4. Revenue Recognition

Revenues from Contracts with Customers 

In October 2025, the Company, through its subsidiary Kyma Batteries LLC (“Kyma Batteries”) or its assignee entered into an asset management agreement (the “Asset Management Agreement” or the “DBD contract’) with BESS Rural Energy Cooperative LCA (the “Cooperative”) and DBD Express I, LLC (“DBD Express”) for the management of 101 utility scale batteries representing 241 megawatts of nameplate capacity (the “BESS Fleet” and each individual battery a "BESS Unit”) which DBD Express acquired from GridCore Infrastructure, LLC (“GridCore”) for approximately $216.9 million in 2025.

Asset Management and Deployment Services under DBD Contract

Asset management and deployment services are recognized monthly based on the number of BESS Units deployed to customers of DBD Express (the “End Customer”), and upon fulfillment of the Company’s monthly performance obligations under the DBD contract.

Performance Obligations under DBD Contract

The Company’s contractual performance obligations include performing monitoring and maintenance of the BESS Fleet, deployment of BESS Units to End Customer locations, End Customer support, and negotiation of rental agreements with End Customer, as defined in the respective contract and subject to approval by End Customer.

During the six months ended June 30, 2026, there were no revenues earned from the DBD contract, as no BESS Units were deployed during these periods.

Equity Instruments Issued as Consideration

In connection with the DBD contract, the Company issued the Cooperative warrants to purchase 62,312,964 Class A common shares of the Company (the “Warrants”) on December 30, 2025. The Warrants were accounted for under ASC 815 and ASU 2025-04 utilizing the Black Scholes valuation methodology, resulting in the Company recording a Contract Asset from the DBD contract of $2,394,598 on the accompanying condensed consolidated balance sheets. The Contract Asset will be amortized over the life of the DBD contract.

Battery Management and Monitoring System Contract

In September 2025, the Company entered into a master supply and services agreement (the “GridCore Agreement” or “Battery Management and Monitoring System Contract”) with GridCore whereby the Company would provide the design, manufacture and integration of its Software Platform on the BESS Fleet. The contract price was $97.2 million, of which the Company received a cash down payment of $10.6 million on September 11, 2025. The remaining purchase price of $86.6 million was paid in the form of a secured promissory note issued by GridCore (the “GridCore Note”) calling for semi-annual interest payments beginning in March 2026 and quarterly principal payments of $21.65 million beginning in December 2026, with the final payment due in September 2027. The Company received the first interest payment of approximately $1.7 million under the GridCore Note in March 2026.

Performance Obligations under Battery Management and Monitoring System Contract

The Company’s contractual performance obligations included delivery of the BESS Fleet and necessary Power Conversion Systems to a rental yard capable of charging the BESS Fleet, commission the Company’s Software Platform onto the BESS Fleet, and all other services necessary to achieve Final Acceptance and Placed-In Service status. The Company successfully delivered, installed, deployed and energized its Software Platform on the BESS Fleet during September 2025, establishing the Placed-In-Service date for the BESS Fleet, effectively satisfying the Company’s contractual obligations under the GridCore Agreement.