitalized compensation costs of $67,608 related to development, pre-construction and construction projects for the period from January 10, 2025 (Inception) through December 31, 2025.

We review property, plant, and equipment, net for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such indicators are present, we compare the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset, including estimated cash outflows needed to prepare the asset for its intended use. If the carrying amount exceeds the estimated future net cash inflows, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset’s fair value. As of December 31, 2025, no impairment indicators existed.

The Company's cloud computing arrangements are primarily hosting arrangements that are accounted for as service contracts. The Company capitalizes certain implementation costs incurred in connection with these arrangements when the costs are directly attributable to configuring and implementing the hosted software for its intended use. Capitalized implementation costs include external consulting fees and internal payroll and payroll-related costs (including share-based compensation) directly associated with implementation activities. Capitalization begins when (i) management has authorized and committed to fund the implementation and (ii) it is probable the implementation will be completed and the hosted solution will be used as intended. Capitalization ceases when the related implementation is substantially complete and ready for its intended use, including completion of significant testing. Capitalized implementation costs are included in prepaid expenses and other assets on the consolidated balance sheet and are amortized on a straight-line basis over the fixed, non-cancelable term of the associated hosting arrangement, as well as any renewal periods that are reasonably certain that the Company will exercise.


Noncash investing and financing activities:	For the period from January 10, 2025 (Inception) through December 31, 2025

Conversion of Series Seed, Series A, and Series B to common stock	$	282,176
Issuance of Class A Unit associated with Preferred Units issuance	37,869
Capital contribution expense related to induced conversion of Series A and Series B convertible Notes	23,674


Accrued investments in Property, plant and equipment, net	158,106
Capitalized share-based compensation expense related to Property, plant and equipment, net	66,661
Capitalized interest related to investments in Property, plant and equipment, net	18,354
Issuance of Series B Convertible Note in relation to asset acquisition	117,000
Issuance of Promissory Note in relation to asset acquisition	20,000
ROU asset obtained in exchange for a new operating lease liability	24,644
Common stock issued pursuant to prepayment of finance lease	23,679
Recognition of embedded derivative liability associated with Preferred Units Issuance	31,990
Recognition of embedded derivative liability associated with Macquarie Term Loan Issuance	5,500

Other income (expense), net consists primarily of changes in the fair value of embedded derivatives, an inducement expense incurred in connection with the Preferred Units Financing, a charitable donation expense, and foreign exchange losses resulting from foreign currency transactions. For the period from January 10, 2025 (Inception) through December 31, 2025, other income (expense), net included approximately $111,590 of fair value remeasurements on embedded derivatives, $23,674 of inducement expense, $173,784 of charitable donation expense, and $3,284 of foreign exchange losses.

The Company follows the guidance in ASC 820, Fair Value Measurement (“ASC 820”) for its fair value measurements. Valuation techniques used to measure fair value require us to utilize observable and unobservable inputs. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial instruments measured at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

The reported fair values for financial instruments that use Level 2 or Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of any balance sheet dates presented or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement.

The Company’s financial instruments include cash, cash equivalents, accounts payable, accrued liabilities, debt, net and embedded derivatives. Cash and cash equivalents, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Embedded derivatives

ASC 825, Financial Instruments (“ASC 825”), allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date.

As of December 31, 2025, the Company does not have any financial instruments outstanding that are required to be carried at fair value. For the period from January 10, 2025 (Inception) through December 31, 2025, the Company issued and derecognized or reclassified certain financial instruments and the fair value of such financial instrument was estimated using Level 3 input. The following table presents changes in the liability balances for financial instruments measured using significant unobservable inputs (Level 3) for the period from January 10, 2025 (Inception) through December 31, 2025:


	Series B Convertible Notes		Embedded Derivative in Preferred Units		Embedded Derivative in Macquarie Term Loan
	(See Note 7)		(See Note 3)		(See Note 7)
As of January 10, 2025 (Inception)	$	-	$	-	$	-
Initial recognition	117,000		31,990		5,500
Remeasurement (gain)/loss	61,000		46,350		4,240
Derecognition/Reclassification1	(178,000)		(78,340)		(9,740)
As of December 31, 2025	$	-	$	-	$	-

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 (“ASU 2024-03”). In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-30): Clarifying the Effective Date, which clarified the effective date of this standard. The standard requires the disclosure of additional information about specific expense categories in the notes to the consolidated financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The standard allows for adoption on a prospective or retrospective basis. We are currently assessing the impact of adopting ASU 2024-03 on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instrument (“ASU 2024-04”), to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options. The amendments in this ASU are effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. We are currently assessing the impact of adopting ASU 2024-04 on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (“Subtopic 350-40”): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which amends certain aspects of the accounting for and disclosure of software costs under Subtopic 350-40. The amendments improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and for interim periods within those annual reporting periods, with early adoption permitted. The Company elected to early adopt this guidance for the period from January 10, 2025 (Inception) through December 31, 2025, effective as of January 10, 2025 (Inception), and