Debt, net |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt, net | Debt, net The table below summarizes the Company’s debt as of December 31, 2025:
As of December 31, 2025, the annual principal maturities of outstanding debt obligations for each of the next five years is as follows:
In May 2025, we issued the Seed Convertible Notes for an aggregate principal amount of $26,124. The Seed Convertible Notes bore 15.0% simple interest, payable in-kind, and matured in five years. At any time at the holder’s election, the Seed Convertible Notes were convertible into Class A Units at a conversion price of $0.89 per unit. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $10,000 through the issuance of equity securities at a pre-money valuation of $1,000,000, or (ii) entered into binding agreements for hyperscaler datacenter development – the Seed Convertible Notes would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit that such equity securities were sold. Holders had voting rights on an as-converted basis. The Seed Convertible Notes were unsecured obligations and ranked equally in right of payment with each other and with all other unsecured debt of the Company, without any preference or priority among them. In connection with the Preferred Units issuance, all outstanding Seed Convertible Notes automatically converted into 30,572,796 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (see Note 3, Stockholders’ Equity). In June 2025, we issued the Series A Convertible Notes for an aggregate principal amount of $58,900. In July 2025, we issued additional Series A Convertible Notes for an aggregate principal amount of $16,600. The Series A Convertible Notes bore 15.0% simple interest, were payable in-kind, and matured in five years. At any time at the holder’s election, the Series A Convertible Notes were convertible into Class A Units at a conversion price of $1.33 per unit. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $150,000 through the issuance of equity securities at a pre-money valuation of at least $1,000,000, or (ii) entered into binding agreements for hyperscaler datacenter development – the Series A Convertible Notes would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit that such equity securities were sold. Holders had voting rights on an as-converted basis. The Series A Convertible Notes were secured by a first-priority security interest in certain turbines to be purchased by the Company and cash deposits and ranked senior to all unsecured indebtedness of the Company. In connection with the Preferred Units issuance, all holders elected to convert their Series A Convertible Notes into 58,437,945 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (See Note 3, Stockholders’ Equity). On July 29, 2025, in connection with the Company’s acquisition of Firebird Equipment Holdco, we issued the Series B Convertible Note for an aggregate principal amount of $145,000. The Series B Convertible Note bore 11.0% simple interest, was payable in-kind quarterly, and matured on January 31, 2026, unless earlier converted pursuant to its terms described herein. At any time at the holder’s election, the Series B Convertible Note was convertible into Class A Units at a conversion price equal to $3,000,000 divided by the Company’s fully diluted capitalization immediately prior to the conversion. Upon the occurrence of certain qualified events – specifically, either (i) an equity financing transaction in which the Company raised at least $150,000 through the issuance of equity securities at a pre-money valuation of at least $1,000,000, or (ii) entered into a binding agreement for hyperscaler data development – the Series B Convertible Note would automatically convert, at the holder’s election, into Class A Units or the class of equity securities issued upon the closing of such qualified event at a conversion price equal to the lowest price per unit at which such equity securities were sold. In the event of a change of control prior to the maturity date, the holder could elect to (i) receive a cash payment equal to 115.0% of the outstanding principal amount or (ii) convert the note into Class A Units at the conversion price, with any unconverted portion paid in cash equal to 15.0% of the principal amount. The holder had voting rights on an as-converted basis. The Series B Convertible Note was secured by a first-priority security interest in certain retained assets, including equipment to be purchased by the Company and ranked pari passu with all other Series B Convertible Notes. The note was subordinated to up to $150,000 of senior bank debt incurred in connection with, or following the closing of, the Siemens Contract and ranked senior to all of our unsecured debt. In connection with the Preferred Units Financing, the holder elected to convert the Series B Convertible Note into 28,777,021 Class A Units of Fermi LLC and, in connection with the Corporate Conversion, those Class A Units converted into shares of common stock (see Note 3, Stockholders’ Equity). Upon issuance, the Company elected to account for the Series B Convertible Note using the fair value option and initially recognized the Series B Convertible Note at a fair value of $117,000. Prior to their conversion on August 29, 2025, the Series B Convertible Note were remeasured at a fair value of $178,000 and the change in fair value of $61,000 was recorded in within the consolidated statement of operations. The Company measured the fair value of the Series B Convertible Note using an option pricing framework using Level 3 inputs like the Company’s fully operational value, probability of success, volatility, and probability and timing of potential exit events. On July 29, 2025, in connection with the Company’s acquisition of Firebird Equipment Holdco, we issued the Promissory Note for an aggregate principal amount of $20,000. The Promissory Note bore interest at a rate of 4.5% per annum, calculated on a simple interest basis, and matured on December 1, 2025. The Promissory Note was payable in monthly installments, with the first installment of $5,000 due and paid on July 29, 2025, and subsequent monthly installments of $2,500 each through December 2025. The Promissory Note was secured by a first-priority security interest in certain equipment and related assets, including rights under a contract for the supply of power generation equipment, and ranked senior to all unsecured debt of the Company. The Promissory Note may be prepaid at any time without penalty. Upon the occurrence of an event of default, all outstanding principal and accrued interest became immediately due and payable. As of December 31, 2025, the Company had fully repaid the Promissory Note. On August 29, 2025, we entered into a senior secured term loan agreement (the “Macquarie Term Loan”) with Macquarie. Pursuant to the Macquarie Term Loan, the Company received proceeds of $99,342, net of debt issuance costs, with an obligation to repay $148,986 upon maturity. The Macquarie Term Loan bears 1.0% interest, payable quarterly, and matures on August 29, 2026. Obligations under the Macquarie Term Loan are secured on a first-priority basis by equipment owned by the Company. The agreement allows both optional and lender-elected prepayments. Any repayment, whether scheduled, early, or due to acceleration, must include a premium that ensures lenders receive at least 1.50 times their original investment. Prepayments may be required at the lender’s election under certain circumstances, including after an IPO, which must be repaid within 150 days of completion. Prepayment may also be required if the Company makes certain asset sales or incurs debt that is not permitted under the agreement. If the Company defaults, the outstanding amounts accrue interest at a rate equal to the regular interest rate plus an additional 1.5% per month. As of December 31, 2025, the carrying value of the Macquarie Term Loan was $109,799, net of the debt discount and unamortized debt issuance costs. In addition, the Macquarie Term Loan contains customary events of default that entitle the lenders to cause any indebtedness under the Macquarie Term Loan to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Macquarie Term Loan. Under the Macquarie Term Loan, an event of default will occur if, among other things, the Company fails to make payments under the Macquarie Term Loan, the Company breaches any of the covenants under the Macquarie Term Loan, subject to specified cure periods with respect to certain breaches, the lenders determine that a material adverse change has occurred, or the Company or the Company’s assets become subject to certain legal proceedings, such as bankruptcy proceedings. Upon the occurrence and for the duration of an event of default, an additional default interest rate, equal to 1.0% per annum will apply to all obligations owed under the Macquarie Term Loan. The prepayment upon default and other potential additional interest provisions under the Macquarie Term Loan were determined to be an embedded derivative that was required to be bifurcated from the loan under ASC 815. Accordingly, a liability related to the embedded derivative was initially recognized, with a corresponding discount on the Macquarie Term Loan. The discount is subsequently amortized to interest expense over the term of the loan. The fair value of the bifurcated embedded derivative is determined as the difference in the values of the Macquarie Term Loan with and without the embedded derivative which are estimated using a discounted cash flow model based on Level 3 inputs including the discount rate, calibration discount, and the probability and estimated timing of an IPO. At the inception of the Macquarie Term Loan, the fair value of the embedded derivative was determined to be $5,500. The embedded derivative instrument was remeasured at fair value on September 30, 2025, with the change in fair value reported in other income (expense), net in the consolidated statement of operations. During the period from January 10, 2025 (Inception) through December 31, 2025, the Company recognized a $4,240 loss in other income (expense), net related to the change in fair value of the embedded derivative instrument. The Company reclassified the embedded derivative within the Macquarie Term Loan to other liabilities on September 30, 2025, as the instrument no longer met the definition of an embedded derivative under ASC 815. The fair value of the Macquarie Term Loan was approximately $145,899 as of December 31, 2025. For the period from January 10, 2025 (Inception) through December 31, 2025, we recognized interest income of $4,384 and interest expense of $652, respectively. The accrued and unpaid interest was capitalized into the outstanding principal balance of the Promissory Note each quarter, and interest did not accrue on any capitalized interest amounts. The total accrued interest on the Promissory Note of $224 was paid in cash through December 1, 2025, the date of the last principal repayment. The Promissory Note had an effective interest rate of 4.5% and the Macquarie Term Loan has an effective interest rate of 48.9%. As of December 31, 2025, accrued interest related to the Macquarie Term Loan totaled $16,302 and is reflected in debt, net on the consolidated balance sheet. All accrued interest on the Seed, Series A, and Series B Convertible Notes converted into Class A Units of Fermi LLC in connection with the Preferred Units Financing, and, in connection with the Corporate Conversion, those Class A Units converted into 117,787,762 shares of common stock. See Note 3, Stockholders’ Equity for further detail. As of December 31, 2025, the Company was in compliance with all material covenants under its debt agreements.
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