GRIDAI TECHNOLOGIES CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026


☐	TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

From the transition period from to

Commission File Number 001-37853

GRIDAI TECHNOLOGIES CORP.

(Exact name of registrant as specified in its charter)

Delaware

46-4993860

(State or other jurisdiction of

incorporation or organization)

(I.R.S Employer

Identification No.)


433 Plaza Real, Suite 275,
Boca Raton, Florida		33432
(Address of principal executive offices)		(Zip Code)

(561) 589-7020

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share	GRDX	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 7,131,123 shares of the registrant’s common stock, par value $0.0001 per share (the “Common Stock”), outstanding as of Aug 21, 2026.

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TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

Item 4.	Controls and Procedures	45

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

SIGNATURES

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “target”, “potential”, “will”, “would”, “could”, “should”, “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

●

our ability to maintain compliance with the applicable listing requirements of The Nasdaq Capital Market;

●

our ability to satisfy our existing payment obligations and other payment obligations as they become due, including those related to the acquisition of First Wave Bio, Inc. and the Grid AI acquisition, as well as risks and uncertainties associated with integrating Grid AI’s operations and meeting related financial commitments;

●

statements regarding the impact of geopolitical events, including the war in Ukraine and the Middle East, and their effects on our operations, access to capital, research and development and clinical trials and potential disruption in the operations and business of third-party vendors, contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”), other service providers, and collaborators with whom we conduct business;

●

the availability of capital to satisfy our working capital requirements;

●

our ability to execute definitive customer, project, development, software, licensing and other commercial agreements on the timing and terms anticipated;

●

our ability to successfully commercialize, deploy and scale the technologies and platforms of Grid AI Corp.;

●

our ability to convert existing and prospective customer and project opportunities into binding commercial agreements and ultimately into revenue;

●

our ability to achieve our projected revenue, margins, profitability, cash flows and other financial and operating results, including the timing and magnitude of the anticipated ramp-up in revenue from our AI Segment;

●

the accuracy of our assumptions and estimates regarding future customer demand, market opportunities, project capacity, commercialization timelines and the expected scale and economics of our AI and energy technology business;

●

our current and future capital requirements and our ability to raise additional funds to satisfy our capital needs;

●

the effects of the completed rescission of the IMGX transaction and the liabilities retained by the Company in connection therewith;

●

the accuracy of our estimates regarding expense, future revenue and capital requirements;

●

our ability to continue operating as a going concern;

●

our plans to develop and commercialize our product candidates, including Adrulipase,

●

our ability to initiate and complete our clinical trials and to advance our principal product candidates into additional clinical trials, including pivotal clinical trials, and successfully complete such clinical trials;

●

regulatory developments in the U.S. and foreign countries;

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●

the performance of our third-party vendor(s), CROs, CDMOs and other third-party non-clinical and clinical development collaborators and regulatory service providers;

●

our ability to obtain and maintain intellectual property protection for our core assets;

●

the size of the potential markets for our product candidates and our ability to serve those markets;

●

the rate and degree of market acceptance of our product candidates for any indication once approved;

●

the success of competing products and product candidates in development by others that are or become available for the indications that we are pursuing;

●

the loss of key scientific, clinical and nonclinical development, and/or management personnel, internally or from one of our third-party collaborators; and

●

other risks and uncertainties, including those listed under Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K.

Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K and for the reasons described elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our businesses and the markets in which we operate, including the markets for certain drugs and consumer products and the artificial intelligence, energy technology, data center infrastructure and grid optimization markets in which Grid AI Corp. and our AI Segment operate. Such information includes, among other things, data and assumptions regarding estimated market sizes and projected growth rates, the incidence of certain medical conditions, anticipated customer demand and adoption, commercialization opportunities, project development and deployment timelines, expected market opportunities, and other industry and market trends.

Certain information relating to our AI Segment and Grid AI Corp. also includes estimates, forecasts, projections and assumptions regarding the commercialization and deployment of our technology platforms and related software, energy optimization and data center infrastructure opportunities.

Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to significant uncertainties, risks and assumptions, and actual events, results or circumstances may differ materially from the events, results and circumstances reflected in such information. Unless otherwise expressly stated, we obtained industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources, as well as, where applicable, information provided by customers, prospective customers, project counterparties and other third parties. We have not independently verified data obtained from third-party sources. In some cases, we do not expressly refer to the sources from which these data are derived.

In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “GridAI,” the “Company,” “we,” “us,” “our” and similar references are to GridAI Technologies Corp. and its subsidiaries on a consolidated basis.

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PART I

FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. We have consolidated such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued by filing with the SEC.

These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the SEC on May 1, 2026.

The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026.

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GRIDAI TECHNOLOGIES CORP.

Condensed Consolidated Balance Sheets (unaudited)


	June 30,		December 31,
	2026		2025
	(unaudited)
ASSETS

Current Assets:
Cash and cash equivalents	$	1,379,721	$	899,784
Accounts receivable, net		79,578		29,974
Other current receivables		371,807		1,309,053
Other current assets		—		246,134
Prepaid expenses		468,078		110,934
Total Current Assets		2,299,184		2,595,879

Other Assets:
Developed technology, net		17,846,025		18,810,675
Customer relations, net		2,089,813		2,233,938
Trade name, net		752,025		792,675
Goodwill		14,048,553		24,118,676
Total Other Assets		34,736,416		45,955,964
Total Assets	$	37,035,600	$	48,551,843

LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	2,293,761	$	3,381,500
Accrued expenses		1,294,661		1,434,826
Due to related parties		251,887		267,512
Accrued dividend payable		1,811,250		1,647,820
Deferred consideration		6,250,000		6,250,000
Notes payable		1,676,361		2,027,184
Operating lease liabilities		135,609		135,609
Income tax payable		130,573		—
Common stock payable		202,900		—
Other current liabilities		98,837		14,870
Total Current Liabilities		14,145,839		15,159,321
Deferred tax liability		4,121,323		4,559,000
Total Liabilities		18,267,162		19,718,321

Mezzanine Equity:
Series G preferred stock- Par value $0.0001 per share; 13,000 shares designated; 596 and 596 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively.		3,890,626		3,890,626
Stockholders’ Equity:
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares authorized; 475.56 and 475.56 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively.		—		—
Series C preferred stock- Par value $0.0001 per share; 75,000 shares authorized; 0 shares issued and outstanding at June 30, 2026 and December 31, 2025.		—		—
Series D preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at June 30, 2026 and December 31, 2025.		—		—
Series E preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at June 30, 2026 and December 31, 2025.		—		—
Series F preferred stock- Par value $0.0001 per share; 7,000 shares designated; 0 shares issued and outstanding at June 30, 2026 and December 31, 2025.		—		—
Series H preferred stock- Par value $0.0001 per share, 38,801.546 shares designated; 38,801.546 and 38,801.546 shares issued and outstanding at June 30, 2026 and December 31, 2025.		4		4
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 6,913,198 and 4,224,146 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively.		691		422
Additional paid-in capital		239,708,042		228,558,107
Shareholder and subscription receivables		(4,363,499)		—
Accumulated deficit		(224,924,691)		(208,780,662)
Non-controlling interest		4,791,062		5,126,029
Accumulated other comprehensive income (loss)		(333,799)		38,996
Total Stockholders’ Equity		14,877,812		24,942,896
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	37,035,600	$	48,551,843

See accompanying notes to unaudited condensed consolidated financial statements

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GRIDAI TECHNOLOGIES CORP.

Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Revenue		$	85,876		$	—		$	124,084		$	—
Cost of services			122,390			—			774,338			—
Gross loss			(36,514)			—			(650,254)			—
Operating expenses:
Research and development expenses			8,424			10,631			639,804			26,458
Goodwill impairment			10,070,124			—			10,070,124			—
General and administrative expenses			2,991,698			628,233			5,361,076			1,433,791
Total operating expenses			13,070,246			638,864			16,071,004			1,460,249

Loss from operations			(13,106,760)			(638,864)			(16,721,258)			(1,460,249)

Other expenses:
Interest income (expense), net			(387,435)			(36,067)			(909,535)			(53,968)
Other income (expense), net			398,443			—			798,710			(108,818)
Total other income (expense)			11,008			(36,067)			(110,825)			(162,786)

Loss from continuing operations before income taxes		$	(13,095,752)		$	(674,931)		$	(16,832,083)		$	(1,623,035)

Income tax benefit			55,459			—			353,088			—
Loss from continuing operations		$	(13,040,293)		$	(674,931)		$	(16,478,995)		$	(1,623,035)

Loss from discontinued operations net of tax			—			(323,340)			—			(634,855)
Net loss		$	(13,040,293)		$	(998,271)		$	(16,478,995)		$	(2,257,890)
Net loss attributable to non-controlling interests			(221,221)			—			(334,967)			—
Preferred stock dividends			(82,165)			(82,165)			(163,427)			(163,428)
Net loss applicable to common shareholders		$	(12,901,237)		$	(1,080,436)		$	(16,307,455)		$	(2,421,318)

Weighted average shares outstanding, basic and diluted			6,419,222			4,765,004			5,796,241			4,765,004
Loss per share, basic and diluted		$	(2.01)		$	(0.23)		$	(2.81)		$	(0.51)
Loss per share from discontinued operations, basic and diluted		$	—		$	(0.07)		$	—		$	(0.13)


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Net loss		$	(13,040,293)		$	(998,271)		$	(16,478,995)		$	(2,257,890)
Other comprehensive loss - foreign currency translation adjustment		$	(383,133)		$	—		$	(372,795)		$	—
Comprehensive loss		$	(13,423,426)		$	(998,271)		$	(16,851,790)		$	(2,257,890)

See accompanying notes to unaudited condensed consolidated financial statements

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GRIDAI TECHNOLOGIES CORP.

Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders’ Equity (Deficit) (unaudited)

For the Three Months Ended June 30, 2026


		Series G Convertible					Series B Convertible					Series H Convertible										Shareholder and			Additional						Non			Accumulated			Total
		Preferred Stock					Preferred Stock					Preferred Stock					Common Stock					subscription			Paid In			Accumulated			Controlling			Other Comprehensive			Stockholders’
		Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount			receivable			Capital			Deficit			Interest			Income (Loss)			Equity
Balance, March 31, 2026		596		$	3,890,626		476		$	—		38,802		$	4		6,108,264		$	610		$	(163,500)		$	230,808,909		$	(212,105,618)		$	5,012,283		$	49,334		$	23,602,023
Deemed dividend of Series B preferred stock		—			—		—			—		—			—		—			—			—			(82,165)			—			—			—			(82,165)
Issuance of common stock for exercise of warrants		—			—		—			—		—			—		136,562			14			—			148,839			—			—			—			148,853
Issuance of common stock on exercise of pre-funded warrants		—			—		—			—		—			—		105,000			10			—			(10)			—			—			—			—
Issuance of common stock in settlement of accounts payable		—			—		—			—		—			—		80,629			8			—			227,722			—			—			—			227,730
Issuance of common stock in settlement of accrued interest on revolving loan		—			—		—			—		—			—		71,482			7			—			232,308			—			—			—			232,315
Issuance of common stock, pre-funded warrants and warrants in private placements, net of subscriptions receivable		—			—		—			—		—			—		161,260			16			(4,199,999)			7,789,966			—			—			—			3,589,983
Stock based compensation - RSU		—			—		—			—		—			—		250,000			25			—			582,475			—			—			—			582,500
Other comprehensive income (loss) - foreign currency translation adjustment		—			—		—			—		—			—		—			—			—			—			—			—			(383,133)			(383,133)
Net income (loss)		—			—		—			—		—			—		—			—			—			—			(12,819,072)			(221,221)			—			(13,040,293)
Balance, June 30, 2026		596		$	3,890,626		476		$	—		38,802		$	4		6,913,198		$	691		$	(4,363,499)		$	239,708,042		$	(224,924,691)		$	4,791,062		$	(333,799)		$	14,877,812

For the Three Months Ended June 30, 2025


		Series G Convertible					Series B Convertible					Series H Convertible										Additional						Total
		Preferred Stock					Preferred Stock					Preferred Stock					Common Stock					Paid In			Accumulated			Stockholders’ Equity
		Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount			Capital			Deficit			(Deficit)
Balance, March 31, 2025		12,373		$	61,681,100		476		$	—		—		$	—		1,588,576		$	160		$	198,429,849		$	(203,647,628)		$	(5,217,619)
Deemed dividend of Series B preferred stock		—			—		—			—		—			—		—			—			(82,165)			—			(82,165)
Net income (loss)		—			—		—			—		—			—		—			—			—			(998,270)			(998,270)
Balance, June 30, 2025		12,373		$	61,681,100		476		$	—		—		$	—		1,588,576		$	160		$	198,347,684		$	(204,645,898)		$	(6,298,054)

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For the Six Months Ended June 30, 2026


		Series G Convertible					Series B Convertible					Series H Convertible										Shareholder and			Additional						Non			Accumulated			Total
		Preferred Stock					Preferred Stock					Preferred Stock					Common Stock					subscription			Paid In			Accumulated			Controlling			Other Comprehensive			Stockholders’
		Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount			receivable			Capital			Deficit			Interest			Income (Loss)			Equity
Balance, December 31, 2025		596		$	3,890,626		476		$	—		38,802		$	4		4,224,147		$	422		$	—		$	228,558,107		$	(208,780,662)		$	5,126,029		$	38,996		$	24,942,896
Deemed dividend of Series B preferred stock		—			—		—			—		—			—		—			—			—			(163,427)			—			—			—			(163,427)
Issuance of common stock for services		—			—		—			—		—			—		45,000			4			—			159,746			—			—			—			159,750
Issuance of common stock for exercise of warrants		—			—		—			—		—			—		1,303,063			130			(163,500)			1,420,297			—			—			—			1,256,927
Issuance of common stock from vested RSUs		—			—		—			—		—			—		160,000			16			—			(16)			—			—			—			—
Issuance of common stock on exercise of pre-funded warrants		—			—		—			—		—			—		367,617			37			—			(37)			—			—			—			—
Issuance of common stock in settlement of accounts payable		—			—		—			—		—			—		80,629			8			—			227,722			—			—			—			227,730
Issuance of common stock in settlement of accrued interest on revolving loan		—			—		—			—		—			—		71,482			7			—			232,308			—			—			—			232,315
Issuance of common stock, pre-funded warrants and warrants in private placements, net of subscriptions receivable		—			—		—			—		—			—		161,260			16			(4,199,999)			7,789,966			—			—			—			3,589,983
Stock based compensation - RSU		—			—		—			—		—			—		500,000			50			—			1,164,950			—			—			—			1,165,000
Issuance of warrants related to promissory note		—			—		—			—		—			—		—			—			—			318,428			—			—			—			318,428
Other comprehensive income (loss) - foreign currency translation adjustment		—			—		—			—		—			—		—			—			—			—			—			—			(372,795)			(372,795)
Net income (loss)		—			—		—			—		—			—		—			—			—			—			(16,144,028)			(334,967)			—			(16,478,995)
Balance, June 30, 2026		596		$	3,890,626		476		$	—		38,802		$	4		6,913,198		$	691		$	(4,363,499)		$	239,708,042		$	(224,924,691)		$	4,791,062		$	(333,799)		$	14,877,812

For the Six Months Ended June 30, 2025


		Series G Convertible					Series B Convertible					Series H Convertible									Additional						Total
		Preferred Stock					Preferred Stock					Preferred Stock				Common Stock					Paid In			Accumulated			Stockholders’ Equity
		Shares		Amount			Shares		Amount			Shares		Amount		Shares		Amount			Capital			Deficit			(Deficit)
Balance, December 31, 2024 - post reverse stock split		12,373		$	61,681,100		476		$	—		—		$	—	1,584,679		$	159		$	198,511,111		$	(202,388,008)		$	(3,876,738)
Deemed dividend of Series B preferred stock		—			—		—			—		—			—	—			—			(81,263)			—			(81,263)
Issuance of common stock from RSU vest		—			—		—			—		—			—	3,897			—			—			—			—
Net income (loss)		—			—		—			—		—			—	—			—			—			(1,259,620)			(1,259,620)
Deemed dividend of Series B preferred stock		—			—		—			—		—			—	—			—			(82,165)			—			(82,165)
Net income (loss)		—			—		—			—		—			—	—			—			—			(998,270)			(998,270)
Balance, June 30, 2025		12,373		$	61,681,100		476		$	—		—		$	—	1,588,576		$	160		$	198,347,684		$	(204,645,898)		$	(6,298,054)

See accompanying notes to unaudited condensed consolidated financial statements

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GRIDAI TECHNOLOGIES CORP.

Condensed Consolidated Statements of Cash Flows (unaudited)


		Six Months Ended June 30,
		2026			2025
Cash flows from operating activities:
Net loss		$	(16,478,995)		$	(2,257,890)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets		$	1,149,426		$	—
Amortization of debt discount		$	688,226		$	—
Goodwill impairment		$	10,070,124		$	—
Stock-based compensation		$	1,324,750		$	—
Change in right-of-use assets		$	—		$	17,994
Impairment of right-of-use assets		$	—		$	108,759
Changes in assets and liabilities:
Trade receivable		$	(49,604)		$	—
Other current assets		$	937,246		$	—
Prepaid expenses		$	(357,144)		$	1,160
Lease liabilities		$	—		$	(4,925)
Deposits		$	—		$	49,129
Deferred tax liability		$	(437,677)		$	—
Accounts payable		$	(860,009)		$	339,199
Accrued expenses		$	92,150		$	163,396
Other current liabilities		$	83,967		$	—
Other operating assets and liabilities, net		$	545,969		$	709,665

Net cash used in operating activities		$	(3,291,571)		$	(873,513)

Cash flows from financing activities:
Proceeds from issuance of common stock, pre-funded warrants and warrants, net		$	3,289,983		$	—
Repayment of revolving loan principal		$	(700,000)		$	—
Proceeds from promissory notes		$	999,000		$	700,000
Proceeds from warrant exercises		$	555,320		$	—
Net cash provided by financing activities		$	4,144,303		$	700,000
Effect of exchange rate changes on cash		$	(372,795)		$	—
Net increase (decrease) in cash, cash equivalents and restricted cash		$	479,937		$	(173,513)
Cash, cash equivalents and restricted cash, beginning balance		$	899,784		$	184,992
Cash, cash equivalents and restricted cash, ending balance		$	1,379,721		$	11,479
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		$	1,379,721		$	4,474
Restricted cash		$	—		$	7,005
Cash, cash equivalents and restricted cash		$	1,379,721		$	11,479
Supplemental disclosures of cash flow information:

Non-cash investing and financing activities:
Accrued dividends on Series B preferred stock		$	163,427		$	163,428
Warrants granted with promissory notes		$	318,428		$	—
Promissory notes settled for warrant exercises		$	701,780		$	—
Shareholder receivable related to warrant exercises		$	163,500		$	—
Subscription receivable related to private placements		$	4,199,999		$	—
Common stock issued in settlement of accounts payable		$	227,730		$	—
Common stock issued in settlement of accrued interest on revolving loan		$	232,315		$	—

Promissory note settled in connection with May 2026 private placement		$	300,000		$	—

See accompanying notes to unaudited condensed consolidated financial statements

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GRIDAI TECHNOLOGIES CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2026 and December 31, 2025, and for the Three and Six Months Ended June 30, 2026 and 2025

Note 1 - The Company and Basis of Presentation

The Company

GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.) (the “Company”) and its wholly-owned subsidiary, GridAI Corp., are collectively referred to as the “Company.” Historically, the Company focused on the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

In May 2024, the Company previously changed its name from First Wave Biopharma, Inc. to Entero Therapeutics, Inc. The Company’s historical development pipeline consisted of gut-restricted GI clinical drug candidates, including the biologic Adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients. The Company is evaluating strategic alternatives related to its historical gastrointestinal therapeutic assets while continuing development activities related to Adrulipase.

The Company terminated its license agreement with Sanofi on February 26, 2025, and no further payments have been made related to its Capeserod program, a selective 5-HT4 receptor partial agonist. The Company is also exploring strategic alternatives for its Niclosamide program, an oral small molecule with antiviral and anti-inflammatory properties.

On September 30, 2025, the Company completed a share exchange transaction with GridAI Corp., a Nevada corporation (“GridAI”), and the stockholders of GridAI (the “Sellers”), pursuant to which GridAI became a wholly-owned subsidiary of the Company (the “GridAI Acquisition”). Following the GridAI Acquisition, the Company expanded its operations to include an artificial intelligence-driven energy technology platform focused on distributed energy resource optimization and grid-edge applications. In connection with the GridAI Acquisition, the Company subsequently changed its corporate name from Entero Therapeutics, Inc. to GridAI Technologies Corp. on October 1, 2025.

Pursuant to the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of GridAI in exchange for (i) an aggregate of 424,348 shares of the Company’s common stock, representing 19.99% of the issued and outstanding shares of common stock as of the date of entry into the Share Exchange Agreement, and (ii) 38,801.546 shares of the Company’s Series H Non-Voting Convertible Preferred Stock, having such rights and preferences as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series H Non-Voting Convertible Preferred Stock filed with the Delaware Secretary of State on October 1, 2025. The Series H Non-Voting Convertible Preferred Stock is convertible into an aggregate of 38,801,546 shares of the Company’s common stock, subject to stockholder approval and certain conditions and adjustments as set forth in the Certificate of Designation.

See Note 3 – Business Combination – GridAI Acquisition for additional information regarding the transaction.

As of December 31, 2025, the Company’s consolidated subsidiaries include First Wave Bio, Inc., GridAI Corp., AMPX UK Holdings, and AMPX Limited. AMPX UK Holdings is a majority-owned subsidiary of the Company and is the parent of AMPX Limited. These entities are included in the Company’s condensed consolidated financial statements.

The Company is also engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

Risks and Uncertainties

The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use as In-Process Research and Development (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with ImmunogenX, LLC (“IMGX”) which included intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). The IMGX transaction was subsequently rescinded on December 31, 2025, and the Company no longer holds the related intellectual property or patents.

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As of June 30, 2026, the Company’s intangible assets primarily relate to technologies and intellectual property acquired in connection with the GridAI transaction. Intangible assets related to IPR&D are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written off, and the Company will record a noncash impairment loss in its Consolidated Statements of Operations. For those technologies that reach commercialization, the related intangible assets will be amortized over their estimated useful lives.

For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

As of June 30, 2026, the Company had cash and cash equivalents of approximately $1.4 million, a working capital deficit of approximately $11.8 million, and an accumulated deficit of approximately $224.9 million.

The Company has been, and is expected to continue, exploring various potential strategies available including but not limited to raising capital, restructuring its indebtedness and identifying and evaluating potential strategic alternatives but there can be no assurance that these efforts will be successful, that the Company will be able to raise necessary capital on acceptable terms, reach agreement with lenders, or that the strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. The Company is evaluating all potential strategic options, including a merger, reverse merger, sale, wind-down, liquidation and dissolution or other strategic transaction. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stakeholder value or that it will make any cash distributions to stockholders. Any failure in these efforts could force the Company to delay, limit or terminate operations, make reductions in its workforce, discontinue research and development programs, liquidate all or a portion of assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. If the Company is not able to obtain necessary capital, it may be required to terminate operations, liquidate all or a portion of assets and/or seek bankruptcy protection. As a result, the Company concluded that its plans at this stage do not alleviate substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of Grid AI and its wholly owned subsidiaries and First Wave Biopharma, Inc. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of our management, the accompanying unaudited condensed consolidated financial statements of Grid AI, and it’s subsidiaries, included herein have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Act. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Filed with SEC on May 1, 2026. The consolidated Balance Sheet as of December 31, 2025 was derived from the audited financial statements included in Company’s Annual Report on Form 10-K

The interim results for the six months ended June 30, 2026 are not necessarily indicative of the results expected for the fiscal year.

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Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Segment Information

The Company operates through two operating segments: (i) its legacy biopharmaceutical business focused on the research and development of gastrointestinal therapeutic candidates, and (ii) its GridAI business, which focuses on the development and commercialization of artificial intelligence-driven energy optimization platforms and technologies.

The Chief Executive Officer (“CEO”), as the Company’s chief operating decision maker, reviews financial information and allocates resources between these two operating segments based on their respective business activities, strategic priorities, and capital requirements. This approach enables the CEO to assess the performance of each segment and make decisions regarding resource allocation and strategic direction.

Reverse Stock Split

On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock split referenced above.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less from date of purchase to be cash equivalents. A portion of the Company’s cash and cash equivalents is held by foreign subsidiaries and is denominated in foreign currencies, including British Pound Sterling, Czech Koruna and Australian Dollar.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. In addition, the Company maintains cash balances in foreign financial institutions in jurisdictions in which it operates, including the United Kingdom and the Czech Republic. The Company may from time to time have cash in banks in excess of FDIC insurance limits. Cash held outside the United States may not be subject to U.S. federal deposit insurance and may be subject to foreign exchange risk and local regulatory restrictions. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Equity-Based Payments to Non-Employees

Equity-based payments to non-employees are measured at fair value on the grant date per ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.

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Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. During the three and six months ended June 30, 2026, the Company performed a quantitative goodwill impairment assessment and recognized a goodwill impairment charge of approximately $0 and $10.1 million, respectively. No goodwill impairment charge was recognized during the three or six months ended June 30, 2025. See Note 7.

Digital Assets

The Company is evaluating the planned acceptance of stable-coins as a form of consideration in future transactions. Under U.S. GAAP, digital assets similar to stable-coins are potentially classified within the scope of ASU 2023-08 (ASC 350-60, Crypto Assets) and would be measured at fair value with changes recognized in earnings. Digital assets that do not meet the scope criteria would continue to be accounted for as indefinite-lived intangible assets under ASC 350 and measured at cost, less impairment. The Company is currently assessing the appropriate classification and measurement for any such digital assets based on their specific characteristics. As of June 30, 2026, the Company did not hold any stable-coins or other in-scope crypto assets.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. The recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through June 30, 2026.

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Income Taxes

Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company operates in foreign jurisdictions, primarily in the United Kingdom, through its AMPX subsidiaries. The Company accounts for income taxes in these jurisdictions in accordance with ASC 740, including the recognition of deferred tax assets and liabilities based on local tax laws and enacted rates. Deferred tax liabilities arising from taxable temporary differences in foreign jurisdictions are evaluated in conjunction with available net operating loss carryforwards and other tax attributes. In certain foreign jurisdictions, net operating loss carryforwards are available to offset deferred tax liabilities, and accordingly, no valuation allowance has been recorded where such offsets are expected to be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740. When uncertain tax positions exist, the Company recognizes a tax benefit only to the extent that the position is more likely than not to be sustained based on its technical merits and the available facts and circumstances. As of June 30, 2026 and December 31, 2025, the Company did not have any significant uncertain tax positions.

Leases

Leases are recorded on the balance sheet as right of use assets and lease obligations. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a term of 12 months or less at inception are expensed monthly over the lease term. The lease term is determined by assuming the exercise of renewal options that are reasonably certain. The implicit interest rate or the incremental borrowing rate is used in determining the present value of future payments.

Loss Per Share

Basic loss or earnings per share (“EPS”) is computed by dividing the loss attributable to common shareholders by the weighted average number of shares of Common Stock outstanding. Diluted EPS reflects the potential dilution that could occur from shares of Common Stock issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options is excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.

The dilutive effect of stock options and warrants is determined using the treasury stock method. Stock options, warrants, pre-funded warrants and other potentially dilutive securities were not included in the computation of diluted earnings per share for the periods presented because the Company incurred losses and their effect would have been anti-dilutive. See Note 19.

Research and Development

The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use, as In-Process R&D (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with IMGX which included the intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). Subsequent to the acquisition, the Company rescinded the IMGX transaction, which was completed on December 31, 2025. As a result, the Company no longer holds the related intellectual property or patents and derecognized associated assets of approximately $63.4 million.

Intangible assets related to IPR&D are considered definite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off, and the Company will record a noncash impairment loss on its Condensed Consolidated Statements of Operations. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. The impairment test for indefinite-lived intangible assets is a one-step test that compares the fair value of the intangible asset to its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.

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Following the acquisition of Grid AI Corp. on September 30, 2025, the Company’s research and development activities also include technology and platform development related to energy optimization and digital infrastructure solutions. Costs associated with these activities, primarily consisting of professional fees and personnel-related expenses, are expensed as incurred. During the quarter ended June 30, 2026, certain of these costs were classified within research and development expense, while other costs continued to be classified within operating expenses based on their nature.

For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

Assets Held for Sale and Discontinued Operations

Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. A newly acquired business in a business combination that has met the held for sale criteria should be measured at fair value less costs to sell. This is because the business has been recently acquired and its carrying value has been adjusted to its fair value. Depreciation and amortization of assets cease upon designation as held for sale.

Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes, and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements.

As of June 30, 2026, the Company does not have any assets or liabilities classified as held for sale and has not presented any discontinued operations.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

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Energy generation revenue

Energy generation revenue is generated primarily from contracts with various non-affiliated parties under long-term power purchase agreements (“PPAs”) or feed-in tariffs. The Company recognizes energy revenue when persuasive evidence of an arrangement exists, and energy has been generated and transmitted to the grid. The price of energy is fixed or determinable and the collectability of the resulting receivable is reasonably assured.

Engineering, procurement & construction (“EPC”) revenue

The Company recognizes revenue for sale of EPC and development services over time based on the estimated progress to completion using a cost-based input method. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize.

Cost-based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy EPC and development services contracts and, therefore, reflect the transfer of goods or services to a customer under such contracts. Costs incurred towards contract completion may include costs associated with direct materials, labor, subcontractors, and other indirect costs related to contract performance.

Management fee and other revenues

Operation and maintenance (“O&M”) services are transferred over time when customers receive and consume the benefits provided by the Company’s performance under the terms of service arrangements. Revenues from O&M services are recognized when the work completed to date does not require re-performances and the costs of O&M services are expensed when incurred.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for expected credit losses based on management’s assessment of collectability, historical experience, current conditions and reasonable and supportable forecasts in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”). As of June 30, 2026, December 31, 2025 and December 31, 2024, the Company did not record an allowance for credit losses. Accounts receivable balances were $79,578, $29,974 and $0 as of June 30, 2026, December 31, 2025 and December 31, 2024, respectively. Management evaluated the $79,578 balance at June 30, 2026 and determined that no write-off or allowance was required.

Prepaid Expenses

Prepaid expenses include $250,000 paid to Aldersgate Capital Partners Ltd. on May 29, 2026 under a 12-month capital markets advisory engagement. The amount is being recognized over the contractual service period and is not a placement or finder’s fee related to the May 2026 private placements.

Notes Payable and Warrants

The Company accounts for notes payable in accordance with applicable guidance under ASC 470, Debt. Notes payable are initially recorded at their principal amount, net of any discounts, and are subsequently measured at amortized cost using the effective interest method.

In connection with certain financing arrangements, the Company has issued warrants to purchase its common stock. The Company evaluates such warrants to determine whether they should be classified as equity or as a liability in accordance with ASC 480 and ASC 815. Warrants that meet the criteria for equity classification are recorded in additional paid-in capital, while warrants that require liability classification are recorded at fair value with changes in fair value recognized in earnings.

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Foreign Currency

The Company’s functional currency is the U.S. dollar. For foreign subsidiaries, the functional currency is generally the local currency. The Company operates through subsidiaries in multiple jurisdictions, including the United Kingdom, Czech Republic, and Australia, whose functional currencies are primarily the British Pound Sterling, Czech Koruna, and Australian Dollar, respectively. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date, while income and expense accounts are translated at average exchange rates during the period. Resulting translation adjustments are recorded in accumulated other comprehensive income (loss), a component of stockholders’ equity.

Foreign currency transaction gains and losses are recognized in the condensed consolidated statements of operations as incurred and are included within Other income (expense), net. Transactions denominated in currencies other than the functional currency are recorded at the exchange rate in effect at the date of the transaction, and monetary assets and liabilities are remeasured at exchange rates in effect at the reporting date, with resulting gains and losses recognized in earnings.

Recent Accounting Pronouncements

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). ASU 2025-04 revises the definition of “performance condition” for share-based consideration payable to a customer, removes the policy election to account for forfeitures as they occur for awards with service conditions, and clarifies that ASC 606 variable consideration guidance does not apply to such awards. This guidance is effective for the Company beginning in the first quarter of 2027, with early adoption permitted, and may be applied on a modified retrospective or retrospective basis. The Company does not currently issue share-based consideration to customers and does not expect the adoption of ASU 2025-04 to have a material impact, but will continue to monitor for applicability.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) (“ASU 2025-03”), which clarifies the requirements for determining the accounting acquirer in the acquisition of a variable interest entity. ASU 2025-03 is effective beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of ASU 2025-03, however, does not expect it to have a material impact on its financial statements.

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 additional disclosures of specified expense categories, qualitative descriptions of remaining amounts in expense captions, and disclosure of selling expenses and the Company’s definition thereof. This guidance is effective for the Company beginning with the 2027 annual report, with early adoption permitted. The Company is evaluating its reporting processes to ensure compliance with the new disclosure requirements.

Management has reviewed the above standards and, based on the Company’s current operations and transactions, does not expect their adoption to have a material impact on the Company’s condensed consolidated financial statements.

The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

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Note 3 – Business Acquisitions

IMGX Acquisition

On March 13, 2024, the Company acquired ImmunogenX, Inc. (“IMGX”) pursuant to an Agreement and Plan of Merger. The transaction was accounted for as a business combination under ASC 805, with the Company identified as the accounting acquirer.

On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to a Rescission Agreement, as amended. As a result of the rescission, the Company no longer holds the assets and liabilities associated with IMGX, and IMGX is no longer a subsidiary of the Company. The Company also cancelled substantially all of the equity consideration previously issued in connection with the IMGX acquisition, including the applicable shares of common stock, Series G Preferred Stock, assumed options and assumed warrants.

As of June 30, 2026, the Company had no assets or liabilities classified as held for sale related to IMGX. See Note 4 - Discontinued Operations and Assets Held for Sale.

Acquisition of Grid AI Corp.

On September 30, 2025, the Company completed the acquisition of Grid AI Corp. (“Grid AI”), a Nevada corporation, pursuant to a Share Exchange Agreement dated September 30, 2025, by and among the Company and the shareholders of Grid AI. Under the terms of the agreement, the shareholders of Grid AI transferred all of the issued and outstanding shares of Grid AI to the Company in exchange for equity interests of the Company.

The acquisition of Grid AI was undertaken to expand the Company’s operations into AI-driven energy optimization, distributed energy resource management, battery storage and energy orchestration solutions.

At closing, the Company issued to the sellers 424,348 shares of common stock and 38,801.546 shares of Series H Non-Voting Convertible Preferred Stock. The Series H Preferred Stock is convertible into an aggregate of not less than 38,801,546 shares of common stock, subject to stockholder approval, achievement of specified milestones and other conditions and adjustments set forth in the applicable certificate of designation.

The combined fair value of the equity consideration issued to the sellers was estimated at approximately $27.1 million, consisting of approximately $2.1 million attributable to the common stock issued and approximately $25.0 million attributable to the Series H Preferred Stock. The Company also recognized a non-controlling interest of approximately $5.3 million, representing the estimated fair value of the 25% ownership interest in AMPX UK Holdings not owned directly or indirectly by the Company. No cash consideration was paid.

Transaction costs related to the acquisition were not material and were expensed as incurred.

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Purchase Price Allocation

The transaction was accounted for under the acquisition method of accounting in accordance with ASC 805. The preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:


Assets acquired:
Cash and cash equivalents	$	332,969
Trade receivable and other current assets		381,561
Prepaid expenses		11,125
Subscription receivable		447,935
Developed technology		19,293,000
Customer relationships		2,306,000
Trade name		813,000
Total assets	$	23,585,590
Liabilities assumed:
Accounts payable		1,079,668
Tax payable		71,140
Deferred consideration		7,000,000
Notes payable		310,000
Due to related parties		269,898
Deferred tax liability		4,892,262
Total liabilities	$	13,622,968
Goodwill recorded:
Goodwill	$	22,434,494
Net assets acquired	$	32,397,116

The purchase price allocation remains preliminary and subject to adjustment during the measurement period, which extends through September 30, 2026. During the measurement period, the Company may record adjustments to the provisional amounts recognized for assets acquired and liabilities assumed based on additional information obtained about facts and circumstances that existed as of the acquisition date. No measurement period adjustments were recorded during the six months ended June 30, 2026.

The excess of the fair value of the consideration transferred over the fair value of the identifiable net assets acquired was recorded as goodwill of approximately $22.4 million. The goodwill recognized is primarily attributable to expected synergies from integrating Grid AI’s operations with the Company’s existing platform, including anticipated growth in AI-driven energy optimization solutions, expansion into new markets, workforce expertise, and assembled workforce, which do not qualify for separate recognition as intangible assets. None of the goodwill is expected to be deductible for tax purposes.

All intangible assets acquired are subject to amortization and their associated estimated acquisition date fair values are as follows:


		Estimated		Acquisition Date
Intangible Asset		Useful Life		Fair Value
Developed technology		10 years		$	19,293,000
Customer relationships		8 years		$	2,306,000
Trade name		10 years		$	813,000

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Note 4 – Discontinued Operations, Assets Held for Sale

The Company previously completed a merger with ImmunogenX, LLC (“IMGX”) and, during the year ended December 31, 2024, initiated a plan to dispose of certain IMGX assets and liabilities. As a result, such assets and liabilities were classified as held for sale and the results of IMGX were presented as discontinued operations.

As of June 30, 2026, the Company had no assets or liabilities classified as held for sale and had no discontinued operations related to IMGX.

The following table summarizes the Company’s loss from discontinued operations:


		Six Months Ended			Six Months Ended
		June 30,			June 30,
		2026			2025
Operating expenses:
Research and development expenses		$	—			—
General and administrative expenses			—			—
Total operating expenses			—			—
Interest expense			—			(634,855)
Other (expense) income			—			—
Loss from discontinued operations		$	—			(634,855)

As of June 30, 2026, the Company had no assets or liabilities classified as held for sale. Assets and liabilities held for sale as of June 30, 2025 were as follows:


		2026		2025
Assets held for sale:
Prepaid expenses and other current assets		$	—	3,131,929
Property and equipment, net			—	16,180
Goodwill and intangible assets			—	80,021,900
Total assets held for sale		$	—	83,170,009
Liabilities held for sale:
Accounts payable		$	—	141,906
Accrued expenses and other current liabilities			—	2,804,810
Debt			—	6,403,737
Deferred tax liability			—	13,872,684
Total liabilities held for sale		$	—	23,223,137

As of December 31, 2025, the Company completed the rescission of the IMGX transaction and derecognized the related assets and liabilities previously classified as held for sale.

Note 5 - Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. The carrying value of the deferred consideration and note payable approximates their fair value as of June 30, 2026.

At June 30, 2026 and December 31, 2025, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

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Note 6 – Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements consisted of the following:


		June 30,			December 31,
		2026			2025
Computer equipment and software		$	11,540		$	11,540
Office equipment			48,278			48,278
Leasehold improvements			28,000			28,000
Total property, plant, and equipment			87,818			87,818
Less accumulated depreciation			(87,818)			(87,818)
Property, plant and equipment, net		$	—		$	—

Depreciation expense was $0 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Note 7 – Goodwill

Goodwill is as follows:


Balance on December 31, 2024	$	1,684,182
Goodwill associated with Grid AI acquisition		22,434,494
Balance at December 31, 2025	$	24,118,676
Goodwill impairment charge during the six months ended June 30, 2026		(10,070,124)
Balance at June 30, 2026	$	14,048,553

The goodwill recognized in connection with the Grid AI acquisition is primarily attributable to expected synergies from integrating Grid AI’s operations with the Company’s existing platform, including anticipated growth in AI-driven energy optimization solutions, expansion into new markets, and assembled workforce.

The Company’s goodwill is associated with its acquisition of Grid AI Corp. During the six months ended June 30, 2026, the Company identified a triggering event as actual operating performance and updated near-term financial projections were significantly below the projections established at the acquisition date, primarily due to delays in commercialization and customer contract execution. As a result, the Company performed a quantitative goodwill impairment assessment and recognized a goodwill impairment charge of approximately $10.1 million as of June 30, 2026.

The impairment primarily reflects a delay in the timing of projected revenue and cash flows, rather than a fundamental change in the expected long-term performance of the Grid AI business. Although the anticipated revenue and profitability ramp-up has been deferred, management continues to believe that the long-term revenue levels and commercial potential contemplated in the original projections remain achievable.

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Note 8 – Intangible Assets

The following identifiable intangible assets were recognized as part of the Grid AI acquisition and are not classified as held for sale. These assets are amortized on a straight-line basis over their estimated useful lives:


		Estimated		June 30,
		Useful Life		2026
Developed Technology		10 years		$	19,293,000
Less: accumulated amortization					(1,446,975)
Developed Technology, net				$	17,846,025
Customer Relationships		8 years		$	2,306,000
Less: accumulated amortization					(216,187)
Customer Relations, net				$	2,089,813
Trade Name		10 years		$	813,000
Less: accumulated amortization					(60,975)
Trade Name, net				$	752,025


		Estimated
Year ending December 31,		Amortization Expense
2026			1,149,425
2027			2,298,850
2028			2,298,850
2029			2,298,850
2030 and thereafter			12,641,888
Total		$	20,687,863

Amortization expense related to intangible assets was approximately $1.1 million for the six months ended June 30, 2026. No impairment of the Company’s finite-lived intangible assets was recognized as of June 30, 2026.

Note 9 - Accrued Expenses

Accrued expenses consisted of the following:


		June 30,			December 31,
		2026			2025
Professional fees			576,245			1,138,207
Consulting			617,514			84,717
Accrued interest			—			111,000
Lease obligation fee			100,902			100,902
Total accrued expenses		$	1,294,661		$	1,434,826

Note 10 – Capital Stock

The Company’s certificate of incorporation, as amended and restated, authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock were converted automatically into one issued and outstanding share of common stock, without any change in the number of authorized shares of common stock or the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock split referenced above.

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Common Stock

The Company had 6,913,198 and 4,224,146 shares of common stock issued and outstanding at June 30, 2026 and December 31, 2025, respectively.

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders. The Company’s certificate of incorporation and amended and restated bylaws do not provide for cumulative voting rights.

The holders of common stock are entitled to receive dividends, if any, as may be declared by the Board out of legally available funds. Upon liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in all assets legally available for distribution after payment of liabilities and satisfaction of any preferential rights of outstanding preferred stock.

Holders of common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock that the Company may designate and issue.

Common Stock Payable

As of June 30, 2026, common stock payable of $202,900 related to LMC Communications Inc. under a consulting arrangement. Subsequent to June 30, 2026, the Company issued 50,000 shares of common stock to LMC Communications Inc. in settlement of this obligation, as further disclosed in Note 22.

Preferred Stock

The Board of Directors is authorized to divide the preferred stock into any number of series, fix the designation and number of shares of each series, and determine or change the designation, relative rights, preferences and limitations of any series of preferred stock.

Series B Preferred Stock

On July 16, 2020, the Company designated approximately 5,194.81 shares as Series B Preferred Stock. As of June 30, 2026 and December 31, 2025, 475.56 shares of Series B Preferred Stock were issued and outstanding. Each share of Series B Preferred Stock has a liquidation preference equal to its stated value of $7,700 per share, plus any accrued and unpaid dividends.

As of June 30, 2026 and December 31, 2025, the Company had accrued dividends payable related to the Series B Preferred Stock of approximately $1.8 million and $1.6 million, respectively, which are included in accrued dividend payable on the condensed consolidated balance sheets.

Series C Preferred Stock

On January 5, 2021, the Company designated 75,000 shares as Series C Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of Series C Preferred Stock were issued and outstanding.

Series D Preferred Stock

On July 15, 2022, the Company designated 150 shares as Series D Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of Series D Preferred Stock were issued and outstanding.

Series E Preferred Stock

On July 15, 2022, the Company designated 150 shares as Series E Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of Series E Preferred Stock were issued and outstanding.

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Series F Preferred Stock

On November 28, 2022, the Company designated 7,000 shares as Series F Preferred Stock. As of June 30, 2026 and December 31, 2025, no shares of Series F Preferred Stock were issued and outstanding.

Series H Preferred Stock

On September 30, 2025, the Company designated 38,801.546 shares of Series H Non-Voting Convertible Preferred Stock. As of June 30, 2026 and December 31, 2025, 38,801.546 shares of Series H Preferred Stock were issued and outstanding.

Each share of Series H Preferred Stock has a liquidation preference of $618.53 per share, resulting in an aggregate liquidation preference of approximately $24.0 million as of June 30, 2026.

The Series H Preferred Stock was issued to the shareholders of Grid AI Corp. as part of the consideration for the acquisition of Grid AI Corp. (See Note 3).

The Series H Preferred Stock is convertible into shares of the Company’s common stock, subject to stockholder approval, achievement of defined milestone events relating to the business of AMPX and certain beneficial ownership limitations. Following stockholder approval, each share is convertible at a stated conversion ratio, initially 1-for-1,000, subject to adjustment, and issuable in multiple tranches upon achievement of defined milestone events relating to the business of AMPX.

The Series H Preferred Stock does not have voting rights, except as required by law or as otherwise provided in the applicable Certificate of Designation, and is not redeemable.

As of and through June 30, 2026, no shares of Series H Preferred Stock had been converted into common stock.

Mezzanine Equity

Series G Preferred Stock

As of June 30, 2026 and December 31, 2025, the Company had 595.81 shares of Series G Convertible Preferred Stock issued and outstanding, representing a stated value of approximately $3.9 million.

On March 13, 2024, the Company issued 12,373.226 shares of Series G Convertible Preferred Stock in connection with the IMGX merger.

On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to the Rescission Agreement, as amended. In connection with the rescission, 11,777.416 shares of Series G Convertible Preferred Stock issued in connection with the IMGX merger were cancelled and returned to the Company.

Following stockholder approval, each share of Series G Preferred Stock is convertible into 1,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations.

The Series G Preferred Stock is classified as mezzanine equity because the shares may become redeemable for cash at the option of the holder upon the occurrence of certain events outside the control of the Company.

Holders of Series G Preferred Stock are entitled to receive dividends on an as-if-converted basis consistent with dividends declared on shares of common stock.

August 2025 Reverse Stock Split

On August 18, 2025, the Company effected a reverse stock split of its issued and outstanding common stock at a ratio of 1-for-3. As a result of the reverse stock split, every three shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, without any change to the par value per share or the number of authorized shares. The reverse stock

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split proportionately adjusted the number of shares underlying the Company’s outstanding warrants and pre-funded warrants, and the corresponding exercise prices of such warrants were adjusted in accordance with their terms.

September 2025 Registered Direct Offering

During September 2025, the Company completed a registered direct offering consisting of shares of common stock, pre-funded warrants and common warrants. The Company received gross proceeds of approximately $3.0 million, before placement agent fees and offering expenses.

Pre-Funded Warrant Exercises

During the three months ended June 30, 2026, holders exercised 105,000 pre-funded warrants to purchase shares of the Company’s common stock. Common warrant exercises during the three months ended June 30, 2026 resulted in cash proceeds of approximately $148,853. During the six months ended June 30, 2026, holders exercised 367,617 pre-funded warrants to purchase shares of the Company’s common stock. Common warrant exercises during the six months ended June 30, 2026 resulted in cash proceeds of approximately $555,320 and the settlement of outstanding promissory note obligations of approximately $701,780 through cancellation of such notes. The related issuances of common stock were recorded within stockholders’ equity.

Common Stock Issuances

During the three months ended June 30, 2026, warrants and pre-funded warrants to purchase an aggregate of 241,562 shares of common stock were exercised, including 105,000 pre-funded warrants. During the six months ended June 30, 2026, warrants and pre-funded warrants to purchase an aggregate of 1,670,680 shares of common stock were exercised. Of this amount, 367,617 shares related to the exercise of pre-funded warrants.

During the three months ended June 30, 2026, the Company issued an aggregate of 250,000 shares of common stock in connection with the vesting of restricted stock units and equity compensation arrangements. During the six months ended June 30, 2026, the Company issued an aggregate of 660,000 shares of common stock in connection with the vesting of restricted stock units and equity compensation arrangements.

No shares of common stock were issued in exchange for services rendered during the three months ended June 30, 2026. During the six months ended June 30, 2026, the Company issued an aggregate of 45,000 shares of common stock in exchange for services rendered.

During the three months ended June 30, 2026, the Company issued an aggregate of 80,629 shares of common stock in settlement of accounts payable. During the six months ended June 30, 2026, the Company issued an aggregate of 80,629 shares of common stock in exchange for settlement of accounts payable.

During the three months ended June 30, 2026, the Company issued an aggregate of 71,482 shares of common stock in settlement of accrued interest under the revolving loan agreement. During the six months ended June 30, 2026, the Company issued an aggregate of 71,482 shares of common stock in settlement of accrued interest under the revolving loan agreement.

During the three months ended June 30, 2026, the Company issued an aggregate of 161,260 shares of common stock in connection with financing transactions. During the six months ended June 30, 2026, the Company issued an aggregate of 161,260 shares of common stock in connection with financing transactions.

No shares of common stock were issued in connection with the vesting of restricted stock units during the three months ended June 30, 2025. During the six months ended June 30, 2025, the Company issued an aggregate of 3,897 shares of common stock in connection with the vesting of restricted stock units. In addition, certain warrant exercises during the six months ended June 30, 2026 resulted in shareholder receivables of approximately $163,500 as of June 30, 2026, representing amounts due to the Company for shares issued in connection with warrant exercises that had not yet been settled in cash as of period end. Subscription receivables associated with the May 2026 private placements were approximately $4.2 million as of June 30, 2026 and were recorded as a reduction of stockholders’ equity.

The Company had 6,913,198 shares of common stock issued and outstanding as of June 30, 2026.

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Note 11 – Warrants

Warrant activity for the six months ended June 30, 2026 and 2025 was as follows:


				Weighted			Weighted
				Average			Average
		Number of		Exercise Price			Remaining
		Warrants		Per Share			Term in Years
Warrants outstanding and exercisable on December 31, 2025		5,190,571		$	5.15		4.36
Issued during the period		6,924,120			1.46		4.86
Cancelled during the period		—			—		—
Expired during the period		(166)			94,431.03		—
Exercised during the period		(1,670,680)			0.85		—
Warrants outstanding and exercisable on June 30, 2026		10,443,845		$	2.31		4.44

Warrants outstanding and exercisable on December 31, 2024		1,642,571		$	20.94		4.71
Issued during the period		—			—		—
Expired during the period		(23)			150,323.49		—
Exercised during the period		—			—		—
Warrants outstanding and exercisable on June 30, 2025		4,927,691		$	6.75		4.46

During the six months ended June 30, 2026, the Company issued warrants to purchase an aggregate of 303,696 shares of common stock in connection with promissory note financing transactions. See Note 15 - Debt for additional information regarding the related promissory notes and debt discount.

The weighted-average grant date fair value of the warrants issued in connection with promissory note financing transactions during the six months ended June 30, 2026 was approximately $1.69 per warrant. No warrants were granted during the six months ended June 30, 2025.

The grant date fair values of the warrants issued during the six months ended June 30, 2026 were calculated using the Black-Scholes option pricing model with the following assumptions:


		2026
Expected life (in years)		4.46 - 4.91
Volatility		116% – 118	%
Risk-free interest rate		3.90-4.28	%
Dividend yield		0	%

During the six months ended June 30, 2026, warrants and pre-funded warrants to purchase an aggregate of 1,670,680 shares of common stock were exercised, including 367,617 pre-funded warrants. No warrants were exercised during the six months ended June 30, 2025.

The outstanding warrants expire from 2026 through 2033.

Note 12 – Equity Incentive Plan

The Company’s Board of Directors and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which became effective on May 12, 2014. The Company’s Board of Directors and stockholders also adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which became effective on September 11, 2020. Following the adoption of the 2020 Plan, no new awards have been or will be granted under the 2014 Plan.

The 2020 Plan provides for the issuance of equity-based awards, including stock options and restricted stock units, to employees, directors and consultants. As of January 1, 2026, the number of shares of common stock available for issuance under the 2020 Plan automatically increased to 3,801,549 shares pursuant to the evergreen provision of the plan.

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


				Weighted			Remaining
				Average			Contract
		Number		Exercise			Life		Intrinsic
		of Shares		Price			(Years)		Value
Outstanding as of December 31, 2025		19		$	39,125.17		5.54		$	—
Granted		—			—		—			—
Exercised		—			—		—			—
Expired		—			—		—			—
Cancelled		—			—		—			—
Outstanding as of June 30, 2026		19		$	—		—			—
Exercisable as of June 30, 2026		19		$	39,125.17		5.54		$	—

Outstanding as of December 31, 2024		29,950		$	8,181.66		—		$	—
Acquired from IMGX		—			—		—			—
Expired		(27,191)			223.80		—			—
Outstanding as of June 30, 2025		2,759			37,875.21		5.67			—
Exercisable as of June 30, 2025		2,759		$	37,875.21		5.67		$	—

There were no grants of stock options during the six months ended June 30, 2026 or 2025.

Restricted Stock Units

Restricted stock unit awards (“RSUs”) represent the right to receive shares of the Company’s common stock upon satisfaction of applicable vesting conditions under the Company’s 2020 Omnibus Equity Incentive Plan.

RSU activity for the six months ended June 30, 2026 was as follows:


				Weighted-			Weighted-Average
				Average			Remaining
		Number		Grant Date			Recognition
		of Shares		Fair Value			Period (Years)
Non-vested Outstanding at December 31, 2025		1,160,000		$	2.33		—
Awarded		—			—		—
Vested		(660,000)			—		—
Non-vested Outstanding at June 30, 2026		500,000		$	2.33		—

Non-vested Outstanding at December 31, 2024		1,667		$	11.88		2.24
Awarded		—			—		—
Vested		—			—		—
Cancelled		(1,667)		$	11.88		—
Non-vested Outstanding at June 30, 2025		—		$	—		—

During the six months ended June 30, 2026, 660,000 RSUs vested. No additional RSUs were awarded during the period. As of June 30, 2026, 500,000 RSUs remained non-vested, relating to the December 2025 grant to the Chief Executive Officer, with remaining quarterly vesting tranches scheduled for September 30 and December 31, 2026, subject to the terms of the award.

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Stock - Based Compensation Expense

The total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows:


		Six months ended June 30,
		2026			2025
Research and development		$	—		$	—
General and administrative			1,324,751			—
Total stock-based compensation expense		$	1,324,751		$	—

Stock-based compensation and other equity compensation expense recognized during the six months ended June 30, 2026 included approximately $1.165 million related to RSU compensation and $159,750 related to common stock issued for services. The $227,730 of common stock issued in settlement of accounts payable was recorded as a non-cash settlement of an existing liability.

As of June 30, 2026, unrecognized compensation cost associated with future 2026 RSU vesting tranches was approximately $1.165 million, expected to be recognized over the remaining applicable vesting periods during 2026.

Note 13 – Agreements

License Agreement with Sanofi

On September 13, 2023, the Company entered into a License Agreement with Sanofi pursuant to which the Company obtained certain exclusive worldwide rights to develop and commercialize Capeserod for gastrointestinal indications.

Under the terms of the agreement, the Company paid Sanofi an upfront payment of $500,000 in October 2023. The agreement also included potential development, regulatory and commercial milestone payments, as well as royalty obligations based on future net sales.

The upfront payment was recorded as research and development expense during the year ended December 31, 2023.

On February 26, 2025, the Company provided notice of termination to Sanofi. The License Agreement was terminated effective February 2025 and no additional payments were due to Sanofi.

Note 14 – Leases

The Company previously leased office space consisting of approximately 3,472 square feet in Boca Raton, Florida, which served as its corporate headquarters. The lease was originally scheduled to expire on August 31, 2026.

During 2025, the Company ceased use of the leased premises and defaulted under the lease arrangement. In connection with the default, the Company fully impaired the related right-of-use (“ROU”) asset and continued to recognize the associated lease liability.

As of June 30, 2026, the Company had an operating lease liability of approximately $135,609.

The default was accounted for in accordance with ASC 842 and resulted in:

●

a decrease in ROU assets of approximately $108,759

●

recognition of additional accrued obligations of approximately $236,511

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As of June 30, 2026, the weighted-average remaining lease term and weighted-average discount rate under operating leases were as follows:


		June 30,
		2026
Lease term and discount rate
Weighted-average remaining lease term (years)		0.2
Weighted-average discount rate		7.00	%

Future minimum lease payments under non-cancelable operating leases as of June 30, 2026 were as follows:


Year	Amount
2026	$	149,381
Total lease payments	$	149,381
Less: imputed interest	$	(13,772)
Present value of lease liabilities	$	135,609

In connection with the lease default, the Company recognized:

●

a decrease in ROU assets of approximately $108,759

●

lease liabilities of approximately $135,609

●

additional accrued obligations of approximately $236,511 related to remaining payments, settlement costs and penalties

The Company recognized a loss on lease termination of approximately $199,724, which was included in other expense during the year ended December 31, 2025.

Note 15 – Debt

The debt balances presented on the condensed consolidated balance sheets consist of deferred consideration of $6,250,000 and notes payable of $1,676,361 as of June 30, 2026. As of December 31, 2025, deferred consideration was $6,250,000 and notes payable were $2,027,184.

Deferred Consideration

In connection with the acquisition of Grid AI Corp., the Company recognized deferred consideration payable of $7,000,000 as part of the purchase consideration. During the year ended December 31, 2025, the Company made cash payments of $750,000 toward this obligation. As of June 30, 2026, the outstanding balance was $6,250,000. The deferred consideration is non-interest bearing and is expected to be settled through future cash payments or other negotiated arrangements in accordance with the terms of the acquisition agreement.

Notes Payable

Notes payable activity during the period ended June 30, 2026:


		Revolving			Promissory notes			Promissory
		line of credit			with warrants			Notes			Total
Principal balance December 31, 2025		$	700,000		$	1,017,184		$	310,000		$	2,027,184
Additions			—			999,000			—		$	999,000
Cash repayment of revolving loan principal			(700,000)			—			—			(700,000)
Debt settlement (non-cash)			—			(692,080)			(310,000)		$	(1,002,080)
Net amortization and settlement effect of debt discounts			—			352,257			—		$	352,257
Total notes payable as of June 30, 2026		$	—		$	1,676,361		$	—		$	1,676,361

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All outstanding debt was classified as current as of June 30, 2026.

Revolving Line of Credit

Prior to settlement, the Company had drawn $700,000 under the facility. As of June 30, 2026, no amounts remained outstanding under the revolving loan facility following the May 14, 2026 settlement described below.

Promissory Note with Warrants

During the period from October 17, 2025 through December 26, 2025, the Company entered into financing arrangements that included promissory notes issued together with warrants to purchase shares of the Company’s common stock. The aggregate principal amount of the notes issued was $2,300,000. The warrants issued in connection with these arrangements were determined to have an aggregate fair value of approximately $1,040,851 at issuance, which was recorded as a debt discount. The notes do not bear stated interest and are accreted to their face value over the term of the instruments using the effective interest method.

During the three months ended June 30, 2026, the Company recognized amortization of debt discount of approximately $369,798. For the six months ended June 30, 2026, debt discount amortization was approximately $688,226. Warrants issued in connection with promissory note financing transactions during the six-month period resulted in approximately $336,270 of additional debt discount. After repayments, non-cash settlements and amortization of debt discounts, total notes payable were approximately $1.7 million as of June 30, 2026.

The promissory notes are unsecured and mature one year and one day from their respective issuance dates.

Note 16 - Related Party Transactions

The Company has related party transactions with AMP Solar Group Ltd. (“AMP Solar Group”), which holds a 25% non-controlling interest in AMP UK Holdings, a subsidiary of the Company. AMP Solar Group is part of the broader Amp Energy group of companies. Amp Z is an affiliated platform within the Amp Energy ecosystem and operates under common ownership and/or control with AMP Solar Group. As a result of this relationship, transactions between Grid AI Corp. and Amp Z are considered related party transactions. In connection with the acquisition of Grid AI Corp. on September 30, 2025, the Company assumed deferred consideration liabilities totaling $7.0 million. During the year ended December 31, 2025, the Company made payments totaling $750,000 related to this deferred consideration. As of June 30, 2026, the outstanding balance was $6.25 million. See Note 15.

A significant portion of the revenue and cash flow projections utilized in the goodwill impairment analysis related to the acquisition of Grid AI Corp., as described in Note 7, is anticipated to be generated from future commercial arrangements with Amp Z. As of June 30, 2026, the applicable commercial agreements with Amp Z had not been finalized. Accordingly, the timing and amount of revenues and cash flows associated with these arrangements are subject to uncertainty and depend, among other things, on the successful negotiation and execution of definitive agreements and subsequent commercialization.

The Company also has obligations to North York and Strategic EP LLC under arrangements predating the Grid AI acquisition. These obligations are non-interest bearing and are included within notes payable, rather than due to related parties, on the condensed consolidated balance sheets.

The Company has entered into consulting and service arrangements with certain members of management, including the Chief Executive Officer and Chief Financial Officer, either directly or through affiliated entities. Fees incurred under these arrangements are included in general and administrative expenses, and related unpaid amounts are included within due to related parties, as applicable. As of June 30, 2026, amounts due to related parties were $251,887.

The Company’s Chief Financial Officer is compensated only through an affiliated entity. The Chief Financial Officer’s consulting arrangement was previously with Skowron Accounting Professional Corporation and was subsequently transitioned to BPC Consulting Ltd. BPC Consulting Ltd. provides Chief Financial Officer and other consulting and accounting services to the Company.

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Consulting Agreement and Equity Compensation

On December 19, 2025, the Compensation Committee of the Board of Directors approved an Amended and Restated Consulting Agreement between the Company and Access Alternative Group S.A. (the “Consultant”), an entity affiliated with the Company’s Chief Executive Officer, pursuant to which the Consultant provides services to the Company, including services in connection with the duties of the Chief Executive Officer.

Under the terms of the Consulting Agreement, the Company agreed to pay the Consultant base compensation of $25,000 per month, retroactive to October 1, 2025, and a quarterly fee of $20,000 payable for each quarter in which the Company remains in compliance with Nasdaq listing requirements.

The Consultant is also eligible to receive certain additional compensation, including cash and equity-based compensation upon the achievement of specified milestones.

In connection with the Consulting Agreement, the Compensation Committee approved the grant of 1,000,000 restricted stock units (“RSUs”) under the Company’s 2020 Omnibus Equity Incentive Plan. The RSUs vest in equal quarterly installments during 2026, subject to the achievement of certain performance objectives, with accelerated vesting upon certain events, including a change in control or termination without cause.

Note 17- Commitments and Contingencies

Legal Matters

Ellenoff Grossman & Schole LLP

The Company was previously engaged in discussions with Ellenoff Grossman & Schole LLP (“EGS”) regarding certain outstanding legal fees and litigation initiated by EGS against the Company relating to unpaid legal fees. On May 12, 2026, the Company entered into a Settlement Agreement and General Releases with EGS to resolve the matter. Pursuant to the settlement agreement, the Company agreed to pay EGS an aggregate settlement amount of $360,000, consisting of (i) an initial payment of $100,000, which has been paid, and (ii) three installment payments of approximately $86,667 payable over a one-year period. Upon receipt of the initial payment, EGS agreed to dismiss the pending litigation with prejudice. As of June 30, 2026, approximately $260,000 remained payable under the settlement and was included within accounts payable. The litigation was discontinued with prejudice on May 14, 2026. The settlement resulted in a gain on settlement of approximately $389,301, which was recognized within other income (expense), net during the three and six months ended June 30, 2026.

WestPark

On May 26, 2026, WestPark Capital, Inc. (“WestPark”) commenced an arbitration proceeding against the Company before JAMS in New York. The claim, subsequently amended, alleges that the Company breached the terms of an investment banking agreement by not offering WestPark the right of first refusal to participate various transaction from August 2025 through July 2026. WestPark is seeking damages of approximately $2,057,600.

The Company denies the allegations set forth in the amended claim. At this time, the outcome of the arbitration cannot be reasonably predicted. The Company has recorded an accrual of $202,000 related to this matter in its financial statements as of June 30, 2026.

Asymchem Inc.

On April 22, 2026, the Supreme Court of the State of New York, County of New York, entered a judgment in favor of Asymchem, Inc. and against the Company related to unpaid invoices from prior years in the principal amount of $171,219, plus applicable interest at a rate of 9% per annum. The judgment amount of approximately $209,000 was accrued in the Company’s financial statements as of June 30, 2026. On August 17, 2026, the Company and Asymchem entered into a stipulation pursuant to which the parties agreed that the full judgment would be remitted from the restrained funds to Asymchem in full satisfaction of the judgment. The payment process was in progress as of the date of this Quarterly Report.

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Government Grant

During 2025, AMPX, a subsidiary of the Company, applied for government grants related to research and development expenditure tax credits in the United Kingdom.

During the six months ended June 30, 2026, the Company recognized approximately $0.4 million of government grant income related to these programs, which was included in Other income (expense), net in the condensed consolidated statements of operations. The grant income was recognized during the three months ended March 31, 2026. No government grant income was recognized during the three months ended June 30, 2026.

All related government grant receivables had been collected by May 2026, and no government grant receivable remained outstanding as of June 30, 2026.

Note 18 - Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.

The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Although the Company believes that it has adequately reserved for uncertain tax positions (including interest and penalties), it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustments to these reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. Carryforward attributes that were generated in tax years prior to those that remain open for examination may still be adjusted by relevant tax authorities upon examination if they either have been, or will be, used in a future period.

In applying the estimated annual effective tax rate approach prescribed under ASC 740-270, the Company recognized an income tax benefit of approximately $0.4 million for the six months ended June 30, 2026. For the three months ended June 30, 2026, the Company recognized an income tax benefit of approximately $55,000. The interim tax provision reflects the estimated annual effective tax rate adjusted for discrete items, including foreign tax attributes and research and development tax credits. No income tax benefit or expense was recognized for the comparable three-month period in 2025.

The Company may incur current income tax liabilities in individual foreign, state or local jurisdictions notwithstanding a consolidated pre-tax loss because taxable income and loss are determined separately by legal entity and jurisdiction. As of June 30, 2026, the Company recorded $130,573 of income tax payable associated with such jurisdictional tax obligations and timing differences.

The Company’s effective tax rate for interim periods differs from the applicable statutory tax rate primarily due to valuation allowance considerations, foreign rate differentials, noncontrolling interest allocations and research and development tax credits.

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Note 19 - Net Loss per Common Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the periods presented, all potentially dilutive securities have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

All shares of Common Stock that may potentially be issued in the future are as follows:


		June 30, 2026		December 31, 2025
Series G convertible preferred stock		1,787,424		1,787,424
Common stock warrants		10,443,845		5,190,325
Stock options		19		22
Restricted stock units outstanding and not vested		500,000		160,000
Series B convertible preferred stock		786,523		786,523
Series H preferred stock		38,802,000		38,802,000
Restricted stock not yet issued		1		1
Total shares of common stock issuable		52,319,812		46,726,295

Note 20 – Employee Benefit Plans

401(k) Plan

Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan which complies with Section 401(k) of the Internal Revenue Code and covers substantially all eligible employees of the Company.

Employees may contribute from 1% to 100% of their compensation, and the Company may match contributions equal to 100% of the first 6% of employee contributions. The Company may also make discretionary profit-sharing contributions.

Employer contributions under the 401(k) plan amounted to approximately $0 for the six months ended June 30, 2026 and $5,402 for the year ended December 31, 2025.

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Note 21 - Segments

The Company applies the provisions of ASC 280, Segment Reporting, which requires segment information to be reported based on the “management approach,” reflecting the manner in which the Company’s Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance.

In 2025, in connection with the acquisition of Grid AI Corp. on September 30, 2025, the Company reassessed its operating and reportable segments. Based on this assessment, the Company determined that it operates through two operating and reportable segments:

●

AI Segment – consisting of the Company’s artificial intelligence–driven energy technology platform focused on distributed energy resource optimization and grid-edge applications through Grid AI Corp. and its subsidiaries.

●

GI Segment – consisting of the Company’s legacy biotechnology operations, including the development of targeted, non-systemic therapies for gastrointestinal diseases. The Company’s Chief Executive Officer, Jason D. Sawyer, has been identified as the CODM. The CODM reviews operating results on both a segment basis and a condensed consolidated basis to evaluate performance and allocate resources.

The measure of segment profit or loss is loss from operations, as reported in the condensed consolidated statements of operations. This measure is used by the CODM to assess performance and make resource allocation decisions. Segment assets are measured as total assets, as reported in the condensed consolidated balance sheets. The Company’s segments differ with respect to the nature of products and services, regulatory environments, and customer bases. As such, management has concluded that aggregation of these segments is not appropriate under ASC 280.

The following represents selected information for the Company’s reportable segments:


		June 30, 2026			December 31, 2025
Total assets by reportable segments:
AI segment		$	33,776,129		$	46,435,854
GI segment			3,259,471			2,115,989
Total assets by reportable segments		$	37,035,600		$	48,551,843


		Three Months Ended			Three Months Ended
		June 30, 2026			June 30, 2025
Loss from operations by reportable segment:
AI segment		$	(10,872,231)		$	—
GI segment			(2,234,529)			(638,864)
Total operating loss by reportable segments		$	(13,106,760)		$	(638,864)

For the six months ended June 30, 2025, prior to the acquisition of Grid AI Corp., the Company operated through one reportable segment, its legacy GI Segment. Accordingly, no AI Segment results are presented for that period.

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Operations by reportable segment for the six months ended June 30, 2026 are as follows:


		GridAI Technologies			Grid AI Corp
		Corp (GI Segment)			(AI Segment)			Total
Revenue		$	—		$	124,084		$	124,084
Cost of Services			—			774,338			774,338
Gross Loss			—			(650,254)			(650,254)

Operating expenses:
Research and development expenses			8,424			631,380			639,804
Goodwill impairment			—			10,070,124			10,070,124
General and administrative expenses			4,114,207			1,246,869			5,361,076
Total operating expenses			4,122,631			11,948,373			16,071,004
Loss from operations			(4,122,631)			(12,598,627)			(16,721,258)

Other expenses:
Interest income (expense), net			(909,541)			6			(909,535)
Other income (expense), net			389,301			409,409			798,710
Total other income (expense)			(520,240)			409,415			(110,825)
Loss from continuing operations before income taxes			(4,642,871)			(12,189,212)			(16,832,083)
Income tax benefit			—			353,088			353,088
Net loss		$	(4,642,871)		$	(11,836,124)		$	(16,478,995)

For the Six months ended June 30, 2025, prior to the acquisition of Grid AI Corp., the Company operated through one reportable segment, its legacy GI Segment. Accordingly, no AI Segment results are presented for that period.

Note 22 - Subsequent Events

Equity Awards

Subsequent to June 30, 2026, the Company issued 56,000 shares of common stock upon the exercise of outstanding warrants for cash consideration. In addition, the Company issued 2,950 shares of common stock in settlement of outstanding accounts payable to Martin-Krusin-Elbaum. The Company also issued 50,000 shares of common stock to LMC Communications Inc. in settlement of the $202,900 common stock payable outstanding at June 30, 2026, as further disclosed in Note 9. Additionally, 108,932 shares of common stock were issued in connection with the July 2026 financing transactions.

Financing Transactions

On July 1, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with the purchasers identified therein pursuant to which the Company agreed to sell in private placements an aggregate of (i) 108,932 shares of common stock, (ii) pre-funded warrants to purchase up to 1,742,991 shares of common stock and (iii) common stock purchase warrants to purchase up to 1,851,923 shares of common stock, for aggregate gross proceeds of approximately $8.5 million. The combined purchase price for one share of common stock, or one pre-funded warrant in lieu thereof, together with one common warrant was $4.59 per unit.

The Company intends to use the net proceeds for general corporate purposes, which may include acquisitions, repayment of outstanding debt and working capital. The closing occurred on July 7, 2026, subject to the terms and conditions of the Purchase Agreement.

The Pre-Funded Warrants have an exercise price of $0.0001 per share, subject to adjustment and no expiration date. The Pre-Funded Warrants will be exercisable immediately and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.

The Common Warrants are exercisable immediately and expire five years from the earlier of the effective date of the Registration Statement or the date that the common stock underlying the Pre-Funded Warrants and Common Warrants can be resold without restriction or limitation pursuant to Rule 144. The Common Warrants have an exercise price of $4.47 per share, subject to adjustment as set forth in the Common Warrants for stock splits, stock dividends, recapitalizations and similar customary adjustments. The

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Purchasers may exercise the Common Warrants on a cashless basis if the shares of common stock underlying the Common Warrants are not then registered pursuant to an effective registration statement.

Loan to Pronghorn Resources LLC

On July 17, 2026, GridAI Technologies Corp. (the “Company”) made a loan (“Loan”) to Pronghorn Resources, LLC, a Delaware limited liability company (“Pronghorn”, and, together with the Company, the “Parties”), pursuant to the terms of a Secured Convertible Promissory Note (“Note”), in the principal sum of $2,000,000 (the “Principal Amount”). The Principal Amount, in addition to all interest due under the Note, is payable on the earlier to occur of: (i) December 31, 2026; and (ii) the consummation of a Change of Control Transaction (as defined below). The Note bears interest at an annual rate of seven percent (7%), such interest calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and accrues daily, commencing on the Maturity Date until payment in full of the Note. Pronghorn agreed to customary covenants and made customary representations and warranties under the Note. Pronghorn agreed to certain negative covenants, including not to: (a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any Indebtedness; (b) create, permit or suffer to exist any Lien on any of its or any subsidiaries’ properties and assets other than Permitted Liens; or (c) enter into any agreement with respect to any of the foregoing. The payment for the loan has been made in the sum of $2,000,000 as of date of this Quarterly Report to Pronghorn.

Nicholas D’Onofrio, a shareholder of Pronghorn, also holds common stock and common warrants of the Company.

Upon an Event of Default (as defined below), the Company has the right, at its election, to convert the Payment Amount (as defined below) (or, from and after the date of the occurrence of any Event of Default, the Default Amount) of the Note, in whole or in part (as the case may be, the “Conversion Amount”) into such number of membership interests equal to ten percent (10%) of the fully diluted capitalization of Pronghorn as of the date of conversion (“Conversion Interests” and such date of conversion, “Conversion Date”). If any Event of Default occurs and is uncured for the applicable cure period, the Note becomes, at the Company’s election, immediately due and payable in cash in the Default Amount (as defined below), and, alternatively, upon the Company’s election, convertible, in part or in full, into Conversion Interests, pursuant to the terms of Section 4(a) of the Note.

The Note ranks pari passu with Pronghorn’s existing Indebtedness. The Note is secured by all of Pronghorn’s assets, pursuant to the terms of that certain Security Agreement entered into between the Parties on July 17, 2026 (“Security Agreement”). Under the Security Agreement, Pronghorn granted a lien security interest in all of its assets to the Company.

Asymchem Inc.

On April 22, 2026, the Supreme Court of the State of New York, County of New York, entered a judgment in favor of Asymchem, Inc. and against the Company related to unpaid invoices from prior years in the amount of $209,386. Following entry of the judgment, Asymchem caused a restraint to be placed on certain funds held in one of the Company’s bank accounts.

On August 17, 2026, the Company and Asymchem entered into a stipulation pursuant to which the parties agreed that the full judgement would be remitted from the restrained funds to Asymchem in full satisfaction of the judgment. Upon receipt and clearance of the payment, Asymchem is required to withdraw and release the restraint on the remaining funds in the applicable bank account. The Company has accrued the amount of the judgment and applicable interest in its financial statements as of June 30, 2026.

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

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this interim report. Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. As discussed in the section titled “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS,” the following discussion and analysis contains forward-looking statements including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on May 1, 2026.

Overview

GridAI Technologies Corp., formerly known as Entero Therapeutics, Inc., is a diversified technology and life sciences company operating through two reportable segments: (i) an artificial intelligence-driven energy technology business focused on distributed energy resource optimization and grid-edge applications through Grid AI Corp. and its subsidiaries, and (ii) a legacy gastrointestinal biopharmaceutical business focused primarily on Adrulipase.

On September 30, 2025, we completed the acquisition of Grid AI Corp., a Nevada corporation. Following the acquisition, Grid AI Corp. became a wholly owned subsidiary of the Company. Grid AI Corp., through its subsidiaries, including AMPX UK Holdings and AMPX Limited, is focused on AI-driven energy optimization, distributed energy resource management, battery storage, energy orchestration, and related technology solutions.

Prior to the Grid AI acquisition, we operated primarily as a clinical-stage biopharmaceutical company focused on targeted, non-systemic therapies for gastrointestinal diseases. Our continuing legacy biopharmaceutical activities are centered on Adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in patients with exocrine pancreatic insufficiency, including patients with cystic fibrosis and chronic pancreatitis.

In March 2024, we completed a merger with ImmunogenX, Inc., which became ImmunogenX, LLC following the transaction. IMGX was developing Latiglutenase for celiac disease and CypCel, a metabolic marker compound. In March 2025, we entered into a rescission agreement with IMGX and the former shareholders of IMGX. The rescission transaction was completed on December 31, 2025. As a result, IMGX is no longer a subsidiary of the Company, and the Company no longer holds any ownership interest in IMGX.

Following the rescission of the IMGX transaction, the Company no longer owns or develops the Latiglutenase and CypCel programs. The Company also terminated its license agreement with Sanofi for Capeserod effective in 2025, and no further payments are due to Sanofi. The Company is no longer actively pursuing the Niclosamide program.

For the three months ended June 30, 2026, our results reflect the Company’s post-Grid AI acquisition structure, including the operations of Grid AI and AMPX, together with our continuing legacy Adrulipase-related activities and public company costs.

Our Product Candidates and Technology Platforms

Following the acquisition of Grid AI Corp., our business includes both AI-driven energy technology activities and legacy biopharmaceutical development activities.

Our Grid AI business is focused on AI-driven energy optimization, distributed energy resource management, battery storage, energy orchestration, and related technology solutions. Through Grid AI Corp. and its subsidiaries, including AMPX UK Holdings and AMPX Limited, we are developing and commercializing technology intended to optimize energy infrastructure and grid-edge applications.

Our continuing legacy biopharmaceutical activities are focused primarily on Adrulipase, an oral, non-systemic biologic therapy being developed for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). Adrulipase is designed as a recombinant lipase enzyme intended to enable the digestion of fats and other nutrients. Our goal is to provide CF and CP patients with a non-animal-derived therapy that may reduce daily pill burden.

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In July 2023, we announced topline results from our Phase 2b monotherapy bridging study using a new enteric microgranule formulation of Adrulipase. Although the primary efficacy endpoint was not achieved, data from the study indicated that the enhanced Adrulipase formulation was safe and well tolerated and demonstrated improvement over prior formulations of Adrulipase. We continue to evaluate next steps for the Adrulipase program, subject to available capital and strategic priorities.

Our former Latiglutenase and CypCel programs were part of the IMGX business. Following the completion of the IMGX rescission transaction on December 31, 2025, we no longer own or develop those programs.

Our Capeserod program was in-licensed from Sanofi in September 2023. On February 26, 2025, we notified Sanofi of our intent to terminate the license agreement. The agreement was terminated in 2025, and no further payments are due to Sanofi. We are no longer developing Capeserod.

Our Niclosamide programs previously involved proprietary oral and topical formulations for multiple gastrointestinal conditions, including inflammatory bowel disease indications. We are no longer actively pursuing these programs.

Nasdaq Listing Requirements

On September 6, 2024, the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share, because the closing bid price of the Company’s common stock had remained below $1.00 per share for 30 consecutive business days.

The Company was initially provided 180 calendar days, or until March 5, 2025, to regain compliance. On March 6, 2025, Nasdaq granted the Company an additional 180-day compliance period, or until September 1, 2025, to regain compliance with the minimum bid price requirement.

On September 2, 2025, the Company received written notice from Nasdaq that it had regained compliance with the minimum bid price requirement.

In addition, on January 7, 2025, the Company received a notice from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5620(a) due to the failure to hold an annual meeting of stockholders within twelve months of the Company’s fiscal year end. The Company submitted a compliance plan to Nasdaq and subsequently regained compliance with the annual meeting requirement during 2025.

On April 22, 2026, The Nasdaq Stock Market LLC notified the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of the delayed filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Nasdaq advised the Company that it had 60 calendar days to submit a plan to regain compliance and that Nasdaq could grant an exception period until October 12, 2026. On May 1, 2026, the Company filed its Annual Report on Form 10-K for the year ended December 31, 2025. On May 4, 2026, Nasdaq notified the Company that, based on the filing of the Form 10-K, the Company had regained compliance with Nasdaq Listing Rule 5250(c)(1) and that the matter was closed.

Although the Company has regained compliance with the foregoing Nasdaq listing requirements, there can be no assurance that the Company will continue to maintain compliance with all applicable Nasdaq continued listing standards in the future.

Revolving Loan Agreement

Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 with 1396974 BC Ltd., pursuant to which the lender agreed to make loans to the Company. Under the Revolving Loan Agreement, all outstanding principal, accrued and unpaid interest and other amounts were due in full on January 31, 2026.

On April 1, 2026, the Company received a demand letter from the lender asserting that the Company was in default and demanding payment of $1,014,675, consisting of $700,000 of principal, interest, and default amounts.

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principal and $100,000 of accrued interest, and (ii) the issuance of 71,482 shares of common stock at a deemed price of $3.25 per share, in satisfaction of remaining accrued interest obligations of $232,315.

Pursuant to the agreement, the Company paid $800,000 in cash and issued 71,482 shares of common stock at a deemed price of $3.25 per share in full satisfaction of the outstanding balance. As a result, the indebtedness has been fully satisfied and extinguished, and the Company no longer has access to borrowings under the revolving loan agreement.

Rescission Agreement with ImmunogenX

In March 2025, the Company entered into a rescission agreement with ImmunogenX, LLC (“IMGX”) and the former shareholders of IMGX to unwind the Company’s March 2024 acquisition of IMGX. The rescission transaction was completed on December 31, 2025.

As a result of the rescission, IMGX is no longer a subsidiary of the Company, and the Company no longer holds any ownership interest in IMGX. The Company also no longer owns or develops the Latiglutenase and CypCel programs that were previously part of the IMGX business.

In connection with the rescission, the Company returned or cancelled the equity consideration previously issued to the former IMGX shareholders, including common stock and Series G preferred stock, and cancelled the assumed IMGX options and warrants. Following the closing of the rescission transaction, the Company retained certain agreed obligations, while IMGX and/or its former shareholders remained responsible for certain IMGX liabilities, including secured debt obligations.

For the three months ended June 30, 2026, IMGX was not included in the Company’s consolidated results.

Liquidity and Capital Resources

To date, we have not generated significant product and service revenue and have experienced net losses and negative cash flows from operations. Our historical operations were funded primarily through sales of equity securities, equity-linked securities and debt financings. In 2025, our business changed significantly as a result of the acquisition of Grid AI Corp. and the completion of the rescission transaction involving ImmunogenX, LLC. Notwithstanding those transactions, as of June 30, 2026, we remained dependent on external sources of capital to fund our operations, satisfy our obligations and execute our business plan.

As of June 30, 2026, we had cash and cash equivalents of approximately $1.4 million, a working capital deficit of approximately $11.8 million and an accumulated deficit of approximately $224.9 million.

We remain dependent on obtaining additional working capital funding from the sale of equity and/or debt securities, warrant exercises, strategic transactions, commercial arrangements, or other sources of financing in order to continue operations and execute our business plan. Without adequate funding, we may not be able to meet our obligations as they become due. These conditions raise substantial doubt about our ability to continue as a going concern.

Our primary sources of liquidity have been capital raises through equity and debt financings. During 2025 and 2026, we also entered into promissory note arrangements and other financing transactions to fund working capital needs. Our ability to raise additional capital may be affected by market conditions, our operating performance, our Nasdaq listing status, the trading price of our common stock, our capital structure, and broader macroeconomic and geopolitical conditions.

We expect to incur expenditures in the foreseeable future related to the operation and development of the Grid AI and AMPX business, maintenance of our public company infrastructure, professional fees, financing costs, debt service, and, subject to available capital, development activities related to Adrulipase. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet obligations, and our ability to pursue our business strategies.

We may seek funds through additional equity and/or debt financings, warrant exercises, strategic or commercial arrangements, asset sales, or other sources of financing. Future equity or equity-linked financings may be dilutive to existing stockholders. There can be no assurance that additional financing will be available on acceptable terms or at all.

In January 2025, we entered into a revolving loan arrangement that provided for borrowings of up to $2.0 million. The facility bears interest at a high rate and matures on January 31, 2026. As of April 1, 2026, the Company was in default under the revolving loan

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arrangement as a result of its failure to repay amounts due at maturity, and the lender has issued a demand for repayment of the outstanding amounts. On May 14, 2026, GridAI Technologies Corp. entered into a Debt Settlement and Subscription Agreement with 1396974 BC Ltd. to settle the outstanding indebtedness, consisting of principal and accrued interest under a revolving loan agreement dated January 27, 2025. Pursuant to the agreement, the Company paid $800,000 in cash and issued 71,482 shares of common stock at a deemed price of $3.25 per share in full satisfaction of the outstanding balance. As a result, the indebtedness has been fully satisfied and extinguished, and the Company no longer has access to borrowings under the revolving loan agreement.

During 2025, we also completed the acquisition of Grid AI Corp., which expanded our operations beyond our legacy life sciences activities to include software-enabled energy orchestration and grid-edge platform activities through Grid AI Corp. and AMPX. In addition, on December 31, 2025, we completed the rescission transaction involving ImmunogenX, LLC, pursuant to which that business ceased to be our subsidiary. Following the rescission, we no longer held any ownership interest in ImmunogenX, although we retained certain liabilities as set forth in the related transaction documents. As a result of these transactions, our liquidity and capital resource profile at year-end 2025 differed materially from prior periods.

We expect to continue to incur substantial expenditures in the foreseeable future, including expenditures relating to operation and integration of the Grid AI Corp. and AMPX business, maintenance of our public company infrastructure, professional fees, debt service and evaluation of strategic and financing alternatives. In addition, although Adrulipase remains our principal retained legacy biopharmaceutical asset, any meaningful advancement of that program would require substantial additional capital for manufacturing, clinical development, regulatory activities and related support functions.

In May 2026, the Company completed two private placement financing transactions providing for aggregate gross proceeds of approximately $7.8 million. The financings closed on May 18, 2026. The Company received approximately $2.54 million of gross proceeds from the first financing at closing. With respect to the approximately $5.25 million additional financing, 20% of the gross proceeds was payable at closing and the remaining 80% is payable upon effectiveness of the related Form S-1 resale registration statement.

On July 1, 2026, the Company entered into a securities purchase agreement with the purchasers identified therein pursuant to which the Company agreed to sell to the Purchasers in private placements an aggregate of (i) 108,932 shares of common stock, which shares have been issued as of the date of this Quarterly Report (ii) pre-funded warrants to purchase up to an aggregate of 1,742,991 shares of common stock (the “Pre-Funded Warrants”) and (iii) common stock purchase warrants to purchase up to an aggregate of 1,851,923 shares of common stock (the “Common Warrants”) for gross proceeds to the Company of approximately $8,500,000. The combined purchase price for one share of common stock or Pre-Funded Warrant in lieu of share of common stock and one Common Warrant is $4.59 per unit.

On July 17, 2026, the Company made a loan (“Loan”) to Pronghorn Resources, LLC, a Delaware limited liability company (“Pronghorn”, and, together with the Company, the “Parties”), pursuant to the terms of a Secured Convertible Promissory Note (“Note”), in the principal sum of $2,000,000 (the “Principal Amount”). The Principal Amount, in addition to all interest due under the Note, is payable on the earlier to occur of: (i) December 31, 2026; and (ii) the consummation of a Change of Control Transaction (as defined below). The Note bears interest at an annual rate of seven percent (7%), such interest calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and accrues daily, commencing on the Maturity Date until payment in full of the Note.

Because we do not currently generate revenue from approved pharmaceutical product sales and because the Grid AI Corp. and AMPX business remains in an early stage within our consolidated structure, we expect to continue to rely on external capital resources. If we are unable to obtain additional financing when needed, on acceptable terms or at all, we may be required to delay, reduce or terminate operating activities, defer strategic initiatives, reduce headcount, dispose of assets, restructure obligations or pursue other alternatives that may materially adversely affect our business, financial condition and results of operations.

Our access to capital may also be adversely affected by factors beyond our control, including inflation, interest rates, capital markets volatility, geopolitical conflicts, supply chain disruption and changing investor sentiment toward small-cap public companies, biotechnology issuers, emerging energy technology companies or issuers with complex capital structures.

Based on our cash position, operating plans, debt obligations and expected cash requirements, management concluded that substantial doubt existed regarding our ability to continue as a going concern for a period of one year from the date of issuance of the financial statements, unless we are able to obtain additional capital or otherwise improve liquidity. The accompanying financial statements have

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been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to issue additional securities will depend on market conditions, the availability of effective registration statements or applicable exemptions from registration, stockholder approval requirements, Nasdaq rules and the terms of our existing securities and financing arrangements. Future equity or equity-linked financings may be dilutive to existing stockholders and may include rights, preferences or privileges senior to those of our Common Stock.

Debt Obligations

Revolving line of credit

Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 with 1396974 BC Ltd., pursuant to which the lender agreed to make loans to the Company. Under the Revolving Loan Agreement, the lender made an initial advance of $700,000 to the Company. The Revolving Note bears interest at a rate of 18% per annum.

All outstanding principal, accrued interest and other amounts under the Revolving Loan Agreement were due on January 31, 2026. The Company did not repay the amounts due at maturity. On April 1, 2026, the Company received a demand letter from the lender asserting that the Company was in default and demanding payment of $1,014,675.

On May 14, 2026, the Company entered into a Debt Settlement and Subscription Agreement with the lender. Under the settlement agreement, the Company agreed to satisfy the outstanding obligation through a cash payment of $800,000, consisting of $700,000 of principal and $100,000 of accrued interest, and the issuance of 71,482 shares of common stock at a deemed price of $3.25 per share in satisfaction of remaining accrued interest obligations of $232,315. Following the settlement, the Company no longer has access to the revolving loan facility.

Promissory notes

As of June 30, 2026, the Company had outstanding promissory notes and related financing obligations classified as current liabilities. These obligations included promissory notes issued in connection with financing arrangements entered into during 2025 and 2026, including notes issued together with warrants to purchase shares of the Company’s common stock.

The Company continues to evaluate repayment, refinancing, restructuring, settlement, or equity-linked alternatives with respect to its outstanding indebtedness. There can be no assurance that the Company will be able to refinance or settle these obligations on acceptable terms or at all.

IMGX debt obligations

In connection with the rescission of the IMGX transaction completed on December 31, 2025, IMGX is no longer a subsidiary of the Company. Accordingly, IMGX debt obligations, including the former IMGX revolving credit facility, promissory notes, and EIDL loan, are no longer obligations of the consolidated Company, except for any obligations expressly retained by the Company under the rescission arrangements.

Financial Operations Overview

The Company operates through two reportable segments: (i) its artificial intelligence-driven energy technology business (“AI Segment”) and (ii) its legacy biotechnology operations focused on gastrointestinal therapies (“GI Segment”). The AI Segment consists of operations conducted through Grid AI Corp. and its subsidiaries, including AMPX, while the GI Segment reflects the Company’s retained biopharmaceutical development activities, including Adrulipase. Management evaluates performance and allocates resources across these segments based on strategic priorities and expected returns.

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Revenue

Historically, the Company’s legacy GI Segment did not generate revenue from the sale of approved biopharmaceutical products. Following the acquisition of Grid AI Corp. on September 30, 2025, the Company began generating revenue within its AI Segment from operations conducted through Grid AI Corp. and AMPX.

For the three months ended June 30, 2026, the Company recognized revenue of $85,876, all of which was attributable to the AI Segment. The GI Segment did not generate product revenue during the period.

Looking forward, the Company expects its revenue profile to differ from prior periods as a result of the inclusion of Grid AI Corp. and AMPX. With respect to the Company’s retained legacy biopharmaceutical operations, the Company has not generated revenue from product sales and does not expect to do so unless and until a product candidate receives regulatory approval and is successfully commercialized. The Company may also seek to generate revenue in the future from strategic relationships, licensing arrangements, milestone payments, service arrangements, grants, or other sources, although there can be no assurance that any such revenue will be realized.

Research and Development Expense

Research and development expenses for the three months ended June 30, 2026 related primarily to the Company’s retained biopharmaceutical activities within the GI Segment. During the quarter, the Company incurred limited research and development expense associated with Adrulipase and related retained development activities.

Following the discontinuation of certain legacy biotechnology programs and the completion of the rescission transaction involving ImmunogenX, LLC on December 31, 2025, Adrulipase is the Company’s only remaining active biotechnology development program. The Company no longer owns or develops the Latiglutenase or CypCel programs, and is no longer developing Capeserod or Niclosamide.

Research and development expenses generally include internal and external costs incurred in connection with product development, regulatory activities, consultants, professional fees and personnel-related expenses, contractors, contract, contract development and manufacturing organizations, drug substance, drug product, clinical materials, preclinical activities, non-clinical activities, and other costs associated with maintaining or evaluating retained development assets in the GI and AI Segments.

For the three months ended June 30, 2026, research and development expenses were $8,424, compared with $10,631 for the three months ended June 30, 2025.

Management expects the level and composition of research and development expense to depend on available capital, strategic priorities, and future decisions regarding the Adrulipase program.

General and Administrative Expense

General and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation, related to executive, finance, business development, legal, compliance and other administrative functions. General and administrative expenses also include legal fees relating to corporate, transactional, governance and intellectual property matters, insurance, information technology costs, professional fees for accounting, auditing, tax and other advisory services, public company costs, including corporate communications and investor relations expenses, and facility-related costs.

General and administrative expenses increased in importance during 2025 as a result of the Company’s acquisition of Grid AI Corp., the integration of the Grid AI Corp. and AMPX business, changes in management and board composition and the continued requirements of operating as a public company.

We expect general and administrative expenses to remain significant and they may increase in future periods as we continue to support the operation and integration of the Grid AI Corp. and AMPX business, satisfy public company reporting and compliance obligations and incur costs associated with corporate governance, legal, accounting, finance, investor relations and information technology infrastructure.

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General and administrative expenses may also increase in connection with business development initiatives, financing activities, strategic transactions, integration efforts and the expansion of our administrative and operational infrastructure, including the engagement of additional personnel, consultants and outside service providers. General and administrative expenses support both the AI Segment and the GI Segment and are managed on a consolidated basis.

Condensed Consolidated Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025


		Three Months Ended
		June 30,						Increase
		2026			2025			(Decrease)
Revenue		$	85,876		$	—		$	85,876
Cost of Service			122,390			—			122,390
Gross loss			(36,514)			—			(36,514)
Operating expenses:
Research and development expenses			8,424			10,631			(2,207)
Goodwill impairment			10,070,124			—			10,070,124
General and administrative expenses			2,991,698			628,233			2,363,465
Total operating expenses			13,070,246			638,864			12,431,382
Loss from operations			(13,106,760)			(638,864)			(12,467,896)
Other (expense) income:
Interest expense, net			(387,435)			(36,067)			(351,368)
Other income (expense), net			398,443			—			398,443
Total other income (expense)			11,008			(36,067)			47,075
Loss from continuing operations before income taxes		$	(13,095,752)		$	(674,931)		$	(12,420,821)
Loss from discontinued operations			—			(323,340)			323,340
Income tax benefit			55,459			—			55,459
Net loss		$	(13,040,293)		$	(998,271)		$	(12,042,022)


		Six Months Ended
		June 30,						Increase
		2026			2025			(Decrease)
Revenue		$	124,084		$	—		$	124,084
Cost of Service			774,338			—			774,338
Gross loss			(650,254)			—			(650,254)
Operating expenses:
Research and development expenses			639,804			26,458			613,346
Goodwill impairment			10,070,124			—			10,070,124
General and administrative expenses			5,361,076			1,433,791			3,927,285
Total operating expenses			16,071,004			1,460,249			14,610,755
Loss from operations			(16,721,258)			(1,460,249)			(15,261,009)
Other (expense) income:
Interest expense, net			(909,535)			(53,968)			(855,567)
Other income (expense), net			798,710			(108,818)			907,528
Total other income (expense)			(110,825)			(162,786)			51,961
Loss from continuing operations before income taxes		$	(16,832,083)		$	(1,623,035)		$	(15,209,048)
Loss from discontinued operations			—			(634,855)			634,855
Income tax benefit			353,088			—			353,088
Net loss		$	(16,478,995)		$	(2,257,890)		$	(14,221,105)

Revenues

Historically, we did not generate revenue from the sale of approved biopharmaceutical products and devoted substantially all of our time and efforts to acquiring and developing our product candidates, including Adrulipase, Niclosamide, Capeserod and Latiglutenase.

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During the three months ended June 30, 2026, the Company recognized revenue of $85,876 from energy technology operations within the AI Segment, compared with no revenue in the three months ended June 30, 2025. For the six months ended June 30, 2026, revenue was $124,084, compared with no revenue in the six months ended June 30, 2025.

With respect to our legacy GI Segment operations, we have not generated revenue from product sales and do not expect to do so unless and until a product candidate receives regulatory approval and is successfully commercialized.

Cost of Services

Cost of services was approximately $0.1 million for the three months ended June 30, 2026 and approximately $0.8 million for the six months ended June 30, 2026. The six-month amount includes approximately $0.7 million of cost of services incurred during the first quarter of 2026. The quarterly pattern reflects the timing and mix of project and service activity, and direct service costs did not vary proportionately with quarterly revenue. There was no cost of services in the comparable 2025 periods.

Research and Development Expense

Research and development expenses were approximately $8,000 for the three months ended June 30, 2026, compared with approximately $11,000 for the three months ended June 30, 2025. For the six months ended June 30, 2026, research and development expenses were approximately $0.6 million, compared with approximately $0.03 million for the six months ended June 30, 2025.

General and Administrative Expense

General and administrative expenses were approximately $3.0 million for the three months ended June 30, 2026, compared with approximately $0.6 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, general and administrative expenses were approximately $5.4 million, compared with approximately $1.4 million for the six months ended June 30, 2025. The increase was primarily attributable to costs associated with the acquisition and integration of Grid AI Corp. and AMPX, increased professional fees, public company expenses, financing activities, legal and accounting costs, compensation-related expenses and the operational and administrative infrastructure required to support the Company’s expanded business activities.

Goodwill impairment

During the three months ended June 30, 2026, actual operating performance and updated near-term financial projections for the Grid AI business were significantly below the projections established at the acquisition date, primarily due to delays in commercialization and customer contract execution. These developments constituted a triggering event for impairment testing. The Company performed a quantitative goodwill impairment assessment and recognized a non-cash goodwill impairment charge of approximately $10.1 million. The impairment primarily reflects a delay in the timing of projected revenues and cash flows rather than a change in management’s longer-term expectations regarding the commercial opportunity for the Grid AI business. While the timing of anticipated commercialization and revenue generation has been extended relative to the projections established at the acquisition date, management continues to believe that the Grid AI business has significant long-term commercial potential and remains central to the Company’s go-forward strategy. The Company continues to pursue customer contracts and commercialization opportunities consistent with this strategy. However, the timing and extent of future commercialization and revenue generation remain subject to uncertainty, and further delays in customer contract execution, commercialization or deterioration in projected cash flows could result in additional impairment charges and could adversely affect the Company’s business, financial condition and results of operations.

Goodwill impairment expense was approximately $10.1 million for both the three and six months ended June 30, 2026. No goodwill impairment expense was recognized in the comparable 2025 periods.

Total other Income (Expense)

For the three months ended June 30, 2026, total other income was approximately $0.01 million, compared with total other expense of approximately $0.04 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, total other expense was approximately $0.1 million, compared with approximately $0.2 million for the six months ended June 30, 2025. Other income (expense), net for the three and six months ended June 30, 2026 included a gain on settlement of approximately $389,301 recognized in connection with the May 2026 settlement with EGS. The six-month amount also included approximately $0.4 million of government grant income recognized during the first quarter of 2026.

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Loss from Continuing Operations

Loss from continuing operations was approximately $13.0 million for the three months ended June 30, 2026, compared with approximately $0.7 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, loss from continuing operations was approximately $16.5 million, compared with approximately $1.6 million for the six months ended June 30, 2025.

Loss from discontinued operations

There was no loss from discontinued operations for the three or six months ended June 30, 2026. Loss from discontinued operations was approximately $0.3 million for the three months ended June 30, 2025 and approximately $0.6 million for the six months ended June 30, 2025, related primarily to the ImmunogenX business, which was ultimately disposed of through the rescission transaction completed on December 31, 2025.

Income Tax Benefit

Income tax benefit was approximately $55,000 for the three months ended June 30, 2026 and approximately $0.4 million for the six months ended June 30, 2026. No income tax benefit or expense was recognized in the comparable 2025 periods.

Net income (loss)

As a result of the factors above, our net loss was approximately $13.0 million for the three months ended June 30, 2026, compared with approximately $1.0 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, our net loss was approximately $16.5 million, compared with approximately $2.3 million for the six months ended June 30, 2025.

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Cash Flows for the Six Months Ended June 30, 2026 and 2025

The following table summarizes our cash flows for the periods indicated:


		Six Months Ended
		June 30,
		2026			2025
Net cash (used in) provided by:
Operating activities		$	(3,291,571)		$	(873,513)
Investing activities			—			—
Financing activities			4,144,303			700,000
Effect of exchange rate changes on cash		$	(372,795)		$	—
Net increase (decrease) in cash and cash equivalents		$	479,937		$	(173,513)

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2026 was approximately $3.3 million. The principal non-cash adjustments to the approximately $16.5 million net loss included approximately $10.1 million of goodwill impairment, approximately $1.1 million of intangible asset amortization, approximately $1.3 million of stock-based compensation and approximately $0.7 million of debt discount amortization. Working-capital changes included decreases in accounts payable and deferred tax liabilities, partially offset by increases in accrued expenses and other current liabilities, together with the net change in other operating assets and liabilities. The $100,000 interest portion of the revolving loan settlement is reflected in operating cash flows through accrued expenses.

Net cash used in operating activities for the six months ended June 30, 2025 was approximately $0.9 million, primarily attributable to a net loss of approximately $2.3 million, partially offset by changes in operating assets and liabilities and other non-cash adjustments.

Investing Activities

There was no net cash provided by or used in investing activities during the six months ended June 30, 2026 or 2025.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2026 was approximately $4.1 million. Financing cash flows included approximately $3.3 million of proceeds from the May 2026 private placements, approximately $0.6 million of cash proceeds from warrant exercises and approximately $1.0 million of proceeds from promissory notes, partially offset by a $0.7 million repayment of revolving loan principal. The $100,000 interest portion of the settlement is included in operating cash flows.

Net cash provided by financing activities for the six months ended June 30, 2025 was approximately $0.7 million, reflecting proceeds from the revolving loan arrangement.

On May 8, 2026, May 11, 2026 and May 12, 2026, the Company entered into securities purchase agreements with certain purchasers pursuant to which the Company agreed to sell in private placements an aggregate of (i) 74,000 shares of common stock, which shares have been issued as of the date of this Quarterly Report (ii) pre-funded warrants to purchase up to an aggregate of 1,196,001 shares of common stock and (iii) common stock purchase warrants to purchase up to an aggregate of 1,270,001 shares of common stock for aggregate gross proceeds of approximately $2.54 million. The combined purchase price for one share of common stock or pre-funded warrant in lieu thereof and one common warrant was $2.00. The Company intends to use the net proceeds for general corporate purposes, including working capital and repayment of certain outstanding liabilities. The transactions closed on May 18, 2026, subject to the satisfaction of customary closing conditions. The pre-funded warrants have an exercise price of $0.00001 per share and are exercisable immediately with no expiration date. The common warrants are exercisable beginning six months following issuance and expire five years from the earlier of the effectiveness of the related registration statement or the date the underlying securities may be resold pursuant to Rule 144 without restriction. The common warrants have exercise prices ranging from $2.56 to $2.89 per share, subject to adjustment. In connection with the securities purchase agreements, the Company entered into registration rights agreements pursuant to which the Company agreed to file a resale registration statement covering the shares issued and issuable in connection with the private placements within 15 days following the closing date.

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On May 11, 2026, the Company entered into an additional securities purchase agreement with certain purchasers pursuant to which the Company agreed to sell in a private placement an aggregate of (i) 87,260 shares of common stock, (ii) pre-funded warrants to purchase up to 1,745,199 shares of common stock and (iii) common stock purchase warrants to purchase up to 1,832,459 shares of common stock for aggregate gross proceeds of approximately $5.25 million. The combined purchase price for one share of common stock, or one pre-funded warrant in lieu thereof, together with one common warrant was $2.865 per unit. The closing occurred on May 18, 2026. Twenty percent (20%) of the gross proceeds was payable at closing, with the remaining 80% payable upon effectiveness of the related Form S-1 resale registration statement.

The pre-funded warrants issued in connection with the additional financing have an exercise price of $0.00001 per share and no expiration date. The common warrants are exercisable immediately and expire five years from the earlier of the effectiveness of the related registration statement or the date the underlying securities may be resold pursuant to Rule 144 without restriction. The common warrants have an exercise price of $2.865 per share, subject to adjustment.

Critical Accounting Policies and Estimates

Our accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of our condensed consolidated financial statements are summarized in Note 2 to the condensed consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of those policies are considered to be particularly important to the presentation of our financial results because they require us to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the six months ended June 30, 2026, we performed a quantitative goodwill impairment assessment related to the acquisition of Grid AI Corp. following lower-than-projected operating results and delays in anticipated commercialization and customer contract execution. The assessment involved significant estimates and assumptions, including projected revenues and cash flows, commercialization timing and discount rates. Based on this assessment, we recognized a goodwill impairment charge of approximately $10.1 million. Changes in actual results, projected cash flows, commercialization timelines or other key assumptions could materially affect future impairment assessments.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a - 15(b) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10 - Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a - 15(e) and 15d - 15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective at the reasonable assurance level due to the existence of a material weakness in internal control over financial reporting related to the integration of Grid AI Corp., including insufficient accounting resources and processes to ensure the timely and accurate preparation and review of financial information.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a - 15(d) or 15d - 15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10 - Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Ellenoff Grossman & Schole LLP

On March 17, 2025, Ellenoff Grossman & Schole LLP (“EGS”) initiated an action against the Company by filing a summons and complaint in the Supreme Court of the State of New York, New York County. The complaint alleges that the Company owes to EGS $749,301.00 in fees for legal services EGS allegedly provided to the Company between September 2023 to January 2025, which amount had been accrued within accounts payable in the Company’s financial statements prior to the settlement, including as of December 31, 2025. EGS’s lawsuit alleges breach of contract, account stated, and quantum meruit claims. On May 12, 2026, Ellenoff Grossman & Schole LLP and GridAI Technologies Corp. entered into a Settlement Agreement and General Release to resolve the action filed by EGS in the Supreme Court of the State of New York, New York County, relating to alleged unpaid legal fees. Under the terms of the settlement, the Company agreed to pay EGS a total of $360,000, consisting of an initial payment of $100,000, which has been paid, and the remaining balance in three equal installment payments over a one-year period. Upon receipt of the initial payment, EGS agreed to dismiss the action with prejudice. The settlement agreement includes mutual releases of claims related to the dispute and contains customary confidentiality, non-disparagement, and default provisions. The Company expressly denied any admission of liability in connection with the settlement. The litigation has since been discontinued with prejudice on May 14, 2026.

WestPark

Asymchem Inc.

See Note 17 - Commitments and Contingencies for a discussion of the Asymchem Inc. legal matter and the August 17, 2026 stipulation.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. For a detailed discussion of the risks and uncertainties related to our business, please refer to the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Except as set forth below, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

Our ability to achieve our projected results depends on the timely execution of customer and commercial agreements, successful commercialization and deployment of our technologies, customer adoption and access to sufficient capital. During the three months ended June 30, 2026, delays in commercialization and customer contract execution resulted in lower-than-projected operating results and contributed to a goodwill impairment charge of approximately $10.1 million. Further delays or failure to achieve our projections could materially adversely affect our business, financial condition and results of operations.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the quarter ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

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ITEM 6. EXHIBITS

(b)Exhibits

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on October 21, 2024).
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022).
31.1*		Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101)

*filed herewith

**furnished, not filed, herewith

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.