]
As filed with the Securities and Exchange Commission on September 21, 2026.
Registration No. 333-298675
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SB Energy, Inc.
(Exact name of registrant as specified in its charter)
Texas | 4911 | 99-0945123 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
3 Lagoon Dr., Suite 280
Redwood City, CA 94065
(650) 731-3262
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ryan Bates
3 Lagoon Dr., Suite 280
Redwood City, CA 94065
(650) 731-3262
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Ryan J. Maierson John J. Slater Latham & Watkins LLP 811 Main Street #3700 Houston, Texas 77002 (713) 546-5400 | Justin R. Salon R. John Hensley Morrison & Foerster LLP 2100 L Street, NW, Suite 900 Washington, D.C. 20037 (202) 887-1500 | Michael Kaplan Marcel Fausten Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000 |
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS
REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the
following box. ☐
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
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 7(a)(2)(B) of the Securities Act. ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Subject to Completion. Dated September 21, 2026.
Shares
SB Energy, Inc.
Common Stock
This is an initial public offering of shares of common stock of SB Energy, Inc., a Texas corporation. We are offering shares of our common
stock.
Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share of
our common stock will be between $ and $ . We have applied to list our common stock on The Nasdaq Global Select Market
(“Nasdaq”) and Nasdaq Texas, Inc. (“Nasdaq Texas”) under the symbol “SBE.”
We are an “emerging growth company,” as defined under the federal securities laws, and, as such, may elect to comply with certain reduced public
company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”
Investing in our common stock involves risks. See “Risk Factors” beginning on page 37 to read about factors you should consider before buying
shares of our common stock.
Per Share | Total | ||
Initial public offering price .............................................................................................................................................. | $ | $ | |
Underwriting discounts and commissions(1) ............................................................................................................... | $ | $ | |
Proceeds, before expenses, to us ............................................................................................................................... | $ | $ | |
(1)See the section titled “Underwriting” for a description of the compensation payable to the underwriters.
We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to an additional shares
of our common stock from us at the initial public offering price, less the underwriting discounts and commissions.
At our request, the underwriters have reserved up to 5% of the shares of common stock offered by this prospectus for sale, at the initial public
offering price, to our directors, officers, certain employees and certain other persons associated with us. See “Underwriting—Directed Share
Program.”
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SoftBank Group Corp., through certain affiliated entities, is expected to beneficially own approximately % of our outstanding shares of common
stock, representing approximately % of the combined voting power of our outstanding capital stock, following the completion of this offering (or
% and %, respectively, if the underwriters exercise in full their option to purchase additional shares of our common stock), based upon
an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus). As
a result of SoftBank Group Corp.’s voting power, after the completion of this offering, we will be a “controlled company” within the meaning of the
corporate governance rules of Nasdaq and Nasdaq Texas. As a “controlled company,” we intend to elect not to comply with certain corporate
governance requirements applicable to most Nasdaq- and Nasdaq Texas-listed companies. See the section titled “Management—Controlled
Company Status.”
In connection with this offering, NVIDIA Corporation ("NVIDIA") has contractually committed to purchase $1.5 billion of a new class of our non-
voting Class N common stock in a private placement at a price per share equal to the initial public offering price. This commitment is contingent
upon, and is expected to close simultaneously with, the closing of this offering, subject to the satisfaction of certain customary closing conditions.
Separately, NVIDIA has also prepaid $1.5 billion to purchase shares of our Class N common stock at a price per share equal to 90% of the initial
public offering price pursuant to a prepaid forward contract, which will settle upon the completion of this offering. In total, NVIDIA will invest $3.0
billion in our Company in connection with this offering. The shares of Class N common stock to be sold in these transactions will not be registered
under the Securities Act of 1933, as amended (the "Securities Act"). The closing of this offering is not conditioned upon the closing of the concurrent
private placement or the settlement of the prepaid forward contract. For additional information, see "Concurrent Private Placement and Prepaid
Forward Contract."
Neither the Securities and Exchange Commission nor any state securities commission or any other regulatory body has approved or
disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The underwriters expect to deliver the shares of our common stock against payment on , 2026.
J.P. Morgan | Goldman Sachs & Co. LLC | Morgan Stanley |
Citigroup | Mizuho |
BNP PARIBAS | Jefferies | Natixis | RBC Capital Markets | Wolfe | Nomura Alliance |
Huntington Capital Markets | ING | MUFG | Santander | SMBC Nikko |
BTIG | Daiwa Capital Markets America Inc. | Newmark Securities | Raymond James | Rosenblatt |
Prospectus dated , 2026.
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TABLE OF CONTENTS
Page | |
About this Prospectus ...................................................................................................................................... | |
Prospectus Summary ...................................................................................................................................... | |
Risk Factors ...................................................................................................................................................... | |
Cautionary Note Regarding Forward-Looking Statements ........................................................................ | |
Use of Proceeds ............................................................................................................................................... | |
Dividend Policy ................................................................................................................................................. | |
Capitalization ..................................................................................................................................................... | |
Dilution ............................................................................................................................................................... | |
Business ............................................................................................................................................................ | |
Management ..................................................................................................................................................... | |
Executive Compensation ................................................................................................................................ | |
Principal Shareholders .................................................................................................................................... | |
Certain Relationships and Related Party Transactions .............................................................................. | |
Description of Certain Indebtedness ............................................................................................................. | |
Description of Capital Stock............................................................................................................................ | |
Shares Eligible for Future Sale ...................................................................................................................... | |
Underwriting ...................................................................................................................................................... | |
Concurrent Private Placement and Prepaid Forward Contract ................................................................. | |
Legal Matters .................................................................................................................................................... | |
Experts ............................................................................................................................................................... | |
Where You Can Find More Information ........................................................................................................ | |
Index to Consolidated Financial Statements ............................................................................................... |
Through and including , 2026 (the 25th day after the date of this prospectus), all dealers
effecting transactions in these securities, whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus
when acting as an underwriter and with respect to an unsold allotment or subscription.
Neither we nor the underwriters have authorized anyone to provide you with information or make any
representations other than those contained in this prospectus or in any free writing prospectuses
prepared by or on behalf of us or to which we have referred you. We and the underwriters take no
responsibility for, and provide no assurance as to the reliability of, any other information that others may
give you. This prospectus is an offer to sell only the shares offered hereby, and only under circumstances
and in jurisdictions where it is lawful to do so. You should assume that the information appearing in this
prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial
condition, results of operations and prospects may have changed since that date. For investors outside
the United States: Neither we, nor any of the underwriters, have done anything that would permit this
offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is
required, other than in the United States. Persons outside of the United States who come into possession
of this prospectus must inform themselves about, and observe any restrictions relating to, this offering of
our common stock and the distribution of this prospectus outside of the United States.
ii
GLOSSARY
The terms below that are used frequently in this prospectus have the following meanings:
“AI” means artificial intelligence.
“Amended and Restated OpenAI Warrant Agreement” means the Amended and Restated OpenAI
Warrant Agreement, dated as of August 17, 2026, between us and OpenAI Infra Holdings, LLC, which
amended and restated the Original OpenAI Warrant Agreement in its entirety.
“Ares” means affiliates of Ares Management Corporation that hold preferred equity interests and warrants
of SBE Global, including Ares SBE SPV, L.P.
“Ares Redemption” means the redemption in full by SBE Global of the preferred equity interests held by
Ares together with the cash net settlement of the warrants held by Ares, which we currently expect to
occur prior to or substantially concurrently with the completion of this offering.
“BESS” means battery energy storage system.
“Big Five Borrowers” means Big Five Holdco 1, LLC, Big Five Holdco 2, LLC, Big Five Intermediate
Holdco 1, LLC and Big Five Intermediate Holdco 2, LLC.
“CAISO” means the market and balancing authority area administered by the California Independent
System Operator Corporation.
“CFIUS” means the Committee on Foreign Investment in the United States.
“Class N common stock” means the class of non-voting common stock, par value $0.0001 per share,
authorized and designated in connection with the Concurrent Private Placement and the Prepaid Forward
Contract, which ranks pari passu with common stock as to distributions and is convertible into common
stock on a one-for-one basis as described under “Description of Capital Stock.”
“Closing Distribution” means the mandatory distribution, at or immediately following the closing of this
offering, of all shares of our common stock then held by SBE Global, our sole shareholder before this
offering, to Energy Global and, in turn, from Energy Global to its limited partners in accordance with the
Energy Global LP Agreement.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Concurrent Private Placement” means the private placement of Class N common stock to NVIDIA
Corporation under the Share Purchase Agreement dated August 17, 2026, to be effected simultaneously
with the closing of this offering, assuming the satisfaction of certain customary closing conditions, at a
number of shares equal to $1.5 billion divided by the per-share initial public offering price before
underwriting discounts and expenses, rounded down to the nearest whole share.
“Corporate Conversion” means the statutory conversion of SE Global Holdings, LLC into a Delaware
corporation named SE Global Holdings, Inc., which was completed on July 10, 2026.
“Credit Facility” means the new senior secured revolving credit and letter of credit facilities that we
expect to enter into in connection with this offering, as described under “Description of Certain
Indebtedness.”
“DC” means our data centers reportable segment.
“DOE Portsmouth Site” means the site of the U.S. Department of Energy's former Portsmouth Gaseous
Diffusion Plant in Pike County, Ohio.
iii
“ERCOT” means the market and balancing authority area administered by the Electric Reliability Council
of Texas.
“Energy Global” means Energy Global, LP, a Delaware limited partnership and, prior to the Closing
Distribution, our indirect parent entity. Energy Global holds its interest in SB Energy, Inc. indirectly through
SBE Global, LP, our direct parent entity prior to the Closing Distribution.
“Energy Global LP Agreement” means the limited partnership agreement of Energy Global, as
amended.
“FERC” means the Federal Energy Regulatory Commission.
“First phase revenue” refers to the first revenue we expect to recognize from contractual rent payable
under our data center leases once the applicable rent commencement milestones are achieved. These
milestones vary by project and lease. See “Business—Our Company.”
“Foundation Agreement” means the Foundation Agreement, dated January 9, 2026, by and among
OpenAI Infra Holdings, LLC, Energy Global and SoftBank Group Corp., as amended and restated in its
entirety pursuant to Amendment No. 1 to Foundation Agreement, dated August 17, 2026.
“GAAP” means accounting principles generally accepted in the United States.
“GHG” means greenhouse gas.
“GW” means gigawatts.
“GWac” means gigawatts of alternating current power capacity for solar and battery energy storage
assets.
“GW-gross” means gigawatts of gross power available to support data halls and network computing
equipment and ancillary loads such as cooling, lighting and other non-IT building systems.
“GWh” means gigawatt hours.
“GW-IT” means gigawatts of critical IT capacity available to support data halls and network computing
equipment, excluding ancillary loads such as cooling, lighting and other non-IT building systems.
“Intercompany Notes Repayment” means the repayment in full by SB Energy, Inc., of the
approximately $709.5 million of intercompany notes (plus accrued and unpaid interest) owed to SBE
Global, funded with cash on hand, borrowings under the Credit Facility and/or other sources prior to or
substantially concurrently with the completion of this offering.
“ISO” means an Independent System Operator.
“ITC” means an investment tax credit under applicable U.S. federal tax law.
“Management LP” means Energy Global Management, LP, a Delaware limited partnership that serves as
an incentive equity vehicle through which certain equity incentive awards relating to Energy Global and its
affiliates are held by our employees, officers and directors.
“MISO” means the market and balancing authority administered by the Midcontinent Independent
System Operator, Inc.
“MW” means megawatts.
“MWac” means megawatts of alternating current power capacity for solar and battery energy storage
assets.
“MW-IT” means megawatts of critical IT capacity available to support data halls and network computing
equipment, excluding ancillary loads such as cooling, lighting and other non-IT building systems.
iv
“MWh” means megawatt-hours, a unit of energy equal to one megawatt delivered for one hour.
“Name Change” means the change of our corporate name from SE Global Holdings, Inc. to SB Energy,
Inc., which became effective on August 31, 2026.
“NVIDIA” means NVIDIA Corporation and, where the context requires, its applicable subsidiaries and
controlled affiliates.
“OpenAI” means OpenAI Group PBC and, where the context requires, its applicable subsidiaries and
controlled affiliates, including OpenAI Global, LLC and OpenAI Infra Holdings, LLC.
“OpenAI Warrants” means the 3,991,809 warrants issued by us to OpenAI pursuant to the Amended and
Restated OpenAI Warrant Agreement, dated August 17, 2026, and outstanding as of the date of this
prospectus at a nominal exercise price of $0.01 per share, of which 1,737,867 are vested or vest upon the
pricing of this offering and will be net exercised for shares of our common stock through the contribution
and exchange mechanics described herein. Any OpenAI Warrants that vest after this offering will be
exercisable directly for shares of our common stock. See “Certain Relationships and Related Party
Transactions—Transactions with OpenAI—Warrants.”
“OpenAI Warrant Exercises” means the automatic net (cashless) exercise, upon completion of this
offering, of 1,737,867 OpenAI Warrants, consisting of the 868,934 OpenAI Warrants vested before this
offering and the 868,933 OpenAI Warrants that vest upon pricing of this offering. It excludes the
2,253,942 OpenAI Warrants that will remain unvested and outstanding following this offering. See
“Certain Relationships and Related Party Transactions—Transactions with OpenAI—Warrants.”
“Original OpenAI Warrant Agreement” means the Warrant Agreement, dated January 9, 2026, between
us and OpenAI Infra Holdings, LLC, which was amended and restated by the Amended and Restated
OpenAI Warrant Agreement.
“PJM” means the market and balancing authority area administered by PJM Interconnection, L.L.C.
“PORTS-Pike Technology Campus” or “PORTS” means our anticipated data center campus in Pike
County, Ohio, designed to comprise 17 data center buildings aggregating approximately 8.0 GW-IT of
critical IT capacity, together with the associated site, infrastructure and leasehold interests.
“PPA” means a power purchase agreement.
“Prepaid Forward Contract” means the prepaid forward contract dated August 17, 2026 between Energy
Global and NVIDIA under which NVIDIA prepaid $1.5 billion to Energy Global for delivery of Class N
common stock upon the completion of this offering at the initial public offering price before underwriting
discounts and expenses multiplied by 90%. See “Concurrent Private Placement and Prepaid Forward
Contract.”
“PTC” means a production tax credit under applicable U.S. federal tax law.
“PUCT” means the Public Utility Commission of Texas.
“RFS” means “ready for service”.
“RTO” means a Regional Transmission Organization.
“SBE Global” means SBE Global, LP, a Delaware limited partnership formed on March 4, 2022 and our
direct parent.
“SLN” means our solutions reportable segment.
“SoftBank” means SoftBank Group Corp. and, where the context requires, its applicable subsidiaries
and affiliates (other than the Company, Energy Global and SBE Global).
“SP” means our standalone power reportable segment.
v
“Specified QPO” means a qualified public offering under the Energy Global LP Agreement that triggers
the automatic conversion of Energy Global’s outstanding preferred equity interests into common equity
interests. This offering is expected to constitute a Specified QPO.
“Stock Split” means the -for- forward split of our outstanding common stock to be effected
immediately following the effectiveness of the registration statement of which this prospectus forms a part,
and prior to the completion of this offering.
“Texas Conversion” means the conversion of SE Global Holdings, Inc. from a Delaware corporation into
a Texas for-profit corporation, which was completed on August 28, 2026.
“Threshold Date” means the date on which SoftBank and its controlled affiliates cease to own at least
33% of the total voting power of all of the then-outstanding shares of our capital stock.
“token” means a digital unit, credit, or record that is created, issued, recorded, transferred or otherwise
maintained using blockchain, distributed ledger or similar technology and that may be used to access,
allocate, meter, pay for or settle transactions involving compute capacity, data center services, cloud
infrastructure, storage, bandwidth, energy, software or related services on or through the applicable
network or platform.
“U.S.–Japan Partnership” means the United States–Japan Global Strategic Partnership for Economic
Security and Infrastructure, a framework publicly announced by the governments of the United States and
Japan.
“WECC” means the Western Electricity Coordinating Council, which exists to ensure a reliable bulk
electric system in the geographic area known as the Western Interconnection.
1
ABOUT THIS PROSPECTUS
As used in this prospectus, unless the context otherwise requires, references to “we,” “us,” “our,” the
“Company,” and similar references refer to: (i) prior to the Corporate Conversion on July 10, 2026, SE
Global Holdings, LLC and its consolidated subsidiaries, (ii) after the Corporate Conversion and prior to the
Name Change, SE Global Holdings, Inc. and its consolidated subsidiaries (SE Global Holdings, Inc.
having been a Delaware corporation prior to the Texas Conversion on August 28, 2026 and a Texas for-
profit corporation from and after that date) and (iii) after the Name Change, SB Energy, Inc. and its
consolidated subsidiaries. Unless otherwise indicated, all share, per share, ownership, capitalization,
dilution and other share-number information in this prospectus assumes no exercise by the underwriters
of their option to purchase additional shares of our common stock.
Unless otherwise indicated or the context otherwise requires, the consolidated financial statements and
other historical financial information included in this prospectus are those of SE Global Holdings, LLC and
its consolidated subsidiaries and do not give effect to the transactions described under “Prospectus
Summary—Transactions in Connection with This Offering,” other than in any pro forma or pro forma as
adjusted information included elsewhere in this prospectus. SE Global Holdings, LLC is the accounting
predecessor of SB Energy, Inc. for financial reporting purposes. You should read this prospectus together
with our consolidated financial statements and related notes included elsewhere in this prospectus.
This prospectus includes certain non-GAAP financial measures, including Total Segment Adjusted
EBITDA and Net Debt, as well as key business metrics, including Data Center Contracted Portfolio and
Standalone Power Contracted Portfolio. Our non-GAAP financial measures are presented as
supplemental information only and should not be considered in isolation or as substitutes for measures
presented in accordance with GAAP, and our calculations may not be comparable to similarly titled
measures used by other companies. Unless expressly stated otherwise, references to portfolio capacity,
pipeline capacity, capacity under signed lease, capacity under signed PPA or backlog may include
projects, contracts or capacity at varying stages of development, construction, contracting or operation
and should not be read to mean that the related capacity is operating, that the related revenue has been
recognized under GAAP, or that such amounts will be realized on the timelines, or in the amounts
currently anticipated. Further, backlog-associated capex does not reflect operating expenses,
maintenance costs, non-capitalized interest expense, non-capitalized taxes, non-capitalized overhead,
depreciation, cost overruns, timing delays, customer defaults or other costs, risks or events that may
affect the profitability or economic return of the projects underlying our backlog.
As of June 30, 2026, our actual operating capacity consists of approximately 2.2 GWac of solar power
and BESS projects that have been placed in service under the terms of their respective interconnection
and offtake agreements. No data center capacity is currently in operation. Our first data center projects,
the Cosmos Technology Campus and Milam County Data Center, are under construction. In addition, as
of the date of this prospectus, we have executed a definitive lease for our PORTS-Pike Technology
Campus, which is not yet under construction. There can be no assurance that these projects or any other
project will be completed on the anticipated timeline or at all.
This prospectus also includes “backlog,” which we define as the estimated revenue remaining to be
recognized over the life of our executed and binding customer contracts, and “backlog-associated capex,”
which represents the aggregate capital expenditures we expect to incur to develop and construct projects
under executed and binding customer contracts, based on the construction schedules set forth in those
contracts. Our backlog figures are based on a number of assumptions and estimates, including: the
construction of each relevant project (including obtaining required regulatory approvals and successfully
achieving grid interconnection); estimated revenues determined according to the terms of the applicable
PPA or lease for the contracted term; timely construction and commissioning in accordance with
milestones provided for in the applicable agreement; and management’s estimates of applicable
locational curtailment, degradation and variability in weather conditions. These assumptions do not give
effect to any potential adjustment or payment relating to deficient production or otherwise. As a result, our
2
backlog and backlog-associated capex are estimates only that reflect hypothetical revenue and
hypothetical capital expenditures relating to our executed and binding customer contracts, and are not
necessarily indicative of future revenue, profits or costs associated with the development and construction
of our projects. We may not fully realize the revenue estimated in our backlog and we may exceed the
capital expenditures estimated in our backlog-associated capex, any of which could have a material
adverse impact on our business, financial condition and results of operations.
See “Risk Factors—Risks Related to Our Business and Operations—Our backlog and our backlog-
associated capex are not necessarily indicative of our future revenue, profits or costs associated with the
development and construction of our projects, and we may not fully realize the revenue estimated in our
backlog or may exceed the costs estimated in our backlog-associated capex.”
References in this prospectus to our “data centers,” “standalone power” and “solutions” businesses
describe our commercial and operating activities. For financial reporting purposes, our reportable
segments are DC, SP, and SLN, as described in our consolidated financial statements and related notes
included elsewhere in this prospectus.
Certain monetary amounts, percentages, and other figures included in this prospectus have been subject
to rounding adjustments. Percentage amounts included in this prospectus have not in all cases been
calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For
this reason, percentage amounts in this prospectus may vary from those obtained by performing the
same calculations using the figures in our consolidated financial statements included elsewhere in this
prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding.
TRADEMARKS, SERVICE MARKS AND TRADE NAMES
This prospectus includes our owned and in-licensed registered or common law trademarks, service marks
and trade names, which are protected under applicable intellectual property laws. This prospectus also
contains trademarks, service marks, and trade names of other companies, which are the property of their
respective owners. We do not intend our use or display of other parties’ trademarks, service marks or
trade names to imply, and such use or display should not be construed to imply a relationship with,
endorsement of, or sponsorship of us by, these other parties. Solely for convenience, trademarks, service
marks, and trade names referred to in this prospectus may appear without the ®, ™, or SM symbols, but
such references are not intended to indicate, in any way, that we will not assert to the fullest extent
permitted under applicable law, our rights or the right of the applicable licensor to these trademarks,
service marks, and trade names.
References in this prospectus to “SB Energy” and related marks, domain names, and trade names
include the marks, domain names, and trade names that are licensed to us by SoftBank Group Corp. and
SBE Global. We do not own the “SB” or “SB Energy” marks, and our rights to use such marks, domain
names, and trade names are limited by, and subject to the terms and conditions of, our license agreement
with SoftBank, as amended, including consent and termination provisions. See “Certain Relationships and
Related Party Transactions—Certain Transactions with SoftBank—Trademark License Agreement,” “Risk
Factors—Risks Related to Intellectual Property, Data Privacy and Cybersecurity” and “Risk Factors—
Risks Related to Our Corporate Structure and Ownership.”
MARKET AND INDUSTRY DATA
This prospectus contains estimates, projections and information concerning our industry, our business
and the market size, and growth rates of the markets in which we participate. Some data and statistical
and other information are based on independent reports from third parties, as well as industry and general
publications, research, surveys and studies conducted by third parties which we have not independently
verified. Some data and statistical or other information are based on internal estimates and calculations
that are derived from publicly available information, research we conducted, a report of Altman Solon US,
LP (“Altman Solon”), dated June 24, 2026 (the “Altman Solon Report”), relating to the data center industry,
3
internal surveys, our management’s knowledge of our industry and their assumptions based on such
information and knowledge, which we believe to be reasonable.
In each case, this information and data involves a number of assumptions and limitations. Projections,
assumptions, and estimates of the future performance of the industry in which we operate and our future
performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors,
including those described in the sections entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements.” These and other factors could cause our future performance to differ
materially from the assumptions and estimates made by third parties and us.
The markets in which we operate, including AI infrastructure, data center development, power generation,
battery storage, grid interconnection, and related energy infrastructure markets, are rapidly evolving.
Third-party reports, industry publications, and our internal estimates may use different methodologies,
assumptions, definitions and data collection practices, including with respect to AI adoption, AI-enabled
data center capacity, critical IT capacity, announced or pipeline capacity, hyperscaler capital expenditures,
data center power demand, power generation capacity, interconnection timelines, customer site-selection
criteria and other market trends. As a result, market, industry, and competitive-position data included in
this prospectus may not be comparable across sources or to similarly titled information presented by
other companies. Actual market conditions may differ materially from the estimates, projections and
assumptions reflected in such data.
4
PROSPECTUS SUMMARY
This summary highlights selected information that is presented in greater detail elsewhere in this
prospectus. This summary does not contain all of the information you should consider before investing in
our common stock. You should read this entire prospectus carefully, including the sections titled “Risk
Factors,” “Cautionary Note Regarding Forward-Looking Statements,” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and
related notes included elsewhere in this prospectus, before making an investment decision. Some of the
statements in this prospectus constitute forward-looking statements. See “Cautionary Note Regarding
Forward-Looking Statements” contained elsewhere in this prospectus.
Unless otherwise indicated, the consolidated financial statements and other historical financial information
included in this prospectus are those of SE Global Holdings, LLC, the accounting predecessor of SB
Energy, Inc., and its consolidated subsidiaries and do not give effect to the Corporate Conversion except
where expressly presented on a pro forma or pro forma as adjusted basis.
Unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” and similar
references refer to: (i) prior to the Corporate Conversion on July 10, 2026, SE Global Holdings, LLC and
its consolidated subsidiaries, (ii) after the Corporate Conversion and prior to the Name Change, SE
Global Holdings, Inc. and its consolidated subsidiaries (SE Global Holdings, Inc. having been a Delaware
corporation prior to the Texas Conversion on August 28, 2026 and a Texas for-profit corporation from and
after that date) and (iii) after the Name Change, SB Energy, Inc. and its consolidated subsidiaries.
Overview
Our Mission
To enable the new AI economy by developing, building and owning its critical physical infrastructure –
delivering gigawatt-scale data center and power capacity to our customers with speed, reliability and cost
discipline.
Our Company
We are unlocking the future of AI as a leading, integrated data center and power infrastructure company.
We develop, construct and plan to operate gigawatt-scale data center facilities and we develop, construct,
own and operate power generation assets. Our vertically integrated, power-first, community-focused
model is purpose-built for the AI era. We believe this will enable the delivery of data center capacity with
the scale, speed and reliability required to support our customers’ rapidly growing demand for compute.
SoftBank and OpenAI are strategic investors and customers at our data center campuses – Cosmos
(SoftBank), Milam County (OpenAI) and PORTS-Pike Technology Campus (OpenAI) – and NVIDIA is a
strategic investor and residual value guarantor at the PORTS-Pike Technology Campus. NVIDIA is also
expected to become a holder of our Class N common stock in connection with this offering, subject to
each of the closing of the Concurrent Private Placement and the settlement of the Prepaid Forward
Contract.
AI is driving a generational shift in the global economy. Just as the electric power grid underwrote the
modern industrial economy and the interstate highway system underwrote the consumer economy, we
believe gigawatt-scale, power-integrated data centers will underwrite the AI economy. The scale of that
shift is difficult to overstate: according to International Data Corporation (“IDC”), AI is projected to
generate a cumulative global economic impact of $20 trillion by 2030. The compute required to train and
operate the systems delivering that impact is growing at a pace without historical precedent, and every
credible projection of AI progress – from model scale, to inference volume, to the emergence of
autonomous agentic systems – depends on the deployment of physical infrastructure. Meeting that
demand will require a rapid global build-out of data center capacity, which, according to the Altman Solon
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Report, is expected to grow from 82 GW in 2025 to 274 GW by 2030, with approximately 40-45% of that
growth coming from the United States. We are in the business of building that very infrastructure.
That ambition is matched by tangible scale today. Our business model is designed to generate three
interrelated revenue streams: entering into long-term lease agreements and service level agreements
with hyperscaler and AI lab customers for our data center capacity, the sale of electricity and related
products under fixed-price PPAs and other offtake agreements to utilities and corporations, and the
design, engineering, construction management and operations management services to our businesses.
Based on internal estimates and industry benchmarking, we believe we have one of the largest Data
Center Contracted Portfolio capacities among data center companies as of the date of this prospectus,
with 8.8 GW-IT in our portfolio, including 0.8 GW-IT of under-construction capacity, inclusive of our
Cosmos Technology Campus and Milam County Buildings 1 and 2, and 8.0 GW-IT of capacity contracted
but not yet under construction, consisting of the 8.0 GW-IT PORTS-Pike Technology Campus, which we
believe will be among the largest data center development sites in the world. Our data center pipeline
includes campuses at Borden County and Scurry County, Texas, among other sites, where we have
secured land and are actively pursuing development and lease negotiations. Together, Borden County
and Scurry County represent approximately 1.7 GW-IT of near-term critical IT capacity in ERCOT with
secured interconnection under Batch Zero Base Load (representing approximately 2.35 GW gross power
capacity available in 2028 under such designation), subject to confirmation under the ERCOT large-load
verification process; neither is currently included in our Data Center Contracted Portfolio or in the
calculation of our backlog. No data center capacity is currently in operation. Realization of the under
construction and contracted capacity as revenue-generating assets is dependent upon, among other
things, completion of construction, receipt of permits, successful interconnection, lease commencement
and tenant acceptance.
Across these 8.8 GW-IT of data center campuses with leases signed and our 5.5 GWac of power that is
operating, under construction or contracted as of the date of this prospectus, we have approximately $439
billion of backlog, comprising approximately $430 billion of DC segment backlog and approximately $10
billion of SP backlog. The PORTS-Pike Technology Campus constitutes all of our contracted-but-not-
under-construction data center capacity and a substantial majority of our DC segment backlog. The
weighted average remaining contract length (by capacity) for our power projects is 16.6 years and for our
data center projects is 19.6 years, in each case as of the date of this prospectus. See the section titled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors
Affecting Our Business and Results of Operations” for a definition of backlog.
For the six months ended June 30, 2026, we generated total revenue of $138.7 million (including $58.7
million from contracts with customers, $12.6 million of realized change in fair value of power price swap
derivatives, and $67.4 million of unrealized change in fair value of power price swap derivatives) and
incurred a net loss attributable to SB Energy, Inc. of $3,208.9 million (including a $589.5 million non-cash
expense related to stock-based compensation and a $2,573.1 million non-cash expense related to the
change in fair value of our warrant liability). For the year ended December 31, 2025, we generated total
revenue of $213.5 million (including $143.0 million from contracts with customers, $7.2 million of realized
change in fair value of power price swap derivatives, and $63.3 million of unrealized change in fair value
of power price swap derivatives) and incurred a net loss attributable to SB Energy, Inc. of $738.0 million
(including a $674.1 million non-cash expense related to stock-based compensation). For the year ended
December 31, 2024, we generated total revenue of $232.2 million (including $100.6 million from contracts
with customers, $12.4 million of realized change in fair value of power price swap derivatives, and $119.3
million of unrealized change in fair value of power price swap derivatives) and generated net income
attributable to SB Energy, Inc. of $106.1 million (including a $140.3 million non-cash expense related to
stock-based compensation). As of June 30, 2026, our accumulated deficit was $3,803.0 million.
Our revenue to date has been generated predominantly by our SP segment. Our DC segment has not
generated significant revenue to date and is not expected to generate significant revenue until we achieve
first phase revenue, which we expect to first occur under the first phase of Cosmos, subject to the
completion of remaining construction activities and other conditions. There can be no assurance that
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Cosmos or any other project will be completed on the anticipated timeline or at all or that we will be able
to generate first phase revenue on the anticipated timeline. We expect to first achieve first phase revenue
at the Cosmos Technology Campus, a facility in Travis County, Texas, with approximately 50 MW of
critical IT capacity. In May 2026, we issued $999.0 million aggregate principal amount of 8.875% Senior
Secured Notes due 2031 to finance the project, and one of our parent entities provided a completion
guaranty for the benefit of the noteholders and the tenant. The lease provides for a 15-year initial term
with an affiliate of SoftBank as tenant, structured as a triple-net lease with 100% operating expense pass-
through, rent based on a percentage return on total project cost with annual escalators and limited tenant
termination rights. Expected aggregate rent under the Cosmos lease over its 15-year initial term is
approximately $2.5 billion. SoftBank Group Capital Limited, a SoftBank Group affiliate, has delivered a
guaranty in favor of our subsidiary for the tenant’s obligations, with anticipated aggregate guaranty
exposure of approximately $2.9 billion. The Cosmos Technology Campus is financed in part by $999.0
million aggregate principal amount of 8.875% Senior Secured Notes due 2031, issued in May 2026, and
is being renovated to support our tenants' current needs, which include research, development, and
engineering related to advanced AI compute technologies. Rent commencement for the initial phase of
the Cosmos lease is structured to occur on the earlier of December 11, 2026 or the applicable phase of
the facility achieving RFS status, which requires, among other things, substantial completion of
construction, satisfaction of tenant acceptance conditions, delivery of required certifications, and
compliance with specified commissioning standards. We will not recognize any data center leasing
revenue until rent commences and the applicable facility is made available for the tenant’s use. We
currently expect first phase revenue from Cosmos during the fourth quarter of 2026. The lease contains
milestones and conditions precedent, including delivery of design documents, early access completion,
substantial completion and final completion by specified deadlines. The remaining steps to achieve first
phase revenue include completion of the Phase 1 build-out, tenant inspection, satisfaction of acceptance
conditions and formal lease commencement. There can be no assurance that Cosmos or any other
project will be completed on the anticipated timeline or at all. For a definition of “first phase revenue” and
a discussion of the conditions to its achievement, see “Glossary.”
Our backlog reflects our customers' committed expenditures that we have not yet recognized as revenue,
including revenue that has been billed but deferred and revenue that has been contracted but not yet
billed. Backlog reflects only revenue under binding agreements and does not include revenue from
merchant electricity sales or uncommitted future contract renewals. We believe this backlog will be
realized as revenue based on the following factors: (i) our data center leases and PPAs are binding, long-
term contracts with creditworthy counterparties (weighted average remaining contract length of 16.6 years
for power and 19.6 years for data centers); (ii) our power projects have historically converted from
construction to operations consistent with projected timelines; and (iii) our data center leases are
structured as triple-net leases, which generally require the tenant to accept delivery upon completion of
construction and to pay rent for the full term regardless of utilization. However, some programs
comprising backlog are scheduled many years in the future, and the economic viability of contractual
counterparties is not guaranteed over time. See “Risk Factors—Risks Related to Our Business and
Operations—Our backlog and our backlog-associated capex are not necessarily indicative of our future
revenue, profits or costs associated with the development and construction of our projects, and we may
not fully realize the revenue estimated in our backlog or may exceed the costs estimated in our backlog-
associated capex.”
Our business is led by a management team with deep, multi-decade experience across data center
development, power infrastructure development and large-scale capital formation. We started our
business in 2019 with a focus on power infrastructure led by a team of industry veterans. Since our
founding, we have developed, financed and begun construction on 4.7 GWac of solar power and BESS
projects. We have additionally focused on the development of data center infrastructure. To bolster our
existing expertise, in 2025, we acquired and integrated Studio 151, a data center construction
management and operations firm. Through that legacy organization, the leaders of our data center
business have been developing and operating mission-critical facilities since 2008, collectively delivering
15 completed data center facilities to third parties. This experience combined with our power generation
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roots creates deep institutional expertise in developing, building and operating large-scale infrastructure
assets. We have developed in and operate across multiple major U.S. power markets, including ERCOT,
CAISO and PJM, have 24 unique customers, and have executed 37 distinct project financings. This depth
of experience is what enables us to navigate the federal, state and local relationships that increasingly
determine which data center and power projects actually get delivered. Our partnerships with SoftBank,
OpenAI and NVIDIA further provide us with valuable insight into, and access to, the forefront of the AI
ecosystem. We believe our combination of data center development pedigree, power market expertise
and integrated execution capability – together with our partnerships across the AI ecosystem – position us
to seek to deliver a speed-to-compute advantage and pursue attractive returns on invested capital over
time.
A New Era of Data Center Infrastructure
Our business is built to serve the next generation of data centers and supply the power these data
centers will require. Demand for compute is undergoing a generational reordering as AI workloads layer
on top of enterprise IT and cloud to drive unprecedented capacity growth. As of year-end 2025 according
to the Altman Solon Report, there were approximately 82 GW of data center capacity globally with
demand projected to increase to 274 GW by 2030, implying a net demand increase of 192 GW, driven by
rapid growth in AI demand and continued robust growth in cloud demand. This build-out will not resemble
the data centers of yesteryear: modern graphics processing unit (“GPU”) clusters require higher rack
densities, innovative cooling techniques and campuses orders of magnitude larger than legacy sites. We
believe the incumbent development model, shaped over three decades around enterprise IT and cloud
virtualization, was engineered for a fundamentally different workload that oriented around kilowatts per
rack, modestly sized facilities near urban centers, and incremental capacity expansion. The incumbent
development model is not structurally suited to deliver what AI now requires due to the following
shortcomings:
•Real estate first, power later – Power was historically secured after land acquisition and design
were complete.
•Fragmented value chain – Responsibility was distributed across utilities, developers, landlords and
operators, creating coordination risk, slower execution and limited accountability for delivering an
integrated solution.
•Sub-scale design and execution – Facilities were engineered to be built and expanded
incrementally on the megawatt scale over multi-year delivery cycles, an approach misaligned with the
gigawatt-scale capacity and compressed timelines that hyperscale AI workloads demand.
•Limited stakeholder engagement – Legacy projects were smaller and pursued with limited early
coordination with utilities, regulators and local communities – an approach no longer viable given the
size, visibility and grid impact of modern AI infrastructure.
•Extended execution timelines – Development and construction timelines were optimized for steady,
predictable cloud demand, with multi-year delivery cycles that are not compatible with the
compressed timelines of current AI-driven capacity requirements.
Our Solutions for the AI Infrastructure Build-out
Meeting hyperscale AI demand requires a fundamental departure from the incumbent real estate
development approach and a reordering of the sequence in which physical infrastructure is built. We have
engineered our integrated business model for that reality, integrating power origination, grid
interconnection, data center construction and data center operations within a single, scalable model that
we believe will deliver faster execution at large scale. This integration is the foundation of the structural
advantages that we believe differentiate us in the market:
•Power-first development – In a market where power availability is the binding constraint on data
center delivery and the principal bottleneck for our customers, we invert the traditional development
8
sequence by establishing scalable, reliable and cost-effective power delivery capabilities and then
securing site control and committing to design. We work simultaneously across grid analysis,
interconnection strategy, power supply and high-voltage equipment procurement at the earliest stages
of development, drawing on existing relationships and execution experience to compress timelines
and provide customers with greater certainty around delivery, cost and reliability. Where appropriate,
we pair sites with on-site generation to provide reliable energy supply and lock in long-term, cost-
effective electricity, improving operating-cost visibility for our customers over the lease term.
•Vertically integrated business model – Our vertical integration provides a structural advantage: We
centralize capabilities that other companies typically source separately, including site identification,
interconnection, on-site generation, design, construction management and operations of the data
center and the power infrastructure that serves it. This single point of accountability allows us to
control the interfaces that drive schedule, cost and reliability – the same interfaces that fragment in
the legacy model and create execution risk. It also lets us engage utilities, regulators, and host
communities through one coordinated voice, and to pair large-scale data center deployments with
incremental power generation in a way that supports rate affordability and community alignment.
•Deep relationships across the development ecosystem – We have deep-rooted relationships with
utilities, Regional Transmission Organizations (“RTOs”), Independent System Operators (“ISOs”), and
federal, state and local agencies, built through years of engagement and a development approach
designed to align large-scale data center and power infrastructure deployment with grid reliability and
community priorities. Our operating experience in the CAISO and ERCOT power markets, together
with our ongoing development activities and utility and stakeholder engagement in PJM, MISO and
WECC helps us navigate interconnection and infrastructure planning more efficiently, improving
schedule certainty for multi-phase campuses. We also invest meaningfully in the communities that
host our facilities and maintain constructive relationships with local leaders, which is increasingly
important amid heightened public scrutiny of large data center developments and concerns about
potential retail electricity price impacts.
•Gigawatt scale – We have what we believe to be one of the largest data center portfolio capacities
among data center companies today. As of the date of this prospectus, we have 8.8 GW-IT of total
data center capacity contracted, of which 0.8 GW-IT is under-construction capacity and 8.0 GW-IT is
contracted. No data center capacity is currently in operation. Based on internal estimates and industry
benchmarking, we believe we are developing four of the seven largest data center sites by IT capacity
in the United States today. Scale of this magnitude reshapes execution: It enables standardized
delivery across campuses, more efficient construction sequencing, and meaningful procurement
leverage for the long lead electrical and mechanical equipment that increasingly governs project
timelines. It also deepens our engagement with suppliers, utilities and equipment manufacturers,
supporting more predictable execution across multi-year build programs. But scale is also a customer
requirement, not just an operating advantage. The frontier AI models of the next decade, and the
inference demand emerging from agentic AI and broader enterprise adoption, may not be able to be
trained or served from sub-scale facilities. Our customers demand mega-sites, and we are among the
few data center providers positioned to deliver them.
•Speed to compute – Time-to-energization has become the defining variable in data center
development. According to the Altman Solon Report, standard grid interconnection timelines for
hyperscale-size deployments (50 MW+) in 2025 have stretched to approximately seven years in
Northern Virginia and approximately three years in Texas. Our 8.8 GW-IT portfolio of data center
capacity contracted, of which 0.8 GW-IT is under construction and 8.0 GW-IT is contracted, along with
an incremental pipeline of submitted interconnection applications across carefully selected locations,
gives customers earlier visibility and substantially higher confidence in energization dates than the
market can otherwise offer. Where grid timelines remain binding, we aim to complement
interconnection with on-site generation to keep delivery schedules on track and bring capacity online
ahead of what conventional development paths would allow. Our work alongside SoftBank, OpenAI
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and NVIDIA further sharpens this advantage, keeping us at the leading edge of data center design,
construction and operating practice as the technology stack evolves.
•Alignment with U.S. AI and energy security objectives – We operate at the intersection of AI
infrastructure, grid reliability and new generation build-out – three areas of growing strategic
importance for the United States. Our combination of speed to power, gigawatt-scale execution, and
sensitivity to retail electricity, transmission and distribution price impacts aligns directly with national
priorities around energy security and AI competitiveness. See “Business—Our Solutions for the AI
Infrastructure Build-out—Alignment with U.S. AI and energy security objectives” for further detail.
•Demonstrated access to large-scale project capital – As part of building our infrastructure
portfolio, we have established deep and repeat relationships with a broad base of institutional lenders
and investors. Since inception through the date of this prospectus, we have raised approximately $19
billion in project capital, including approximately $15 billion in project debt and nearly $4 billion in tax
equity financing.
•Experienced, execution focused team – Our integrated power and data center business is
managed by an experienced leadership team, with an average of 23 years of industry experience and
further supported by an organization that includes approximately 350 professionals spanning
development, financing, construction management, operations and asset management. The depth of
our in-house capability allows us to manage complex, multi-phase programs with tight coordination
across utilities, regulators, community partners, customers and vendors. As we scale, our team’s
integrated expertise across data center and power infrastructure supports repeatable execution and
disciplined growth.
Our strategy of executing on power and data center infrastructure at scale is most clearly demonstrated at
our PORTS-Pike Technology Campus in Pike County, Ohio, which we believe will be among the largest
data centers in the world. As of the date of this prospectus, the site is designed to include 8.0 GW-IT of
data center capacity, representing 10 GW of gross power load expected to be supported by the PJM
transmission system and new neighboring gas-fired generation facilities. Rent commencement for each
phase and the tenant’s associated obligations remain conditioned on satisfaction of the applicable RFS
conditions, including completion and availability of the interconnection facilities and generation resources
necessary to serve the contracted load, as well as substantial completion and commissioning of the
applicable buildings. The project sits at the confluence of seven major high-voltage transmission lines and
on the site of a retired large industrial load. Those transmission lines had available capacity for a new
customer in part because of the retirement of the U.S. Department of Energy’s (“DOE”) nearby
Portsmouth Gaseous Diffusion Plant. We subsequently worked with the local transmission owner, the
distribution utility, local landowners, and the DOE to assemble the power and site control. In August 2026,
we leased the data center site to OpenAI, a strategic investor in our business, under a 20-year term. We
are developing and will own and operate the data center site, but we do not expect to own or operate the
gas-fired generation facilities. We have broken ground on the site for certain aspects of the project and
the first phase is targeting commencement of operations in 2028, subject to receipt of required regulatory
approvals, availability of financing, procurement of long-lead equipment, construction of supporting
transmission and pipeline infrastructure, completion of construction and commissioning, and other
customary construction and commissioning conditions. See “Risk Factors.” See also “Business—Our
Solutions for the AI Infrastructure Build-out” for additional information related to the PORTS-Pike
Technology Campus.
Our Portfolio
Our Place in the Data Center Value Chain
Our vertically integrated business is designed to deliver the full physical foundation on which modern AI
compute runs – land, power, fiber, water, building shells and the critical internal systems that bring them
together, including mechanical, electrical and plumbing (“MEP”) systems, power distribution and cooling.
Customers bring their own racks and semiconductors for compute; we deliver everything required to
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power, house and operate them. By design, our core turnkey scope today ends at the rack; we do not
currently offer compute-as-a-service, although we may decide to in the future. This preserves customer
flexibility over the hardware and compute architecture inside our facilities while giving them a single
counterparty for the infrastructure that surrounds it.
Our integrated capabilities are designed to allow us to engage customers at multiple points along the data
center value chain, from delivering powered land, to constructing building shells, to providing full turnkey
data centers. Today, we concentrate our capital and execution on turnkey delivery: the model we believe
will best leverage the full breadth of our integrated business and generates the most attractive returns at
scale. The breadth of our capability set, however, gives us the flexibility to meet customers where their
own development preferences sit, and to evolve our delivery model as the market and our customers’
needs evolve.
Our Data Center & Power Portfolio
Our data center sites are located primarily in the PJM and ERCOT transmission regions, two of the
largest data center markets and among the most competitive and liquid power markets in the United
States. As of the date of this prospectus, our portfolio of data center capacity is comprised of: (i) 0.8 GW-
IT of under-construction capacity and (ii) 8.0 GW-IT of contracted capacity that is not yet under
construction. We are also pursuing multiple GWs of incremental development pipeline, consisting of
approximately 30.6 GW-IT of data center capacity, approximately 4.2 GWac of data center dedicated
power and approximately 6.9 GWac of standalone power capacity, in each case not included in our
contracted portfolios, at additional sites where we have filed for load interconnection and are pursuing
land control, interconnection approvals, permitting, commercial contracting among other development
activities. Our data center pipeline includes campuses at Borden County and Scurry County, Texas, as
well as additional sites at varying stages of development. We have secured land and filed load
interconnection requests at these sites and are pursuing lease negotiations with prospective tenants.
Together, the Borden County Data Center and Scurry County Data Center represent approximately 1.7
GW-IT of near-term critical IT capacity in ERCOT with secured interconnection under Batch Zero Base
Load (representing approximately 2.35 GW gross power capacity available in 2028 under such
designation), subject to confirmation under the ERCOT large-load verification process. These pipeline
sites are at earlier stages of development than our contracted portfolio and are not yet included in our
Data Center Contracted Portfolio or in the calculation of our backlog. There can be no assurance that
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definitive lease agreements will be executed at any of these pipeline sites on the terms currently
anticipated, or at all.
DATA CENTER CONTRACTED PORTFOLIO | ||||||||||
Capacity | ||||||||||
Project | (MW-IT) | County | State | Ownership | Status | Last RFS | Contracted | Load Interconnection | Land Control | Co-located power |
Cosmos Technology Campus | 50 | Travis | TX | 100% | Construction | 2027 | ü | ü | ü | O |
Milam County 1 | 308 | Milam | TX | 100% | Construction | 2028 | ü | ü | ü | ü |
Milam County 2 | 445 | Milam | TX | 100% | Construction | 2028 | ü | ü | ü | ü |
Under Construction | 803 | |||||||||
PORTS-Pike Technology Campus Buildings 1-9 | 4,248 | Pike | OH | 100% | Contracted | 2031 | ü | ü(1) | ü | ü(2) |
PORTS-Pike Technology Campus Buildings 10-17 | 3,776 | Pike | OH | 100% | Contracted | 2032 | ü | ü(1) | ü | ü(2) |
Contracted | 8,024 | |||||||||
Total | 8,827 | |||||||||
_________________
(1)Utility service agreements for 9.2 GW capacity are subject to final regulatory approvals.
(2)Planned gas-fired generation facilities not owned by the Company. Gas-fired generation facilities not yet financed, constructed or
contracted and subject to permits and approvals.
Alongside our data center portfolio, we also develop, construct, own and operate utility-scale power
generation and BESS. Our activities span the full project lifecycle, from greenfield development through
construction and long-term operations. Our operating power generation and BESS assets are located
primarily in the CAISO and ERCOT markets, and we are developing additional projects in the Western
Electricity Coordinating Council (“WECC”), MISO and other U.S. markets. The portfolio includes
standalone assets that sell power under long-term PPAs and other offtake arrangements and capacity
that is purpose-built to provide power to our own data centers. As of June 30, 2026, our operating power
generation portfolio consisted of approximately 2.2 GW of solar power and BESS projects, with an
additional approximately 2.5 GW of solar power and BESS projects in construction. As of the date of this
prospectus, we also have additional contracted capacity of 0.8 GW of solar power and BESS projects that
are not yet under construction. We are also pursuing multiple GWs of incremental pipeline capacity
consisting of projects at earlier stages of development where we have filed for generator interconnection.
We are pursuing site control, interconnection approval, permitting, offtake negotiation, financing and other
development milestones at these various projects.
Together, these two interrelated portfolios are the operating expression of our power-first model: data
center capacity sited where power can actually be delivered, and a generation business engineered to
ensure it is.
Capacity Utilization
The following table sets forth capacity utilization metrics for our operating standalone power generation
portfolio for the periods indicated:
Asset / Region | Capacity (MWac) | Capacity Factor (2025) (1) | Availability Factor (2025) (2) | |||
Solar (ERCOT) ............................................................................ | ~1,692 | 25.8% | 96.1% | |||
Solar (CAISO) ............................................................................. | ~450 | 32.1% | 98.9% | |||
Total ......................................................................................... | ~2,142 | 27.2% | 96.7% | |||
(1)“Capacity factor” represents actual energy delivered as a percentage of theoretical maximum output.
(2)“Availability factor” takes into account site outages and AC equipment availability (inverters, block, circuits and substations).
(3)Material deviations between nameplate capacity and actual utilization are primarily attributable to: (i) the intermittent nature of solar
generation (solar assets generate only during daylight hours and are affected by weather and seasonal irradiance); (ii) curtailment
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ordered by grid operators during periods of transmission congestion or negative pricing; and (iii) scheduled and unscheduled
maintenance downtime. The table presents solar generation assets only and excludes co-located BESS capacity.
At the portfolio-level capacity factor of 27.2% for the year ended December 31, 2025, our approximately
2,142 MWac operating portfolio generated approximately 5,097 GWh of electricity during the period. For
the six months ended June 30, 2026, the portfolio generated approximately 2,350 GWh, reflecting a
capacity factor consistent with seasonal irradiance patterns in the first half of the year. Year-over-year
increases in total generation have been primarily driven by the addition of new projects achieving
commercial operations (including the Orion I, II, and III projects, which contributed a full twelve months of
generation in 2025 compared to a partial year in 2024) rather than material changes in capacity factor at
existing facilities. For additional quantitative discussion of the relationship between generation volumes,
average realized pricing and energy revenue for each period covered by our financial statements, see
“Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations.”
Our Market Opportunity
The Structural Shift in Data Center Demand
Data center demand is undergoing a generational reordering, as AI workloads build on legacy enterprise
IT and cloud to drive capacity growth. According to the U.S. Census Bureau, only 18% of surveyed
businesses had adopted AI at the end of 2025, indicating today’s demand is simply scratching the surface
of the AI opportunity set, with the vast majority of enterprise workloads, industry verticals and consumer
use cases yet to be meaningfully penetrated by AI-enabled infrastructure. A 2025 independent third-party
survey conducted by Altman Solon as summarized in the Altman Solon Report revealed that 98% of
companies surveyed are planning to adopt at least one GenAI tool in the future, pointing to a near-
ubiquitous adoption. We believe AI compute demands will further expand as users increase adoption and
existing users ramp usage – creating a multiplier effect for underlying data center demand and therefore
investment by the hyperscalers. This demand growth from AI builds on ongoing significant growth from
traditional cloud demand. The five largest hyperscalers spent approximately $383 billion in capital
expenditures in 2025 and, based on publicly available research estimates derived from company
disclosures and equity research as of May 2026, are projected to spend approximately $768 billion in
2026 and approximately $1,125 billion in 2027, as access to AI-enabled digital infrastructure is
increasingly mission critical.
The data center industry evolved around enterprise IT and cloud, but that model is increasingly shifting
towards AI-driven demand for campuses on compressed timelines. Hyperscaler capital is being deployed
against two distinct but related AI workloads. AI training involves the computationally intensive process of
developing foundation models by iterating across massive datasets, requiring tightly coupled clusters of
tens of thousands of accelerators operating in synchrony over weeks or months. AI inference, by contrast,
is the production deployment of trained models to serve end-user queries in real time, requiring lower
latency, broader geographic distribution and continuous availability. Inference demand, as estimated in
the Altman Solon Report, will grow to represent approximately 40% of total global data center demand by
2030, becoming the primary driver of global data center demand from 2026 onward, along with cloud
workloads, driven by increased AI adoption, usage, and complexity of the queries, including the rise of
agentic AI. Both AI workloads require specialized hardware and up to ~10x or more the power of
traditional data centers. This step-change in power requirement is driving demand for larger, denser
facilities and campuses, bespoke mechanical and electrical designs, advanced cooling techniques and
gigawatt-scale site planning that is a material step up from legacy data center footprint demands.
The Agentic AI Inflection
The industry is entering the era of agentic AI, transforming AI from an episodic tool into a persistent,
autonomous layer embedded across users and enterprises. This agentic layer executes complex and
multi-step tasks continuously thereby consuming 10 to 100 times more compute than a single chatbot
query, which means inference demand and the power and data center capacity required to serve it, is set
to grow by orders of magnitude. Unlike conventional generative AI, which is invoked episodically by a
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human prompt, agentic systems run persistently, chain together many model calls per task, and operate
continuously in the background of business processes. We expect agentic AI to be embedded across
organizations of all sizes and across substantially every industry vertical, from customer support and
software engineering to financial analysis, healthcare administration and scientific research. As agentic
adoption scales, inference will become the dominant share of AI compute consumption, a transition
already acknowledged by leading hyperscalers and accelerator vendors. We believe that, even in a
scenario where the pace of frontier model training were to moderate, the secular growth of inference
workloads driven by agentic deployment will continue to drive and potentially even accelerate long-term
demand for high-density, power-dense data center capacity.
Additionally, agentic AI exhibits a self-reinforcing dynamic: As agents are deployed, they generate
proprietary interaction data and task outcomes that are used to fine-tune and improve subsequent model
generations. This in turn drives broader and deeper enterprise adoption, a virtuous cycle that compounds
both training and inference workloads over time and requires significant addition of data center and power
capacity. According to Rystad Energy, a simple chat query uses roughly 0.3 watt-hours, a reasoning
model uses 5 to 20 times more, while an agentic workflow that calls multiple tools and iterates on its own
output can use 50 to 100 times more.
Power as the Binding Constraint
Power has emerged as the defining bottleneck of the AI infrastructure build-out – and the basis on which
we expect the next generation of data center developers will be differentiated. The data center
infrastructure required for large-scale Generative AI training differs materially from traditional enterprise
data center deployments. According to the Altman Solon Report, modern GPU clusters are characterized
by significantly higher rack power densities (often 50+ kW/rack), advanced liquid-cooling architectures,
and substantially larger power requirements, with leading AI training campuses increasingly designed to
support hundreds of MW of power capacity at a single site. Even as GPUs become more efficient, the
power needed to train ever-more capable frontier models, a proliferation of specialized models and
support accelerating AI adoption is outpacing those gains, further straining an already constrained grid.
According to BloombergNEF, data center power demand in the United States is expected to grow at a
16.8% CAGR over the next five years and will account for 8.6% of United States power demand by 2030.
Aggregate power demand from the AI build-out continues to compound, even as individual silicon
becomes more efficient, which has led to longer interconnection timelines, delays and higher all-in costs
as customers seek gigawatt-scale capacity. This dynamic has produced acute bottlenecks across the
value chain: from extended utility interconnection queues to multi-year delays in procuring long-lead
electrical equipment such as high-voltage transformers and switchgear facing extended delivery windows.
Power, rather than land or fiber, has become a binding constraint on the pace at which AI infrastructure
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can be brought online. According to the Altman Solon Report, the primary differentiation parameters for AI
infrastructure are scale and time to power:
In response to these constraints, an increasing number of utilities, regulators, and local jurisdictions are
moving toward frameworks that require new large-load data center capacity to be matched with
incremental, dedicated generation rather than drawing from existing grid headroom. This shift reflects a
recognition that the pace of AI-driven load growth cannot be sustainably absorbed by legacy grid
infrastructure alone, and that bringing gigawatt-scale data center capacity online without accompanying
generation risks reliability, affordability and community impact. As a result, the ability to co-develop or
contract for dedicated power generation alongside data center capacity is becoming a structural
prerequisite for participating in the next phase of large-scale build-out.
Rapid growth in power demand driven by data centers, manufacturing and electrification, combined with
the expected retirement of approximately 66 GW of legacy and aging fossil generation capacity is
expected to result in a total power generation capacity shortfall of approximately 98 GW by 2035. These
trends support the need for significant new power capacity additions. According to BloombergNEF, an
additional 71 GW of new generation capacity in the United States are required through 2035 to meet
worldwide data center demand alone.
With a primary consideration for data center development being the availability of reliable and reasonably-
priced power, we believe our access to grid interconnected sites and co-located power capabilities
present a meaningful competitive advantage from a speed-to-power and cost-of-power perspective. In
addition to expediting delivery timelines, earlier integration of power procurement and grid strategy can
reduce the all-in cost of compute, meaningfully improving our customers’ unit economics. We believe our
integrated business model is well positioned to address this critical bottleneck. Additionally, the ability to
match new power generation and transmission to new data center load is important for our community
relationships: financing and building new generation and transmission helps prevent significant increases
in retail electricity prices from new loads affecting our neighboring communities.
Cost Per Token as the Competitive Battleground
We believe the economics of agentic AI at enterprise scale will be won on cost per token, placing data
center design, power sourcing and operating efficiency at the heart of industry competitiveness. Agentic
AI is both power-intensive and cost-intensive at the workload level, and we believe that its proliferation will
drive token consumption to levels orders of magnitude above current run-rates. Just as cloud computing
was won on cost per compute hour, the AI era will be won on cost per unit of intelligence delivered.
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Critically, compressing the cost per token is not a zero-sum dynamic for infrastructure demand, it is the
mechanism by which the addressable market expands. As the all-in cost of serving a token falls through a
combination of hardware efficiency gains, model optimization, and more efficient power and data center
design, workloads that were previously uneconomic become viable, enterprise adoption deepens and
entirely new categories of agentic applications emerge. Each step-change in efficiency historically has
been met with a more-than-offsetting expansion in compute consumption, and we expect agentic AI to
amplify this dynamic given its 100x-1,000x compute intensity per task relative to conventional generative
AI.
For model providers, application developers and end customers to sustain the unit economics required to
deploy agentic systems at enterprise scale, the cost per token served must continue to stay optimized on
a sustained, multi-year trajectory. This places the economics of inference infrastructure, and by extension,
the design, power sourcing and operating efficiency of the underlying data center, at the center of industry
competitiveness and differentiation. We believe that data center developers that can deliver power-
efficient, purpose-built capacity at scale will be best positioned to participate in this expanding market,
particularly as hyperscalers deploy large capital investments with an eye on capital efficiency and on
selecting long-term partners in their infrastructure providers.
Our Vertically Integrated Approach
Our vertically integrated approach is designed to directly address the bottlenecks that increasingly
determine which projects get delivered and produces several distinct competitive advantages:
•Virtuous cycle of development – Our power generation development activity gives us a head start
in identifying sites for building large power and data center infrastructure and provides invaluable data
and insight on local grid dynamics. This foothold has allowed us to expedite data center development
adjacent to our existing power sites. The data center development will in turn create new load that we
can help to satisfy with additional power assets. We believe this flywheel effect can create a virtuous
cycle as we continue to expand both our power and data center footprints at these sites.
•One-stop-shop for generation and load – As mandates increasingly require new data center load
to be matched with new generation, our internal expertise to interact with utilities and regulatory
authorities and our ability to deliver both as a single counterparty is a meaningful differentiator. We
can resolve issues with utilities and authorities more effectively than developers who must coordinate
across multiple parties with conflicting incentives.
•Designed to support local grids and communities – By co-locating power generation with our
planned data center campuses, we believe we can support grid reliability and limit upward pressure
on retail electricity rates. We engage with local communities earlier and more substantively than
single-discipline developers, building the long-term relationships that large-scale infrastructure
requires.
•Cost certainty for our customers – On-site power enables our customers to lock in long-term,
predictable power costs for the duration of their lease, insulating their unit economics from fluctuating
utility rates. This cost stability becomes increasingly valuable to customers planning multi-year
capacity commitments. It also creates incremental investment opportunities for us.
•Flexible power design – Our development approach is designed to enable a range of generation
modalities, from grid-connected, behind-the-meter, renewable, traditional and bridge solutions.
•Tight execution – Our structure enables close coordination across sourcing, development,
construction and operations than is achievable across separate counterparties. With each deal cycle,
our handoffs sharpen and our execution speed accelerates.
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Our Growth Strategies
Our growth strategy is to compound the advantages of our integrated business across each successive
build cycle, converting secured capacity into delivered GWs, extending our footprint at sites where we
already have a power and community foothold, and originating the next generation of gigawatt-scale
campuses ahead of demand. Our specific strategies are:
•Execute on our contracted backlog – Our most immediate growth lever is the conversion of our 8.8
GW-IT of data center capacity contracted into delivered, revenue-generating campuses. We are
progressing our first wave of data centers at the Cosmos Technology Campus, in Austin, Texas,
Milam County Buildings 1 and 2 in Milam County, Texas, and the PORTS-Pike Technology Campus in
Pike County, Ohio, while advancing the balance of our pipeline. Each phase that is delivered is
expected to convert contracted backlog into long-duration cash flows under our triple-net lease and
PPA structures, as applicable.
•Expand within our existing campuses – We intend to add incremental phases at sites where we
already have land control, interconnection, community relationships, and operating infrastructure in
place. Multi-phase expansion is a structurally attractive strategy due to its comparative lower friction,
higher certainty versus prospecting, and it is increasingly valued by hyperscale customers who
require the ability to scale a single campus into a contiguous, multi-gigawatt training or inference
cluster. We have multi-phase build-outs planned at our Milam, Pike, and other campuses. As
described in “—Our Vertically Integrated Approach,” we believe each incremental phase will reinforce
our virtuous cycle of development – additional load deepens utility coordination and creates the basis
for further on-site or nearby power generation, which in turn supports additional data center growth.
•Originate the next generation of multi-gigawatt sites – We intend to grow our data center and
power pipelines by originating additional campus-scale sites in markets where transmission
infrastructure, power deliverability, and the regulatory environment support gigawatt-scale build-outs.
Our origination focus today for data centers is principally domestic, concentrated in the PJM, ERCOT,
and WECC footprints where we believe our development activities, grid analysis, and utility
relationships support our ability to identify and advance attractive campus-scale opportunities. Our
operating experience in markets such as CAISO and ERCOT informs our approach to interconnection
strategy and utility engagement across our integrated business. We intend to also pursue non-grid
connected and partial grid-connection data center sites, where the development opportunity and
potential value for our customers are attractive. We also selectively evaluate additional U.S. and
international markets where customer demand and our integrated model can be applied.
•Broaden and deepen our customer base – We intend to expand our footprint with existing
hyperscale customers as they scale their AI infrastructure commitments, while extending our data
center business to additional hyperscalers, sovereign customers, and large enterprises as the
addressable buyer set expands. As described in “—Our Market Opportunity,” the combination of
optimized cost per token, the emergence of agentic AI, and the early stage of enterprise adoption is
expected to materially expand the total addressable market for AI infrastructure over time. While 92%
of companies plan to increase AI spending over the next three years, just 1% of business leaders
classify their companies as mature on the AI deployment spectrum, indicating that even today’s
adopters are early in their multi-year investment cycle. We believe this trajectory will support both
deeper deployments with our existing customers and the emergence of new categories of customers
requiring large-scale, power-integrated infrastructure.
•Deploy automation to accelerate delivery timelines – We intend to expand the use of automation,
prefabrication and technology-enabled workflows across our development, construction, and
commissioning processes to shorten delivery timelines and improve schedule predictability.
Standardizing repeatable workstreams across multi-phase campuses and applying automated quality
control at scale, building on the in-house design and construction capabilities established through our
acquisition and integration of Studio 151, are intended to reduce rework, compress critical path
activities, and support safer, more productive execution as we scale across multiple large projects in
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parallel. We believe our strategic relationships with SoftBank, OpenAI, and NVIDIA will help us
provide differentiated visibility into emerging physical AI technologies that can be applied to our
development and operating model.
•Selectively pursue acquisitions to accelerate growth – We may pursue selective acquisitions that
expand our development pipeline, deepen our in-house capabilities or broaden our customer
relationships. Our 2025 acquisition of Studio 151, which has since been integrated into our data
center execution organization, demonstrates our ability to identify, transact and integrate
complementary capabilities. We believe our balance sheet, project finance experience, integrated
operating strategy and power expertise position us to evaluate and execute on additional
opportunities where they can accelerate the delivery of our existing pipeline or extend the scope of
our integrated model.
Across each of these strategies, our focus is the disciplined, repeatable build-out of a long-duration
integrated business. By combining power origination, grid execution and data center development within a
single integrated model, we believe we can consistently originate, underwrite and deliver gigawatt-scale
campuses supported by long-term contracted revenues. We intend to execute our growth strategies by
pacing growth against customer demand, interconnection availability and capital allocation discipline,
while preserving the flexibility to expand sites through incremental phases as the market evolves. Just as
prior generations of physical infrastructure underwrote prior eras of economic growth, we believe the AI
era will be underwritten by the power and data center providers that can deliver power, land and data
center capacity together at scale, and we have built our company to be one of them.
Our Segments
We operate our business through three reportable segments: (i) Data Centers (“DC”), which includes the
development and commercialization of large-scale data center campuses, powered land opportunities
and related infrastructure solutions, with current campuses located primarily in the PJM and ERCOT
transmission regions; (ii) Standalone Power (“SP”), which includes the development, construction,
ownership and operation of grid-connected utility-scale solar photovoltaic and battery energy storage
system (“BESS”) projects, with current operating assets located in the CAISO (California) and ERCOT
(Texas) markets; and (iii) Solutions (“SLN”), which provides integrated design, engineering, construction
management and operations management solutions to our SP and DC segments (and, in the future, may
provide such solutions to our affiliates, third parties, and their respective projects). Our SP segment
currently generates substantially all of our revenue, while our DC segment is in a pre-revenue stage with
initial revenues expected to commence in late 2026.
Our Relationship with SoftBank, OpenAI, and NVIDIA
SoftBank, OpenAI, and NVIDIA are strategic investors in our business. SoftBank is, and following this
offering will be, our controlling shareholder and is expected to beneficially own % of our outstanding
common stock following this offering, or % if the underwriters exercise their option to purchase
additional shares of common stock in full, based upon an assumed initial public offering price of
$ per share (which is the midpoint of the price range set forth on the cover page of this prospectus).
OpenAI is expected to be the beneficial owner of % of our outstanding common stock (on an as-
converted basis) following this offering and the Closing Distribution, based upon an assumed initial public
offering price of $ per share (which is the midpoint of the price range set forth on the cover page of
this prospectus). NVIDIA is expected to be the beneficial owner of % of our outstanding common stock
following the closing of the Concurrent Private Placement and the settlement of the Prepaid Forward
Contract, based upon an assumed initial public offering price of $ per share (which is the midpoint of
the price range set forth on the cover page of this prospectus).
SoftBank and OpenAI, through their affiliates, are also customers at three of our data center campuses
through long-term data center leases — Cosmos (SoftBank), Milam County (OpenAI) and PORTS-Pike
Technology Campus (OpenAI) — and NVIDIA is a strategic investor and residual value guarantor at the
PORTS-Pike Technology Campus. We expect lease payments under these arrangements to constitute a
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significant portion of our near-term data center revenue. However, rent commencement under these
leases is subject to satisfaction of applicable RFS conditions, and delays in achieving RFS at the PORTS-
Pike Technology Campus or Milam County Data Center could defer the commencement of lease revenue
and extend the period during which we incur construction costs without offsetting cash flows. Under the
leases for the PORTS-Pike Technology Campus, we are subject to specified construction milestones and
deadlines, and failure to meet these requirements may entitle the tenant to remedies including liquidated
damages, rent credits, and self-help rights. However, the tenant does not have termination rights under
the leases for failure to achieve the specified construction milestones. Furthermore, the deadlines are
extendable on a day-for-day basis for tenant delays, force majeure events, and utility delays. Under the
leases for the Milam County Data Center, we are subject to similar tenant contractual protections, with the
differences that the tenant has buy-out rights (at fair market value) following substantial delays beyond
construction deadlines and there are no extensions for utility delays. Because substantially all of our near-
term data center revenue is expected to be derived from these related-party leases, any significant delay
in rent commencement at PORTS-Pike Technology Campus or Milam County, and any termination of any
related leases could have a material adverse effect on our cash flows, liquidity and ability to service our
indebtedness.
We believe these leases and guarantees were negotiated on terms that reflect arm's-length dealing,
informed in part by the participation of independent counterparties with adverse economic interests who
negotiated vigorously on economic terms, including rent structure, guaranty structure and amount, and
lease milestones. See “Certain Relationships and Related Party Transactions—Review of Related Party
Transactions” for additional information regarding the negotiation process and board review and
approvals of these arrangements. For a more complete discussion of the foregoing relationships and
arrangements, including the net economic effects of lease payments, royalty arrangements and other
payments among us, SoftBank and OpenAI, see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Related Party Cash Flows,” “Certain Relationships and Related
Party Transactions,” “Risk Factors—Risks Related to Our Corporate Structure and Ownership,” “Risk
Factors—Risks Related to Our Business and Operations,” “Principal Shareholders.”
In addition to lease payments we expect to receive from related parties, we anticipate some cash outflows
to related parties under our existing arrangements. We have committed to minimum purchases of OpenAI
software and tools of $10.0 million, $15.0 million and $25.0 million for 2026, 2027 and 2028, respectively,
or $50.0 million in the aggregate through 2028. We are utilizing these AI-driven software and tools to
improve productivity across our Company and accelerate our project development and construction
timelines. We also pay annual royalties to SoftBank equal to 1% of our consolidated gross profit under the
trademark license agreement; $0.1 million was payable for 2025 and no royalties were payable for 2024.
We do not currently have any obligations under the tax sharing agreement for the 2025 tax year. In total,
our currently quantified aggregate outflows to SoftBank and OpenAI for the period from 2025 through
2028 totals approximately $50.1 million, and we do not expect any net proceeds from this offering to be
paid directly to SoftBank or OpenAI. On a net basis, we expect cash inflows from related-party lease
arrangements to substantially exceed these outflows for the foreseeable future, subject to the timing of
rent commencement under our data center leases. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations—Related Party Cash Flows."
Our Project-Level Structure and Indebtedness
We conduct substantially all of our power and data center operations through project-level subsidiaries.
These are special-purpose, project finance vehicles, each of which typically holds the assets, contracts,
permits, and financing arrangements for a single project or a defined group of related projects. Certain of
them receive, or are expected to receive, revenues, from rent under triple-net leases or from the sale of
electricity, capacity, renewable energy credits or other attributes generated by the applicable project.
Holders of our common stock are structurally subordinated to all project-level and corporate indebtedness
and other liabilities of our subsidiaries. As of June 30, 2026, we had approximately $4.0 billion of
aggregate principal indebtedness outstanding, approximately $3.9 billion net of unamortized issuance
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costs and discount, of which approximately $1.2 billion was current. Our project-level entities were parties
to over $3.6 billion of project-level debt and approximately $1.7 billion of tax equity financing
arrangements, and we expect to incur additional corporate-level indebtedness under the Credit Facility.
We and our subsidiaries also expect to incur a substantial amount of additional indebtedness to finance
the PORTS-Pike Technology Campus and other projects in the pipeline, all of which could be structurally
senior to our common stock. Our shareholders’ claims are junior in right of payment to all such
indebtedness and liabilities, and we rely on distributions to us by our subsidiaries, which depend on
project-level distributions permitted under project financing covenants. See “Description of Certain
Indebtedness—Structural Priority and Subordination” and “Risk Factors—Risks Related to Our
Indebtedness and Liquidity—Holders of our common stock are structurally subordinated to creditors of
our subsidiaries.”
We also use intermediate holding companies that own the equity interests in one or more project-level
entities. These companies serve operational, financing and administrative purposes—for example, acting
as borrowers under portfolio-level financing arrangements, holding development-stage assets before
project financing, or serving as the vehicle through which equity capital is contributed to project-level
entities.
Cash generated at the project level flows to SB Energy, Inc. through distribution mechanisms governed by
project-level financing agreements. These distributions are typically subject to cash sweep mechanisms,
debt service coverage ratio tests, reserve account requirements, and other restrictions imposed by project
lenders. As a result, the timing and amount of cash available to us from project-level entities may differ
materially from the revenues and earnings those entities generate.
As of June 30, 2026, our project-level entities were parties to over $3.6 billion of outstanding project debt
and approximately $1.7 billion of outstanding tax equity financing arrangements. These financing
arrangements are generally non-recourse to SB Energy, Inc. (subject to temporary limited sponsor
guaranties and credit support in certain cases) and are secured solely by the assets and cash flows of the
relevant project-level entity. As of June 30, 2026, on a consolidated basis, we had approximately $4.0
billion in aggregate principal amount of indebtedness outstanding (approximately $3.9 billion net of
unamortized issuance costs and discount), of which approximately $1.2 billion was classified as current.
Our largest near-term maturities include the Pelicans Jaw Facility, approximately $857.8 million
outstanding, maturing by March 2027, the Hickory Facilities, approximately $473.0 million outstanding,
maturing October 2027, and the Athos Storage Facility, approximately $361.9 million outstanding,
maturing by February 2027. We expect to address these maturities through term loan conversions upon
project completion, refinancings, and tax equity funding. As of June 30, 2026, our only material recourse
corporate indebtedness was the Hickory Facilities, which are obligations of SE Global Borrower, LLC and
are guaranteed and secured by specified subsidiaries and pledged equity interests; SB Energy, Inc. is not
itself a borrower or guarantor under those facilities. In connection with this offering, the cash borrowings
under the Hickory Facilities will be repaid in full with the proceeds of the initial borrowing under the Credit
Facility, and the letters of credit issued under the Hickory Facilities will be replaced within a limited period
of time with letters of credit issued under the Credit Facility, at which point the related commitments, liens
and guarantees will be terminated or released, and SB Energy, Inc. will become the direct borrower under
the Credit Facility. All other project-level financings are structured as non-recourse to SB Energy, Inc.,
meaning that the lenders' recourse is limited to the assets and cash flows of the applicable project-level
subsidiary and the pledged equity interests in that subsidiary. See “Business—Our Portfolio” for further
detail on our project-level entities, “Management's Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources” for a discussion of distributions received from
project-level entities, and “Description of Certain Indebtedness” and “Risk Factors—Risks Related to Our
Indebtedness and Liquidity” for a discussion of our subordinated debt.
Recent Developments
On August 17, 2026, 17 of our subsidiaries, each as landlord, and an affiliate of OpenAI, as tenant,
entered into individual lease agreements for the PORTS-Pike Technology Campus, resulting in 17 leases
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covering approximately 8.0 GW-IT of critical IT capacity in the aggregate. Each lease has a 20-year initial
term commencing on the applicable commencement date, includes four five-year extension options
exercisable by the tenant, and is structured as a triple-net lease with yield-on-cost rent, an annual
escalator and phased commencement tied to RFS conditions. Rent commencement for each phase and
the tenant’s associated obligations are conditioned on satisfaction of the applicable RFS conditions,
including completion and availability of the interconnection facilities and generation resources necessary
to serve the contracted load, as well as substantial completion and commissioning of the applicable
buildings.
NVIDIA has provided residual value guaranties of the OpenAI tenant’s lease obligations at PORTS-Pike
Technology Campus covering only the initial approximately 4.25 GW-IT at an aggregate guaranteed value
of $105 billion, with an option, in NVIDIA’s sole discretion, to guarantee the remaining 3.78 GW-IT. If
NVIDIA does not provide such guaranties by a date certain, OpenAI is required to secure a replacement
guarantor meeting or exceeding a credit rating for A- from Standard & Poor’s (“S&P”) or its equivalent
from Moody’s. The guaranty is triggered only upon specified tenant insolvency or an uncured monetary
default under an applicable lease, and may terminate upon specific ratings upgrades of OpenAI, or other
events such as the 20th anniversary of the commencement, or termination in accordance with its terms,
of an applicable lease. Following a trigger, NVIDIA may assume an applicable tenancy itself or through an
assignee or direct us to re-let (or, if unsuccessful in reletting, sell) the premises. The guaranteed minimum
value declines on a defined schedule over the 20-year leases. The aggregate remedy cap is $105 billion
across related guaranties on the initial 4.25 GW-IT. The guaranty automatically terminates and NVIDIA is
released if OpenAI Group PBC achieves a certain designated credit rating or if specified replacement
guaranties or leases are provided. We did not offer and do not owe any compensation to NVIDIA for the
guaranties; such compensation is provided separately by OpenAI under a separate agreement.
On August 17, 2026, Energy Global entered into the Prepaid Forward Contract with NVIDIA under which
NVIDIA prepaid $1.5 billion to Energy Global for our delivery of Class N common stock at the per-share
initial public offering price before underwriting discounts and expenses, multiplied by 90%. NVIDIA funded
the full $1.5 billion under the Prepaid Forward Contract on August 17, 2026, and Energy Global then
contributed those proceeds to us. NVIDIA will become a holder of our capital stock upon the closing of the
Concurrent Private Placement and settlement of the Prepaid Forward Contract in connection with this
offering, subject to the conditions described in “Concurrent Private Placement.”
On August 17, 2026, we entered into a Share Purchase Agreement with NVIDIA, under which NVIDIA
agreed to purchase shares of a newly authorized and designated class of non-voting Class N common
stock, in a private placement simultaneously with the closing of this offering. Each share of Class N
common stock is convertible one-for-one into common stock automatically upon transfer to a non-affiliate.
The number of shares will equal $1.5 billion divided by the per-share initial public offering price before
underwriting discounts and expenses, rounded down to the nearest whole share (reflecting an investment
from NVIDIA of $3.0 billion in total between the Prepaid Forward Contract and the Share Purchase
Agreement). The shares will be restricted securities with customary registration rights. See “Certain
Relationships and Related Party Transactions—Registration Rights Agreement.”
On August 17, 2026, we entered into the Amended and Restated Warrant Agreement with OpenAI, which
amended and restated the Original OpenAI Warrant Agreement in its entirety. The amended agreement
covers 3,991,809 OpenAI Warrants. The OpenAI Warrants have a nominal exercise price of $0.01 per
share, may be exercised on a cash or cashless basis at the holder's election, and have a ten-year
exercise period expiring on the later of January 9, 2036 and the date on which any required antitrust or
other regulatory approvals for exercise are obtained. The amended agreement includes a revised eight-
tranche vesting schedule tied to project milestones, the pricing of a Specified QPO (which this offering is
expected to constitute), and achievement of specified equity valuation thresholds ranging from $80 billion
to $200 billion. See "Certain Relationships and Related Party Transactions—Transactions with OpenAI—
OpenAI Warrants."
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Summary Risk Factors
There are a number of risks that you should understand before making an investment decision regarding
this offering. These risks are discussed more fully in the section entitled “Risk Factors” following this
prospectus summary. If any of these risks occur, our business, financial condition, or results of operations
could be materially and adversely affected. In such case, the trading price of our common stock would
likely decline, and you may lose all or part of your investment. These include, but are not limited to:
Risks Related to Our Business and Operations
•Our backlog and backlog-associated capex may not be indicative of future revenue, profits or costs,
and we may not fully realize backlog revenue or may exceed the backlog-associated capex costs.
•Our growth depends on continued demand for data center capacity and AI infrastructure; grid
interconnection backlogs, rising costs and letter of credit requirements could delay projects or limit
financing.
•We may not secure binding tenant leases for our development pipeline and complex permitting
requirements could delay or prevent project development.
•Projects under construction face completion risks including cost overruns, delays and performance
shortfalls, operating facilities face equipment failures and tenant service level requirements, and
tenant guarantees are only effective after rent commencement.
•We may not be able to raise the substantial amount of capital needed to fund the development and
construction of our data center and power pipeline, potentially leading to delays and lost revenue
under our customer contracts.
•We have limited operating history in data centers with none currently operational, are substantially
dependent on OpenAI, and face challenges in personnel, labor and business management.
•Our data center infrastructure is new, purpose-built for AI and untested at scale, we have a history of
net losses and may not achieve profitability, and we operate in a highly competitive industry.
•We depend on a limited number of customers and their creditworthiness, face risks in securing
sufficient electrical power and grid interconnection, and depend on third parties for facility
connectivity.
•Construction cost overruns may erode returns, we depend on limited third-party contractors, and
climate change and extreme weather could adversely affect our operations.
•Inflation and rising costs could adversely affect our business and strategic relationships may not be
successful.
Risks Related to Government Incentives and Tax Matters
•Our business depends on government incentives for renewable energy that may change and supply
chain disruptions and gas turbine constraints could delay development.
•Tax equity financing is subject to recapture risks and availability constraints that could reduce the
economic viability of our projects.
•Tax law changes could adversely affect our business, our ability to use net operating losses (“NOLs”)
may be limited.
Risks Related to Governmental Regulation and Legal Matters
•FERC authorization may be required for certain investments, we are subject to extensive FERC
regulation, and changes to wholesale electricity market rules or interconnection regulations could
affect our business.
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•State regulatory and environmental permitting could delay projects, the evolving AI regulatory
landscape could adversely affect our business, including through potential bans or moratoria
regarding data center development, and environmental, health and safety laws could result in
liabilities.
•The PORTS-Pike Technology Campus constitutes all of our contracted-but-not-under-construction
data center capacity and a substantial majority of our DC segment backlog, and its development may
be affected by the timely funding and commissioning of approximately 9.2 GW of generation under
the U.S.–Japan Partnership, which may be delayed, reduced or withdrawn, as well as regulatory and
environmental permitting, which is subject to uncertainties.
•Equipment supply from China may become further constrained due to geopolitical and trade factors,
complicating construction of our projects, and geopolitical tensions involving China and Taiwan could
disrupt the supply of semiconductors to our customers and reduce demand for our data center
infrastructure
Risks Related to Intellectual Property, Data Privacy and Cybersecurity
•We may not be able to adequately protect our intellectual property rights, third parties may claim we
infringe their intellectual property, and we rely on third-party IP licenses that may not remain available.
•We are subject to privacy laws requiring compliance resources, and we and our third-party providers
face cybersecurity risks that have resulted in, and could result in, damage to our reputation and
financial penalties.
Risks Related to Our Corporate Structure and Ownership
•SoftBank controls our company, its interests may conflict with ours and with those of holders of our
common stock, and as a controlled company we qualify for exemptions from certain corporate
governance requirements.
•We have entered into significant related-party transactions with SoftBank, OpenAI and their
respective affiliates, and our financial dependence on SoftBank could limit our operational flexibility
and create conflicts of interest.
Risks Related to Our Indebtedness and Liquidity
•We have significant liquidity needs and may not generate sufficient cash, our multilayered
indebtedness could affect financial health, financing covenants limit our flexibility, common
shareholders are structurally subordinated to subsidiary creditors, interest rate increases and capital
market volatility could affect our financial condition and ability to fund our pipeline.
Risks Related to Our Common Stock and This Offering
•Our stock price may be volatile, future stock sales could depress our stock price, you will experience
immediate dilution in net tangible book value, FERC regulations may limit investors from acquiring
10% or more voting equity interests without prior authorization, additional equity issuances could
cause dilution, and we may issue preferred equity senior to common stock.
•We have identified a material weakness in internal control over financial reporting, failure to maintain
effective disclosure controls could harm regulatory compliance, and being a public company
increases costs and regulatory requirements.
Before you invest in our common stock, you should carefully consider all of the information in this
prospectus, including matters set forth under the heading “Risk Factors.”
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Our Sponsor
Our founding sponsor and ultimate parent company is SoftBank, an AI-centric strategic investment
holding company, founded in 1981 and headquartered in Tokyo, Japan, with investments spanning
semiconductors, AI, robotics and digital infrastructure. Guided by its corporate philosophy of “Information
Revolution—Happiness for everyone,” SoftBank has made significant investments in AI and digital
infrastructure businesses, including commitments to OpenAI and announced transactions involving
robotics and digital infrastructure assets. In addition, SoftBank manages a global investment portfolio
comprising subsidiaries, associates, and other investees across a broad range of technology sectors. Its
portfolio includes companies such as Arm Holdings plc and OpenAI, as well as the SoftBank Vision
Funds, which, as of June 30, 2026, had invested in more than 500 technology companies (including
exited investments) across a broad range of industries.
As of June 30, 2026, SoftBank had a net asset value of approximately $445.3 billion. We founded our
company with original backing from SoftBank in 2019. In recent years, SoftBank has focused its strategy
on becoming the world's top Artificial Super Intelligence (“ASI”) Platform Provider through investments in
and the operation of businesses across four strategic pillars: AI models, AI chips, AI infrastructure, and
physical AI. Through its affiliates, SoftBank has made aggregate capital contributions of approximately
$3.2 billion to our business. Through SoftBank’s other portfolio companies and broader ecosystem, we
gain insight into the evolving compute, connectivity and infrastructure requirements of frontier AI systems
and access to relationships that support our growth strategy. Our business supports one of the four
strategic pillars of SoftBank's AI strategy—AI infrastructure—through the development and operation of
the energy infrastructure required to power AI data centers. Following this offering, SoftBank will continue
to be our controlling shareholder and will hold certain governance rights pursuant to a shareholders’
agreement (the “Shareholders’ Agreement”) we intend to enter into in connection with this offering,
including the right to designate candidates for election to our board of directors depending on SoftBank’s
and its controlled affiliates’ level of ownership of our outstanding shares of common stock. SoftBank’s
designation rights will range from the ability to designate six candidates so long as they beneficially own
50% or more of our outstanding shares of common stock down to the ability to designate one candidate
so long as they beneficially own more than 5% of our outstanding shares of common stock. The
Shareholders’ Agreement also grants certain preemptive rights, rights with respect to related party
transactions, information and other rights, consultation rights and consent rights, among others, including
during periods in which SBE Global beneficially owns less than a majority of our outstanding shares of
common stock. Accordingly, SoftBank will maintain significant control over our corporate and business
activities until such rights terminate. The Shareholders’ Agreement will also grant OpenAI the right to
designate one candidate for election to our board of directors for so long as OpenAI and its controlled
affiliates beneficially own more than 5% of our outstanding shares of common stock. See “Certain
Relationships and Related Party Transactions—Shareholders’ Agreement.”
Neither SoftBank nor any of its respective affiliates is acting as an underwriter or otherwise participating in
the offering in any capacity other than as an existing equity holder subject to customary lock-up
arrangements. Historically, we have depended on SoftBank for financial support, and SoftBank's
continued willingness and ability to provide capital is a significant factor in our ability to execute our
growth strategy.
For a more complete discussion of our relationship with, and dependence upon, SoftBank, including the
material corporate governance rights held by SoftBank, see “Certain Relationships and Related Party
Transactions—Certain Transactions with SoftBank,” “Risk Factors—Risks Related to Our Corporate
Structure and Ownership,” “Risk Factors—Risks Related to Our Business and Operations” and “Principal
Shareholders.”
Implications of Being a Controlled Company
SoftBank is expected to beneficially own approximately % of our outstanding shares of
common stock, representing approximately % of the combined voting power of our outstanding
24
capital stock, following the completion of this offering (or approximately % and %,
respectively, if the underwriters exercise their option to purchase additional shares of our common stock
in full), based upon an assumed initial public offering price of $ per share (which is the midpoint of
the price range set forth on the cover page of this prospectus). As a result of SoftBank’s voting power, we
will be a “controlled company” within the meaning of the corporate governance rules of Nasdaq and
Nasdaq Texas. Under these rules, a listed company of which more than 50% of the voting power is held
by an individual, group or another company is a “controlled company” and may elect not to comply with
certain corporate governance requirements applicable to most Nasdaq- and Nasdaq-Texas listed
companies. We intend to rely on some or all of these exemptions. Accordingly, you may not have the
same protections afforded to shareholders of companies that are subject to all of these corporate
governance requirements. See “Risk Factors” and “Management—Controlled Company Status.”
Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified
by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company,
we may take advantage of specified reduced disclosure and other requirements that are otherwise
applicable, in general, to public companies that are not emerging growth companies. These provisions
include:
•the presentation of only two years of audited financial statements and only two years of related
Management’s Discussion and Analysis of Financial Condition and Results of Operations in this
prospectus;
•reduced disclosure about our executive compensation arrangements;
•no non-binding shareholder advisory votes on executive compensation or golden parachute
arrangements;
•exemption from compliance with the requirement of the Public Company Accounting Oversight Board
regarding communication of critical audit matters in the auditor’s report in the financial statements;
and
•exemption from an audit on our internal control over financial reporting.
We may take advantage of these provisions until the last day of our fiscal year following the fifth
anniversary of the date of the first sale of our common stock in this offering or such earlier time that we
are no longer an emerging growth company. We would cease to be an emerging growth company upon
the earliest of: (i) the last day of the first fiscal year in which our annual gross revenues are $1.235 billion
or more; (ii) the date on which we have, during the previous three-year period, issued more than $1.0
billion in non-convertible debt securities; or (iii) the date on which we are deemed to be a “large
accelerated filer,” which will occur as of the end of any fiscal year in which we (x) have an aggregate
market value of our common stock held by non-affiliates of $700 million or more as of the last business
day of our most recently completed second fiscal quarter, (y) have been required to file annual and
quarterly reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a
period of at least 12 months and (z) have filed at least one annual report pursuant to the Exchange Act.
We may choose to take advantage of some or all of these reduced burdens. We have elected to adopt the
reduced requirements with respect to the presentation of our financial statements and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” disclosure. Further, pursuant
to Section 107 of the JOBS Act, as an emerging growth company, we have elected to take advantage of
the extended transition period for complying with new or revised accounting standards until those
standards would otherwise apply to private companies. As a result, our operating results and financial
statements may not be comparable to the operating results and financial statements of other companies
who have adopted the new or revised accounting standards. It is possible that some investors will find our
common stock less attractive as a result of these elections, which may result in a less active trading
market for our common stock and higher volatility in our stock price.
25
Our Corporate Information
Our business began in 2019. SE Global Holdings, LLC was formed as a Delaware limited liability
company on January 23, 2024 and converted into a Delaware corporation named SE Global Holdings,
Inc. on July 10, 2026. Pursuant to a plan of conversion, we converted into a Texas for-profit corporation
on August 28, 2026. Effective August 31, 2026, we changed our corporate name from SE Global
Holdings, Inc. to SB Energy, Inc. Our corporate headquarters are located at 3 Lagoon Dr., Suite 280,
Redwood City, CA 94065. Our telephone number is (650) 731-3262.
Our principal website address is www.sbenergy.com. The information on, or that can be accessed
through, our website is deemed not to be incorporated in this prospectus or to be part of this prospectus.
You should not consider information contained on our website to be part of this prospectus in deciding
whether to purchase shares of our common stock.
Corporate Structure
The following diagram sets forth a simplified view of our corporate structure after giving effect to this
offering, the Concurrent Private Placement, the settlement of the Prepaid Forward Contract, the OpenAI
Warrant Exercises, and the Closing Distribution. This chart is for illustrative purposes only and does not
represent all legal entities affiliated with the entities depicted.*
*The organizational chart above has been simplified to depict the ownership and control relationships we believe most relevant to
investors in this offering. It generally omits wholly owned intermediate holding companies and consolidates our project-level subsidiaries
into summary boxes. See “Our Project-Level Structure and Indebtedness.” Certain of the project-level subsidiaries included in the SP
Segment Companies summary box are consolidated variable interest entities in which third-party tax equity investors hold
noncontrolling interests. See "Our Project-Level Structure and Indebtedness" and Note 3 to our consolidated financial statements
included elsewhere in this prospectus.
**Includes holdings through Management LP following the Closing Distribution.
***Shares of Class N common stock held by NVIDIA have the same economic rights as our common stock, including with respect to
dividends and other distributions, but are non-voting. See “Description of Capital Stock—Class N Common Stock.”
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Transactions In Connection with this Offering
Prior to and in connection with this offering, we have completed, or expect to complete, the following
transactions:
•the Corporate Conversion, as described under “—Our Corporate Information”;
•the Texas Conversion, as described under “—Our Corporate Information” and “Description of Capital
Stock”;
•the Intercompany Notes Repayment and the Ares Redemption, as described under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital
Resources—The Ares Investment and Redemption” and “Description of Certain Indebtedness—
Intercompany Notes”;
•our entry into the Credit Facility and the repayment in full and termination of the Hickory Facilities with
the proceeds of the initial borrowing thereunder and the replacement of the letters of credit issued
under the Hickory Facilities with letters of credit under the Credit Facility, as described under
“Description of Certain Indebtedness—New Credit Facility”;
•the Stock Split, as described under “Glossary” and “Description of Capital Stock”;
•the OpenAI Warrant Exercises, as described under “Certain Relationships and Related Party
Transactions—Transactions with OpenAI—OpenAI Warrants”;
•the accelerated vesting of certain outstanding incentive equity awards, as described under “Executive
Compensation” and “Capitalization”;
•the Concurrent Private Placement and the Prepaid Forward Contract, as described under “Concurrent
Private Placement and Prepaid Forward Contract” and “Description of Capital Stock—Class N
Common Stock”; and
•the Closing Distribution, as described under “Glossary,” and “Principal Shareholders.”
Except as otherwise noted, the consolidated financial statements, selected historical consolidated
financial data and other financial information included elsewhere in this prospectus are those of SE Global
Holdings, LLC, our accounting predecessor, and its subsidiaries, and do not give effect to the transactions
listed above. We expect those transactions to have the following principal effects on our financial
statements: (i) the reclassification of contributed capital of $5.4 billion from members’ equity into common
stock (at par value) and additional paid-in capital, and a corresponding change in our equity presentation
from members’ equity to stockholders’ equity; (ii) a decrease in debt from related parties of approximately
$709.5 million to zero upon repayment of the intercompany notes owed to SBE Global; (iii) the entry into
the Credit Facility, and the repayment in full of the approximately $473.0 million of borrowings outstanding
under our Hickory Facilities, together with accrued and unpaid interest thereon, funded with the proceeds
of the initial borrowing under the Credit Facility, resulting in a net change in third-party debt of
approximately $473.0 million, reflecting expected borrowings under the Credit Facility at the closing of this
offering; (iv) the modification of the warrants in connection with the PORTS lease, which resulted in an
increase to the warrant liability of $ to reflect the fair value of the warrants prior to the modification
offset by the cancellation of warrants resulting in a decrease to the warrant liability of $ , resulting in
a net adjustment of $ ; (v) the $ million effect on additional paid-in capital and warrant liability of
the vesting of certain of the OpenAI Warrants; (vi) the issuance of shares of Class N common stock
to NVIDIA in the Concurrent Private Placement and the delivery of shares of Class N common
stock upon settlement of the Prepaid Forward Contract, resulting in a total increase in additional paid-in
capital of $ million; and (vii) an increase in accumulated deficit of approximately $ million, with a
corresponding increase in additional paid-in capital, reflecting incremental stock-based compensation
expense from the accelerated vesting of outstanding incentive equity awards in connection with this
offering. The effects of the Corporate Conversion will be reflected in our consolidated financial statements
27
for the fiscal quarter in which the Corporate Conversion was completed, and the effects of the remaining
transactions will be reflected in our consolidated financial statements for the fiscal quarter in which this
offering is consummated.
In connection with the transactions described above, OpenAI Infra Holdings, LLC will transfer common
equity interests in Energy Global to SVF II Energy (DE) LLC, a SoftBank affiliate. Following the Closing
Distribution, SVF II Energy (DE) LLC will hold shares of our common stock attributable to such interests.
See “Principal Shareholders” for additional information.
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THE OFFERING
Common stock offered by us ....................... | shares of common stock. | |
Underwriters’ option to purchase additional shares of common stock ............. | We have granted the underwriters a 30-day option to purchase up to additional shares of common stock from us at the initial public offering price, less the underwriting discounts and commissions. | |
Common stock to be outstanding after this offering ...................................................... | shares (or shares if the underwriters exercise their option to purchase additional shares of common stock in full). | |
Class N common stock to be outstanding after this offering ............................................ | shares, based upon an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus). | |
Total common stock and Class N common stock to be outstanding after this offering .. | shares, based upon an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus). | |
Use of proceeds ............................................. | We estimate that the net proceeds from this offering will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares of common stock in full), based upon an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus) and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our shareholders. We currently expect to use substantially all of the net proceeds from this offering for general corporate purposes, with priority given to working capital, operating expenses and capital expenditures required to develop and construct our data center, power generation, storage and related infrastructure projects. Within capital expenditures, we currently expect to prioritize funding the equity portion of project-level financings for our contracted data center and power projects. We do not intend to use any of the net proceeds from this offering to repay the approximately $473.0 million outstanding under our Hickory Facilities. We may also use a portion of the net proceeds for technology development and to acquire or invest in businesses, products, services or technologies that complement our integrated business; however, we do not have binding agreements or commitments for any material acquisitions or investments at this time. Because we do not currently have specific plans for the net proceeds, we cannot specify with certainty the particular uses or approximate amounts we will use for each purpose, and we will have broad discretion in the way that we use the net proceeds of this offering. See “Use of Proceeds.” | |
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Controlled company ....................................... | Immediately following this offering and the Closing Distribution, SoftBank, through certain affiliated entities, will beneficially own approximately % of our outstanding shares of common stock (or % if the underwriters exercise in full their option to purchase additional shares of our common stock), based upon an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus). As a result of SoftBank’s ownership, after the completion of this offering, we will be a “controlled company” within the meaning of the Nasdaq and Nasdaq Texas rules. Under these rules, a “controlled company” may elect not to comply with certain corporate governance requirements, including the requirements that, within one year of the listing date, (i) we have a board of directors that is composed of a majority of independent directors, (ii) we have a compensation committee that consists entirely of independent directors and (iii) our director nominations be made, or recommended to our full board of directors, by independent directors or by a nominating and corporate governance committee that consists entirely of independent directors. Following this offering, we intend to elect not to comply with certain of such corporate governance requirements, including exemptions from the requirements that a majority of our board of directors consist of independent directors and that our compensation and nominating committees be composed entirely of independent directors. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq and Nasdaq Texas, we will be required to comply with these provisions within the applicable transition periods. See “Management— Controlled Company Status.” | |
Concurrent Private Placement and Prepaid Forward Contract ............................ | We have entered into a purchase agreement with NVIDIA pursuant to which NVIDIA has agreed to purchase shares of our Class N common stock in a private placement at a price per share equal to the initial public offering price before underwriting discounts and expenses, for an aggregate purchase price of $1.5 billion (rounded down to the nearest whole share). The purchase of our Class N common stock is contingent upon, and is scheduled to close simultaneously with, the closing of this offering, subject to the satisfaction of certain conditions. Additionally, NVIDIA has prepaid $1.5 billion under a prepaid forward contract that will settle upon or immediately prior to the closing of this offering by delivery of shares of our Class N common stock at a price per share equal to 90% of the initial public offering price. The sale of such shares to NVIDIA will not be registered in this offering. See “Concurrent Private Placement and Prepaid Forward Contract,” and “Recent Developments” for additional information. | |
Voting rights .................................................... | Following this offering, we will have two classes of common stock: common stock and Class N common stock. The rights of the holders of common stock and Class N common stock are identical, except with respect to voting and conversion. Each share of common stock will be entitled to one vote and will not be convertible into any other class of our share capital. Shares of Class N common stock will be non-voting, except as may be required by law. Each share of Class N common stock may be converted into one share of common stock at the option of its holder, subject to the ownership limitations provided for in our amended and restated certificate of formation to become effective upon the completion of this offering; any conversion at the option of the holder will require at least 60 days’ prior written notice to us or our transfer agent, and each share will convert automatically, without further holder action, upon any sale, assignment, transfer or other disposition to any person other than an affiliate of the holder. See “Description of Capital Stock” for additional information. | |
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Dividend policy ............................................... | We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. Any future determination as to the declaration and payment of dividends, if any, will be at the sole discretion of our board of directors and will depend on then-existing conditions, including, among other things, our results of operations, financial condition, cash requirements, capital requirements, contractual restrictions and other factors that our board of directors may deem relevant. Because we are a holding company and have no direct operations, we will only be able to pay dividends from funds we receive from our subsidiaries. In addition, the Credit Facility will prohibit us from paying cash dividends on our common stock prior to January 1, 2029, and will thereafter permit dividends only subject to specified conditions, and our ability to pay dividends may be further limited by the covenants of the agreements governing our current or future indebtedness. See “Dividend Policy.” | |
Lock-up agreements ...................................... | We, our directors, executive officers and holders of substantially all of our outstanding capital stock have agreed, subject to certain exceptions, not to offer, sell or agree to sell, directly or indirectly, any shares of common stock without the permission of J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, for a period of 180 days after the date of this prospectus. See “Underwriting.” | |
Shares eligible for future sale ...................... | Upon completion of this offering, we will have shares of common stock outstanding (or shares if the underwriters exercise their option to purchase additional shares in full) and shares of Class N common stock outstanding, in each case after giving effect to the Stock Split, the OpenAI Warrant Exercises, the Concurrent Private Placement and the settlement of the Prepaid Forward Contract and in each case based upon an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus). Immediately prior to the Closing Distribution, SBE Global will hold shares of common stock on behalf of Energy Global and its limited partners, all of which will be distributed in the Closing Distribution and will be subject to the 180-day lock-up agreement applicable to this offering. All shares of common stock sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by our “affiliates” as defined in Rule 144 under the Securities Act. Class N common stock issued or delivered to NVIDIA in connection with the Concurrent Private Placement and the settlement of the Prepaid Forward Contract will be restricted securities subject to the applicable transfer and lock-up restrictions. See “Shares Eligible for Future Sale.” | |
Directed Share Program ............................... | At our request, the underwriters will reserve up to 5% of the shares of common stock being offered by this prospectus for sale at the initial public offering price to our directors, officers, certain employees and certain other individuals associated with us. The sales will be made by J.P. Morgan Securities LLC through a directed share program. We do not know if these persons will choose to purchase all or any portion of these reserved shares of common stock, but any purchases they do make will reduce the number of shares of common stock available to the general public. Any reserved shares of common stock not so purchased will be offered by the underwriters to the general public on the same terms as the other shares of common stock. Shares of common stock purchased by our directors, officers and certain employees in the directed share program will be subject to the lock-up restrictions described in this prospectus. We have agreed to indemnify J.P. Morgan Securities LLC against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sales of reserved shares of common stock. See “Underwriting —Directed Share Program.” | |
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Emerging Growth Company ......................... | We are an “emerging growth company” as defined in the JOBS Act. We will remain an emerging growth company until the earliest to occur of (i) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more, (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three years, (iii) the date on which we are deemed to be a large accelerated filer under the rules of the SEC or (iv) the last day of the fiscal year following the fifth anniversary of the completion of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company.” | |
Risk factors ..................................................... | ||
Transfer agent and registrar ......................... | The transfer agent and registrar for our common stock and Class N common stock is Fidelity Stock Transfer Solutions LLC. | |
Proposed listing and trading symbol ........... | We have applied to list our common stock on Nasdaq and Nasdaq Texas under the symbol “SBE.” |
The number of shares of our common stock and Class N common stock that will be outstanding
immediately after the completion of this offering is based on shares of our common stock
outstanding, after giving effect to the Stock Split and no shares of Class N common stock outstanding as
of , 2026, and excludes:
•2,253,942 OpenAI Warrants remaining unvested following this offering, which may be exercisable for
up to shares of our common stock upon satisfaction of the applicable vesting conditions and
cashless exercise formula;
• shares of our common stock reserved for future issuance under the 2026 Incentive
Award Plan (the “2026 Plan”), which will become effective in connection with this offering.
Unless we specifically state otherwise or the context otherwise requires, the share information in this
prospectus assumes:
•the Stock Split;
•no exercise by the underwriters of their option to purchase up to additional shares of common
stock from us;
•the issuance of an aggregate of shares of common stock upon the OpenAI Warrant
Exercises immediately prior to and conditioned upon the completion of this offering, based on an
assumed initial public offering price of $ per share, the midpoint of the price range set forth
on the cover page of this prospectus;
•the issuance of shares of Class N common stock upon the consummation of the Concurrent
Private Placement and the settlement of the Prepaid Forward Contract, in each case in connection
with the closing of this offering and on the terms described in this prospectus based on an assumed
initial public offering price of $ per share, the midpoint of the price range set forth on the
cover page of this prospectus;
•the adoption, filing and effectiveness of our amended and restated certificate of formation (the
“Certificate of Formation”) and the effectiveness of our amended and restated bylaws (the “Bylaws”);
and
•an initial public offering price of $ per share of common stock, which is the midpoint of the
price range set forth on the cover page of this prospectus.
32
For illustrative purposes, the table below sets forth the assumed initial public offering price per share at
various price points, including the midpoint of the price range set forth on the cover page of this
prospectus, and the corresponding number of shares of common stock that would be issued upon the
OpenAI Warrant Exercises, assuming in each case that the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same, and issuances of Class N common stock to
NVIDIA in the concurrent private placement and pursuant to the Prepaid Forward Contract, at each such
price point.
Initial Public Offering Price | Shares of Common Stock to be Issued Upon Exercise of the OpenAI Warrants That Vest Upon This Offering | Shares of Common Stock to be Outstanding Immediately Following the Completion of This Offering | ||
Initial Public Offering Price | Shares of Class N Common Stock to be Issued in Concurrent Private Placement and Pursuant to the Prepaid Forward Contract | Shares of Class N Common Stock to be Outstanding Immediately Following the Completion of This Offering | ||
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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
The following tables set forth the summary consolidated financial and other data of SE Global Holdings,
LLC, the accounting predecessor of SB Energy, Inc., for each of the periods indicated. The summary
consolidated statements of operations data and summary consolidated statements of cash flows data for
the years ended December 31, 2025 and 2024 have been derived from the audited consolidated financial
statements of SB Energy, Inc. included elsewhere in this prospectus. The summary consolidated
statements of operations data and summary consolidated statements of cash flows data for the six
months ended June 30, 2026 and 2025 and the summary consolidated balance sheet data as of June 30,
2026 have been derived from the unaudited condensed consolidated financial statements of SB Energy,
Inc. included elsewhere in this prospectus. Results for the six months ended June 30, 2026 and 2025 are
not necessarily indicative of the results that may be expected for the full year or any future reporting
period.
Our historical results are not necessarily indicative of the results that may be expected in the future. Our
unaudited interim financial statements were prepared on the same basis as our audited financial
statements and include, in the opinion of management, all adjustments, consisting of normal recurring
adjustments, that are necessary for the fair statement of the financial information set forth in those
financial statements. The following summary consolidated financial and other data should be read in
conjunction with the sections titled “Prospectus Summary—Transactions in Connection with This
Offering,” “Concurrent Private Placement and Prepaid Forward Contract,” “Capitalization,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial
statements and the related notes included elsewhere in this prospectus.
(in thousands, except unit/share and per unit/ share amounts) | Six Months Ended June 30, | Year Ended December 31, | |||||
2026 | 2025 | 2025 | 2024 | ||||
Consolidated Statement of Operations and Comprehensive Loss: | |||||||
Revenue....................................................................... | $138,659 | $83,322 | $213,467 | $232,243 | |||
Operating costs and expenses: | |||||||
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below ....................................................................... | 40,656 | 39,122 | 81,393 | 55,213 | |||
Depreciation, amortization and accretion .......... | 48,100 | 46,935 | 94,080 | 73,314 | |||
General and administrative ................................. | 601,507 | 177,807 | 679,566 | 169,095 | |||
Operating loss .................................................. | $(551,604) | $(180,542) | $(641,572) | $(65,379) | |||
Interest income ...................................................... | 8,518 | 9,216 | 14,638 | 18,964 | |||
Interest expense .................................................... | (86,872) | (98,646) | (162,392) | (127,554) | |||
(Loss) gain in equity method investment ........... | (6,729) | 3,574 | (1,740) | (14,203) | |||
Change in fair value of warrant liability .............. | (2,573,056) | — | — | — | |||
Other income (expense), net ............................... | (7,890) | 13,691 | 12,176 | (617) | |||
Loss before income taxes ......................................... | (3,217,633) | (252,707) | (778,890) | (188,789) | |||
Income tax benefit (expense) .............................. | 25,369 | (3,139) | (9,202) | (15,262) | |||
Net income (loss) and comprehensive income (loss) ............................................................................ | $(3,192,264) | $(255,846) | $(788,092) | $(204,051) | |||
Less: Net income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests ........................................ | 16,608 | (40,316) | (50,084) | (310,155) | |||
Net income (loss) and comprehensive income (loss) attributable to SB Energy, Inc. ....................... | $(3,208,872) | $(215,530) | $(738,008) | $106,104 | |||
Net income (loss) per unit, basic and diluted(1) ...... | $(160.71) | $(10.79) | $(36.96) | $5.31 | |||
34
(in thousands, except unit/share and per unit/ share amounts) | Six Months Ended June 30, | Year Ended December 31, | |||||
2026 | 2025 | 2025 | 2024 | ||||
Weighted-average units outstanding, basic and diluted(1) ........................................................................ | 19,966,564 | 19,966,564 | 19,966,564 | 19,966,564 | |||
Pro forma net income (loss) per share, basic and diluted(2) ........................................................................ | |||||||
Pro forma weighted-average shares outstanding, basic and diluted(2) ..................................................... | |||||||
(1)Refer to Note 20 of our audited consolidated financial statements and Note 19 of our unaudited condensed consolidated financial
statements.
(2)The unaudited pro forma basic and diluted net income (loss) per share have been prepared to give effect to the (i) Corporate
Conversion and the Stock Split, (ii) the Intercompany Notes Repayment and the repayment of the outstanding principal amount under
the Hickory Facilities with the proceeds of the initial borrowing under the Credit Facility, (iii) our entry into the Credit Facility, (iv) the
impact of the OpenAI Warrant modification in connection with the Ports arrangement, (v) the accelerated vesting of outstanding
incentive equity awards as a result of this offering, (vi) our entry into the Prepaid Forward, and (vii) the vesting of OpenAI Warrants upon
completion of this offering, as if such transactions occurred on January 1, 2025. The vesting of the outstanding incentive equity awards
and OpenAI Warrant are based on an assumed initial public offering price of $ per share, which is the midpoint of the range set forth
on the cover page of this prospectus. The following table sets forth the computation of our unaudited pro forma net income (loss) per
share, basic and diluted as if such transactions occurred on January 1, 2025:
(in thousands, except unit/share and per unit/share amounts) | Six Months Ended June 30, | Year Ended December 31, | |
2026 | 2025 | ||
Numerator: | |||
Net loss and comprehensive loss attributable to SB Energy, Inc. .................................................... | $(3,208,872) | $(738,008) | |
Pro forma adjustment to reverse the historical interest expense related to the intercompany notes and Hickory Facilities, offset by the write off of deferred financing costs, which were repaid in connection with this offering .................................................................................................. | 46,711 | 63,163 | |
Pro forma adjustment to record the estimated interest expense related to the $473.0 million of expected borrowings under the Credit Facility, assuming a 6.10% interest rate calculated based on SOFR plus margin .................................................................................................................. | (14,426) | (28,852) | |
Pro forma adjustment to reflect the incremental fair value adjustment related to the amended OpenAI Warrants in connection with the PORTS arrangement ....................................................... | |||
Pro forma adjustment to record incremental stock-based compensation expense related to the accelerated vesting of outstanding incentive equity awards, based on an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus) ........................................................................................................ | |||
Pro forma adjustment to reflect the mark-to-market loss recognized in connection with the fair value measurement of the Prepaid Forward Contract liability .......................................................... | — | (166,667) | |
Pro forma adjustment to record incremental expense upon vesting of certain of the OpenAI Warrants in connection with this offering, based on an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus) ............................................................................................................................................... | |||
Pro forma net income (loss) attributable to SB Energy, Inc. ............................................................. | |||
Denominator: | |||
Weighted-average units outstanding, basic and diluted as adjusted for the Corporate Conversion and the Stock Split .............................................................................................................. | |||
Pro forma weighted-average shares outstanding, basic and diluted ............................................... | |||
Pro forma net loss per share, basic and diluted ........................................................................... | |||
Six Months Ended June 30, | Year Ended December 31, | ||||||
(in thousands) | 2026 | 2025 | 2025 | 2024 | |||
Consolidated Cash Flow Data: | |||||||
Net cash used in operating activities ..................... | $(55,597) | $(46,254) | $(40,049) | $(65,871) | |||
Net cash used in investing activities ...................... | (1,706,243) | (372,257) | (1,194,998) | (648,252) | |||
Net cash provided by financing activities .............. | 3,758,657 | 203,897 | 879,582 | 1,021,458 | |||
35
As of June 30, 2026 | |||||
(in thousands) | Actual | Pro forma(1) | Pro forma as adjusted(2) | ||
Consolidated Balance Sheet Data: | |||||
Cash and cash equivalents .................................................................... | $1,199,139 | ||||
Property, plant and equipment, net ...................................................... | 6,841,446 | ||||
Total assets .............................................................................................. | 13,522,208 | ||||
Debt, net, current and non-current ....................................................... | 3,891,875 | ||||
Total liabilities ........................................................................................... | 11,408,752 | ||||
Redeemable noncontrolling interests ................................................... | 3,254 | ||||
Total member’s equity ............................................................................. | 1,568,681 | ||||
Noncontrolling interests .......................................................................... | 541,521 | ||||
Total liabilities, redeemable noncontrolling interests and equity ...... | 13,522,208 | ||||
(1)The pro forma consolidated balance sheet data as of June 30, 2026 presents our consolidated balance sheet data to give effect to
Corporate Conversion and the Stock Split, the Intercompany Notes Repayment and the repayment of the Hickory Facilities with the
proceeds of the initial borrowing under the Credit Facility, our entry into the Credit Facility, the OpenAI Warrant modification, the vesting
of certain OpenAI Warrants, the Prepaid Forward Contract, and the accelerated vesting of outstanding incentive equity awards, in each
case as if such transactions had occurred on June 30, 2026. The vesting of the outstanding incentive equity awards and the OpenAI
Warrant are based on an assumed initial public offering price of $ per share, which is the midpoint of the range set forth on the cover
page of this prospectus. For more information, refer to section “Capitalization”.
(2)The pro forma as adjusted consolidated balance sheet data gives effect to (i) the adjustments set forth in the bullet above, (ii) the
issuance and sale by us of shares of our common stock in this offering at the assumed initial public offering price of
$ per share (the midpoint of the price range set forth on the cover page of this prospectus), after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us, and the application of the net proceeds therefrom as
described under “Use of Proceeds,” (iii) the Concurrent Private Placement by us to NVIDIA of Class N common stock at the
assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this
prospectus, and (iv) the delivery of shares of Class N common stock upon settlement of the Prepaid Forward Contract, at a price
equal to 90% of the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the
cover page of this prospectus.
Key Business Metrics and Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we use the following non-
GAAP financial measures and other key business metrics to evaluate our business, measure our
performance, identify trends in our business, develop financial forecasts and make strategic decisions.
We believe that such non-GAAP financial measures and other key business metrics, when taken
collectively, may be helpful to investors because they provide consistency and comparability with past
financial performance. These non-GAAP measures and other key business metrics should not be
considered in isolation or as a substitute for analysis of our results as reported under GAAP, and may not
be comparable to similarly titled measures used by other companies. For the definition of Total Segment
Adjusted EBITDA and a reconciliation to the most directly comparable GAAP financial measure, see Note
21 to our audited consolidated financial statements and Note 20 to our unaudited condensed consolidated
financial statements included elsewhere in this prospectus. For the definition of Net Debt and a
reconciliation to the most directly comparable GAAP financial measure, see “—Reconciliation of Non-
GAAP Measures” below. See the sections titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Non-GAAP Financial Measures” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Key Business Metrics” for additional
information on our key business metrics and non-GAAP measures, including why we believe such
measures are helpful to us and our investors and the limitations of such measures, as well as
reconciliations of our non-GAAP financial measure to the most directly comparable financial measure
prepared in accordance with GAAP.
Six Months Ended June 30, | Year Ended December 31, | ||||||
(in thousands, as applicable) | 2026 | 2025 | 2025 | 2024 | |||
Total Segment Adjusted EBITDA(1) ........................ | $62,399 | $47,585 | $119,934 | $68,630 | |||
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As of June 30, | As of December 31, | ||||
(in thousands, as applicable) | 2026 | 2025 | 2024 | ||
Net Debt(2) ............................................................................................ | $1,810,042 | $1,949,404 | $946,822 | ||
Data Center Contracted Portfolio (GW-IT)(3) .................................. | 0.8 | 0.1 | — | ||
Standalone Power Contracted Portfolio (GWac)(4) ........................ | 5.5 | 4.7 | 2.9 | ||
(1)Total Segment Adjusted EBITDA is a non-GAAP financial measure. For a definition of Total Segment Adjusted EBITDA and a
reconciliation to net loss and comprehensive loss, the most directly comparable GAAP financial measure, see Note 21 of the audited
consolidated financial statements of the Company for the year ended December 31, 2025 and 2024 and Note 20 of the unaudited
condensed consolidated financial statements of the Company for the six months ended June 30, 2026 and 2025 included elsewhere in
this prospectus. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP
Financial Measures” for additional information about Total Segment Adjusted EBITDA
(2)We define Net Debt as debt for borrowed money, current and non-current, less cash and cash equivalents and restricted cash. Net Debt
excludes debt from related parties, letters of credit, guarantees, surety indemnities, deferred purchase price obligations, redeemable
noncontrolling interests and other non-debt liabilities. Net Debt is a non-GAAP financial measure and should not be considered as an
alternative to debt, net, current and non-current and debt from related parties or any other measure of liquidity presented in accordance
with GAAP. This measure may not be comparable to similarly titled measures used by other companies. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics and Non-GAAP Financial Measures
—Reconciliation of Non-GAAP Measures” below for a reconciliation of Net Debt to debt, net, current and non-current, the most directly
comparable GAAP financial measures. See also “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Reconciliation of Non-GAAP Financial Measures” for additional information about Net Debt.
(3)We define Data Center Contracted Portfolio as the total critical IT capacity, measured in GWs of IT capacity (GW-IT), of data center
facilities and projects in our portfolio as of the end of the applicable period, consisting of capacity operating, under construction or
contracted under long-term leases but not yet under construction, as of the end of the applicable period. Critical IT capacity reflects the
power available to support data halls and network equipment and excludes ancillary loads such as cooling, lighting, and other non-IT
building systems. Capacity included in Data Center Contracted Portfolio may include projects that have not yet commenced
construction and should not be read as operating capacity. No data center capacity is currently in operation. Realization of the under
construction and contracted capacity as revenue-generating assets is dependent upon, among other things, completion of construction,
receipt of permits, successful interconnection, lease commencement, and tenant acceptance. This metric is presented on a total basis
as of the end of each period and does not represent incremental capacity added during the period.
(4)We define Standalone Power Contracted Portfolio as the total power generation capacity, measured in GWac, of solar photovoltaic and
BESS projects that are operating, under construction or contracted under long-term PPAs but not yet under construction as of the end
of the applicable period, excluding capacity associated with our Data Center project companies or customers. A single project may have
multiple PPAs or hedge contracts covering all or part of its operating capacity, and the total contracted capacity in a given period may
be less than the project’s full nameplate capacity. For purposes of this metric, we report the full nameplate capacity of each qualifying
project, even if less than all of that capacity is under contract during the reporting period, in order to better represent the capacity of the
portfolio as a whole. Where solar and BESS assets are co-located at the same project site, each technology is measured separately
and aggregated for the reportable metric. For example, a project comprising 0.7 GWac of solar and 0.7 GWac of storage is recorded as
1.4 GWac of total capacity. This metric is presented on a total basis as of the end of each period and does not represent incremental
capacity added during the period.
37
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider and read the
following risk factors, together with all of the other information contained in this prospectus, including the
section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our consolidated financial statements and related notes thereto, before deciding to invest in our
common stock. The risks described below are not the only ones we face. Our business, financial
condition and/or results of operations could be materially and adversely affected by any of these risks or
uncertainties, as well as by risks or uncertainties not currently known to us, or that we do not currently
believe are material. In such case, the trading price of our common stock could decline, and you may lose
some or all of your investment.
RISKS RELATED TO OUR BUSINESS AND OPERATIONS
Our business strategy and growth prospects depend on continued and accelerating demand for
data center capacity and AI infrastructure, which may not materialize at the levels or on the
timelines we anticipate.
Our business strategy, growth prospects and the substantial capital investments we have made and
expect to continue to make are predicated on the assumption that demand for data center capacity and AI
infrastructure will continue to grow at or above historical levels. We have committed significant resources
to developing a pipeline of gigawatt-scale data center campuses and co-located power generation assets,
and we expect to continue to deploy substantial capital to expand our data center and power operations.
Our development pipeline, backlog, and projected capital expenditures all reflect an expectation of
sustained, significant growth in AI-driven demand for compute infrastructure. If demand for data center
capacity and AI infrastructure does not continue to grow at the pace we anticipate, or if such demand
declines, plateaus, or grows more slowly than historical rates, we may be unable to lease our data center
facilities at the rates, on the timelines or at the scale we currently project, which could materially and
adversely affect our business, financial condition, results of operations and prospects.
Demand for compute is undergoing what we believe to be a generational reordering, as AI workloads
layer on top of enterprise IT and cloud to drive capacity growth. Our projections assume continued
expansion of both AI training workloads, which involve the computationally intensive process of
developing foundation models by iterating across massive datasets, and AI inference workloads, which
involve the production deployment of trained models to serve end-user queries in real time. We also
expect the emergence and proliferation of agentic AI, which we believe will consume 10 to 100 times
more compute than a single chatbot query, to drive inference demand and the power and data center
capacity required to serve it by orders of magnitude. Our assumptions further reflect our expectation that
enterprise adoption of AI will deepen significantly over time, and that, based on publicly available research
estimates derived from company disclosures and equity research as of May 2026, the five largest
hyperscalers, are projected to spend approximately $768 billion in 2026 and will continue to invest at
comparable or greater levels in AI-enabled digital infrastructure. These assumptions underpin, among
other things, our pipeline development strategy, our capital allocation decisions, our financing
arrangements and the long-term economics of our data center leases and power generation projects.
The estimates of data center demand and growth included in this prospectus may prove to be inaccurate.
Data center capacity estimates and growth forecasts included in this prospectus are subject to significant
uncertainty and are based on assumptions and estimates that may not prove to be accurate. Some of
these assumptions include, among other factors, (i) sustained artificial intelligence adoption and
monetization at scale, (ii) continued growth in compute intensity, (iii) long term availability of power, (iv)
continued meaningful hyperscaler and enterprise capex commitments, (v) societal acceptance of data
centers and (vi) no material inflection in compute efficiency that would substantially alter future data
center capacity requirements.
38
However, there can be no assurance that demand for data center capacity and AI infrastructure will
continue at historical levels, and a number of factors, many of which are beyond our control, could cause
demand to grow more slowly than we anticipate, to plateau or to decline. These factors include, among
others:
•advances in model efficiency, chip design, software optimization or other innovations that reduce AI
infrastructure requirements, including improvements in data efficiency, retrieval-augmented
generation, narrow AI architectures and algorithmic breakthroughs, any of which could significantly
reduce the computing power and data center capacity required for AI workloads;
•the development of AI models that utilize significantly less computing power to operate, or the
practical limits of AI technology plateauing regardless of available compute capacity, which could
reduce the need for continued data center capacity expansion;
•a failure of enterprises to adopt AI at the pace or scale we anticipate, including the possibility that
agentic AI does not become embedded across organizations and industry verticals as we expect, or
that inference workloads do not grow to become the dominant share of AI compute consumption;
•a deceleration in hyperscaler capital expenditure on AI infrastructure, a shift in hyperscaler priorities
toward self-build models, or decisions by hyperscalers to reduce, delay, or reprioritize their
investments in data center capacity;
•an oversupply of data center capacity resulting from the significant amount of early-stage capacity
that has been announced across the United States, which could exceed actual demand and depress
lease rates and occupancy levels;
•changes in the federal, state and local regulatory environment affecting AI development and
deployment, including concerns about the energy intensity of AI training and inference that may lead
to regulations affecting the siting, permitting, or operation of data centers, or new laws that impose
requirements or restrictions on our hyperscaler tenants and AI compute operators that reduce
demand for AI compute infrastructure;
•a decline in broader digital economy activity, including reduced demand for mobile and web-based
commerce, enterprise cloud computing, or traditional IT outsourcing, which could reduce our
hyperscaler tenants' need for data center capacity independent of any slowdown in AI-specific
demand;
•macroeconomic conditions, including inflation, interest rate volatility, trade policy uncertainty, tariffs,
export controls and geopolitical instability, that could reduce overall investment in technology
infrastructure or disrupt supply chains for critical data center and AI hardware components;
•growing public skepticism and resistance to AI, including concerns about AI’s impact on employment,
privacy, safety, environmental and broader societal implications, that could reduce consumer and
enterprise willingness to adopt AI technologies and therefore reduce demand for the data center
infrastructure that supports them; and
•the rapid development of new technologies, workload architectures or industry standards that could
render our facilities obsolete or unmarketable, including changes in required rack densities, cooling
configurations, power delivery specifications or campus layouts that differ materially from the design
choices we have made, which could require costly retrofitting or result in stranded assets.
Our business is particularly sensitive to these risks because we have designed our integrated business
model to serve the next generation of AI-driven data centers, which require higher rack densities,
innovative cooling techniques and campuses orders of magnitude larger than legacy sites. Because our
facilities are purpose-built around specific power density, cooling and campus configuration assumptions,
they may not be readily adaptable to alternative workloads or next-generation infrastructure requirements
if market demand shifts away from our current design specifications. Our development pipeline reflects
39
gigawatt-scale capacity commitments that are predicated on sustained demand for this type of
infrastructure. If the market for large-scale, AI-ready data center capacity does not develop as we
anticipate, we may be unable to convert our pipeline into operating facilities, lease our data center
capacity on commercially acceptable terms, or generate the revenues necessary to justify the significant
capital investments we have made and expect to continue to make. The variables underlying our
estimates of market opportunity, including assumptions regarding the pace of enterprise AI adoption, the
ratio of training to inference workloads, hyperscaler capital expenditure levels, power density
requirements and the rate at which new market participants enter or exit the data center development
industry, are subject to change over time as industry conditions evolve, and there is no guarantee that any
particular number or percentage of addressable customers will lease our data center facilities or purchase
power from our projects at all or generate any particular level of revenue for us. Even if the markets in
which we operate achieve forecasted growth, our business could fail to grow at similar rates, if at all. Any
material shortfall in demand relative to our expectations could have a material adverse effect on our
business, financial condition, results of operations, liquidity and prospects.
Grid interconnection backlogs, rising costs and our substantial letter of credit requirements could
delay or prevent the development of our projects, and we may be unable to secure adequate
financing to fund our development activities.
The proliferation of data center and renewable energy projects across the United States has created
significant backlogs in interconnection queues, leading to extended review timelines and uncertainty
around the timing and availability of grid capacity. Grid operators or other regulators may impose
conditions, require us to fund costly transmission or distribution system upgrades, network reinforcements
or other costly solutions as a condition of interconnection, or they may delay or deny approvals for
reasons beyond our control, including congestion on transmission systems, regulatory proceedings or
changes in interconnection policies, the scope, timing and cost of which may not be known until late in the
development process. For projects where interconnection is under negotiation, there can be no assurance
that approvals will be secured on commercially acceptable terms, or at all. These upgrade costs may be
substantial, may not be recoverable from tenants or through offtake arrangements and could render
certain projects economically unviable. In addition, grid operators may require us to post financial security
deposits or other collateral as a condition of reserving our position in interconnection queues,
independent of any obligation to fund network upgrades themselves. Even where we are not required to
fund transmission upgrades or network reinforcements directly, we remain dependent on third parties—
including utilities and grid operators—to complete such work on schedule. Delays in their performance
could postpone our projects’ energization timelines and commercial operations for reasons entirely
outside our control. In recent years, the time and costs required to secure and expand interconnection
facilities and transmission systems have increased significantly, further complicating project planning and
heightening the risk that certain projects may need to be reduced in scope or abandoned altogether
during the development phase.
Our ability to secure and maintain grid interconnection rights, as well as to satisfy credit support
requirements under PPAs, interconnection agreements, construction contracts, equipment purchase
agreements and lease arrangements, depends on our capacity to post substantial letters of credit, surety
bonds, guaranties, cash or other forms of credit support required by grid operators, utilities and
counterparties.
Letters of credit (“LC” or “LCs”) are a critical component of our development and financing strategy, and
our LC requirements are significant in scale; the interconnection rights for the data centers for our
PORTS-Pike Technology Campus project alone could require over $6 billion in credit support which could
be in the form of letters of credit that are not reflected on our balance sheet. This figure is a collateral
amount and the actual termination payment if the transmission expansion project is terminated early could
differ. Across our pipeline, aggregate LC exposure is a material component of our capital structure. If our
credit facilities do not provide sufficient letter of credit, guaranties or surety bond capacity, or if we are
unable to renew or replace existing letters of credit or surety bonds, we may have to utilize cash to make
postings or otherwise be unable to satisfy credit support requirements necessary to advance or maintain
40
our projects, which could delay or prevent interconnection, jeopardize project timelines, result in defaults
under our commercial agreements or the termination of key project contracts or force us to abandon or
reduce the scope of projects that are otherwise development-ready.
Our development activities require substantial capital investment, which will need to be funded through a
combination of equity capital, corporate-level debt financing and cash flows from operations. There can
be no assurance that we will be able to obtain financing on commercially acceptable terms, or at all, and
adverse changes in macroeconomic conditions, interest rates, credit markets or investor risk appetite
could limit our access to capital. Any failure to secure adequate financing or maintain sufficient letter of
credit and surety bond capacity on a timely basis could result in construction delays, project deferrals,
defaults under commercial agreements, or the abandonment of projects within our pipeline.
Interconnection delays and failures to maintain adequate credit support could also jeopardize our ability to
meet guaranteed completion dates under our project-level financing agreements, PPA and tenant lease
agreements. Because we are subject to completion and performance guarantees, certain of which are
recourse to the parent company, any delay in securing or maintaining grid interconnection or in posting
required credit support that prevents timely project delivery could trigger obligations to pay liquidated
damages, provide additional credit support, or permit tenants to exercise buy-out options or termination
rights. These consequences could have a direct and material impact on our consolidated financial
condition and liquidity.
We may not successfully secure binding tenant leases or offtake arrangements for a substantial
majority of our development pipeline, which could impair our ability to justify the significant
capital investments required to advance our projects.
We have significant data center and power generation development pipelines, the substantial majority of
which have not yet secured binding tenant leases or offtake arrangements or commenced construction.
Our ability to convert these pipelines into shovel-ready projects depends on numerous factors, many of
which are beyond our control. Before construction can commence on a data center or power generation
project, we must, among other things, secure adequate site control, easements, and other real property
rights; obtain grid interconnection approvals from utilities, independent system operators and regional
transmission organizations (which may require multi-year lead times), execute definitive lease
agreements or long-term PPAs and other offtake arrangements with creditworthy counterparties on
commercially acceptable terms; obtain all necessary environmental, zoning, land use and building
permits, arrange adequate project-level and corporate financing and secure key construction contracts
and equipment purchases (which may have significant lead-times or be subject to market-driven scarcity).
We are in negotiations for additional lease agreements, offtake agreements or long-term PPAs for a
portion of our pipeline capacity, but there can be no assurance that definitive agreements will be
executed, or, if executed, that they will be on terms favorable to us. Our ability to attract and retain
creditworthy tenants and offtakers at acceptable rates and pricing will be critical to the financial viability of
these projects. Moreover, prospective tenants may have significant bargaining power and may demand
capital support, infrastructure rebates or operational guarantees as conditions of entering into leases,
which could increase our costs, reduce our profitability or result in lease terms that are less favorable than
we currently project. If we are unable to secure tenants or offtake arrangements for our projects, or if
counterparties delay, reduce the scope of, or terminate their commitments, we may not generate the
revenues necessary to justify the significant capital investments required to develop our pipeline.
Our pipeline and portfolio metrics, including backlog, represent estimated capacity based on
management’s current expectations, which may change as projects progress through the development
process. These metrics should not be viewed as a reliable indicator of future revenue, and there can be
no assurance that projects in our pipeline will result in operating facilities or revenue. Any of the foregoing
risks—individually or in combination—could result in significant delays, cost overruns, reduced project
scope or project abandonment, any of which could erode our expected returns on invested equity, require
additional capital investment beyond initial estimates, or render the economics of affected projects
unviable. These risks could be compounded by changes in market conditions (including decreases in data
41
center demand, lease rates, or wholesale electricity prices) or adverse regulatory developments. If a
material portion of our pipeline is not converted into operating facilities, our growth, business, financial
condition, results of operations and prospects could be materially and adversely affected. See also “—Our
backlog and our backlog-associated capex are not necessarily indicative of our future revenue, profits or
costs associated with the development and construction of our projects, and we may not fully realize the
revenue estimated in our backlog or may exceed the costs estimated in our backlog-associated capex.”
Our projects are subject to complex and unpredictable permitting requirements that could delay
or prevent development and adversely affect our data center and power generation businesses
and operations.
Our power generation and data center projects are subject to federal, state and local permitting
requirements, including environmental permits, zoning and land use approvals, building permits and fire
and life safety approvals. The permitting process can be lengthy and unpredictable, and may be
influenced by community opposition, environmental advocacy groups, changes in regulatory standards, or
the listing of new threatened or endangered species in areas where we develop projects. Delays in
obtaining or renewing necessary permits and approvals, denials of permit applications, or the imposition
of moratoria or outright bans on project development could impair our ability to commence or complete
construction on schedule, or at all, and the imposition of unanticipated conditions, mitigation measures or
other requirements could increase project costs, delay timelines, or render projects economically unviable
or force us to abandon affected projects entirely. In addition, delays in receiving applicable permits, utility
service or interconnection expansion, or meeting other development milestones could cause us to miss
important deadlines under our leases for the PORTS-Pike Technology Campus, which could trigger
termination rights.
In particular, the PORTS-Pike Technology Campus, as well as the planned 9.2 GW gas-fired generation
facilities neighboring the PORTS-Pike Technology Campus being developed by an affiliate of SoftBank
that is not our subsidiary, are subject to extensive permitting and reviews, including environmental permits
and other applicable local, state and federal regulations. There can be no guarantee we will receive any
of the necessary permits or approvals required to commence construction. Further, the buildings will be
located across several thousand acres of private property. Aquatic, wildlife, and cultural surveys have
been completed for much of the property, and applications for federal, state and local permits, including
permits relating to potential impacts to water resources, are in various stages of preparation and review
by governmental authorities. There is no guarantee that such permits will be obtained in a timely manner
in accordance with the current schedule for the PORTS-Pike Technology Campus, or at all. Additional
permit applications are planned to be submitted for other project areas as remaining site surveys and
associated reports are delivered from the various contractors supporting the development effort. There
can be no assurance that future legislation or ordinances will not require additional permits, in which case
we would be required to comply with any applicable new regulations. Air permits within our purview will be
required for emergency backup generation only, and the permitting timeline will be determined once the
number and make/model of the backup generation engines has been selected. Air and wastewater
permits will also be required for the neighboring 9.2 GW gas-fired generation facilities, which are the
responsibility of the developer and owner of such facilities.
We may face strong opposition and potential lawsuits from community, environmental advocacy and other
interest groups. Such opposition or lawsuits may cause delays in or jeopardize our ability to obtain the
necessary federal, state and local approvals, which could delay our construction schedule, cause us to
miss development milestones that could lead to adverse actions under our leases, including and up to
termination, increase our costs and materially adversely affect our business, results of operations and
financial condition. Such opposition could also lead to delays in the commissioning and delivery of the
gas-fired generation facilities.
For risks related to community opposition, advocacy campaigns, moratoria and restrictive legislation, see
“—We may face community opposition, local moratoria, and hyper-local dissent, including growing public
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resistance to AI and AI-related infrastructure, that may adversely affect our data center and power
generation businesses and operations.”
We may not be able to raise the substantial amount of capital needed in order to fund the
development and construction of our data center and power pipeline, potentially affecting our
ability to deliver projects on-time to our customers and begin generating revenue.
The development and construction of our data center and power projects is highly capital-intensive. Our
backlog-associated capex, tied to our contracted projects alone, amounts to an estimated $178 billion,
which we expect to incur over approximately the next six years (approximately 27% in years 0-2, 39% in
years 2-4, and 34% in years 4-6). We plan to fund that capex and the capex for uncontracted projects in
our pipeline with a combination of cash on hand, cash generated by our operating projects, newly raised
corporate-level equity financing, and newly raised project-level debt financing. In particular, we plan to
fund the majority of the capex through this final category, project-level debt financing. For the PORTS-
Pike Technology Campus, we are targeting up to 90% debt financing of per-building capital expenditures
representing a range of $8 billion to $9 billion per building, with the balance expected to be funded
through equity capital and cash flows from operations. However, the availability, amount and terms of any
such debt financing will depend on market conditions as well as a range of other factors, including the
credit worthiness of the tenant and the terms of the relevant data center leases. As a result, we may not
achieve the targeted debt financing for any particular building or other project, in which case we may need
to explore alternative financing structures and/or finance a greater portion of the relevant capital
expenditures with equity in order to complete the development and construction of the relevant building or
project.
We may face difficulty securing the quantum of capital required to fund our project pipeline, particularly if
the debt capital markets tighten causing the availability of such capital to become constrained and/or the
pricing of such capital to increase. While most of our contracted portfolio has secured investment-grade
offtake, some of our contracts are with sub-investment grade offtakers. The availability of debt financing
for these contracted projects could become particularly constrained.
Any delays in our ability to secure debt financing or other sources of necessary financing could delay our
construction schedules, cause us to miss development milestones that could lead to adverse actions
under our leases or other customer contracts, including and up to termination, increase our costs and
materially adversely affect our business, results of operations and financial condition. See also “—We
have significant liquidity needs and may not be able to generate sufficient cash flows or obtain adequate
financing to fund our operations, service our debt and pursue our growth strategy.”
Our data center and power generation projects under construction are subject to significant
completion risks, including cost overruns, delays and performance shortfalls, and we are subject
to completion and performance guarantees.
Once construction has commenced, our projects remain subject to substantial execution risks. The
construction of large-scale data center campuses and power generation projects is complex and capital-
intensive, requiring the coordinated execution of civil works, high-voltage electrical infrastructure,
substation construction, power generation equipment, construction of cooling systems and other building
systems, and data hall build-out. Our projects involve multiple phases with interdependent construction
workstreams, and delays in any workstream, errors in sequencing, delayed component delivery, delayed
governmental approvals such as construction permits or design misalignment could significantly impact
deployment timelines, construction costs or overall project operability. Our project development and
construction timelines are estimates based on current expectations and are subject to change based on a
variety of factors, including permitting delays, interconnection timing, equipment delivery schedules,
weather conditions, labor availability and construction progress. Projects at various stages of construction
involve activities that may extend over multiple years. There can be no assurance that any project under
construction will reach commercial operation on our anticipated schedule, at our anticipated cost, or at all.
Failure to complete projects on time or within budget could materially reduce our expected returns on
invested equity and adversely affect our overall cost of and access to capital.
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The availability of qualified contractors, skilled labor and specialized construction resources is subject to
intense competition in the current market environment, and we may face difficulty in securing adequate
construction resources at reasonable costs or on acceptable timelines. Construction cost overruns may
arise from increases in the cost of labor, materials, or equipment, unforeseen site conditions, design
changes or regulatory requirements imposed during the construction period. Such overruns would
increase the total capital required to bring projects to commercial operation, reduce returns on invested
equity, and could require additional financing that may not be available on acceptable terms or at all.
Procurement of critical long-lead equipment and materials—including high-voltage transformers,
switchgear, other high-voltage equipment, generators, turbines, cooling systems, solar modules, battery
modules, inverters and substation components needed for our power infrastructure—is essential to
maintaining construction schedules, and global supply chain constraints or vendor delays could impair our
ability to meet guaranteed completion dates. See also “ —We are dependent on third-party vendors and
service providers including a limited number of suppliers for BESS components, gas turbines,
transformers and other long-lead electrical equipment, to provide certain services, personnel and
equipment to our projects.” In addition, our tenants are responsible for procuring the computing hardware
necessary to occupy and utilize the data center capacity we deliver, including servers, accelerators and
GPUs, chips, high-bandwidth memory (HBM), networking switches, fiber optic cabling and advanced
cooling components. Industry-wide constraints on manufacturing capacity and extended delivery lead
times for these components may delay energization schedules, facility commissioning, or tenant
readiness dates, or increase project costs. In particular, global supply constraints on high-bandwidth
memory and advanced semiconductors, which are subject to concentrated manufacturing capacity and
significant demand from hyperscale and AI-focused customers, may limit the ability of our tenants to
procure and deploy compute hardware on anticipated timelines, which could in turn delay lease
commencements, reduce near-term demand for data center capacity, or otherwise adversely affect our
revenue and results of operations. Supply chain disruptions, tariffs, export controls, trade restrictions and
geopolitical factors may further limit the availability or increase the cost of these items. We are subject to
completion and performance guarantees under both our project-level financing arrangements, PPAs and
our tenant lease agreements, certain of which are recourse to the parent company. Under these
guarantees, we may be obligated to achieve specified construction milestones, deliver completed facilities
by guaranteed dates, and ensure that completed projects meet defined performance specifications.
Supply chain delays that prevent timely delivery of critical components—whether procured by us or by our
tenants—could directly impair our ability to meet these guaranteed milestones or performance thresholds,
potentially requiring us to pay liquidated damages, provide additional credit support, repurchase or
refinance the relevant project, or permit tenants to exercise buy-out options. Our strategy of co-locating
power generation assets with our planned data center campuses adds additional layers of execution
complexity, as the development of these power assets is subject to its own permitting, interconnection
and construction risks, and delays associated with those power generation assets could negatively and
materially affect our data center business.
Our operating data center and power facilities are subject to operational risks, including
equipment failures, resource variability and tenant service level requirements, any of which could
result in reduced revenues and financial penalties.
Once our data center and power projects achieve commercial operation, they remain subject to significant
ongoing operational risks. Our data center lease agreements typically contain service level agreements
(“SLAs”) that require us to maintain specified levels of facility uptime, power availability, cooling
performance, and other operational metrics. Failure to meet these SLA thresholds can result in significant
financial consequences, including rent abatements or credits that could, in certain circumstances, result in
the loss of an entire month’s rent or more for a single SLA breach. Repeated or prolonged SLA failures
could also give tenants the right to terminate their leases, reduce committed capacity, or pursue other
contractual remedies. Maintaining compliance with SLA requirements demands continuous investment in
facility maintenance, redundancy systems and skilled operational personnel, and there can be no
assurance that we will be able to meet all SLA commitments at all times across our portfolio.
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Our power facilities are subject to resource risks inherent to energy generation from various technologies.
The generation of electricity from solar energy sources depends on suitable meteorological conditions,
and actual generation may be lower than expected due to weather variability, cloud cover, seasonal
fluctuations, equipment degradation or other factors. Components of our systems could be damaged by
severe weather events, including hurricanes, hailstorms and extreme temperatures. Further, our
equipment, especially our solar panels, degrade over time, which could impact our output levels and
could increase maintenance costs or require replacement and spare parts, which may be difficult or costly
to acquire or may be unavailable. If actual generation falls below the levels projected in our financial
models or committed under our offtake arrangements, the revenue generated by our power generation
portfolio may be materially lower than anticipated, which could impair our ability to service project-level
debt, meet equity return targets and fund ongoing operations. Operational underperformance at our
power facilities could also trigger default provisions or performance-related adjustments under our PPAs
or financing arrangements.
Additionally, our operating facilities require ongoing access to reliable and sufficient grid capacity. Any
curtailment, congestion or interruption in grid access could reduce our ability to deliver power, capacity
and renewable attributes to offtakers or maintain data center operations, resulting in lost revenue,
contractual penalties or increased operating costs. Our facilities are also subject to evolving regulatory
requirements, and changes in environmental, safety, or operational regulations could require us to incur
additional compliance costs or modify our operations in ways that adversely affect profitability.
We have a limited operating history in data center infrastructure, with no data centers currently in
operation, and we face significant challenges in attracting and retaining key personnel, securing
qualified construction labor and contractors and managing the risks inherent in a new and rapidly
evolving business, any of which could make it difficult to evaluate our prospects and materially
adversely affect our business, financial condition and results of operations.
Our expansion into data center infrastructure represents a new and evolving business. We have a limited
operating history providing infrastructure solutions to tenants and AI compute operators, and our data
center strategy is at an early stage of development. As of the date of this prospectus, none of our data
center projects that are leased are in operation. Our limited operating history in this sector makes it
difficult to evaluate our current business and future prospects and increases the risk of your investment,
and there is no assurance that we will be successful in developing, constructing or operating the data
centers in our pipeline or in continuing to grow our pipeline. Our success depends in large part on the
continued service and performance of our senior management team and other key employees with
expertise across renewable energy development, data center and AI infrastructure operations, project
finance, development, interconnection, design, commercialization, construction and engineering. As we
continue to diversify our operations beyond power generation into data center development, we require
personnel with specialized knowledge spanning multiple complex and technical disciplines, including
electrical and mechanical engineering for high-density computing environments, critical infrastructure
design and large-scale power systems integration. The breadth of expertise required to execute our
strategy across these diverse but interconnected business lines significantly increases the difficulty of
assembling and maintaining a workforce with the requisite skills and experience. Moreover, the
convergence of the energy and technology sectors has intensified demand for professionals who possess
cross-functional capabilities at the intersection of power infrastructure and digital infrastructure, further
constraining the available talent pool. Competition for qualified and skilled personnel in the renewable
energy and data center and AI infrastructure industries is significant, and we may not be able to attract,
train, retain or motivate the key employees necessary to support our growth. Significant amounts of time
and resources are required to train technical, operational and other personnel, and we may lose new
employees to our competitors or other companies before we realize the benefit of our investment in
recruiting and training them.
As of the date of this prospectus, our organization comprised approximately 350 professionals spanning
development, financing, construction management, operations and asset management, and we will need
to significantly expand our workforce as we scale our data center and power infrastructure portfolio.
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Additionally, we have encountered, and will continue to encounter, risks and difficulties frequently
experienced by companies with new and rapidly evolving business models, including challenges in
accurately forecasting revenue and capital requirements, establishing relationships with new customer
types, attracting and retaining qualified personnel across all functions and scaling operations efficiently.
The construction of our data center and power facilities also exposes us to risks related to the availability
of skilled labor and qualified contractors, labor disputes and work stoppages and increased labor costs as
a result of inflation and intense competition for construction resources. There is significant competition for
qualified data center contractors with experience constructing facilities at the power densities and scale
required by modern AI and high-performance computing (“HPC”) workloads, and the pool of contractors
capable of executing such work is limited. If we are unable to attract and retain the talent required to
operate and grow our business, successfully secure adequate construction labor and contractor capacity,
or otherwise successfully execute our data center infrastructure strategy, or if the market for such
infrastructure does not develop as we anticipate, our business, financial condition and results of
operations could be materially adversely affected.
Our backlog and our backlog-associated capex are not necessarily indicative of our future
revenue, profits or costs associated with the development and construction of our projects, and
we may not fully realize the revenue estimated in our backlog or may exceed the costs estimated
in our backlog-associated capex.
Our backlog reflects revenue attributable to our customers’ committed expenditures that we have not yet
recognized as revenue, including revenue that has been billed but deferred and revenue that has been
contracted but not yet billed. Some of the programs comprising our backlog, including funded backlog, are
scheduled many years in the future, and the economic viability of contractual counterparties is not
guaranteed over time. We may not realize the revenue we currently expect from our backlog, or, if
realized, such revenue may not result in expected profits. For example, if a project or contract reflected in
our backlog is abandoned, terminated, reduced in scope, delayed, suspended or disrupted, our backlog
may be reduced, and we may experience a delay in the realization of our estimated revenue or may incur
unrecoverable costs, which could materially reduce the revenue and profits we realize in any particular
period. Further, realization of any revenue included in our backlog is subject to receipt of required
regulatory approvals, completion of interconnection and permitting processes, availability of financing,
procurement of long-lead equipment, completion of construction and commissioning and other customary
construction and commissioning conditions, among other factors.
In addition, our customers have the right under some circumstances to terminate or modify contracts or
defer the timing of our services and their payments to us, including if we do not effectively perform our
obligations under our contracts, as described elsewhere in these risk factors. Although our data center
leases generally have limited termination rights and do not permit termination for convenience, tenants
may terminate a lease upon specified events, which may include a prolonged service interruption
affecting critical services, the seizure or condemnation of all or a material portion of the project site under
eminent domain, a casualty event rendering a material portion of the project site unfit for normal use for a
prolonged period of time, a breach of applicable sanctions regimes or sale or change of control prohibited
under the lease. In addition, certain of our leases include buy-out options that may become exercisable if
RFS conditions are not satisfied within specified periods after target dates (in all cases, greater than a
year), under which the tenant may purchase the affected facility at a contractually specified price. Our
leases also permit tenants to request design modifications and scope changes through change orders,
which may extend project timelines and delay rent commencement. We may generally terminate a lease
upon a tenant default, including nonpayment, insolvency or uncured material breach. In addition, our
leases provide for delay liquidated damages (or, in some cases, rent abatement) for delay beyond
contractual guaranteed delivery dates, in some cases subject to caps, as well as service level credits for
prolonged service interruptions. Certain of our leases also include transfer restrictions that may limit sales
of the landlord entity or project assets to prohibited entities. The exercise of any termination, buy-out,
modification or other contractual remedy described above would reduce the revenue estimated in our
backlog and could trigger defaults or other remedies under our project-level financing arrangements. Our
backlog is not a guarantee of future revenue. In addition, because we only have a small number of leases
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that are contracted or under negotiation, any termination or modification of such lease would have a
materially negative impact on our financial condition and results of operations. Our PPAs also typically
provide for customer termination rights and/or liquidated damages for events of default by us, including
but not limited to, failure to reach commercial operation by milestone dates, failure to meet a threshold
level of power generation, insolvency event and change of control.
Further, we could fail to complete projects as contracted for reasons outside of our control, including
scarcity of key inputs, such as natural gas or other natural resources, environmental hazards and
remediation, unanticipated costs associated with construction, commissioning, testing, labor disputes and
strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems,
industrial accidents, fire, seismic activity and natural disasters. Any of the foregoing could result in us not
realizing all revenues included in our backlog, and any such amounts could be material. The failure to
realize some portion of our backlog could adversely affect our financial performance. In addition, a delay
in the receipt of revenues, even if such revenues are eventually received, may cause our results of
operations for a particular quarter to fall below our expectations. We also expect to incur significant capital
expenditures in connection with our projects, which is not reflected in our calculation of backlog.
Although we believe that our backlog provides visibility as to our future operating performance, our
backlog is based on a number of assumptions and estimates. Those assumptions include, among others,
the construction of each of the relevant projects (including obtaining any required regulatory approvals),
estimated revenues determined according to the formula in the applicable PPA or other contracted offtake
arrangement for the power and, if applicable, RECs, timely construction and commissioning of each
applicable facility in accordance with the milestones provided for in the applicable PPA or other contracted
offtake arrangement and management’s best estimates of any applicable locational curtailment,
degradation of solar panels, degradation of battery storage systems or variability in weather conditions, as
validated by third-party technical advisor reports prepared in connection with any applicable financing for
such projects. These assumptions do not give effect to any potential adjustment or payment relating to
deficient production or otherwise. Any of these assumptions could be wrong, and the amount of revenue
generated under our agreements, if any, could be materially different than the amounts included in our
backlog.
Our 8.0 GW-IT PORTS-Pike Technology Campus constitutes the entirety of our contracted-but-not-under-
construction data center capacity, and a substantial majority of our DC segment backlog is derived from
PORTS-Pike related contracts. The conversion of this backlog into recognized revenue remains subject to
the successful development, financing, permitting, construction, commissioning and delivery of the data
center buildings on the campus and the successful development, financing, permitting, construction,
commissioning and delivery of new transmission lines to the campus. Because we have not yet received
all of the anticipated permits needed for the project, we may be delayed in converting our backlog into
anticipated revenue on the timelines currently estimated, or at all. Further, because the project is in its
development stage, and some of the construction and equipment contracts necessary for the financing,
construction and operation of the PORTS-Pike Technology Campus are not yet executed, we are
significantly reliant on estimates and assumptions, which could materially impact our anticipated revenue.
Furthermore, the successful operation of the data centers may be affected by the successful
development, financing, permitting, construction, commissioning and delivery of the approximately 9.2
GW of new neighboring gas-fired generation facilities, which are also in the early stages of development,
with required permits still outstanding. While we believe our PORTS-Pike Technology Campus would still
be able to move forward if such generation facilities were delayed because the data centers are expected
to be directly connected to the PJM grid, we would likely need to secure alternate sources of power
generation for the project to ensure reliable and cost-efficient operations given the amount of new load
that our data centers represent. There can be no assurance that such alternative sources will be available
on a timely basis, on commercially reasonable terms or at all, which could adversely impact our ability to
finance, develop, construct and commission the data centers comprising the PORTS-Pike Technology
Campus on the anticipated timeline. If the development, construction and operation for the PORTS-Pike
Technology Campus are delayed, reduced or withdrawn, the scope, capacity or timeline of the project
could be materially affected and the related backlog may not convert into revenue on the timelines or in
47
the amounts we currently anticipate, if at all. In addition, given the development stage of the project, we
must rely heavily on our assumptions and estimates, which could prove inaccurate and materially impact
our ability to accurately forecast our future expenditures.
Our backlog-associated capex attributable to our DC segment reflects the aggregate remaining capital
expenditures we expect to incur to develop and construct our data centers under contract based on
management’s project budgets, internal or as prepared in connection with any applicable financing for
such projects. Our backlog-associated capex attributable to our Standalone Power segment reflects the
aggregate remaining capital expenditures we expect to incur to develop and construct our Standalone
Power generation assets based on management’s project budgets, internal or as prepared in connection
with any applicable financing for such projects. These expenditures include construction and
infrastructure costs, including fiber, water and power infrastructure, as well as third-party consultant fees,
land use and entitlement costs, governmental permits and fees, insurance premiums, financing costs,
capitalized interest, taxes and contingencies. For backlog-associated capex in our Data Centers and
Standalone Power segments for which we have not yet entered into construction agreements, such
expenditures are estimated by management as supplemented by Request for Proposal (RFP) processes
with subcontractors where available. Backlog-associated capex does not reflect operating expenses,
maintenance costs, non-capitalized interest expense, non-capitalized taxes, non-capitalized overhead,
depreciation, cost overruns, timing delays, customer defaults or other costs, risks or events that may
affect the profitability or economic return of the projects underlying our backlog. Our estimates of backlog-
associated capex are based on management’s current project-level budgets, expected construction
schedules and assumptions regarding project scope, design specifications, procurement, labor and
construction costs. These estimates incorporate management’s assumptions regarding cost escalation,
including anticipated inflation in materials, equipment, labor and other construction inputs over the
expected development and construction period, as well as contingencies for scope refinements, schedule
changes and other reasonably foreseeable cost increases. With respect to procurement, the estimates
reflect executed purchase orders, vendor bids, framework arrangements and other available pricing
information where available; for equipment, materials or services that have not yet been contracted, the
estimates assume pricing, availability, lead times and commercial terms that management believes are
reasonable based on current market conditions, existing supplier relationships and recent procurement
experience. Each of these estimates and assumptions may be significantly lower than actual costs and
expenditures we incur during the duration of our agreements due to changes in project costs, inflation,
supply chain constraints, financing conditions, among other reasons outside of our control.
Our backlog and backlog-associated capex is subject to large variations from quarter to quarter, and
comparisons of backlog and backlog-associated capex from period to period are not necessarily
indicative of future revenues or expenditures, respectively. As such, these metrics should not be viewed
as reliable indicators of our future revenue or expenditures. See also “—Our data center and power
generation projects under construction are subject to significant completion risks, including cost overruns,
delays and performance shortfalls, and we are subject to completion and performance guarantees.”
In addition, our backlog and backlog-associated capex may be subject to meaningful customer and
supplier concentration risk, respectively. See “—We depend on a limited number of customers, which
subjects us to customer concentration risk” and “—We are dependent on third-party vendors and service
providers, including a limited number of suppliers for BESS components, transformers and other long-
lead electrical equipment, to provide certain services, personnel and equipment to our projects.”
We are substantially dependent on OpenAI as a tenant and strategic partner, and any adverse
change in its financial condition or willingness to perform its contractual obligations could
materially and adversely affect our business.
OpenAI is the tenant under both our PORTS-Pike Technology Campus, which makes up a substantial
majority of our backlog, and leases for Milam County Buildings 1 and 2, a significant equity investor in our
business, and a strategic partner whose contractual rights extend across our data center development
pipeline. This concentration means that our near-term revenues, project-level financing arrangements,
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and development plans are significantly linked to OpenAI's continued performance under our lease and
related agreements. If OpenAI were to experience a material deterioration in its financial condition, seek
to renegotiate or terminate its lease obligations, or exercise contractual rights to reduce the scope of its
leases, the resulting loss of data center revenue could have a material adverse effect on our business,
financial condition and results of operations. The NVIDIA guaranty covers the first 4.25 GW-IT of leases at
the PORTS-Pike Technology Campus upon the occurrence of the applicable default conditions, and any
recovery under the guaranty would depend on NVIDIA’s performance of its obligations thereunder. In
addition, our lease agreements contain indemnification, liability, and service level provisions that could
impose significant costs on us in the event of certain breaches or third-party claims. The creditworthiness
of our primary tenant also directly affects our ability to obtain favorable project-level financing, and any
disruption in our relationship with OpenAI could impair our financing arrangements, limit our development
flexibility, and materially and adversely affect our liquidity and the value of our common stock.
The construction, operation and maintenance of our data center and energy infrastructure
projects are subject to significant safety risks, and safety incidents could result in injuries,
operational interruptions, regulatory liability, personal injury claims, litigation and reputational
harm.
Our project sites, including our data center campuses, solar power generation facilities, BESS and related
transmission and interconnection infrastructure, involve inherently dangerous activities and conditions.
Construction, operation and maintenance activities at these sites may expose our employees,
contractors, subcontractors and other third parties to significant safety risks, including risks associated
with high-voltage electrical systems, heavy equipment, cranes and lifting operations, excavation and
trenching, work at heights, work in confined spaces, energized equipment, battery systems, fires,
explosions, extreme weather, hazardous materials, vehicle and equipment movement and other
construction and industrial hazards. These risks are heightened by the scale and complexity of our
development program, the number of projects we expect to have under construction at any given time,
the involvement of multiple contractors and subcontractors at the same site, and the need to coordinate
construction activities with utility interconnection, energization, commissioning and operational activities.
Safety incidents could result in serious injury or loss of life, damage to or destruction of property,
environmental releases, fires, explosions, equipment failures, work stoppages, project shutdowns, delays
in achieving construction milestones or commercial operation, increased insurance costs, claims by
employees, contractors, tenants, landowners or other third parties, and investigations, citations, fines or
other enforcement actions by OSHA or other federal, state or local regulators. Even if a safety incident is
caused by a contractor, subcontractor, supplier or other third party, we may be subject to liability,
reputational harm, increased oversight or project delays, and our contractual indemnities, insurance
coverage or other risk transfer arrangements may not fully protect us from resulting losses. In addition,
safety incidents may cause regulators, utilities, local governments, communities, tenants or financing
parties to impose additional requirements, suspend work, delay approvals or require remediation
measures, any of which could increase costs or delay our projects. Any significant safety incident, or a
pattern of safety incidents, could materially and adversely affect our business, financial condition, results
of operations, cash flows and prospects.
We and OpenAI are highly dependent on NVIDIA for the successful completion and operation of
our PORTS-Pike Technology Campus.
We and OpenAI are highly dependent on NVIDIA for the success of our PORTS-Pike Technology Campus
and performance under the PORTS-Pike leases. For example, OpenAI is dependent on NVIDIA for
providing the necessary GPU units for the PORTS-Pike data centers. Failure by NVIDIA to deliver the
units as currently expected, for any reason including, but not limited to, any delays, increase in costs, or
decline in NVIDIA’s creditworthiness, could impact OpenAI’s ability or willingness to perform under the
PORTS-Pike leases, and could adversely impact our ability to timely complete the project and generate
revenue as projected.
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Additionally, NVIDIA is providing a residual value guaranty in connection with the initial 4.25 GW-IT at the
PORTS-Pike Technology Campus. Any material deterioration in NVIDIA’s financial condition or any
decline in NVIDIA’s creditworthiness or its ability to perform its obligations under the residual value
guaranty could have a material adverse impact on the PORTS-Pike Technology Campus project. Further,
supply chain disruptions may result in delays in GPU units we require for the project, and any delayed
deliveries and cost escalations could adversely affect our business. Prolonged disruptions in NVIDIA’s
supply chain, including due to significant demand that NVIDIA is unable to meet, could significantly delay
our ability to construct the project on time, if at all. See “—Our ability to finance and realize value from the
PORTS-Pike Technology Campus depends in significant part on the NVIDIA residual value guaranty,
which is limited, may decline over time and may terminate.” See also “—We may face significant delays
and global supply chain disruptions in connection with our anticipated PORTS-Pike Technology Campus,
which could materially impact project timelines and costs.”
We are dependent on third-party vendors and service providers including a limited number of
suppliers for BESS components, gas turbines, transformers and other long-lead electrical
equipment, to provide certain services, personnel and equipment to our projects.
We rely on third-party vendors and service providers to provide certain services, personnel, supplies,
products and equipment to our projects. We have entered into agreements with these third parties in
connection with such services, personnel, supplies, products and equipment. However, the ability of our
third-party vendors and service providers to perform successfully under their agreements is dependent on
a number of factors, including their ability to:
•maintain their own financial condition, including adequate working capital, and their ability to pay debt
service and other liabilities;
•accurately estimate certain costs;
•meet quality or performance standards for third-party equipment;
•timely procure equipment and supplies and navigate regulatory requirements for such equipment and
supplies;
•execute requisite work and services efficiently; and
•attract, develop and retain skilled personnel.
Specifically, our business is highly dependent upon a small number of suppliers for the provision of BESS
components, transformers and other long-lead electrical equipment and turbines. For the six months
ended June 30, 2026, our largest advance to a supplier was approximately $43.9 million. For the year
ended December 31, 2025, our largest advance to a supplier was approximately $17 million. If this
supplier or any other third-party vendor or service provider is unable or unwilling to perform according to
the terms of its respective agreement for any reason or terminates its agreement, we may need to engage
a substitute vendor or service provider or obtain replacement products or services in the marketplace.
There can be no assurance that the marketplace can provide these products and services as, when and
where required, or on terms comparable to our existing arrangements. If we are unable to enter into
replacement agreements on favorable terms or at all, we may be exposed to market price volatility and
the risk that equipment or services may not be available during certain periods at any price. We may also
be required to make significant capital contributions to remove, replace or redesign equipment that cannot
be supported or maintained by replacement suppliers. Any of the foregoing could result in significant
project delays, increased costs and reduced profit, any of which could have a material adverse effect on
our business, contracts, financial condition, operating results, cash flow, financing requirements, liquidity,
prospects and the price of our common stock.
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Our data center infrastructure is new, purpose-built for AI training, and has not yet been deployed
at the scale we require.
While new data centers have been built and operated by others, few have deployed data center
infrastructure at our anticipated scale or with our specific design requirements for AI training workloads.
We are building and operating these facilities faster than is typical in the industry, and we are making
architectural and engineering decisions that reflect this pace and the novelty of our workloads. As a result,
we face meaningful construction and operational risks, including the possibility that our facilities do not
perform as expected, that we encounter unforeseen issues with power delivery, cooling, networking or
other critical systems, or that components of our infrastructure need to be significantly modified or
redesigned as we gain real-world operating experience. In addition, while our initial data center designs
are optimized for AI training workloads, which require tightly coupled clusters of accelerators operating in
synchrony at high power densities, our business strategy contemplates serving the full spectrum of AI
compute demand, including inference and agentic AI workloads that have different latency, geographic
distribution, hardware refresh and cooling requirements. Inference workloads, which may become an
increasingly dominant share of AI compute consumption as agentic AI scales, may require different facility
configurations, power density profiles, or cooling architectures than those we have initially deployed. If the
mix of customer workloads shifts toward inference more rapidly than we anticipate, or if the technical
requirements of inference and agentic AI diverge materially from our current design specifications, we
may need to retrofit, reconfigure, or redesign portions of our facilities, which could result in increased
capital expenditures, construction delays, or periods during which capacity is underutilized. Any such
issues could result in increased costs, delays in our product development, or periods of degraded
performance.
In addition, our data center leases, operating agreements and project-level financing arrangements
subject us to completion and performance guarantees, service level commitments and construction
delivery milestones, and our failure to meet these requirements could result in material liquidated
damages, rent abatements, buy-out options or the obligation to repay amounts advanced to us by our
tenants, any of which could materially and adversely affect our business, financial condition, liquidity and
results of operations.
We have a history of net losses, and we may not achieve or maintain profitability in the future.
We have incurred significant net losses since our inception, and we may continue to incur net losses in
the future. For the six months ended June 30, 2026, we incurred a net loss attributable to SB Energy, Inc.
of approximately $3,208.9 million (including approximately $589.5 million of stock-based compensation
expense). For the year ended December 31, 2025, we incurred a net loss attributable to SB Energy, Inc.
of approximately $738.0 million (including approximately $674.1 million of stock-based compensation
expense). We have made substantial investments in the development and construction of our power
projects and are making substantial investments in our data center strategy, including the initial
development of large-scale gas-fired power generation facilities to supply our data centers.
Further, as of the date of this prospectus, we have not generated any revenue from our data center
business, and we will not do so unless and until our data centers are operational and lease payments
commence. Our data center leases, operating agreements and project-level financing arrangements
subject us to completion guarantees, construction delivery milestones and performance requirements that
impose significant financial consequences in the event of delay or non-performance. If we fail to meet
specified construction milestones, delivery deadlines or operating standards, our tenants may be entitled
to liquidated damages, rent abatements or credits (which could, in certain circumstances, result in the
loss of an entire month’s rent or more for a single breach), buy-out options permitting the tenant or its
designee to acquire affected project assets at prices that may be materially below our invested capital,
and the obligation to repay any and all amounts advanced to us in the form of prepayments or
reimbursements, which amounts would be significant. Any such termination and required repayments may
lead to our insolvency. In addition, a lease termination or failure to satisfy lease milestones may trigger
defaults, mandatory prepayments, cash collateral requirements, reserve funding obligations, foreclosure
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rights, or other remedies under our project-level debt facilities and related financing arrangements,
creating cascading financial consequences that extend beyond the affected project. Because certain of
our completion and performance guarantees are recourse to the parent company, construction delays or
performance shortfalls at individual projects could have a direct and material impact on our consolidated
financial condition, liquidity and results of operations.
We have limited experience developing and operating gas-fired power generation facilities, and
any expansion into gas-fired generation at significant scale would involve substantial execution,
operational and commodity risks.
As of the date of this prospectus, our operating power generation portfolio has consisted entirely of solar
power and BESS assets, and we do not currently own or operate any gas-fired generation facilities. We
are currently developing, and may in the future construct and operate, gas-fired generation facilities at
significant scale. We have limited institutional experience with gas-fired power plants, and the
development, construction and operation of large-scale gas-fired generation involves risks and
complexities that differ materially from those associated with solar power and BESS projects, including
fuel procurement, transportation, storage, emissions compliance and commodity price risks to which we
have not historically been exposed. We may seek to manage these risks through contractual
arrangements and other risk management strategies; however, such arrangements may not fully mitigate
the effects of market volatility or changing market conditions. In addition, industrial scale gas-fired
turbines are in high demand in the United States and globally, and demand appears to have significantly
outstripped available supply, resulting in reports of lead-times of up to seven years. We could experience
significant delays and increased costs in obtaining any necessary gas-fired turbines, which could
adversely affect our ability to meet milestone deadlines. Any gas-fired generation facilities we develop
would also require air quality permits under the Clean Air Act and analogous state laws, and changes in
federal or state emissions standards, environmental policy priorities or public sentiment (including public
opposition or legal challenges to the permitting process) could result in more restrictive permitting
requirements, longer review timelines, increased compliance costs or denial of permits. While we are not
anticipating constructing or operating the gas-fired generation facilities supporting the PORTS-Pike
Technology Campus, their completion may affect the project and there can be significant delays in the
permitting, development, construction and operation of these facilities.
There can be no assurance that we will be able to successfully execute on the development, construction
and operation of gas-fired generation facilities on the timelines, at the costs, or at the performance levels
we currently anticipate, and any failure to do so could have a material adverse effect on our business,
financial condition, results of operations and prospects.
We operate in a highly competitive, rapidly evolving industry and if we are unable to respond to
our competitors effectively, it could have a material adverse effect on our business, results of
operations and financial condition.
We compete across multiple dimensions of the data center and power infrastructure value chain and
competition is intensifying as the AI infrastructure build-out accelerates. Our ability to win and retain
hyperscaler tenants, secure development sites, obtain long-lead equipment and deliver projects on
schedule depends in part on our competitive positioning. If we fail to compete effectively, our business,
results of operations and financial condition could be materially and adversely affected.
Our data center business depends on securing long-term lease commitments from a limited number of
hyperscale customers, many of which have the financial resources and technical capability to develop
and operate their own data center campuses. If hyperscalers shift more toward self-build models or
reduce their reliance on third-party developers, demand for our leased capacity could decline. Prominent
third-party data center providers, as well as private operators and new entrants, also compete for these
commitments and may offer more favorable pricing, faster delivery, increasingly favorable grid
interconnection positions or established operating track records that we cannot match at this stage.
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In our power generation business, we compete with established independent power producers and
vertically integrated utilities, many of which have longer operating histories, larger portfolios and lower
costs of capital. As we expand into gas-fired power generation to supply our data centers, we will face
additional competition for natural gas supply, pipeline capacity, gas turbine procurement and skilled
personnel from developers with established experience in thermal generation. We also compete with
developers pursuing alternative on-site generation strategies, including nuclear, fuel cell and long-duration
storage solutions.
The AI infrastructure build-out has created acute supply chain bottlenecks, with delivery windows for high-
voltage transformers, switchgear, gas turbines and other key equipment now extending multiple years.
Competitors with larger procurement volumes, longer-standing vendor relationships or the ability to offer
more favorable commercial terms may secure equipment and labor ahead of us, which could delay our
projects and increase our costs.
Our power generation business has historically benefited from ITCs and other federal tax incentives.
Following the expiration or phase-down of these incentives, competitors with lower operating costs,
access to alternative financing structures or more advanced generation technologies may be better
positioned to compete without the benefit of tax subsidies, which could erode our competitive position in
securing new offtake agreements and increase our cost of power relative to competing sources of supply.
If we are unable to compete effectively across these dimensions, we may be unable to execute the leases
in our pipeline, convert our backlog into revenue-generating assets or expand our business, which could
materially and adversely affect our business, prospects, financial condition and results of operations.
For details on our current competitive landscape, see “Business—Competition.”
We depend on a limited number of customers, which subjects us to customer concentration risk,
and we depend on their creditworthiness, the lack of which may impair our ability to close project
financings.
We operate a portfolio of utility-scale solar and battery energy storage generation capacity across projects
in Texas and California, with additional capacity under construction. Our SP segment generates revenues
primarily from the wholesale sale of electricity and renewable energy certificates under long-term PPAs,
energy hedges, and, to a lesser extent, merchant market sales. A material portion of our revenues is
derived from a limited number of customers, including municipal corporations, power authorities, energy
service companies, community choice aggregators and large commercial customers, under long-term
PPAs. For the six months ended June 30, 2026, two customers each represented more than 10% of our
total revenue (excluding swap settlements), with our largest single customer accounting for approximately
27% of revenue and our second largest customer accounting for approximately 24% of revenue. For the
year ended December 31, 2025, four customers each represented more than 10% of our total revenue
(excluding swap settlements), with our largest single customer accounting for approximately 29% of
revenue. Our largest customers represent a substantial portion of our total revenues, and the loss of any
one of these customers could materially adversely affect our business, financial condition and results of
operations.
In our data center business, our signed data center lease capacity as of the date of this prospectus is
approximately 8.8 GW-IT and is made up entirely of our two anchor tenants—SoftBank at Cosmos and
OpenAI at Milam County Buildings 1 and 2 and the PORTS-Pike Technology Campus. Of this capacity,
approximately 0.8 GW-IT is under construction, and 8.0 GW-IT is the contracted PORTS-Pike Technology
Campus capacity attributable to OpenAI. Our revenue concentration is expected to increase as our data
center business begins generating revenue. Because our data center segment is dependent on this
limited counterparty base, the loss of either SoftBank or OpenAI as tenants due to insolvency, exercise of
contractual rights, force majeure, breach, early termination, a reduction in lease scope or a failure to
renew on commercially acceptable terms could eliminate the data center revenue associated with the
affected project and materially and adversely affect our business, results of operations and financial
condition. We may be unable to replace any lost revenue on comparable terms or within a reasonable
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time. We are also in negotiations with additional hyperscaler customers, but no definitive agreements
have been executed and there can be no assurance that these discussions will result in leases or other
commitments on acceptable terms or at all.
Our tenants provide guarantees and other credit support for their lease obligations; however, not all
tenant guarantors carry investment-grade credit ratings, and any guarantees or backstop arrangements
are subject to limitations, including event-of-default triggers, coverage limits and caps on liability. In
particular, while NVIDIA’s residual value guaranty provides support for the initial 4.25 GW-IT at the
PORTS-Pike Technology Campus, it is subject to significant limitations. Under the guaranty, no covered
loss amount is payable unless and until the applicable RFS Conditions have been satisfied, and it is
subject to specified tenant insolvency or uncured monetary default under applicable lease triggers, a
declining guaranteed minimum value and a $105 billion aggregate cap across related guaranties. The
guaranty may terminate upon a specified ratings upgrade or other events. NVIDIA also has consent rights
over amendments and waivers under the project arrangements and may elect to assume an applicable
lease, require reletting of the applicable building or a sale, any of which may not preserve our expected
economics. See “—Our ability to finance and realize value from the PORTS-Pike Technology Campus
depends in significant part on the NVIDIA residual value guaranty, which is limited, may decline over time
and may terminate” and “—We are substantially dependent on OpenAI as a tenant and strategic partner,
and any adverse change in its financial condition or willingness to perform its contractual obligations could
materially and adversely affect our business.”
Tenants whose guarantors lack investment-grade credit ratings, including OpenAI, may present
heightened credit risk, particularly in the event of an economic downturn or disruption in the AI industry. If
the leases do not commence as of their targeted rent commencement dates, the guarantee under such
lease will not become effective until the completion of the data center, and there are scenarios in which
our leases could be terminated without triggering a tenant guarantee, including in the event a tenant
purports to terminate without having the ability to do so.
In addition, certain of our data center leases include a buy-out option that may become exercisable if
applicable RFS conditions are not satisfied within specified periods after target RFS dates. If such a buy-
out option were exercised, the tenant or its designee could acquire the affected project assets for a
contractually specified price that may be based on fair market value subject to adjustments, with a floor
tied to the payoff of applicable construction financing. In a severe delay scenario, the purchase price
could be materially below the value we otherwise expect to realize from long-term ownership and
operation of those assets, and we would lose all future lease revenue from the affected project after
having already incurred substantial development, procurement, construction and financing costs. Even if
the buy-out option is not exercised, the existence of such a remedy could affect how lenders underwrite
the affected project, require additional reserves or equity support, limit refinancing alternatives or increase
the cost of capital.
The creditworthiness of our tenants directly affects our entire project financing strategy. Lenders may
require additional credit support or impose less favorable terms for projects where the tenant has a
weaker credit profile or does not provide an investment-grade parent guarantee. A lease termination or
failure to satisfy lease milestones may also trigger defaults, mandatory prepayments, cash collateral
requirements, reserve funding obligations, foreclosure rights or other remedies under the applicable
project-level debt facilities and related financing arrangements. Because we finance primarily through
project-level structures matched to milestone risk, the credit quality of the underlying tenant is a critical
factor in lender underwriting, and any deterioration in a tenant’s financial condition could impair our ability
to close project financings on acceptable terms or at all, thereby constraining our growth and ability to
convert pipeline into operating assets.
Furthermore, because our tenant base is concentrated in similar industries and markets, any
macroeconomic or microeconomic changes that adversely impact any one of our tenants may also
adversely impact one or more (or potentially all) of our other tenants, thereby exacerbating the resulting
adverse impact on our business, financial condition, results of operations and cash flows.
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Our ability to finance and realize value from the PORTS-Pike Technology Campus depends in
significant part on the NVIDIA residual value guaranty, which is limited, may decline over time and
may terminate.
The PORTS-Pike Technology Campus is our largest data center asset and its financeability and value
depend in significant part on the NVIDIA residual value guaranty supporting the OpenAI tenant’s lease
obligations, as OpenAI is not currently an investment-grade tenant. The guaranties, taken together, cover
only the initial 4.25 GW-IT of the 8.0 GW-IT PORTS-Pike Technology Campus at an aggregate
guaranteed value of $105 billion; the remaining 3.78 GW-IT is subject only to an option to guaranty that is
in NVIDIA’s sole discretion and may never be exercised. The guaranty is a residual value guaranty, is
triggered only upon tenant insolvency or an uncured monetary default under an applicable lease, and the
guaranteed minimum value declines on a defined schedule over the applicable 20-year lease, and is
intended to cover debt principal, accrued interest, invested equity, targeted equity returns and committed
transmission payments. Following a trigger, NVIDIA may assume an applicable tenancy itself or through
an assignee or direct us to re-let (or, if unsuccessful in reletting, sell) the premises. The aggregate
remedy cap is $105 billion across related guaranties on the initial 4.25 GW-IT. If the guaranty is
unavailable, insufficient or terminates with respect to any PORTS-Pike lease we may not be compensated
in full or at all for any lost rental revenue under the applicable lease. Moreover, we may be unable to
obtain or maintain financing for PORTS-Pike Technology Campus on acceptable terms, and the value of
our largest asset and our ability to convert related backlog into revenue could be materially and adversely
affected.
Further, if any tenant defaults on its obligations, or if a guarantor is unable to perform under a guaranty,
our ability to service our indebtedness and fund our development activities could be materially and
adversely affected. Because our signed data center leases across three campuses—Cosmos, Milam
County Buildings 1 and 2, and the 17 PORTS-Pike leases—are with affiliates of SoftBank or OpenAI, a
deterioration in the financial condition of either related-party group could simultaneously affect tenant
payment obligations, guaranty performance and our relationship with the counterparty, creating correlated
credit and governance risks that would not be present in an arm’s-length transaction with an unaffiliated
party. Although NVIDIA has provided a residual value guaranty for the initial 4.25 GW-IT at the PORTS-
Pike Technology Campus, it is not a guaranty of rent or other payment obligations, is capped and declines
over time, may terminate upon specified ratings upgrades or substitute credit support, and gives NVIDIA
consent rights and assumption, reletting and sale elections that may not preserve our expected
economics. See “—Our ability to finance and realize value from the PORTS-Pike Technology Campus
depends in significant part on the NVIDIA residual value guaranty, which is limited, may decline over time
and may terminate.” Our signed data center lease capacity is approximately 8.8 GW-IT across Cosmos,
Milam County Buildings 1 and 2 and the PORTS-Pike Technology Campus, and we have no unaffiliated
data center tenants. Any dispute with SoftBank or OpenAI or their affiliates regarding a lease could be
complicated by SoftBank’s controlling interest in us, and our board of directors may face conflicts of
interest in enforcing our rights against a related-party tenant, which could result in outcomes that are less
favorable to us than if the tenant were an unaffiliated third party. The guaranty automatically terminates
and NVIDIA is released if OpenAI Group PBC achieves a certain designated credit rating or if specified
replacement guaranties or leases are provided.
Because NVIDIA is permitted to designate an assignee to assume the applicable lease in the event of
such trigger, there is a possibility that any or all of the PORTS-Pike leases could have a replacement
tenant that is less creditworthy than OpenAI. However, under any such assignment by NVIDIA, the
residual value guaranty from NVIDIA would remain in place.
We face significant risks related to securing and maintaining access to sufficient electrical power
and grid interconnection for our operations.
Our business depends on being able to secure sufficient power, including for our data center facilities, in a
cost-effective manner. Our inability to secure sufficient power or any power outages, shortages, supply
chain issues, capacity constraints or significant increases in the cost of securing power could have an
55
adverse effect on our business. We rely in part on third parties, third-party infrastructure, governments,
and suppliers to provide power to develop, construct and, once operational maintain our data center
facilities and meet the needs of our current and future customers. At PORTS-Pike, electric utility service
has been contracted for approximately 0.8 GW of gross load. Serving the remaining planned load
requires additional transmission facilities which AEP identified in the interconnection request process,
PJM studies of the facilities identified by AEP, and OPSB, FERC and PUCO approvals. These facilities
and approvals may be delayed, conditioned, reduced or denied. If sufficient power is not available when
required, we could fail to satisfy applicable RFS conditions under our leases, delay rent commencement,
incur contractual remedies and fail to convert the related backlog into revenue as anticipated, if at all.
In addition, we could be required to post significant collateral for the transmission expansion project that
enables the full planned capacity for the data centers at our PORTS-Pike Technology Campus. That
transmission expansion project alone could require over $6 billion in credit support which could be in the
form of guaranties or letters of credit that are not reflected on our balance sheet. This figure is a collateral
amount and the actual termination payment if the transmission expansion project is terminated early could
differ. See “—Grid interconnection backlogs, rising costs and our substantial letter of credit requirements
could delay or prevent the development of our projects, and we may be unable to secure adequate
financing to fund our development activities.”
Transmission constraints and outages, including line maintenance outages, can cause transmission
congestion that negatively impacts energy prices at our facilities. Our operations depend on transmission
and distribution facilities owned and operated by RTOs, ISOs and other unaffiliated parties. If
transmission service is unavailable or disrupted, or if the transmission capacity infrastructure is
inadequate, our ability to sell and deliver power may be materially affected. Transmission congestion, grid
reliability measures or system constraints may result in curtailment of our generation output, which would
reduce revenues, cause us to fail to meet performance guarantees under PPAs, and impair project
economics. For our data center leases, such disruptions could cause us to fail to meet these SLA
thresholds, which could result in significant financial consequences, including rent abatements or credits
that could, in certain circumstances, result in the loss of an entire month's rent or more for a single SLA
breach. Repeated or prolonged SLA failures could also give tenants the right to terminate their leases,
reduce committed capacity or pursue other contractual remedies.
Limitations on generation and transmission may limit our ability to obtain sufficient power capacity for
potential expansion sites in new or existing markets, including due to utility companies curtailing access to
power for a variety of reasons. Utility companies and other third-party power providers may impose
onerous operating conditions to any approval or provision of power or we may experience significant
delays, unfavorable contractual terms, and substantial increased costs to provide the level of electrical
service required by our current or future data center designs. Our ability to find reliable partners and
appropriate sites for expansion may also be limited by access to power, especially as we design our data
centers to the specifications of hyperscaler tenants operating data centers for high-performance
computing (“HPC”) technology, which is power-intensive.
The proliferation of power generation projects and large-load data center developments has resulted in a
large volume of interconnection requests submitted to grid operators, resulting in significant delays to the
approval process and estimated completion dates for both our power generation and data center projects.
In recent years, the time and costs required to secure and expand interconnection facilities and
transmission systems have increased, complicating project planning and creating additional contractual
and financial risk for projects under construction. We may face difficulties in expanding our
interconnection facilities and access to transmission systems in a timely manner and at a reasonable cost
as well as curtailment resulting from transmission facility downtime. Delays or failures in securing
interconnection approvals (whether for generator interconnection or load interconnection), completing grid
upgrades, satisfying regulatory or utility requirements, or finalizing definitive power arrangements could
limit our ability to develop sites as planned, increase costs, or result in projects being delayed, scaled
back or abandoned.
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We may also face electricity market risks relating to changes in laws, regulations and requirements of
market operators, network operators and regulatory bodies, including with respect to interconnection of
facilities of large electrical loads to regional grids, grid stability requirements, and curtailment obligations.
New regulatory processes that evaluate multiple large load interconnection requests together on a
portfolio basis for transmission planning purposes could increase costs, delay project timelines, or impose
additional operational constraints on our facilities. In particular, ERCOT has implemented a batch study
process for large load interconnection requests, under which interconnection applications are grouped
and evaluated collectively in periodic study cycles rather than on a first-come, first-served basis. This
process introduces uncertainty into the timing and outcome of our interconnection requests in Texas, as
the approval of any individual application may depend on the aggregate load requested across all
applications in the same batch, the results of system-wide reliability and deliverability studies, and the
scope and cost of network upgrades identified during the study process. ERCOT’s batch study approach
may result in our applications being delayed until a subsequent study cycle, require us to fund significant
network upgrades as a condition of approval, or result in the denial or modification of our requested load
levels if the aggregate demand in a given batch exceeds available transmission capacity. Because a
significant portion of our data center development pipeline is located in the ERCOT market, delays or
adverse outcomes in the ERCOT batch study process could materially affect our ability to energize
facilities on our anticipated timelines and could impair our competitive positioning relative to developers
that secured interconnection approvals before the implementation of the batch process or that hold more
favorable queue positions. Additionally, any similar developments for PJM with respect to interconnection,
grid stability, curtailment obligations and other electricity market laws, regulations and requirements could
adversely impact the development of our projects.
We will depend on third parties to provide Internet, telecommunication and fiber optic network
connectivity to the tenants in our data center facilities, and any delays or disruptions in service
could have a material adverse effect on us.
Our data center business will rely on third-party service providers. In particular, we expect to depend on
third parties to provide Internet, telecommunication and fiber optic network connectivity to the tenants in
our future data center facilities, and we have no control over the reliability of the services provided by
these suppliers. Our tenants may in the future experience difficulties due to service failures unrelated to
our systems and services. Any Internet, telecommunication or fiber optic network failures may result in
significant loss of connectivity to our data center facilities once operational, which could reduce the
confidence of our tenants and could consequently impair our ability to retain existing tenants or attract
new tenants and could have a material adverse effect on us.
Similarly, we depend upon the presence of Internet, telecommunications and fiber optic networks serving
the locations of our data center projects in order to attract and retain tenants. The construction required to
connect multiple carrier facilities to our data center projects is complex, requiring a sophisticated
redundant fiber network, and involves matters outside of our control, including regulatory requirements
and the availability of construction resources. Each new data center facility that we develop requires
significant amounts of capital for the construction and operation of a sophisticated redundant fiber
network. We believe that the availability of carrier capacity affects our business and future growth. We
cannot assure you that any carrier will elect to offer its services within our data center facilities once
operational or that once a carrier has decided to provide connectivity to our data center facilities that it will
continue to do so for any period of time. Furthermore, some carriers are experiencing business difficulties
or have announced consolidations or mergers. As a result, some carriers may be forced to downsize or
terminate connectivity within our data center facilities, which could adversely affect our tenants and could
have a material adverse effect on us.
Our lease agreements contain provisions that could allow tenants to terminate upon specific
events and, in some cases, require us to pay significant liquidated damages.
Our data center leases contain, and we anticipate that any future lease agreements that we may enter
into will contain, milestones and conditions precedent that, if not timely satisfied, could entitle tenants to
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remedies including liquidated damages, rent credits or, in certain cases, termination of the lease. For
example, certain of our leases provide that if we fail to deliver design documents or to achieve early
access, ready for service or final completion of a project by specified deadlines, the tenant may exercise a
buy-out option or terminate the lease and require repayment of accrued rent credits and other amounts
previously advanced. The exercise of such remedies under any of our leases could have a material
adverse effect on our financial condition, results of operations and cash flows.
In addition, a lease termination or failure to satisfy lease milestones may trigger defaults, rent credits, rent
abatements, SLA service credits, mandatory prepayments, cash collateral requirements, reserve funding
obligations or other remedies under applicable project-level debt facilities and related financing
arrangements. If a lease is terminated, we may also incur costs to make the premises ready for a
replacement tenant and experience delays in re-leasing, and we may be unable to re-lease the facility on
a timely basis, on favorable terms or at all. Our ability to complete project milestones is subject to risks
related to permitting, utility interconnection, labor availability, supply-chain conditions and other factors,
many of which are outside our control.
Certain of our data center lease arrangements could permit a tenant to acquire affected project
assets if we fail to meet construction delivery timelines and may otherwise limit transfers
involving those assets.
Certain data center leases include project-specific remedies triggered by delays in making data center
capacity available. These leases may include buy-out options that become exercisable if applicable RFS
conditions are not satisfied within specified periods after target dates. The relevant RFS conditions are
detailed and may require, among other things, substantial completion, satisfaction of acceptance
conditions, delivery of required certifications and specified commissioning standards. Failure to satisfy
these conditions could occur even where significant construction has been completed.
If such a buy-out option were exercised, the tenant or its designee could acquire the affected project
assets for a contractually specified price that may be based on fair market value subject to adjustments,
with a floor tied to the payoff of applicable construction financing or other agreed amounts. In a severe
delay scenario, the purchase price could be materially below the value we otherwise expect to realize
from long-term ownership and operation of those assets, and we would lose future lease revenue from
the affected project after having already incurred substantial development, procurement, construction and
financing costs.
Exercise of such an option could result in the loss of future lease revenue, reduce or eliminate our
expected return on invested capital, impair our ability to service or refinance project-level debt, reduce
collateral available to our financing sources and require us to recognize losses or impairments. Exercise
of the buy-out option could also result in acceleration of any related project debt, requiring us to repay or
refinance such indebtedness before maturity. The relevant triggers relate to construction delivery timelines
and technical acceptance standards, which are subject to permitting, interconnection, equipment, labor,
contractor performance, weather, supply chain and other risks, many of which are outside our control.
These lease arrangements may also include remedies such as liquidated damages, rent credits, self-help
or acquisition rights rather than a simple right to terminate, and the availability or exercise of these
remedies could affect our liquidity, financing arrangements and negotiating leverage. Even if a buy-out
option is not exercised, the existence of such a remedy could affect how lenders underwrite the affected
project, require additional reserves or equity support, limit refinancing alternatives or increase the cost of
capital. These remedies are further reinforced by completion and performance guarantees under our
project-level financing arrangements, certain of which are recourse to the parent company, compounding
the financial impact of any delay.
Certain data center lease and related arrangements also include restrictions or remedies tied to transfers
or sales involving prohibited or restricted entities, including rent reductions, consent rights or termination
rights in specified circumstances. These provisions may limit or delay sales of the landlord entity or the
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underlying project assets, restrict change-of-control transactions, reduce the universe of potential buyers
or strategic partners and adversely affect valuation in any disposition or restructuring.
Our PPAs contain provisions that provide buyers with termination rights, liquidated damages and
other remedies upon specified events.
Our existing PPAs contain, and we anticipate that any future PPAs that we may enter into will contain,
certain conditions precedent and delivery schedules and requirements that, if we are unable to meet,
could result in significant liquidated damages or termination of the PPAs, which would subject us to
significant losses and have a material adverse effect on our business prospects, financial condition,
results of operations and cash flows. If we fail to meet certain delivery milestones with dates to be
specified in any of our PPAs, including the construction of substation projects and delivery of the agreed
upon power capacity and/or storage capacity by certain specified deadlines, buyers may be entitled to
substantial liquidated damages that would have a material adverse effect on our financial position and
liquidity.
In addition, if we fail to meet the performance obligations set out under these PPAs, the buyers may
terminate their agreements and we would be obligated to pay liquidated damages as well as repay
amounts equal to or in excess of any and all accrued amounts advanced to us in the form of any
prepayments or reimbursements, which amounts would be significant. Any such termination and required
repayments may lead to our insolvency. A termination of a PPA would cause us to lose all of the revenue
associated with that PPA, which could represent substantially all of our revenue associated with the
project and cause us to have to find alternative sources of revenue to meet any financing obligations and
to prevent a default under such financings. We may be unable to replace such lost revenue, which would
have a material adverse effect on our financial position and liquidity. Additionally, upon certain events,
including natural disasters or other force majeure events, planned outages, forced facility outages or
pursuant to regulators' demands, all of our power generation customer agreements allow buyers to
request curtailment of energy deliveries of, in certain circumstances, up to 100% of committed capacity
through the submission of curtailment orders. If we deliver excess capacity in contradiction with any valid
curtailment request, we may be required to pay the buyer delivery costs, settlement costs, or any
penalties by ISOs or similar authorities imposed for such excess delivery. Alternatively, in the event
buyers request curtailment in contradiction to our agreements, we may be entitled to payments for energy
we could have produced but forewent. In the event we deliver less energy than we may be required to
under our agreements, we are required to pay our buyers “shortfall damages” equal to a prescribed
amount pursuant to a formula in the applicable agreement. A PPA termination or failure to meet PPA
delivery, performance, credit support or other material obligations may also trigger defaults, mandatory
prepayments, cash collateral requirements, reserve funding obligations, letter of credit draws, foreclosure
rights or other remedies under the applicable project-level debt facilities and related financing
arrangements. Our ability to supply power according to the terms of such PPAs is subject to substantial
risks, many of which are out of our control.
Our operations are concentrated in a limited number of geographic regions, which exposes us to
regional risks.
Our operating and under-construction portfolio of solar and battery energy storage system projects is
concentrated in California, Texas and Nevada, and a significant portion of our development pipeline is
located in these states and a limited number of other states. This geographic concentration exposes us to
risks specific to these regions, including:
•regional economic downturns or changes in electricity demand;
•state-specific regulatory and policy changes affecting renewable energy, including changes to net
metering, renewable portfolio standards or utility procurement requirements;
•regional environmental conditions, including droughts, wildfires, hurricanes and other natural
disasters;
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•transmission constraints, basis and grid congestion specific to these markets;
•changes in wholesale electricity prices;
•insufficient electrical power capacity to meet tenant demands;
•opposition to renewable energy or data center development;
•potential moratoria on renewable energy or data center development: and
•concentration of our data center and power infrastructure development in a limited number of
locations with favorable power access.
In Texas, our projects operate within the ERCOT market, which operates largely in isolation from other
U.S. power grids and has experienced significant price volatility and reliability challenges. ERCOT’s
unique market structure and regulatory framework expose us to risks that may not affect projects in other
regions. In California, we face risks from the state’s complex regulatory environment, ongoing wildfire
risks and evolving policies regarding distributed energy resources and utility procurement.
Our data center and power infrastructure development strategy may also result in geographic
concentration if we develop multiple facilities in a limited number of locations with favorable power
access. Any adverse developments in the regions where our assets are concentrated could have a
disproportionate impact on our business, financial condition and results of operations.
Our sales cycles can be long and unpredictable, and our sales efforts require considerable time
and expense, particularly with respect to government procurement processes.
Our business involves the sale of large-scale data center leases and PPAs to hyperscale tenants, AI
compute operators and utilities. Sales to such customers involve longer and more unpredictable sales
cycles. Customers often view the commitment to a long-term data center lease or PPA as a significant
strategic decision and, as a result, frequently require considerable time to evaluate, negotiate and qualify
our projects prior to entering into or expanding a relationship with us. Large enterprises and government
entities in particular often undertake a significant evaluation and procurement process that further
lengthens our sales cycle. In addition, given our strategic partnerships and government initiatives,
including, we may be subject to government procurement processes that can be lengthy, unpredictable
and subject to budget constraints, multiple approvals, and unanticipated administrative, processing and
other delays. Government contracts may also be subject to the approval of appropriations and funding
authorizations as well as bidding processes, all of which may be beyond our control. We spend
substantial time and resources on our sales and business development efforts without any assurance that
our efforts will produce a definitive agreement. As a result, it is difficult to predict whether and when a sale
or lease will be completed. The failure of our efforts to secure agreements after investing resources in a
lengthy sales or procurement process could adversely affect our business, financial condition, results of
operations and prospects.
Our operating results may fluctuate significantly from period to period, which could make our
future results difficult to predict and could cause our operating results to fall below expectations.
Our operating results may vary significantly from period to period, and we expect that our operating
results will continue to vary significantly in the future such that period-to-period comparisons of our
operating results may not be meaningful. Accordingly, our financial results in any one quarter or fiscal
year should not be relied upon as indicative of future performance. Our quarterly and annual financial
results may fluctuate as a result of a number of factors, many of which are outside of our control, and may
be difficult to predict, including, without limitation: the amount and timing of operating costs and capital
expenditures related to the expansion of our data center and power generation business; any power
outages, shortages, supply chain issues, capacity constraints or significant increases in the cost of
securing power; the timing of revenue recognition upon rent commencement of data center leases and
commercial operation of power generation facilities; seasonal and weather-related variations in our solar
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generation; changes in wholesale electricity prices and the timing of settlement under our hedging
arrangements; general global macroeconomic and political conditions, including trade policy uncertainty,
inflation, interest rate volatility, and potential economic slowdowns; and changes in the regulatory
environment affecting our operations. Fluctuations in quarterly or annual results may negatively impact
the trading price of our common stock.
Our business, assets and operations are exposed to changes in the legal and regulatory
environment in Texas and Ohio.
Our business operations and financial condition are exposed to changes in the legal and regulatory
environment in the State of Texas and the State of Ohio. For example, in Texas, Texas Senate Bill 6
adopted in 2025 and rules proposed by the Public Utility Commission of Texas impose financial
obligations and operational requirements on data centers seeking new ERCOT interconnections of 75
MW or more, which may impose constraints. Additionally, on August 3, 2026, the Governor of Texas
directed ERCOT and PUCT to undertake additional verification and review of data center projects
advancing through ERCOT’s large-load interconnection process. ERCOT has subsequently implemented
an eligibility verification process and temporarily paused energization approvals for certain large data
center loads pending completion of that process. The duration and ultimate outcomes of this process is
uncertain and may impact our Texas pipeline.
In Ohio, several bills relating to regulations of data center projects have been proposed or are progressing
through the Ohio Legislature, aimed at curbing electric use, minimizing water use, restricting certain
electricity-demand thresholds, and/or requiring community approval, any of which could impact cost and
timing of the data center to comply.
If the legal, regulatory and economic environment in Texas or Ohio were to become less favorable,
including by way of increased taxes, higher regulatory costs, or changes to regulatory or permitting
requirements, our business, could be adversely affected. In addition, local governmental entities may also
seek to restrict or otherwise limit new or expanded data center development. Any such moratoria,
restrictions or other impositions on data centers could delay or hinder our ability to receive the permits
necessary to start or complete construction impacting our ability to meet RFS conditions and delay our
ability to convert our backlog into revenue.
We may face community opposition, local moratoria and hyper-local dissent, including growing
public resistance to AI and AI-related infrastructure, that may adversely affect our data center and
power generation businesses and operations.
In some areas where we expect to construct and operate our projects, including Ohio and Texas,
concerns about the power and resources consumed by data centers, as well as the environmental and
land use impacts of utility-scale solar and battery energy storage projects, have garnered organized
opposition from environmental, agricultural preservation and anti-growth groups. In addition, growing
public skepticism and resistance to AI—including concerns about AI’s impact on employment, privacy,
safety and broader societal implications—may intensify opposition to infrastructure projects that are
perceived as enabling or accelerating AI development. Because our data center projects are designed
primarily to support AI workloads and our hyperscaler tenants are focused on AI compute, our projects
may face heightened scrutiny and opposition from groups that are critical of the AI industry, even in
jurisdictions that might otherwise be receptive to data center or renewable energy development. With
respect to our data center projects, disapproval from local communities or other interested parties may
lead to direct action that could impede our tenants’ ability to commence or carry out operations at the
affected projects, resulting in reputational damage and difficulty in leasing, renewing or re-leasing such
data center facilities, as well as our ability to develop and construct data centers and to convert our
backlog into realized revenue. With respect to our power generation projects, community opposition has
arisen in certain jurisdictions based on concerns about the conversion of agricultural or open land to solar
installations, the visual impact of large-scale solar arrays, potential impacts on local property values,
perceived fire or safety risks associated with battery energy storage systems, and the routing of new
transmission lines through residential or agricultural areas. Such community opposition may include
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undertaking legal proceedings (including challenges to required governmental approvals), seeking orders
to prevent part or all of our operations, media campaigns and protests. If such community members are
successful in any such campaigns, our data center projects may be delayed or abandoned, tenant
operations at completed projects may be suspended, our power generation projects may be delayed or
abandoned or we may not be able to obtain the permits and approvals needed to carry out commercial
operations. These outcomes could adversely affect our tenants’ ability to satisfy their rent payment
obligations, impede our ability to develop and construct data centers and to convert our backlog into
realized revenue, reduce revenues from our power generation projects, and therefore could impact our
financial performance. In response to such concerns and political opposition, a growing number of state
legislatures, county boards, city councils and other local governing bodies have enacted, or are
considering enacting, temporary or permanent moratoria, restrictive zoning amendments, heightened
permitting requirements and other land use limitations that prohibit or significantly constrain the
development of new data centers, solar energy facilities, battery energy storage systems, gas-fired
generation facilities or related infrastructure. Based on publicly available industry and press reports,
several hundred jurisdictions across the United States have adopted or are considering measures of this
type applicable to data center development, and the number of such jurisdictions has increased
significantly in recent years. These actions are often driven by concerns regarding potential for strain on
local electrical grids and water supplies, visual and noise impacts, potential property devaluation, loss of
agricultural land, fire risks and the perceived limited local economic benefit of such facilities after
construction is completed. For instance, on July 14, 2026, New York State issued a state-wide moratorium
on hyperscale data centers, imposing a freeze on state permitting for new large data centers for up to a
year while state legislatures were directed to create standards with respect to environmental impacts,
energy demand, water usage and other factors for such data centers. Similar restrictions are being
considered in other states, including Ohio, where there have been efforts to include a statewide ban on
data centers over 25 MW on the 2027 ballot. As in other states, county and local governments in Ohio
have enacted moratoria or other restrictions on data centers. On August 3, 2026, Governor Abbott of
Texas directed ERCOT and PUCT to undertake additional verification and review of data center projects
and ERCOT temporarily paused certain energization approvals pending completion of the process. We
cannot predict whether additional moratoria or restrictive land use regulations will be adopted in
jurisdictions where we currently have projects under development or where we intend to develop future
projects. If moratoria or restrictive regulations are adopted in jurisdictions where we have projects in our
pipeline, we may be forced to abandon those projects, relocate to alternative sites that may be less
desirable or more costly to develop, or incur significant unrecoverable costs for land acquisition,
permitting, engineering and equipment procurement. Any such restrictions could also impair our
interconnection queue positions, delay the energization of data center capacity, or undermine our
vertically integrated business model by preventing us from co-locating power generation with our data
center facilities. In other areas, data centers could face utility rate structures or other regulations that
could increase operating costs, leading to lower lease rates, and power generation projects could face
interconnection or curtailment requirements that reduce project economics. Any of the foregoing could
have a material adverse effect on our business, financial condition, results of operations and growth
prospects.
If we fail to meet the reliability and performance metrics required under our data center leases and
operating agreements, we may be required to pay liquidated damages or provide rent abatements
to our tenants, which could materially and adversely affect our revenue, results of operations and
reputation.
Our data center leases and operating agreements contain, and we expect future agreements to contain,
stringent service level commitments and performance metrics, including requirements relating to power
availability, cooling performance and facility uptime (in certain cases exceeding 99.99% availability) that
will apply once the relevant facilities are operational. If we are unable to meet these performance metrics
due to equipment failure, power outages, cooling system malfunctions, human error, natural disasters,
cybersecurity incidents or other factors, whether or not within our control, we may be contractually
obligated to pay liquidated damages to our tenants. In addition, certain of our agreements provide for rent
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abatements or service credits in the event of service interruptions, material interference or other failures
to maintain agreed-upon operating conditions. These liquidated damages and rent abatements could be
substantial, particularly given the mission-critical nature of our tenants’ operations, and could significantly
reduce our revenue and cash flow in the periods in which they apply.
Furthermore, certain of our lease agreements provide tenants with termination rights in the event of
prolonged or material service failures that are not cured within a specified period once the relevant
facilities are operational. For example, pursuant to certain of our data center leases, under certain
conditions, if a service interruption affecting critical services continues for thirty consecutive days, the
tenant has the right to terminate the lease upon written notice to us. The loss of significant tenants as a
result of such termination events could materially reduce our revenue and significantly increase our costs,
including costs associated with securing replacement tenants and maintaining idle capacity. Further, we
may be unable to re-lease the facility on a timely basis, on favorable terms or at all. Any exercise of
termination rights by our tenants, or the perception that such rights may be exercised, could also damage
our reputation and impair our ability to attract and retain tenants on favorable terms, any of which could
adversely affect our business, financial condition, results of operations and prospects. In addition, service
failures at our data center facilities could result in damage to our tenants’ equipment, lost profits or other
indirect or consequential damages, and our tenants may seek to recover such damages from us
notwithstanding any contractual limitations on our liability. We cannot guarantee that a court would
enforce any such contractual limitations. Moreover, any failure to meet reliability metrics, even if not
resulting in formal contractual remedies, could damage our reputation, reduce the confidence of existing
and prospective tenants, and impair our ability to attract and retain tenants on favorable terms. Because
our tenants include large hyperscale cloud operators and AI computing companies whose workloads are
highly sensitive to downtime, any disruption, however brief, could have reputational consequences
disproportionate to the duration of the interruption, any of which could adversely affect our business,
financial condition, results of operations and prospects.
The cost and availability of insurance, including insurance for our ITC positions, may be
inadequate given the unprecedented scale of our projects and portfolio, and any failure to obtain
or maintain sufficient coverage could have a material adverse effect on our business, financial
condition and results of operations.
We maintain comprehensive insurance programs covering our properties, operations and projects,
including property and casualty insurance, builder’s risk coverage, general liability and other policies
required by our financing arrangements, tax equity partnerships and commercial agreements. However,
our insurance coverage may not be sufficient to cover all losses or liabilities we may incur, and we may
not be able to maintain insurance at commercially reasonable rates or at all. Our policies are subject to
deductibles, coverage limits, exclusions and other limitations that could result in us bearing a substantial
portion of any loss.
The scale of our development program presents insurance challenges that are, to our knowledge, without
precedent in the energy infrastructure sector. Each of our large-scale projects requires an insurance stack
that is approximately two times the size of the largest individual renewable energy project previously
insured in the market, and our aggregate portfolio, which we expect to grow to hundreds of billions of
dollars in total insured value as our pipeline is built out, far exceeds the total capacity historically deployed
for any single developer or platform in the renewable energy and data center sectors. There can be no
assurance that the global insurance and reinsurance markets will have sufficient capacity to underwrite
coverage at the levels required for our projects, individually or in the aggregate, or that such coverage will
be available on commercially reasonable terms. If available capacity is insufficient, we may be required to
retain significantly higher levels of risk, self-insure certain exposures or accept coverage gaps that could
leave us exposed to catastrophic losses.
Our insurance policies are subject to periodic renewal, typically on an annual basis, and there can be no
assurance that we will be able to renew our coverage on terms comparable to our existing policies. At
each renewal, insurers may seek to increase premiums, impose more restrictive terms and conditions,
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raise deductibles, reduce coverage limits, add exclusions or decline to renew coverage altogether.
Insurance markets for renewable energy, data center and large-scale infrastructure risks have become
increasingly restrictive in recent years due to the increased frequency and severity of weather-related
losses, heightened reinsurer scrutiny and reduced appetite for concentrated risk. These trends may be
exacerbated by the sheer scale of our portfolio, which requires insurers to commit capacity at levels that
may represent a significant share of their available limits for any single account or geographic region. If
we are unable to renew our insurance coverage on acceptable terms, or if coverage lapses between
policy periods, we could be in breach of covenants under our project-level financing arrangements and
tax equity partnerships, which typically require us to maintain specified insurance coverage as a condition
of continued compliance.
We also face particular risks relating to the insurability of our ITC positions. We have structured certain of
our solar and energy storage projects to qualify for ITC under Sections 48 or 48E of the Code, including
bonus adders for energy communities and domestic content, and we have financed a significant portion of
our operating projects through tax equity partnerships in which tax equity investors receive these tax
benefits. Our tax equity arrangements typically require us to indemnify our tax equity investors for the
reduction, denial or recapture of ITCs in connection with certain specified events, including events within
the meaning of Section 50 of the Code or breaches of representations, warranties or covenants that result
in the reduction, denial, or recapture of such credits. We seek to mitigate this exposure through tax credit
insurance and related coverage; however, given the scale of our projects, including multi-gigawatt solar
and storage facilities, the aggregate insured value of our tax credit positions is substantial, and the
available market capacity for tax credit insurance may not be sufficient to fully cover our exposure across
all projects simultaneously. If a recapture event occurs within the five-year recapture period after a project
is placed in service and our tax credit insurance is insufficient to cover the resulting indemnification
obligation, we would be required to fund the shortfall from our own resources, which could have a material
adverse effect on our financial condition and liquidity.
Certain of our projects are located in regions subject to elevated natural catastrophe risk that compounds
our insurance challenges. In particular, our solar facilities in Milam County, Texas and other Texas
locations are subject to significant hail and severe convective storm risk, as well as risks from hurricanes,
severe thunderstorms, and extreme heat. Hail events can cause catastrophic physical damage to solar
panels and related equipment across an entire project site in a single storm, and the concentrated
geographic footprint of our large-scale facilities means that a single weather event could result in losses
that are significant relative to the total insured value of the affected project. A major casualty event at one
of our solar facilities could simultaneously trigger physical damage claims under our property insurance,
business interruption losses, and, if the project is taken out of service or materially impaired within the
applicable five-year recapture period, ITC recapture obligations to our tax equity investors. The cost of
insuring against these combined and correlated risks is significant and has increased in recent years as
weather-related losses in the renewable energy sector have driven up premiums and reduced insurer
appetite for hail and severe convective storm exposure in Texas and other high-risk regions.
Additionally, the increasing frequency and severity of extreme weather events may lead to higher
insurance costs, reduced availability of coverage or changes in policy terms that further increase our
exposure to weather-related losses. Climate change may exacerbate these trends over time, and insurers
and reinsurers may withdraw capacity from regions or asset classes that they deem to present
unacceptable concentrations of risk. We maintain insurance coverage for certain weather-related risks,
but our coverage may not be sufficient to cover all losses, and we may not be able to maintain insurance
at commercially reasonable rates. Losses in excess of our insurance coverage, or losses not covered by
insurance, could have a material adverse effect on our business, financial condition, and results of
operations. Any of the foregoing, including the inability to obtain adequate insurance at reasonable cost,
uninsured or underinsured losses, the failure to maintain coverage required by our financing
arrangements and tax equity partnerships, or indemnification obligations to our tax equity investors that
exceed our insurance coverage, could have a material adverse effect on our business, financial condition,
results of operations and our ability to achieve our projected returns on invested capital.
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Our insurance coverage may not be adequate to cover all losses we may incur.
We maintain insurance policies covering our properties, operations, directors and officers and other
aspects of our business. However, our insurance coverage may not be sufficient to cover all losses or
liabilities we may incur, and we may not be able to maintain insurance at commercially reasonable rates
or at all. Our policies are subject to deductibles, coverage limits, exclusions and other limitations that
could result in us bearing a substantial portion of any loss.
Certain categories of risk may be difficult or impossible to insure against at reasonable cost, or may be
subject to significant coverage limitations or exclusions. In particular, insurance coverage for
cybersecurity incidents, including ransomware attacks, data breaches and business email compromise,
may be limited, subject to sub-limits, or unavailable for certain categories of losses such as regulatory
fines, reputational harm, or costs arising from nation-state attacks. Insurance coverage for losses arising
from pandemics, acts of terrorism, war, or other force majeure events may similarly be excluded or
subject to restrictive terms. Our directors and officers liability coverage and professional liability coverage
are subject to policy limits that may be insufficient in the event of significant securities litigation, regulatory
proceedings, or other claims.
Our operations are subject to hazards and risks normally associated with the daily operations of energy
infrastructure facilities, including equipment failures, electrical faults, fire, workplace accidents, and
environmental contamination. Our current insurance policies may be insufficient in the case of prolonged,
catastrophic, or certain other events affecting our facilities or operations. The occurrence of any event that
is not entirely covered by our insurance policies may result in interruption of our operations, subject us to
significant losses or liabilities and damage our reputation as a provider of infrastructure services.
In addition, the cost of insurance may increase significantly in the future, which could adversely affect our
results of operations. The insurance market has experienced periods of tightening in which premiums
increase, terms become more restrictive and capacity is reduced across multiple lines of coverage.
Geopolitical instability, inflationary pressures and evolving regulatory requirements may further contribute
to rising insurance costs or reduced availability of coverage. If we are unable to maintain adequate
insurance coverage at commercially reasonable rates, we may be required to self-insure certain
exposures or accept coverage gaps that could leave us exposed to material losses.
Losses in excess of our insurance coverage, or losses not covered by insurance, could have a material
adverse effect on our business, financial condition and results of operations.
Construction cost overruns may erode our equity returns, and our ability to finance such overruns
may be limited by the terms of our revenue contracts, including caps on eligible expenses for
triple-net lease rent calculations and restrictions imposed by our project-level financing
arrangements.
The development and construction of our data center and energy infrastructure projects are subject to
significant cost risks, including risks associated with inflation, tariffs, supply chain disruptions, labor
shortages, escalating material and equipment costs, unanticipated site conditions, permitting delays,
scope changes and the cost and availability of insurance. Our actual construction costs may exceed our
budgeted estimates, and any such cost overruns may need to be funded from equity contributions or
other sources not recoverable through our existing revenue contracts, thereby reducing our anticipated
equity returns on the affected projects.
In particular, certain of our triple-net lease structures include caps on eligible expenses that may be
passed through to tenants as components of rent. To the extent that actual construction costs or operating
expenses exceed these caps, we may be unable to recover the excess amounts from our tenants, and
such excess costs would be borne by us, reducing our project-level returns. Similarly, our project-level
financing arrangements may impose limitations on the quantum of eligible project costs that may be
financed with debt, and any costs in excess of such amounts would need to be funded with additional
equity, further increasing our equity investment in the relevant project and compressing our returns on
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invested capital. Our revenue contracts may also contain limitations on our ability to adjust lease rates or
pass through cost increases, even where such increases result from factors beyond our control, such as
tariff changes, inflationary pressures, insurance cost escalation or regulatory requirements imposed after
the execution of such contracts.
Our projects require us to maintain comprehensive insurance programs, including property, casualty,
builder’s risk, and other coverages, and our project-level financing arrangements and tax equity
partnerships typically require us to maintain specified insurance coverage as a condition of funding and
continued compliance. The scale and concentration of our development program present significant
insurance challenges. Each of our large-scale projects requires substantial insurance coverage, and the
aggregate insurance requirements across our portfolio are significant relative to the capacity of the
insurance market for energy and infrastructure projects. Insurance premiums and the cost of maintaining
required coverages represent a material component of our project-level operating costs, and these costs
have increased in recent years due to market conditions, increased frequency and severity of weather-
related losses, and heightened insurer scrutiny of large-scale renewable energy and data center projects.
There can be no assurance that we will be able to obtain or maintain the insurance coverage required by
our financing arrangements and commercial agreements at commercially reasonable rates, or at all. In
addition, our insurance policies are subject to periodic renewal, and insurers may seek to increase
premiums, impose more restrictive terms and conditions, reduce coverage limits, or decline to renew
coverage upon expiration of existing policy terms, any of which could increase our costs or leave us
exposed to uninsured or underinsured losses.
We also face particular risks relating to the insurability of our ITC positions. We have structured certain of
our solar and energy storage projects to qualify for ITCs under Sections 48 or 48E of the Code, including
bonus adders for energy communities and domestic content, and we have financed a significant portion of
our operating projects through tax equity partnerships in which tax equity investors receive these tax
benefits. Our tax equity arrangements typically require us to indemnify our tax equity investors for the
reduction, denial, or recapture of ITCs in connection with certain specified events, and we seek to mitigate
this exposure through tax credit insurance and related coverage. However, given the scale of our projects,
including multi-gigawatt solar and storage facilities, the aggregate insured value of our tax credit positions
is substantial, and the available market capacity for tax credit insurance may not be sufficient to fully
cover our exposure. Certain of our projects, including our solar facilities in Milam County, Texas, are
located in regions subject to elevated hail and severe convective storm risk, which increases the
likelihood of physical damage that could, in turn, trigger recapture or other adverse consequences for our
tax credit positions and our obligations to tax equity investors. If a casualty event causes a project to be
taken out of service or materially impaired within the applicable recapture period, we may be required to
indemnify our tax equity investors for the resulting loss of tax credits, and our insurance coverage may not
be sufficient to cover both the physical damage and the associated tax credit recapture liability. The cost
of insuring against these combined risks is significant and may increase over time as our portfolio grows
and as weather-related loss trends continue.
Additionally, our project-level debt facilities may restrict our ability to incur additional indebtedness or draw
additional amounts to fund cost overruns, and our corporate-level financing may impose similar
constraints. If we are unable to fund cost overruns—including unanticipated increases in insurance costs,
uninsured or underinsured losses, or indemnification obligations under our tax equity arrangements—
through available debt or operating cash flow, we may be required to contribute additional equity capital,
seek alternative financing on potentially unfavorable terms, defer or downscale development plans, or
abandon projects entirely. In addition, cost overruns that exhaust available financing capacity could impair
our ability to satisfy the completion and performance guarantees to which we are subject under our
project-level financing arrangements and tenant lease agreements, certain of which are recourse to the
parent company. If construction costs materially exceed our estimates and we are unable to fund the
shortfall, we may be unable to achieve guaranteed construction milestones or deliver completed facilities
by guaranteed dates, which could trigger obligations to pay liquidated damages, provide additional credit
support, or, in certain circumstances, repurchase or refinance the relevant project. Because certain of
these guarantees are parent-recourse, cost-driven failures to meet completion obligations at individual
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projects could have a direct and material impact on our consolidated financial condition, liquidity and
results of operations. For example, one of our parent entities, Energy Global, provided a completion
guaranty for the benefit of the noteholders of our $999.0 million Senior Secured Notes due 2031. Any
construction delays or performance shortfalls at the project level could have a direct and material impact
on our consolidated financial condition, liquidity, and results of operations. While these guarantees are not
reflected as funded indebtedness on our consolidated balance sheets, they represent contingent
obligations that could require significant cash outlays or additional credit support if triggered.
Maintenance, expansion and refurbishment of electric generation facilities involve significant
risks that could result in unplanned power outages or reduced output.
Our facilities may require periodic upgrading and improvement. Any unexpected operational or
mechanical failure, including failure associated with breakdowns and forced outages, could reduce our
facilities’ generating capacity below expected levels, reducing our revenues. Degradation of the
performance of our solar and BESS facilities above levels provided for in the related offtake agreements
may also reduce our revenues. Unanticipated capital expenditures associated with maintaining, upgrading
or repairing our facilities may also reduce profitability. If we make any major modifications to our facilities
in the power generation segment, it may be required to install the best available control technology or to
achieve the lowest achievable emission rates as such terms are defined under the new source review
provisions of the Clean Air Act in the future. Any such modifications could result in substantial additional
capital expenditures. We may also choose to repower, refurbish or upgrade its facilities based on its
assessment that such activity will provide adequate financial returns. Such facilities require time for
development and capital expenditures before commencement of commercial operations, and key
assumptions underpinning a decision to make such an investment may prove incorrect, including
assumptions regarding construction costs, timing, available financing and future fuel and power prices.
These events could have a material adverse effect on our business, financial condition, results of
operations and cash flows.
We depend on a limited number of third-party architects, engineers and contractors to design and
construct our data center and renewable energy projects, and we bear significant construction
and labor-related risks despite outsourcing the majority of our architecture, engineering and
construction (“AEC”) work.
We outsource the majority of the AEC work for our data center projects to a limited number of
sophisticated third-party architectural and engineering firms, general contractors and specialty
subcontractors. As a result, the successful completion of our data center projects is highly dependent
upon the performance, financial condition and reliability of these firms and contractors. Failure by such
firms or contractors to perform successfully under such agreements could lead to significant cost
overruns, project delays and reduced profit. See “—We are dependent on third-party vendors and service
providers to provide certain services, personnel and equipment to our projects.” There is significant
competition for qualified data center contractors with experience constructing facilities at the power
densities and scale required by modern AI and HPC workloads, and the pool of contractors capable of
executing such work is limited. If any of our key contractors is unable or unwilling to perform its
obligations—whether due to financial difficulties, labor shortages, supply chain disruptions, capacity
constraints, bankruptcy, or other factors—we may be required to engage a substitute contractor, which
would likely result in significant project delays and increased costs and could have a material adverse
effect on our ability to deliver facilities to our tenants on the contractually committed timelines.
Construction of our data centers and power generation facilities also exposes us to risks related to lack of
availability of parts and labor, increased prices as a result of inflation, labor disputes and work stoppages,
unanticipated environmental issues and geological problems, and delays related to permitting and
approvals from public agencies and utility companies. Although we provide completion guarantees for
certain construction projects, there can be no assurance that we will have sufficient funds to meet our
obligations under such guarantees if we are unable to complete construction within our anticipated cost
estimates.
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Although our AEC contracts may provide for liquidated damages or other contractual remedies in the
event of contractor non-performance, such damages are typically subject to caps and may not be
sufficient to cover the full extent of losses we may suffer, including lost revenue, penalties owed to our
tenants and damage to our reputation. Moreover, under certain of our contractual arrangements, we
retain significant construction risk, including certain cost-overrun risk, schedule risk and responsibility for
site conditions, permitting and utility interconnection, even though the physical construction work is
outsourced to third parties. In the event of a contractor default or underperformance, we may face
cascading delays across multiple projects if the same contractor is engaged on several of our facilities
simultaneously.
Further, if our third-party architectural and engineering firms, general contractors and specialty
subcontractors, or any of their parents or affiliates become subject to bankruptcy or similar proceedings,
our ability to complete our projects in accordance with our design and quality standards and on our
anticipated schedule may be adversely affected. We may be unable to replace such third parties on the
same terms, if at all.
We face similar, though less acute, construction contracting risks with respect to our renewable energy
generation projects, where we also depend on third-party engineering, procurement and construction
contractors for the construction of solar facilities and battery energy storage systems. The availability of
qualified renewable energy contractors may be constrained by the volume of renewable energy projects
under development across the United States, increasing competition for contractor capacity. Should any
of our contractors for either our data center or renewable energy projects experience financial difficulties,
work stoppages, labor disputes, or other problems during the construction process, we could experience
significant delays, increased costs to complete the relevant project, and other negative impacts to our
expected returns, any of which could have a material adverse effect on our business, financial condition,
results of operations and prospects.
Climate change, extreme weather events and natural disasters could materially adversely affect
our operations, financial condition and results of operations.
Our operations are exposed to the physical risks of climate change and extreme weather events,
including hurricanes, tornadoes, severe storms, wildfires, droughts, flooding, hail, severe convective
storms, extreme temperatures and other natural disasters. These events can cause significant damage to
our power projects and data center infrastructure, disrupt our operations, reduce electricity generation,
delay construction activities and result in increased costs for repairs, maintenance and insurance. Our
development strategy is concentrated in a limited number of gigawatt-scale campuses, and we believe we
are developing four of the seven largest data center sites in the United States by IT capacity, including the
PORTS-Pike Technology Campus in Pike County, Ohio, which we believe will be among the largest data
center development sites in the world. This concentrated footprint means that a single extreme weather
event affecting one project site could result in catastrophic losses across an entire facility, including
damage to power generation assets, data center infrastructure and long-lead equipment that may take
months or years to replace. Because each of our campuses represents a significant portion of our total
portfolio capacity and contracted backlog, the financial impact of a major weather event at any one site
would be disproportionate to what a more geographically diversified portfolio would experience.
Furthermore, the co-location of some of our or our partners’ power generation and data center assets at
these sites amplifies this concentration risk, as a single event could simultaneously impair both the power
supply infrastructure and the data center facilities it serves. The critical systems of the power generation
facilities we operate, the services we provide and the data center facilities we develop are subject to
failure. Any failure in the critical systems of any facility we operate, facility we develop or services that we
provide, including a breakdown in critical plant, equipment or services, routers, switches or other
equipment, power supplies or network connectivity, whether or not within our control, could result in
service interruptions impacting our operations as well as equipment damage, which could significantly
disrupt our business operations and the operations of our customers, harm our reputation and reduce our
revenue. In addition, force majeure, casualty or similar provisions in our leases, PPAs and other
commercial arrangements may reduce amounts payable to us, excuse performance, extend milestone
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deadlines or give counterparties termination or other rights, which could adversely affect our revenue,
cash flows and project financing arrangements. For example, our solar projects in Texas are subject to
significant hail and severe convective storm risk, as well as hurricanes, severe thunderstorms and
extreme heat, while our California projects face risks from wildfires, earthquakes and drought conditions.
Climate change may increase the frequency, severity and unpredictability of extreme weather events,
which could exacerbate these risks over time. Rising temperatures reduce the efficiency of solar panels
and increase cooling requirements for our data center facilities. Changes in precipitation patterns could
affect water availability for our operations. Additionally, climate change may lead to changes in seasonal
patterns that affect solar irradiance and electricity demand. We are also subject to transition risks
associated with climate change, including evolving restrictions on greenhouse gas (“GHG”) emissions and
requirements to disclose information relating to climate risk disclosure requirements at the federal and
state levels. These disclosure rules may require us to disclose GHG emissions, climate-related financial
risks and transition plans, the costs of compliance with which may be significant.
We maintain insurance coverage for certain weather-related risks, but our coverage may not be sufficient
to cover all losses, and we may not be able to maintain insurance at commercially reasonable rates.
Insurance markets for climate-related risks have become more restrictive, particularly for construction-
phase and operational risks associated with large-scale renewable energy and data center projects, and
premiums have increased in certain regions. If we are unable to obtain adequate insurance coverage at
reasonable costs, or if our losses exceed our coverage, our financial condition and results of operations
could be materially adversely affected. Furthermore, the increasing frequency and severity of extreme
weather events may lead to higher insurance costs, reduced availability of coverage, or changes in policy
terms that increase our exposure to weather-related losses. In addition, a major casualty event that takes
a project out of service or materially impairs its operation within the applicable recapture period could
trigger ITC recapture obligations, compounding our financial exposure beyond direct physical damage
and business interruption losses.
We are exposed to commodity price risk and volatility in wholesale electricity markets, both as a
seller of electricity in our power generation business and as a purchaser of electricity for our
future data center operations.
A portion of our revenues is derived from the sale of electricity at market prices in our power generation
business line, and our financial performance is affected by fluctuations in wholesale electricity prices.
Wholesale electricity prices are influenced by numerous factors beyond our control, including:
•supply and demand for electricity in the relevant market;
•the prices of natural gas and other fuels used in electricity generation;
•transmission constraints and grid congestion;
•tariffs;
•weather conditions affecting both electricity demand and renewable energy generation;
•the addition of new generation capacity, including renewable energy projects;
•regulatory changes affecting electricity markets; and
•general economic conditions.
For projects that sell electricity under long-term PPAs, we are exposed to commodity price risk upon
expiration of those agreements, as we may not be able to renew or replace them on favorable terms. We
may also have merchant exposure during construction or prior to securing offtake agreements for new
projects. In addition, certain PPAs may commit the buyer to purchase only a specified fraction of a
project’s output, leaving remaining output uncontracted and exposed to wholesale spot prices, including in
ERCOT, where prices have experienced significant volatility. As a result, even projects with long-term
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PPAs may have a merchant revenue component that could vary materially from our expectations and
reduce revenues or cash flows if market prices are unfavorable.
We may enter into hedging arrangements, including fixed price contracts, financial derivatives, and other
instruments, to manage our exposure to commodity price volatility. To manage financial exposures related
to power price fluctuations, our Athos I and Athos II project companies have entered into swap
agreements, each with a contractual term of seven years, that hedge the floating electricity price per MWh
against a contractual fixed price based on the underlying projected capacity of each respective solar
plant. These swaps are settled based on the California Independent System Operator SP15 on-peak and
off-peak forward power price curves. As of June 30, 2026, the remaining contractual lives of the Athos
swaps were approximately 2.8 years for Athos I and Athos II, after which these projects will be fully
exposed to market pricing for the energy component of their revenue unless replacement hedges are
secured. In addition, certain of our Texas-based project companies, including Paris Farm, Ben Milam 1,
Ben Milam 2 and Ben Milam 3, use short-term energy swaps to manage earnings variability resulting from
fluctuations in ERCOT market prices of energy, with settlements occurring on a monthly basis. Although
these swaps are intended to reduce our exposure to power price fluctuations, they are accounted for as
derivatives, and we have not applied hedge accounting; accordingly, cash settlements and changes in fair
value may increase or decrease revenue in the periods in which they are recognized. However, our
hedging activities may not be effective in fully mitigating price risk, and hedging itself involves costs and
risks in certain circumstances, including when the counterparty to the hedging contract defaults on its
contractual obligations or there is a change in the expected differential between the underlying price in the
hedging agreement and actual prices received. While the substantial majority of our PPAs are structured
on an “as produced” basis, under which we sell electricity actually generated without a commitment to
deliver specified volumes, a limited number of our fixed-price contracts and hedges require us to deliver
specified volumes of power at a fixed price. Because our solar generation assets produce electricity on an
intermittent basis that varies with weather and solar irradiance conditions, our actual generation may not
match the delivery profile committed under these contracts, exposing us to the risk of purchasing
replacement power at prevailing market prices to satisfy our delivery obligations. If wholesale market
prices exceed the fixed prices in our contracts during periods when our generation falls short of
committed volumes, we could incur significant losses. Our hedging counterparties may fail to perform
their obligations, and changes in market conditions may reduce the effectiveness of our hedging
strategies. Additionally, we may be unable to hedge our entire exposure, and the terms of our financing
arrangements may limit our ability to enter into certain hedging transactions. In addition, our economic
exposure to gas-fired generation facilities or other fuel-consuming assets exposes us to fuel procurement,
transportation, storage, emissions and commodity price risks associated with those assets. Significant
and sustained changes in commodity prices could adversely affect our revenues, profitability and cash
flows.
In addition to our exposure to commodity price risk as a seller of electricity in our power generation
business, our future data center operations will be exposed to electricity price risk as a purchaser of
power. While we may seek to provide cost certainty to certain of our data center tenants through on-site
power generation and long-term power supply arrangements, a majority of our data center power
requirements are sourced from third-party utilities or wholesale markets, exposing us to fluctuations in
retail and wholesale electricity prices. Rising electricity costs could increase our operating expenses,
compress our margins, or make our lease rates less competitive relative to data center operators in
regions with lower power costs. To the extent we pass through electricity costs to tenants, significant price
increases could adversely affect tenant demand or our tenants’ ability to meet their payment obligations.
Where we have entered into long-term PPA or other offtake arrangements to secure electricity supply for
our planned data center facilities, we are exposed to counterparty performance risk. Power suppliers may
fail to deliver contracted electricity volumes due to project delays, equipment failures, force majeure
events, or financial difficulties. In periods of significant wholesale price increases or supply chain
disruptions, power suppliers may have economic incentives to terminate or renegotiate existing
agreements, even if doing so requires forfeiture of development security or other contractual remedies. If
a power supplier defaults on or terminates a supply agreement, we may be required to procure
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replacement power at significantly higher prevailing market prices, which could adversely affect our
financial condition and results of operations.
We are exposed to credit risk from our PPA counterparties, data center tenants, guarantors, AI
compute operators and other customers and certain EPC contractors, and defaults by our
counterparties could adversely affect our revenues and cash flows.
We sell the electricity generated by our projects primarily under long‑term PPAs with utilities, corporations
and other offtakers. Our revenues, cash flows and ability to obtain and maintain financing on favorable
terms depend on the ability and willingness of these counterparties to perform their obligations under the
PPAs, including their obligations to purchase electricity at the contracted prices and to make timely
payments. The creditworthiness of our counterparties is also a critical factor in lender underwriting of our
project‑level financings, and any deterioration in a counterparty’s financial condition could impair our
ability to close project financings on acceptable terms or at all, thereby constraining our growth and ability
to convert pipeline into operating assets.
Our PPA counterparties are subject to their own operational, financial, and regulatory risks that could
affect their ability to perform their obligations to us. If a counterparty experiences financial difficulties,
bankruptcy, or insolvency, it may be unable or unwilling to make payments under the PPA, may seek to
renegotiate the PPA on less favorable terms, or may attempt to reject the PPA in bankruptcy proceedings.
Utilities may also face regulatory pressures that affect their ability to honor long-term PPAs.
We evaluate the creditworthiness of our counterparties before entering into agreements with them and
may require credit support, such as letters of credit or parent guarantees, from counterparties that do not
meet our credit standards. However, our credit evaluation may not accurately predict a counterparty’s
future financial condition, and any credit support we obtain may be insufficient to cover our losses if a
counterparty defaults.
We are also exposed to credit risk from guarantors of our counterparties’ obligations. Certain of our PPAs,
data center leases and related agreements are supported by parent guarantees or other third‑party credit
support, and we rely on the creditworthiness of those guarantors as a component of our overall
counterparty credit assessment and as a factor in obtaining project‑level financing. If a guarantor
experiences financial difficulties, becomes subject to bankruptcy or insolvency proceedings, or otherwise
fails or refuses to honor its guarantee, we may be unable to recover amounts owed to us by the
underlying counterparty, and lenders may require additional credit support or impose less favorable terms
on associated project financings. Our tenants’ guarantees of their obligations under the leases are only
effective following the rent commencement date and are subject to certain limitations, including event of
default triggers and caps on liability. If a data center lease does not commence as of its targeted rent
commencement date, the guarantee under such lease will not become effective until the completion of the
data center, and if completion of the data center is delayed, our tenant may have the right to terminate its
lease without triggering the guarantee. In addition, there may be other events of default or termination
events that result in the termination of a lease without triggering a tenant guarantee, including where a
tenant purports to terminate its lease without having the ability to do so, and if we have a disagreement
with a guarantor about whether its guarantee has been triggered, there can be no assurance that the
guarantor will honor the guarantee in a timely manner or at all. Any of the foregoing could also trigger
defaults under our project‑level debt facilities, which could result in the foreclosure of a facility.
Certain of our counterparties, including community choice aggregators and other municipal-type entities,
may have limited independent creditworthiness or more constrained balance sheets than investment-
grade corporate or utility counterparties. Although we may obtain letters of credit, parent guarantees or
other credit support in some cases, such protections may be unavailable, limited in amount or duration, or
insufficient to cover our losses if a counterparty defaults, seeks to renegotiate its agreement or fails to
perform.
In addition, certain PPAs and resource adequacy agreements may limit our monetary recovery to a
termination payment or other contractually specified remedy and may exclude consequential, indirect or
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similar damages. These remedy limitations may protect us from certain claims but could also cap our
recovery if a buyer defaults, leaving us unable to recover lost future profits, opportunity costs,
replacement costs or other losses that we may suffer.
In addition to our exposure to PPA counterparty credit risk, we sell a portion of the electricity generated by
our projects into wholesale electricity markets administered by ISOs and RTOs, including CAISO and
ERCOT. Our ability to receive payment for electricity sold into these markets depends on the proper
functioning of the ISO or RTO settlement systems and the creditworthiness of other market participants.
ISOs and RTOs operate settlement systems that net obligations among market participants, and if one or
more significant market participants default on their payment obligations, the ISO or RTO may be unable
to pay generators, including us, the full amounts owed for electricity delivered. Although ISOs and RTOs
typically maintain credit requirements and default protocols to mitigate this risk, these protections may be
insufficient in the event of widespread market disruption, extreme price volatility, or the default of a major
market participant. Any failure by an ISO or RTO to pay amounts owed to us could adversely affect our
revenues, cash flows, and financial condition.
In our data center business, we will depend on the creditworthiness of hyperscaler tenants and AI
compute operators. These tenants may include technology companies with varying financial profiles,
including smaller or less established companies with limited operating histories and uncertain financial
prospects. Our contracts with tenants at our data centers could subject us to significant liability. In the
ordinary course of business, we enter into agreements with tenants pursuant to which we lease our data
center space, power, environmental controls, physical security and connectivity products. These contracts
typically contain indemnification and liability provisions, in addition to service level commitments, which
could potentially impose a significant cost on us in the event of losses arising out of certain breaches of
such agreements, services to be provided by us or our subcontractors or from third-party claims. HPC
data center tenants increasingly are looking to pass through their regulatory obligations and other
liabilities to their outsourced data center providers and we may not be able to limit our liability or damages
in an event of loss suffered by such tenants whether as a result of our breach of an agreement or
otherwise.
A default by one or more of our counterparties could adversely affect our revenues, cash flows and ability
to service our debt obligations, and could have a material adverse effect on our business and financial
condition.
If we are unable to complete the construction of our data centers in a timely manner or within our
anticipated cost estimates, it could have a material adverse effect on our business, results of
operations, liquidity and our ability to make payments on our outstanding indebtedness.
Our business and growth prospects depend upon the construction of data centers for our tenants. The
substantial majority of our data center and power generation development pipelines have not yet secured
binding tenant leases or offtake arrangements or commenced construction. Until we complete
construction of those data centers, we will not realize the full amount of projected revenue from such
leases. We cannot guarantee we will complete construction of all or any portion of our projects or any
future strategic growth initiatives on time or within our cost estimates, if at all, due in part to the ongoing
challenges to the global supply chain, the implementation of new tariffs and more restrictive trade policies,
increased inflation and changing conditions within the United States labor market.
Under certain circumstances, our lessees will have the right to terminate the lease if there are significant
delays in the completion of construction, subject to extension for force majeure events and certain tenant
delays. If we experience delays in the construction process or are unable to complete construction within
our anticipated costs estimates, we may not generate sufficient revenues to fund our liquidity needs,
including payment of principal and interest on the notes.
Development and construction delays, cost overruns, changes in market circumstances, environmental or
community constraints and other factors may have a material adverse effect on our operations, expansion
plans, financial position and financial performance. We will continue to review our expansion plans in light
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of evolving market conditions. Any such delays, and any failure to execute the construction of our data
centers, could have a material adverse effect on our business, financial condition, cash flows and results
of operations.
Our tenants’ guarantees and other backstop arrangements under our leases will only be effective
after rent commencement under such leases and are subject to certain limitations, like event of
default triggers or caps.
Our tenants’ guarantees of their obligations under the leases are only effective following the rent
commencement date of such lease and are subject to certain limitations, like event of default triggers or
caps on liability. If the leases do not commence as of their targeted rent commencement date, then the
guarantee under such lease will not become effective until the completion of the data center. If completion
of the data centers are delayed, our tenants may have the right to terminate their lease. Such termination
events would not trigger the tenants’ guarantee either. While we believe they are unlikely to occur, there
are other events of default or termination events that may result in the termination of the leases without
triggering a tenant guarantee, including in the event a tenant purports to terminate their lease without
having the ability to do so. In addition, if we have a disagreement with our tenants about whether their
guarantee has been triggered, there can be no assurance that they will honor their guarantee in a timely
manner or at all. If a guarantee has been triggered, they are subject to certain caps on such guarantor’s
liability, which may limit the amount of tenant’s obligations that are guaranteed. Any of the foregoing could
also trigger defaults under our project-level debt facilities, which could result in the foreclosure of a facility.
Any of the foregoing could have a material adverse effect on our business, financial condition, cash flows
and results of operations.
Geopolitical risks, including war, terrorism, trade disputes, tariffs, and sanctions, could adversely
affect our business and supply chain.
Our business is subject to risks arising from geopolitical instability, including war, armed conflict, acts of
terrorism, trade disputes, economic sanctions and other international developments. These events can
disrupt global supply chains, increase costs for equipment and materials, affect the availability and cost of
financing, create uncertainty in energy markets and adversely affect economic conditions generally.
A significant portion of the solar photovoltaic panels, inverters, transformers, turbines, battery storage
systems and other equipment used in our projects is manufactured outside the United States, including in
countries that may be subject to trade restrictions, tariffs, or sanctions. Geopolitical tensions, including
ongoing trade disputes between the United States and China, have resulted in tariffs and other
restrictions on imports of solar equipment that have increased costs and created uncertainty regarding the
availability and pricing of key components. Newly imposed and potential U.S. tariff actions, including
Section 232 actions relating to polysilicon and related solar supply chain inputs, could further increase
equipment costs, restrict availability or require us to source alternative suppliers. For example, on August
26, 2026, the Trump administration signed an emergency order allowing the DOE to prohibit the
acquisition, importation, transfer or installation of foreign-produced bulk-power equipment if it determines
such transaction involves a covered foreign entity and poses an unacceptable security risk. The order
also allows the DOE to require foreign-manufactured or operated equipment to be identified, isolated,
monitored, secured, disconnected, replaced or removed, potentially requiring utilities and other
infrastructure operators to make changes to existing systems. While we do not yet know the impact this
order may have on our operations, if we are required to source equipment from other suppliers we may
be unable to do so, or may find alternative suppliers at higher costs than we currently anticipate. The
imposition of additional tariffs, sanctions, or trade restrictions, or the escalation of geopolitical conflicts,
could further disrupt our supply chain, delay our projects and increase our costs.
Armed conflicts, such as the wars in Ukraine and Iran, can affect global energy markets, commodity
prices and supply chains. Terrorist attacks or other acts of violence could damage our facilities, disrupt
our operations, or create broader economic instability. Sanctions or export controls imposed by the United
States or other countries could restrict our ability to source equipment, engage with certain
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counterparties, or operate in certain markets. Additionally, our data center customers may be affected by
geopolitical developments that reduce their demand for our infrastructure services.
We depend on key personnel, including our Co-Chief Executive Officers and our ability to attract,
train and retain qualified employees is critical to our success.
Our success depends in large part on the continued service and performance of our senior management
team, including Rich Hossfeld and Abhijeet Sathe, our Co-Chief Executive Officers and other key
employees, including those with expertise in power generation development, data center and AI
infrastructure operations, project finance, development, interconnection, design, commercialization,
construction and engineering. The relationships and reputation that each of Mr. Hossfeld, Mr. Sathe and
other members of our senior management team have established and maintain with state and federal
government agencies and hyperscalers contribute to our ability to maintain strong customer relationships,
identify new business opportunities and provide the level of service our customers expect in a timely and
efficient manner. The loss of any of our senior management team could disrupt our operations, delay the
development of our projects and adversely affect our ability to execute our business strategy.
Competition for qualified and skilled personnel in the power generation and data center and AI
infrastructure industries is significant, and we may not be able to attract, train, retain or motivate key
employees. Often, significant amounts of time and resources are required to train technical, sales and
other personnel. Further, significant amounts of time and resources are required to train technical, sales
and other personnel, and we may lose new employees to our competitors or other companies before we
realize the benefit of our investment in recruiting and training them. We may be unable to attract and
retain suitably qualified individuals who can meet our growing technical, operational and managerial
requirements, on a timely basis or at all, and we may be required to pay increased compensation to do
so. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they
have been improperly solicited or divulged proprietary or other confidential information. If we are unable to
attract and retain the talent required to operate and grow our business, our business, financial condition
and results of operations could be materially adversely affected.
We do not own certain of the land on which our projects are located, and we are subject to risks
related to ground leases, easements and other real property interests.
We do not own most of the land underlying our solar and storage projects, and we only own certain of the
land our data center projects are located on. We typically lease land from private landowners,
governmental entities, or other third parties pursuant to long-term ground leases, such as the DOE Lease.
Our ground leases generally have initial terms of 20 to 35 years, with options to renew, and require us to
make periodic rental payments that may be subject to escalation over time.
Our reliance on leased land exposes us to a number of risks, including:
•Lease expiration and renewal risk. Our ground leases may expire before the end of the useful life of
our projects, and we may not be able to renew or extend the leases on acceptable terms, or at all. If
we are unable to renew a ground lease, we may be required to remove our equipment and restore the
land, which could result in significant costs and the loss of the project.
•Landowner disputes. We may experience disputes with landowners regarding lease terms, rental
payments, land use, access rights, or other matters. Such disputes could disrupt our operations,
require us to incur legal expenses, or result in unfavorable outcomes that affect our ability to operate
our projects.
•Title and encumbrance risks. The land underlying our projects may be subject to title defects, liens,
encumbrances, or other claims that could affect our ability to use the land or our rights under the
ground leases. We conduct title searches and obtain title insurance for our projects, but our title
insurance may not cover all defects or provide sufficient coverage for our losses.
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•Easement and access risks. Our projects require easements and rights-of-way for access roads,
transmission lines and other infrastructure. We may not be able to obtain or maintain the necessary
easements on acceptable terms, or disputes may arise regarding the scope or use of our easement
rights.
•Condemnation and eminent domain. Government authorities may seek to acquire all or a portion of
the land underlying our projects through eminent domain or condemnation proceedings. Such actions
could disrupt our operations, reduce our generating capacity, or result in the loss of a project.
•Environmental and land use restrictions. The land underlying our projects may become subject to new
environmental or land use regulations that restrict our operations or require us to incur additional
costs for compliance.
Certain ground leases and related real property arrangements may include cure and termination
provisions that create additional site-control risk. For example, failure to cure rent payment defaults within
applicable cure periods could permit a landowner to seek termination, and certain governmental leases or
rights-of-way may include stricter default regimes under which repeated breaches may result in
immediate default without a cure period. If we lose, or are restricted in using, site control, easements,
transmission line rights, or similar real property interests, we may be unable to operate, complete or
finance the affected project on the terms or timeline we expect.
Any of these risks could adversely affect our ability to operate our projects and could have a material
adverse effect on our business, financial condition and results of operations.
Our projections and estimates regarding solar resource, construction costs, financing costs,
equipment performance and customer demand are subject to inherent uncertainty.
Our business decisions, including decisions to develop new projects, enter into PPAs and other offtake
agreements, and commit capital, are based on various projections and estimates that are inherently
uncertain. These include:
•Solar resource estimates. We rely on historical solar irradiance data, satellite imagery and modeling
to estimate the solar resource at our project sites. Actual solar conditions may vary significantly from
our estimates due to weather patterns, climate change, atmospheric conditions, or other factors,
which could result in lower-than-expected electricity generation and revenues.
•Construction cost estimates. We estimate construction costs based on equipment pricing, labor rates,
site conditions and other factors that may change between the time we commit to a project and the
time construction is completed. Actual construction costs may exceed our estimates due to supply
chain disruptions, inflation, labor shortages, unforeseen site conditions, design changes, or other
factors.
•Financing costs and interest rate risk. We will require significant additional capital to construct and
complete certain of our projects, and we may not be able to secure such financing on time with
acceptable terms for interest rate pricing, fees, or other structural terms, or at all, which could cause
delays in our construction, lead to inadequate liquidity and increase overall costs. Any delays in
construction could prevent us from commencing operations when we anticipate and could prevent us
from realizing anticipated cash flows, all of which could have a material adverse effect on our
business, contracts, financial condition, operating results, cash flow, financing requirements, liquidity,
prospects and the price of our common stock.
•Equipment performance projections. We rely on manufacturer specifications and warranties, industry
studies and our own experience to project the performance and degradation rates of solar panels,
inverters, battery storage systems and other equipment. Actual equipment performance may be lower
than our projections due to manufacturing defects, installation issues, environmental conditions, or
other factors.
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•Customer demand forecasts. Our development strategy is based on projections of demand for AI
compute infrastructure that are inherently uncertain. If demand for AI infrastructure does not grow as
we anticipate, if technological changes reduce the power requirements of AI systems, or if other
events occur that decrease the demand for AI infrastructure, our projections may prove to be
inaccurate.
If our projections and estimates prove to be inaccurate, we may experience lower revenues, higher costs,
or reduced returns on our investments, which could adversely affect our business, financial condition and
results of operations. Additionally, inaccurate projections could affect our ability to comply with the terms
of our offtake agreements, financing arrangements, or other contractual obligations which could require
us to pay significant penalties or allow our counterparties to terminate such agreements with us, which
could materially adversely affect our business, financial condition and results of operations.
Inflation and rising costs could adversely affect our business, financial condition and results of
operations.
Inflation and rising costs for labor, equipment, materials and services could adversely affect our business.
We have experienced and may continue to experience, cost increases for solar panels, battery storage
systems, transformers, inverters, steel, copper and other materials and equipment used in our projects.
Labor costs have also increased due to demand for skilled workers in the renewable energy and
construction industries.
While we attempt to mitigate the impact of inflation through fixed-price contracts, equipment procurement
agreements and other measures, we may not be able to fully pass through cost increases to our
customers, particularly under long-term PPAs with fixed or limited price escalation provisions. Additionally,
inflation may increase our operating and maintenance costs, insurance premiums, land lease payments
and other expenses.
If the current rate of inflation continues or accelerates, our costs may increase faster than our revenues,
which could compress our margins and adversely affect our profitability. Higher inflation may also lead to
increased interest rates, which could increase our borrowing costs and reduce the availability of financing
for our projects, and have similar financing pressures on our customers. Any of these factors could
adversely affect our business, financial condition and results of operations.
We have in the past, and may in the future, enter into collaborations, joint ventures or strategic
transactions with third parties. If we are unsuccessful in establishing or maintaining strategic
relationships with these third parties or if these third parties fail to deliver certain operational
services, our business, operating results, financial condition and prospects could be adversely
affected.
From time to time, we have pursued, and may continue to pursue joint ventures or other strategic
transactions or investments to expand our business. Our partners may have, or may develop, interests or
objectives that are different from, or in conflict with, our objectives, which could have a negative impact on
the success of our projects. Joint venture investments could be adversely affected by our lack of sole
decision-making authority, our reliance on our partners’ financial condition, and disputes between us and
our partners. Our partners may have, or may develop, interests or objectives that are different from, or in
conflict with, our objectives, which could have a negative impact on the success of our projects.
Further, identifying strategic relationships with third parties, and negotiating and documenting
relationships with them, may be time-consuming and complex and may distract management. Moreover,
we may be delayed, or may not be successful, in achieving the objectives that we anticipate as a result of
such strategic relationships. In evaluating counterparties in connection with collaborations or strategic
alliances, we consider a wide range of economic, legal and regulatory criteria depending on the nature of
such relationship, including the counterparties’ reputation, operating results and financial condition,
operational ability to satisfy our and our customers’ needs in a timely manner, efficiency and reliability of
systems, certifications costs to us or to our customers and licensure and compliance status. Despite this
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evaluation, third parties may still not meet our or our customers’ needs which may adversely affect our
ability to deliver solutions and services to customers and may adversely impact our business, operating
results, financial condition and prospects. Counterparties to any strategic relationship may have economic
or business interests or goals that are, or that may become, inconsistent with our business interests or
goals, and may subject us to additional risks to the extent such third party becomes the subject of
negative publicity, faces its own litigation or regulatory challenges, or faces other adverse circumstances.
Conflicts may arise with our strategic partners, such as the interpretation of significant terms under any
agreement, which may result in litigation or arbitration which would increase our expenses and divert the
attention of our management. If we are unsuccessful in establishing or maintaining strategic relationships
with third parties, our ability to compete or to grow our revenue could be impaired and our business,
operating results, financial condition and prospects could be adversely affected.
Negative publicity about us, SoftBank, OpenAI, NVIDIA, or other third parties we work with, or
about the wider data center and AI infrastructure industry, including concerns regarding energy
consumption, water usage, environmental impact and community disruption, could adversely
affect our ability to develop and operate our projects, harm our reputation and materially and
adversely affect our business, financial condition and results of operations.
Negative publicity about our company, our integrated business model, solutions, or services, SoftBank or
its affiliates, OpenAI or its affiliated entities, NVIDIA or its affiliated entities, or the data center and AI
infrastructure industry generally, even if inaccurate or untrue, could adversely affect our reputation and the
confidence in our business, which could harm our business, operating results, financial condition and
prospects. We operate within the broader ecosystem of OpenAI and its partners, and negative publicity
regarding OpenAI, its technology, its leadership, or its business practices could adversely affect public
and governmental perception of our projects and operations, even where our business is not directly
implicated. Harm to our reputation can arise from many sources, including employee misconduct,
misconduct by our partners, consultants, suppliers and outsourced service providers, failures of our
facilities, or adverse actions taken by SoftBank or its affiliated entities or by OpenAI or its affiliated
entities. Additionally, negative publicity with respect to our partners, investors, or service providers could
also affect our business, operating results, financial condition and prospects to the extent that we rely on
these partners or if our customers or prospective customers associate our company with these parties.
From time to time, political and public sentiment may result in a significant amount of adverse press
coverage and other adverse public statements affecting us. Adverse press coverage and other adverse
statements, whether or not driven by political or public sentiment, may also result in investigations by
regulators, legislators and law enforcement officials, internal investigations, or legal claims. Addressing
any adverse publicity, governmental scrutiny, enforcement, or other legal proceedings is time consuming
and expensive and, regardless of the factual basis for the assertions being made, can have a negative
impact on our reputation, on the morale and performance of our employees, and on our relationships with
regulators, customers and other counterparties. The direct and indirect effects of negative publicity, and
the demands of responding to and addressing it, may have a material adverse effect on our business,
financial condition, results of operations and prospects.
Further, our data center and energy infrastructure projects require permits, entitlements and approvals
from various federal, state and local governmental agencies, including permits and entitlements related to
zoning, land use, environmental compliance and utility interconnection. There continues to be increasing
public scrutiny and concern regarding the potential environmental impact of large-scale data center
operations, including substantial consumption of electricity and water. Community groups, environmental
organizations, neighboring landowners, and other stakeholders have in certain jurisdictions opposed, or
may in the future oppose, the development and operation of data center facilities due to concerns about
energy usage, potential for strain on local power grids, noise, water consumption and broader
environmental impact. Governmental authorities have in the past imposed moratoria on data center
development, citing concerns about energy usage and requiring new data centers to meet energy
efficiency requirements, and similar restrictions could be imposed in jurisdictions where we seek to
develop our projects. In addition, negative public sentiment regarding the AI industry—including concerns
about the societal implications of AI, its energy intensity and the pace of deployment—could result in
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adverse publicity, regulatory scrutiny, or political opposition that makes it more difficult for us to site,
permit and construct our facilities. Our ability to develop new projects depends in part on maintaining
constructive relationships with the communities in which our projects are located, including local
government bodies, regulatory authorities and community stakeholders. Any failure to obtain or maintain
the requisite community and governmental support for our projects could delay or prevent the
development and construction of our data center and energy infrastructure projects on our anticipated
schedule, at our anticipated cost, or at all, which could have a material adverse effect on our business,
financial condition, results of operations and prospects.
We maintain insurance policies covering our properties, operations, directors and officers and other
aspects of our business. However, our insurance coverage may not be sufficient to cover all losses or
liabilities we may incur. Our policies are subject to deductibles, coverage limits, exclusions and other
limitations that could result in us bearing a substantial portion of any loss. Certain categories of risk may
be difficult or impossible to insure against at reasonable cost, or may be subject to significant coverage
limitations or exclusions. In particular, insurance coverage for cybersecurity incidents, including
ransomware attacks, data breaches and business email compromise, may be limited, subject to sub-
limits, or unavailable for certain categories of losses such as regulatory fines, reputational harm, or costs
arising from nation-state attacks. Insurance coverage for losses arising from pandemics, acts of terrorism,
war, or other force majeure events may similarly be excluded or subject to restrictive terms. Our directors
and officers liability coverage and professional liability coverage are subject to policy limits that may be
insufficient in the event of significant securities litigation, regulatory proceedings, or other claims.
Our operations are subject to hazards and risks normally associated with the daily operations of energy
infrastructure facilities, including equipment failures, electrical faults, fire, workplace accidents and
environmental contamination. The occurrence of any event that is not entirely covered by our insurance
policies may result in interruption of our operations, subject us to significant losses or liabilities and
damage our reputation as a provider of infrastructure services.
In addition, the cost of insurance may increase significantly in the future, which could adversely affect our
results of operations. The insurance market has experienced periods of tightening in which premiums
increase, terms become more restrictive and capacity is reduced across multiple lines of coverage.
Geopolitical instability, inflationary pressures and evolving regulatory requirements may further contribute
to rising insurance costs or reduced availability of coverage. If we are unable to maintain adequate
insurance coverage at commercially reasonable rates, we may be required to self-insure certain
exposures or accept coverage gaps that could leave us exposed to material losses. Losses in excess of
our insurance coverage, or losses not covered by insurance, could have a material adverse effect on our
business, financial condition and results of operations.
We may be unable to make strategic acquisitions or successfully integrate them into our business
which could adversely affect our business, financial condition and results of operations.
As part of our business strategy, we have made and may continue to pursue strategic acquisitions of
businesses that complement our business. There is no assurance that any businesses we acquire will be
successfully integrated into our business or generate substantial revenue.
Acquisitions involve numerous risks, any of which could harm our business and negatively affect our
business, financial condition and results of operations, including:
•intense competition for suitable acquisition targets, which could increase prices and adversely affect
our ability to consummate deals on favorable or acceptable terms;
•failure or material delay in closing a transaction;
•transaction-related lawsuits or claims;
•difficulties in integrating the technologies, operations, existing customer agreements, and personnel
of an acquired company;
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•difficulties in retaining key employees, customers, or business partners of an acquired company;
•challenges with integrating the brand identity of an acquired company with our own;
•diversion of financial and management resources from existing operations or alternative acquisition
opportunities;
•failure to realize the anticipated benefits or synergies of a transaction;
•failure to identify the problems, liabilities, or other shortcomings or challenges of an acquired
company or technology, including issues related to intellectual property, regulatory compliance
practices, litigation, revenue recognition or other accounting practices, or employee or user issues;
•risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an
acquired company or business;
•risks that regulatory bodies do not approve our acquisitions or business combinations or delay such
approvals;
•theft of our trade secrets or confidential information that we share with potential acquisition
candidates;
•risk that an acquired company or investment cannibalizes a portion of our existing business; and
•adverse market reaction to an acquisition.
If we fail to address the foregoing risks or other problems encountered in connection with past or future
acquisitions of businesses, new technologies, enabling services and other assets and strategic
investments, or if we fail to successfully integrate such acquisitions or investments, our business, financial
condition, and results of operations could be adversely affected.
RISKS RELATED TO GOVERNMENT INCENTIVES AND TAX MATTERS
Our business depends significantly on government incentives that support renewable energy
development, and the reduction, elimination, modification or expiration of such incentives could
materially adversely affect our business.
Construction and operation of our solar photovoltaic power plants and energy storage facilities has
benefited, and is expected to continue to benefit, from public policies and government incentives that
support renewable energy production. Our projects have benefited from ITCs under Section 48 of the
Code including for the energy community adder and domestic content adder. In addition, under the One
Big Beautiful Bill Act (the “OBBBA”), which was signed into law on July 4, 2025, the clean energy
production credit and clean energy investment credit under Sections 45Y and 48E of the Code,
respectively, for solar and wind projects are subject to an accelerated termination schedule. Solar and
wind projects must either have begun construction on or before July 4, 2026 or be placed in service on or
before December 31, 2027 to qualify for these credits. While we believe the large majority of our current
solar and battery energy storage pipeline has satisfied applicable safe harbor requirements for purposes
of establishing the beginning of construction under current U.S. Internal Revenue Service (“IRS”)
guidance, these legislative changes may nonetheless affect the availability and economics of tax equity
financing for later-stage portions of our development pipeline and for future projects that have not yet
commenced construction. A reduction in available tax equity or a contraction in investor appetite for
energy and digital infrastructure assets could constrain our growth or reduce expected returns on
deployed capital.
In addition, we are currently developing, and may in the future construct and operate, gas-fired generation
facilities at significant scale. While we expect that the gas-fired generation assets planned for our projects
will benefit from accelerated depreciation deductions, including bonus depreciation under the Modified
Accelerated Cost Recovery System (“MACRS”), recent and future changes in tax law, and any further
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legislative modification or elimination of accelerated depreciation for gas-fired power generation assets,
could materially reduce the after-tax economics of these projects, increase our cost of capital and
adversely affect our ability to finance the development and construction of gas-fired generation on
favorable terms.
Changes to government policies supporting renewable energy or gas-fired generation, or any reduction in
or elimination of government incentives, could adversely affect our business in multiple ways:
•reduce the economic viability of our projects and cause us to reduce construction of new projects;
•decrease the attractiveness of renewable power generation to potential offtakers, reducing demand
for our power;
•result in increased financing costs and difficulty in obtaining financing on acceptable terms; and
•put us at a competitive disadvantage compared to businesses using other energy sources or that
have access to alternative financing structures.
In addition, pursuant to recently enacted legislation, photovoltaic solar and BESS facilities are subject to
construction commencement and placed-in-service deadlines in order to qualify for ITCs and other related
incentives. New foreign entity of concern (“FEOC”) requirements also restrict availability of credits to
qualified facilities if the entity that owns the facility has certain relationships with or makes certain
payments to prohibited foreign entities, or if the percentage of components in the facility manufactured by
prohibited foreign entities exceeds specified thresholds. The OBBBA also created new limitations and
FEOC restrictions relating to the direct or indirect ownership, influence, or control of U.S. clean energy
projects by, and the inclusion of equipment and components within U.S. clean energy projects provided
by, citizens of and entities organized under the laws of certain non-U.S. countries, including the People's
Republic of China. While we are not an FEOC (and do not expect to be an FEOC following this offering),
these regulations may nonetheless be applicable to us. These restrictions may negatively affect the
competitiveness of our solar projects and could reduce the number of new projects and result in a
significant reduction in demand for our services. These changes may also affect the availability and
economics of tax equity financing for portions of our development pipeline, which has historically been a
critical source of capital for our photovoltaic solar and BESS projects.
In addition to federal incentives, our power generation and data center projects directly benefit from
various state-level incentives, programs and regulatory frameworks that support renewable energy
development and data center investment. In Texas, we have obtained property tax abatements for certain
of our solar projects under Chapter 313 (now repealed and replaced by Chapter 403) of the Texas Tax
Code and similar local incentive programs, which significantly reduce project operating costs during the
abatement period. Our data center projects also benefit from state and local economic development
incentives, including property tax abatements, sales tax exemptions on qualifying equipment and
infrastructure, and other economic incentive agreements offered by state and local governments to attract
data center investment. Changes to Texas tax abatement programs, the expiration of existing
abatements, or our inability to qualify for future abatements could increase our operating costs and
reduce project returns for both our photovoltaic solar and data center projects. In California, our projects
benefit from the state’s Renewables Portfolio Standard (“RPS”), which requires utilities to procure a
specified percentage of electricity from eligible renewable sources, and from resource adequacy (“RA”)
requirements that create demand for capacity from renewable generators. Changes to California’s RPS
targets, modifications to RA program rules, or shifts in regulatory priorities could reduce offtake
opportunities or adversely affect pricing for our California projects. State-level renewable energy and data
center incentive policies vary significantly and are subject to change based on political, budgetary and
regulatory factors, and any reduction or elimination of state incentives or supportive regulatory
frameworks could adversely affect the economics of our existing projects and the viability of future
development.
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The gas-fired power generation supporting the PORTS-Pike Technology Campus depends in part
on funding commitments from the U.S. federal government and Japanese institutional participants
that are subject to political and budgetary processes and other conditions, and there can be no
assurance that such funding will be provided on the anticipated timeline, in the anticipated
amounts, or at all.
The U.S.–Japan Partnership has been publicly announced with funding associated with the development
and construction of approximately 9.2 GW of gas-fired generation facilities neighboring the PORTS-Pike
Technology Campus. The facilities are being developed by an affiliate of SoftBank that is not our
subsidiary, and we do not expect to own or operate them. We may provide development, construction
management or operational services, but the scope of any such involvement has not been finalized. We
and our affiliates have engaged with the U.S. Army Corps of Engineers and the Federal Permitting
Improvement Steering Council, a program for streamlining certain reviews and approvals pursuant to the
federal Fixing America’s Surface Transportation Act, in connection with that designation. SoftBank has
engaged in discussions with the Department of Commerce regarding the U.S.–Japan Partnership
framework and has engaged with U.S. and Japanese government officials regarding the scope and
implementation of the U.S.–Japan Partnership. The permits, reviews and approvals required for the gas-
fired generation facilities or the PORTS-Pike Technology Campus may be subject to delays or may not be
successfully completed. The generation facilities are expected to be funded under the U.S.–Japan
Partnership through an investment vehicle jointly owned by the U.S. Department of Commerce and an
entity established by the Japan Bank for International Cooperation. No specific operator or power seller
for the generation facilities has been finally designated, and any revenue-sharing, power-allocation or
other offtake mechanism remains subject to negotiation and definitive documentation. As of the date of
this prospectus, no binding or non-binding agreement has been executed between us or any of our
subsidiaries and any governmental entity with respect to the funding, construction, ownership or operation
of the generation facilities. It is our understanding that a binding agreement has been executed between
the SoftBank affiliate that is developing the generation facilities and a governmental entity with respect
thereto. There can be no assurance that any such agreements will be entered into, that the U.S.–Japan
Partnership funding will be obtained on the anticipated timeline or in the anticipated amounts, or that the
generation facilities will be constructed on the anticipated schedule or at all. Any delays in obtaining
financing or constructing the power generation facilities could complicate our ability to procure sufficient
power from PJM to supply the PORTS-Pike Technology Campus. Further, under the leases governing the
PORTS-Pike Technology Campus, any such delays could lead to delay in meeting the RFS conditions set
forth in the lease, resulting in the tenant’s ability to delay rent payments and in certain circumstances
collect damages.
The PORTS-Pike Technology Campus requires approximately 10 GW of gross power load from the grid to
support its 8.0 GW-IT of planned data center capacity, expected to be supported by the PJM transmission
system and new neighboring gas-fired generation facilities. The 8.0 GW-IT PORTS-Pike Technology
Campus constitutes the entirety of our contracted-but-not-under-construction data center capacity, and a
substantial majority of our DC segment backlog is derived from PORTS-Pike related contracts. Rent
commencement for each phase and the tenant’s associated obligations remain conditioned on
satisfaction of the applicable RFS conditions, including completion and availability of the interconnection
facilities and generation resources necessary to serve the contracted load, as well as substantial
completion and commissioning of the applicable buildings. While we do not anticipate that we will own or
operate the generation facilities, the campus will require adequate power, and there can be no assurance
that alternative sources will be available on a timely basis or on commercially reasonable terms, or at all.
If funding or development for the gas-fired power is delayed, reduced or withdrawn, or if power allocation,
permitting, financing, procurement or commissioning is delayed or fails, the scope, capacity or timeline of
PORTS-Pike Technology Campus could be materially reduced or delayed, and we may be unable to
convert related backlog into revenue. See “ — We are subject to state regulatory requirements,
environmental laws including the Clean Air Act and complex permitting processes that vary by jurisdiction
and are subject to political change, and failure to obtain or maintain required permits and approvals could
delay or prevent the development and operation of our projects.”
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We may face significant delays and global supply chain disruptions in connection with our
anticipated PORTS-Pike Technology Campus, which could materially impact project timelines and
costs.
Our anticipated PORTS-Pike Technology Campus requires timely procurement of gas turbines,
transformers, power electronics, heating-ventilation-and air conditioning systems and modular data center
elements, many of which originate from international vendors. While we have access to what we believe
will be the necessary amount of gas turbines, there can be no assurance that we will be able to receive
such turbines on time, or at all. Geopolitical conflict, trade restrictions and tariffs, maritime shipping
delays, or semiconductor shortages may delay site readiness, reduce operational capacity, or force
reprioritization of development phases. In addition, recent global supply chain disruptions have
increasingly affected both the availability and cost of raw materials, component manufacturing and
deliveries. These disruptions may result in delays in equipment deliveries and cost escalations that could
adversely affect our business. Prolonged disruptions in the supply of any of our key materials or
components, difficulty finding qualifying new sources of supply, implementing the use of replacement
materials or new sources of supply or any volatility in prices could have a material adverse effect on our
ability to operate in a cost-efficient, timely manner. Such prolonged disruptions could also cause us to
experience cancellations or delays of scheduled launches, tenant cancellations or reductions in our prices
and margins, any of which could harm our business, financial condition, results of operations and cash
flows.
The scale and complexity of the PORTS-Pike Technology Campus exposes us to construction and
logistics risks at each development phase. The availability of critical path equipment such as heat
exchangers, reactor modules, turbines, switchgear and gas infrastructure is subject to global supply chain
variability and vendor capacity.
We do not have manufacturing assets and will rely on third-party manufacturers and construction firms to
build out the PORTS-Pike Technology Campus. Moreover, we will be significantly dependent on future
supplier capability to meet production demands attendant to our forecasts. If our supply chain cannot
meet the schedule demands, our projected sales revenues could be materially impacted. Shortages in
skilled labor, construction permitting delays, inclement weather, or force majeure events could delay or
halt construction, which could trigger certain damages on our agreement. Each delay can cause
cascading impacts on integration, interconnection and move-in schedules, reducing our ability to generate
revenue or meet certain milestones.
High demand for, constraints on the supply of, and increasing costs for industrial scale gas-fired
turbines could lead to significant delays in our ability to develop the natural gas fired power
generation infrastructure we will need to achieve our power delivery goals on the schedule we are
projecting.
The PORTS-Pike Technology Campus expects to include approximately 10 GW of new generation,
primarily comprising gas fired power, with the potential to deploy in excess of that amount. Industrial scale
gas fired turbines are in high demand in the United States and globally for grid power generation, new
and expanded LNG facilities and AI hyperscalers, creating significant delays in delivery as well as
increasing costs. This increase in demand for gas-fired combustion turbines, after years of little or no
demand for new gas-fired combustion turbines, appears to have significantly outstripped available supply,
resulting in reports of lead-times for delivery of new gas-fired combustion turbines of up to seven years.
Although we have access to turbine reservations that meet our project timelines, we could nonetheless
experience significant delays and increased costs in obtaining the necessary gas fired turbines, which
could adversely affect our ability to meet milestone deadlines, which could materially and adversely affect
our business.
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Any delays of the PORTS-Pike Technology Campus that result in failure to meet development
milestones, target RFS dates or other service level requirements under the PORTS-Pike leases
may result in consequences under each lease, including liquidated damages, and could give rise
to termination rights, which may adversely impact our business, financial condition and results of
operations.
The PORTS-Pike leases are expected to commence in stages between early 2028 and 2032, with rent
commencement for each phase expected to occur on the date the RFS conditions for such phase have
been satisfied. If we fail to satisfy the RFS conditions by the target RFS dates under the applicable lease,
the tenant will be entitled to liquidated damages in the form of credits against base rent, which credits
escalate based on the duration of the delay. Additionally, failure to meet certain service level requirements
for critical services (e.g., availability of power, supply of water, sewer, storm sewer and gas services,
telecommunications, fiber and network services, and reasonable access to the premises) may result in
rent credits awarded to the tenant under the applicable lease.
While the tenant has no general right to terminate for convenience, it does have termination rights in
specified circumstances, including casualty and condemnation events, prohibited sales or transfers,
prolonged service interruptions caused by our fraud, willful misconduct or negligent acts, and prolonged
insufficient electrical capacity conditions, in each case continuing beyond specified cure periods.
In addition, each lease requires completion of specified development events—typically including grid
approval, procurement of competitive retail electric service agreements, securing financing arrangements,
permits, environmental reports, site acquisition, land surveys, remediation obligations and water
connection milestones—by deadlines tied to the date that is 12 months prior to the target commencement
date for the first phase of the applicable building, subject to extension for force majeure and tenant
delays. If any development event is not timely completed, either party may terminate the applicable lease
upon prior written notice. The incurrence of liquidated damages or rent credits, or the exercise by either
party of its termination rights, would reduce the total revenues paid to us under the applicable lease or
trigger defaults under any related financing arrangements, all of which could materially and adversely
impact our business prospects, financial condition, results of operations and cash flows.
Our tax equity financing arrangements are subject to recapture risks and other adverse tax
consequences.
We have financed a significant portion of our operating projects through tax equity partnerships in which
tax equity investors receive tax benefits, including ITCs, depreciation deductions and allocations of
income and loss. If a recapture event occurs within the five-year period after a project is placed in service,
we may be required to indemnify our tax equity invest1ors for the reduction, denial or recapture of ITCs.
Recapture events may be triggered by events within the meaning of Section 50 of the Code, or breaches
of representations, warranties or covenants by us or our affiliates that result in reduction, denial or
recapture of ITCs. In addition, a major casualty event—such as a hail storm, severe convective storm,
fire, or other natural disaster—that causes a project to be taken out of service or materially impaired
within the applicable five-year recapture period could trigger ITC recapture obligations to our tax equity
investors. Certain of our projects, including our solar facilities in Milam County, Texas, are located in
regions subject to elevated natural catastrophe risk, increasing the likelihood of increased insurance
coverages or physical damage that could trigger recapture or other adverse consequences for our tax
credit positions. If a recapture event occurs and our tax credit insurance is insufficient to cover the
resulting indemnification obligation, we would be required to fund the shortfall from our own resources.
Any such recapture, or indemnification obligation could have a material adverse effect on our financial
condition, liquidity and results of operations.
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Our dependence on tax equity financing exposes us to risks related to the availability and terms of
tax equity capital, regulatory and structural uncertainties affecting partnership-based tax equity
arrangements and restrictive operational covenants.
Tax equity financing has been a critical source of capital for our solar and battery energy storage projects.
Since inception through June 30, 2026, we had raised nearly $4 billion in tax equity financing, and we
expect to continue to rely on tax equity partnerships and tax credit transfers to fund a significant portion of
our development pipeline. The tax equity market is concentrated among a limited number of large
financial institutions whose appetite for tax equity investments is driven primarily by their own taxable
income, regulatory capital requirements and Community Reinvestment Act obligations. A decline in the
taxable income of these institutions—whether caused by an economic downturn, changes in financial
regulation, increased regulatory capital requirements, or other factors—could significantly reduce the pool
of available tax equity capital, increase the cost of tax equity financing, or result in less favorable terms for
project sponsors such as us. In addition, the enactment of the OBBBA and the termination of clean
energy tax credits, together with broader uncertainty regarding the future of clean energy tax policy, have
contributed to a contraction in the tax equity market, reducing both the availability of tax equity capital and
the willingness of investors to commit to new transactions. We may also face increased competition for a
shrinking pool of tax equity capital from other renewable energy developers and project sponsors. Any
prolonged reduction in the availability of tax equity financing, or a material increase in the cost or
restrictiveness of tax equity terms, could constrain our ability to finance new projects, delay construction
timelines, reduce project-level returns, and have a material adverse effect on our business, financial
condition and results of operations.
Our tax equity financing arrangements are structured as partnerships in which allocations of tax benefits,
income, losses and cash distributions are governed by complex contractual provisions. These partnership
structures are subject to evolving regulatory oversight by the IRS and the U.S. Department of the
Treasury, and there can be no assurance that current IRS guidance, including safe harbors governing
partnership flip structures, will remain in effect or will not be modified, revoked, or interpreted in a manner
adverse to our interests. The IRS or Treasury could issue adverse guidance regarding the
characterization of tax equity arrangements, challenge the allocation of tax benefits under existing
partnership structures, or seek to recharacterize tax equity investments as debt rather than equity for
federal income tax purposes, any of which could fundamentally alter the economics of our existing and
future tax equity arrangements. In addition, our tax equity partnership agreements impose extensive
ongoing operational covenants, including requirements to maintain the tax status of our projects,
restrictions on transfers and changes of control, reporting and compliance obligations, and prohibitions on
specified actions that could jeopardize tax benefits. Inadvertent non-compliance with these covenants
could trigger buyout obligations, put rights, or other remedies in favor of our tax equity investors, which
could require us to acquire our investors’ partnership interests at a premium or on other unfavorable
terms, potentially at times when we may not have sufficient liquidity to fund such obligations. Any of the
foregoing risks—including adverse regulatory developments, recharacterization of partnership structures,
or covenant-related liabilities—could have a material adverse effect on our business, financial condition,
liquidity and results of operations.
Changes in tax laws, including the repeal, modification, or expiration of tax credits and other tax
incentives, could have a material adverse effect on our business, financial condition, and results
of operations.
Our business depends significantly on tax credits, deductions and other tax incentives available under the
Code, including ITCs under Section 48, clean energy investment credits under Section 48E, clean energy
production credits under Section 45Y, accelerated depreciation, and the ability to transfer tax credits
pursuant to Section 6418 of the Code. Congress could repeal, further modify, or allow to expire some or
all of the tax credits and incentives on which our projects depend, and there can be no assurance that
existing tax benefits will remain available at current levels, or at all. In addition, new income, sales, use or
other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, or existing tax laws
could be interpreted, changed, modified or applied adversely to us.
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Under OBBBA, which was signed into law on July 4, 2025, the clean energy production credit and clean
energy investment credit under Sections 45Y and 48E of the Code for solar and wind projects are subject
to an accelerated termination schedule—projects must either have begun construction on or before July
4, 2026 or be placed in service on or before December 31, 2027 to qualify. Future legislative action could
impose additional restrictions, further accelerate termination timelines, reduce credit amounts, or
eliminate tax credits or incentives applicable to our operations entirely. In addition, if there is a tax law
change that repeals, amends or modifies Section 6418 of the Code in a manner that prohibits or
adversely affects our ability to transfer ITCs or other tax credits with respect to a project, the value of tax
benefits to our tax equity investors may be reduced, and our ability to monetize tax credits—a critical
component of our project economics and financing structures—could be materially impaired. The value of
accelerated depreciation deductions, including bonus depreciation under the MACRS, is also subject to
legislative change, and any further legislative modification or elimination of accelerated depreciation for
energy infrastructure assets, could reduce the after-tax economics of our projects and increase our cost
of capital.
Any such changes in tax law could reduce the economic viability of our existing projects, decrease
investor appetite for tax equity financing, increase our cost of capital, put us at a competitive
disadvantage and require us to restructure existing financing arrangements. The likelihood of any such
changes being enacted is uncertain, and we are currently unable to predict whether such changes will
occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative
impact on us, our tax equity investors, our customers or our suppliers, including as a result of related
uncertainty, these changes could have a material adverse effect on our business, financial condition,
results of operations and prospects.
Our ability to use NOLs and certain other tax attributes to offset future taxable income may be
limited.
We currently have substantial U.S. federal net operating loss (“NOL”) carry forwards and other state tax
attributes. Our ability to use these tax attributes to reduce our future U.S. federal and state income tax
obligations depends on many factors, including our future taxable income, the timing of which is
uncertain. In addition, our ability to use NOL carryforwards and other tax attributes may be subject to
limitations under Section 382 of the Code and corresponding provisions of state law.
Under Section 382 of the Code and corresponding provisions of state law, if a corporation, such as us,
undergoes an ownership change, which is generally defined as a greater than 50 percent change in its
equity ownership by shareholders who own, directly or indirectly, 5 percent or more of its common stock
(or are otherwise treated as “5-percent shareholders” under Section 382 of the Code) over a three-year
period, our ability to utilize U.S. NOL carryforwards and other tax attributes may be limited. It is possible
that an ownership change may have occurred or may occur in the future, which may materially impact our
ability to use our U.S. NOL carryforwards and other tax attributes to reduce U.S. federal and state taxable
income. Such limitation could adversely affect our results of operations, financial position and cash flows.
Geopolitical tensions involving China and Taiwan could disrupt the supply of semiconductors to
our customers and reduce demand for our data center infrastructure.
Our business model is to develop, construct and operate data center facilities and power infrastructure;
we do not provide computing hardware or offer compute-as-a-service. Our core turnkey scope ends at the
rack—customers bring their own semiconductors, servers and related computing equipment to deploy
within our facilities. As a result, our business depends in significant part on our customers’ ability to
procure the advanced semiconductors, including GPUs, central processing units (“CPUs”) and other
specialized AI chips, necessary to populate and utilize the data center capacity we deliver.
A significant portion of the world’s advanced semiconductor manufacturing capacity is concentrated in
Taiwan, particularly at Taiwan Semiconductor Manufacturing Company (“TSMC”) and other foundries that
produce chips for our customers and their technology suppliers. Any escalation in geopolitical tensions
between China and Taiwan, including a military conflict, blockade, economic coercion, or other hostile
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action, could severely disrupt semiconductor manufacturing and supply chains, resulting in shortages,
extended lead times, or the inability for our customers to procure the computing hardware necessary to
occupy our facilities. If our customers are unable to obtain sufficient semiconductors to deploy computing
capacity within our data centers, they may delay or reduce their lease commitments, defer planned
expansions, or seek to renegotiate or terminate existing lease arrangements, any of which could
adversely affect our revenues and financial condition.
In addition, the U.S. government has imposed, and may continue to impose, export controls, trade
restrictions and sanctions targeting China’s semiconductor industry, which could provoke retaliatory
measures affecting the supply of components, rare earth materials, or other inputs critical to
semiconductor manufacturing. China controls a significant share of the global supply of certain rare earth
elements and other materials used in chip fabrication, and any restriction on the export of such materials
could further constrain global semiconductor supply and exacerbate the risks to our customers’ ability to
source computing hardware. See also “—Geopolitical risks, including war, terrorism, trade disputes,
tariffs, and sanctions, could adversely affect our business and supply chain.”
A prolonged disruption in semiconductor supply could broadly reduce demand for new data center
capacity across the industry if hyperscaler customers and other AI compute operators are unable to
procure the hardware necessary to utilize additional facilities. Reduced demand could make it more
difficult for us to commercialize new phases of our development pipeline, could impair the economic
viability of projects under development, and could intensify competition among data center developers for
a smaller pool of customer commitments. Any of the foregoing could have a material adverse effect on
our business, financial condition, results of operations and ability to execute our development strategy.
RISKS RELATED TO GOVERNMENTAL REGULATION AND LEGAL MATTERS
Prior authorization from the FERC may be required for certain investments.
Because we own subsidiaries that are “public utilities” under the Federal Power Act (“FPA”), we must (i)
obtain prior authorization from FERC to transfer, sell or otherwise directly or indirectly dispose of 10% or
greater of our voting securities or the voting securities in any of our public utility companies or (ii) qualify
for a blanket authorization granted by FERC order or available under FERC’s regulations. Similar
restrictions imposed by the FPA apply to a purchaser of our securities who is a holding company under
the Public Utility Holding Company Act of 2005 (“PUHCA”) in a holding company system that includes a
transmitting utility or an electric utility. Accordingly, as a general matter, absent prior authorization by
FERC or qualification for a blanket authorization granted by FERC order or available under FERC’s
regulations, no purchaser, together with its affiliates (as defined in FERC’s regulations), may acquire,
whether in this offering, subsequent offerings by us or any of our shareholders, including in open market
transactions or otherwise, 10% or more of our issued and outstanding securities or otherwise acquire
control over us, including by virtue of the ability to appoint a non-independent board member to our board
of directors. A violation of these requirements by us as seller, or an investor as a purchaser of our
securities, could subject the party in violation to civil or criminal penalties under the FPA, including
possible sanctions and FERC rendering the transaction void. Additionally, holders of our common stock
should manage their investment in us in a manner consistent with the FPA’s requirements.
We are subject to extensive federal regulation as a public utility holding company, and failure to
comply with FERC requirements could result in material penalties, loss of market-based rate
authority and adverse effects on our operations.
Our operations are subject to extensive regulation by various federal, state and local governmental
agencies, including FERC, the U.S. Department of the Treasury, state public utility commissions and
environmental agencies. Changes in the legal and regulatory environment affecting our operations could
adversely affect our financial performance, and compliance with the requirements under these various
regulatory regimes may cause us to incur significant additional costs. Failure to comply with such
requirements could result in the shutdown of a non-complying facility, the imposition of liens, fines and/or
civil or criminal liability and/or the loss of exemption from certain types of regulation.
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Each of the project subsidiaries that own operational power generation or storage projects in our portfolio
satisfies the requirements for status as an “Exempt Wholesale Generator,” or EWG, as defined under
PUHCA. We and our holding company subsidiaries that own such project subsidiaries are entitled to
exemptions from the federal books and records access provisions of PUHCA so long as such project
subsidiaries maintain such EWG status and any future project subsidiaries that own power generation or
storage projects obtain and maintain similar status or otherwise obtain an exemption from such
regulation.
Certain of our project subsidiaries are subject to regulation as “public utilities” under the FPA, including
regulation of rates and issuances of debt or securities. The ability of an operational project subsidiary that
is subject to and not otherwise exempt from regulation as a public utility under the FPA to charge the
negotiated rates contained in its PPA is subject to that operational project subsidiary’s maintenance of its
general authorization from FERC to sell electricity at market-based rates. Each of the operational project
subsidiaries that are public utilities has obtained or applied for such market-based rate authorization and
associated blanket authorizations and waivers from FERC under the FPA, which allows (or is expected to
allow) such project subsidiaries to sell electric energy, capacity and specified ancillary services at
wholesale at market-based (i.e., negotiated) rates, instead of cost-of-service rates, and allows or is
expected to allow these subsidiaries blanket authorization to issue debt or securities. Having market-
based rate authorization requires our public utility subsidiaries to make ongoing public reports to FERC
concerning their power contracts and sales and file updates with FERC on facts related to ownership,
affiliation and market power, including regular updates in certain regions of the United States, and
whenever a change in affiliation occurs or certain new projects come online. Our public utility subsidiaries’
market-based sales are also subject to certain rules prohibiting manipulative or deceptive conduct, and
FERC may revoke or suspend a subsidiary’s market-based rate authorization if it determines that,
together with its affiliates, the project subsidiary can exercise market power in transmission or generation,
create barriers to entry, or has engaged in abusive affiliate transactions.
Failure to comply with applicable regulatory requirements may result in the imposition of criminal or civil
penalties of up to approximately $1.58 million, per violation per day, adjusted annually for inflation, and
disgorgement of profits associated with the violation, penalties, suspension or revocation of market-based
rate authority. If such generating companies were to lose their market-based rate authority, such
companies would be required to obtain FERC’s acceptance of a cost-based rate schedule and could
become subject to the significant accounting, record-keeping and reporting requirements that are
imposed on utilities with cost-based rate schedules. This could have a material adverse effect on the rates
we are able to charge for power from our facilities. Further, the negotiated rates entered into under the
PPAs of the project subsidiaries regulated as public utilities could be changed by FERC in certain
circumstances if it determines such rates are no longer just and reasonable. If FERC were to make such
a determination and as a result decrease the prices paid to us for energy delivered under any of our
PPAs, our revenues could be below our projections, which could have a material adverse effect on our
business, financial condition and results of operations.
Substantially all of our operational power generation and storage assets are also subject to the mandatory
reliability standards promulgated by the North American Electric Reliability Corporation (“NERC”) and
approved by FERC. The NERC reliability standards are a series of requirements that relate to maintaining
the reliability of the North American bulk electric system and cover a wide variety of topics, including
physical security and cyber-security of critical assets, information protocols, frequency and voltage
standards, testing, documentation and outage management. If we fail to comply with the mandatory
reliability standards, we could be subject to sanctions, including substantial monetary penalties and
increased compliance obligations.
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Changes to wholesale electricity market rules, tariffs and market design by RTOs and ISOs could
materially adversely affect our ability to sell power and the prices we receive for our energy,
capacity, and ancillary services.
Our projects are located in regions in which the bulk power transmission system and associated
wholesale markets for electric energy, capacity and/or ancillary services are administered by ISOs and
RTOs that are subject to FERC jurisdiction and operate under FERC-approved tariffs, including open
access transmission tariffs. We own or are developing projects in the PJM and the CAISO balancing
authority areas, each of which is a FERC-jurisdictional RTO or ISO that prescribes rules for the terms of
participation in the wholesale electric energy and ancillary services markets (and for PJM, capacity
markets) administered by that RTO or ISO. We also own projects located in the ERCOT balancing
authority area. ERCOT prescribes the rules for and terms of participation in most of the Texas energy
market much like the other RTOs and ISOs mentioned, but ERCOT is not subject to rate regulation by
FERC; rather its rules are generally approved by the PUCT.
RTOs and ISOs can impose rules, restrictions and terms of service that are regulatory in nature and may
have a material adverse effect on our business. For example, ISOs and RTOs have developed bid-based
locational pricing rules for the electric energy markets that they administer. In addition, most ISOs and
RTOs have also developed bidding, scheduling and market behavior rules, both to curb the potential
exercise of market power by market participants and to ensure certain market functions and system
reliability. These rules, restrictions and terms of service could change over time and could materially
adversely affect our project subsidiaries’ ability to sell, and the price we receive for, our energy, capacity
and/or ancillary services. From time to time, we may voluntarily submit communications to various
regulatory authorities to report any acts of non-compliance identified by us. Such reports may result in
investigations by such regulators, and there can be no assurance that losses arising from any such
investigations will not be material to our business.
We will also be affected by legislative and regulatory changes, as well as changes to market design,
market rules, tariffs, cost allocations and bidding rules that occur in the existing regional markets operated
by RTOs or ISOs. The RTOs/ISOs that oversee most of the wholesale power markets impose, and in the
future may continue to impose, mitigation, including price limitations, offer caps, must-offer rules, non-
performance penalties and other mechanisms to address some of the volatility and the potential exercise
of market power in these markets. These types of price limitations and other regulatory mechanisms may
have a material adverse effect on the profitability of our generation facilities that sell energy, capacity and
ancillary products into the wholesale power markets. The regulatory environment for electric generation
has undergone significant changes in the last several years due to state and federal policies affecting
wholesale competition and the creation of incentives for the addition of large amounts of new renewable
generation and, in some cases, transmission assets. These changes are ongoing, and we cannot predict
the future design of the wholesale power markets or the ultimate effect that the changing regulatory
environment will have on our business. In addition, in some of these markets, interested parties have
proposed to re-regulate the markets or require divestiture of electric generation assets by asset owners or
operators to reduce their market share. Other proposals to re-regulate may be made and legislative or
other attention to the electric power market restructuring process may delay or reverse the deregulation
process. If competitive restructuring of the electric power markets is reversed, discontinued, or delayed,
our business prospects and financial results could be negatively impacted.
Additionally, pursuant to the terms of some of our PPAs with electric utilities, the failure to supply the
contracted capacity and energy may result in the imposition of penalties. We may be required to make
payments to power purchasers under certain conditions, such as shortfall in delivery of renewable energy,
and not meeting certain performance threshold requirements, which could materially and adversely affect
our business.
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Evolving interconnection and transmission regulations, including ERCOT’s batch study process
for large load interconnection, PJM’s evolving cost allocation framework, and potential federal
assertion of jurisdiction over large load interconnections, could materially delay our projects,
increase development costs, or require us to abandon projects in our pipeline.
As a developer and operator of data centers and power generation facilities in an energy-intensive
industry like HPC, we are subject to legislative and regulatory developments and we seek to engage with
relevant stakeholders to align our business practices with an evolving legal framework. Recently, there
have been several legislative and regulatory efforts to manage power consumption and support grid
reliability, which affect our business as an operator of industrial-scale data centers and large-scale power
generation facilities. Regulatory efforts may require new processes and impose new requirements for the
interconnection of facilities with large electrical loads to regional power grids, require security type
payments as part of initial interconnection requests and create new approvals that may be required for co-
location of generation with large loads. These developments, along with potential requirements relating to
grid stability, voltage ride-through, frequency ride-through and curtailment obligations, could increase
costs, delay project timelines, or impose additional operational constraints.
In particular, PJM, MISO, CAISO and ERCOT have proposed or implemented changes to their
interconnection and transmission study processes related to large load and generation that could
materially affect the timing and cost of securing load service for our data center projects. PJM’s approach
to cost allocation for transmission service for entities serving large load customers continues to evolve
and may impose operational restrictions, additional costs and delayed timelines for our projects, and, in
the meantime, certain transmission owners within PJM are requiring substantial transmission security
agreements from large load customers in order to move forward with large load interconnections.
ERCOT has implemented a batch study process for large load interconnection requests, under which
interconnection applications are grouped and evaluated collectively in periodic study cycles rather than on
a first-come, first-served basis. This process introduces uncertainty into the timing and outcome of our
interconnection requests in Texas, as the approval of any individual application may depend on the
aggregate load requested across all applications in the same batch, the results of system-wide reliability
and deliverability studies, and the scope and cost of network upgrades identified during the study
process. ERCOT’s batch study approach may result in our applications being delayed until a subsequent
study cycle, require us to fund significant network upgrades as a condition of approval, or result in the
denial or modification of our requested load levels if the aggregate demand in a given batch exceeds
available transmission capacity. Because a significant portion of our data center development pipeline is
located in the ERCOT market, delays or adverse outcomes in the ERCOT batch study process could
materially affect our ability to energize facilities on our anticipated timelines and could impair our
competitive positioning relative to developers that secured interconnection approvals before the
implementation of the batch process or that hold more favorable queue positions. ERCOT’s requirements
relating to large flexible load interconnection and curtailment and grid reliability standards, may also
impose additional study requirements, increase interconnection costs, require costly network upgrades, or
delay the approval of interconnection requests for our facilities. Other RTOs and ISOs may adopt similar
approaches.
In addition, in October 2025, the Secretary of Energy directed, and FERC issued, an Advanced Notice of
Proposed Rulemaking (“ANOPR”) outlining a framework for expanding FERC's legal authority over the
interconnection of large loads (generally greater than 50 MW), which invited public comment on potential
reforms to ensure the timely and orderly interconnection of large loads. On June 18, 2026, building on
over 3,500 pages of comments received in the ANOPR docket, the Commission issued tailored show
cause orders under Section 206 of the FPA to each of the six FERC-jurisdictional RTOs/ISOs—including
PJM, MISO, and CAISO—preliminarily finding that their existing tariffs appear to be unjust and
unreasonable because they do not adequately address the challenges associated with the integration of
large and co-located loads onto the transmission system. The orders directed the RTOs/ISOs and
transmission owners, to either justify their existing tariffs or propose revisions addressing five categories
of reform: (1) transmission service application and study processes, including consideration of alternative
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transmission technologies; (2) preventing cost shifting and requiring transparency into transmission costs;
(3) co-location arrangements and behind-the-meter generation; (4) new transmission services for flexible
large loads; and (5) generating facilities serving electrically proximate and co-located large loads. The
orders also required the RTOs/ISOs to submit informational reports on resource adequacy. These
proceedings could have myriad impacts on our project development costs and timelines, and our data
center projects across PJM, MISO, and CAISO are now subject to an active federal regulatory process
with new requirements and cost allocation methodologies. These evolving interconnection and
transmission regulations introduce additional uncertainty into our project development costs and timelines
and could cause us to delay, modify, or abandon projects within our pipeline.
We are subject to state regulatory requirements, environmental laws including the Clean Air Act
and complex permitting processes that vary by jurisdiction and are subject to political change,
and failure to obtain or maintain required permits and approvals could delay or prevent the
development and operation of our projects.
Although our operational project subsidiaries are not subject to state utility rate regulation because they
sell energy exclusively on a wholesale basis, we are subject to other state regulations that may affect our
projects’ sale of energy and operations. Changes in state regulatory treatment are unpredictable and
could have a material adverse effect on our business, financial condition and results of operations. States
in which we develop data center projects, including Texas, have enacted or are considering legislation or
regulations requiring large data centers to pay for transmission improvements and provide backup power,
and mandating remote disconnect capabilities for emergency load-shedding. Federal and regional
regulators are transitioning toward “grid-aware” load mandates, requiring large-scale AI additions to prove
they do not compromise system reliability.
Our development activities require compliance with extensive, federal, state and local permitting
requirements, including environmental permits, zoning and land use approvals, building permits, and fire
and life safety approvals. Regulatory timelines are uncertain, and changes in permitting standards,
stakeholder intervention, or litigation could delay development or increase costs.
In particular, the gas-fired generation facilities, including the 9.2 GW gas-fired generation facilities planned
for the PORTS-Pike Technology Campus, will require air quality permits under the Clean Air Act and
analogous state laws. These permits are issued at the state level and the requirements, processing
timelines, and political environment governing air permit approvals vary significantly by jurisdiction and
are subject to change. Air quality permits for gas-fired generation facilities are subject to New Source
Review (“NSR”) provisions of the Clean Air Act, including requirements to install the best available control
technology or achieve the lowest achievable emission rates. States may impose more stringent emissions
standards than federal law requires, and changes in state political leadership, environmental policy
priorities, or public sentiment could result in more restrictive air permitting requirements, longer review
timelines, additional conditions or mitigation measures, or denial of permits for new gas-fired generation.
While the current regulatory environment in Texas and Ohio is generally supportive of gas-fired
generation development, there can be no assurance that this will continue, and any shift in state
environmental policy—whether driven by changes in gubernatorial administration, state legislative action,
state environmental agency rulemaking, or judicial decisions—could delay or prevent the permitting and
construction of the gas-fired generation facilities planned for our projects.
At the federal level, the Clean Air Act and associated regulations administered by the U.S. Environmental
Protection Agency (the “EPA”) govern emissions of criteria pollutants, hazardous air pollutants, and
greenhouse gases from stationary sources, including gas-fired power plants. Changes in federal
emissions standards, including changes to National Ambient Air Quality Standards, New Source
Performance Standards for gas turbines, or GHG regulations applicable to the power sector, could
increase compliance costs, require additional pollution control equipment, or impose operational
limitations on the gas-fired generation facilities neighboring our PORTS-Pike Technology Campus. For
example, in 2024, the EPA issued a rule requiring certain categories of natural gas fired power plants to
implement carbon capture and sequestration technologies or other GHG emissions reduction
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technologies. While the EPA under the current administration has proposed revoking this rule and has
rolled back other measures regulating GHG emissions, future efforts to regulate GHG emissions from the
power sector under the Clean Air Act, including as a result of policy changes under a future
administration, may adversely impact fossil fuel-based power projects, including the development of the
gas-fired generation facilities producing power near our PORTS-Pike Technology Campus. If we make
major modifications to our generation facilities or generation facilities powering our projects, the
installation of the best available control technology or the achievement of the lowest achievable emission
rates under the NSR provisions of the Clean Air Act may be required, which could result in substantial
additional capital expenditures or increases in our energy costs.
Our projects are also required to obtain and maintain numerous other environmental permits, including
permits for air emissions from backup diesel generators and other stationary sources, stormwater
discharges, hazardous materials handling and storage, water use and wastewater discharge, and fuel
supply and related infrastructure. Failure to obtain or maintain required permits, or failure to comply with
applicable environmental laws and regulations, could result in fines, penalties, project delays, or the
shutdown of non-complying facilities. In general, our projects are subject to numerous ongoing
operational compliance requirements, including environmental monitoring, hazardous materials
management and safety programs. Compliance with these requirements increases operational complexity
and costs, and failure to comply could result in penalties, operational restrictions, or revocation of permits.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of
operations and prospects.
Our projects depend on numerous county and other local approvals, and local opposition,
changes in local requirements or delays by local authorities with jurisdiction could delay or
prevent the development and operation of our projects.
In addition to the federal and state requirements described above, the development and operation of our
data center campuses and power generation projects depend on numerous county, municipal and other
local approvals, including land use permits, environmental permits, zoning and rezoning approvals,
conditional use permits, variances, subdivision and site plan approvals, building permits, certificates of
occupancy and fire and life safety approvals, among others. Certain of these approvals are discretionary,
are typically granted only after public hearings and may be conditioned, deferred or denied based on
community sentiment, local policy considerations or other factors. They may also be subject to
administrative or judicial appeal or other challenges by project opponents. These approvals are generally
prerequisites to commencing construction or placing a facility in service, and neither our control of a
project site nor our interconnection or other power rights assures that the required local approvals will be
obtained.
Local requirements are not uniform across the markets in which we operate, may change over time and
often afford local authorities with jurisdiction substantial discretion, including with respect to land use, fire
suppression and water supply for fire protection, battery energy storage system siting and setbacks,
backup generator siting, noise and visual screening and other project characteristics. We have
experienced, and expect to continue to experience, extended review periods, requests for additional
engineering or technical analyses and requirements to implement additional mitigation measures as
conditions of approval, as well as local opposition. Local authorities may also respond to community
concerns regarding land use, water consumption, noise, traffic, property values, power consumption, grid
reliability or electricity costs by imposing additional conditions, deferring action, adopting moratoria,
enacting more restrictive requirements or denying applications. Approvals that have been obtained may
also be appealed or challenged, modified or revoked in certain circumstances or allowed to lapse.
Our projects are developed on multi-year schedules and may be subject to completion and performance
guarantees under our leases, power purchase agreements and project-level financing arrangements. In
particular, the PORTS-Pike Technology Campus data center and power facilities are still pending local
approval and the requisite power and financing arrangements, among other necessary conditions in order
to commence construction. Any delays in obtaining local, state and federal approvals, as well as entering
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into requisite arrangements, could cause delay a project or phase from achieving RFS status, defer rent
commencement, result in liquidated damages or additional credit support obligations, permit a tenant or
other counterparty to exercise termination, buy-out or other contractual remedies, cause us to miss
guaranteed completion dates or require us to reduce the scope of or abandon an affected project. Any of
the foregoing could have a material adverse effect on our business, financial condition, results of
operations, liquidity and prospects.
The regulatory landscape for AI is rapidly evolving, and unfavorable changes could adversely
affect our business and the business of our tenants.
Pursuant to our partnership with OpenAI, our employees may use AI, generative AI, machine learning and
similar tools and technologies in connection with our business, including ChatGPT, and may rely on AI
tools developed by third parties. The use of generative AI, a relatively new and emerging technology in
the early stages of commercial use, exposes us to additional risks, such as damage to our reputation,
competitive position and business, legal and regulatory risks and additional costs. Our use of AI tools in
our operations, including for project planning, energy management and operational optimization, subjects
us to risks related to data privacy, algorithmic errors and cybersecurity vulnerabilities. The development
and deployment of AI technologies are subject to increasing regulatory scrutiny in the United States and
internationally. Governments have enacted legislation or are considering enacting regulations addressing
various aspects of AI, including data privacy, algorithmic accountability, energy consumption and national
security. For example, concerns about the energy intensity of AI training and inference may lead to
regulations that affect the siting, permitting or operation of data centers that support AI workloads.
Additionally, our customers’ use of AI may become subject to new or expanded regulations that could
reduce demand for our infrastructure services. New laws, regulations, or guidance could impose
requirements or restrictions that adversely affect our hyperscaler tenants and AI compute operators,
reduce demand for AI compute infrastructure, or increase our compliance costs. If we or our customers
fail to comply with applicable AI-related regulations, we could face regulatory penalties, litigation, or
reputational harm. The broader adoption, use, and commercialization of AI technology and the continued
rapid pace of developments in the AI field, are inherently uncertain. Failure by our customers to continue
to use our infrastructure to support AI use cases, or our ability to keep up with evolving AI technology
requirements and regulatory frameworks, could have a material adverse effect on our business. AI has
been developing at a rapid pace, and continues to evolve and change. We cannot predict whether
additional computing power will continue to be required to develop larger, more powerful AI models, or if
the practical limits of AI technology will plateau in the future regardless of available compute capacity.
Further, advancements in AI technology, including open-source AI models, may lead to compute and
other efficiencies that may impact the demand for AI services, including our infrastructure, which may
adversely impact our revenue and profitability. Many of our projections rely on a certain level of demand
for AI infrastructure in the future, and if such demand projections prove inaccurate, our business may be
adversely affected.
Public perception of AI and its societal impact could also affect the regulatory environment and demand
for AI infrastructure. Concerns relating to the use by our customers of new and evolving technologies
supported by our infrastructure may result in collateral reputational harm to us, adverse regulatory action,
or reduced demand for our services. Any of these factors could adversely affect our business, financial
condition and results of operations.
If our customers violate existing or proposed AI regulatory regimes or use our infrastructure services for
unlawful or noncompliant purposes, we could be subject to regulatory investigations, fines, reputational
damage, or contractual liability for their actions, even if we do not control their applications. It is possible
that such regulatory frameworks will impose obligations on infrastructure providers to oversee, monitor, or
restrict the use of AI systems that are trained or deployed on their data center or AI platforms. The costs
of compliance with multiple evolving laws, rules, and regulations from different jurisdictions related to AI
could increase our cost of doing business or require us to change how we operate in certain jurisdictions.
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We are subject to environmental, health and safety laws and regulations that could result in
liabilities, increased costs and delays in permitting and construction.
Our operations are subject to extensive and evolving international, federal, state and local environmental,
health and safety laws and regulations, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”), the Resource Conservation and Recovery Act
(“RCRA”), the Clean Water Act, the Clean Air Act, the Toxic Substances Control Act, NEPA, the
Endangered Species Act, the Occupational Safety and Health Act, and analogous state and local laws.
The costs of compliance with these laws, and our ability to obtain and maintain environmental permits and
governmental approvals required for the development, construction and operation of our projects, may
result in liabilities, increased costs, and delays in construction. We could be exposed to significant liability
under CERCLA and other hazardous substance laws for the investigation and remediation of
contamination at our current or former facilities, or at off-site locations to which we have sent waste for
disposal, regardless of fault or the legality of the original disposal. The presence or use of hazardous
substances at our facilities subjects us to potential strict, joint and several liability under these laws. Our
PORTS-Pike Technology Campus is located on and around the former Portsmouth Gaseous Diffusion
Plant site, which is impacted with historic contamination and is subject to ongoing remediation efforts. If
these efforts are ineffective and indemnification under the DOE Lease for site contamination is not
available, we may incur liability in connection with our operation of this site. From time to time, we submit
communications to various regulatory authorities, including the California Air Resources Board (“CARB”),
to report certain instances of non-compliance identified by us. Such reports may result in investigations by
such regulators, and there can be no assurance that losses arising from any such investigations will not
be material to our business.
We are required to obtain and maintain numerous environmental permits for our operations, including
permits for construction activities, discharges to the environment (including air and water) from our
operations, air emissions from backup generators, gas-fired generation or other stationary sources,
hazardous materials handling, storage and waste management, water withdrawal or use, wastewater
discharge and related infrastructure. Our projects may also be subject to environmental reviews under
federal and state environmental legislation, which could result in additional costs and delays to project
timelines. Failure to obtain or maintain required permits, or failure to comply with applicable environmental
laws and regulations, could result in fines, penalties, project delays, or the shutdown of non-complying
facilities.
Our development activities may be subject to scrutiny from the U.S. Fish and Wildlife Service and state
wildlife agencies under the Endangered Species Act and analogous state laws, as well as from the U.S.
Army Corps of Engineers under Section 404 of the Clean Water Act for projects affecting waters of the
United States, including wetlands. Project development may also be subject to review by water
conservation authorities and neighboring land stakeholders. Our battery energy storage systems present
additional safety risks, including the risk of thermal runaway, fire and the release of toxic gases, which are
subject to regulation under National Fire Protection Association (“NFPA”) standards, state fire codes and
local building codes. Any incident involving our battery systems could result in property damage, personal
injury, environmental contamination, regulatory enforcement actions, or litigation, and could lead to more
stringent regulatory requirements or moratoria on battery storage permitting in affected jurisdictions.
Additionally, we are subject to asset retirement obligations for the eventual decommissioning of our solar
and battery storage facilities. Several states in which we operate have enacted or proposed legislation
governing the end-of-life management and recycling of solar panels and battery systems, and the costs of
compliance with such requirements, including the costs of panel and battery recycling or disposal in
accordance with RCRA requirements, could increase over time and may exceed our current estimates.
The removal, transportation and disposal of battery energy storage system components, solar panels,
inverters and other equipment from our project sites at end of life, upon equipment failure, or following a
casualty event requires compliance with federal and state hazardous materials transportation and waste
management regulations, including the U.S. Department of Transportation’s Hazardous Materials
Regulations and RCRA’s requirements for the characterization, manifesting, transport and disposal of
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hazardous waste. Battery modules and certain other components may contain materials classified as
hazardous waste, including lithium, cobalt, cadmium and electrolyte solutions, that require handling by
licensed hazardous materials contractors and disposal at permitted hazardous waste treatment, storage,
and disposal facilities. The costs of properly removing, transporting and disposing of such equipment are
significant, particularly following large-scale casualty events where damaged battery modules or solar
panels must be classified, segregated and transported in compliance with applicable regulations.
Improper handling or disposal of such materials could expose us to strict liability under RCRA and
CERCLA, as well as state equivalents, and could result in environmental contamination, regulatory
enforcement actions, fines and remediation obligations. As of June 30, 2026 and December 31, 2025, we
had asset retirement obligations for solar power generation facilities of approximately $65.6 million and
$63.7 million, respectively.
There can be no assurance that we will not be subject to material environmental enforcement actions or
investigations in the future. The costs of any required investigation, remediation, or compliance actions
could be material and are difficult to estimate in advance.
Certain components in our operating projects have experienced performance degradation or
defects, and we are subject to risks associated with equipment underperformance, warranty
claims and supplier non-performance.
Certain components in our operating solar and BESS portfolio, including solar modules and inverters,
have over time experienced performance degradation, manufacturing defects, or other issues that have
reduced energy output below the levels projected in our financial models or committed under our offtake
arrangements. Degradation of the performance of our solar facilities above levels provided for in the
related offtake agreements may reduce our revenues. We depend on a limited number of equipment
suppliers for critical components, including solar modules, and as of June 30, 2026, our largest advance
to a supplier was approximately $43.9 million. For the year ended December 31, 2025, our largest
advance to a supplier was approximately $17 million. If this or any other equipment supplier delivers
components that do not meet quality or performance standards, or if components fail to perform as
warranted over their expected useful life, we may experience reduced energy generation, increased
operating costs and diminished project economics.
We have pursued, and are currently pursuing, warranty claims and other remedies against certain
equipment suppliers in connection with component underperformance and defects. These claims involve
tens of millions of dollars in alleged damages, reflecting both direct costs of equipment replacement or
remediation and lost revenue from reduced generation output. Certain of these claims are ongoing, and
there can be no assurance that we will recover the full amount of our losses through warranty claims,
indemnification provisions, or other contractual remedies. Equipment warranties are typically subject to
caps, limitations and exclusions, and the financial condition of our suppliers may deteriorate over the
warranty period, impairing their ability to honor warranty obligations. If a supplier becomes insolvent or
refuses to perform its warranty obligations, we may be required to fund replacement equipment or
remediation from our own resources, which could require significant capital expenditures that we may
need to fund through additional equity contributions or alternative financing sources.
Component underperformance that results in reduced energy generation could also have adverse
consequences for our project-level financing arrangements. Our project-level debt facilities contain
financial covenants, including debt service coverage ratio requirements, and if energy generation and
associated revenues decline materially as a result of equipment underperformance, we may be unable to
maintain compliance with these covenants. A breach of financial covenants could restrict our ability to
receive distributions from affected project subsidiaries, trigger mandatory prepayment obligations, or
constitute an event of default that could result in acceleration of project-level indebtedness or foreclosure
on project assets. In addition, reduced energy output may trigger performance-related adjustments or
remedies under our PPAs, including the imposition of performance damages or, in extreme cases,
termination rights in favor of the buyer. Any of the foregoing could have a material adverse effect on our
business, financial condition, results of operations and prospects.
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Our operations depend on the availability of water resources, and restrictions on water use or
water scarcity could adversely affect our business.
Our data center facilities utilize water for cooling systems that support computing workloads, primarily
closed loop, air-cooled systems. Closed loop, air-cooled systems require significant initial volumes of
water at initiation during construction, but less significant volumes of water during operations due to their
closed loop nature. Our renewable energy operations may also require water for dust suppression and
mitigation during construction and ongoing operations, panel and equipment cleaning, vegetation
management and other site maintenance purposes. Water for dust mitigation is particularly important at
our solar project sites located in arid and semi-arid regions, where construction activities and ongoing
operations generate airborne particulates that, if not controlled, can reduce panel efficiency, contribute to
equipment degradation and result in violations of applicable air quality regulations and dust control
permits. Water availability may be affected by regulatory restrictions, drought conditions, climate variability
and competing demands from agricultural, municipal and industrial users.
Several of our projects are located in regions that have experienced, or may in the future experience,
periods of limited water availability, including parts of Texas, Nevada, Arizona and California. Regulatory
authorities in these regions may impose restrictions on water use, increase water costs, or require
investments in water conservation, recycling or alternative supply systems. Local communities and
stakeholders may raise concerns regarding water use by industrial facilities, including data centers and
large-scale solar projects, which could result in permitting conditions, mitigation requirements, or delays
that increase our costs or affect project timelines.
For our data center facilities, water supports cooling infrastructure designed to maintain optimal operating
temperatures for high-density computing equipment. We design our facilities to incorporate water-efficient
cooling technologies where practicable, and we evaluate alternative cooling approaches, including air-
cooled and hybrid systems, on a site-by-site basis. However, if water supplies in a particular region
become constrained or subject to allocation restrictions, we may need to invest in additional water
efficiency measures, alternative cooling technologies, or supplemental water supply infrastructure, which
could increase our capital and operating costs. In certain scenarios, sustained water supply disruptions at
a facility could affect our ability to maintain full operational capacity.
Climate variability may affect water availability in regions where we operate by altering precipitation
patterns, and increasing evaporation rates. Increasing competition for limited water resources from other
users could further constrain availability for our operations. Any material disruption to our water supply, or
substantial increase in water costs, could adversely affect our business, financial condition and results of
operations.
We may become subject to litigation, arbitration or other legal proceedings that could result in
significant costs and liabilities.
We are, and may in the future become, subject to litigation, arbitration, regulatory proceedings and other
legal proceedings arising out of the ordinary course of our business. These proceedings may involve
claims related to contract disputes, construction defects, equipment performance, employment matters,
environmental compliance, intellectual property, personal injury, property damage and other matters.
Litigation and other legal proceedings are inherently uncertain, and we cannot predict the outcome of any
pending or future proceedings. Defending against legal claims can be expensive and time-consuming,
diverting management’s attention and resources from our business operations. An unfavorable outcome
in any legal proceeding could result in significant monetary damages, injunctive relief, or other remedies
that adversely affect our business. Even if we prevail in a legal proceeding, we may not be able to recover
our legal fees and costs.
We maintain insurance coverage for certain types of claims, but our insurance may not cover all claims or
may be insufficient to cover all losses. Additionally, our insurance policies are subject to deductibles,
coverage limits and exclusions that could result in us bearing a substantial portion of any loss.
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Any significant litigation or legal proceedings could adversely affect our reputation, business, financial
condition and results of operations.
We are subject to risks associated with national security regulations due to our foreign
ownership.
We have entered into National Security Agreements with the U.S. Government, represented by the
U.S. Department of the Treasury and the DOE on behalf of the CFIUS. These National Security
Agreements were required in connection with our structure as an indirect subsidiary of SoftBank. The
terms of this agreement may impose certain restrictions on our operations that our competitors do not
face, creating competitive disadvantages. These restrictions include limitations on hiring foreign nationals
or granting them access to certain facilities, technologies or information, as well as requirements to obtain
regulatory approval or non-objection before certain new employees may access specified IP, each of
which restricts our ability to recruit from the global talent pool, has delayed and may continue to delay
hiring or onboarding of new employees and adversely affects our ability to attract and retain key
personnel; requirements to obtain regulatory approval or non-objection for certain vendor relationships,
facility changes, or property acquisitions, which can delay procurement and operational decisions;
limitations on developing specified IP outside designated countries; mandatory reporting requirements
and government oversight that consume management time and resources; and limitations on international
collaborations or technology sharing that may limit our ability to partner with foreign research institutions
or customers.
These restrictions have delayed, and may continue to delay, our ability to onboard vendors, localize
systems in foreign markets, establish or expand facilities and engage prospective manufacturing and
other commercial partners. These restrictions may also impair our ability to compete for international
customers and partnerships and could result in lost commercial opportunities for us. The ongoing and
indefinite requirements of these National Security Agreements impose limits on the way we run our
business and if we are found to not be in compliance with the terms of the National Security Agreements,
we could face government investigations, penalties, or disruption of operations, any of which could cause
our business and reputation to be harmed. In addition, competitors not subject to similar agreements can
move faster in hiring, vendor selection, facility expansion and international partnerships, placing us at a
persistent competitive disadvantage.
Contractual transfer restrictions, consent rights and rights of first offer or refusal could delay or
prevent asset sales, project-level restructurings, financings, remedial sales or other strategic
transactions.
Certain agreements governing our projects and capital structure contain transfer restrictions, consent
rights, rights of first refusal and rights of first offer that may limit or delay transactions involving our assets,
project companies or equity interests. For example, certain of our PPAs require buyer consent for a
change of control of the seller and permit the buyer to withhold consent on any reasonable basis or a right
of first offer on sales of the applicable facility or ownership interests in the supplier. These provisions
could require us to notify counterparties, observe offer or negotiation periods, obtain consent, provide
information or demonstrate satisfaction of contractual conditions before completing a transaction.
In addition, our governing and partnership arrangements include CFIUS-related transfer restrictions that
require specified approvals for certain transfers or foreclosure events that could present national security
concerns. These restrictions could apply to transfers involving foreign investors, sovereign wealth funds,
foreign technology companies, entities with ties to countries of concern or other parties whose ownership
or control could raise national security considerations. They may also affect secured creditor remedies
because a foreclosure, remedial sale or other enforcement action could itself be treated as a transfer
requiring approvals or satisfying contractual conditions.
Certain of our financing counterparties also have contractual consent rights over certain remedial sales or
financings involving data center projects or equity interests in data center entities to or by prohibited
entities. As a result, in a distressed or restructuring scenario, creditors, preferred investors, project-level
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lenders and other stakeholders may not be able to dispose of or finance affected data center assets with
the bidder or financing source that offers the most favorable terms unless the relevant consents are
obtained. This could create conflicts between creditor enforcement rights and tenant or partner approval
rights, reduce leverage in negotiations, delay a restructuring or financing process and materially reduce
recoveries.
Rights of first offer or refusal and consent rights may also deter prospective buyers, lenders, joint venture
partners or strategic counterparties from participating in transaction processes because they may be
concerned that another party can match their offer, that transaction terms will be shared with an
incumbent counterparty, or that consent may be delayed, conditioned or withheld. Even when a
transaction is ultimately permitted, compliance with these procedures could extend timelines, increase
transaction costs, require interim financing, reduce competitive tension, require us to accept less
favorable terms or prevent us from acting quickly in response to market opportunities or liquidity needs.
Any of these outcomes could materially and adversely affect our business, financial condition, results of
operations, liquidity and prospects.
We are subject to anti-corruption, anti-bribery and similar laws and non-compliance with such
laws could subject us to criminal or civil liability and harm our business.
We are subject to the United States Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and
other anti-corruption, anti-bribery, anti-money laundering and similar laws in the United States and other
countries in which we conduct activities. Anti-corruption and anti-bribery laws, which have been
interpreted broadly, prohibit companies and their employees, officers, directors, agents and in some cases
their intermediaries, and other third parties from promising, authorizing, making, or offering improper
payments or other benefits to government officials and others in the public and, in certain cases, private
sector recipients. Some of these laws also prohibit receiving and soliciting bribes or kickbacks. Given the
nature of our business and our interactions with government entities and regulatory bodies, including the
DOE, FERC, state public utility commissions and foreign regulatory authorities, as well as our strategic
partnership with the DOE and our National Security Agreement with CFIUS, we and our third-party
intermediaries may have direct or indirect interactions with officials and employees of government
agencies or state-owned or affiliated entities. We may be held liable for the corrupt or other illegal
activities of our employees, representatives, contractors, partners, agents, intermediaries and other third
parties, even if we do not explicitly authorize such activities. We cannot ensure that our internal controls
and compliance procedures will protect us from reckless or criminal acts that may be committed by our
employees or third parties with whom we work. As an issuer, the FCPA also requires us to maintain
complete and accurate books and records, and to implement a system of adequate internal accounting
controls. Noncompliance with these laws could subject us to investigations, severe criminal or civil
sanctions, settlements, prosecution, disgorgement of profits, significant fines, damages, other civil and
criminal penalties or injunctions, whistleblower complaints, adverse media coverage and other
consequences. Investigations, actions, or sanctions could harm our reputation, business, operating
results, financial condition and prospects.
Tenant-initiated change orders may delay substantial completion of our data center projects, defer
rent commencement, and cause us to recognize less revenue than anticipated in a given period.
Our data center lease agreements permit tenants to request design modifications, scope changes and
other change orders during the construction process. While change orders may be subject to approval
processes and cost-recovery mechanisms, their implementation can require redesign work, procurement
of additional or different materials, resequencing of construction activities and engagement of additional
or different subcontractors, any of which may extend project timelines. Because our data center leases
contain milestones tied to the delivery of design documents, early access completion, power delivery,
substantial completion and final completion by specified deadlines, tenant-initiated change orders that
extend the construction schedule could delay achievement of substantial completion and, consequently,
the date on which rent commences under the affected lease.
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Our revenue from data center leases will be recognized over the applicable lease term as tenants obtain
access to contracted facilities. Rent commencement is generally conditioned upon achievement of RFS or
substantial completion milestones. If tenant change orders delay substantial completion, the
commencement of rent under the affected lease may shift into a subsequent fiscal quarter, causing us to
recognize materially less revenue than anticipated in the period in which we originally expected rent to
begin. Given the scale of our individual data center projects and the magnitude of the associated lease
payments, even a single project delay attributable to tenant change orders could result in a material
shortfall in quarterly revenue relative to market expectations.
In addition, delays caused by tenant change orders may interact with our completion and performance
guarantees under project-level financing arrangements, certain of which are recourse to the parent
company. If a tenant-initiated change order delays substantial completion beyond contractually
guaranteed dates—and such delay is not treated as a tenant-caused delay excusing our performance—
we may be exposed to liquidated damages, additional credit support requirements, or other remedies
under our financing agreements. Moreover, extended construction timelines increase our exposure to cost
overruns, supply chain disruptions, labor constraints and other execution risks that compound the impact
of the initial delay. Any of the foregoing could have a material adverse effect on our business, financial
condition, results of operations and cash flows, and could cause our results in any particular quarter to fall
materially short of expectations.
RISKS RELATED TO INTELLECTUAL PROPERTY, DATA PRIVACY AND
CYBERSECURITY
We may not be able to adequately obtain, maintain, enforce or protect our intellectual property
rights that are material to our business.
Our ability to compete effectively depends in part upon establishing and protecting our rights in
trademarks, trade secrets and other intellectual property rights we own or license. We rely on a
combination of trademark, trade secret, unfair competition and other intellectual property laws, as well as
confidentiality and license agreements and other procedures and contractual provisions, to establish and
protect our intellectual property and other proprietary rights both in the United States and in other
jurisdictions. Such means may afford only limited protection of our intellectual property and may not
prevent third parties from independently developing product and service offerings similar to or duplicative
of our product and service offerings or prevent our competitors from gaining access to our proprietary
information and technology. These measures may also not prevent, or provide meaningful protection in
the event of any, misappropriation, infringement, reverse engineering or other violation of intellectual
property rights owned or licensed by us.
In addition, our intellectual property rights could be challenged, invalidated, circumvented, or infringed,
misappropriated or otherwise violated. Intellectual property laws vary by jurisdiction and we may be
unable to maintain, protect or enforce our proprietary rights adequately in all cases, and enforcing our
rights may be costly and require significant expenditure of resources, including costs associated with
maintenance, monitoring, sending demand letters, initiating administrative proceedings and filing lawsuits.
We may also be unable to detect or determine the full extent of any unauthorized use of our intellectual
property rights. Intellectual property rights we acquire or license may be generated through the use of
U.S. government funding and may therefore be subject to retained U.S. government rights, including a
non-exclusive, non-transferable, irrevocable worldwide license for the U.S. government to use the
intellectual property for any governmental purpose.
In addition, current or departing employees may attempt to misappropriate trade secrets or other
proprietary or confidential information in a manner that may be difficult to detect, or to prove in a court
action undertaken to remedy the misappropriation. While it is our policy to enter into confidentiality
agreements with our employees, contractors, consultants and other third parties to protect our trade
secrets and other proprietary information, there can be no assurances that: (i) our confidentiality
agreements will not be breached; (ii) such agreements will provide meaningful protection for our trade
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secrets or other proprietary information; or (iii) adequate remedies will be available in the event of any
misappropriation or unauthorized use or disclosure of such trade secrets or proprietary information. In
addition, we cannot guarantee that we have entered into confidentiality agreements or intellectual
property assignment agreements with all employees, independent contractors, consultants, or other third
parties that have or may have had access to our trade secrets or other proprietary or confidential
information, or that have otherwise developed intellectual property for us, or that these agreements will be
effective in controlling access to, and use and distribution of, our intellectual property and proprietary
information. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-
how is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, trade
secrets and know-how can be difficult to protect and some courts inside and outside the United States are
less willing or unwilling to protect trade secrets and know-how. Furthermore, competitors or other third
parties may independently discover our trade secrets, copy, or reverse engineer our products or portions
thereof, or develop similar technology.
Third parties may claim that we infringe, misappropriate, or otherwise violate their intellectual
property rights, which could be time-consuming and costly to defend and could harm our
business.
Our success depends, in part, on our ability to develop and operate our business without infringing,
misappropriating, or otherwise violating the intellectual property or other proprietary rights of third parties.
We may, in the future, encounter disputes from time to time concerning intellectual property rights of
others, including our competitors, and we may not prevail in these disputes. Third parties may raise
claims against us alleging infringement, misappropriation, or other violations of their intellectual property
rights. We cannot be certain that the conduct of our business does not and will not infringe,
misappropriate or otherwise violate intellectual property or other proprietary rights of third parties.
An assertion of an intellectual property infringement, misappropriation or other claim against us,
regardless of the merit or resolution of such claim, may be costly, result in adverse judgments, result in
settlement on unfavorable terms or cause us to spend significant amounts of time and attention of our
management team and technical personnel to defend. An adverse determination in any intellectual
property claim could require us to temporarily or permanently cease making, using, selling, or importing
technologies that incorporate the challenged intellectual property, or obtain a license from the holder,
which may not be available on reasonable terms or at all. Even if we ultimately prevail, we may have to
pay significant monetary damages, lose significant revenues, or suffer harm to our brand, any of which
could adversely affect our business, financial condition and results of operations.
We rely on the availability of third-party licenses of intellectual property, and if we fail to comply
with our obligations under such agreements or are unable to extend our existing third-party
licenses or enter into new third-party licenses on reasonable terms or at all, it could have a
material adverse effect on our business, operating results and financial condition.
We rely on licensing certain intellectual property rights from third parties, which may include intellectual
property rights jointly developed by us with our counterparties. While we believe, based upon past
experience and standard industry practice, that such licenses generally could be obtained and maintained
on commercially reasonable terms, there can be no assurances that our existing or future third-party
licenses will be available to us on commercially reasonable terms, if at all. Even if such licenses are
available, in return for the use of a third party’s intellectual property, we may agree to pay the licensor
royalties, and such payment terms may be unfavorable to us.
In addition, licensing intellectual property rights from third parties exposes us to increased risk of being
the subject of intellectual property infringement claims due to, among other things, our lower level of
visibility into the development process with respect to such intellectual property. We cannot be certain that
our licensors do not or will not infringe on the intellectual property rights of third parties or that our
licensors have or will have sufficient rights to the licensed intellectual property in all jurisdictions in which
we operate. Further, our ability to comply with such license terms may be affected by factors that we can
only partially influence or control. If we fail to comply with any of our obligations under such agreements,
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we may be required to pay damages, and the licensor may have the right to terminate the license.
Termination by the licensor would cause us to lose valuable rights. Our business would suffer if any
current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensors
fail to enforce licensed intellectual property rights against infringing third parties, if the licensed intellectual
property rights are found to be infringing third-party rights, or if we are unable to enter into necessary
licenses on acceptable terms. Additionally, third parties from whom we currently license intellectual
property rights could refuse to renew our agreements upon their expiration. If we are unable to continue to
license intellectual property rights from third parties, we may be required to acquire or develop alternative
technology or other intellectual property, which we may be unable to do in a commercially feasible
manner, or at all, and may require us to use lesser quality alternatives, which may have a material impact
on our business, results of operation, financial condition and ability to compete effectively.
Compliance with ever-evolving federal and state laws and other requirements relating to the
processing of information about individuals necessitates significant expenditure and resources,
and any failure by us or our vendors to comply may result in significant liability, negative publicity
and/or an erosion of trust, which could materially adversely affect our business, results of
operations and financial condition.
In connection with running our business, we may receive, store, use and otherwise process information
that relates to individuals and/or constitutes “personal data,” “personal information,” “personally
identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal
Information”), including from and about actual and prospective customers, as well as our employees and
business contacts. We also depend on a number of third party vendors in relation to the operation of our
business, a number of which process Personal Information on our behalf.
We and our vendors are subject to a variety of federal and state data privacy laws, rules, regulations,
industry standards and other requirements, including those that apply generally to the processing of
Personal Information, and those that are specific to certain industries, sectors, contexts, or locations. For
example, we are subject to the laws and regulations of certain state and federal regulatory commissions,
which are aimed at strengthening cybersecurity measures required for information and operational
technology and critical energy infrastructure and that apply to the collection, use, retention, protection,
disclosure, transfer and other processing of personal information. These cybersecurity, data protection
and privacy law requirements, and their application, interpretation and amendment are constantly
evolving. It is also possible that new laws, regulations and other requirements, or amendments to or
changes in interpretations of existing laws, regulations and other requirements, may require us to incur
significant costs, implement new processes, or change our processing of information and business
operations, which could ultimately hinder our ability to grow our business by extracting value from our
data assets.
For example, in the United States, the Federal Trade Commission and state regulators enforce a variety
of data privacy issues, such as promises made in privacy policies or failures to appropriately protect
information about individuals, as unfair or deceptive acts or practices in or affecting commerce in violation
of the Federal Trade Commission Act or similar state laws. In addition, certain states have adopted or
modified data privacy and security laws and regulations that may apply to our business. For example, the
California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the
“CCPA”) provides California residents with certain individual privacy rights and imposes privacy, data
protection and cybersecurity obligations on covered companies. The CCPA requires businesses that
process personal information of California residents to, among other things: provide certain disclosures to
California residents regarding the business’s collection, use and disclosure of their personal information;
receive and respond to requests from California residents to access, delete and correct their personal
information, or to opt-out of certain disclosures of their personal information; and enter into specific
contractual provisions with service providers that process California resident personal information on the
business’s behalf. In addition, comprehensive privacy statutes that share similarities with the CCPA are
now in effect and enforceable in numerous states, and have been proposed in many other states and at
the federal level, creating a patchwork of overlapping but different laws. Additionally, laws, regulations and
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standards covering marketing, advertising and other activities conducted by telephone, email, mobile
devices, and the internet may be or become applicable to our business, such as the Federal
Communications Act, the Federal Wiretap Act, the Electronic Communications Privacy Act, the Telephone
Consumer Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of
2003 and similar state consumer protection and communication privacy laws, such as California’s
Invasion of Privacy Act.
Even though we believe we and our vendors are generally in compliance with applicable laws, rules and
regulations relating to privacy and data security, these laws are in some cases relatively new and the
interpretation and application of these laws are uncertain. To the extent multiple state-level laws are
introduced with inconsistent or conflicting standards, it may require costly and difficult efforts to achieve
compliance with such laws. Any failure or perceived failure by us to comply with data privacy laws, rules,
regulations, industry standards and other requirements could result in proceedings or actions against us
by individuals, consumer rights groups, government agencies, or others. We could incur significant costs
in investigating and defending such claims and, if found liable, pay significant damages or fines or be
required to make changes to our business. Further, these proceedings and any subsequent adverse
outcomes may subject us to significant negative publicity and an erosion of trust. If any of these events
were to occur, our business, results of operations and financial condition could be materially adversely
affected.
We and our third-party providers are exposed to security breaches, cybersecurity risks and other
disruptions to our information technology systems which may result in, and at times have
resulted in damage to our brand and reputation, material financial penalties and legal liability,
which could adversely affect our business, results of operations and financial condition.
We and certain of our third-party providers collect, process and store data about customers, employees,
business partners and others, including sensitive information about individuals such as our employees
and contractors, intellectual property, proprietary business information belonging to our business, such as
trade secrets, and information relating to our customers and business partners (collectively, “Confidential
Information”). We rely on information technology systems and networks that are critical to our business
(collectively, “IT Systems”) to manage our operations, including the operation and monitoring of our
renewable energy facilities and data center infrastructure. We own and manage some of these IT
Systems and also rely on third parties for some IT Systems and related services.
We face evolving cybersecurity risks that could threaten the confidentiality, integrity and availability of our
IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored
organizations and opportunistic hackers, as well as diverse attack vectors, such as social engineering and
phishing, malware (including ransomware), malfeasance by insiders, human or technological error and as
a result of malicious code embedded in open-source software, or misconfigurations, bugs or other
vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT
Systems, products or services.
We may also be vulnerable to physical security breaches, which could disrupt our operations and have a
material adverse effect on our business, financial condition and results of operations. The compromise of
physical security measures protecting our facilities could cause interruptions or malfunctions in our
operations and misappropriate our property or the property of our customers. Our business depends on
providing tenants with highly reliable services, including with respect to physical security, cybersecurity
and maintenance of environmental conditions. Our operations could be vulnerable to such attacks, as well
as mechanical or telecommunications failure, power outage, war, terrorism, fire, earthquake, pandemics,
hurricane, flood and other natural disasters. See also “—Geopolitical risks, including war, terrorism, trade
disputes and sanctions, could adversely affect our business and supply chain” for more information.
Despite our security measures, our information technology infrastructure may be vulnerable to
cyberattacks or security breaches, and we may be unable to detect, investigate, remediate, or recover
from attacks or incidents in a timely manner, or to avoid a material adverse impact. Cyberattacks are
expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming
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increasingly sophisticated in using techniques and tools—including AI—that circumvent security controls,
evade detection and remove forensic evidence. There can also be no assurance that our cybersecurity
risk management program and processes, including our policies, controls or procedures, will be fully or
timely implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Additionally, any integration of AI in our or our service providers’ operations, products, or services may
pose new or unknown cybersecurity risks and challenges. As techniques used to breach security change
frequently and sometimes not recognized until launched against a target, we may not be able to
implement new security measures in a timely manner or, if and when implemented, we may not be certain
whether these measures could be circumvented. Remote and hybrid working arrangements at our
company and at many of our third-party providers also increase cybersecurity risks due to the challenges
associated with managing remote computing assets and security vulnerabilities that are present in many
non-corporate and home networks. We may be required to expend significant capital and resources to
protect against such threats or to alleviate problems caused by breaches in security. Any such attack or
breach could result in the unauthorized access to, or acquisition, destruction, loss, alteration, or
disclosure of, sensitive information.
We and certain of our third-party providers may experience, and have experienced, cyberattacks and
other security incidents, and we expect that attacks and incidents could occur in the future. For example,
we suffered a phishing attack in 2022 when an employee’s email account was compromised, allowing
attackers to impersonate vendors and redirect payments to fraudulent bank accounts. We also suffered a
cybersecurity incident in March 2026 in which one of our contractor’s credentials were obtained, enabling
an attacker to access certain of our project-specific local networks and deploy malware. Though these
incidents did not materially impact our operations or result in material financial losses, and we have since
implemented additional procedures and protections designed to protect against further attacks, a
successful cyberattack could disrupt our operations, including the operation of our power generation
facilities and the development, construction or future operation of our data center infrastructure, damage
our reputation, result in the loss of customers, expose us to regulatory penalties and litigation and require
us to expend significant resources to investigate and remediate any vulnerabilities.
For our data center segment, we have service level commitment obligations to certain tenants that will
apply once the relevant data center facilities become operational, and service interruptions or significant
equipment damage in our data center facilities could result in difficulty maintaining service level
commitments to these customers and potential claims related to such failures. A failure to meet these or
other commitments in our data center facilities could subject us to contractual liability, including service
level credits against tenant rent payments, legal liability, monetary damages and regulatory sanctions.
Service interruptions, equipment failures, or security breaches could also materially impact our brand and
reputation globally and lead to customer contract terminations or non-renewals and an inability to attract
customers in the future. We may be required to expend significant capital and resources to protect
against such threats or to alleviate problems caused by breaches in security. Our insurance coverage
may not be sufficient to cover all losses arising from a cyberattack or security breach, and applicable
insurance may not be available to us in the future on economically reasonable terms or at all. As cyber
threats continue to evolve, we may be required to expend significant additional resources to continue to
modify or enhance our protective measures or to investigate and remediate any security vulnerabilities.
We may also be subject to specific data security frameworks and/or laws that require us to maintain a
certain level of security. For example, the Federal Trade Commission expects a company’s data security
measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information
it holds, the size and complexity of its business, and the cost of available tools to improve security and
reduce vulnerabilities.
RISKS RELATED TO OUR CORPORATE STRUCTURE AND OWNERSHIP
SoftBank controls our company, and its interests may conflict with yours.
Following this offering, SoftBank will control a majority of the voting power of our outstanding common
stock. As a result, SoftBank will control the election of our board of directors and will be able to determine
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all matters requiring shareholder approval, including mergers and other business combinations, the
acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional equity
securities, and the payment of dividends. Pursuant to the shareholders’ agreement we will enter into with
SoftBank upon the completion of this offering (the “Shareholders’ Agreement”), SoftBank will have the
right to designate a number of candidates for election to our board of directors depending on its and its
controlled affiliates’ level of ownership of our outstanding shares of common stock. These designation
rights will range from the ability to designate six candidates so long as they beneficially own 50% or more
of our outstanding shares of common stock down to the ability to designate one candidate so long as they
beneficially own more than 5% of our outstanding shares of common stock. The Shareholders’ Agreement
also grants certain preemptive rights, rights with respect to related party transactions, information and
other rights, consultation rights and consent rights, among others, including during periods in which
SoftBank beneficially owns less than a majority of our outstanding shares of common stock. Accordingly,
SoftBank will maintain significant control over our corporate and business activities until such rights
terminate. See “Certain Relationships and Related Party Transactions—Shareholders’ Agreement.”
SoftBank’s controlling ownership may have the effect of delaying, deferring, or preventing a change of
control of our company, and may discourage or prevent transactions that might otherwise be favorable to
our other shareholders. Even if SoftBank’s ownership percentage declines below a majority of the voting
power, it may continue to be able to significantly influence the composition of our board of directors and
the approval of actions requiring shareholder approval.
The interests of SoftBank may not always be aligned with the interests of our other shareholders.
SoftBank could pursue strategic objectives that may conflict with our interests or those of our minority
shareholders. For example, SoftBank could invest in entities that directly or indirectly compete with us,
and when conflicts arise between the interests of SoftBank and the interests of other shareholders,
members of our board of directors who are affiliated with SoftBank may not be disinterested. SoftBank
may also have different tax positions or investment time horizons than our other shareholders, which
could influence its decisions regarding our business and capital allocation. See also “—SoftBank’s
interests may conflict with our own interests and those of holders of our common stock.”
We have entered into significant related-party transactions with SoftBank, OpenAI and their
respective affiliates, which could limit our operational flexibility and create conflicts of interest.
We have entered into, and expect to continue to enter into, various transactions with SoftBank and its
affiliates, including the lease of our Cosmos Technology Campus to a SoftBank affiliate, a trademark
license agreement, pursuant to which we pay royalties to Softbank equal to 1% of our consolidated gross
profit, a management services arrangement and an intellectual property assignment and license
agreement. In 2025, $0.1 million was payable to SoftBank under the trademark license agreement,
calculated on an entity-by-entity basis pursuant to the letter agreement dated June 11, 2026. No royalties
were payable under the trademark license agreement in 2024 because consolidated gross profit was not
positive under the methodology specified in the agreement. Although we believe these arrangements
were negotiated on terms that reflect arm’s-length dealing, informed in part by the participation of
independent counterparties with adverse economic interests, they are related-party transactions and were
not negotiated with wholly unaffiliated parties, and consequently there can be no assurance that the terms
are as favorable to us as those that could have been obtained from unaffiliated third parties. In addition,
we may choose not to enforce, or to enforce less vigorously, our rights under agreements with affiliates
because of our desire to maintain our ongoing relationships with SoftBank, OpenAI and their respective
affiliates. We have limited ability to renegotiate or terminate the other arrangements while SoftBank and
OpenAI continue to hold their respective equity positions and governance rights, and our board of
directors may face conflicts of interest in evaluating whether the terms of these arrangements remain
appropriate over time.
SoftBank’s dual role as both our controlling shareholder and a counterparty to significant commercial
arrangements creates inherent conflicts of interest. Decisions regarding the enforcement of obligations
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under these arrangements may be influenced by SoftBank’s own financial needs or strategic priorities
rather than our best interests.
Additionally, one of our affiliates provides management and administrative services for project
development and asset management and charges periodic management fees. These arrangements were
established by SoftBank in its capacity as our controlling shareholder, and we have limited ability to
negotiate their terms or to terminate them on terms that are favorable to us. Even following this offering,
SoftBank’s continued control of our company will affect our ability to modify or terminate these related
party arrangements. If any of these related party arrangements prove to be on terms that are unfavorable
to us relative to what could be obtained from third parties, we may be unable to renegotiate or terminate
such arrangements, which could have a material adverse effect on our business, financial condition,
results of operations, and the trading price of our common stock.
Our related-party arrangements may attract regulatory scrutiny, and the perception of
interconnected fund flows among us, SoftBank and OpenAI could adversely affect investor
confidence and our ability to access capital markets.
Our commercial and financial relationships with SoftBank and OpenAI involve significant and recurring
financial flows among related parties, and a substantial portion of our near-term data center revenue will
be derived from lease payments by affiliates of SoftBank and OpenAI. These arrangements include our
data center leases with affiliates of SoftBank and OpenAI, which represents a substantial majority of our
backlog, a parent guaranty supporting one of those leases, the OpenAI Warrants, a trademark license
agreement, commitments to purchase software and services from OpenAI, and tax sharing obligations, in
each case involving amounts that are or may become material to us. For a description of these
arrangements, including their material terms and the amounts involved, see “Certain Relationships and
Related Party Transactions.” Although we believe these arrangements reflect arm’s-length dealing, the
scale and interrelated nature of these fund flows could nonetheless be perceived by regulators, investors
or other market participants as not reflecting arm’s-length terms or as lacking economic substance
independent of our related-party relationships.
Changes in the regulatory environment, heightened scrutiny of foreign ownership of critical infrastructure,
or changes in the political landscape could result in additional conditions, restrictions or requirements
being imposed on our business. In addition, because a substantial portion of our revenue and costs flow
between related parties, our transfer pricing, cost allocation and intercompany arrangements could be
subject to review by the IRS or state tax authorities, and any determination that our intercompany
arrangements do not reflect arm’s-length terms could result in adjustments that increase our tax liability.
Our data center and power operations are also subject to regulation by FERC and state public utility
commissions, and our related-party arrangements could attract scrutiny from these regulators, particularly
to the extent that lease payments, royalties or other intercompany charges are ultimately borne by
ratepayers or reflected in our regulated cost structures. Any such regulatory scrutiny could result in
delays, increased compliance costs, reputational harm or restrictions on our ability to conduct our
business as currently planned.
Moreover, investor perception of the nature and magnitude of our related-party arrangements could
adversely affect the trading price of our common stock, our ability to access the capital markets on
favorable terms, and analyst and investor confidence in our financial reporting. Even if our related-party
arrangements are determined to be on commercially reasonable terms, the complexity and scale of these
arrangements may make it more difficult for investors to evaluate our financial results and may result in a
trading discount relative to companies without significant related-party dependencies.
A significant portion of our near-term data center revenue is expected to be derived from a lease
with a SoftBank affiliate, and our business could be materially adversely affected if such affiliate
fails to perform its obligations or if the lease is terminated.
We have entered into a lease agreement dated November 7, 2025 with an affiliate of SoftBank as tenant
for our Cosmos Technology Campus. The lease provides for a 15-year initial term, with an option to renew
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for an additional 10-year period, and is structured as a triple-net lease with 100% operating expense
pass-through, rent based on a percentage return on total project cost, and limited tenant termination
rights. Expected aggregate rent under the Cosmos lease over its 15-year initial term is approximately $2.5
billion. SoftBank Group Capital Limited, a SoftBank Group affiliate, has delivered a guaranty in favor of
our subsidiary for the tenant’s obligations, with anticipated aggregate guaranty exposure of approximately
$2.9 billion. Our financial performance will be substantially dependent upon the tenant’s ability and
willingness to fulfill its obligations under the lease.
The lease is expected to commence in stages between 2026 and 2027, with rent commencement for
each phase occurring on the earlier of December 11, 2026 or the date the applicable phase achieves RFS
status. We currently expect first phase revenue from Cosmos during the fourth quarter of 2026. The lease
contains milestones and conditions precedent, including delivery of design documents, early access
completion, substantial completion and final completion by specified deadlines. If we are unable to meet
these requirements, the tenant may be entitled to remedies that may include liquidated damages, rent
credits, self-help rights, buy-out rights or repayment of amounts advanced to us. These remedies could
reduce or eliminate expected revenue from the lease, require significant cash payments, impair our
project financing arrangements and materially and adversely affect our financial position and liquidity.
We license our brand name and certain intellectual property from SoftBank, and such license will
terminate automatically if SoftBank ceases to control us, which could disrupt our business and
require a costly rebranding.
Pursuant to a First Amended and Restated License Agreement dated March 28, 2024, SoftBank grants to
us a non-exclusive, non-transferable license to use certain trademarks and domain names, including the
“SB Energy” brand name, solely within the United States in connection with the sale of electrical energy
products and renewable energy credits and services related to renewable energy projects. SoftBank is
and remains the exclusive owner of the licensed marks, and any goodwill arising from our use of the
licensed marks belongs to SoftBank. The license has an initial term of one year and automatically renews
for additional one-year periods unless either party provides written notice of non-renewal at least one
month before the then-current term expires. The license will automatically terminate if our direct parent,
SBE Global, LP, is no longer controlled by SoftBank, and our rights under the license will automatically
terminate if we are no longer controlled by our direct parent, in which case we are required to cease all
use of the licensed marks immediately. In consideration of the license, we are required to pay aggregated
annual royalties to SoftBank equal to 1% of our consolidated gross profit, calculated under the
methodology specified in the agreement. In addition, we are obligated to indemnify SoftBank against
third-party infringement claims arising from our use of the licensed marks, except to the extent such
claims arise from SoftBank's breach of the agreement, and this indemnity obligation is uncapped.
If SoftBank's control of our company were to change—whether as a result of a future sale of its shares, a
change of control of our intermediate parent entities, or otherwise—we would lose the right to use our
current brand name, including the “SB Energy” name, logo, trademark, and domain names, and would be
forced to rebrand. A rebranding would involve significant costs, including the costs of developing a new
brand identity, updating legal documents and regulatory filings, modifying marketing materials and
customer communications, and potentially registering new trademarks and domain names. Such a
rebranding could disrupt our customer and market relationships, reduce our brand recognition, create
confusion among our counterparties and regulators, and adversely affect our business, financial
condition, and results of operations. Furthermore, because SoftBank retains the right to non-renew the
license on one month's notice prior to the end of any one-year renewal period, we face the risk that
SoftBank could terminate our access to the licensed marks even absent a change of control, which would
similarly require a costly and disruptive rebranding.
We are a “controlled company” within the meaning of Nasdaq and Nasdaq Texas rules and, as a
result, qualify for exemptions from certain corporate governance requirements.
Following the completion of this offering, SoftBank will continue to indirectly control a majority of the
combined voting power of our outstanding common stock. As a result, we will be a “controlled company”
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within the meaning of the corporate governance standards of Nasdaq and Nasdaq Texas. Under these
rules, a company of which more than 50% of the voting power is held by an individual, group, or another
company is a “controlled company” and may elect not to comply with certain corporate governance
requirements, including the requirements that:
•a majority of the board of directors consist of independent directors;
•the compensation committee be composed entirely of independent directors with a written charter
addressing the committee’s purpose and responsibilities; and
•the nominating and corporate governance committee be composed entirely of independent directors
with a written charter addressing the committee’s purpose and responsibilities.
We intend to rely on some or all of these exemptions, including exemptions from the requirements that a
majority of our board of directors consist of independent directors and that our compensation and
nominating committees be composed entirely of independent directors. See the section titled
“Management—Controlled Company Status.” Accordingly, you may not have the same protections
afforded to shareholders of companies that are subject to all of the corporate governance requirements of
Nasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares
continue to be listed on Nasdaq and Nasdaq Texas, we will be required to comply with these provisions
within the applicable transition periods.
SoftBank’s and OpenAI’s interests may conflict with our own interests and those of holders of our
common stock.
SoftBank’s interests may diverge from our own interests or the interests of holders of our common stock.
Historically, potential conflicts of interest among our equityholders were governed by the limited
partnership agreements of our parent entities, Energy Global and SBE Global, which contained
negotiated provisions allocating governance rights, economic entitlements and consent rights among the
partners. Upon the Closing Distribution, however, all of the shares of our common stock held by SBE
Global will be distributed to Energy Global and, in turn, to Energy Global’s limited partners, and neither
Energy Global nor SBE Global will thereafter hold any shares of our common stock. As a result, those
partnership arrangements will no longer allocate rights in respect of our common stock, and our principal
equityholders—including SB Energy HoldCo, LLC and SVF II Energy (DE) LLC, each an affiliate of
SoftBank, and OpenAI Infra Holdings, LLC—will hold shares directly and will be free to exercise their
rights as our shareholders without the constraints, consent rights and negotiated protections that
previously applied at the partnership level. Holders of our common stock will instead be subject solely to
the governance framework of our Certificate of Formation, our Bylaws, the Shareholders’ Agreement, the
Registration Rights Agreement and applicable law, which may provide our public shareholders with more
limited protections against these conflicts than the partnership arrangements historically provided to our
equityholders. Furthermore, holders of our common stock, other than those party to the Shareholders’
Agreement and Registration Rights Agreement, will not benefit from the rights thereunder. Because
SoftBank will, through its affiliates and on an aggregated basis, generally have the ability, subject to
limitations in our Certificate of Formation, to control all matters submitted to our shareholders for approval,
including the election of certain of the members of our board of directors, and will have certain enhanced
rights pursuant to the Shareholders’ Agreement, other shareholders will have limited ability to influence
corporate matters. In addition, because SoftBank’s interest in us will be held through more than one
vehicle following the Closing Distribution, investment horizon and disposition considerations, the interests
of those vehicles may differ from one another as well as from the interests of our public shareholders,
including with respect to the timing and manner of any sale of our common stock following expiration of
the lock-up applicable to this offering. As a result, SoftBank may cause us to take corporate actions,
including engaging in transactions with SoftBank or affiliates of SoftBank, that members of our
management or other shareholders do not view as beneficial, or that provide SoftBank with benefits at our
expense. Such actions could have a material and adverse effect on our business, results of operations
and the trading price of our common stock.
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Moreover, under the terms of the Shareholders’ Agreement, SoftBank has a contractual preemptive right.
Specifically, if we propose to issue any shares of our common stock, preferred stock or options, warrants
or other securities convertible into or exercisable for shares of our common stock or preferred stock (other
than pursuant to an offer made to all common shareholders on the same terms or in connection with any
incentive award plan otherwise approved by SoftBank to the extent such approval is required under the
Shareholders’ Agreement), SoftBank and its controlled affiliates, will be entitled (but not obligated) to
subscribe for a number of the securities we propose to issue such that they can maintain their
proportional legal and economic interests in our capital stock prior to such issuance. As a result, while
other holders of our common stock would risk suffering a reduction in percentage ownership in connection
with a new issuance of securities by us, SoftBank and its controlled affiliates will have the opportunity to
avoid a reduction in their legal and economic interests. See “Certain Relationships and Related Party
Transactions—Shareholders’ Agreement—Preemptive Rights.”
The interests of SoftBank and OpenAI may diverge from those of our public shareholders in a number of
respects: SoftBank is an AI-centric strategic investment holding company, with investments spanning
semiconductors, telecommunications, AI, robotics and digital infrastructure, and may prioritize capital
allocation, strategic opportunities or commercial relationships that benefit its broader portfolio at the
expense of our company, or may seek to cause us to pursue transactions or strategies that serve
SoftBank’s broader strategic objectives rather than maximizing value for our public shareholders.
From time to time we have, and in the future we expect to, advise SoftBank with respect to certain of its
proposed investments or acquisitions in, or commercial arrangements or strategic partnerships with,
businesses in or adjacent to our industry. Our efforts to advise SoftBank may require substantial time and
attention from our executives, engineers and other employees, which could divert attention and resources
away from our business. We can provide no assurances that SoftBank will not acquire, invest in or
partner with businesses that compete with us, and we will have no control over SoftBank’s acquisition,
investment or strategic partnership activities, including any investments in, acquisitions of or strategic
partnerships with businesses that compete with us or our customers, or any other actions that SoftBank
may take to compete with us or our customers. Any SoftBank investments in, or acquisitions of, or
strategic partnerships with, businesses that compete with us or our customers could have a material
adverse effect on us and our relationships with affected customers and cause those customers to seek
alternatives to our products and services, which could have a material adverse effect on our business,
results of operations, reputation, financial condition and/or prospects. In addition, although we are not
actively pursuing any investments in, or acquisitions of any such businesses, we may in the future pursue
acquisitions of or investments in entities affiliated with SoftBank or with whom SoftBank or its affiliates
have a commercial relationship.
Disputes may arise between us and SoftBank or its affiliates in a number of areas, including relating to
arrangements with third parties that are exclusionary to us or SoftBank or its affiliates and business
opportunities that may be attractive to both us and SoftBank or its affiliates. We may not be able to
resolve any potential conflicts with SoftBank and, even if we do, the resolution may be less favorable than
if we were dealing with an unaffiliated party, which could have an adverse effect on our business, results
of operations and the trading price of our common stock. In addition, any disputes between us and
SoftBank could distract our management.
In addition, some of our directors and officers currently, and in the future may, directly or indirectly own
equity interests in SoftBank. Ownership of such equity interests by our directors and officers could create,
or appear to create, conflicts of interest with respect to matters involving both us and any one of them, or
involving us and SoftBank. Our Certificate of Formation will renounce any interest or expectancy in
specified corporate opportunities that are presented to our directors and officers who are also directors,
officers or affiliates of SoftBank. We cannot assure you that the Certificate of Formation will adequately
address potential conflicts of interest or that potential conflicts of interest will be resolved in our favor or
that we will be able to take advantage of corporate opportunities presented to individuals who are
directors of both us and SoftBank. As a result, we may be precluded from pursuing certain advantageous
transactions or growth initiatives.
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Furthermore, regardless of the performance of our own business, SoftBank’s business, results of
operations and the trading price of SoftBank’s securities or other matters affecting SoftBank or actions
that SoftBank may take may adversely affect the trading price of our common stock. In addition, SoftBank
is not restricted from competing with us or otherwise taking for itself or its other affiliates certain corporate
opportunities that may be attractive to us.
We will be a “controlled company” under Nasdaq and Nasdaq Texas rules and intend to rely on certain
exemptions from corporate governance requirements, including exemptions from the requirements that a
majority of our board of directors consist of independent directors and that our compensation and
nominating committees be composed entirely of independent directors. As a result, our public
shareholders may not have the same protections afforded to shareholders of companies that are subject
to all of these requirements, and there can be no assurance that the governance mechanisms we adopt
will be effective in managing the conflicts described above or that SoftBank will exercise its influence in a
manner consistent with the interests of our public shareholders. See “Management—Controlled Company
Status.”
We may be subject to shareholder litigation alleging fiduciary duty breaches by our board of
directors in connection with related party transaction approvals.
As a controlled company with significant related party transactions involving our controlling shareholder,
SoftBank, and with OpenAI, our anchor data center tenant and a strategic investor, we may be subject to
shareholder litigation alleging that our board of directors breached its fiduciary duties in approving these
transactions. Shareholders may claim that transactions with SoftBank, OpenAI or their respective affiliates
—including leases, royalty arrangements, governance agreements, warrant issuances and other
commercial arrangements described elsewhere in this prospectus—were not negotiated on arm’s-length
terms or did not reflect the best interests of our company and its minority shareholders. Such claims could
allege, among other things, that directors affiliated with or designated by SoftBank or OpenAI had
conflicts of interest, that the approval process was procedurally deficient, or that the economic terms were
unfair to us. Even if we believe such claims lack merit, defending against shareholder litigation can be
time-consuming and expensive, may divert management attention from our business, and could result in
significant legal fees, settlement costs or adverse judgments. Any such litigation, regardless of outcome,
could damage our reputation and adversely affect investor confidence in our corporate governance
practices. In addition, the threat or pendency of such litigation could complicate our ability to enter into
future related party transactions, attract independent directors, or raise capital on favorable terms. Our
Certificate of Formation may provide for exclusive forum provisions and other mechanisms intended to
address litigation risk, but such provisions may not be enforceable in all circumstances and may not deter
all claims.
SoftBank’s ability to control our board of directors may make it difficult for us to recruit
independent directors.
For so long as SoftBank and its controlled affiliates directly or indirectly hold shares of our common stock
representing at least a majority of the votes entitled to be cast by the holders of shares of our common
stock at a shareholder meeting, SoftBank will be able to elect all of the members of our board of directors.
Additionally, pursuant to the Shareholders’ Agreement, SoftBank will have the right to designate a number
of candidates for election to our board of directors depending on its and its controlled affiliates’ level of
ownership of our outstanding shares of common stock. SoftBank’s designation rights will range from the
ability to designate six candidates so long as they beneficially own 50% or more of our outstanding shares
of common stock down to the ability to designate one candidate so long as they beneficially own more
than 5% of our outstanding shares of common stock. The Shareholders’ Agreement also provides
SoftBank with proportional rights to representation on the committees of our board of directors, subject to
applicable restrictions. Under these circumstances, qualified and experienced persons who might
otherwise accept an invitation to join our board of directors may decline, which means that we would not
be able to benefit from their qualifications and expertise in service as members of our board of directors.
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SoftBank and NVIDIA may engage in financing transactions whereby they pledge shares of our
common stock that they own.
Each of SoftBank and NVIDIA may, from time to time, engage in financing transactions involving our
common stock, such as loans whereby it pledges shares of our common stock as security. We may be
unable to influence the timing or terms of financing transactions by SoftBank and NVIDIA involving our
securities that it owns. We face various risks in connection with such transactions. These transactions
may contain provisions that require prepayment if certain events or circumstances occur, including certain
change of control transactions or in the event of a decline in the trading price of our common stock below
certain thresholds. From time to time, each of SoftBank and NVIDIA may consider it advisable to sell its
shares of our common stock in order to finance the prepayment or repayment of such financings in
amounts that may, individually or in the aggregate, be significant. In addition, any such financings may
provide that if the price of our common stock declines to certain levels, absent a repayment of the
applicable financing, SoftBank and NVIDIA, as applicable, may be required to provide additional
collateral. In the case of any non-payment at maturity by SoftBank or NVIDIA or another event of default
in respect of any such financing, the providers of any such financing may, in addition to other remedies,
exercise their rights to foreclose on and sell or cause the sale of our shares of common stock that
SoftBank or NVIDIA, as applicable, has pledged as collateral. These actions could cause a change of
control of our company and, if such shares are sold, those sales could cause the trading price of our
common stock to decline. Sales of our securities in connection with such financing transactions, whether
by SoftBank or NVIDIA or upon enforcement against collateral, could have a material and adverse effect
on our business, results of operations, access to equity capital and the trading price of our common stock.
The future exercise of registration rights by the parties to our Registration Rights Agreement may
materially and adversely affect the market price of our common stock.
Pursuant to the Registration Rights Agreement, certain shareholders will be entitled to registration rights
pursuant to which they may demand that we register the resale of shares of our common stock or
securities convertible into or exchangeable for shares of our common stock (“Registrable Securities”) and,
under certain circumstances, will also have customary “piggyback” registration rights for their Registrable
Securities in connection with certain registrations of securities by us. In addition, the parties to the
Registration Rights Agreement may require us to file and maintain an effective shelf registration statement
under the Securities Act covering the resale of their Registrable Securities. SoftBank’s registration rights
will be pari passu with NVIDIA and OpenAI, and any cutbacks among SoftBank, NVIDIA and OpenAI will
be made on a pro rata basis. The registration of the resale of these securities will facilitate the public sale
of such securities without regard to any limitations on volume. In light of the expected beneficial
ownership of our shares of common stock of the parties to the Registration Rights Agreement after giving
effect to this offering, the registration of the resale of a significant number of shares, or the perception that
significant sales may occur, may have a material adverse effect on the market price of our common stock.
RISKS RELATED TO OUR INDEBTEDNESS AND LIQUIDITY
We have significant liquidity needs and may not be able to generate sufficient cash flows or obtain
adequate financing to fund our operations, service our debt and pursue our growth strategy.
Our business is capital-intensive and requires substantial ongoing capital expenditures for the
development and construction of power and data center infrastructure. For instance, as of the date of this
prospectus, our backlog-associated capex totaled approximately $178 billion, measured on a cash basis
from June 30, 2026, the date of our most recent financial statements included elsewhere in this
prospectus. We expect to continue to make significant capital investments to execute our growth strategy.
Our liquidity needs include:
•funding the development of new projects;
•funding the construction of new projects;
•making scheduled payments of principal and interest on our indebtedness;
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•funding working capital and other operating expenses;
•funding potential redemption obligations under our preferred equity arrangements; and
•pursuing strategic acquisitions or other business opportunities.
Historically, our principal sources of liquidity included cash on hand, cash flows from operations,
borrowings under our credit facilities, tax equity financing, proceeds from project level financings, equity
capital raises and proceeds from preferred equity issuances. Our ability to generate cash from operations
depends on the performance of our projects, including electricity generation, offtake pricing, data center
rent and operating costs. We cannot assure you that we will generate sufficient cash flows from
operations or that we will be able to obtain adequate financing on acceptable terms to meet our liquidity
needs. If our cash flows and capital resources are insufficient to fund our operations and service our debt,
we may be forced to reduce or delay capital expenditures, sell assets, seek additional equity or debt
financing, or restructure our indebtedness. In particular, insufficient liquidity could impair our ability to fund
obligations under our completion and performance guarantees, certain of which are recourse to the
parent company. Under these guarantees, we may be obligated to achieve specified construction
milestones and deliver completed facilities by guaranteed dates, and a failure to do so could require us to
pay liquidated damages, provide additional credit support, post letters of credit, or repurchase or
refinance affected projects. Any liquidity shortfall that prevents us from satisfying these guarantee
obligations could have cascading financial consequences extending beyond the affected project, including
defaults under project-level debt facilities and adverse effects on our consolidated financial condition. Any
of these actions could adversely affect our business, financial condition and results of operations.
Further, our project financing are generally limited recourse. In the event the relevant project associated
with such financings does not generate anticipated revenues, we may be unable to service such debt,
which could result in a default on such obligations under the relevant debt documents, creditors may have
direct recourse to us, to the extent of our limited recourse obligations, and we may be required to make
distributions received by us from other projects, as well as other sources of cash available to us, in order
to satisfy such obligations. In addition, if the creditors foreclose on the relevant collateral, we may lose our
ownership interest in the relevant project-level subsidiary or our project-level subsidiary owning the power
plant may only retain an interest in the physical assets, if any, remaining after all debts and obligations
were paid in full. Any of the foregoing could have a material adverse effect on our business, financial
condition and results of operations.
We expect that significant additional capital will be needed in the future to continue our planned
operations, including investment in our customers’ projects, risk-sharing arrangements and costs
associated with operating as a public company. Our ability to access debt and equity capital markets
either at the corporate level, the non-recourse project-level subsidiary or otherwise, and the costs of such
capital, depends on a variety of factors, including market conditions, our credit ratings, the availability of
tax equity financing and investor demand for our securities or our financial performance and level of
indebtedness. To raise capital, we may enter into financing arrangements that may be costly or impose
certain restrictive covenants or otherwise restrict our ability to seek additional leverage or financing. We
may also seek to sell common stock, convertible securities or other equity securities in one or more
transactions at prices and in a manner we determine from time to time. If we sell common stock,
convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
Such sales may also result in material dilution to our existing shareholders, and new investors could gain
rights, preferences and privileges senior to the holders of our common stock. Any of the above events
could significantly harm our business, prospects, financial condition and results of operations and cause
the price of our common stock to decline.
In addition, other companies with which we compete may have greater liquidity, more unencumbered
assets, less indebtedness, greater access to credit and other financial resources, lower cost structures,
more effective risk management policies and procedures, greater ability to incur losses, longer-standing
relationships with customers, or greater flexibility in the timing of their sale of generation capacity and
ancillary services than we do. If we are unable to fund capital expenditures for any reason, we may not be
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able to capture available growth opportunities and any such failure could have a material adverse effect
on our results of operations and financial condition.
We have substantial indebtedness, which could adversely affect our financial health, limit our
operational flexibility and increase our vulnerability to adverse conditions.
As of June 30, 2026, on a consolidated basis, we had approximately $4.0 billion in aggregate principal
amount of indebtedness outstanding (approximately $3.9 billion net of unamortized issuance costs and
discount), of which approximately $1.2 billion was classified as current and all of which was incurred at
the subsidiary level and is non-recourse to SB Energy, Inc. We also had $709.5 million of intercompany
borrowings from SBE Global, which are direct obligations of SB Energy, Inc. and are expected to be
repaid in full by SB Energy, Inc., together with accrued and unpaid interest, funded with cash on hand,
borrowings under the Credit Facility and/or other sources prior to or substantially concurrently with the
completion of this offering. This repayment is not conditioned on entry into the Credit Facility, and we
have, and expect to have, sufficient cash on hand to repay the notes in full if the Credit Facility is not
entered into. In addition, $1.1 billion of letters of credit were outstanding as of June 30, 2026. See
“Description of Certain Indebtedness.”
Our substantial indebtedness could:
•limit our ability to borrow additional funds or refinance existing indebtedness on favorable terms;
•require us to dedicate a substantial portion of our cash flow from operations to the payment of
principal and interest on our indebtedness;
•limit our flexibility in planning for or reacting to changes in our business and industry;
•place us at a competitive disadvantage compared to competitors with less debt;
•increase our vulnerability to adverse economic and industry conditions;
•limit our subsidiaries’ ability to make distributions to us;
•limit our ability to make distributions to our equity holders;
•restrict our ability to pursue strategic acquisitions or other business opportunities; and
•trigger cross-default provisions in our other financing agreements, potentially resulting in the
acceleration of substantially all of our outstanding indebtedness and the exercise of remedies by
multiple groups of lenders simultaneously.
Our credit facilities contain financial and other restrictive covenants that limit our ability to return capital to
shareholders or otherwise engage in activities that may be in our long-term best interests. The Credit
Facility we expect to enter into in connection with this offering will require us to maintain minimum liquidity
as specified in the Credit Facility. Because availability under the revolving commitments counts toward
this test, borrowing under the Credit Facility will reduce our headroom under the covenant, which may
constrain our ability to draw on the facility at the times we most need liquidity. Borrowings under the Credit
Facility may be used for, and/or cash on hand or other sources may be used for, the Intercompany Notes
Repayment and that use could further reduce liquidity available for operations, project development, debt
service and contingencies. The Credit Facility will also prohibit cash dividends on our common stock prior
to January 1, 2029. The Credit Facility remains subject to the satisfaction of customary conditions
precedent, including the pricing of this offering, and there can be no assurance that it will become
effective.
We do not intend to use any of the net proceeds from this offering to repay indebtedness outstanding
under the Hickory Facilities. As of June 30, 2026, approximately $473.0 million was outstanding under the
Hickory Facilities, consisting of borrowings under the Term Loan Facility and the Revolving Facility,
bearing interest at six-month Term SOFR plus a margin of 375 basis points and maturing on October 18,
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2027. The Hickory Facilities are obligations of SE Global Borrower, LLC and are guaranteed by specified
intermediate subsidiaries and secured by pledged equity interests; SB Energy, Inc. is not itself a borrower
or guarantor under those facilities. We expect to repay the Hickory Facilities in full with the proceeds of
the initial borrowing under the Credit Facility, substantially concurrently with the closing of the Credit
Facility, and to terminate the related commitments, liens and guarantees in connection therewith. We will
have a limited period following the closing date to complete the repayment and obtain the release of the
related liens and guarantees, during which we may not request new borrowings or letters of credit under
the Credit Facility. The closing of the Credit Facility is subject to customary conditions precedent,
including the execution and delivery of definitive loan documentation, the pricing of this offering, the
completion of the Ares Redemption and the repayment of the outstanding borrowings under the Hickory
Facilities. There can be no assurance that the Credit Facility will become effective. If the Credit Facility
does not become effective, we would need to repay the Hickory Facilities using cash on hand or
alternative financing sources prior to their October 2027 maturity. Doing so would reduce the liquidity
available for operations, project development and debt service, leave the existing Hickory liens and
guarantees in place until repayment, reduce our available letter-of-credit capacity and could require us to
divert capital from project-level equity contributions or other planned uses. In addition, if the Credit Facility
is not entered into, we would not have the revolving borrowing capacity and letter-of-credit capacity we
expect the Credit Facility to provide, which could constrain our ability to fund working capital needs, post
required credit support under our commercial and interconnection agreements, and pursue our growth
strategy. See "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources" and "Description of Certain Indebtedness—New
Credit Facility."
Our inability to satisfy certain financial covenants could prevent us from paying cash dividends, and our
failure to comply with those and other covenants could result in an event of default which, if not cured or
waived, may entitle the related lenders to demand repayment or enforce their security interests, which
could have a material adverse effect on our business, financial condition, results of operations and cash
flows. In addition, the agreements governing our project-level financing contain financial and other
restrictive covenants that limit our operating subsidiaries’ ability to make distributions to us or otherwise
engage in activities that may be in our long-term best interests. The project-level financing agreements
generally prohibit distributions from the operating subsidiaries to us unless certain specific conditions are
met, including the satisfaction of certain financial ratios. If we are unable to make distributions from our
operating subsidiaries, it could have a material adverse effect on our ability to pay dividends to holders of
our common stock. Our ability to make scheduled debt payments depends on our future operating
performance and cash flow, which are subject to prevailing economic conditions, interest rates, regulatory
approvals and other factors, many of which are beyond our control.
Our financing agreements contain restrictive covenants, including financial maintenance
covenants, that limit our operational and financial flexibility.
Our corporate credit facilities and project-level financing agreements contain various affirmative and
negative covenants that, among other things, restrict our ability and the ability of our subsidiaries to:
•incur additional indebtedness or guarantee obligations;
•create liens on our assets;
•make investments, loans, or advances;
•pay dividends or make other distributions to equity holders;
•sell, transfer, or dispose of assets;
•enter into transactions with affiliates;
•merge or consolidate with other entities; and
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•make capital expenditures.
In addition, certain of our financing agreements require us to maintain specified financial ratios and satisfy
other financial condition tests, including debt service coverage ratios. Our ability to comply with these
covenants depends on our operating performance and cash flows, which are subject to factors beyond
our control. A breach of any of these covenants could result in a default under the applicable financing
agreement. If a default occurs and is not cured or waived, the lenders could accelerate the maturity of the
outstanding debt and exercise other remedies, including foreclosing on the collateral securing the debt. A
default under one financing agreement could also trigger cross-default provisions in our other financing
agreements, which could result in acceleration of substantially all of our indebtedness.
Several of our financing agreements contain cross-default provisions under which a default under one
agreement may constitute a default under one or more of our other financing agreements. Because our
indebtedness is structured across multiple layers, including corporate-level credit facilities, project-level
construction and term loan facilities, intercompany indebtedness and senior secured notes, a default at
any level could potentially cascade across our capital structure. For example, a default under our
corporate-level credit facilities could trigger cross-defaults under our project-level financing agreements,
and a default at the project level could, in certain circumstances, trigger cross-defaults under our
corporate-level facilities or other project-level financings. In addition, certain of our project-level financing
arrangements include cross-default provisions that link the financings for related projects, such that a
default under one project-level facility could result in defaults under the financing agreements for other
projects within the same portfolio. If cross-default provisions were triggered across multiple financing
agreements, we could face simultaneous acceleration of a substantial portion of our outstanding
indebtedness, multiple groups of lenders exercising remedies against different pools of collateral and an
inability to access additional borrowings under our credit facilities, any of which could have a material
adverse effect on our business, financial condition, liquidity and results of operations.
We face near term debt maturities and refinancing risk, which could adversely affect our liquidity
and financial condition.
Certain of our debt facilities have near-term maturities. We may need to refinance some or all of our
indebtedness before it matures. Our ability to refinance our indebtedness on favorable terms, or at all,
depends on a number of factors, including prevailing interest rates, conditions in the credit markets, our
financial condition and operating performance, the credit worthiness of our customers and the value of our
assets. If we are unable to refinance our indebtedness on acceptable terms, we may be required to sell
assets, reduce capital expenditures, or seek additional equity financing, any of which could adversely
affect our business and financial condition. If we cannot refinance or extend our debt maturities, we may
be unable to repay our indebtedness when due, which could result in a default and acceleration of our
obligations. A failure to refinance on acceptable terms could also leave us without sufficient resources to
fund our obligations under completion and performance guarantees, certain of which are recourse to the
parent company. If construction-phase spending cannot be supported by available debt capacity, we may
be unable to meet guaranteed construction milestones, which could trigger liquidated damages, additional
credit support requirements, or project repurchase obligations that further strain our liquidity and
compound the adverse effects of any refinancing shortfall.
In addition, our project-level financing arrangements for operating projects have maturities that are shorter
than the expected useful life of the underlying project. As a result, these financing arrangements will need
to be refinanced one or more times during the life of the project. Upon refinancing, we may be exposed to
then-prevailing interest rates, which could be significantly higher than the rates under the original
financing. Although we employ hedging strategies to mitigate interest rate risk, these strategies may not
be sufficient to fully offset rate increases at the time of refinancing. To the extent our hedging is
inadequate, increases in interest rates at the time of refinancing would increase debt service costs for the
affected projects, reducing project-level cash flows available for distribution to us at the corporate level. In
addition, we may not be able to refinance project-level debt on terms as favorable as the existing
financing, or at all, due to changes in credit market conditions, the performance of the underlying project,
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the remaining useful life of the project assets, or other factors. If we are unable to refinance project-level
debt on acceptable terms, we may be required to contribute additional equity to the project, reduce
distributions from the project, or take other actions that could adversely affect our financial condition and
results of operations.
Further, under certain of our project-level financing arrangements, we may be required to maintain in
effect leases for such project, and any breach of such requirement may, unless certain prepayments are
made, result in an event of default under such agreements, as well as a cross-default under our other
financing agreements for that project or otherwise. If a default occurs and is not cured or waived, the
lenders could accelerate the maturity of the outstanding debt and exercise other remedies, including
foreclosing on the collateral securing the debt. Any foreclosure on the relevant collateral could cause us to
lose our ownership interest in the relevant project-level subsidiary or our project-level subsidiary owning
the power plant may only retain an interest in the physical assets, if any, remaining after all debts and
obligations were paid in full. In addition, a default under one financing agreement could also trigger cross-
default provisions in our other financing agreements, which could result in acceleration of substantially all
of our indebtedness. As a result, a lease termination could have a material adverse effect on our
business, contracts, financial condition, operating results, cash flow, financing requirements, liquidity,
prospects and the price of our common stock.
Holders of our common stock are structurally subordinated to creditors of our subsidiaries.
We conduct substantially all of our operations through our subsidiaries, including our project-level entities.
Our subsidiaries have incurred significant indebtedness, and our project-level debt is generally secured
by the assets of the applicable project company. As of June 30, 2026, on a consolidated basis, we had
approximately $4.0 billion of aggregate principal indebtedness outstanding, approximately $3.9 billion net
of unamortized issuance costs and discount, of which approximately $1.2 billion was current. Our project-
level entities had over $3.6 billion of project-level debt and approximately $1.7 billion of tax equity
financing arrangements, and we expect to incur additional corporate-level indebtedness under the Credit
Facility. Holders of our common stock are structurally subordinated to all project-level and corporate
indebtedness and other liabilities of our subsidiaries. Our shareholders’ claims are junior in right of
payment to all such indebtedness and liabilities, and distributions to us depend on project-level
distributions permitted under project financing covenants. In the event of a bankruptcy, liquidation, or
reorganization of any of our subsidiaries, the creditors of that subsidiary would generally be entitled to
payment of their claims from the assets of that subsidiary before any assets would be available for
distribution to us as an equity holder. Even if we were recognized as a creditor of one of our subsidiaries,
our claims would be subordinate to any security interest in the assets of that subsidiary and any
indebtedness of that subsidiary that is senior to us.
We are exposed to interest rate risk, and increases in interest rates could adversely affect our
financial condition and results of operations.
We are exposed to interest rate risk primarily through our variable rate indebtedness and through timing
gaps between the execution of revenue contracts and the closing of project financing. A significant portion
of our outstanding debt bears interest at floating rates based on the Secured Overnight Financing Rate
(“SOFR”) or other reference rates, plus an applicable margin. Increases in interest rates would increase
our interest expense and reduce our cash available for other purposes, including capital expenditures,
distributions and debt repayment.
We have entered into interest rate swap agreements to hedge a portion of our exposure to interest rate
fluctuations on certain of our debt. However, our hedging arrangements may not fully protect us from
interest rate risk for several reasons:
•We have not hedged all of our variable rate debt, and we remain exposed to interest rate fluctuations
on the unhedged portion;
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•Our interest rate swaps have fixed terms and will expire, at which point we will need to enter into new
hedging arrangements at then-prevailing rates or become fully exposed to interest rate fluctuations;
•Between the time we execute revenue contracts and close project financing, we may be unable to
execute forward interest rate swaps on acceptable terms, or at all, leaving us exposed to adverse
movements in interest rates during that period;
•If interest rates decline, we may not benefit from lower rates on the hedged portion of our debt;
•Our hedging counterparties may fail to perform their obligations, exposing us to counterparty credit
risk; and
•Changes in accounting standards or our hedge accounting treatment could result in increased
volatility in our reported financial results.
Additionally, higher interest rates could adversely affect our ability to refinance existing debt on favorable
terms, increase the cost of financing for new projects, reduce the returns on our development activities,
and make it more difficult for us to compete for projects against competitors with access to lower-cost
capital. Rising interest rates may also reduce the demand for renewable energy investments generally,
which could adversely affect our access to tax equity financing and other sources of capital.
We may be dependent on access to the high yield bond market and investment-grade debt market
to finance certain of our projects, and volatility or disruption in the capital markets or the broader
financing ecosystem could adversely affect our ability to fund our development pipeline.
We have utilized, and expect to continue to utilize, high yield bond financings and investment-grade debt
financings to fund certain of our data center projects or to refinance other of our projects, including
projects that may not qualify for investment-grade financing or other traditional project debt due to their
development-stage nature, tenant concentration, or other credit characteristics. The high yield bond
market and investment-grade debt market are each subject to significant volatility and periodic disruptions
that can limit issuers’ ability to access capital or significantly increase borrowing costs. Market conditions
in these markets are influenced by factors beyond our control, including macroeconomic conditions,
interest rate movements, credit spread widening, investor risk appetite and broader capital markets
sentiment. During periods of market stress or dislocation, bond issuances may be delayed, downsized, or
priced at significantly higher yields than anticipated, any of which could increase our financing costs and
reduce project returns.
If we are unable to access the high yield bond market or investment-grade debt market on acceptable
terms when needed, we may be required to delay or scale back development of certain projects, seek
alternative financing sources that may be more expensive or impose more restrictive terms, contribute
additional equity capital, or abandon projects altogether. In addition, investor demand for bonds issued by
infrastructure and energy companies may be affected by sector-specific factors, including changes in
energy policy, concerns about the credit quality of data center tenants, or shifts in investor sentiment
toward AI-related infrastructure. Any prolonged disruption in our ability to access the capital markets, or a
sustained increase in borrowing costs, could have a material adverse effect on our ability to execute our
development strategy and could adversely affect our business, financial condition and results of
operations.
In addition, our ability to finance projects depends on the health and stability of the broader financing
ecosystem, including the availability of lending institutions, underwriters, tax equity investors and other
financial intermediaries willing to participate in our transactions. A contraction in the number or capacity of
active lenders and investors in our sector, consolidation among financial institutions, increased regulatory
capital requirements, or a general reduction in risk appetite among market participants could reduce the
pool of available financing and increase competition for limited capital. Disruptions to the broader
financing ecosystem, even if not specific to the high yield or investment-grade markets, could constrain
our access to capital, increase financing costs and adversely affect our ability to develop and complete
projects on expected timelines.
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We rely on distributions from our project-level entities, and cash flows from these entities may be
restricted by financing covenants, limiting the availability of cash to service corporate-level
obligations and fund our growth.
We rely on distributions from our project-level subsidiaries to fund our corporate-level operations, service
our corporate debt and support our growth initiatives. Our project-level subsidiaries are generally required
to satisfy certain conditions before distributing cash to their parent entities. Our project-level financing
agreements typically contain restrictions on distributions, including requirements that the project company
maintain specified debt service coverage ratios, reserve accounts and other financial tests before making
distributions. These restrictions could result in available cash being restricted at the project level and
unavailable to service our corporate-level debt obligations or fund our corporate-level operations and
growth initiatives.
If a project underperforms or experiences operating difficulties, the project company may be unable to
satisfy the distribution conditions in its financing agreements, which could reduce the amount of cash
available for distribution to us at the corporate level. Additionally, if we are unable to cause our project-
level subsidiaries to distribute cash to us, we may need to rely on other sources of liquidity to meet our
corporate-level obligations, which may not be available on acceptable terms or at all.
Further, If our project-level subsidiaries default on their obligations under the relevant debt documents,
creditors of a limited recourse project financing may have direct recourse to us, to the extent of our limited
recourse obligations, which may require us to use distributions received by us from other projects, as well
as other sources of cash available to us, in order to satisfy such obligations. In addition, if our project-level
subsidiaries default on their obligations under the relevant debt documents (or a default under such debt
documents arises as a result of a cross-default to the debt documents of some of our other power plants)
and the creditors foreclose on the relevant collateral, we may lose our ownership interest in the relevant
project-level subsidiary or our project-level subsidiary owning the power plant may only retain an interest
in the physical assets, if any, remaining after all debts and obligations were paid in full. Any of the
foregoing could have a material adverse effect on our business, financial condition and results of
operations.
We are a holding company and depend on distributions from our subsidiaries, which may be
restricted by financing covenants, to fund our obligations and pay dividends.
We are a holding company that conducts substantially all of our operations through our subsidiaries. As a
result, we are dependent upon distributions and other payments from our subsidiaries to generate the
funds necessary to meet our financial obligations, including the payment of any dividends to our
shareholders. Our subsidiaries are separate and distinct legal entities and have no obligation to make
funds available to us. Our subsidiaries’ ability to make distributions to us may be restricted by their
respective operating requirements, contractual restrictions (including under their project-level financing
agreements) and applicable law. In particular, our project-level financing agreements typically contain
restrictions on distributions, including requirements that the project company maintain specified debt
service coverage ratios, reserve accounts and other financial tests before making distributions. These
restrictions could result in available cash being restricted at the project level and unavailable to service
our corporate-level debt obligations or fund our corporate-level operations and growth initiatives. If our
subsidiaries are unable to make sufficient distributions to us, we may be unable to meet our corporate-
level obligations or pay dividends to our shareholders.
RISKS RELATED TO OUR COMMON STOCK AND THIS OFFERING
Our stock price may be volatile, and you may not be able to resell your shares at or above the
initial public offering price.
Prior to this offering, there has been no public market for our common stock. The initial public offering
price will be determined through negotiations between us and the underwriters and may not be indicative
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of the price at which our stock will trade after this offering. The market price of our common stock may be
volatile and subject to fluctuations in response to various factors, including:
•actual or anticipated variations in our operating results;
•changes in financial estimates by securities analysts;
•announcements by us or our competitors of new projects, contracts or acquisitions;
•changes in government regulations affecting our industry;
•general economic conditions and trends in the renewable energy and data center and AI
infrastructure industries; and
•the other risk factors described in this prospectus.
Future sales of our common stock, or the perception that such sales may occur, could depress
our stock price.
Sales of a substantial number of shares of our common stock in the public market, or the perception that
such sales could occur, could cause the market price of our common stock to decline and could impair
our ability to raise capital through the sale of additional equity securities. At or immediately following the
closing of this offering, a significant number of shares of our common stock will be distributed to the
limited partners of Energy Global in the Closing Distribution, all of which will be subject to the 180-day
lock-up agreement applicable to this offering. Upon expiration of the lock-up period, these shares and any
additional shares subject to lock-up agreements entered into in connection with this offering will become
eligible for sale. Sales of a substantial number of shares of our common stock could depress the market
price of our common stock.
All of the shares of common stock sold in this offering will be freely tradable without restrictions or further
registration under the Securities Act except that any shares held by our affiliates, as defined in Rule 144
under the Securities Act, would only be able to be sold in compliance with Rule 144 and any applicable
lock-up agreements described below.
In connection with this offering, we, our directors and executive officers, and holders of substantially all
shares of our capital stock or other securities convertible into or exchangeable for shares of our common
stock, including each limited partner of Energy Global receiving shares of our common stock in the
Closing Distribution, have entered into lock-up agreements with the underwriters that prohibit us and
them, subject to certain customary exceptions, from selling, contracting to sell, granting any option for the
sale of, transferring, or otherwise disposing of any shares of common stock or any security or instrument
related to common stock without the permission of J.P. Morgan Securities LLC, Goldman Sachs & Co.
LLC and Morgan Stanley & Co. LLC, on behalf of the underwriters for a period of 180 days from the date
of this prospectus, subject to certain exceptions as described in “Underwriting.” In addition, each of
SoftBank, NVIDIA and their respective affiliates may pledge our common stock in connection with certain
financing activities during the restricted period, subject to the limitations described in “Underwriting.” See
also “—SoftBank and NVIDIA may engage in financing transactions whereby they pledge shares of our
common stock that they own.” When the applicable lock-up periods described above expire, we and our
security holders subject to lock-up agreements will be able to sell our shares in the public market. In
addition, J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, on
behalf of the underwriters, may, in their sole discretion, release all or some portion of the shares subject
to lock-up agreements prior to the expiration of the lock-up period. In certain circumstances, the release
of securities subject to lock-up agreements with certain holders from their lock-up restrictions will trigger a
pro rata release of securities subject to lock-up agreements with SoftBank, OpenAI and NVIDIA. These
agreements are subject to certain exceptions.
Sales of a substantial number of such shares upon expiration of the lock-up agreements, or the
perception that such sales may occur, or early release of these agreements, could cause our market price
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to fall or make it more difficult for you to sell your common stock at a time and price that you deem
appropriate. Except for any shares acquired by our directors, officers, and certain employees, shares of
our common stock purchased pursuant to the directed share program will not be subject to lock-up
agreements with the underwriters. See “Underwriting–Directed Share Program.”
You will experience immediate and substantial dilution in the net tangible book value of the shares
you purchase in this offering.
The initial public offering price of our common stock will be higher than the net tangible book value per
share of our common stock immediately after this offering. As a result, investors purchasing common
stock in this offering will experience dilution in the net tangible book value of the shares purchased. Based
on the initial public offering price of $ per share, which is the midpoint of the price range set forth on
the cover page of this prospectus, you will experience immediate dilution of $ per share,
representing the difference between our pro forma as adjusted net tangible book value per share after
giving effect to this offering and the initial public offering price. We may also issue additional shares of
common stock in the future in connection with acquisitions, strategic transactions, or to raise capital,
which could result in additional dilution to investors. See “—Additional equity issuances (including
pursuant to our outstanding warrants), could result in significant dilution to your ownership and voting
power and cause the trading price of our common stock to decline.” See also “Dilution.”
As a result of the FPA and FERC’s regulations in respect of transfers of control, absent prior
authorization by FERC or an applicable blanket authorization, we cannot convey, nor will an
investor in our company (together with its affiliate and associate companies) generally be
permitted to obtain in the aggregate, a direct and/or indirect voting interest in 10% or more either
of our issued and outstanding voting securities or the right to appoint a non-independent board
member to our board of directors.
We are a holding company under PUHCA with U.S. operating subsidiaries that are regulated by FERC as
“public utilities” under the FPA. As a result, the FPA requires us either to (i) obtain prior authorization from
FERC to transfer an amount of our voting securities sufficient to convey direct or indirect control over any
of our public utility subsidiaries or give any person or entity the right to appoint a non-independent board
member to our board of directors or (ii) qualify for a blanket authorization granted under or an exemption
from FERC’s regulations in respect of direct or indirect sales, transfers or dispositions of voting securities
or the right to appoint a non-independent board member to our board of directors. Similar restrictions
apply to any purchaser of our voting securities that is a “holding company” under PUHCA, in a holding
company system that includes a transmitting utility or an electric utility, or an “electric holding company,”
regardless of whether our voting securities are purchased in this offering, subsequent offerings by us, in
open market transactions or otherwise. A purchaser of our voting securities would be a “holding company”
under PUHCA if the purchaser acquires direct or indirect control over 10% or more of our voting
securities, the voting securities of our public utility operating subsidiaries and the voting securities of any
of our intermediate holding companies through which we may indirectly hold our interests in our public
utility operating subsidiaries, or if FERC otherwise determines that the purchaser could directly or
indirectly exercise control over our management or policies or the management or policies of public utility
operating subsidiaries or the intermediate holding companies through which we may indirectly own our
public utility operating subsidiaries (e.g., as a result of contractual board or approval rights). Under
PUHCA, a “public-utility company” is defined to include an “electric utility company,” which is any
company that owns or operates facilities used for the generation, transmission or distribution of electric
energy for sale, such as our U.S. operating power generation and storage subsidiaries. Accordingly,
absent prior authorization by FERC, for the purposes of sell-side transactions by us and buy-side
transactions involving purchasers of our securities that are already holding companies under PUHCA, no
purchaser can acquire 10% or more of our issued and outstanding voting securities or the right to appoint
a non-independent board member to our board of directors.
Investors in this offering should manage their investment in us in a manner consistent with the FPA and
with FERC’s regulations in respect of obtaining direct or indirect voting interests in our company or the
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right to appoint a non-independent board member to our board of directors. Accordingly, following the
completion of this offering, absent prior authorization by FERC, investors in our common stock that are
holding companies under PUHCA and their affiliate and associate companies are advised not to acquire
in the aggregate a direct and/or indirect voting interest in 10% or more either of our issued and
outstanding voting securities, the voting securities of our public utility operating subsidiaries, or the voting
securities of any of our intermediate holding companies through which we may indirectly hold our
interests in our public utility operating subsidiaries (or have the right to appoint a non-independent board
member to our board of directors of any of the foregoing), in each case whether in connection with an
offering by us, open market purchases, or otherwise. A violation of these regulations by us, as seller, or an
investor, as a purchaser of our securities, including through open market purchases or otherwise, could
subject the party in violation to civil or criminal penalties under the FPA, including civil penalties of up to
approximately $1.58 million per day per violation and other possible sanctions imposed by FERC under
the FPA. Our Certificate of Formation will provide that any investor, together with its affiliate and associate
companies, that acquires a voting interest in 10% or more of our common stock will be prohibited from
exercising such voting power without prior authorization by FERC, and therefore, investors that acquire
such a position may not be able to vote their shares of common stock.
In the event that an investor obtains approval and acquires a direct and/or indirect voting interest in 10%
or more either of our issued and outstanding voting securities, the voting securities of our public utility
operating subsidiaries, or the voting securities of any of our intermediate holding companies through
which we may indirectly hold our interests in our public utility operating subsidiaries (or has the right to
appoint a non-independent board member to our board of directors of any of the foregoing), then such
investor may be deemed an affiliate of our subsidiaries that are public utilities under the FPA. If such
investor were deemed an affiliate, such investor’s other energy related subsidiaries would be deemed
affiliated with our public utility subsidiaries for the purposes of the FPA, including with respect to
determination of market power for purposes of maintaining market-based rate authority and in connection
with approvals required for acquisitions of power generation, transmission or storage facilities.
Additional equity issuances (including pursuant to our outstanding warrants) could result in
significant dilution to your ownership and voting power and cause the trading price of our
common stock to decline.
In the future, we may issue additional shares of our common stock or securities convertible into or
exchangeable for shares of our common stock in connection with financing transactions, acquisitions,
strategic investments, equity incentive plans, or for other purposes. The issuance of additional equity
securities would dilute the ownership interest of our existing shareholders and may reduce the per share
value of your investment. We may also issue preferred stock with rights, preferences, or privileges senior
to those of our common stock, which could adversely affect the rights of holders of our common stock.
Following this offering, 2,253,942 OpenAI Warrants will remain unvested and outstanding and will not
become exercisable unless the applicable equity-value milestone is achieved; if they vest and are
exercised, they will cause additional dilution. The warrants were intended as a material inducement for
OpenAI to enter into the lease agreements with us. All remaining unvested OpenAI Warrants will
automatically vest in full if we undergo a change of control on or before January 9, 2032, while then-
unvested warrants will be cancelled if a change of control occurs after that date. The OpenAI Warrants
are carried as a liability and remeasured at fair value each reporting period, which has in the past, and
may in the future, cause significant volatility in our reported results.
We may issue additional preferred equity securities with rights senior to our common stock,
which could adversely affect your investment.
Our organizational documents authorize us to issue preferred equity securities with such rights,
preferences and privileges as our board of directors may determine. Our parent entity has previously
issued preferred equity interests, which we currently expect to be redeemed in the Ares Redemption prior
to or substantially concurrently with the completion of this offering and before we receive the net proceeds
of this offering, although the actual sequence and timing may differ, and we may in the future issue
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additional preferred equity securities to raise capital, fund acquisitions, or for other purposes. Any such
preferred equity securities may have distribution, voting, liquidation, or other rights that are senior to or
otherwise adversely affect the rights of holders of our common stock. The issuance of additional preferred
equity securities could:
•reduce the amount of cash available for distribution to common shareholders;
•dilute the voting power of common shareholders if the preferred securities have voting rights;
•reduce the liquidation value available to common shareholders;
•make it more difficult for us to raise additional equity capital in the future; and
•adversely affect the market price of our common stock.
Any future issuance of preferred equity securities may be on terms that are more favorable to new
investors than to existing common shareholders.
Certain provisions of Texas law, our Certificate of Formation and Bylaws and the Shareholders’
Agreement could delay, deter, or prevent a change of control or changes in our management,
which could adversely affect the market price of our common stock.
Our Certificate of Formation and Bylaws and the Shareholders’ Agreement will also contain provisions
that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if
a change in control was considered favorable by our shareholders. Such provisions include, but are not
limited to:
•permitting our board of directors to establish the number of directors and, to fill vacancies and newly
created directorships, subject to applicable limitations under the Texas Business Organization Code
(the “TBOC”) and the Shareholders’ Agreement, and providing that, until the Threshold Date, the size
of our board of directors may not be increased or decreased without SoftBank’s prior written consent
under the Shareholders’ Agreement;
•providing that our directors may be removed with or without cause upon the affirmative vote of
holders of at least a majority of the voting power of our outstanding shares entitled to vote in the
election of directors, subject to SoftBank’s board designation rights under the Shareholders’
Agreement;
•providing that, from and after the Threshold Date, our board of directors will be divided into three
classes of directors serving staggered three-year terms;
•requiring super-majority voting to amend some provisions in our Certificate of Formation and our
Bylaws;
•providing that, from and after the completion Threshold Date, any action required or permitted to be
taken at an annual or special meeting of shareholders may be taken by written consent in lieu of a
meeting only with the unanimous written consent of all shareholders entitled to vote on such action;
•providing that the written request of holders of at least 20% (until the Threshold Date) or 25% (from
and after the Threshold Date, or in either case the highest percentage then permitted under the
TBOC) of the voting power of our outstanding voting stock entitled to vote at a proposed special
meeting is required for our shareholders to call a special meeting, subject to further limitation if
permitted by future amendments to the TBOC; and
•requiring that shareholders give advance notice and satisfy ownership and solicitation requirements to
nominate directors or submit proposals for consideration at shareholder meetings.
As a Texas corporation, we are also subject to the provisions of Sections 21.601 through 21.610 of the
TBOC, which may impair a takeover attempt that our shareholders may find beneficial. These provisions
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generally prohibit any shareholder that owns 20% or more of our outstanding voting shares from engaging
in a “business combination” with us for three years following the date that they acquired such voting
shares, unless the transaction that resulted in such shareholder acquiring such shares was approved by
our board of directors before the acquisition date or the business combination is approved by the holders
of at least two-thirds of our outstanding voting shares not beneficially owned by such shareholder at a
meeting held not less than six months after the acquisition date.
These provisions of the TBOC and our Certificate of Formation and Bylaws are intended to discourage
coercive takeover practices that could harm our business and to encourage those seeking to acquire
control of us to negotiate first with our board of directors. However, they could delay, deter, or prevent a
transaction or a change in control that shareholders might otherwise consider favorable, could make it
more difficult for minority shareholders to influence corporate governance, and could adversely affect the
market price of our common stock by delaying or preventing the opportunity for shareholders to receive a
premium for their shares. See “Description of Capital Stock.”
Our Certificate of Formation, Bylaws and Texas law include provisions that limit your ability to
bring a derivative claim against our directors or officers or submit proposals at our annual
meeting in a manner that is more restrictive than the corresponding requirements typically
applicable to shareholders of a Delaware corporation.
The TBOC and our governing documents include certain provisions that limit our shareholders’ ability to
bring derivative claims against our officers and directors and submit proposals on matters to be acted
upon at a meeting of the shareholders. For example, Section 21.419 of the TBOC sets forth certain
presumptions of good faith for the benefit of a corporation’s directors and officers with respect to their
compliance with their respective duties to the corporation, including the duty of care and duty of loyalty as
those duties pertain to transactions with interested persons. Specifically, Section 21.419 provides that, in
taking or declining to take any action on matters of our business, a director or officer is presumed to have
acted (i) in good faith, (ii) on an informed basis, (iii) in furtherance of the interests of the corporation and
(iv) in obedience to the law and the corporation’s governing documents.
Section 21.419 applies to a corporation that has a class or series of voting shares listed on a national
securities exchange or includes a statement affirmatively electing to be governed by this section of the
TBOC in its governing documents. Under Section 21.419, neither a corporation nor any of its
shareholders has any cause of action against a director or officer as a result of any act or omission in
such person’s official capacity, unless the claimant rebuts one or more of these presumptions set forth
above and proves a breach of duty involving fraud, intentional misconduct, an ultra vires act or a knowing
violation of law.
Separately, Section 21.552 of the TBOC empowers corporations with common shares listed on a national
securities exchange and qualifying private corporations that have 500 or more shareholders and
affirmatively elect to be governed by Section 21.419 to establish a required ownership threshold to
institute a derivative proceeding, provided that such required ownership threshold does not exceed 3% of
the outstanding shares of the applicable corporation.
The TBOC similarly permits a “nationally listed corporation” (as defined by the TBOC) to affirmatively elect
to be governed by Section 21.373 of the TBOC under an amendment to the corporation’s governing
documents. If a nationally listed corporation elects to be governed by Section 21.373, a shareholder or
group of shareholders may submit a proposal on a matter to the shareholders of such corporation for
approval at a meeting of shareholders only if such shareholder or group of shareholders (i) holds an
amount of shares entitled to vote at such meeting equal to at least $1,000,000 in market value of us
(determined as of the date of submission of the proposal) or 3% of our voting shares (as defined in the
TBOC), (ii) satisfies certain continuous ownership requirements commencing six months before the date
of the meeting and ending at the conclusion of the meeting and (iii) solicits the holders of shares
representing at least 67% of the voting power of shares entitled to vote on the proposal. Section 21.373
does not apply to director nominations or procedural resolutions ancillary to the conduct of the meeting.
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Following the completion of this offering, we expect to have a class or series of voting shares listed on a
national securities exchange, in which case Section 21.419 will apply to us. Our Bylaws will also establish
a three percent ownership threshold that a shareholder must meet to institute a derivative claim against
us and include a statement affirmatively electing to be governed by Section 21.419 of the TBOC. Upon
the completion of this offering, we will also qualify as a “nationally listed corporation” under Section
21.373 of the TBOC, and our Bylaws will include a statement affirmatively electing to be governed by
Section 21.373 of the TBOC, which will establish the requirements set forth above for a shareholder to
have standing to submit a proposal to be acted upon at a meeting of our shareholders immediately upon
qualifying as a “nationally listed corporation.” These requirements are generally more restrictive than the
requirements applicable to Delaware corporations under SEC Rule 14a-8 and/or Delaware law to institute
a derivative proceeding or submit a proposal to be acted upon at a shareholder meeting.
The foregoing provisions of our Certificate of Formation, Bylaws and Texas law, as applicable, may
reduce the likelihood of success of shareholder litigation, even in circumstances where a shareholder
believes a breach of duty has occurred. These provisions may also prevent smaller shareholders,
including those with legitimate concerns, from influencing our corporate governance or strategic direction
or seeking judicial relief for perceived wrongs. In addition, certain provisions of the TBOC, including
Sections 21.373, 21.419 and 21.552 of the TBOC, were each enacted by the Texas legislature in 2025.
These recently enacted provisions of Texas law have not yet been subject to comprehensive judicial
interpretation and the newly created Texas Business Court is in its infancy, began hearing cases in
September 2024 and will need time to build a body of case law. The body of caselaw interpreting the
TBOC as a whole is generally less developed than the body of caselaw typically applicable to a Delaware
corporation, which may result in less certainty for our officers and directors as well as our shareholders.
As a result, there can be no assurance that the various provisions of the TBOC discussed herein will
operate as anticipated, and an adverse and unexpected interpretation of any such provision could
adversely affect our business, results of operations and financial condition.
Our Bylaws will provide that the Texas Business Court, Third Business Court Division will be the
sole and exclusive forum for substantially all disputes between us and our shareholders
(excluding claims under the Exchange Act), which could limit our shareholders’ ability to obtain a
favorable judicial forum for disputes with us or our directors, officers or employees.
Our Bylaws will provide that, unless we consent in writing to the selection of an alternative forum, the
Texas Business Court, Third Business Court Division (the “Business Court”) (or, if the Business Court
determines that it lacks jurisdiction, the United States District Court for the Western District of Texas,
Austin Division, or, if that court lacks jurisdiction, the state district court of Travis County, Texas) shall, to
the fullest extent permitted by applicable law, be the sole and exclusive forum for any and all disputes,
claims, actions or proceedings, including:
•any derivative action or proceeding brought on our behalf;
•any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or
former director, officer or other employee, agent or shareholder to us or our shareholders, including a
claim alleging the aiding and abetting of such a breach of fiduciary duty;
•any action asserting a claim arising pursuant to any provision of the TBOC or our Certificate of
Formation or Bylaws (as each may be amended from time to time) or as to which the Business Court
has jurisdiction;
•any action to interpret, apply, enforce or determine the validity of our Certificate of Formation or
Bylaws (as either may be amended from time to time);
•any action asserting a claim related to or involving us that is governed by the internal affairs doctrine;
•any action asserting an “internal entity claim” as that term is defined in Section 2.115 of the TBOC;
and
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•any other action within the jurisdiction of the Business Court, including any claims within the
supplemental jurisdiction of the Business Court.
This provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or
any other claim for which the U.S. federal courts have exclusive jurisdiction. In addition, our Bylaws will
provide that, to the fullest extent permitted by law, the federal district courts of the United States shall be
the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under
the Securities Act unless we consent in writing to the selection of an alternative forum.
We believe that the Business Court will provide an efficient forum for resolving corporate disputes,
promote the consistent application of Texas law, reduce litigation costs, and provide greater predictability
in outcomes. The choice of forum provision outlined above, however, may limit or impede your ability to
bring a claim in a judicial forum that you find more favorable or convenient with respect to the types of
disputes to which these provisions apply. These provisions may also discourage lawsuits against us and
may result in increased litigation costs for a shareholder that elects to bring a claim against us.
Alternatively, if a court were to find these choice of forum provisions inapplicable or unenforceable for any
reason, we may incur additional costs associated with litigating in multiple or alternative forums,
potentially across a wide range of geographic locations, which could adversely affect our business, results
of operations and financial condition. Any person or entity purchasing or otherwise acquiring or holding
any interest in shares of our capital stock shall be deemed to have received notice of and consented to
the foregoing provisions. See “Description of Capital Stock.” This provision, however, does not waive our
compliance with our obligations under the federal securities laws and the rules and regulations
thereunder.
While Texas courts have generally determined that choice of forum provisions are facially valid, there is
uncertainty with respect to whether an applicable court would enforce our exclusive forum provision with
respect to claims asserted under the Securities Act, and a shareholder may seek to bring a claim that we
believe is subject to our exclusive forum provision in a venue other than those designated in our exclusive
forum provision, whether such claim is asserted under the Securities Act or other applicable law. In such
instance, to the fullest extent permitted by applicable law, we would expect to vigorously assert the validity
and enforceability of our exclusive forum provision. This may require additional costs associated with
resolving such action in other jurisdictions and there can be no assurance that the exclusive forum
provisions will be enforced by a future court in the manner we expect, if at all.
If securities analysts do not publish research or reports about our business, or if they issue
unfavorable commentary or downgrade our common stock, the price and trading volume of our
common stock could decline.
The trading market for our common stock will depend in part on the research and reports that securities or
industry analysts publish about us or our business. If no or few analysts cover us, the trading price of our
common stock could be negatively affected. If one or more of the analysts who cover us downgrades our
common stock or publishes unfavorable research about our business, the price of our common stock
would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish
reports on us regularly, demand for our common stock could decrease, which could cause the price and
trading volume of our common stock to decline.
Our financial statements involve complex accounting judgments, and errors in our accounting or
changes in accounting standards could adversely affect our reported financial results.
Our financial statements involve complex accounting judgments and estimates that require significant
management judgment. These include, among others:
•Tax equity partnership accounting. We finance a significant portion of our projects through tax equity
partnerships that involve complex allocation arrangements for tax benefits, income and cash
distributions. The accounting for these partnerships requires us to make judgments regarding the
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allocation of profits and losses, the timing of revenue recognition and the consolidation of partnership
entities.
•Derivative and hedge accounting. We enter into interest rate swaps, PPAs, and other derivative
instruments that require complex fair value measurements and hedge accounting determinations.
Changes in the fair value of our derivatives can result in significant volatility in our reported earnings.
•Variable interest entity consolidation. We hold interests in various entities that may be variable
interest entities under accounting standards. We must evaluate these entities to determine whether
we are the primary beneficiary and should consolidate them in our financial statements, which
requires significant judgment.
•Asset impairment. We must evaluate our long-lived assets, including our solar facilities, development
projects and goodwill, for impairment when events or circumstances indicate that the carrying value
may not be recoverable. These evaluations require estimates of future cash flows, discount rates and
other assumptions that are inherently uncertain.
•Lease and customer-contract accounting. Our data center leases, co-located power supply
arrangements, PPAs, derivatives and other customer arrangements may involve judgment in
determining the applicable accounting model, including lease classification, separation of lease and
non-lease components, treatment of lease incentives and timing of revenue or income recognition.
•Equity-based compensation accounting. Our equity-based compensation arrangements may involve
judgment in determining the applicable accounting treatment, including award classification, valuation
assumptions, recognition period, settlement features and financial statement presentation.
•Fair value of warrant liability. We remeasure our liability-classified warrants to fair value at each
reporting date, which requires significant estimates and judgments in the valuation model. Changes in
these inputs can materially affect the fair value of our warrant liability, and result in volatility in our
reporting earnings.
If our accounting judgments or estimates prove to be incorrect, or if accounting standards change in ways
that affect our accounting policies, our financial statements may contain material errors, which could
adversely affect investor confidence and the market price of our common stock. As described below,
management identified errors related to the accounting for certain complex transactions in connection
with the preparation of the financial statements included in this prospectus. Additionally, errors in our
accounting could result in regulatory scrutiny, litigation, or other adverse consequences.
We will incur increased costs and become subject to additional regulations and requirements as a
result of becoming a public company, which could lower our profits, make it more difficult to run
our business or divert management’s attention from our business.
As a public company, we will be required to commit significant resources and management time and
attention to the requirements of being a public company, which will cause us to incur significant legal,
accounting and other expenses that we have not incurred as a private company, including costs
associated with public company reporting requirements. We also will incur costs associated with the
Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street
Reform and Protection Act, and related rules implemented by the SEC, Nasdaq, and Nasdaq Texas, and
compliance with these requirements will place significant demands on our legal, accounting and finance
staff and on our accounting, financial and information systems. Although we have a number of directors,
officers and employees with experience in complying with these requirements applicable to public
companies, there can be no assurance that we will be successful in complying with these requirements.
The expenses incurred by public companies generally for reporting and corporate governance purposes
have been increasing. We expect these rules and regulations to increase our legal and financial
compliance costs and to make some activities more time-consuming and costly, although we are currently
unable to estimate these costs with any degree of certainty. These laws and regulations also could make
it more difficult or costly for us to obtain certain types of insurance, including director and officer liability
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insurance, and we may be forced to accept reduced policy limits and coverage, higher retention, or incur
substantially higher costs to obtain the same or similar coverage. These laws and regulations could also
make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our
board committees or as our executive officers.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to
delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
We have identified a material weakness in our internal control over financial reporting. If we are
unable to implement and maintain the effectiveness of our internal control over financial
reporting, our investors may lose confidence in the accuracy and completeness of our financial
reports, which could adversely affect our stock price.
Management identified a material weakness in our internal control over financial reporting in connection
with the preparation of our financial statements for the years ended December 31, 2025 and 2024
because we did not design and maintain effective controls related to accounting for complex transactions.
Specifically, the technical accounting review controls that we had designed and implemented were not
operating effectively to appropriately evaluate the accounting for significant complex transactions and to
appropriately assess the related financial statement presentation and disclosure requirements. This
material weakness affected our ability to timely and accurately account for complex transactions. As a
result, there was a reasonable possibility that a material misstatement of our consolidated financial
statements would not be prevented or detected on a timely basis.
We are taking steps to remediate the material weakness and to strengthen our internal control over
financial reporting, including designing and implementing additional review controls over complex
accounting matters, implementing additional policies and procedures and expanding training for our
finance and accounting personnel.
We will not be able to fully remediate this material weakness until the applicable controls have been
operating effectively for a sufficient period of time and management has concluded, through testing, that
these controls are designed and operating effectively. As of June 30, 2026, this material weakness has
not been remediated. If we fail to remediate our existing material weakness or identify new material
weaknesses in our internal control over financial reporting, if we are unable to comply with the disclosure
and attestation requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if we are
unable to conclude that our internal control over financial reporting is effective, or if, at such time as we
are no longer an emerging growth company and qualify as an accelerated filer, our independent
registered public accounting firm is unable to express an unqualified opinion on the effectiveness of our
internal control over financial reporting, investors may lose confidence in the accuracy and completeness
of our financial reports and the price of our common stock could be negatively affected. As a result, we
could also become subject to investigations by the SEC, Nasdaq, Nasdaq Texas, or other regulatory
authorities, and become subject to litigation from shareholders, which could harm our reputation and
financial condition or divert financial and management resources from our regular business activities.
In addition, even if we are successful in strengthening our controls and procedures, in the future those
controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate
the fair presentation of our financial statements.
If we fail to maintain an effective system of disclosure controls and internal control over financial
reporting, our ability to produce timely and accurate financial statements or comply with
applicable regulations may be harmed.
As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-
Oxley Act, and the Nasdaq and Nasdaq Texas listing requirements. We expect that the requirements of
these rules and regulations will continue to increase our legal, accounting and financial compliance costs,
make some activities more difficult, time-consuming and costly, and place significant strain on our
personnel, systems, and resources.
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The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and
procedures and internal control over financial reporting. We are continuing to develop and refine our
disclosure controls and other procedures that are designed to ensure that information required to be
disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms and that information required to be
disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive
and financial officers. We are also continuing to improve our internal control over financial reporting, which
includes hiring additional accounting and financial personnel to implement such processes and controls.
We have identified a material weakness in our internal control over financial reporting in the past, most
recently for the year ended December 31, 2025, and cannot assure you that there will not be material
weaknesses or significant deficiencies in our internal controls in the future. In order to maintain and
improve the effectiveness of our disclosure controls and procedures and internal control over financial
reporting, we have expended, and anticipate that we will continue to expend, significant resources,
including accounting-related costs, new internal processes and procedures and significant management
oversight. If any of these new or improved controls and systems do not perform as expected, we may
experience further deficiencies in our controls.
Our current controls and any new controls that we develop may become inadequate because of changes
in conditions in our business. Further, to the extent we acquire other businesses, the acquired company
may not have a sufficiently robust system of controls and we may discover deficiencies. Any failure to
develop or maintain effective controls or any difficulties encountered in their implementation or
improvement may harm our results of operations or cause us to fail to meet our reporting obligations and
may result in a restatement of our financial statements for prior periods. Any failure to implement and
maintain effective internal control over financial reporting also may adversely affect the results of periodic
management evaluations and annual independent registered public accounting firm attestation reports
regarding the effectiveness of our internal control over financial reporting that we will eventually be
required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls
and procedures and internal control over financial reporting could also cause investors to lose confidence
in our reported financial and other information, which would likely cause the price of our common stock to
decline. In addition, if we are unable to continue to meet these requirements, we may not be able to
remain listed on a stock exchange. We are not currently required to comply with the SEC rules that
implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal
assessment of the effectiveness of our internal control over financial reporting for that purpose. As a
public company, we will be required to provide an annual management report on the effectiveness of our
internal control over financial reporting commencing with our second annual report on Form 10-K.
Upon becoming a public company, and particularly after we are no longer an “emerging growth company,”
we expect our independent registered public accounting firm will be required to formally attest to the
effectiveness of our internal control over financial reporting. At such time, our independent registered
public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at
which our internal control over financial reporting is documented, designed, or operating. Any failure to
maintain effective disclosure controls and internal control over financial reporting may harm our business,
financial condition, results of operations and prospects, and may cause the price of our common stock to
decline.
Accordingly, we cannot ensure that we have identified all, or that we will not in the future have additional,
material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our
internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act,
beginning with our second annual report after the completion of this offering.
We have not paid and do not intend to pay cash dividends for the foreseeable future.
We have never declared or paid cash dividends on any class of our capital stock. We currently intend to
retain any future earnings to finance the operation and expansion of our business, and we do not expect
to declare or pay any cash dividends in the foreseeable future. In addition, the Credit Facility we expect to
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enter into in connection with this offering will prohibit us from paying cash dividends on our common stock
prior to January 1, 2029, and will thereafter permit dividends only subject to compliance with a minimum
liquidity covenant and specified baskets and leverage-based tests. Our other financing agreements
currently limit, and future agreements governing our indebtedness may similarly limit our ability to pay
dividends. As a result, you may only receive a return on your investment in our common stock if the
market price of our common stock increases. See “Dividend Policy.”
We have broad discretion in how we use the net proceeds from this offering, and we may not use
them effectively.
We cannot specify with any certainty the particular uses of the net proceeds that we will receive from this
offering. Our management will have broad discretion in the application of the net proceeds from this
offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will
not have the opportunity as part of your investment decision to assess whether the net proceeds are
being used appropriately. Because of the number and variability of factors that will determine our use of
the net proceeds from this offering, their ultimate use may vary substantially from their currently intended
use. The failure by our management to apply these proceeds effectively could adversely affect our
business, financial condition and results of operations. Pending their use, we may invest our proceeds in
a manner that does not produce income or that loses value. Our investments may not yield a favorable
return to our investors and may negatively impact the price of our common stock.
A significant portion of our management team has limited experience managing a public
company.
Most members of our management team have limited experience managing a publicly traded company,
interacting with public company investors and complying with the increasingly complex laws pertaining to
public companies. Our management team may not successfully or efficiently manage our transition to
being a public company that is subject to significant regulatory oversight and reporting obligations under
the federal securities laws and the continuous scrutiny of securities analysts and investors. These new
obligations and constituents will require significant attention from our senior management and could divert
their attention away from the day-to-day management of our business, which could harm our business,
financial condition and results of operations.
We are an “emerging growth company” and the reduced disclosure requirements applicable to
emerging growth companies may make our common stock less attractive to investors.
We are an “emerging growth company” as defined in the JOBS Act. For so long as we remain an
emerging growth company, we are permitted to, and intend to, rely on exemptions from certain disclosure
requirements that are applicable to other public companies. These exemptions include not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation, and exemptions from the requirements of
holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden
parachute payments not previously approved. We may take advantage of these exemptions until we are
no longer an emerging growth company. Reliance on these exemptions may result in reduced investor
interest in our common stock, a less active trading market for our common stock, and increased stock
price volatility.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking statements about us and our industry that involve substantial
risks and uncertainties. All statements other than statements of historical facts contained in this
prospectus, including statements regarding our future results of operations or financial condition, business
strategy, and plans and objectives of management for future operations may be forward-looking
statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar
expressions. Forward-looking statements contained in this prospectus include, but are not limited to
statements about:
•our ability to develop, construct and deliver our data center and power generation projects on
anticipated timelines, at expected costs, and at planned scale;
•our ability to secure customers, execute leases, obtain permits and regulatory approvals and access
grid interconnection capacity necessary for our operations;
•our expectations regarding future revenue, expenses, capital requirements, liquidity and our ability to
obtain financing on acceptable terms;
•our ability to attract and retain key personnel, including our management team;
•the impact of climate change, extreme weather events and natural disasters on our operations;
•our ability to compete effectively in the data center and AI infrastructure industry;
•the availability of government incentives that support renewable energy development and our ability
to benefit from such incentives;
•our exposure to cybersecurity risks, security breaches and other disruptions to our information
technology systems;
•changes in federal, state and local laws and regulations, including those related to the energy and
data center industries and AI;
•our reliance on SoftBank as our controlling shareholder and the potential for conflicts of interest;
•our ability to realize the revenue estimated in our backlog and complete projects within expenditures
estimated in our backlog-associated capex;
•our ability to obtain grid interconnection and requisite permits;
•geopolitical risks, including war, terrorism, trade disputes and sanctions;
•our ability to manage the transition to being a public company and comply with applicable laws and
regulations;
•our ability to remediate the identified material weakness in our internal control over financial reporting
and to implement and maintain effective internal control over financial reporting;
•the volatility of our stock price and the potential for future sales of our common stock to depress our
stock price;
•public perception of the data center and AI infrastructure industry, including concerns regarding
energy consumption, water usage and environmental impact; and
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•other risks and uncertainties described in this prospectus, including those set forth under “Risk
Factors.”
We caution you that the foregoing list may not contain all of the forward-looking statements made in this
prospectus. The forward-looking statements in this prospectus are only predictions. We have based these
forward-looking statements largely on our current expectations and projections about future events and
financial trends that we believe may affect our business, financial condition and results of operations.
Forward-looking 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. We
believe that these factors include, but are not limited to the factors set forth under “Risk Factors.” Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified, you should not rely on these forward-looking statements as predictions of future
events. Moreover, we operate in a very competitive and rapidly changing environment. New risks and
uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties
that could have an impact on the forward-looking statements contained in this prospectus. The events
and circumstances reflected in our forward-looking statements may not be achieved or occur and actual
results could differ materially from those projected in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the
relevant subject. These statements are based upon information available to us as of the date of this
prospectus, and while we believe such information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should not be read to indicate that we have
conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These
statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
The forward-looking statements made in this prospectus relate only to events as of the date on which the
statements are made. We undertake no obligation to update any forward-looking statements made in this
prospectus to reflect events or circumstances after the date of this prospectus or to reflect new
information or the occurrence of unanticipated events, except as required by law. We may not actually
achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should
not place undue reliance on our forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments
we may make.
You should read this prospectus and the documents that we reference in this prospectus and have filed
as exhibits to the registration statement of which this prospectus forms a part with the understanding that
our actual future results, levels of activity, performance and achievements may be materially different from
what we expect. We qualify all of our forward-looking statements by these cautionary statements.
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USE OF PROCEEDS
We estimate that we will receive net proceeds from this offering of approximately $ million (or
$ million if the underwriters exercise their option to purchase additional shares of common stock in
full), based upon an assumed initial public offering price of $ per share (which is the midpoint of
the price range set forth on the cover page of this prospectus) and after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us.
The principal purposes of this offering are to increase our capitalization and financial flexibility, create a
public market for our common stock, and enable access to the public equity markets for us and our
shareholders. We currently expect to use substantially all of the net proceeds from this offering for general
corporate purposes, with priority given to working capital, operating expenses and capital expenditures
required to develop and construct our data center, power generation, storage and related infrastructure
projects. Within capital expenditures, we currently expect to prioritize funding the equity portion of project-
level financings for our contracted data center and power projects. If the Concurrent Private Placement
closes, we will also receive its purchase price, which we expect to use for general corporate purposes.
We may also use a portion of the net proceeds for technology development and to acquire or invest in
businesses, products, services or technologies that complement our integrated business model; however,
we do not have binding agreements or commitments for any material acquisitions or investments at this
time. We do not intend to use any of the net proceeds from this offering to repay the approximately $473.0
million outstanding under our Hickory Facilities. Because we do not currently have specific plans for the
net proceeds, we cannot specify with certainty the particular uses or approximate amounts we will use for
each purpose, and we will have broad discretion in the way that we use the net proceeds of this offering.
If we receive substantially less than the maximum net proceeds expected from this offering, we expect to
prioritize working capital, operating expenses and capital expenditures for existing committed projects
before using proceeds for technology development or potential acquisitions or investments. See “Risk
Factors—Risks Related to Our Common Stock and This Offering—We have broad discretion in how we
use the net proceeds from this offering, and we may not use them effectively” for additional information.
Assuming no exercise of the underwriters’ option to purchase additional shares of common stock, each
$1.00 increase (decrease) in the assumed initial public offering price of $ per share (which is the
midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the
net proceeds to us from this offering by approximately $ million, assuming the number of shares
offered, as set forth on the cover page of this prospectus, remains the same, and after deducting
estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Each 1,000,000 share increase (decrease) in the number of shares offered in this offering would increase
(decrease) the net proceeds to us from this offering by approximately $ million, assuming that the
price per share for the offering remains at $ (which is the midpoint of the price range set forth on the
cover page of this prospectus), and after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us.
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DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all
available funds and any future earnings, if any, for the operation and expansion of our business.
Accordingly, following this offering, we do not expect to declare or pay any cash dividends in the
foreseeable future. Any future determination to declare cash dividends will be made at the discretion of
our board of directors, subject to applicable laws, and will depend on a number of factors, including our
financial condition, results of operations, capital requirements, contractual restrictions, general business
conditions and other factors that our board of directors may deem relevant.
Additionally, we are a holding company that transacts a majority of our business through operating
subsidiaries. Consequently, our ability to pay dividends to shareholders is largely dependent on receipt of
dividends and other distributions from our subsidiaries. The ability of our subsidiaries to pay dividends or
make other distributions to us in the future will depend on, among other things, their earnings, tax
considerations and covenants contained in any financing or other agreements.
Our ability to pay dividends to holders of our common stock is limited as a practical matter by our credit
facilities, insofar as we may seek to pay dividends out of funds made available to us by our subsidiaries,
because our subsidiaries’ debt instruments directly or indirectly restrict our subsidiaries’ ability to pay
dividends or make loans to us. In addition, the Credit Facility we expect to enter into in connection with
this offering will directly restrict our ability to pay cash dividends on our common stock. We do not expect
to be permitted to pay cash dividends on our common stock prior to January 1, 2029, and thereafter our
ability to do so will be subject to compliance with the minimum liquidity covenant and to specified baskets
and leverage-based tests under the Credit Facility. Any financing arrangements or debt arrangements that
we enter into in the future may also include restrictive covenants that limit our ability to pay dividends. See
“Description of Certain Indebtedness—New Credit Facility,” “Risk Factors—Risks Related to Our
Common Stock and This Offering—We do not intend to pay dividends on our common stock for the
foreseeable future” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources” for additional information.
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CAPITALIZATION
The following table sets forth the cash and cash equivalents and our capitalization as of June 30, 2026
on:
•an actual basis;
•a pro forma basis to give effect to the Corporate Conversion and the Stock Split, the Intercompany
Notes Repayment and the repayment of the outstanding principal amount under the Hickory Facilities
with the proceeds of the initial borrowing under the Credit Facility, our entry into the Credit Facility,
the OpenAI Warrant modification, the vesting of the OpenAI Warrant, the Prepaid Forward Contract,
and the accelerated vesting of outstanding incentive equity awards, in each case as if such
transactions had occurred on June 30, 2026; The vesting of the outstanding incentive equity awards
and OpenAI Warrant are based on an assumed initial public offering price of $ per share, which is
the midpoint of the range set forth on the cover page of this prospectus. and
•a pro forma as adjusted basis to further give effect to (i) the adjustments set forth in the bullet above,
(ii) the issuance and sale by us of shares of our common stock in this offering at the
assumed initial public offering price of $ per share (the midpoint of the price range set forth on the
cover page of this prospectus), after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us, and the application of the net proceeds therefrom as
described under “Use of Proceeds,” (iii) the Concurrent Private Placement by us to NVIDIA of
Class N common stock at the assumed initial public offering price of $ per share, which is the
midpoint of the price range set forth on the cover page of this prospectus, and (iv) the delivery of
shares of Class N common stock upon settlement of the Prepaid Forward Contract, at a price
equal to 90% of the assumed initial public offering price of $ per share, which is the midpoint of
the price range set forth on the cover page of this prospectus.
Our capitalization following the closing of this offering will be adjusted based on the actual initial public
offering price and other terms of this offering determined at pricing. You should read this information in
conjunction with our consolidated financial statements and the related notes included elsewhere in this
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prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and “Use of Proceeds” sections and other financial information contained in this prospectus.
As of June 30, 2026 | ||||||
Actual | Pro forma | Pro forma as adjusted(14) | ||||
(in thousands, except share and per share data) | ||||||
Cash and cash equivalents ..................................... | $1,199,139 | (1) | (10) | |||
Debt, net ..................................................................... | 3,891,875 | (2) | ||||
Debt from related parties ......................................... | 709,520 | (3) | ||||
Credit Facility ............................................................. | — | (4) | ||||
Total Debt ................................................................... | 4,601,395 | |||||
Warrant liability .......................................................... | 5,486,117 | (5) | ||||
Other non-current liabilities ...................................... | 139,706 | (6) | (6) | |||
Redeemable noncontrolling interests .................... | 3,254 | |||||
Contributed capital .................................................... | 5,371,682 | (7) | ||||
Common stock, par value $0.0001 per share; no shares authorized, issued or outstanding, actual; shares authorized, pro forma; shares issued and outstanding, pro forma; 100,000,000 shares authorized, pro forma as adjusted; shares issued and outstanding, pro forma as adjusted ........................ | — | (7) | (11) | |||
Preferred stock, par value $0.0001 per share; no shares authorized, issued or outstanding, actual; shares authorized, no shares issued and outstanding, pro forma; 10,000,000 shares authorized, no shares issued and outstanding, pro forma as adjusted ........................ | — | |||||
Class N common stock, par value $0.0001 per share; no shares authorized, issued or outstanding, actual; shares authorized, pro forma; no shares issued or outstanding, pro forma; shares authorized, pro forma as adjusted; shares issued and outstanding, pro forma as adjusted ............................................... | — | (12) | ||||
Additional paid-in capital .......................................... | — | (8) | (13) | |||
Accumulated deficit ................................................... | (3,803,001) | (9) | ||||
Noncontrolling interests ............................................ | 541,521 | |||||
Total shareholders’ equity ........................................ | 2,110,202 | |||||
Total capitalization ..................................................... | $16,942,069 | |||||
(1)Reflects a net increase of approximately $776.3 million in cash and cash equivalents, consisting of:
(i)the receipt of $1.5 billion contributed to us by Energy Global from the proceeds received from NVIDIA under the Prepaid Forward
Contract,
(ii)$473.0 million borrowed under the Credit Facility, less
(iii)the repayment of $709.5 million aggregate principal amount of the Intercompany Notes owed to SBE Global, and
(iv)the repayment in full of $473.0 million of outstanding borrowings under the Hickory Facilities, together with $14.4 million of
accrued interest.
(2)Reflects a net decrease of approximately $458.6 million in net debt, which consists of principal of $473.0 million, net of debt discount of
$14.4 million, attributable to the repayment in full of the Hickory Facilities, together with accrued and unpaid interest thereon, and the
resulting termination of the commitments and release of the guarantees and liens thereunder. We expect the repayment and termination
to occur substantially concurrently with, and to be funded from, the initial borrowing under the Credit Facility.
(3)Reflects the repayment in full of the $709.5 million aggregate principal amount of the Intercompany Notes owed by SB Energy, Inc. to
SBE Global as of June 30, 2026. The repayment will be funded entirely with cash on hand. SBE Global expects to use the proceeds of
the Intercompany Notes Repayment, together with other parent-level cash, in connection with the Ares Redemption; because the Ares
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preferred equity interests and warrants are held at the SBE Global level, the Ares Redemption does not give rise to a separate debt or
equity adjustment in this capitalization table beyond the effects of the Intercompany Notes Repayment described herein.
(4)Reflects $473.0 million of expected funded borrowings under the Credit Facility at the closing of this offering. Of such initial borrowing,
the entirety is expected to be used to repay the Hickory Facilities. The amount presented reflects funded borrowings only and does not
include the undrawn portion of the revolving commitments or outstanding letters of credit.
(5)Reflects the following transactions:
(i)the modification of the warrants in connection with the PORTS lease, which resulted in an increase to the warrant liability of $
to reflect the fair value of the warrants prior to the modification offset by the cancellation of warrants resulting in a decrease
to the warrant liability of $ , resulting in a net adjustment of $ ; and
(ii)the vesting of certain warrants as a result of the offering and the concurrent settlement of the warrants, resulting in a decrease to
the warrant liability of $ , based on an assumed initial public offering price of $ per share (which is the midpoint of the
price range set forth on the cover page of this prospectus).
(6)Pro forma reflects total adjustments of $ , which includes:
(i)the recognition of the Company’s obligation under the Prepaid Forward Contract entered into in connection with NVIDIA’s $1.5
billion prepayment. Under the Prepaid Forward Contract, the Company is obligated to deliver a number of shares of Class N
common stock equal to $1.5 billion divided by 90% of the initial public offering price per share upon completion of the offering. The
pro forma adjustment records an initial contract liability of $1.5 billion, together with an approximately $167.0 million increase to
reflect the obligation at fair value, resulting in a total NVIDIA Prepaid Forward Contract liability of approximately $1.7 billion; and
(ii)recognition of $ in deferred revenue related to the entry into the PORTS lease and cancellation of certain warrants as
discussed in footnote (5).
Pro forma as adjusted reflects the settlement of the Prepaid Forward Contract in connection with this offering and the issuance of Class
N common stock.
(7)Reflects the reclassification of the Company’s historical members’ equity in connection with the Corporate Conversion which occurred
on July 10, 2026. Upon the conversion of SE Global Holdings, LLC into a corporation, each outstanding limited liability company unit
was converted into one share of common stock, and the historical contributed capital balance of approximately $5.4 billion was
reclassified to common stock, at par value of $0.0001, and additional paid-in capital. This adjustment is a non-cash reclassification
within shareholders’ equity and, by itself, does not change total shareholders’ equity or total capitalization.
(8)The $ billion adjustment to additional paid-in capital reflects the following:
(i)The $5.4 billion reclassification from members' equity to additional paid-in capital as a result of the Corporate Conversion,
(ii)increase of approximately $ as a result of the accelerated vesting of certain outstanding incentive equity awards in
connection with this offering which is recorded as a capital contribution; and
(iii)increase of approximately $ which reflects the settlement of the warrants that are expected to vest as a result of this
offering, based on an assumed initial public offering price of $ per share (which is the midpoint of the price range set forth
on the cover page of this prospectus).
(9)Reflects an aggregate decrease of approximately $ in accumulated deficit resulting from charges associated with the transactions
reflected in the pro forma capitalization. The adjustment includes:
(i)the $167 million mark-to-market loss recognized in connection with the fair value measurement of the NVIDIA Prepaid Forward
Contract liability, representing the incremental fair value of the Company’s share-settlement obligation above the $1.5 billion
prepayment received,
(ii)$14.6 million related to the write-off of deferred financing costs associated with the repayment and extinguishment of the Hickory
Facilities,
(iii)increase of approximately $ as a result of the accelerated vesting of certain outstanding incentive equity awards in
connection with this offering which is recorded as a capital contribution, based on an assumed initial public offering price of $
per share (which is the midpoint of the price range set forth on the cover page of this prospectus); and
(iv)the fair value loss of $ recognized as a result of the warrant modification.
(10)Reflects an additional increase of approximately $ in cash and cash equivalents, consisting of:
(i)approximately $ of net proceeds from the issuance and sale by us of shares of common stock in this offering at an
assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of
this prospectus), after deducting approximately $ of underwriting discounts and commissions and approximately $
of estimated offering expenses payable by us, and
(ii)approximately $1.5 billion of proceeds from NVIDIA in the Concurrent Private Placement.
(11)Reflects the issuance of shares of common stock sold by us in this offering at the assumed initial public offering price of $
per share (which is the midpoint of the price range set forth on the cover page of this prospectus), resulting in an increase of
approximately $ in common stock at its $0.0001 per-share par value. The excess of the net offering proceeds over such
aggregate par value is reflected in additional paid-in capital. The pro forma as adjusted presentation assumes no exercise of the
underwriters’ option to purchase additional shares, unless otherwise indicated.
(12)Reflects the issuance or delivery to NVIDIA of an aggregate of shares of Class N common stock, consisting of (i) shares
delivered in settlement of the Prepaid Forward Contract, determined by dividing the $1.5 billion prepaid purchase amount by 90% of the
assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this
prospectus), and (ii) shares issued in the Concurrent Private Placement, determined by dividing approximately $1.5 billion by
the assumed initial public offering price of $ per share, subject to rounding to the nearest whole share. The aggregate par value
of the Class N common stock issued or delivered is approximately $ , with the remaining amount reflected in additional paid-in
capital.
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(13)Reflects an additional net increase of approximately $ million in additional paid-in capital, consisting of:
(i)approximately $ million of net proceeds from this offering at the assumed initial public offering price of $ per share
(which is the midpoint of the price range set forth on the cover page of this prospectus), after deducting the $ aggregate par
value recorded in common stock, underwriting discounts and commissions of approximately $ million and offering expenses
of approximately $ million, and
(ii)approximately $ million attributable to the $1.5 billion Concurrent Private Placement and approximately $ million
associated with the settlement of the Prepaid Forward Contract and issuance of the related Class N common stock at the
assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of
this prospectus), both after deducting the $ aggregate par value of the related Class N common stock.
(14)Each $1.00 increase or decrease in the assumed initial public offering price of $ per share (which is the midpoint of the price
range set forth on the cover page of this prospectus) would increase or decrease each of cash and cash equivalents, additional paid-in
capital, total shareholders’ equity and total capitalization on a pro forma as adjusted basis by approximately $ million, assuming
the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated
underwriting discounts and commissions and estimated offering expenses payable by us. In addition, because the number of shares of
our common stock issued in the Concurrent Private Placement and the Prepaid Forward Contract are determined by reference to the
initial public offering price, each $1.00 increase or decrease in the assumed initial public offering price would also change the number of
shares issued in the Concurrent Private Placement and the Prepaid Forward Contract and, accordingly, the pro forma as adjusted
amounts of common stock and additional paid-in capital, in each case as further described under “The Offering” and “Dilution.”
Each 1,000,000 share increase or decrease in the number of shares offered in this offering would increase or decrease each of cash
and cash equivalents, additional paid-in capital, total shareholders’ equity and total capitalization on a pro forma as adjusted basis by
approximately $ million, assuming that the price per share for the offering remains at $ (which is the midpoint of the price
range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
The number of shares of common stock issued and outstanding pro forma and pro forma as adjusted in
the table above does not reflect:
•2,253,942 OpenAI Warrants remaining unvested following this offering, which may be exercisable for
up to shares of our common stock based on an assumed initial public offering price of $ per
share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
• shares of our common stock reserved for future issuance under the 2026 Plan, which will
become effective in connection with this offering.
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DILUTION
If you invest in our common stock in this offering, your ownership interest will be immediately diluted to
the extent of the difference between the initial public offering price per share of our common stock and the
pro forma as adjusted net tangible book value per share of our common stock immediately after this
offering. Dilution in pro forma as adjusted net tangible book value per share to new investors represents
the difference between the amount per share paid by purchasers of shares of our common stock in this
offering and the pro forma as adjusted net tangible book value per share of our common stock
immediately after completion of this offering.
Net tangible book value per share is determined by dividing our total tangible assets less our total
liabilities by the number of shares of our common stock outstanding. Our historical net tangible book
value (deficit) as of June 30, 2026, was approximately $ million, or $ per share. Our pro
forma net tangible book value as of June 30, 2026 was $ million, or $ per share, based
on the total number of shares of our common stock outstanding as of , 2026, after giving effect to
the Corporate Conversion and Stock Split, the Intercompany Notes Repayment and repayment of the
Hickory Facilities, our entry into the Credit Facility, the OpenAI Warrant modification, the vesting of the
OpenAI Warrant, and the Prepaid Forward Contract, in each case as if such transactions had occurred on
June 30, 2026.
After giving effect to the sale by us of shares of our common stock in this offering at the assumed
initial public offering price of $ per share, which is the midpoint of the estimated offering price
range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts
and commissions, and estimated offering expenses payable by us, our pro forma as adjusted net tangible
book value as of June 30, 2026, would have been $ million, or $ per share. This
represents an immediate increase in pro forma as adjusted net tangible book value of $ per share
to our existing shareholders and an immediate dilution in pro forma as adjusted net tangible book value of
$ per share to investors purchasing shares of our common stock in this offering. The following
table illustrates this dilution:
Assumed initial public offering price per share of common stock ................... | $ | ||
Historical net tangible book value (deficit) per share as of June 30, 2026. | $ | ||
Increase per share attributable to the pro forma adjustments described above ..................................................................................................................... | |||
Pro forma net tangible book value per share as of June 30, 2026 | |||
Increase per share attributable to new investors purchasing shares of common stock in this offering ................................................................................ | |||
Pro forma as adjusted net tangible book value per share immediately after this offering ............................................................................................................... | $ | ||
Dilution in pro forma as adjusted net tangible book value per share to new common stock investors in this offering .............................................................. | $ | ||
Each $1.00 increase (decrease) in the assumed initial offering price of $ per share, which is the
midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our
pro forma as adjusted net tangible book value after this offering by approximately $ million, or
$ per share, and would increase (decrease) the dilution per share to new investors purchasing
our common stock in this offering by $ per share, assuming that the number of shares offered by
us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting
discounts and commissions, and estimated offering expenses payable by us. Each increase (decrease) of
1,000,000 shares in the number of shares sold in this offering, as set forth on the cover page of this
prospectus, would increase (decrease) our pro forma as adjusted net tangible book value after this
offering by approximately $ million, or $ per share, and would increase (decrease) the
dilution per share to new investors by $ per share, assuming that the assumed initial public
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offering price of $ per share, which is the midpoint of the price range set forth on the cover page
of this prospectus, remains the same, and after deducting underwriting discounts and commissions, and
estimated offering expenses payable by us.
The following table presents, on a pro forma basis as of June 30, 2026, after giving effect to the
Corporate Conversion and Stock Split, the Intercompany Notes Repayment and repayment of the Hickory
Facilities, our entry into the Credit Facility, the OpenAI Warrant modification, the vesting of the OpenAI
Warrant, the Concurrent Private Placement, Prepaid Forward Contract, and the sale by us of shares of
our common stock in this offering at the assumed initial public offering price of $ per share, which
is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, the
difference between the existing shareholders and the investors purchasing shares of our common stock in
this offering with respect to the number of shares of our common stock purchased from us, the total
consideration paid or to be paid to us, and the average price per share paid or to be paid to us, before
deducting estimated underwriting discounts and commissions and estimated offering expenses payable
by us:
Shares Purchased | Total Consideration | ||||||||
Number | Percent | Amount | Percent | Average price per Share | |||||
Existing shareholders ........... | % | $ | % | $ | |||||
New investors ........................ | |||||||||
Total ....................................... | 100% | $ | 100% | $ | |||||
Each $1.00 increase (decrease) in the assumed initial offering price of $ per share, which is the
midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the
total consideration paid by new investors, total consideration paid by all shareholders and average price
per share paid by all shareholders by $ , $ and $ per share, respectively,
assuming that the number of shares offered by us, as set forth on the cover page of this prospectus,
remains the same, and after deducting underwriting discounts and commissions, and estimated offering
expenses payable by us. Each increase (decrease) of 1,000,000 shares in the number of shares sold in
this offering, as set forth on the cover page of this prospectus, would increase (decrease) the total
consideration paid by new investors, total consideration paid by all shareholders and average price per
share paid by all shareholders by $ , $ and $ per share, respectively, assuming
that the assumed initial public offering price of $ per share, which is the midpoint of the price
range set forth on the cover page of this prospectus, remains the same, and after deducting underwriting
discounts and commissions and estimated offering expenses payable by us.
If the underwriters exercise in full their option to purchase additional shares of our common stock
in this offering, the pro forma as adjusted net tangible book value (deficit) per share after this offering
would be $ per share and the dilution to new investors in this offering would be $ per
share. If the underwriters exercise such option in full, the number of shares held by new investors will
increase to approximately shares of our common stock, or approximately % of the total
number of shares of our common stock outstanding after this offering.
The foregoing tables and calculations on a pro forma and pro forma as adjusted in the table above do not
reflect shares of common stock that are reserved for future grants or sale under our 2026 Plan or shares
available for issuance upon exercise of the unvested OpenAI Warrants.
The dilution information discussed above is illustrative only and may change based on the actual initial
public offering price and other terms of this offering.
In addition, we may choose to raise additional capital due to market conditions or strategic considerations,
even if we believe we have sufficient funds for our current or future operating plans. To the extent that we
raise additional capital through the sale of equity, as common stock, or other securities that are
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convertible into our common stock, such as convertible debt securities, the issuance of these securities
could result in further dilution to our shareholders.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read
with our audited consolidated financial statements and notes thereto included elsewhere in this
prospectus. Certain of the information contained in this discussion and analysis or set forth elsewhere in
this prospectus, including information with respect to plans and strategy for our business, includes
forward-looking statements that involve risks and uncertainties. As a result of many factors, including
those factors set forth in the section “Risk Factors,” our actual results could differ materially from the
results described in or implied by the forward-looking statements contained in the following discussion
and analysis. Refer to the section entitled “Risk Factors” to gain an understanding of the important factors
that could cause actual results to differ materially from our forward-looking statements. For more
information, see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Effective July 10, 2026, SE Global Holdings, LLC converted into a Delaware corporation named SE
Global Holdings, Inc. pursuant to a statutory conversion. Effective August 28, 2026, SE Global Holdings,
Inc. converted into a Texas for-profit corporation pursuant to a plan of conversion. Effective August 31,
2026, SE Global Holdings, Inc. changed its name to SB Energy, Inc. SB Energy, Inc. remains a holding
company and will continue to conduct our business through our operating subsidiaries.
Overview
We are a leading, integrated data center and power infrastructure company. We develop, construct and
plan to operate gigawatt-scale data center facilities and we develop, construct, own and operate power
generation assets. Our vertically integrated, power-first, community-focused model is purpose-built for the
AI era, enabling the delivery of data center capacity with the scale, speed and reliability required to
support our customers’ rapidly growing demand for compute. SoftBank and OpenAI are strategic
investors and, through their affiliates, customers at our data center campuses—Cosmos (SoftBank),
Milam County (OpenAI) and PORTS-Pike Technology Campus (OpenAI). NVIDIA is a strategic investor
and residual value guarantor at the PORTS-Pike Technology Campus. NVIDIA is also expected to
become a holder of our Class N common stock in connection with this offering, subject to each of the
closing of the Concurrent Private Placement and the settlement of the Prepaid Forward Contract.
Our business model is designed to generate three interrelated revenue streams: (i) long-term lease
agreements and service level agreements with hyperscaler and AI lab customers for our data center
capacity; (ii) the sale of electricity and related products under fixed-price PPAs and other offtake
agreements to utilities and corporations; and (iii) design, engineering, construction management and
operations management services to our businesses. Based on internal estimates and industry
benchmarking, we believe we have one of the largest data center portfolio capacities among data center
companies today, with 8.8 GW-IT in our portfolio, including 0.8 GW-IT of under-construction capacity and
8.0 GW-IT of capacity contracted but not yet under construction, as of the date of this prospectus. No data
center capacity is currently in operation, and realization of the under construction and contracted capacity
as revenue-generating assets is dependent upon, among other things, completion of construction, receipt
of permits, successful interconnection, lease commencement, and tenant acceptance. Our Data Center
Contracted Portfolio includes the 8.0 GW-IT PORTS-Pike Technology Campus, which we believe will be
among the largest data center development sites in the world. As of June 30, 2026, our operating power
generation portfolio consisted of approximately 2.2 GWac of solar power and BESS projects that have
been placed in service. Across our 8.8 GW-IT of data center campuses with leases signed and our 5.5
GWac that is operating, under construction, or contracted as of the date of this prospectus, we have
approximately $439 billion of backlog, comprising approximately $430 billion of DC segment backlog and
approximately $10 billion of SP backlog. This backlog is a hypothetical estimate based on management’s
assumptions and is not necessarily indicative of future revenue. The weighted average remaining contract
length (by capacity) for our power projects is 16.6 years and for our data center projects is 19.6 years, in
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each case as of the date of this prospectus. See “—Key Factors Affecting Our Business and Results of
Operations” below for a definition of backlog.
Our management team has deep, multi-decade experience across data center development, power
infrastructure development and large-scale capital formation. We started our business in 2019 with a
focus on power infrastructure. Since our founding, we have developed, financed and began construction
on 4.7 GWac of solar power and BESS projects. In 2025, we acquired and integrated Studio 151, a data
center construction management and operations firm. Through that legacy organization, the leaders of
our data center business have been developing and operating mission-critical facilities since 2008,
collectively delivering 15 completed data center facilities to third parties. We have developed in and
operate across multiple major U.S. power markets, including ERCOT, CAISO and PJM, have 24 unique
customers, and have executed 37 distinct project financings.
Our Business Model
We operate through an integrated business model consisting principally of our DC and SP segments,
together with a SLN segment that supports project development and delivery.
We generate revenue today primarily from our standalone power business, where our operating portfolio
of utility-scale solar and energy storage projects produces cash flows through long-term PPAs with
utilities, corporate offtakers and community choice aggregators, as well as through participation in
wholesale energy markets, including the sale of electricity, capacity, environmental attributes and, in
certain cases, tax credits. Our battery energy storage systems are primarily used for energy arbitrage and
capacity dispatch under our wholesale power arrangements. In the future, we expect to generate a
significant portion of our revenue from our data centers business through the long-term leasing of grid-
connected, turnkey data center facilities and the delivery of electricity from co-located power generation
assets to hyperscaler and AI lab customers. Our SLN segment provides design, engineering, construction
management and operations management services for data center and infrastructure projects, primarily
through intercompany services.
Our DC, SP and SLN segments are integrated through a unified model that combines our site
development, power grid integration, design engineering, equipment procurement, project financing,
construction management and operational capabilities. We have leveraged the expertise and processes
established in building and operating our multi-gigawatt solar and storage portfolio to support the
development, design and delivery of large-scale powered data center capacity in a coordinated and
capital-efficient manner. Our ability to co-locate data center load directly with power generation at the
same site allows a gigawatt-scale campus to share essential high-voltage equipment as well as meet a
substantial portion of its total electricity needs locally, bypassing grid constraints that can delay competing
projects by several years.
•Data Centers. Our DC segment expects to generate initial revenues in late 2026 through long-term
leasing of grid-connected, turnkey data center facilities and the delivery of electricity from co-located
power generation assets. We have entered into long-term leases with hyperscaler and AI lab
customers for turnkey data center facilities, typically structured with contractual escalators that
provide embedded revenue growth and visibility into future cash flows. These arrangements are
complemented by on-site power supply agreements, under which we expect to deliver electricity
directly to customers, reducing exposure to wholesale market volatility and enhancing overall revenue
stability. Our model integrates data center infrastructure with co-located power generation, enabling
efficient, large-scale deployments by optimizing integration with the broader transmission grid. As of
the date of this prospectus, we had approximately 8.8 GW-IT of total data center portfolio capacity,
consisting of approximately 0.8 GW-IT of contracted and under-construction capacity and an
incremental 8.0 GW-IT of interconnected capacity contracted.
•Standalone Power. Our standalone power business develops, owns and operates utility-scale solar
photovoltaic and battery energy storage system projects. We generate revenue primarily through
long-term PPAs, or PPAs, with counterparties we believe to be creditworthy, including utilities,
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corporate offtakers and community choice aggregators, under which we sell electricity (both energy
and capacity) and associated environmental attributes (primarily as renewable energy credits
(“RECs”) and in certain contracts, transferable tax credits). As a result, the substantial majority of our
revenue in this business is contracted, providing a high degree of predictability and visibility into future
cash flows. A limited portion of our generation capacity is not contracted under long-term PPAs and is
sold on a merchant basis into wholesale electricity markets, including CAISO and ERCOT, at
prevailing market prices. Merchant sales may include electricity produced in excess of contracted
volumes or generation from projects or periods not covered by long-term PPAs. We also use
commodity derivative instruments to manage exposure to power price fluctuations on certain projects.
As of June 30, 2026, we had approximately 2.2 GW of operating power generation capacity and
approximately 2.5 GW of power generation capacity in construction.
•Solutions. Our SLN segment provides design, engineering, construction management and
operations management services for data center and infrastructure projects. These services are
primarily deployed to support our own data center and power generation development activities and
are charged to the DC and SP segments as intercompany services. The SLN segment enhances our
vertically integrated model by bringing in-house the specialized design, construction management
and operations management capabilities that are critical to delivering data center facilities on
accelerated timelines.
As of June 30, 2026, the majority of our revenue from contracts with external customers to date has been
derived from our standalone power business. We expect initial data center leasing revenue to commence
in late 2026. Over time, we expect the data centers business to become an increasingly significant
contributor to our consolidated results once our data center projects reach commercial operation. Our
SLN segment began providing development, construction management, and operations management
services through intercompany service agreements in 2020. Because SLN segment revenue is derived
from intercompany charges rather than sales to external third-party customers, it does not appear as
consolidated revenue under GAAP and is eliminated upon consolidation.
Our ability to develop and deliver data center and power generation projects through a single integrated
business model supported by our SLN segment underpins our growth strategy and positions us to capture
increasing demand for AI-ready digital infrastructure.
Key Factors Affecting Our Business and Results of Operations
The growth and future success of our business depend on many factors. While these factors present
significant opportunities for our business, they also pose important challenges that we must successfully
address in order to sustain our growth, improve our results of operations and achieve and maintain our
long-term profitability.
Our ability to secure power availability for reliable load interconnection and deliver our data center
projects on schedule to meet hyperscaler customer requirements
As of the date of this prospectus, we have begun construction on three data centers with signed leases
and are engaged in active lease negotiations for additional pipeline, though we have not yet achieved
revenue generating operations. The success of our data centers business depends in large part on our
ability to deliver grid-connected, turnkey facilities at scale. Our model integrates power generation and
data center infrastructure at the site level, enabling us to align power availability with data center
deployment. We use our established relationships and previous projects with third-party utilities to secure
load interconnection approvals, while complementing grid power with on-site power generation. This
approach is designed to address one of the primary constraints in data center development, access to
timely and reliable power, which has become the binding factor in data center site selection as the
industry has shifted its focus from network proximity to power availability. We believe our deep expertise
in power infrastructure development, grid interconnection and large-scale project execution provides a
structural advantage over competitors that lack the ability to source, generate and deliver electricity at the
point of consumption.
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Our co-location model pairs renewable and firm power generation assets directly with data center load at
the same site, allowing a gigawatt-scale campus to serve a substantial portion of its total electricity needs
locally. This configuration reduces the impact on the transmission grid and enables us to offer hyperscale
customers a faster and more reliable path to energization. As of the date of this prospectus, our portfolio
included approximately 8.8 GW-IT of contracted capacity across carefully selected locations, and we had
assembled approximately 5.5 GW of standalone power contracted capacity. As of June 30, 2026, our
operating power generation portfolio consisted of approximately 2.2 GW, with an additional approximately
2.5 GW in construction. These capabilities are further supported by established relationships with
prominent utilities such as Oncor and AEP, which facilitate faster approvals in the most critical data center
markets.
Our ability to deliver data center facilities that meet hyperscaler specifications is supported by the in-
house design, construction management and operational planning capabilities we acquired through the
Studio 151 acquisition, as well as a procurement strategy that has pre-secured certain long-lead
equipment, including generator step-up transformers and other high-voltage equipment with lead times
that may otherwise exceed four years. Our data center projects are designed to deliver white-space,
turnkey facilities under long-term triple-net leases, which enhances the predictability of our cash flows.
We believe the combination of integrated power delivery, in-house construction management capabilities
and early grid positioning creates a differentiated value proposition that enhances our ability to attract and
retain hyperscaler tenants and supports the long-term growth of our data centers business.
We expect our competitive positioning to strengthen as grid constraints intensify and power availability
becomes an increasingly scarce resource in data center development. Our early investments in
interconnection, co-located power generation and integrated delivery capabilities are designed to
compound over time, and we believe we are well positioned to compete effectively as the market for
gigawatt-scale data center capacity continues to expand.
Our ability to convert our data center and power generation pipelines into operating, revenue-
generating assets
Since 2023, we have originated approximately 51.2 GW-gross of data center sites across the country,
based on filed load interconnection requests. Only a portion of this total supports our Data Center
Contracted Portfolio, with the balance, which we estimate represents approximately 30.6 GW-IT of critical
IT capacity, representing a significant opportunity to drive future growth as pipeline projects advance into
lease negotiations, construction and operation. As of the date of this prospectus, our Data Center
Contracted Portfolio included approximately 8.8 GW-IT of projects, specifically, (i) 0.8 GW-IT of capacity
was under construction and (ii) an incremental 8.0 GW-IT was contracted but not yet under construction.
No data center capacity is currently in operation. Realization of this capacity as revenue-generating
assets is dependent upon, among other things, completion of construction, receipt of interconnection
approvals and other permits, lease commencement, and tenant acceptance. Our first data center
projects, Cosmos and Milam County, are under construction and our remaining data center projects,
including the PORTS-Pike Technology Campus, remain under development. There can be no assurance
that these projects or any other project will be completed on the anticipated timeline or at all.
Additionally, since 2019, we have originated and maintain approximately 12.4 GWac of standalone solar
power and BESS project sites across the country, based on filed generator interconnection requests. Of
this total, 5.5 GWac represents our Standalone Power Contracted Portfolio with the balance representing
a significant opportunity to drive future growth as pipeline projects advance into revenue contracting,
construction and operation. Within the Standalone Power Contracted Portfolio, as of the date of this
prospectus, (i) approximately 2.2 GWac of capacity was operating, (ii) approximately 2.5 GWac of
capacity was under construction and (iii) an incremental 0.8 GWac was contracted but not yet under
construction. In addition to standalone power, we also have filed generator interconnection requests at
our data center sites for new power projects, which will be dedicated to the data centers they are co-
located with. As of the date of this prospectus, we have originated approximately 14.2 GWac of such data
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center dedicated power projects (based on filed interconnection applications), of which approximately 10
GWac is expected to be owned by third parties and none of which are yet contracted.
Our ability to convert our pipeline into operating, revenue-generating assets is fundamentally dependent
on our ability to lease our portfolio. Our leasing efforts are focused on hyperscaler and AI lab customers,
with current signed capacity concentrated among a limited number of tenants, and our ability to secure
additional leases across our portfolio will depend on, among other things, continued growth in demand for
hyperscale data center capacity, particularly from the limited number of hyperscaler and AI lab customers
to which our leasing efforts are primarily directed. A deceleration in hyperscaler capital expenditure on AI
infrastructure, a shift toward self-build models, or a reduction in the rate of growth in demand for third-
party data center capacity could materially impair our ability to lease available capacity on favorable terms
or at all. In addition, successful conversion requires execution across a defined sequence of development
milestones: land acquisition, permitting, grid interconnection, lease execution, design engineering,
procurement, financing and construction. Each stage presents distinct risks. Interconnection, while a
competitive strength as described above, remains subject to regulatory review. Permitting timelines vary
by jurisdiction and require federal, state, county-level or other local approvals. Supply chain conditions for
critical infrastructure components, labor availability and recent regulatory changes requiring data centers
to protect consumers and other ratepayers (by paying for their own transmission upgrades, providing their
own power generation and capacity, maintaining backup power and demonstrating that new large-scale
loads do not compromise grid reliability) could increase development costs and extend project timelines.
There can be no assurance that all pending approvals will be obtained on expected timelines or at all.
Given the scale and capital intensity of our data center portfolio, with $1.9 billion in construction in
progress on our balance sheet as of December 31, 2025 and $3.7 billion as of June 30, 2026, even
modest timing shifts in our largest projects, such as the 8.0 GW-IT Pike County complex or the 753 MW-
IT Milam County campus, can have a material impact on our near-term results. Certain aspects of our
pipeline, particularly at earlier stages, reflect management’s current expectations and may not ultimately
be realized. No data center capacity is currently in operation, and until our projects reach commercial
operation and begin generating revenue under their respective contracts, our consolidated financial
results will not reflect the full scope of our integrated business model.
We assess the long-term visibility of our revenue base in part by reference to “backlog,” which we define
as the estimated revenue remaining to be recognized over the life of our executed and binding customer
contracts. These contracts include contracts for the physical or virtual delivery of energy, capacity and
renewable energy credits, primarily PPAs and tolling agreements, and triple-net data center leases and
service level agreements corresponding to such leases. We present backlog on both a consolidated basis
and for each of our SP and DC segments. Backlog attributable to our DC segment reflects the estimated
revenue remaining to be recognized over the life of our executed and binding triple-net data center leases
and related service level agreements, as well as any applicable PPAs and other contracted offtake
arrangements for the delivery of energy, capacity and renewable energy credits with our data center
customers. Such estimated revenue (i) is determined according to the formula in the applicable data
center lease, (ii) assumes timely construction and commissioning of each applicable facility in accordance
with the targeted RFS date for each applicable phase provided for in the applicable lease, (iii) does not
give effect to any potential adjustment to the amount of rent payable by the applicable tenant as a result
of any rent credits, rent abatements, reconciliation relating to total project costs, change orders, cost
overruns, or other potential adjustments, and (iv) assumes, among others, obtaining any required
regulatory approvals and permits on time and management’s best estimates of any variability in weather
conditions, as validated by third-party technical advisor reports prepared in connection with any applicable
financing for such projects. In calculating backlog for triple-net data center leases, we exclude estimated
pass-through costs associated with utilities, operations and maintenance provided by third-parties, tax,
insurance, security and similar third-party costs because those amounts generally will be paid directly by,
reimbursed by, or incurred on behalf of our customers and are not amounts on which we retain economics
or generate substantial margin and because they generally reflect variable costs that are subject to
fluctuation and therefore are more difficult to predict than the revenue we expect to retain under our
customer contracts. Instead, we present backlog on a basis that reflects the contracted revenue we
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expect to retain from our customer arrangements, rather than gross amounts, some of which are passed
through from third-party service providers to our customers. Backlog attributable to our SP segment –
represents the estimated revenue remaining to be recognized over the life of our executed and binding
PPAs and other contracted offtake arrangements for the delivery of energy, capacity and RECs from our
power assets contracted with non-data center customers. Such estimated revenue is (i) determined
according to the formula in the applicable PPA or other contracted offtake arrangement for the power and,
if applicable, RECs, (ii) assumes timely construction and commissioning of each applicable facility in
accordance with the milestones provided for in the applicable PPA or other contracted offtake
arrangement, (iii) does not give effect to any potential adjustment or payment relating to deficient
production or otherwise, and (iv) reflects management’s best estimates of any applicable locational
curtailment, degradation of solar panels, degradation of battery storage systems or variability in weather
conditions as validated by third-party technical advisor reports prepared in connection with any applicable
financing for such projects. Backlog represents our customers’ committed expenditures that we have not
yet recognized as revenue under GAAP, including revenue that has been billed but deferred and revenue
that has been contracted but not yet billed. It is limited to revenue under binding agreements, which are in
some cases subject to construction completion, excludes non-binding demand indications, pipeline and
expressions of interest and does not include revenue from merchant electricity sales, uncommitted future
contract renewals, or projects that have not yet achieved executed agreements.
We present backlog both on a consolidated basis, and by SP and DC segment. The timing of recognition
of revenue within our backlog is based on the long-term nature of our revenue contracts, up to 20 years in
our DC segment and up to 25 years in our SP segment. Our backlog is with reference to contracts that
are executed today and underlie projects already in operations or expected to reach operations and begin
delivering revenue by no later than 2032. As of the date of this prospectus, our consolidated backlog was
approximately $439 billion, of which approximately $1 billion is expected to be recognized within 24
months, approximately $12 billion is expected to be recognized between 25 and 48 months,
approximately $30 billion is expected to be recognized between 49 and 72 months, approximately $39
billion is expected to be recognized between 73 and 96 months, and approximately $357 billion is
expected to be recognized thereafter. Of this consolidated backlog, approximately $10 billion was
attributable to our SP segment, of which approximately $1 billion is expected to be recognized within 24
months, approximately $1 billion is expected to be recognized between 25 and 48 months, approximately
$1 billion is expected to be recognized between 49 and 72 months, approximately $1 billion is expected to
be recognized between 73 and 96 months, and approximately $6 billion is expected to be recognized
thereafter. Approximately $430 billion was attributable to our DC segment, of which approximately $1
billion is expected to be recognized within 24 months, approximately $11 billion is expected to be
recognized between 25 and 48 months, approximately $29 billion is expected to be recognized between
49 and 72 months, approximately $38 billion is expected to be recognized between 73 and 96 months,
and approximately $351 billion is expected to be recognized thereafter. Amounts presented by segment
may not sum to consolidated backlog or the related period totals due to rounding.
Our backlog is expected to fluctuate from period to period based on the execution of new contracts,
delivery under existing agreements, and contract modifications or terminations. Our ability to recognize
the revenue reflected in backlog remains subject to the risks and uncertainties described elsewhere in this
prospectus, including receipt of required regulatory approvals, completion of interconnection and
permitting processes, availability of financing, procurement of long-lead equipment, completion of
construction and commissioning and other customary construction and commissioning conditions, among
other factors. In addition, our customers have the right under some circumstances to terminate or modify
contracts or defer the timing of our services and their payments to us, including if we do not effectively
perform our obligations under our contracts, as described elsewhere in these risk factors. Further, we
could fail to complete projects as contracted for reasons outside of our control, including scarcity of key
inputs, such as natural gas or other natural resources, environmental hazards and remediation,
unanticipated costs associated with construction, commissioning, testing, labor disputes and strikes,
difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial
accidents, fire, seismic activity and natural disasters. Any of the foregoing could result in us not realizing
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all revenues included in our backlog, and any such amounts could be material. See also “Risk Factors—
Our backlog and our backlog-associated capex are not necessarily indicative of our future revenue, profits
or costs associated with the development and construction of our projects, and we may not fully realize
the revenue estimated in our backlog or may exceed the costs estimated in our backlog-associated
capex.”
In order to develop and construct the projects underlying our backlog, we expect to incur costs associated
with hiring, site preparation, permitting, procurement, construction, infrastructure development,
interconnection and related development activities. To help management evaluate our operating
performance by assessing the relationship between our backlog, the remaining capital required to support
it and the capital intensity of our contracted project portfolio, management relies on “backlog-associated
capex,” which represents the aggregate capital expenditures we expect to incur to develop and construct
projects under executed customer contracts, based on the construction schedules set forth in those
contracts. We determine backlog-associated capex by SP and DC segment as follows: Backlog-
associated capex attributable to our DC segment reflects the aggregate remaining capital expenditures
we expect to incur to develop and construct our data centers under contract based on management’s
project budgets, internal or as prepared in connection with any applicable financing for such projects.
Backlog-associated capex attributable to our SP segment reflects the aggregate remaining capital
expenditures we expect to incur to develop and construct our power assets under contract based on
management’s project budgets, internal or as prepared in connection with any applicable financing for
such projects. These expenditures include construction and infrastructure costs, including fiber, water and
power infrastructure, as well as third-party consultant fees, land use and entitlement costs, governmental
permits and fees, insurance premiums, taxes and contingencies. To the extent the capital expenditure
estimates include allowable land costs, backlog-associated capex excludes those amounts because they
represent allocated land value, rather than incremental cash expenditures required to develop and
construct the projects or obtain site control. Our estimates of backlog-associated capex are based on
management’s current project-level budgets, expected construction schedules and assumptions
regarding project scope, design specifications, procurement, labor and construction costs. These
estimates incorporate management’s assumptions regarding cost escalation, including anticipated
inflation in materials, equipment, labor and other construction inputs over the expected development and
construction period, as well as contingencies for scope refinements, schedule changes and other
reasonably foreseeable cost increases. With respect to procurement, the estimates reflect executed
purchase orders, vendor bids, framework arrangements and other available pricing information where
available; for equipment, materials or services that have not yet been contracted, the estimates assume
pricing, availability, lead times and commercial terms that management believes are reasonable based on
current market conditions, existing supplier relationships and recent procurement experience.
As of the date of this prospectus, our backlog-associated capex totaled approximately $178 billion,
measured on a cash basis from June 30, 2026, the date of our most recent financial statements included
elsewhere in this prospectus, of which approximately $4 billion was attributable to our SP segment and
approximately $174 billion was attributable to our DC segment. Approximately $48 billion is attributable to
capital expenditures expected to be incurred within 24 months, approximately $69 billion is expected to be
incurred between 25 and 48 months, and approximately $61 billion is expected to be incurred between 49
and 72 months.
Backlog-associated capex should be considered in the context of the assumptions and limitations
underlying our backlog and our project-level development and construction estimates. Management
considers backlog-associated capex alongside backlog because our business model requires significant
upfront capital deployment, often before the associated revenue is realized, and the relationship between
expected capital expenditures and contracted revenue provides useful context for evaluating the capital
intensity of our contracted project portfolio. However, backlog-associated capex does not reflect operating
expenses, maintenance costs, non-capitalized interest expense, non-capitalized taxes, non-capitalized
overhead, depreciation, cost overruns, timing delays, customer defaults or other costs, risks or events
that may affect the profitability or economic return of the projects underlying our backlog. Backlog-
associated capex relies in part on management’s estimates of capital expenditures and may differ
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materially from the amounts ultimately incurred due to changes in project scope, design specifications,
procurement costs, labor costs, construction schedules, inflation, financing conditions or other factors
described under “Risk Factors.” Backlog-associated capex is expected to fluctuate from period to period
as we execute new customer contracts, complete construction milestones, update project budgets and
bring new projects into operation. Other companies may calculate similarly titled measures differently, and
accordingly, our calculation of backlog-associated capex may not be comparable to metrics presented by
other companies. See “Risk Factors—Our backlog and our backlog-associated capex are not necessarily
indicative of our future revenue, profits or costs associated with the development and construction of our
projects, and we may not fully realize the revenue estimated in our backlog or may exceed the costs
estimated in our backlog-associated capex.”
The pace at which we convert our pipeline is also influenced by external demand and competitive
dynamics. Our ability to secure additional contracts across our portfolio and pipeline depends on
continued growth in hyperscaler capital expenditure on AI infrastructure, which is inherently uncertain. A
deceleration in AI investment, a shift in hyperscaler priorities toward self-build models, or the entry of well-
capitalized competitors into the same markets where we operate could reduce demand for our capacity,
compress lease economics, or extend leasing timelines. In addition, the technology landscape for AI
compute is evolving rapidly, and changes in chip architecture, power density requirements, or cooling
technologies could alter the specifications that hyperscale customers require from data center facilities.
While we believe our integrated business model and early grid positioning provide meaningful
advantages, our ability to capture demand will depend on our continued competitive positioning and
responsiveness to evolving customer requirements.
As our pipeline matures, we expect to improve the predictability and efficiency of project delivery through
increased standardization of design and construction processes and continued investment in procurement
and project management capabilities. We also expect that our early positioning in interconnection queues
and the depth of our pre-secured equipment inventory will support more reliable scheduling and reduce
execution risk as projects advance toward construction and commercial operation.
Our ability to access project-level debt and tax equity and corporate financing on attractive terms
to fund our capital-intensive development pipeline
Our business model requires substantial upfront capital investment across our solar and battery storage
assets, co-located power infrastructure, and data center development activities. The redeemable
preferred equity interests were issued by our direct parent, SBE Global to Ares, and are not an obligation
of, or equity interest in, SB Energy, Inc.; they are presented at one of our parent entities and are not
reflected as equity or indebtedness on our consolidated balance sheet. SBE Global on-lent the proceeds
it raised from the issuance of those preferred equity interests to us through intercompany revolving
promissory notes, which had a combined outstanding principal balance of approximately $709.5 million as
of June 30, 2026 and bear interest at rates of 6.000% and 7.272% per annum. We intend to repay those
notes in full using cash on hand, borrowings under the Credit Facility and/or other sources and SBE
Global will use the repayment proceeds together with a cash contribution from existing cash at Energy
Global to redeem the preferred equity interests held by Ares. Additionally, we expect to use proceeds from
the Credit Facility to repay in full the approximately $473.0 million outstanding under the Hickory Facilities
and to fund general corporate purposes. If the Credit Facility is not entered into, we would need to use
additional cash on hand or alternative financing to repay the Hickory Facilities and fund those purposes;
doing so would reduce liquidity for operations, project development and debt service, leave existing
Hickory liens and guarantees in place until repayment and reduce available letter-of-credit capacity. Since
inception through the date of this prospectus, we have raised approximately $19 billion in project capital,
including approximately $15 billion in project debt and nearly $4 billion in tax equity financing, from a
broad base of institutional lenders and investors.
We finance our solar and battery storage projects primarily through a combination of project-level
construction loans that convert to term debt upon substantial completion, and tax equity partnerships in
which third-party investors provide capital in exchange for tax benefits, principally ITCs under the Inflation
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Reduction Act (“IRA”). We finance our data center projects primarily through project-level bank loans and
bond issuances. While we are generally targeting a financing structure of approximately 90% debt and
10% equity for the PORTS-Pike Technology Campus, there is no assurance that we will be able to
achieve this, and the ultimate debt to equity ratio will depend on prevailing market conditions. Given the
capital-intensive nature of our data center projects, we expect to rely significantly on these debt capital
markets in coming years and would be adversely affected by any reduced capital availability. At the
corporate level, we currently maintain senior secured credit facilities providing for term loan, revolving
loan and letter of credit commitments, which we expect to repay in full with the proceeds of the initial
borrowing under the Credit Facility and terminate within a short period of time after the offering. Our
parent entity has issued an aggregate of $800.0 million of preferred equity interests to Ares in aggregate
across 2022, 2024 and 2025, which we currently expect to be redeemed in full in the Ares Redemption
prior to or substantially concurrently with the completion of this offering and before we receive the net
proceeds of this offering, although the actual sequence and timing may differ. In the first half of 2026, we
closed additional project-level construction and bridge loans and senior secured notes totaling
approximately $4.1 billion across the Libra, Athos Storage and Cosmos projects.
Our ability to continue accessing these financing channels on favorable terms directly impacts project
returns and the pace at which we can scale our integrated business. Our project-level borrowings carry
floating interest rates. We mitigate our exposure to interest rate fluctuations by entering into hedging
arrangements on a substantial portion of our existing floating-rate borrowings. Nevertheless, we remain
exposed to changes in benchmark interest rates on new financings, and there can be no assurance that
hedging arrangements will be available on favorable terms, or at all, for future borrowings. Additionally,
recent federal tax legislation enacted on July 4, 2025 materially changes the availability of federal tax
credits for solar and BESS projects: solar projects that begin construction after July 4, 2026 must be
placed in service by December 31, 2027 to qualify for ITCs, and any projects beginning construction after
December 31, 2025 must satisfy new FEOC requirements. While we believe the large majority of our
current solar and battery energy storage pipeline has satisfied applicable safe harbor requirements for
purposes of establishing the beginning of construction under current IRS guidance, these legislative
changes, together with broader uncertainty regarding the future of clean energy tax policy, have
contributed to a significant contraction in the tax equity market, reducing both the availability of tax equity
capital and the willingness of investors to commit to new transactions. In addition, pricing for tax credit
transfers has declined, which may further reduce the economic value of available tax incentives and
adversely affect project-level returns. These legislative changes may nonetheless affect the availability
and economics of tax equity financing for later-stage portions of our development pipeline and for future
projects that have not yet commenced construction. A reduction in available tax equity, a decline in tax
credit pricing, an increase in borrowing costs, or a contraction in investor appetite for energy and digital
infrastructure assets could constrain our growth or reduce expected returns on deployed capital.
As we continue to execute on our financing strategy, we expect to further diversify our capital sources and
enhance our access to funding through long-standing relationships with institutional lenders, tax equity
investors and strategic partners. We also expect to benefit from increased scale and repeat access to
capital markets, which may support more efficient financing structures and improved execution timelines.
Over time, these factors should position us to fund our development pipeline with greater consistency and
flexibility, although our cost of capital and access to financing will continue to be influenced by broader
market conditions, interest rate environments and policy developments.
Our ability to maintain and expand a high-quality, long-term contracted revenue base with
creditworthy counterparties
A significant portion of our standalone power business revenue is derived from long-term PPAs. As our
data centers business scales, we expect a significant portion of our revenue will also be derived from
long-term triple-net leases and co-located power agreements, each of which provides enhanced visibility
into future cash flows. Our power generation PPAs and related offtake arrangements are long-term,
project-specific arrangements with counterparties that we believe to be creditworthy based on our internal
credit assessment and that lenders under our financing arrangements have also evaluated and deemed
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creditworthy. Our PPA terms typically range from 10 to 25 years and certain shorter-term energy hedges
have seven-year terms. Our data center leases are structured as long-term triple-net leases with initial
terms generally of 15 to 20 years and renewal rights that may extend the total lease relationship
depending on the lease and phase, under a yield-on-cost model with contractual escalators generally
ranging from 2% to 3% per annum.
Notwithstanding the apparent credit quality of our counterparty base, our revenue is concentrated among
a limited number of customers. For the six months ended June 30, 2026, two customers each
represented more than 10% of our total revenue (excluding swap settlements), with our largest single
customer accounting for approximately 27% of revenue and our second largest customer accounting for
approximately 24% of revenue. For the year ended December 31, 2025, four customers each represented
more than 10% of our total revenue (excluding swap settlements), with our largest single customer
accounting for approximately 29% of revenue. This concentration reflects the nature of utility-scale power
generation, where individual PPAs cover large blocks of capacity. This concentration is expected to
increase as our data center business begins generating revenue with a limited number of hyperscale
tenants as our principal customers. Our signed data center lease capacity is approximately 8.8 GW-IT
across three campuses—Cosmos with a SoftBank affiliate, Milam County Buildings 1 and 2 with an
OpenAI affiliate, and the PORTS-Pike Technology Campus with an OpenAI affiliate—as of the date of this
prospectus. These signed data center leases are with related parties, and we have no unaffiliated data
center tenants. A deterioration in the financial condition of any of our significant counterparties, a default
under the terms of a PPA or lease, or the failure of a customer to renew or extend an agreement at its
expiration could have a material adverse effect on our revenue and cash flows.
We expect the quality and duration of our contracted revenue base to remain a key driver of our ability to
attract project-level debt and tax equity financing, as lenders and tax equity investors rely on the
predictability of long-term contracted cash flows in underwriting our projects. As we continue to grow our
integrated business model, we expect to expand and further diversify our base of long-term contracted
revenues through a combination of new PPAs, co-located power agreements and data center lease
arrangements with high-quality counterparties. We also expect that the increasing contribution from long-
term data center leases, which include fixed pricing and contractual escalators, will enhance the overall
stability and visibility of our cash flows. In addition, we intend to maintain a disciplined approach to
counterparty selection and credit risk management, including the use of credit enhancements and
contractual protections where appropriate. Over time, we believe these efforts will support a more
balanced customer mix and improve the durability and predictability of our revenue base, although we will
continue to experience some level of customer concentration inherent in large-scale infrastructure
commercialization.
Our ability to navigate an evolving regulatory and policy environment across energy, tax and data
center infrastructure
Our business operates at the intersection of regulated power markets, federal tax policy, and an emerging
regulatory framework for large-load data center development. As a power producer, our business is
subject to the rules of the regional grid operators in which our projects are located, principally ERCOT,
CAISO, MISO and PJM, each of which has distinct interconnection processes, market structures and
reliability standards. Changes to interconnection requirements, queue management, or cost allocation at
any of these ISOs could extend timelines, increase costs, or reduce the value of our existing queue
positions. Certain of these regulatory developments, including moratoria on data center construction,
denial of interconnection or permits, or changes in cost allocation frameworks, could delay or prevent
project completion and give rise to tenant remedies under our data center leases and co-located power
supply agreements, including termination rights. Federal tax policy is also a significant driver of our
standalone power economics. In addition, as an indirect subsidiary of SoftBank, a Japanese corporation,
we are subject to oversight by CFIUS and are party to National Security Agreements with the U.S.
Department of the Treasury and the DOE that impose compliance, security and oversight requirements on
our operations, including vendor approval procedures for certain equipment and technology, cybersecurity
plans and reporting obligations. These requirements could limit our operational flexibility or impose
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additional costs as we scale our integrated business model, and any failure to comply with the terms of
our National Security Agreements could result in regulatory action or other adverse consequences.
The regulatory environment for data center development is evolving with similar speed. Recent federal
and state policy changes are requiring data centers to pay for their own transmission upgrades, maintain
backup power and demonstrate that new large-scale loads do not compromise grid reliability. Several
state legislatures and public utility commissions are considering or have adopted new rules governing the
siting, permitting and grid impact of large-load facilities, and FERC has taken an increasingly active role in
reviewing the interconnection of large loads to the transmission system. These developments could
increase development costs and extend project timelines for our DC segment, particularly in jurisdictions
where regulatory frameworks are still being established.
We expect the regulatory landscape to continue to evolve as policymakers balance the economic benefits
of data center investment against grid reliability and community impact concerns, and we intend to remain
actively engaged in regulatory processes across our key markets to support the continued development
of our integrated business.
Our ability to manage the impact of tax equity financing structures on net income (loss)
attributable to shareholders
We finance a substantial portion of our SP segment projects through tax equity partnerships, in which
third-party investors contribute capital in exchange for the economic benefits of ITCs and accelerated tax
depreciation generated by our solar and battery energy storage assets. Under the hypothetical liquidation
at book value, or HLBV, method of accounting required by GAAP, we allocate income and losses to these
noncontrolling interest holders based on the change in the amount each investor would hypothetically
receive if the partnership were liquidated at book value at the end of each reporting period. In periods
when qualifying projects are placed in service and ITCs are generated, the HLBV method results in a
disproportionately large allocation of net losses to noncontrolling interests, which reduces the net loss
attributable to SB Energy, Inc. Conversely, in periods when no new ITCs are generated, the allocation of
losses to noncontrolling interests is significantly lower, and a greater share of consolidated net loss flows
through to SB Energy, Inc. For example, net loss attributable to noncontrolling interests decreased by
$260.1 million from $310.2 million in 2024 to $50.1 million in 2025 primarily because ITCs were generated
from qualifying projects in 2024 but not in 2025. As we place additional projects in service, including our
Libra and Athos Storage projects, we expect continued period-to-period variability in HLBV-driven
allocations, which will directly affect net income (loss) attributable to SB Energy, Inc. in a manner that may
not correspond to changes in our underlying operational performance. Investors should therefore consider
our results both inclusive and exclusive of the impact of HLBV allocations to noncontrolling interests when
evaluating our financial performance across periods.
Key Business Metrics and Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we use the following non-
GAAP financial measures and other key business metrics to evaluate our business, measure our
performance, identify trends in our business, develop financial forecasts and make strategic decisions.
We believe that such non-GAAP financial measures and other key business metrics, when taken
collectively, may be helpful to investors because they provide consistency and comparability with past
financial performance. These non-GAAP measures and other key business metrics should not be
considered in isolation or as a substitute for analysis of our results as reported under GAAP. You are
encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental
analysis. In addition, in evaluating these non-GAAP measures, you should be aware that in the future we
may incur expenses similar to the adjustments in these presentations. Our presentation of non-GAAP
financial measures or other key business metrics should not be construed as an inference that our future
results will be unaffected by these or other unusual or non-recurring items. Additionally, our non-GAAP
measures may not be comparable to similarly titled measures used by other companies in our industry or
across different industries. See “—Results of Operations” below for a discussion of our GAAP results of
operations, including revenue and net loss. For reconciliations of our non-GAAP financial measures to the
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most directly comparable GAAP measures, see “—Reconciliation of Non-GAAP Financial Measures”
below.
The following tables set forth these non-GAAP financial measures and other key business metrics as of
and for the periods presented:
As of June 30, | As of December 31, | ||||
(in thousands, except for GW-IT and GWac) | 2026 | 2025 | 2024 | ||
Net Debt ......................................................................................... | $1,810,042 | $1,949,404 | $946,822 | ||
Data Center Contracted Portfolio (GW-IT) ................................. | 0.8 | 0.1 | — | ||
Standalone Power Contracted Portfolio (GWac) ...................... | 5.5 | 4.7 | 2.9 | ||
Six Months Ended June 30, | Year Ended December 31, | ||||||
(in thousands) | 2026 | 2025 | 2025 | 2024 | |||
Total Segment Adjusted EBITDA ................... | $62,399 | $47,585 | $119,934 | $68,630 | |||
Total Segment Adjusted EBITDA
Total Segment Adjusted EBITDA is a non-GAAP financial measure. For a definition of Total Segment
Adjusted EBITDA and a reconciliation to net loss and comprehensive loss, the most directly comparable
GAAP financial measure, see Note 20 to our unaudited condensed consolidated financial statements and
Note 21 of our audited consolidated financial statements included elsewhere in this prospectus.
Net Debt
We define Net Debt as debt for borrowed money, current and non-current, less cash and cash equivalents
and restricted cash. Net Debt excludes debt from related parties, letters of credit, guarantees, surety
indemnities, deferred purchase price obligations, redeemable noncontrolling interests and other non-debt
liabilities.
As of June 30, 2026 | ||||||
(in thousands) | Debt | Cash | Net Debt | |||
Recourse corporate .................................................................... | $472,985 | $1,148,482 | $(675,497) | |||
Non-recourse project construction ........................................... | 2,731,450 | 1,021,625 | 1,709,825 | |||
Non-recourse project term ........................................................ | 821,137 | 45,423 | 775,714 | |||
Consolidated ............................................................................ | $4,025,572 | $2,215,530 | $1,810,042 | |||
As of December 31, 2025 | ||||||
(in thousands) | Debt | Cash | Net Debt | |||
Recourse corporate .................................................................... | $496,534 | $151,913 | $344,621 | |||
Non-recourse project construction ........................................... | 847,750 | 5,967 | 841,783 | |||
Non-recourse project term ........................................................ | 823,833 | 60,833 | 763,000 | |||
Consolidated ............................................................................ | $2,168,117 | $218,713 | $1,949,404 | |||
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As of December 31, 2024 | ||||||
(in thousands) | Debt | Cash | Net Debt | |||
Recourse corporate .................................................................... | $443,235 | $374,544 | $68,691 | |||
Non-recourse project construction ........................................... | 188,650 | 113,427 | 75,223 | |||
Non-recourse project term ........................................................ | 889,115 | 86,207 | 802,908 | |||
Consolidated ............................................................................ | $1,521,000 | $574,178 | $946,822 | |||
Restricted cash consists primarily of funds held within our wholly owned subsidiaries that are restricted for
specific uses by the terms of the financing agreements, amended and restated limited liability company
agreements (“LLCAs”) and PPAs. The restricted cash amounts are established for the purpose of paying
principal and interest on debt, lease and property taxes and all the remaining costs required for the
achievement of final completion of the construction or providing the PPA off-takers with control over such
reserve accounts. Under the financing agreements project lenders have recourse to all applicable project
company assets secured thereunder, including cash, and in a foreclosure event such cash would be used
first for debt repayment.
Net Debt is a non-GAAP financial measure and should not be considered as an alternative to debt, net,
current and non-current and debt from related parties or any other measure of liquidity presented in
accordance with GAAP. This measure may not be comparable to similarly titled measures used by other
companies. See “—Reconciliation of Non-GAAP Measures” below for a reconciliation of Net Debt to debt,
net, current and non-current, the most directly comparable GAAP financial measure.
Data Center Contracted Portfolio (GW-IT)
We define Data Center Contracted Portfolio as the total critical IT capacity, measured in GWs of IT
capacity (GW-IT), of data center facilities and projects in our portfolio as of the end of the applicable
period, consisting of capacity operating, under construction, or contracted under long-term leases but not
yet under construction, as of the end of the applicable period. Critical IT capacity reflects the power
available to support data halls and network equipment and excludes ancillary loads such as cooling,
lighting and other non-IT building systems. Capacity included in Data Center Contracted Portfolio may
include projects that have not yet commenced construction, and should not be read as operating capacity.
No data center capacity is currently in operation. Realization of the under construction and contracted
capacity as revenue-generating assets is dependent upon, among other things, completion of
construction, receipt of permits, successful interconnection, lease commencement, and tenant
acceptance. See “Risk Factors—Our ability to convert our data center and power project pipelines into
operating, revenue-generating assets.” This metric is presented on a total basis as of the end of each
period and does not represent incremental capacity added during the period.
Standalone Power Contracted Portfolio (GWac)
We define Standalone Power Contracted Portfolio as the total power capacity, measured in GWac, of
solar photovoltaic and BESS projects that are operating, under construction, or contracted under long-
term PPAs but not yet under construction, as of the end of the applicable period, excluding capacity
associated with our Data Center project companies or customers. A single project may have multiple
PPAs or hedge contracts covering all or part of its operating capacity, and the total contracted capacity in
a given period may be less than the project’s full nameplate capacity. For purposes of this metric, we
report the full nameplate capacity of each qualifying project, even if less than all of that capacity is under
contract during the reporting period, in order to better represent the capacity of the portfolio as a whole.
Where solar and BESS assets are co-located at the same project site, each technology is measured
separately and aggregated for the reportable metric. For example, a project comprising 700 MWac of
solar and 700 MWac of storage is recorded as 1,400 MWac of total capacity. This metric is presented on a
total basis as of the end of each period and does not represent incremental capacity added during the
period.
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Reconciliation of Non-GAAP Measures
Total Segment Adjusted EBITDA and Net Debt are non-GAAP financial measures. These measures are
presented for supplemental informational purposes only, should not be considered a substitute for
financial information presented in accordance with GAAP, and may not be comparable to similarly titled
measures used by other companies.
We use Total Segment Adjusted EBITDA to make strategic decisions, establish business plans and
forecasts, identify trends affecting our business, and evaluate operating performance and financial
condition. We believe Total Segment Adjusted EBITDA is helpful to investors because it allows for greater
transparency into what measure we use in operating our business and measuring our performance and
enables comparison of financial trends and results between periods where items may vary independent of
business performance. For the definition of Total Segment Adjusted EBITDA and a reconciliation to the
most directly comparable U.S. GAAP financial measure, see Note 20 to our unaudited condensed
consolidated financial statements and Note 21 to our audited consolidated financial statements included
elsewhere in this prospectus.
We define Net Debt as debt, net, current and non-current, less cash and cash equivalents and restricted
cash. Net Debt excludes debt from related parties, letters of credit, guarantees, surety indemnities,
deferred purchase price obligations, redeemable noncontrolling interests and other non-debt liabilities.
We believe Net Debt is helpful to investors because it provides a measure of our indebtedness that
reflects cash available to reduce outstanding borrowings.
The following table presents a reconciliation of debt, net, current and non-current, the most directly
comparable GAAP financial measures, to Net Debt for each of the periods presented:
As of June 30, | As of December 31, | |||||
(in thousands) | 2026 | 2025 | 2024 | |||
Debt, net, current ........................................................................ | $1,197,859 | $193,281 | $234,675 | |||
Debt, net, non-current ................................................................ | 2,694,016 | 1,910,172 | 1,221,965 | |||
Total debt, net, current and non-current .................................. | 3,891,875 | 2,103,453 | 1,456,640 | |||
Add: unamortized issuance costs and discount .................... | 133,698 | 64,664 | 64,360 | |||
Total debt ................................................................................... | 4,025,572 | 2,168,117 | 1,521,000 | |||
Less: cash and restricted cash ................................................. | (2,215,530) | (218,713) | (574,178) | |||
Consolidated net debt ............................................................ | $1,810,042 | $1,949,404 | $946,822 | |||
COMPONENTS OF RESULTS OF OPERATIONS
Revenue
We generate revenue from three reportable segments: DC, SP and SLN. Our DC segment is expected to
generate revenue through long-term leasing of grid-connected, turnkey data center facilities and the
delivery of electricity from co-located power assets, with initial revenues expected in late 2026. We expect
our data centers revenue model to include recurring lease payments for dedicated data center capacity,
together with charges for electricity delivered from co-located power assets and related services. Subject
to the final terms and accounting classification of the applicable arrangements, we expect lease revenue
to be recognized over the applicable lease term as customers obtain access to the contracted facilities,
and revenue from electricity delivery and related services to be recognized as electricity is delivered or
the services are performed.
Our SP segment generates revenue primarily from the sale of electricity produced by our utility-scale
solar generation facilities and related environmental attributes. This revenue consists of three principal
streams: (i) energy revenue from the sale of electricity under long-term PPAs, or PPAs with investment-
grade counterparties, as well as merchant sales of electricity into wholesale energy markets, including
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CAISO and ERCOT, at prevailing market prices; (ii) realized gains and losses from net settlements under
energy-related derivative PPA swap arrangements, and unrealized gains and losses resulting from
changes in the fair value of such derivative PPA swaps, each of which is recorded in revenue; and (iii)
revenue from the sale of RECs, generated by our solar facilities, which are sold either as part of bundled
PPAs or through standalone REC contracts. Merchant revenue is generated from sales of electricity that
are not contracted under long-term PPAs, including sales of generation in excess of contracted volumes,
and is subject to prevailing wholesale market prices at the time of sale. Under our PPAs, we sell the
electricity generated by our solar facilities at contracted prices over terms that typically range from 10 to
25 years. Revenue is recognized as electricity is delivered to the grid or the offtaker.
Amounts received from sales of electricity or related products during the testing or commissioning period,
before the project reaches commercial operation, are recorded as a reduction of construction in progress
rather than as revenue. Once a project is placed in service, the related construction in progress is
transferred to property, plant and equipment, depreciation begins and subsequent sales are recognized
as revenue in accordance with our revenue recognition policy.
Our SLN segment provides design, engineering, construction management, and operations management
services for data center and infrastructure projects. These services are primarily deployed to support our
own data center and power project development activities and are charged to the DC and SP segments
as intercompany services at a mark-up. For the six months ended June 30, 2026 and year ended
December 31, 2025, our SLN segment generated approximately $52.8 million and $62.4 million,
respectively, in revenue from transactions with other operating segments. Because SLN segment revenue
is derived from intercompany charges rather than sales to external third-party customers, it does not
appear as consolidated revenue under GAAP and is eliminated, together with the related intercompany
expenses recognized by the other segments, upon consolidation. While the SLN segment does not
contribute to our consolidated revenue, the segment is material to our results on a segment-reporting
basis, and its intercompany charges represent a significant component of project development and
construction costs capitalized or expensed by our DC and SP segments. We expects revenue growth in
future periods driven by the progression of power projects from construction to operational status, the
commencement of data center leasing revenue, and continued growth in services activity.
Cost of operations, exclusive of depreciation, amortization and accretion
Cost of operations, exclusive of depreciation, amortization and accretion consists primarily of project-level
operating costs incurred after facilities achieve commercial operation. These costs include operations and
maintenance expense, land lease expense, repair and maintenance costs, insurance, property taxes and
other site-level costs. This line item also includes legal, advisory and transaction-related costs incurred in
connection with projects and associated development activities, as well as certain regulatory or
contingency-related operating charges, when applicable.
In our SP segment, we generally bear project-level operating expenses for our power facilities under our
PPAs, including operations and maintenance costs, insurance, property taxes and similar site-level
expenses, and these costs are not separately passed through to offtakers. By contrast, we expect our
data center leases to be structured primarily on a triple-net basis, under which the applicable tenant is
responsible for substantially all facility-level operating expenses, insurance and property taxes, either by
paying those amounts directly or reimbursing us for amounts we pay on the tenant’s behalf. To the extent
we incur reimbursable data center operating costs, we expect to record the costs in cost of operations
and the related tenant reimbursements as revenue or additional rent, as applicable, in accordance with
the terms of the lease and applicable accounting guidance. As a result, the pass-through nature of these
arrangements may increase both reported revenue and cost of operations without having a corresponding
impact on operating margin to the extent the costs are fully reimbursed by tenants.
We expect our cost of operations to increase in absolute dollars as additional facilities achieve
commercial operation. The majority of the accumulated cost of solar plants, data centers and BESS that
have not been placed into service as of the reporting date are recorded under construction in progress
and not as cost of operations.
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Depreciation, Amortization and Accretion
Depreciation, amortization and accretion expense as recorded for financial reporting purposes under
GAAP, reflects: (i) depreciation of solar generation assets battery energy storage systems and related
leasehold improvements recorded in property, plant and equipment; (ii) accretion of asset retirement
obligations, or AROs, associated with the future decommissioning and site restoration of our operating
projects; and (iii) amortization of finite-lived intangible assets, including certain acquired easements and
other project-related intangible assets when applicable. For financial reporting purposes, solar systems
are depreciated under GAAP on a straight-line basis over an estimated useful life of 35 years and
leasehold improvements are depreciated over the shorter of the remaining lease term or their estimated
useful life. These estimated useful lives used for financial reporting may differ from the recovery periods
and methods used for federal and state income tax purposes, including under the Modified Accelerated
Cost Recovery System.
We expect depreciation, amortization and accretion expense to increase as additional solar generation
and battery energy storage assets achieve commercial operation and are placed in service, resulting in
higher depreciable property balances, together with the commencement of depreciation on data center
assets currently under construction and continued accretion on the associated asset retirement
obligations.
General and Administrative
General and administrative expenses consist primarily of stock-based compensation, compensation and
benefits for corporate and administrative personnel, professional service fees and other corporate
overhead.
We expect our general and administrative expenses to increase as we continue to grow our business. We
also expect to incur additional recurring expenses as a public company, including costs associated with
compliance under the Exchange Act, registrar and transfer agent fees, stock exchange fees, audit fees,
incremental director and officer liability-insurance costs and director and officer compensation. We also
expect to incur incremental, non-recurring costs related to our transition to a publicly traded company,
including the costs of this offering.
Interest Income
Interest income consists primarily of earnings on our cash, cash equivalents and restricted cash balances
held with financial institutions.
Interest Expense
Interest expense relates to borrowings under our project-level and corporate-level financing arrangements
and includes both cash and non-cash components. It consists primarily of contractual interest expense,
amortization of deferred financing costs and, where applicable, other financing-related charges. For
construction-period borrowings, a portion of financing costs may be capitalized to construction in progress
until the related project is placed in service, after which those costs are recognized through interest
expense over the remaining life of the borrowing.
(Loss) Gain in Equity Method Investment
(Loss) gain in equity method investment reflects our share of the earnings or losses of Balanced Rock
Power, LLC, in which we hold a 27.9% economic interest as of June 30, 2026 and December 31, 2025.
Our share of profits and losses is recognized based on the hypothetical liquidation at book value (“HLBV”)
methodology.
Change in Fair Value of Warrant Liability
Change in fair value of warrant liability reflects the non-cash gain or loss recognized on the
remeasurement of Company’s outstanding warrant liability to fair value at each reporting date.
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Other Income (Expense), Net
Other income (expense), net includes certain acquisition-related items, non-operating-related termination
payments and receipts and other miscellaneous non-operating gains and losses.
Income Tax Benefit (Expense)
We elected to be taxed as a corporation for U.S. federal income tax purposes and therefore are subject to
entity-level U.S. federal income tax. Income tax benefit (expense) recognized at the entity level reflects: (i)
U.S. federal income taxes imposed on us and on any corporate subsidiaries that are subject to entity-level
income tax; (ii) state and local income taxes in jurisdictions that impose entity-level taxes on corporations
or pass-through entities; and (iii) changes in deferred tax assets and liabilities, including as a result of
temporary differences between the tax basis and financial statement carrying value of our assets and
liabilities.
Net Income (Loss) and Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling
Interests and Noncontrolling Interests
We consolidate subsidiaries in which tax equity investors hold noncontrolling interests. Income and loss
are allocated between SB Energy, Inc. and the noncontrolling interest holders using the HLBV method, a
balance sheet approach that determines each investor’s claim on the net assets of the partnership as if
the entity were liquidated at book value at each reporting date. The allocation of earnings and losses
under HLBV can vary significantly from period to period based on changes in the underlying economics of
our project-level partnerships, including the impact of tax attributes such as ITCs and accelerated tax
depreciation. In periods when ITCs are generated from newly placed-in-service projects, the HLBV
method may allocate a disproportionately large share of losses to the noncontrolling interest holders,
which has the effect of reducing net loss attributable to SB Energy, Inc. Conversely, in periods when no
new ITCs are generated, allocations to noncontrolling interest holders are substantially lower, resulting in
a greater proportion of losses being attributed to SB Energy, Inc. As a result, the net income (loss)
attributable to SB Energy, Inc. reported in our consolidated statements of operations can exhibit
significant period-to-period volatility driven primarily by the timing of project completions and the
recognition of related tax attributes, rather than by changes in underlying operational performance.
Investors should consider the impact of HLBV allocations when evaluating trends in our net income (loss)
attributable to SB Energy, Inc. For additional information regarding our HLBV methodology, see “Critical
Accounting Policies and Estimates—Noncontrolling interests and HLBV” and Note 2 to our audited
consolidated financial statements, each included elsewhere in this prospectus.
RESULTS OF OPERATIONS
Our results of operations are discussed on a consolidated basis because the majority of our revenue from
customers is currently generated by our SP segment. Our DC segment is in the early stages of
development and has not yet generated any revenue, and our SLN segment revenue is derived entirely
from intercompany transactions that are eliminated upon consolidation. We also present and discuss the
primary drivers of period‑over‑period changes for each major expense category on a consolidated basis.
For additional detail regarding our segment-level financial results, see Note 20 to our unaudited
condensed consolidated financial statements and Note 21 to our audited consolidated financial
statements, each included elsewhere in this prospectus.
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Six months ended June 30, 2026 compared to six months ended June 30, 2025
The following table summarizes our historical results of operations data for the six months ended June 30,
2026 and 2025:
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Revenue ........................................................... | 138,659 | 83,322 | $55,337 | 66.4% | |||
Operating costs and expenses: | |||||||
Cost of operations, exclusive of depreciation, amortization, and accretion .. | 40,656 | 39,122 | 1,534 | 3.9% | |||
Depreciation, amortization and accretion ... | 48,100 | 46,935 | 1,165 | 2.5% | |||
General and administrative .......................... | 601,507 | 177,807 | 423,700 | 238.3% | |||
Operating loss .................................................. | (551,604) | (180,542) | (371,062) | (205.5)% | |||
Interest income ............................................... | 8,518 | 9,216 | (698) | (7.6)% | |||
Interest expense ............................................. | (86,872) | (98,646) | 11,774 | 11.9% | |||
(Loss) gain in equity method investment .... | (6,729) | 3,574 | (10,303) | (288.3)% | |||
Change in fair value of warrant liability ....... | (2,573,056) | — | (2,573,056) | N/M | |||
Other income (expense), net ........................ | (7,890) | 13,691 | (21,581) | (157.6)% | |||
Loss before income taxes .............................. | (3,217,633) | (252,707) | (2,964,926) | (1173.3)% | |||
Income tax benefit (expense) ....................... | 25,369 | (3,139) | 28,508 | 908.2% | |||
Net loss ............................................................ | (3,192,264) | (255,846) | (2,936,418) | (1147.7)% | |||
Net income (loss) and comprehensive income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests ................................. | 16,608 | (40,316) | 56,924 | 141.2% | |||
Net loss attributable to SB Energy, Inc. .. | $(3,208,872) | $(215,530) | $(2,993,342) | (1388.8)% | |||
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Year ended December 31, 2025 compared to year ended December 31, 2024
The following table summarizes our historical results of operations data for the year ended December 31,
2025 and 2024:
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Revenue ........................................................... | $213,467 | $232,243 | $(18,776) | (8.1)% | |||
Operating costs and expenses: | |||||||
Cost of operations, exclusive of depreciation, amortization, and accretion | 81,393 | 55,213 | 26,180 | 47.4% | |||
Depreciation, amortization and accretion | 94,080 | 73,314 | 20,766 | 28.3% | |||
General and administrative ........................ | 679,566 | 169,095 | 510,471 | 301.9% | |||
Operating loss .................................................. | (641,572) | (65,379) | (576,193) | (881.3)% | |||
Interest income ............................................ | 14,638 | 18,964 | (4,326) | (22.8)% | |||
Interest expense. ......................................... | (162,392) | (127,554) | (34,838) | (27.3)% | |||
Losses in equity method investment ........ | (1,740) | (14,203) | 12,463 | 87.7% | |||
Other income (expense), net ..................... | 12,176 | (617) | 12,793 | 2073.4% | |||
Loss before income taxes ............................... | (778,890) | (188,789) | (590,101) | (312.6)% | |||
Income tax expense .................................... | (9,202) | (15,262) | 6,060 | 39.7% | |||
Net loss ............................................................ | (788,092) | (204,051) | (584,041) | (286.2)% | |||
Net loss and comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling interests ............................... | (50,084) | (310,155) | 260,071 | 83.9% | |||
Net income (loss) attributable to SB Energy, Inc. ................................................. | $(738,008) | $106,104 | $(844,112) | (795.6)% | |||
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
Revenue
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Total revenue from contracts with customers .......................................................... | $58,710 | $61,799 | $(3,089) | (5.0%) | |||
Realized revenue from power price swap derivatives ......................................................... | 12,579 | 9,649 | 2,930 | 30.4% | |||
Unrealized change in fair value of power price swap derivatives ..................................... | 67,370 | 11,874 | 55,496 | 467.4% | |||
Revenue ............................................................. | $138,659 | $83,322 | $55,337 | 66.4% | |||
Revenue increased by $55.3 million, or approximately 66.4%, to $138.7 million for the six months ended
June 30, 2026, from $83.3 million for the six months ended June 30, 2025. The increase was primarily
attributable to a $58.4 million increase in power price swap derivative revenue (from $21.5 million to $79.9
million), including a $55.5 million increase in unrealized change in fair value of derivatives, as well as a
$2.9 million increase in realized revenue from derivatives, resulting from higher realized and unrealized
mark-to-market gains on PPA swap contracts. In addition, revenue from contracts with customers
decreased $3.1 million, or (5%), reflecting a $3.5 million decrease in energy revenue (from $53.9 million
to $50.5 million) and a $0.3 million decrease in REC revenue (from $7.9 million to $7.6 million), reflecting
lower generation across projects due to higher curtailment and basis, offset by revenue from the addition
of the Angela project during the six months ended June 30, 2026.
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The following table sets forth key operating metrics for our standalone power generation portfolio for the
periods indicated:
Six Months Ended June 30, | |||||||
2026 | 2025 | Change | Change (%) | ||||
Electricity generated (GWh) ............................ | 2,350 | 2,519 | (169) | (6.7)% | |||
Energy revenue decreased $3.5 million, or (6.4)%, to $50.5 million for the six months ended June 30,
2026, from $53.9 million for the six months ended June 30, 2025. The decrease was primarily attributable
to a (6.7)% decrease in generation volumes, primarily driven by higher curtailment and basis during the
six months ended June 30, 2026, which was offset by the increase in contribution of generation from the
Angela project, which commenced commercial operations during 2026. Volume decrease contributed
approximately $4.5 million to the period-over-period change, offset by the additional generation of the
Angela project of approximately $1.0 million.
Cost of Operations, exclusive of depreciation, amortization, and accretion
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Cost of operations, exclusive of depreciation, amortization, and accretion ..... | $40,656 | $39,122 | $1,534 | 3.9% | |||
Cost of operations, exclusive of depreciation, amortization, and accretion increased by $1.5 million, or
3.9%, to $40.7 million for the six months ended June 30, 2026, from $39.1 million for the six months
ended June 30, 2025. The nominal increase was primarily driven by higher project-level operating costs
associated with newly operational facilities, including operations and maintenance expense, onsite
expenses, and land lease costs, and increased research and development expenses as compared to the
prior period. This change was offset by decrease in engineering advisory fees, property tax expenses and
property insurance expenses as compared to the prior period.
Depreciation, Amortization and Accretion
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Depreciation, amortization and accretion ..... | $48,100 | $46,935 | $1,165 | 2.5% | |||
Depreciation, amortization and accretion increased by $1.2 million, or 2.5%, to $48.1 million for the six
months ended June 30, 2026, from $46.9 million for the six months ended June 30, 2025. The nominal
increase was primarily attributable to a largely consistent asset base over the periods presented.
General and Administrative
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
General and administrative ............................. | $601,507 | $177,807 | $423,700 | 238.3% | |||
General and administrative expenses increased by $423.7 million, or 238.3%, to $601.5 million for the six
months ended June 30, 2026, from $177.8 million for the six months ended June 30, 2025. The increase
was primarily attributable to $589.5 million of stock-based compensation expense recognized in general
and administrative for the six months ended June 30, 2026. This was partially offset by lower general and
administrative expenses across other categories. For the six months ended June 30, 2025, stock-based
compensation expense was approximately $162.5 million.
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Interest Income
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Interest income ................................................. | $8,518 | $9,216 | $(698) | (7.6%) | |||
Interest income decreased by $0.7 million, or 7.6%, to $8.5 million for the six months ended June 30,
2026, from $9.2 million for the six months ended June 30, 2025.Despite a larger ending cash balance as
of June 30, 2026, the change was primarily attributable to lower six-month average cash balance for the
accounts that are the primary drivers of our interest income, as the six-month average from January 1,
2026 to June 30, 2026, decreased significantly when compared to the six-month average from January 1,
2025 to June 30, 2025. The change was partially offset by the increase in our cash and restricted cash
balance of $1,856.0 million as compared to the prior period, primarily related to cash contributions
received from SBE Global our direct parent, in May 2026 and June 2026.
Interest Expense
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Interest expense ............................................... | $(86,872) | $(98,646) | $11,774 | 11.9% | |||
Interest expense decreased $11.8 million, or 11.9%, to $86.9 million for the six months ended June 30,
2026, from $98.6 million for the six months ended June 30, 2025. The decrease was primarily attributable
to a $24.0 million favorable swing in the changes in fair value of interest rate swap derivatives, from an
unrealized mark to market loss of $24.4 million in the six months ended June 30, 2025 to an unrealized
mark to market loss of $0.4 million in the six months ended June 30, 2026. This is partially offset by an
increase in interest expense of $11.8 million primarily driven by higher average outstanding indebtedness
as total debt grew from $2.1 billion as of June 30, 2025 to $3.9 billion as of June 30, 2026, reflecting new
construction loan draws on the Pelicans Jaw Facility ($137.9 million drawn during the six months ended
June 30, 2026), the Libra Construction Loan ($512.9 million outstanding as of June 30, 2026), the Athos
Storage Construction Loan ($286.6 million outstanding as of June 30, 2026), the Athos Storage Bridge
Loan ($75.3 million outstanding as of June 30, 2026), the Cosmos Senior Secured Notes ($999.0 million
as of June 30, 2026), and draws on the Global Borrower Revolving Loan ($37.0 million drawn during the
six months ended June 30, 2026). Additionally, interest expense also includes approximately $7.3 million
of amortization of deferred financing costs for the six months ended June 30, 2026 versus $8.6 million in
the six months ended June 30, 2025.
(Loss) Gain in Equity Method Investment
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
(Loss) gain in equity method investment ...... | $(6,729) | $3,574 | $(10,303) | (288.3%) | |||
(Loss) gain in equity method investment changed by $10.3 million, or 288.3%, to a loss of $6.7 million for
the six months ended June 30, 2026, from a gain of $3.6 million for the six months ended June 30, 2025.
The loss reflects our share of losses allocated under the HLBV methodology applied to our 27.9% interest
in Balanced Rock Power, LLC.
Change in Fair Value of Warrant Liability
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Change in fair value of warrant liability ......... | $(2,573,056) | $— | $(2,573,056) | N/M | |||
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Change in fair value of warrant liability increased to $2,573.1 million for the six months ended June 30,
2026 due to the loss recognized on the remeasurement of our warrants issued on January 9, 2026, in
connection with the Milam County data center facility lease arrangements with OpenAI.
Other income (expense), Net
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Other income (expense), net .......................... | $(7,890) | $13,691 | $(21,581) | (157.6)% | |||
Other income (expense), net decreased $21.6 million, or 157.6%, to $7.89 million of expense for the six
months ended June 30, 2026 from $13.7 million of income for the six months ended June 30, 2025. The
change was primarily attributable to a $15.2 million termination payment received during the six months
ended June 30, 2025 in connection with the mutual termination of lease options related to the Holville
solar development project that we determined not to pursue. No comparable payment was received
during the six months ended June 30, 2026. In addition, the change was attributable to a $6.8 million loss
on debt extinguishment recorded during the six months ended June 30, 2026 related to unamortized debt
issuance costs. There were no debt extinguishments in 2025.
Income Tax Benefit (Expense)
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Income tax benefit (expense) ......................... | $25,369 | $(3,139) | $28,508 | 908.2% | |||
Income tax benefit (expense) increased $28.5 million, or 908.2%, to a benefit of $25.4 million for the six
months ended June 30, 2026 from an expense of $3.1 million for the six months ended June 30, 2025.
The change in deferred tax expense was mainly related to a decrease in deferred state taxes as a result
of an increase in apportionable state losses over the prior period. We elected to be taxed as a corporation
for U.S. federal income tax purposes and are therefore subject to entity-level U.S. federal income tax.
Net Income (Loss) and Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling
Interests and Noncontrolling Interests
(in thousands, except percentages) | Six Months Ended June 30, | ||||||
2026 | 2025 | Change ($) | Change (%) | ||||
Net income (loss) and comprehensive income (loss) attributable to redeemable noncontrolling interests and noncontrolling interests ............................................................ | $16,608 | $(40,316) | $56,924 | 141.2% | |||
Net income (loss) attributable to noncontrolling interests increased $56.9 million, or 141%, to $16.6 million
(income allocated to NCI) for the six months ended June 30, 2026 from $40.3 million (loss allocated to
NCI) for the six months ended June 30, 2025. The change was primarily driven by a $52.0 million
increase attributable to three of our eight tax equity partnerships, which included a $32.0 million increase
attributable to a tax equity partnership as a result of the allocation percentage increasing from 18% in
2025 to 27% in 2026, which allocates 9% more of the remaining cash distributions to the tax equity
investor and a $20.0 million increase driven by the effects of the partnership’s respective HLBV
distribution waterfalls and changes in tax depreciation and capital account balances between periods. The
remaining $4.9 million variance reflects changes in income and loss allocations across our other tax
equity partnerships, as the respective HLBV-based allocations shifted between periods.
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COMPARISON OF THE YEARS ENDED DECEMBER 31, 2025 AND 2024
Revenue
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Total revenue from contracts with customers .......................................................... | $142,981 | $100,552 | $42,429 | 42.2% | |||
Realized revenue from power price swap derivatives ......................................................... | $7,186 | $12,391 | $(5,205) | (42.0%) | |||
Unrealized change in fair value of power price swap derivatives ..................................... | $63,300 | $119,300 | $(56,000) | (46.9%) | |||
Revenue ............................................................. | $213,467 | $232,243 | $(18,776) | (8.1%) | |||
Revenue decreased by $18.8 million, or 8.1%, to $213.5 million for the year ended December 31, 2025,
from $232.2 million for the year ended December 31, 2024. The decrease was primarily attributable to a
$61.2 million decrease in both unrealized change in fair value of derivatives and realized revenue from
derivatives (from $131.7 million to $70.5 million), resulting from lower unrealized mark-to-market gains on
PPA swap contracts. The decrease was partially offset by a $38.3 million increase in energy revenue
(from $87.5 million to $125.8 million), reflecting higher generation from newly operational projects,
including Orion I, II, and III, which contributed a full twelve months of revenue for the year ended
December 31, 2025 as opposed to a partial year for the year ended December 31, 2024. We also
experienced generally favorable basis and node pricing in Texas. REC revenue also increased $4.1
million (from $13.1 million to $17.2 million).
The following table sets forth key operating metrics for our standalone power generation portfolio for the
periods indicated:
Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change | Change (%) | ||||
Electricity generated (GWh) .................................... | 5,097 | 4,412 | 685 | 15.5% | |||
Energy revenue increased $38.3 million, or 43.8%, to $125.8 million for the year ended December 31,
2025, from $87.5 million for the year ended December 31, 2024. The increase was primarily attributable
to a 15.5% increase in generation volumes, driven primarily by the contribution of a full twelve months of
generation from the Orion I, II, and III projects (which commenced commercial operations during 2024)
and generally favorable availability. Volume increase contributed approximately $13.6 million to the year-
over-year increase in revenue and change in realized price contributed approximately $24.7 million to the
year-over-year change.
Cost of Operations, exclusive of depreciation, amortization, and accretion
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Cost of operations, exclusive of depreciation, amortization, and accretion ..... | $81,393 | $55,213 | $26,180 | 47.4% | |||
Cost of operations, exclusive of depreciation, amortization, and accretion increased by $26.2 million, or
47.4%, to $81.4 million for the year ended December 31, 2025, from $55.2 million for the year ended
December 31, 2024. The increase was primarily driven by higher project-level operating costs associated
with newly operational facilities, including operations and maintenance expense, onsite expenses, and
land lease costs, which increased by approximately $11.0 million. In addition, property taxes and
insurance expense increased by $7.0 million.
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The increase also reflected higher research and development expenses of approximately $3.5 million and
increased engineering advisory costs of approximately $1.5 million. Legal fees increased modestly, by
approximately $2.3 million compared to the prior year. These increases were partially offset by the
absence of certain discrete costs in the latter part of the year and by expense levels normalizing toward
the end of 2025.
Depreciation, Amortization and Accretion
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Depreciation, amortization and accretion ..... | $94,080 | $73,314 | $20,766 | 28.3% | |||
Depreciation, amortization and accretion increased by $20.8 million, or 28.3%, to $94.1 million for the
year ended December 31, 2025, from $73.3 million for the year ended December 31, 2024. The increase
was primarily attributable to the expansion of our operating asset base as additional projects achieved
commercial operation and were placed into service, resulting in a higher depreciable property balance in
2025.
General and Administrative
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
General and administrative ............................. | $679,566 | $169,095 | $510,471 | 301.9% | |||
General and administrative expenses increased by $510.5 million, or 301.9%, to $679.6 million for the
year ended December 31, 2025, from $169.1 million for the year ended December 31, 2024. The
increase was primarily attributable to a $533.7 million increase in noncash stock-based compensation
expense, partially offset by a $101.8 million decrease in stock-based compensation expense related to
units which were fully redeemed during 2024.
Interest Income
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Interest income ................................................. | $14,638 | $18,964 | $(4,326) | (22.8%) | |||
Interest income decreased by $4.3 million, or 22.8%, to $14.6 million for the year ended December 31,
2025, from $19.0 million for the year ended December 31, 2024. The decrease was primarily attributable
to lower average cash and restricted cash balances in 2025 as funds were deployed into construction and
development activities. Total cash and restricted cash declined $355.5 million, or 61.9%, from $574.2
million at December 31, 2024, to $218.7 million at December 31, 2025.
Interest Expense
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Interest expense ............................................... | $(162,392) | $(127,554) | $(34,838) | 27.3% | |||
Interest expense increased $34.8 million, or 27.3%, to $162.4 million for the year ended December 31,
2025, from $127.6 million compared to the prior year for the year ended December 31, 2024. The
increase was primarily driven by higher average outstanding indebtedness as total debt, on a principal
basis, grew from $1.5 billion to $2.2 billion, reflecting new construction loan draws on the Pelicans Jaw
Facility ($296.8 million drawn during 2025), the Angela Bridge Loan ($127.9 million outstanding at year-
end), and draws on the Global Borrower Revolving Loan, the proceeds of which were used to fund our
162
project development activities. The increase in interest expense was partially offset by higher
capitalization of interest costs to construction in progress during 2025.
Losses in Equity Method Investment
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Losses in equity method investment ............. | $(1,740) | $(14,203) | $12,463 | (87.7%) | |||
Loss in our equity method investment decreased $12.5 million, or 87.7%, to $1.7 million for the year
ended December 31, 2025 from $14.2 million for the year ended December 31, 2024, primarily reflecting
lower portion of losses allocated under the HLBV method applied to our 27.9% economic interest in
Balanced Rock Power, LLC. During 2025, we made additional contributions of $13.0 million to Balanced
Rock Power, LLC, increasing the carrying value of the investment from $22.5 million to $33.8 million as of
December 31, 2025.
Other income (expense), Net
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Other income (expense), net .......................... | $12,176 | $(617) | $12,793 | (2073.4%) | |||
Other income (expense), net changed from a $0.6 million expense for the year ended December 31, 2024
to $12.2 million of income, net for the year ended December 31, 2025, an increase of $12.8 million. The
increase was primarily attributable to a $15.2 million release payment received during the first quarter of
2025 in connection with the mutual termination of lease options related to a solar development project
that we determined not to pursue. This gain was partially offset by other net charges recognized during
the year.
Income Tax Expense
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change ($) | Change (%) | |||
Income tax expense ......................................... | $(9,202) | $(15,262) | $6,060 | (39.7%) | |||
Income tax expense decreased by $6.1 million, or 40%, to $9.2 million for the year ended December 31,
2025 from $15.3 million for the year ended December 31, 2024. The decrease was primarily attributable
to lower state tax expense resulting from higher pre-tax operating losses in 2025. This decrease was
partially offset by higher permanent adjustments in 2025 and a reduction in valuation allowance in 2024.
Since we have elected to be taxed as a corporation for federal income tax purposes, income tax expense
reflects (i) U.S. federal income taxes imposed on us and on any corporate subsidiaries that are subject to
entity-level income tax, (ii) state and local income taxes in jurisdictions that impose entity-level taxes on
corporations or pass-through entities, and (iii) changes in deferred tax assets and liabilities, including as a
result of temporary differences between the tax basis and financial statement carrying value of our assets
and liabilities.
Net Loss and Comprehensive Loss Attributable to Redeemable Noncontrolling Interests and
Noncontrolling Interests
(in thousands, except percentages) | Year Ended Dec 31, 2025 | Year Ended Dec 31, 2024 | Change | Change (%) | ||||
Net loss and comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling interests .......... | $(50,084) | $(310,155) | $260,071 | (83.9%) | ||||
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Net loss and comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling
interests decreased by $260.1 million, or 83.9%, to $50.1 million for the year ended December 31, 2025
from $310.2 million for the year ended December 31, 2024. The decrease was primarily driven by the
allocation of losses under the HLBV method. The allocation of earnings and losses can vary significantly
from period to period based on changes in the underlying economics of our project-level partnerships,
including the impact of tax attributes such as ITCs and accelerated tax depreciation. In 2024, we
recognized greater ITCs from qualifying projects, resulting in a greater allocation of losses to NCIs. No
ITCs were generated or recognized in 2025, resulting in a lower allocation of losses compared to the prior
year.
LIQUIDITY AND CAPITAL RESOURCES
We are a capital-intensive business that requires significant funding to develop, construct and operate
utility-scale solar, energy storage and data center projects. At June 30, 2026, we had unrestricted cash
and cash equivalents of $1,199.1 million, restricted cash of $1,016.4 million, and $2.5 billion of undrawn
committed borrowing capacity, primarily consisting of $1.9 billion undrawn under our Libra Construction
and Bridge Loan, $0.3 billion undrawn under our Athos Storage Construction and Bridge Loan, and $0.2
billion remaining undrawn under our Pelicans Jaw Construction and Bridge Loan.
Our primary sources of liquidity have been capital contributions from our direct and indirect parent
entities, proceeds from project-level financings, including construction loans, term loans, bridge loans and
tax equity, as well as cash generated from our operating portfolio of solar projects. Our primary uses of
cash include funding the construction of data center projects, solar and energy storage projects, servicing
project-level debt, making capital distributions and paying operating expenses associated with our
existing portfolio of projects and corporate overhead.
We believe that our existing cash and cash equivalents, together with available borrowing capacity under
our existing credit facilities, distributions from our operational subsidiaries, and expected contributions
from tax equity in connection with certain project financings, including the Libra Project and Athos
Storage, will be sufficient to meet our operating expenses, debt service requirements and capital
expenditure needs for at least the next 12 months from the date of this prospectus.
Our future capital requirements will depend on many factors, including the pace of new project
development and construction, the timing and amount of tax equity financing closings, energy pricing
conditions, the regulatory environment for renewable energy tax credits and our ability to access
additional debt and equity financing on favorable terms.
Debt from Related Parties
As of June 30, 2026 and December 31, 2025, we had $709.5 million of borrowings from related parties
outstanding, all of which was classified as non-current. In addition to borrowings from related parties, we
maintain the following project-level and subsidiary-level financing arrangements with third-party lenders.
Project-level Debt Arrangements
Our project-level and subsidiary-level financing arrangements contain customary project finance
covenants and events of default, including covenants relating to preservation of material project
documents, permits and project collateral, maintenance of debt service reserve accounts and limitations
on restricted payments. In particular, distributions under the Big Five senior and intermediate facilities
described below are conditioned on, among other things, no default or event of default, a debt service
coverage ratio of at least 1.20:1.00 for the two most recently completed semi-annual periods,
maintenance of required debt service reserves or qualifying credit support, and no outstanding
reimbursement obligations or project or debt service reserve letter of credit loans. Distributions under the
Global Borrower Credit Agreement are conditioned on, among other things, no default or event of default,
a debt service coverage ratio of at least 1.10:1.00 for the two most recently completed semi-annual
periods and maintenance of the required liquidity and debt service reserve amount. The Pelicans Jaw
financing is generally non-recourse to us, except for specified sponsor guaranties and indemnities
164
provided by SBE US Holdings One, LLC, including guaranties supporting certain construction-period, tax
credit and reserve obligations. As of June 30, 2026, we were in compliance with all financial covenants
under our financing agreements.
Certain of our financings are secured by pledges of equity interests in the applicable project or borrower
entities and security interests in project assets, including material project documents, permits and related
collateral. Upon an event of default, the applicable lenders may be entitled to accelerate amounts
outstanding, terminate commitments, require cash collateralization of outstanding letters of credit and
exercise remedies against the applicable collateral; certain related financing arrangements also include
cross-default provisions that may cause a default under one financing arrangement to result in remedies
under another related financing arrangement. In addition, our financing agreements, including our project-
level debt agreements, include various customary restrictive covenants, including covenants restricting
the payment of distributions and requiring maintenance of certain financial ratios.
Cosmos Bridge Loan and Cosmos Senior Secured Notes
On March 31, 2026, SE Cosmos, LLC, our wholly owned subsidiary, entered into a financing agreement
with certain lenders to obtain a bridge loan for a total loan commitment of $425.0 million (“Cosmos Bridge
Loan”). On April 1, 2026, SE Cosmos, LLC drew down and received proceeds of $342.3 million.
On April 30, 2026, SE Cosmos, LLC entered into a purchase agreement and related financing
arrangements to issue $999.0 million aggregate principal amount of 8.875% senior secured notes due
2031, which settled on May 7, 2026 (“Cosmos Senior Secured Notes”). Part of the proceeds were used to
repay in full the outstanding principal and accrued interest of the Cosmos Bridge Loan. As of June 30,
2026, the principal outstanding was $999.0 million under the Cosmos Senior Secured Notes.
The Cosmos Senior Secured Notes are secured by first‑priority liens on substantially all assets of SE
Cosmos, LLC, including pledged equity and the project assets, pursuant to a security agreement with a
collateral agent.
Libra Construction Loan and Libra Bridge Loan
On March 13, 2026, Libra Project Company and Libra Member B, LLC, our wholly owned subsidiaries,
entered into a financing agreement with certain lenders for a total loan commitment of $2.4 billion (“Libra
Construction Loan” and “Libra Bridge Loan”) and a letter of credit facility of $98.0 million. As of June 30,
2026, the principal outstanding was $512.9 million under the construction loan.
The obligations under the Libra Construction Loan or the Libra Bridge Loan are secured by substantially
all project assets and are subject to customary project finance covenants, including minimum debt service
coverage requirements and restrictions on additional indebtedness, liens and distributions.
Athos Storage Construction Loan and Athos Storage Bridge Loan
On March 19, 2026, Athos Storage, LLC and Athos Storage Member B, LLC, our wholly owned
subsidiaries, entered into financing agreements with certain lenders for a total loan commitment of $679.4
million (“Athos Storage Construction Loan” and “Athos Storage Bridge Loan”) and a letter of credit facility
of $78.0 million. As of June 30, 2026, the principal outstanding was $286.6 million under the construction
loan and $75.3 million under the bridge loan.
The obligations under the Athos Storage Construction Loan or the Athos Storage Bridge Loan are
secured by substantially all project assets and are subject to customary project finance covenants,
including minimum debt service coverage requirements and restrictions on additional indebtedness, liens
and distributions.
Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan
Pelicans Jaw Solar, LLC entered into a financing agreement dated December 23, 2024 providing for an
aggregate loan commitment of $1,028.3 million and a $72.3 million letter of credit facility. The Pelicans
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Jaw Construction Loan will convert to a term loan on the earlier of the term loan conversion date, the tax
equity final funding date or March 31, 2027. During 2025, Pelicans Jaw Solar, LLC made additional draws
of $296.8 million on the construction loan and $234.4 million on the bridge loan. As of June 30, 2026,
Pelicans Jaw Solar, LLC made additional draws of $137.9 million on the bridge loan, and the principal
outstanding was $485.4 million under the construction loan and $372.3 million under the bridge loan, and
both facilities are due March 31, 2027.
The obligations under the Pelicans Jaw Construction/Bridge Loan are guaranteed by Pelicans Jaw TE
Holdco, LLC, Pelicans Jaw Member B, LLC, and Pelicans Jaw Construction Holdco, LLC and are secured
by a first priority lien on substantially all of the assets of Pelicans Jaw Solar, LLC, Pelicans Jaw TE
Holdco, LLC, Pelicans Jaw Member B, LLC, and Pelicans Jaw Construction Holdco, LLC.
Global Borrower Term Loan and Global Borrower Revolving Loan
On October 18, 2023, SE Global Borrower, LLC entered into the Global Borrower Credit Agreement
providing for a term loan, revolving loan and letter of credit facility, each of which was subsequently
amended prior to and during 2025. Following the October 22, 2025 amendment, the revolving loan
commitment increased to $262.0 million and the letter of credit facility commitment increased to $475.0
million. The Global Borrower Term Loan and Global Borrower Revolving Loan bear interest at 6-month
SOFR plus 375 basis points and mature on October 18, 2027. As of June 30, 2026, the principal amount
outstanding was $263.0 million under the term loan and $210.0 million under the revolving loan.
Senior Borrower 1 Term Loan
On January 24, 2024, Big Five Holdco 1, LLC (“Senior Borrower 1”) entered into a financing agreement
providing for a $162.2 million term loan and an $8.4 million letter of credit facility, which was subsequently
increased through an omnibus amendment and joinder agreement. At closing, Senior Borrower 1 drew
down the full $162.2 million term loan commitment. The loan bears interest at daily compounded SOFR
plus a 2.0% margin, matures on January 29, 2034 and is secured by a pledge of 100% of the
membership interests held by certain subsidiaries in the applicable project-level tax equity partnerships,
which subsidiaries are indirect subsidiaries of Senior Borrower 1. As of June 30, 2026, principal
outstanding under the Senior Borrower 1 Term Loan was $162.2 million.
The obligations under the Senior Borrower 1 Term Loan are guaranteed by Big Five Holdco 2, LLC, SE
Big Five Pledgor, LLC, and SE Big Five Borrower, LLC and are secured by a first priority lien on
substantially all of the assets of Big Five Holdco 1, LLC, Big Five Holdco 2, LLC, SE Big Five Pledgor,
LLC, and SE Big Five Borrower, LLC.
Senior Borrower 2 Term Loan
On January 24, 2024, Big Five Holdco 2, LLC (“Senior Borrower 2”) entered into a financing agreement
providing for a $162.2 million term loan and an $8.4 million letter of credit facility. At closing, Senior
Borrower 2 drew down the full $162.2 million term loan commitment. The loan bears interest at daily
compounded SOFR plus a 2.0% margin, matures on January 29, 2034 and is secured by 100% of the
membership interests of the applicable Class N Members. As of June 30, 2026, principal outstanding
under the Senior Borrower 2 Term Loan was $162.2 million.
The obligations under the Senior Borrower 2 Term Loan are guaranteed by Big Five Holdco 1, LLC, SE
Big Five Pledgor, LLC, and SE Big Five Borrower, LLC and are secured by a first priority lien on
substantially all of the assets of Big Five Holdco 1, LLC, Big Five Holdco 2, LLC, SE Big Five Pledgor,
LLC, and SE Big Five Borrower, LLC.
Angela Bridge Loan
Angiola East, LLC (“Angiola East”) entered into a financing agreement dated May 12, 2025 providing for a
total loan commitment of $140.6 million. The Angela Bridge Loan bears interest at SOFR plus 125 basis
points and matured on March 31, 2026. During 2025, Angiola East, LLC made additional draws of $66.9
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million. On February 11, 2026, Angiola East fully repaid the outstanding principal of the Angela Bridge
Loan.
Orion 3 Member B Term Loan
On September 3, 2024, Orion 3 Member B, LLC converted its then-outstanding construction financing for
the Ben Milam 3 project into a term loan with a total loan commitment of $98.2 million and a related letter
of credit facility. The loan bears interest at 6-month SOFR plus 162.5 basis points, matures on September
3, 2029 and is secured by a pledge of 100% of the membership interests of Ben Milam 3 Project
Company held through Orion 3 TE Holdco, LLC. As of June 30, 2026, principal outstanding under the
Orion 3 Member B Term Loan was $95.6 million.
The obligations under the Orion 3 Member B Term Loan are guaranteed by Orion 3 Construction Holdco,
LLC, Orion 3 TE Holdco, LLC, and Orion 3 Class N Member Holdco, LLC and are secured by a first
priority lien on substantially all of the assets of Orion 3 Member B, LLC, Orion 3 Construction Holdco,
LLC, and Orion 3 TE Holdco, LLC.
Orion 2 Member B Term Loan
On November 26, 2024, Orion 2 Member B, LLC converted the Ben Milam 2 Construction Loan into the
Orion 2 Member B Term Loan with a total loan commitment of $96.1 million and a related letter of credit
facility. The loan bears interest at 6-month SOFR plus 187.5 basis points, matures on November 26, 2034
and is secured by 100% of the membership interests of Ben Milam 2 Project Company held through Orion
2 TE Holdco, LLC. As of June 30, 2026, principal outstanding under the Orion 2 Member B Term Loan
was $92.3 million.
The obligations under the Orion 2 Member B Term Loan are guaranteed by Orion 2 Construction Holdco,
LLC, Orion 2 TE Holdco, LLC, and Orion 2 Class N Member Holdco, LLC and are secured by a first
priority lien on substantially all of the assets of Orion 2 Member B, LLC, Orion 2 Construction Holdco,
LLC, and Orion 2 TE Holdco, LLC.
Eiffel Term Loan
On December 6, 2023, Eiffel Member B, LLC converted the Eiffel Construction Loan into the Eiffel Term
Loan with a total commitment of $91.1 million. The Eiffel Term Loan bears interest at 6-month SOFR plus
175 basis points, matures on December 6, 2033 and is secured by 100% of the membership interests of
Paris Farm Project Company held through Eiffel TE Holdco, LLC. As of June 30, 2026, principal
outstanding under the Eiffel Term Loan was $88.7 million.
The obligations under the Eiffel Term Loan are guaranteed by Eiffel Construction Holdco, LLC, Eiffel TE
Holdco, LLC, and Eiffel Class N Member Holdco, LLC and are secured by a first priority lien on
substantially all of the assets of Eiffel Member B, LLC, Eiffel Construction Holdco, LLC, and Eiffel TE
Holdco, LLC.
Orion 1 Member B Term Loan
On October 30, 2024, Orion 1 Member B, LLC converted the Ben Milam 1 Construction Loan into the
Orion 1 Member B Term Loan with a total loan commitment of $85.0 million and a related letter of credit
facility. The loan bears interest at 6-month SOFR plus 162.5 basis points, matures on October 29, 2029
and is secured by 100% of the membership interests of Ben Milam 1 Project Company held through Orion
1 TE Holdco, LLC. As of June 30, 2026, principal outstanding under the Orion 1 Member B Term Loan
was $83.2 million.
The obligations under the Orion 1 Member B Term Loan are guaranteed by Orion 1 Construction Holdco,
LLC, Orion 1 TE Holdco, LLC, and Orion 1 Class N Member Holdco, LLC and are secured by a first
priority lien on substantially all of the assets of Orion 1 Member B, LLC, Orion 1 Construction Holdco,
LLC, and Orion 1 TE Holdco, LLC.
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SE Borrower Term Loan
On March 6, 2024, SE Borrower, LLC (“SE Borrower”) entered into a financing agreement providing for a
total term loan commitment of $134.0 million. The SE Borrower Term Loan bears interest at a fixed rate of
12.0% and, following the September 18, 2025 amendment, matures on September 6, 2026. As of
December 31, 2025, principal outstanding under the SE Borrower Term Loan was $60.5 million. On
January 22, 2026, SE Borrower fully repaid the outstanding principal of SE Borrower Term Loan.
The obligations under the SE Borrower Term Loan are guaranteed by Aratina Holdings, LLC and are
secured by a first priority lien on substantially all of the assets of SE Borrower, LLC, Aratina Holdings,
LLC, Aratina Pledgor, LLC, and Aratina Borrower, LLC.
Mezzanine Borrower 1 Term Loan.
On January 24, 2024, Big Five Intermediate Holdco 1, LLC (“Mezzanine Borrower 1”) entered into a
financing agreement providing for a $50.0 million term loan and a $15.0 million letter of credit facility. At
closing, Mezzanine Borrower 1 drew down the full $50.0 million term loan commitment. The loan bears
interest at daily compounded SOFR plus a 3.0% margin, matures on January 29, 2034 and is secured by
a pledge of 50% of the membership interests in the applicable senior-level holding company that indirectly
holds the project interests securing the related senior financing. As of June 30, 2026, principal
outstanding under the Mezzanine Borrower 1 Term Loan was $50.0 million.
The obligations under the Mezzanine Borrower 1 Term Loan are guaranteed by Big Five Intermediate
Holdco 2, LLC and are secured by a first priority lien on substantially all of the assets of Big Five
Intermediate Holdco 1, LLC and Big Five Intermediate Holdco 2, LLC.
Mezzanine Borrower 2 Term Loan
On January 24, 2024, Big Five Intermediate Holdco 2, LLC (“Mezzanine Borrower 2”) entered into a
financing agreement providing for a $50.0 million term loan and a $17.0 million letter of credit facility. At
closing, Mezzanine Borrower 2 drew down the full $50.0 million term loan commitment. The loan bears
interest at daily compounded SOFR plus a 3.0% margin, matures on January 29, 2034 and is secured by
a pledge of 50% of the membership interests in Big Five Senior Pledgor, LLC, the applicable senior-level
holding company that indirectly owns, through several intermediate entities, the project interests in the
Athos I, Athos II, Titan, Aragorn, and Juno solar projects securing the related senior financing. As of June
30, 2026, principal outstanding under the Mezzanine Borrower 2 Term Loan was $50.0 million.
The obligations under the Mezzanine Borrower 2 Term Loan are guaranteed by Big Five Intermediate
Holdco 1, LLC and are secured by a first priority lien on substantially all of the assets of Big Five
Intermediate Holdco 1, LLC and Big Five Intermediate Holdco 2, LLC.
IP Backlog Land Loan
On September 10, 2020, IP Backlog Land Holdings, LLC, entered into the IP Backlog Land Loan for a
total loan amount of $37.0 million. The loan bears interest at 450 basis points per annum and is
scheduled to be paid in full on August 11, 2055. As of June 30, 2026, principal outstanding under the IP
Backlog Land Loan was $37.0 million.
The obligations under the IP Backlog Land Loan are not guaranteed by any affiliate of the Borrower and
are secured by a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
on substantially all of the assets of IP Backlog Land Holdings, LLC.
New Credit Facility
We expect to enter into the Credit Facility with Citibank, N.A. as administrative agent and collateral agent.
Borrowings and letters of credit under the Credit Facility will be available for working capital and general
corporate and other lawful purposes, including refinancing existing indebtedness, investments,
acquisitions and capital expenditures. We expect the repayment in full of all amounts outstanding under
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our Hickory Facilities and the termination of all liens and guarantees in connection therewith to occur
substantially concurrently with, and to be funded from, the initial borrowing under the Credit Facility. The
Credit Facility will require us to maintain minimum liquidity as specified in the Credit Facility. The Credit
Facility will provide for (i) a senior secured revolving credit facility in an aggregate committed amount of
up to $1.875 billion (providing cash and letters of credit) and (ii) a separate senior secured letter of credit
facility in an aggregate committed amount of up to $1.125 billion, for aggregate commitments of $3.0
billion, in each case maturing three and one-half years after the closing date. Letters of credit may be
issued under the revolving facility within the revolving commitments. Borrowings under the Credit Facility
are expected to bear interest at our option, at a rate per annum equal to term SOFR or an alternate base
rate, in each case plus an applicable margin ranging from 1.75% to 2.25% for term SOFR borrowings and
from 0.75% to 1.25% for alternate base rate borrowings, determined by reference to our secured net
leverage ratio. We also expect to pay a commitment fee of 0.375% per annum on the undrawn portion of
both the revolving commitments and the letter of credit facility commitments, together with customary
letter of credit and agency fees. The Credit Facility remains subject to the satisfaction of customary
conditions precedent, including the pricing of this offering, and there can be no assurance that it will
become effective. See also “Description of Certain Indebtedness.”
Letters of Credit and Other Credit Support
In addition to funded indebtedness we had substantial outstanding letters of credit and similar credit
support arrangements. These related primarily to PPAs, interconnection performance obligations, debt
service reserves, cluster study agreements, interconnection bonds, equipment bonds and
decommissioning bonds. The total amount of letters of credit used was $1,141.6 million as of June 30,
2026.
These credit support requirements reduce the availability of capacity under certain of our credit facilities
and may require us to use cash or other liquidity sources if letters of credit are drawn, expire, are not
renewed or must be replaced with cash collateral or other forms of support. Our collateral and credit
support requirements will increase materially as we enter into new or amended commercial,
interconnection, derivative, procurement or financing arrangements, or upon events specified in existing
agreements, including project delays, missed milestones, market price movements, increased project or
interconnection costs, or changes in the credit quality of us, our parent, any guarantor or other credit
support provider. See also “Description of Certain Indebtedness.”
PORTS-Pike Technology Campus NVIDIA residual value guaranty. NVIDIA has provided residual
value guaranties over the tenant’s obligations under the leases covering each of the initial nine buildings,
representing approximately 4.25 GW-IT of critical IT load, subject to a declining guaranteed minimum
value and an aggregate cap of $105 billion. The guaranties are residual value guaranties and are
triggered only upon tenant insolvency or an uncured monetary default under an applicable lease.
Following a trigger, NVIDIA may assume an applicable tenancy itself or through an assignee or direct us
to re-let (or, if unsuccessful in reletting, sell) the premises. The guaranteed minimum value declines on a
defined schedule over the 20-year leases. The aggregate remedy cap is $105 billion across related
guaranties on the initial 4.25 GW-IT. The guaranty automatically terminates and NVIDIA is released if
OpenAI Group PBC achieves a certain designated or if specified replacement guaranties or leases are
provided. We did not offer and do not owe any compensation to NVIDIA for the guaranties; such
compensation is provided separately by OpenAI under a separate agreement.
NVIDIA also has an option, in its sole discretion, to provide guaranties for the remaining approximately
3.78 GW-IT of buildings. If NVIDIA does not provide such guaranties by a date certain, OpenAI is required
to secure a replacement guarantor meeting or exceeding a credit rating for A- from S&P or its equivalent
from Moody’s.
For additional information regarding our debt arrangements, including principal amounts outstanding,
maturity dates, interest rates, collateral arrangements and future principal repayments, as well as letters
of credit and other credit commitments or arrangements, see Note 10 and Note 13, respectively, to our
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unaudited condensed consolidated financial statements and Note 11 and Note 14, respectively, to our
audited consolidated financial statements each included elsewhere in this prospectus.
The Ares Investment and Redemption
Original Investment
Across 2022, 2024, and 2025, SBE Global issued $800 million of preferred equity interests with an
aggregate liquidation preference of approximately $996 million as of December 31, 2025 to Ares. In
connection with the 2025 issuance, SBE Global also issued warrants to Ares to purchase common equity
interests of SBE Global equal to the then-expected fair market value.
Deployment of Proceeds
SBE Global used the proceeds from the Ares investment to redeem in full some previously issued
preferred equity, pay accrued interest and transaction fees, and deployed the balance to us through two
intercompany revolving promissory notes with an aggregate principal balance of approximately $709.5
million (the “Intercompany Notes”). We used the proceeds of the Intercompany Notes to fund the
construction of power projects (including Pelicans Jaw, Angela, and Athos Storage), data center site
acquisition and development expenditures, and general corporate and working capital needs. In total,
SBE Global raised approximately $800 million through the issuance of those preferred equity interests
(representing an aggregate liquidation preference of approximately $996 million as of December 31,
2025), a portion of which was made available to us through the Intercompany Notes to fund our
development and construction activities.
Under the SBE Global partnership agreement, Ares is allocated interest income equal to its preferred
accretion (i.e., the preferred return on its preferred equity interests) before any amounts are allocated to
the holders of common equity interests. SB Energy, Inc. has cash-paid the annual interest accrual on the
intercompany notes owed to SBE Global.
Ares Redemption Mechanics
We currently expect the Ares Redemption to occur prior to or substantially concurrently with the
completion of this offering and before we receive the net proceeds of this offering, although the actual
sequence and timing may differ. In connection with the Ares Redemption:
(1)SB Energy, Inc. is expected to complete the Intercompany Notes Repayment, funded with cash on
hand, borrowings under the Credit Facility and/or other sources prior to or substantially concurrently
with the completion of this offering; this repayment is not conditioned on entry into the Credit Facility,
and we have, and expect to have, sufficient cash on hand to repay the Intercompany Notes in full if
the Credit Facility is not entered into;
(2)SBE Global will use the proceeds of the Intercompany Notes Repayment, together with a cash
contribution from existing cash at Energy Global, to redeem, in full, the preferred equity interests held
by Ares at a redemption price determined under the limited partnership agreement of SBE Global;
and
(3)the warrants held by Ares will be net-settled for cash, with the net cash settlement amount expected
to be approximately $40 million and funded by SBE Global (directly or through the proceeds of the
Intercompany Notes Repayment) or by Energy Global rather than by the Company.
Following completion of the Ares Redemption, Ares will no longer hold any equity interest, preferred claim,
or warrant position in SBE Global or any of its subsidiaries.
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Cash Flows
Comparison of the six months ended June 30, 2026 and 2025
The following table summarizes our cash flows for the periods presented:
Six Months Ended June 30, | |||
(in thousands) | 2026 | 2025 | |
Net cash used in operating activities ................................................................... | $(55,597) | $(46,254) | |
Net cash used in investing activities .................................................................... | (1,706,243) | (372,257) | |
Net cash provided by financing activities ............................................................ | 3,758,657 | 203,897 | |
Operating Activities
Net cash used in operating activities was $55.6 million for the six months ended June 30, 2026, compared
to $46.3 million for the six months ended June 30, 2025.
Cash used in operating activities for the six months ended June 30, 2026 reflected a net loss of $3,192.3
million, partially offset by net noncash adjustments of $3,141.0 million, including $2,573.1 million loss on
the change in fair value of the warrant liability, $589.5 million of stock-based compensation expense,
$48.1 million of depreciation, amortization and accretion, $7.3 million of amortization of deferred financing
costs, $6.8 million loss on debt extinguishment, $6.7 million unrealized loss on our equity method
investment, and $1.8 million of noncash lease expense. These noncash adjustments were partially offset
by a $67.0 million change in the fair value of derivatives, and a $25.4 million decrease in deferred tax
liability. The net impact of changes in operating assets and liabilities was unfavorable by $4.3 million,
driven primarily by a $3.4 million decrease in other non-current assets, a $20.3 million decrease in
accounts payable, a $7.4 million increase in accounts receivable, and a $2.0 million increase in income
taxes receivable. These unfavorable items were partially offset by a $9.5 million decrease in prepaid and
other current assets, a $7.6 million increase in accrued expenses and other current liabilities, a $3.8
million increase in payables to related parties, and a $1.2 million increase in operating lease liabilities.
Cash used in operating activities for the six months ended June 30, 2025 reflected a net loss of $255.8
million, partially offset by noncash adjustments of approximately $227.0 million, including $162.5 million of
stock-based compensation expense, $46.9 million of depreciation, amortization and accretion, $12.5
million of changes in fair value of derivatives, and $8.6 million of amortization of deferred financing costs.
These noncash adjustments were partially offset by a $3.6 million unrealized gain on our equity method
investment. The net impact of changes in operating assets and liabilities was unfavorable by $17.4
million, driven by a $15.9 million decrease in payables to related parties, a $9.4 million decrease in
accrued expenses and other current liabilities, a $3.3 million increase in other non-current assets, a $7.6
million increase in accounts receivable, and a $2.8 million decrease in other non-current liabilities. These
unfavorable items were partially offset by a $14.1 million increase in accounts payable, a $4.2 million
increase in operating lease liabilities, a $3.1 million decrease in income taxes receivable, and a $0.3
million decrease to prepaid and other current assets.
The period-over-period increase in net cash used in operating activities of $9.3 million was primarily
attributable to $2,936.4 million increase in net loss and a $13.1 million favorable change in operating
assets and liabilities, reflecting a higher net working capital in the six months ended June 30, 2026 as
compared to the prior-year period. This increase was substantially offset by a $2,914.0 million increase in
noncash adjustments, primarily driven by the change in fair value of the warrant liability and higher stock-
based compensation expense in the six months ended June 30, 2026 as compared to the prior-year
period.
Investing Activities
Net cash used in investing activities was $1,706.2 million for the six months ended June 30, 2026,
compared to $372.3 million for the six months ended June 30, 2025.
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Cash used in investing activities for the six months ended June 30, 2026, was primarily driven by
$1,672.5 million in payments for property, plant and equipment, including $1,618.9 million specifically for
payments related to construction in progress for various projects. Additionally, $33.8 million in payments
for advances to suppliers (primarily EPC contractor prepayments related to the Milam County Data Center
project) as we continued to expand our development and construction activities across multiple projects.
Cash used in investing activities for the six months ended June 30, 2025 was primarily driven by $357.5
million in payments for property, plant and equipment, $8.0 million in contributions to our equity method
investment in Balanced Rock Power, LLC, and $6.8 million in payments for advances to suppliers.
The period-over-period increase in net cash used in investing activities of $1,334.0 million was primarily
attributable to a $1,315.0 million increase in payments for property, plant and equipment and a $26.9
million increase in payments made for advances to suppliers, which was partially offset by the absence of
equity method investment contributions for the six months ended June 30, 2026.
Financing Activities
Net cash provided by financing activities was $3,758.7 million for the six months ended June 30, 2026,
compared to net cash provided by financing activities of $203.9 million for the six months ended June 30,
2025.
Cash provided by financing activities for the six months ended June 30, 2026 consisted of $2,396.1
million of proceeds from debt, primarily from the issuance of Cosmos Senior Secured Notes and
construction loan draws on the Libra Construction Loan, Athos Storage Construction Loan, Athos Storage
Bridge Loan, Pelicans Jaw Bridge Loan, SE Cosmos Bridge Loan, and Global Borrower Revolving Loan,
$1,905.4 million in capital contributions, and $222.8 million in proceeds from the financing obligation
(related to the Angela facility). These inflows were partially offset by $538.6 million in repayments of debt
(including the repayment of the SE Cosmos Bridge Loan of $342.7 million, the Angela Bridge Loan of
$133.1 million, and the SE Borrower Term Loan of $61.0 million), $105.1 million of deferred financing
costs associated with new credit facilities, $67.3 million in payments for financing obligations (related to
the Angela facility), $14.8 million in capital distributions, and $39.9 million in payments made for equity
financing costs.
Cash provided by financing activities for the six months ended June 30, 2025 consisted of $495.0 million
in capital contributions (related to funding from the issuance of preferred equity interests in SBE Global)
and $255.6 million of proceeds from debt. These inflows were partially offset by $520.4 million in capital
distributions (primarily related to the $495.0 million payment to Ares for the redemption of previously
issued preferred equity interests in SBE Global), $18.3 million in repayments of debt, $7.4 million in
payment of deferred financing costs, and $0.6 million in payments made for equity financing costs.
The period-over-period change of $3,554.8 million in financing activities was primarily attributable to a
$2,140.5 million increase in proceeds from debt, a $1,410.4 million increase in capital contributions, and a
$505.7 million decrease in capital distributions, partially offset by higher debt repayments and higher
deferred financing costs that occurred in the six months ended June 30, 2026.
Comparison of the years ended December 31, 2025 and 2024
The following table summarizes our cash flows for the periods presented:
Year Ended December 31, | |||
(in thousands) | 2025 | 2024 | |
Net cash used in operating activities ................................................................... | $(40,049) | $(65,871) | |
Net cash used in investing activities .................................................................... | (1,194,998) | (648,252) | |
Net cash provided by financing activities ............................................................ | 879,582 | 1,021,458 | |
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Operating Activities
Net cash used in operating activities was $40.0 million for the year ended December 31, 2025, compared
to $65.9 million for the year ended December 31, 2024. Cash used in operating activities for the year
ended December 31, 2025 reflected a net loss of $788.1 million, substantially offset by non-cash
adjustments of $742.8 million, including $674.1 million of stock-based compensation expense, $94.1
million of depreciation, amortization and accretion, $16.4 million of amortization of deferred financing
costs, a $9.3 million increase in deferred tax liability and a $1.7 million unrealized loss on our equity
method investment, partially offset by a $56.2 million change in fair value of derivatives.
The net impact of changes in operating assets and liabilities was $5.2 million, driven primarily by a $23.4
million increase in accounts payable, an $18.1 million decrease in payables to related parties, a $1.9
million increase in operating lease liabilities, a $4.5 million decrease in prepaid and other current assets,
and a $0.5 million decrease in accounts receivable, partially offset by a $7.1 million increase in other non-
current assets and a $0.2 million decrease in income taxes payable.
Net cash used in operating activities for the year ended December 31, 2024 reflected a net loss of $204.1
million, partially offset by non-cash adjustments of $131.8 million, including $140.3 million of non-cash
stock-based compensation expense, $73.3 million of depreciation, amortization and accretion, $19.8
million of amortization of deferred financing costs, a $16.1 million increase in deferred tax liability, an
unrealized loss of $14.2 million on our equity method investment and $1.8 million of payments of interest
and fees on related party loans. These non-cash adjustments were partially offset by a $135.6 million
change in fair value of derivatives and a $1.3 million income tax benefit.
The net impact of changes in operating assets and liabilities was $6.4 million, driven primarily by a $27.8
million increase in accrued expenses and other current liabilities, an $18.5 million decrease in receivables
from related parties, a $6.2 million increase in operating lease liabilities and a $1.6 million increase in
income taxes payable. These impacts were partially offset by a $28.7 million increase in other non-current
assets, an $8.6 million increase in accounts receivable and an $8.0 million increase in prepaid and other
current assets.
The year-over-year decrease in net cash used in operating activities of $25.8 million was primarily
attributable to a $611.1 million increase in non-cash adjustments, primarily driven by a $533.7 million
increase in stock-based compensation expense and a $1.2 million unfavorable change in operating
assets and liabilities. These favorable impacts were partially offset by a $584.0 million increase in net loss
year-over-year.
Investing Activities
Net cash used in investing activities was $1,195.0 million for the year ended December 31, 2025,
compared to $648.3 million for the year ended December 31, 2024. Cash used in investing activities for
the year ended December 31, 2025 was primarily driven by $1,073.8 million in payments for construction
in progress as we continued to expand development, including development and construction of our
projects. Additionally, we made $62.2 million in deposits, $27.0 million in advances to suppliers for
equipment and materials, $19.1 million in payments for property, plant, and equipment, and $13.0 million
in contributions to our equity method investment in Balanced Rock Power, LLC.
Net cash used in investing activities for the year ended December 31, 2024 was primarily driven by
$601.2 million in payments for property, plant and equipment, $36.7 million in contributions to our equity
method investment in Balanced Rock Power, LLC, and $10.3 million in deposits.
The year-over-year increase in net cash used in investing activities of $546.7 million was primarily
attributable to a $491.8 million increase in payments for property, plant and equipment, reflecting
increased construction and development activity across our project portfolio. The increase was also
driven by a $51.9 million increase in deposits and $27.0 million in advances to suppliers for equipment
and materials in 2025, partially offset by a $23.8 million decrease in contributions to our equity method
investment.
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Financing Activities
Net cash provided by financing activities was $879.6 million for the year ended December 31, 2025,
compared to $1,021.5 million for the year ended December 31, 2024. Cash provided by financing
activities for the year ended December 31, 2025 consisted of $670.1 million of proceeds from debt,
primarily from construction loan draws on the Pelicans Jaw Facility and the Angela Bridge Loan, $496.6
million in capital contributions from SBE Global, and $299.5 million in proceeds from debt from related
parties. These inflows were partially offset by $538.5 million in capital distributions, $23.0 million in
repayments of borrowings, $20.7 million in deferred financing costs associated with new and amended
credit facilities, and $4.5 million of payments for equity financing costs.
Net cash provided by financing activities for the year ended December 31, 2024 consisted of $1,473.6
million of proceeds from debt and $1,219.8 million of capital contributions. These inflows were partially
offset by $1,466.5 million of repayments of debt, $115.6 million of capital distributions, $66.6 million of
payments for deferred financing costs and $23.2 million of payments for equity financing costs.
The decrease in cash provided by financing activities was primarily attributable to lower capital
contributions and lower proceeds from debt in 2025 compared to 2024, partially offset by the absence of
significant debt repayments in 2025 and $299.5 million of proceeds from debt from related parties.
Related Party Cash Flows
SoftBank and OpenAI, through their affiliates, are current customers at three of our data center campuses
through long-term data center leases—Cosmos (SoftBank), Milam County (OpenAI) and PORTS-Pike
Technology Campus (OpenAI)—and we expect lease payments under these arrangements to constitute a
significant portion of our near-term data center revenue, subject to each facility reaching RFS status. For
Cosmos, rent commencement for each phase is scheduled to occur on the earlier of December 11, 2026
or the date the applicable phase achieves RFS status, and expected aggregate rent is approximately $2.5
billion over the 15-year initial term with SoftBank Group Capital Limited, a SoftBank Group affiliate,
guaranty exposure of approximately $2.9 billion. The Milam County leases cover approximately 753 MW
of critical IT capacity across two buildings and have 15-year initial terms. On August 17, 2026, 17 of our
subsidiaries, each as landlord, and an affiliate of OpenAI, as tenant, entered into individual lease
agreements for the PORTS-Pike Technology Campus, resulting in 17 leases covering approximately 8.0
GW-IT of critical IT capacity in the aggregate. Each lease has a 20-year initial term, structured as triple-
net leases with yield-on-cost rent, an annual escalator and phased commencement tied to RFS
conditions.
In addition to lease payments, we expect to continue to pay a portion of our operating cash flows to
SoftBank through annual royalties equal to 1% of our consolidated gross profit under the trademark
license agreement and, potentially, through tax sharing obligations, and to OpenAI through software
purchase commitments. For 2025, $0.1 million was payable to SoftBank under the trademark license
agreement, calculated on an entity-by-entity basis pursuant to the letter agreement dated June 11, 2026,
paid to SoftBank under the trademark license agreement. No royalties were payable for 2024 because we
did not have positive consolidated gross profit under the methodology specified in the trademark license
agreement. We have committed to minimum purchases of OpenAI software and tools of $10.0 million,
$15.0 million and $25.0 million for 2026, 2027 and 2028, respectively, or $50.0 million in the aggregate
through 2028. We are utilizing these AI-driven software and tools to improve productivity across our
Company and accelerate our project development and construction timelines.Expected aggregate rent
under the Cosmos lease is approximately $2.5 billion over its 15-year initial term. Direct cash inflows
(excluding pass through operating expenditures) from all leases is expected to be approximately $439
billion. However, there is no assurance we will be able to translate this backlog figure into revenues, and
rent commencement on all of our data centers are subject to significant uncertainties described under
“Risk Factors.” Our currently quantified aggregate outflows to SoftBank and OpenAI under the trademark
license agreement, the tax sharing agreement and our OpenAI software commitments total approximately
$50.1 million, consisting of $0.1 million payable to SoftBank in 2025, no tax sharing obligations for the
2025 tax year and $50.0 million of minimum software purchase commitments through 2028. Indirectly, the
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$1.5 billion Prepaid Forward Contract payment was received by Energy Global and was contributed to us
in full on the same day. We do not expect any net proceeds from this offering to be paid directly to
SoftBank or OpenAI. On a net basis, we expect cash inflows from related-party lease arrangements to
substantially exceed the outflows described above for the foreseeable future. The economic substance of
these arrangements, taken together, is that we function as a developer and operator of data center
infrastructure on behalf of related-party tenants, and our ability to generate revenue, service debt and
fund operations remains dependent on those counterparties performing their obligations. We believe that
we have entered into the agreements described in this section on an arm’s-length basis. See “Risk
Factors—Risks Related to Our Corporate Structure and Ownership” and “Certain Relationships and
Related Party Transactions.”
OFF-BALANCE SHEET ARRANGEMENTS
In the ordinary course of our development and financing activities, we are required to post letters of credit,
surety bonds and other forms of credit support under our PPAs, interconnection agreements, lease
arrangements and project-level financing agreements. For additional information regarding our letters of
credit and other commitments and contingencies, see Note 13 to our unaudited condensed consolidated
financial statements and Note 14 to audited consolidated financial statements, each included elsewhere
in this prospectus. Generally, our credit support requirements reduce the availability of capacity under
certain of our credit facilities and may require us to use cash or other liquidity sources if letters of credit
are drawn, expire, are not renewed, or must be replaced with cash collateral or other forms of support.
We also post surety bonds to satisfy credit support requirements under certain of our interconnection
agreements, equipment procurement contracts and decommissioning obligations. Our ability to secure
and maintain grid interconnection rights, as well as to satisfy credit support requirements under our
commercial and financing agreements, depends on our capacity to post substantial letters of credit, surety
bonds, cash, or other forms of credit support required by grid operators, utilities and counterparties. If our
credit facilities do not provide sufficient letter of credit or surety bond capacity, or if we are unable to
renew or replace existing letters of credit or surety bonds, we may have to utilize cash to make postings
or otherwise be unable to satisfy credit support requirements necessary to advance or maintain our
projects.
Our collateral and credit support requirements may increase as we enter into new or amended
commercial, interconnection, derivative, procurement, or financing arrangements, or upon events
specified in existing agreements, including project delays, missed milestones, market price movements,
increased project or interconnection costs, or changes in the credit quality of us, our parent, any
guarantor, or other credit support provider. While these arrangements are not reflected as indebtedness
on our consolidated balance sheets, they represent contingent obligations that could affect our liquidity if
letters of credit are drawn or if we are required to post additional collateral.
In addition, we are subject to completion and performance guarantees under both our project-level
financing arrangements and our tenant lease agreements, certain of which are recourse to a parent entity.
Under these guarantees, we may be obligated to achieve specified construction milestones, deliver
completed facilities by guaranteed dates, and ensure that completed projects meet defined performance
specifications. If we fail to meet these guaranteed milestones or performance thresholds, we may be
required to pay liquidated damages, provide additional credit support, or, in certain circumstances,
repurchase or refinance the relevant project. Completion of projects are contingent upon third-party
suppliers, which we or our project entities have entered into future purchase commitments with the
suppliers of $6.3 billion as of June 30, 2026 for the remainder of 2026 through 2028. Energy Global, our
indirect parent entity, provided a completion guaranty for the benefit of the noteholders of our $999.0
million Senior Secured Notes due 2031. Because certain of these obligations are recourse to a parent
entity, construction delays or performance shortfalls at the project level could have a direct and material
impact on our consolidated financial condition, liquidity and results of operations. While these guarantees
are not reflected as funded indebtedness on our consolidated balance sheets, they represent contingent
obligations that could require significant cash outlays or additional credit support if triggered.
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CRITICAL ACCOUNTING ESTIMATES
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these
consolidated financial statements requires us to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates
and assumptions on an ongoing basis. Our estimates are based on management's best knowledge of
current events, historical experience, actions we may undertake in the future and various other
assumptions that are believed to be reasonable under the circumstances. Our actual results may differ
from these estimates under different assumptions or conditions.
The critical accounting estimates, assumptions and judgments that we believe have the most significant
impact on our consolidated financial statements are described below. Refer to Note 2—to our unaudited
condensed consolidated financial statements and audited consolidated financial statements, each
included elsewhere in this prospectus for further information on our other significant accounting policies.
Derivative Instruments
We follow the guidance of ASC Topic 815, Derivatives and Hedging (“ASC 815”), to account for derivative
instruments. ASC 815 requires us to mark-to-market all derivative instruments on the balance sheet,
unless designated as a normal purchase normal sale, and recognize fair value change in earnings. ASC
815 applies to energy related commodity contracts and interest rate swaps.
Energy-Related Commodities
As of June 30, 2026 and December 31, 2025, for purposes of measuring the fair value of derivative
instruments, we determine the fair value of its financial instruments using discounted cash flow models
that require the use of assumptions concerning the amount of estimated future cash flows. The
assumptions are determined using external, observable market inputs when available. When observable
market inputs are not available, we must apply significant judgment to determine market participant
assumptions such as future electricity prices, future interest rates and discount rates. As these inputs are
based on estimates, fair values may not reflect the amounts actually realized from the related transaction.
Interest Rate Derivatives
We are exposed to changes in interest rates through our issuance of variable rate debt. To manage our
interest rate risk, we enter into interest rate swap agreements. The fair value of the interest rate swaps is
calculated as the net of the discounted future cash flows of the pay and receive legs of the swaps. Mid-
market interest rates on the valuation date are used to create the forward curve for the floating legs and
discount curve.
Stock-Based Compensation
We grant profit units of Energy Global, our indirect parent entity, to certain employees and non-employee
directors. We account for share-based compensation in accordance with ASC Topic 718, Compensation—
Stock Compensation. The fair value of profit units is estimated on the grant date utilizing an option pricing
model to estimate the fair value of the profit units granted, which requires the input of highly subjective
assumptions including: the equity value, the equity volatility, the risk-free rate and term to liquidity.
Changes in any of these subjective input assumptions can materially affect the fair value estimates and
the resulting stock-based compensation recognized. Forfeitures are recognized as they occur. Stock-
based compensation expense is recognized on a straight-line basis over the requisite service period for
the entire award. Liability classified awards that settle in cash, or include an election to be settled in cash,
are remeasured at fair value through settlement or maturity. Liability awards are recorded at fair value and
marked to market each reporting period.
Noncontrolling Interests and HLBV
Certain portions of our noncontrolling interest relate to third-party interests in the net assets of tax equity
arrangements, which we consolidate. These agreements were established to finance the costs of facilities
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eligible for specific tax credits and benefits. We have concluded that the portions of these contractual
arrangements constitute substantive profit-sharing arrangements. Accordingly, we apply a balance sheet
approach using the HLBV method to measure noncontrolling interests consistent with these
arrangements.
Under the HLBV method, the amounts reported as noncontrolling interests approximate the hypothetical
distributions investors in the tax equity arrangements would receive if the net assets of the funding
structures were liquidated at their carrying values as determined in accordance with GAAP at each
reporting date. Investors’ interests in the operating results of these funding structures are recognized as
the change in noncontrolling interest between reporting periods, adjusted for any capital transactions
between the funding structures and their investors.
The calculations underlying the HLBV method include estimated taxable income or losses for each
reporting period, as well as estimated tax capital accounts based on the relevant provisions of each
agreement and applicable tax guidance. In certain cases, we and our partners agree to utilize some tax
benefits outside of the tax equity arrangements, which may result in differences between the hypothetical
liquidation amounts calculated strictly under the contractual terms and actual distributions. These
differences are recognized in the Consolidated Statements of Operations and Comprehensive Loss using
a systematic and rational method over the period during which the investor is expected to achieve its
target return. Therefore, we must apply significant judgment in determining the methodology for applying
the HLBV method and changes in certain factors may have a significant impact on the amounts that an
investor would receive upon hypothetical liquidation. As such, the use of the HLBV method to allocate
income or loss to the noncontrolling interest holders may create volatility in the Consolidated Statements
of Operations and Comprehensive Loss.
Warrant Liabilities
We evaluate warrants issued in connection with financing transactions to determine whether the
instruments should be classified as equity or liabilities in accordance with the applicable guidance in ASC
Topic 480, Distinguishing Liabilities from Equity, and ASC 815. This assessment considers whether the
warrants meet the criteria for equity classification, including whether the warrants are indexed to our own
equity and whether the settlement provisions could require net cash settlement or contain adjustment
features that would preclude equity classification. This assessment is performed at the time of issuance
and reassessed at each reporting date while the warrants remain outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are
recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not
meet the criteria for equity classification, the warrants are recorded at fair value as warrant liabilities on
the audited consolidated and combined balance sheets and unaudited condensed consolidated balance
sheets at the date of issuance and remeasured at fair value at each subsequent reporting date.
We account for the outstanding warrants issued in connection with the Milam County data center facility
lease arrangements and related agreements as liability-classified instruments. The fair value of these
warrants is determined using a Monte Carlo simulation within an option pricing framework due to their
performance-based vesting conditions and other complex features. This valuation model requires
significant estimates and judgments, including assumptions related to the estimated fair value of the
underlying equity, expected volatility, contractual term, risk-free interest rate, expected distributions, and
the probability and timing of achievement of specified operational, commercial, financing, equity valuation,
and public offering milestones. As these warrants are classified as liabilities, changes in their fair value
are recognized as a change in fair value of warrant liability within our Consolidated Statements of
Operations and Comprehensive Loss at each reporting date. Refer to Note 17 in our unaudited
condensed consolidated financial statements included elsewhere in this prospectus for further
information.
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RECENT ACCOUNTING PRONOUNCEMENTS
See the sections titled “Recent accounting pronouncements adopted” and “Recent accounting
pronouncements not yet adopted” in Note 2 to our unaudited condensed consolidated financial
statements and audited consolidated financial statements each included elsewhere in this prospectus for
more information.
JOBS ACT ACCOUNTING ELECTION
We are an “emerging growth company” under the JOBS Act, which permits us to take advantage of an
extended transition period to comply with new or revised accounting standards applicable to public
companies. We have elected to use this extended transition period until we are no longer an emerging
growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a
result, our consolidated financial statements may not be comparable to companies that comply with new
or revised accounting pronouncements applicable to public companies.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
Management identified a material weakness in our internal control over financial reporting in connection
with the preparation of our financial statements for the years ended December 31, 2025 and 2024
because we did not design and maintain effective controls related to accounting for complex transactions.
Specifically, the technical accounting review controls that we had designed and implemented were not
operating effectively to appropriately evaluate the accounting for significant complex transactions and to
appropriately assess the related financial statement presentation and disclosure requirements. This
material weakness affected our ability to timely and accurately account for complex transactions. As a
result, there was and still is a reasonable possibility that a material misstatement of our consolidated
financial statements would not be prevented or detected on a timely basis.
We are taking steps to remediate the material weakness and to strengthen our internal control over
financial reporting, including designing and implementing additional review controls over complex
accounting matters, implementing additional policies and procedures and expanding training for our
finance and accounting personnel.
As of June 30, 2026, this material weakness has not been remediated. We will not be able to fully
remediate this material weakness until the applicable controls have been operating effectively for a
sufficient period of time and management has concluded, through testing, that these controls are
designed and operating effectively.
Accordingly, we cannot ensure that we have identified all, or that we will not in the future have additional,
material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our
internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act,
beginning with our second annual report after the completion of this offering.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of
loss that may impact our financial position due to adverse changes in financial market prices and rates.
Our market risk exposure is primarily the result of fluctuations in commodity prices, interest rates and the
credit of our customers.
Commodity Price Risk
As of June 30, 2026, our operating portfolio includes approximately 2.2 GWac of utility-scale solar and
BESS projects located in California and Texas. The majority of our revenue is supported by long-term
physical and financial PPAs with fixed or predetermined pricing structures. The largely contracted nature
of our revenue base substantially reduces our direct exposure to fluctuations in wholesale electricity
prices for the contracted terms.
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We manage our market exposure through long-term PPAs, short-term hedges and energy-related swap
arrangements, among other risk management instruments to reduce market volatility exposure. The bulk
of our PPAs are on an as produced basis, minimizing generation and price volatility. We have minimal
merchant exposure that is managed through short-term contracts when appropriate.
Our Athos I and Athos II swaps have a firm obligation where the project companies receive a fixed price
based on specified quantities of electricity and pay the counterparty a variable market price based on the
same specified quantities, settling monthly. This energy swap structure can reduce exposure to power
price fluctuations, but cash settlements and changes in fair value may increase or decrease revenue
during the periods in which they are recognized. The swaps have contractual terms ranging from seven to
fifteen years and hedge the floating electricity price per MWh against a contractual fixed price based on
the underlying capacity of the respective solar plant. The fair values are determined using CAISO SP15
on-peak and off-peak forward power price curves for Athos I and Athos II based on observable market
data obtained from S&P. As of June 30, 2026, the power price swaps have remaining contractual lives of
approximately 2.8 years for Athos I and Athos II project companies.
Our Athos Storage swaps are embedded fixed-for-floating energy price swaps within certain Top-Bottom 4
(“TB4”) capacity arrangements, under which the project company receives a fixed payment based on
contractual capacity and pay a variable energy settlement amount based on market prices. This energy
swap structure can reduce exposure to power price fluctuations, but cash settlements and changes in fair
value may increase or decrease revenue during the periods in which they are recognized. During the
second quarter of 2026, the swaps became subject to derivative accounting under ASC Topic 815 after
the outstanding construction permits were obtained and the predominant underlying became the market
price on which the swaps settle. The swaps have contractual terms of 15 years and become effective on
December 1, 2026. The fair values are determined using a discounted cash flow method based on
contractual fixed prices, contract capacity, and forecasted hourly power prices using observable CAISO
SP15 forward curves where available and forward price curves derived from S&P market data for later
periods. Due to the significance of long-dated price forecasts and hourly shaping assumptions, the swaps
are classified as Level 3 within the fair value hierarchy. As of June 30, 2026, the power price swaps are
presented as derivative assets on the Company’s condensed consolidated balance sheets.
Our existing operating power project portfolio does not consume fuel to generate electricity. Our solar
generation currently has no direct exposure to natural gas, coal, nuclear fuel or other fossil fuel price
fluctuations that affect thermal generation companies. However, if we develop, own, operate, or have
economic exposure to gas-fired generation facilities or other fuel-consuming assets in the future, including
in connection with data center projects, we may become exposed to fuel procurement, transportation,
storage, emissions and commodity price risks associated with those assets, as well as additional basis,
transmission congestion and market pricing risks. We may seek to manage these risks through
contractual arrangements and other risk management strategies; however, such arrangements may not
fully mitigate the effects of market volatility or changing market conditions.
Labor, Supply Chain and Construction Input Costs
Our development and construction activities expose us to significant risks associated with the cost and
availability of labor, materials and equipment. Because our revenue contracts, including long-term PPAs
and data center leases, are often executed prior to the final execution of contracts for equipment
procurement and construction services, the actual costs to construct a project can be materially higher
than those assumed in our revenue contract economics.
Owner-Furnished Equipment. For equipment that we procure directly, increased project costs can result
from commodity price increases affecting solar modules, battery energy storage system components,
high-voltage transformers, switchgear, inverters, steel, copper and other critical materials, as well as from
change-of-law tariffs, logistics surcharges and manufacturing defects. Project schedule delays can also
result from supply chain disruptions causing production delays at manufacturers, shipping and port
congestion and importation disruptions, including disruptions arising from government policies related to
Foreign Entity of Concern, or FEOC, restrictions and other trade controls. Global supply chain constraints,
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tariffs, export controls and geopolitical factors may further limit the availability or increase the cost of
these items in ways that we cannot fully predict or control.
Construction Services (EPC). Our EPC contracts for construction services are also frequently executed
after revenue contracts have been set, exposing us to higher-than-anticipated pricing due to commodity
price increases, EPC contractor scarcity for the relevant project region or construction timeframe, and
labor scarcity, particularly for large-scale projects with accelerated construction schedules. The
construction of large-scale data center campuses and power generation projects requires skilled workers
across multiple trades, including high-voltage electrical, civil, mechanical and specialized data center
MEP disciplines, and there is significant competition for qualified labor in both the renewable energy and
data center construction industries. The limited pool of EPC contractors capable of executing work at the
power densities and scale required by modern AI workloads intensifies this constraint. More generally,
limited supply of qualified EPC companies or available labor pools can lead to unfavorable commercial
terms in our construction contracts, including reduced liquidated damages caps, more limited
performance guarantees and other terms that increase our risk of cost overages. In addition, union and
project labor agreement, or PLA, dynamics in certain of our project markets increase the risk of wage
escalation and work stoppages, including strikes, which could further increase construction costs and
cause project delays.
Impact of Delays. To the extent that any of the foregoing supply chain, labor, or EPC risks result in delays
to project construction schedules, we may be exposed to liquidated damages obligations owed to our
data center tenants or PPA offtakers, higher carrying costs on construction financing, and the loss of
anticipated revenue during the delay period. While we attempt to mitigate these risks through fixed-price
EPC contracts, advance procurement and framework purchasing arrangements, we may not be able to
fully pass through cost increases to our customers, particularly under long-term PPAs and data center
leases with fixed or limited price escalation provisions and any sustained increase in labor, material, or
construction costs could compress our margins and adversely affect our profitability.
Interest Rate Risk
We are exposed to interest rate risk first through our variable-rate indebtedness, the majority of which
bears interest at SOFR plus an applicable margin. As of June 30, 2026, we had $3.9 billion of borrowings,
net, from financial institutions. A substantial portion of these borrowings bears floating rates, while certain
facilities, including the Cosmos Senior Secured Notes and the IP Backlog Land Loan, bear fixed rates.
We use interest rate swaps to manage a portion of this exposure and, as of June 30, 2026, had
outstanding interest rate swaps with an aggregate notional amount of $2.1 billion. As of June 30, 2026,
these swaps were recorded as a $9.9 million derivative asset and a $9.0 million derivative liability.
We are also exposed to interest rate risk through the executed fixed price contracts on our data center
and power projects which have not yet secured financing. The returns on such projects can be negatively
impacted by increases in interest rates and thus financing costs, without a corresponding increase in
revenues due to the fixed price nature of the contracts. In some cases, we manage this exposure through
interest rate swaps. In other cases, including on the last 3.78 GW-IT of the leases at the PORTS-Pike
Technology Campus, we secure pricing that floats within a set range in response to changes in interest
rates, thereby partially mitigating this risk.
For illustrative purposes, based on the amount of variable-rate borrowings disclosed as outstanding at
June 30, 2026 and before giving effect to our outstanding interest rate swaps, a hypothetical 100 basis
point increase or decrease in market interest rates would change annual cash interest expense by
approximately $29.9 million. Because we have entered into significant interest rate swap arrangements,
the actual impact of a 100 basis point change in interest rates on our results of operations and cash flows
would be lower than this pre-hedge amount.
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Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in
financial loss to us. We consider available reasonable and supportive forward-looking information
including indicators like external credit rating (as far as available) and macro-economic information (such
as regulatory changes, government directives, market interest rate, etc.). Financial instruments that
potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents,
restricted cash, receivables from related parties, advances to suppliers, accounts receivable and
derivatives. We maintain our cash balances with major financial institutions that management believes
have high credit quality. Cash deposits held in the United States are insured by the federal deposit
insurance corporation (“FDIC”) for up to $0.3 million per account. As of June 30, 2026, our cash, cash
equivalents and restricted cash balance amounted to $2,215.5 million, which was not fully insured by the
FDIC. Nonetheless, we believe that using major financial institutions with high credit ratings mitigates our
credit risk sufficiently.
We are also exposed to counterparty credit risk associated with our derivative asset, which consists
primarily of $9.9 million of interest rate swap arrangements as of June 30, 2026. These derivatives are
subject to the risk of loss in the event that counterparties fail to perform under the terms of the contracts.
More than 45% of our interest rate swap derivative assets were concentrated with a single lender as of
June 30, 2026. We enter into derivative contracts with counterparties that we believe to be credit worthy,
and we monitor counterparty exposure on an ongoing basis to manage the risk of counterparty default.
In addition, as of June 30, 2026, our largest advance to a supplier was approximately $43.9 million. We
believe that the credit risk posed by such supplier concentration is offset by the creditworthiness of our
supplier base. Customer concentration also contributes to credit exposure, as two customers each
represented more than 10% of our total revenue (excluding swap settlements) during the six months
ended June 30, 2026, and together represented approximately 51% of such revenue, including one
customer that represented 27%. We perform ongoing credit evaluations of our counterparties, suppliers
and customers. While we believe the credit quality of our counterparty base mitigates the risk of
counterparty default, our customer concentration exposes us to the risk that the loss of, or a material
adverse change in the financial condition or payment behavior of, any significant customer could have a
material adverse effect on our revenue, results of operations and cash flows. See “Risk Factors—Risks
Related to Our Business and Operations—We depend on a limited number of customers, which subjects
us to customer concentration risk, and we depend on their creditworthiness, the lack of which may impair
our ability to close project financings.” Contracts classified as “normal” purchase or sale and non-
derivative contractual commitments are not marked-to-market in the financial statements. Such
contractual commitments may contain pricing that is favorable considering current market conditions and
therefore represent economic risk if the counterparties do not perform.
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BUSINESS
Our Mission
To enable the new AI economy by developing, building and owning its critical physical infrastructure --
delivering gigawatt-scale data center and power capacity to our customers with speed, reliability and cost
discipline.
Our Company
We are unlocking the future of AI as a leading, integrated data center and power infrastructure company.
We develop, construct and plan to operate gigawatt-scale data center facilities and we develop, construct,
own and operate power generation assets. Our vertically integrated, power-first, community-focused
model is purpose-built for the AI era. We believe this will enable the delivery of data center capacity with
the scale, speed and reliability required to support our customers’ rapidly growing demand for compute.
SoftBank and OpenAI are strategic investors and customers at our data center campuses – Cosmos
(SoftBank), Milam County (OpenAI) and PORTS-Pike Technology Campus (OpenAI) – and NVIDIA is a
strategic investor and residual value guarantor at the PORTS-Pike Technology Campus. NVIDIA is also
expected to become a holder of our Class N common stock in connection with this offering, subject to
each of the closing of the Concurrent Private Placement and the settlement of the Prepaid Forward
Contract.
AI is driving a generational shift in the global economy. Just as the electric power grid underwrote the
modern industrial economy and the interstate highway system underwrote the consumer economy, we
believe gigawatt-scale, power-integrated data centers will underwrite the AI economy. The scale of that
shift is difficult to overstate: according to International Data Corporation (“IDC”), AI is projected to
generate a cumulative global economic impact of $20 trillion by 2030. The compute required to train and
operate the systems delivering that impact is growing at a pace without historical precedent, and every
credible projection of AI progress – from model scale, to inference volume, to the emergence of
autonomous agentic systems – depends on the deployment of physical infrastructure. Meeting that
demand will require a rapid global build-out of data center capacity, which, according to the Altman Solon
Report, is expected to grow from 82 GW in 2025 to 274 GW by 2030, with approximately 40-45% of that
growth coming from the United States. We are in the business of building that very infrastructure.
That ambition is matched by tangible scale today. Our business model is designed to generate three
interrelated revenue streams: entering into long-term lease agreements and service level agreements
with hyperscaler and AI lab customers for our data center capacity, the sale of electricity and related
products under fixed-price PPAs and other offtake agreements to utilities and corporations, and the
design, engineering, construction management and operations management services to our businesses.
Based on internal estimates and industry benchmarking, we believe we have one of the largest Data
Center Contracted Portfolio capacities among data center companies as of the date of this prospectus,
with 8.8 GW-IT in our portfolio, including 0.8 GW-IT of under-construction capacity, inclusive of our
Cosmos Technology Campus and Milam County Buildings 1 and 2, and 8.0 GW-IT of capacity contracted
but not yet under construction, consisting of the 8.0 GW-IT PORTS-Pike Technology Campus, which we
believe will be among the largest data center development sites in the world. We are also pursuing
multiple GWs of incremental development pipeline, consisting of approximately 30.6 GW-IT of data center
capacity, approximately 4.2 GWac of data center dedicated power and approximately 6.9 GWac of
standalone power capacity, in each case not included in our contracted portfolios, at additional sites
where we have filed for load interconnection and are pursuing land control, interconnection approvals,
permitting, commercial contracting among other development activities. Our data center pipeline includes
campuses at Borden County and Scurry County, Texas, among other sites, where we have secured land
and are actively pursuing development and lease negotiations. Together, Borden County and Scurry
County represent approximately 1.7 GW-IT of near-term critical IT capacity in ERCOT with secured
interconnection under Batch Zero Base Load (representing approximately 2.35 GW gross power capacity
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available in 2028 under such designation), subject to confirmation under the ERCOT large-load
verification process; neither is currently included in our Data Center Contracted Portfolio or in the
calculation of our backlog. No data center capacity is currently in operation. Realization of the under
construction and contracted capacity as revenue-generating assets is dependent upon, among other
things, completion of construction, receipt of permits, successful interconnection, lease commencement
and tenant acceptance.
Across these 8.8 GW-IT of data center campuses with leases signed and our 5.5 GWac of power that is
operating, under construction or contracted as of the date of this prospectus, we have approximately $439
billion of backlog, comprising approximately $430 billion of DC segment backlog and approximately $10
billion of SP backlog. The PORTS-Pike Technology Campus constitutes all of our contracted-but-not-
under-construction data center capacity and a substantial majority of our DC segment backlog. The
weighted average remaining contract length (by capacity) for our power projects is 16.6 years and for our
data center projects is 19.6 years, in each case as of the date of this prospectus. See the section titled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors
Affecting Our Business and Results of Operations” for a definition of backlog.
For the six months ended June 30, 2026, we generated total revenue of $138.7 million (including $58.7
million from contracts with customers, $12.6 million of realized change in fair value of power price swap
derivatives, and $67.4 million of unrealized change in fair value of power price swap derivatives) and
incurred a net loss attributable to SB Energy, Inc. of $3,208.9 million (including a $589.5 million non-cash
expense related to stock-based compensation and a $2,573.1 million non-cash expense related to the
change in fair value of our warrant liability). For the year ended December 31, 2025, we generated total
revenue of $213.5 million (including $143.0 million from contracts with customers, $7.2 million of realized
change in fair value of power price swap derivatives, and $63.3 million of unrealized change in fair value
of power price swap derivatives) and incurred a net loss attributable to SB Energy, Inc. of $738.0 million
(including a $674.1 million non-cash expense related to stock-based compensation). For the year ended
December 31, 2024, we generated total revenue of $232.2 million (including $100.6 million from contracts
with customers, $12.4 million of realized change in fair value of power price swap derivatives, and $119.3
million of unrealized change in fair value of power price swap derivatives) and generated net income
attributable to SB Energy, Inc. of $106.1 million (including a $140.3 million non-cash expense related to
stock-based compensation). As of June 30, 2026, our accumulated deficit was $3,803.0 million.
Our revenue to date has been generated predominantly by our SP segment. Our DC segment has not
generated significant revenue to date and is not expected to generate more significant revenue until we
achieve first phase revenue, which we expect to first occur under the first phase of Cosmos, subject to the
completion of remaining construction activities and other conditions. There can be no assurance that
Cosmos or any other project will be completed on the anticipated timeline or at all or that we will be able
to generate first phase revenue on the anticipated timeline. We expect to first achieve first phase revenue
at the Cosmos Technology Campus, a facility in Travis County, Texas, with approximately 50 MW of
critical IT capacity. In May 2026, we issued $999.0 million aggregate principal amount of 8.875% Senior
Secured Notes due 2031 to finance the project, and one of our parent entities provided a completion
guaranty for the benefit of the noteholders and the tenant. The lease provides for a 15-year initial term
with an affiliate of SoftBank as tenant, structured as a triple-net lease with 100% operating expense pass-
through, rent based on a percentage return on total project cost with annual escalators and limited tenant
termination rights. Expected aggregate rent under the Cosmos lease over its 15-year initial term is
approximately $2.5 billion. SoftBank Group Capital Limited, a SoftBank Group affiliate, has delivered a
guaranty in favor of our subsidiary for the tenant’s obligations, with anticipated aggregate guaranty
exposure of approximately $2.9 billion. The Cosmos Technology Campus is financed in part by $999.0
million aggregate principal amount of 8.875% Senior Secured Notes due 2031, issued in May 2026, and
is being renovated to support our tenants' current needs, which include research, development, and
engineering related to advanced AI compute technologies. Rent commencement for the initial phase of
the Cosmos lease is structured to occur on the earlier of December 11, 2026 or the applicable phase of
the facility achieving RFS status, which requires, among other things, substantial completion of
construction, satisfaction of tenant acceptance conditions, delivery of required certifications, and
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compliance with specified commissioning standards. We will not recognize any data center leasing
revenue until rent commences and the applicable facility is made available for the tenant’s use. We
currently expect first phase revenue from Cosmos during the fourth quarter of 2026. The lease contains
milestones and conditions precedent, including delivery of design documents, early access completion,
substantial completion and final completion by specified deadlines. The remaining steps to achieve first
phase revenue include completion of the Phase 1 build-out, tenant inspection, satisfaction of acceptance
conditions and formal lease commencement. There can be no assurance that Cosmos or any other
project will be completed on the anticipated timeline or at all. For a definition of “first phase revenue” and
a discussion of the conditions to its achievement, see “Glossary.”
Our backlog reflects our customers' committed expenditures that we have not yet recognized as revenue,
including revenue that has been billed but deferred and revenue that has been contracted but not yet
billed. Backlog reflects only revenue under binding agreements and does not include revenue from
merchant electricity sales or uncommitted future contract renewals. We believe this backlog will be
realized as revenue based on the following factors: (i) our data center leases and PPAs are binding, long-
term contracts with creditworthy counterparties (weighted average remaining contract length of 16.6 years
for power and 19.6 years for data centers); (ii) our power projects have historically converted from
construction to operations consistent with projected timelines; and (iii) our data center leases are
structured as triple-net leases, which generally require the tenant to accept delivery upon completion of
construction and to pay rent for the full term regardless of utilization. However, some programs
comprising backlog are scheduled many years in the future, and the economic viability of contractual
counterparties is not guaranteed over time. See “Risk Factors—Risks Related to Our Business and
Operations—Our backlog and our backlog-associated capex are not necessarily indicative of our future
revenue, profits or costs associated with the development and construction of our projects, and we may
not fully realize the revenue estimated in our backlog or may exceed the costs estimated in our backlog-
associated capex.”
Our business is led by a management team with deep, multi-decade experience across data center
development, power infrastructure development and large-scale capital formation. We started our
business in 2019 with a focus on power infrastructure led by a team of industry veterans. Since our
founding, we have developed, financed and begun construction on 4.7 GWac of solar power and BESS
projects. We have additionally focused on the development of data center infrastructure. To bolster our
existing expertise, in 2025, we acquired and integrated Studio 151, a data center construction
management and operations firm. Through that legacy organization, the leaders of our data center
business have been developing and operating mission-critical facilities since 2008, collectively delivering
15 completed data center facilities to third parties. This experience combined with our power generation
roots creates deep institutional expertise in developing, building and operating large-scale infrastructure
assets. We have developed in and operate across multiple major U.S. power markets, including ERCOT,
CAISO and PJM, have 24 unique customers, and have executed 37 distinct project financings. This depth
of experience is what enables us to navigate the federal, state and local relationships that increasingly
determine which data center and power projects actually get delivered. Our partnerships with SoftBank
and OpenAI further provide us with valuable insight into, and access to, the forefront of the AI ecosystem.
We believe our combination of data center development pedigree, power market expertise and integrated
execution capability – together with our partnerships across the AI ecosystem – position us to seek to
deliver a speed-to-compute advantage and pursue attractive returns on invested capital over time.
The following table summarizes the current status of our material data center projects under development
or construction as of the date of this prospectus. The completion of these projects on the anticipated
timelines, and the commencement of related lease revenue, are subject to significant risks. See “Risk
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Factors—Risks Related to Our Business and Operations” and “Risk Factors—Risks Related to Our
Indebtedness and Liquidity.”
Cosmos | Milam County Bldg 1 | Milam County Bldg 2 | PORTS-Pike Technology Campus (17 buildings) | Borden County | Scurry County | |||||||
Location .............................. | Travis County, TX | Milam County, TX | Milam County, TX | Pike County, OH | Borden County, TX | Scurry County, TX | ||||||
Critical IT Capacity ........... | ~50 MW-IT | ~308 MW-IT | ~445 MW-IT | ~8,024 MW-IT | ~836 MW-IT | ~900 MW-IT | ||||||
Tenant .................................. | SoftBank affiliate | OpenAI affiliate | OpenAI affiliate | OpenAI affiliate | N/A | N/A | ||||||
Lease Status ...................... | Executed (Nov. 2025) | Executed (Jan. 2026) | Executed (Jan. 2026) | Executed (Aug. 2026) | N/A | N/A | ||||||
NTP / Construction Start | March 2026 | April 2026 | April 2026 | N/A | N/A | N/A | ||||||
Load Interconnection (1) ... | Utility and ISO secured | Utility and ISO secured | Utility and ISO secured | Utility and ISO secured (0.8 GW) / Utility secured (9.2 GW) | Utility and ISO secured | Utility and ISO secured | ||||||
Key Permits ........................ | Obtained; no material delays as of the date of this prospectus | Obtained; no material delays as of the date of this prospectus | Obtained; no material delays as of the date of this prospectus | In process | In process | In process | ||||||
Construction Financing .. | $999M Senior Secured Notes (May 2026) | In active discussions; not yet closed | In active discussions; not yet closed | In active discussions | N/A | N/A | ||||||
Completion Guarantor .... | Energy Global (for noteholders) | Energy Global (for tenant) | Energy Global (for tenant) | Energy Global (for tenants) | N/A | N/A | ||||||
Target RFS .......................... | 2026-2027 | 2027-2028 | 2028 | 2028-2032 | N/A | N/A | ||||||
Construction Status ......... | Under construction | Under construction | Under construction | Pre-construction | N/A | N/A | ||||||
(1) Energization of certain Texas projects remains subject to completion of the ERCOT and PUCT audit and verification process.
Financial Impact of Delays
Delays in permitting, interconnection, or construction at any of our material projects can result in material
financial consequences. Our data center leases provide for delay liquidated damages, or in some cases
rent abatement, for delays beyond the contractual guaranteed delivery date, in some cases subject to
caps. It is not possible to ascertain our aggregate maximum exposure under delay damages, as some
liquidated damages provisions are uncapped. In addition, delays would result in increased interest carry
on our construction-period financing—as of June 30, 2026, we had approximately $3.7 billion of
construction in progress on our balance sheet—as well as deferred revenue recognition and potential loss
of tax credit eligibility under safe-harbor or placed-in-service deadlines. Any financial impact of delays at
our projects under construction may be mitigated by delay liquidated damages owed to us by our
construction contractors as a result of such delays. See “Risk Factors—Risks Related to Our Business
and Operations.”
In addition, delays in achieving first phase revenue would defer the commencement of our data center
leasing revenue and could have a material adverse effect on our financial condition, liquidity and results
of operations. Until we achieve first phase revenue, we will continue to incur construction costs, interest
expense on the $999.0 million Senior Secured Notes and other project-level indebtedness, and operating
expenses without offsetting data center revenue. Delays in permitting, interconnection or construction can
result in material financial consequences, including liquidated damages payable to offtake counterparties
under our leases (or, in some cases, rent abatement) for delay beyond the contractual guaranteed
delivery date, in some cases subject to caps, increased interest carry costs on construction-period
financing, deferred revenue recognition, and potential loss of tax credit eligibility under safe-harbor or
placed-in-service deadlines. In addition, certain of our data center leases contain buy-out options that
may become exercisable if applicable RFS conditions are not satisfied within specified periods of at least
one year after target dates. If we are unable to meet the lease milestones and conditions precedent, the
tenant may be entitled to remedies including liquidated damages, rent credits, self-help rights, buy-out
rights or repayment of amounts advanced to us. These remedies could reduce or eliminate expected
revenue from the lease, require significant cash payments, impair our project financing arrangements and
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materially and adversely affect our financial position and liquidity. See “Risk Factors—Risks Related to
Our Business and Operations” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” for additional discussion.
Delays in achieving RFS for a project could defer the commencement of lease revenue from that project
and extend the period during which we are incurring construction costs without offsetting cash flows. For
Cosmos, rent commencement for each phase is structured to occur on the earlier of December 11, 2026
or the date the applicable phase achieves RFS, so rent is scheduled to begin by December 11, 2026 even
if RFS is delayed, subject to extension for force majeure and tenant-caused delays. Under our data center
leases, we are subject to specified construction milestones and deadlines. If we fail to meet these
requirements, the tenant may be entitled to remedies including liquidated damages, rent credits, self-help
rights, buy-out rights, or repayment of amounts advanced to us. In the case of the Cosmos project, delays
could also trigger obligations under the Energy Global completion guaranty or impair our ability to service
the $999.0 million Senior Secured Notes. For the Milam County leases, the tenant holds a buy-out option
that may become exercisable if applicable RFS conditions are not satisfied within specified periods after
target dates, and exercise of such option could result in a transfer of project assets at a price materially
below long-term ownership value. Our liquidity during the construction period is dependent on timely
achievement of these milestones and access to project-level and corporate financing; material delays at
multiple projects simultaneously could require additional equity contributions or result in covenant defaults
under our existing financing arrangements. See “Risk Factors—Risks Related to Our Business and
Operations” and “Risk Factors—Risks Related to Our Indebtedness and Liquidity.”
Completion and Performance Guarantees
Certain of our project-level commercial and financing arrangements require us to provide completion
guarantees and performance guarantees. With respect to Cosmos, Energy Global, our indirect parent
entity, has provided a completion guaranty for the benefit of the holders of the $999.0 million Senior
Secured Notes due 2031. Completion guarantees typically require the project to achieve mechanical
completion and commercial operation by a specified date, with exposure limited primarily to construction
debt and tax equity bridge loans. It is difficult to ascertain the maximum financial exposure under our
completion and performance guarantees, as the costs to remedy—either through capital expenditures to
complete a project or costs to cure underperformance in the open market—are theoretically uncapped.
For a description of our material completion and performance guarantees and the associated risks, see
“Description of Certain Indebtedness” and “Risk Factors—Risks Related to Our Business and
Operations.”
A New Era of Data Center Infrastructure
Our business is built to serve the next generation of data centers and supply the power these data
centers will require. Demand for compute is undergoing a generational reordering as AI workloads layer
on top of enterprise IT and cloud to drive unprecedented capacity growth. As of year-end 2025 according
to the Altman Solon Report, there were approximately 82 GW of data center capacity globally with
demand projected to increase to 274 GW by 2030, implying a net demand increase of 192 GW, largely
driven by AI demand. This build-out will not resemble the data centers of yesteryear: modern GPU
clusters require higher rack densities, innovative cooling techniques and campuses orders of magnitude
larger than legacy sites. We believe the incumbent development model, shaped over three decades
around enterprise IT and cloud virtualization, was engineered for a fundamentally different workload that
oriented around kilowatts per rack, modestly sized facilities near urban centers, and incremental capacity
expansion. The incumbent development model is not structurally suited to deliver what AI now requires
due to the following shortcomings:
•Real estate first, power later – Power was historically secured after land acquisition and design
were complete.
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•Fragmented value chain – Responsibility was distributed across utilities, developers, landlords and
operators, creating coordination risk, slower execution and limited accountability for delivering an
integrated solution.
•Sub-scale design and execution – Facilities were engineered to be built and expanded
incrementally on the megawatt scale over multi-year delivery cycles, an approach misaligned with the
gigawatt-scale capacity and compressed timelines that hyperscale AI workloads demand.
•Limited stakeholder engagement – Legacy projects were smaller and pursued with limited early
coordination with utilities, regulators and local communities – an approach no longer viable given the
size, visibility and grid impact of modern AI infrastructure.
•Extended execution timelines – Development and construction timelines were optimized for steady,
predictable cloud demand, with multi-year delivery cycles that are not compatible with the
compressed timelines of current AI-driven capacity requirements.
Our Solutions for the AI Infrastructure Build-out
Meeting hyperscale AI demand requires a fundamental departure from the incumbent real estate
development approach and a reordering of the sequence in which physical infrastructure is built. We have
engineered our integrated business model for that reality, integrating power origination, grid
interconnection, data center construction and data center operations within a single, scalable model that
we believe will deliver faster execution at large scale. This integration is the foundation of the structural
advantages that we believe differentiate us in the market:
•Power-first development – In a market where power availability is the binding constraint on data
center delivery and the principal bottleneck for our customers, we invert the traditional development
sequence by establishing scalable, reliable and cost-effective power delivery capabilities and then
securing site control and committing to design. We work simultaneously across grid analysis,
interconnection strategy, power supply and high-voltage equipment procurement at the earliest stages
of development, drawing on existing relationships and execution experience to compress timelines
and provide customers with greater certainty around delivery, cost and reliability. Where appropriate,
we pair sites with on-site generation to provide reliable energy supply and lock in long-term, cost-
effective electricity, improving operating-cost visibility for our customers over the lease term.
•Vertically integrated business model – Our vertical integration provides a structural advantage: We
centralize capabilities that other companies typically source separately, including site identification,
interconnection, on-site generation, design, construction management and operations of the data
center and the power infrastructure that serves it. This single point of accountability allows us to
control the interfaces that drive schedule, cost and reliability – the same interfaces that fragment in
the legacy model and create execution risk. It also lets us engage utilities, regulators, and host
communities through one coordinated voice, and to pair large-scale data center deployments with
incremental power generation in a way that supports rate affordability and community alignment.
•Deep relationships across the development ecosystem – We have deep-rooted relationships with
utilities, Regional Transmission Organizations (“RTOs”), Independent System Operators (“ISOs”), and
federal, state and local agencies, built through years of engagement and a development approach
designed to align large-scale data center and power infrastructure deployment with grid reliability and
community priorities. Our operating experience in the CAISO and ERCOT power markets, together
with our ongoing development activities and utility and stakeholder engagement in PJM, MISO and
WECC helps us navigate interconnection and infrastructure planning more efficiently, improving
schedule certainty for multi-phase campuses. We also invest meaningfully in the communities that
host our facilities and maintain constructive relationships with local leaders, which is increasingly
important amid heightened public scrutiny of large data center developments and concerns about
potential retail electricity price impacts.
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•Gigawatt scale – We have what we believe to be one of the largest data center portfolio capacities
among data center companies today. As of the date of this prospectus, we have 8.8 GW-IT of total
data center capacity contracted, of which 0.8 GW-IT is under-construction capacity and 8.0 GW-IT is
contracted. No data center capacity is currently in operation. Based on internal estimates and industry
benchmarking, we believe we are developing four of the seven largest data center sites by IT capacity
in the United States today. Scale of this magnitude reshapes execution: It enables standardized
delivery across campuses, more efficient construction sequencing, and meaningful procurement
leverage for the long lead electrical and mechanical equipment that increasingly governs project
timelines. It also deepens our engagement with suppliers, utilities and equipment manufacturers,
supporting more predictable execution across multi-year build programs. But scale is also a customer
requirement, not just an operating advantage. The frontier AI models of the next decade, and the
inference demand emerging from agentic AI and broader enterprise adoption, may not be able to be
trained or served from sub-scale facilities. Our customers demand mega-sites, and we are among the
few data center providers positioned to deliver them.
•Speed to compute – Time-to-energization has become the defining variable in data center
development. According to the Altman Solon Report, standard grid interconnection timelines for
hyperscale-size deployments (50 MW+) in 2025 have stretched to approximately seven years in
Northern Virginia and approximately three years in Texas. Our 8.8 GW-IT portfolio of data center
capacity contracted, of which 0.8 GW-IT is under construction and 8.0 GW-IT is contracted, along with
an incremental pipeline of submitted interconnection applications across carefully selected locations,
gives customers earlier visibility and substantially higher confidence in energization dates than the
market can otherwise offer. Where grid timelines remain binding, we aim to complement
interconnection with on-site generation to keep delivery schedules on track and bring capacity online
ahead of what conventional development paths would allow. Our work alongside SoftBank and
OpenAI further sharpens this advantage, keeping us at the leading edge of data center design,
construction and operating practice as the technology stack evolves.
•Alignment with U.S. AI and energy security objectives – We operate at the intersection of AI
infrastructure, grid reliability and new generation build-out – three areas of growing strategic
importance for the United States. Our combination of speed to power, gigawatt-scale execution and
sensitivity to retail electricity, transmission and distribution price impacts aligns directly with national
priorities around energy security and AI competitiveness. This alignment is further illustrated by our
PORTS-Pike Technology Campus, which is expected to be developed and constructed alongside
approximately 9.2 GW of gas-fired generation facilities whose development and funding is being
pursued under the U.S.–Japan Partnership. We are not a party to any agreement relating to the U.S.–
Japan Partnership and do not expect to receive any funding directly under the U.S.–Japan
Partnership or to own or operate such generation facilities. See "Risk Factors—Risks Related to
Government Incentives and Tax Matters—The gas-fired power plants that will bring new generation to
match the load created by the PORTS-Pike Technology Campus depend in part on funding
commitments from the U.S. federal government and Japanese institutional participants that are
subject to political and budgetary processes and other conditions, and there can be no assurance that
such funding will be provided on the anticipated timeline, in the anticipated amounts, or at all."
•Demonstrated access to large-scale project capital – As part of building our infrastructure
portfolio, we have established deep and repeat relationships with a broad base of institutional lenders
and investors. Since inception through the date of this prospectus, we have raised approximately $19
billion in project capital, including approximately $15 billion in project debt and nearly $4 billion in tax
equity financing.
•Experienced, execution focused team – Our integrated power and data center business is
managed by an experienced leadership team, with an average of 23 years of industry experience and
further supported by an organization that includes approximately 350 professionals spanning
development, financing, construction management, operations and asset management. The depth of
our in-house capability allows us to manage complex, multi-phase programs with tight coordination
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across utilities, regulators, community partners, customers and vendors. As we scale, our team’s
integrated expertise across data center and power infrastructure supports repeatable execution and
disciplined growth.
The PORTS-Pike Technology Campus is designed to comprise 17 data center buildings, each with
approximately 472 MW of critical IT capacity at the building level, aggregating to approximately 8.0 GW-IT
of data center capacity and supported by approximately 10 GW of gross power load. Each of the 17
buildings is subject to a separate 20-year NNN lease. The campus is divided into four discrete
construction projects delivered in a phased sequence. The gross power load is expected to be supplied
by the PJM power grid and further supplemented by an initial build-out of approximately 9.2 GW of gas-
fired generation facilities. Power will be delivered in tranches with concurrent construction activities
managed across all projects simultaneously. The scale of this development represents one of the largest
single-site infrastructure construction programs in the United States, and we expect the campus to
support tens of thousands of construction jobs during the build-out and thousands of permanent operating
roles.
The PORTS-Pike Technology Campus project site is located proximate to the second largest natural gas-
producing region in the world. Major natural gas pipelines, including the Tennessee Gas Pipeline (12.4
Bcf/day), Texas Eastern Transmission (12.1 Bcf/day), and Columbia Gas Transmission (9.7 Bcf/day),
transport gas to within approximately 25 miles of the PORTS-Pike Technology Campus site, and we
believe limited new pipeline construction would be required to supply the site. Subject to the risks and
uncertainties described under “Risk Factors,” we believe the site's confluence of seven major high-voltage
transmission lines, proximity to abundant natural gas supply, and availability of existing infrastructure from
the former DOE facility provide structural advantages for large-scale data center and power infrastructure
deployment.
The PORTS-Pike Technology Campus and the U.S.–Japan Partnership
In connection with the PORTS-Pike Technology Campus, our subsidiary has entered into a phased lease
with the DOE at the DOE Portsmouth Site. We and our affiliates have engaged with relevant authorities
on federal permitting required for the PORTS-Pike Technology Campus and the gas-fired generation
plants, have had limited preliminary discussions with the Department of Commerce regarding the broader
Partnership framework, and SoftBank has engaged with U.S. and Japanese government officials
regarding the scope and implementation of the Partnership with respect to the generation facilities. The
gas-fired generation facilities are being developed by an affiliate of SoftBank that is not our subsidiary. Air
and wastewater permits will also be required for the neighboring 9.2 GW gas-fired generation facilities,
which are the responsibility of the developer and owner of such facilities. As of the date of this prospectus,
no binding or non-binding agreement has been executed between us or any of our subsidiaries and any
governmental entity with respect to the funding, construction, ownership or operation of the generation
facilities. It is our understanding that a binding agreement has been executed between the Softbank
affiliate that is developing the generation facilities and a governmental entity with respect thereto
AEP Ohio and its affiliates intend to incur approximately $5.1 billion in capital costs to help facilitate the
new regional grid infrastructure upgrades necessary to serve the PORTS-Pike Technology Campus.
These capital costs plus a regulated return and certain other costs would then be passed onto us by way
of transmission and distribution charges over the operational term. Further, we expect to post collateral
covering these capital costs and payments to AEP Ohio until the end of such term. Over that same period,
we anticipate directly assuming additional transmission charges that could arise from the peak load of the
PORTS-Pike Technology Campus. This structure is intended to directly allocate the costs of this
expansion and other embedded costs to the PORTS-Pike Technology Campus and to protect ratepayers
of AEP Ohio as well as more broadly in the region. Our leases with OpenAI will then pass on these costs
as operating costs throughout the duration of the lease. There can be no assurance that such grid
upgrades will be completed in a timely manner, or at all, and the cost estimate may prove incorrect,
including materially. Any revenue-sharing, power-allocation or other offtake mechanism, including the
allocation of generation between PORTS, the grid and any other users, remains subject to negotiation
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and definitive documentation. U.S. federal authorities are expected to have roles in permitting, regulatory
review and any U.S.–Japan Partnership-related funding or approvals, while the generation facilities are
expected to be funded under the U.S.–Japan Partnership through an investment vehicle jointly owned by
the U.S. Department of Commerce and an entity established by the Japan Bank for International
Cooperation, with potential participation by various Japanese institutional investors. The 8.0 GW-IT
PORTS-Pike campus constitutes the entirety of our contracted-but-not-under-construction data center
capacity, and a substantial majority of our DC segment backlog is derived from PORTS-Pike related
contracts. The realization of that capacity and backlog is linked to the timely development and
commissioning of the generation facilities and to the announced Partnership funding.
To support the financeability of the PORTS-Pike Technology Campus, NVIDIA has provided a residual
value guaranty of the OpenAI tenant’s lease obligations covering the initial 4.25 GW-IT at an aggregate
guaranteed value of $105 billion, with an option, at NVIDIA’s sole discretion, to guarantee the remaining
3.78 GW-IT. The guaranty is triggered only upon tenant insolvency or an uncured monetary default under
an applicable lease. Following a trigger, NVIDIA may assume an applicable tenancy itself or through an
assignee or direct us to re-let (or, if unsuccessful in reletting, sell) the premises. The guaranteed
minimum value declines on a defined schedule over the 20-year lease. The aggregate remedy cap is
$105 billion across related guaranties on the initial 4.25 GW-IT. The guaranty automatically terminates
and NVIDIA is released if OpenAI Group PBC achieves a certain designated credit rating or if specified
replacement guaranties or leases or substitute credit support are provided. See “—Customer Contracts—
Data Center Leases—PORTS-Pike Technology Campus Leases” for further summary of the PORTS-Pike
leases and the NVIDIA residual value guaranty.
Our Portfolio
Our Place in the Data Center Value Chain
Our vertically integrated business is designed to deliver the full physical foundation on which modern AI
compute runs – land, power, fiber, water, building shells and the critical internal systems that bring them
together, including mechanical, electrical and plumbing (“MEP”) systems, power distribution and cooling.
Customers bring their own racks and semiconductors for compute; we deliver everything required to
power, house and operate them. By design, our core turnkey scope today ends at the rack; we do not
currently offer compute-as-a-service, although we may decide to in the future. This preserves customer
flexibility over the hardware and compute architecture inside our facilities while giving them a single
counterparty for the infrastructure that surrounds it.
Our integrated capabilities are designed to allow us to engage customers at multiple points along the data
center value chain, from delivering powered land, to constructing building shells, to providing full turnkey
data centers. Today, we concentrate our capital and execution on turnkey delivery: the model we believe
will best leverage the full breadth of our integrated business and generates the most attractive returns at
scale. The breadth of our capability set, however, gives us the flexibility to meet customers where their
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own development preferences sit, and to evolve our delivery model as the market and our customers’
needs evolve.
Our Data Center & Power Portfolio
Our data center sites are located primarily in the PJM and ERCOT transmission regions, two of the
largest data center markets and among the most competitive and liquid power markets in the United
States. As of the date of this prospectus, our portfolio of data center capacity is comprised of: (i) 0.8 GW-
IT of under-construction capacity and (ii) 8.0 GW-IT of contracted capacity that is not yet under
construction. We are also pursuing multiple GWs of incremental development pipeline, consisting of
approximately 30.6 GW-IT of data center capacity, including approximately 4.2 GWac of data center
dedicated power and approximately 6.9 GWac of standalone power capacity, in each case not included in
our contracted portfolios, at additional sites where we have filed for load interconnection and are pursuing
land control, interconnection approvals, permitting, commercial contracting among other development
activities. . Our data center pipeline includes campuses at Borden County and Scurry County, Texas,
which are included in the data center pipeline capacity described above, as well as additional sites at
varying stages of development. We have secured land and filed load interconnection requests at these
sites and are pursuing lease negotiations with prospective tenants. Together, the Borden County Data
Center and Scurry County Data Center represent approximately 1.7 GW-IT of near-term critical IT
capacity in ERCOT with secured interconnection under Batch Zero Base Load (representing
approximately 2.35 GW gross power capacity available in 2028 under such designation), subject to
confirmation under the ERCOT large-load verification process. These pipeline sites are at earlier stages
of development than our contracted portfolio and are not yet included in our Data Center Contracted
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Portfolio or in the calculation of our backlog. There can be no assurance that definitive lease agreements
will be executed at any of these pipeline sites on the terms currently anticipated, or at all.
DATA CENTER CONTRACTED PORTFOLIO | ||||||||||
Capacity | ||||||||||
Project | (MW-IT) | County | State | Ownership | Status | Last RFS | Contracted | Load Interconnection | Land Control | Co-located power |
Cosmos Technology Campus ............................. | 50 | Travis | TX | 100% | Construction | 2027 | ü | ü | ü | O |
Milam County 1 ................ | 308 | Milam | TX | 100% | Construction | 2028 | ü | ü | ü | ü |
Milam County 2 ................ | 445 | Milam | TX | 100% | Construction | 2028 | ü | ü | ü | ü |
Under Construction ..... | 803 | |||||||||
PORTS-Pike Technology Campus Buildings 1-9 ..... | 4248 | Pike | OH | 100% | Contracted | 2031 | ü | ü(1) | ü | ü(2) |
PORTS-Pike Technology Campus Buildings 10-17 . | 3776 | Pike | OH | 100% | Contracted | 2032 | ü | ü(1) | ü | ü(2) |
Contracted ...................... | 8,024 | |||||||||
Total ................................. | 8,827 | |||||||||
_________________
(1)Utility service agreements for 9.2 GW capacity are subject to final regulatory approvals.
(2)Planned gas-fired generation facilities not owned by the Company. Gas-fired generation facilities not yet financed, constructed or
contracted and subject to permits and approvals.
Alongside our data center portfolio, we also develop, construct, own and operate utility-scale power
generation and BESS. Our activities span the full project lifecycle, from greenfield development through
construction and long-term operations. Our operating power generation and BESS assets are located
primarily in the CAISO and ERCOT markets, and we are developing additional projects in the Western
Electricity Coordinating Council (“WECC”), MISO and other U.S. markets. The portfolio includes
standalone assets that sell power under long-term PPAs and other offtake arrangements and capacity
that is purpose-built to provide power to our own data centers. As of June 30, 2026, our operating power
generation portfolio consisted of approximately 2.2 GW of solar power and BESS projects, with an
additional approximately 2.5 GW of solar power and BESS projects in construction. As of the date of this
prospectus, we also have additional contracted capacity of 0.8 GW of solar power and BESS projects that
are not yet under construction. We are also pursuing multiple GWs of incremental pipeline capacity
consisting of projects at earlier stages of development where we have filed for generator interconnection.
We are pursuing site control, interconnection approval, permitting, offtake negotiation, financing and other
development milestones at these various projects.
Together, these two interrelated portfolios are the operating expression of our power-first model: data
center capacity sited where power can actually be delivered, and a generation business engineered to
ensure it is.
Capacity Utilization
The following table sets forth capacity utilization metrics for our operating standalone power generation
portfolio for the periods indicated:
Asset / Region | Capacity (MWac) | Capacity Factor (2025) (1) | Availability Factor (2025) (2) | |||
Solar (ERCOT) ............................................................................ | ~1,692 | 25.8% | 96.1% | |||
Solar (CAISO) ............................................................................. | ~450 | 32.1% | 98.9% | |||
Total ......................................................................................... | ~2,142 | 27.2% | 96.7% | |||
(1)“Capacity factor” represents actual energy delivered as a percentage of theoretical maximum output.
(2)“Availability factor” takes into account site outages and AC equipment availability (inverters, block, circuits and substations).
(3)Material deviations between nameplate capacity and actual utilization are primarily attributable to: (i) the intermittent nature of solar
generation (solar assets generate only during daylight hours and are affected by weather and seasonal irradiance); (ii) curtailment
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ordered by grid operators during periods of transmission congestion or negative pricing; and (iii) scheduled and unscheduled
maintenance downtime. The table presents solar generation assets only and excludes co-located BESS capacity.
At the portfolio-level capacity factor of 27.2% for the year ended December 31, 2025, our approximately
2,142 MWac operating portfolio generated approximately 5,097 GWh of electricity during the period. For
the six months ended June 30, 2026, the portfolio generated approximately 2,350 GWh, reflecting a
capacity factor consistent with seasonal irradiance patterns in the first half of the year. Year-over-year
increases in total generation have been primarily driven by the addition of new projects achieving
commercial operations (including the Orion I, II, and III projects, which contributed a full twelve months of
generation in 2025 compared to a partial year in 2024) rather than material changes in capacity factor at
existing facilities. For additional quantitative discussion of the relationship between generation volumes,
average realized pricing and energy revenue for each period covered by our financial statements, see
“Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations.”
Our Market Opportunity
The Structural Shift in Data Center Demand
Data center demand is undergoing a generational reordering, as AI workloads build on legacy enterprise
IT and cloud to drive capacity growth. According to the U.S. Census Bureau, only 18% of surveyed
businesses had adopted AI at the end of 2025, indicating today’s demand is simply scratching the surface
of the AI opportunity set, with the vast majority of enterprise workloads, industry verticals and consumer
use cases yet to be meaningfully penetrated by AI-enabled infrastructure. A 2025 independent third-party
survey conducted by Altman Solon as summarized in the Altman Solon Report revealed that 98% of
companies surveyed are planning to adopt at least one GenAI tool in the future, pointing to a near-
ubiquitous adoption. We believe AI compute demands will further expand as users increase adoption and
existing users ramp usage – creating a multiplier effect for underlying data center demand and therefore
investment by the hyperscalers. The five largest hyperscalers spent approximately $383 billion in capital
expenditures in 2025 and, based on publicly available research estimates derived from company
disclosures and equity research as of May 2026, are projected to spend approximately $768 billion in
2026 and approximately $1,125 billion in 2027, as access to AI-enabled digital infrastructure is
increasingly mission critical.
The data center industry evolved around enterprise IT and cloud, but that model is increasingly shifting
towards AI-driven demand for campuses on compressed timelines. Hyperscaler capital is being deployed
against two distinct but related AI workloads. AI training involves the computationally intensive process of
developing foundation models by iterating across massive datasets, requiring tightly coupled clusters of
tens of thousands of accelerators operating in synchrony over weeks or months. AI inference, by contrast,
is the production deployment of trained models to serve end-user queries in real time, requiring lower
latency, broader geographic distribution and continuous availability. Inference demand, as estimated in
the Altman Solon Report, will grow to represent approximately 40% of total global data center demand by
2030, becoming the primary driver of global data center demand from 2026 onward, along with cloud
workloads, driven by increased AI adoption, usage, and complexity of the queries, including the rise of
agentic AI. Both AI workloads require specialized hardware and up to ~10x or more the power of
traditional data centers. This step-change in power requirement is driving demand for larger, denser
facilities and campuses, bespoke mechanical and electrical designs, advanced cooling techniques and
gigawatt-scale site planning that is a material step up from legacy data center footprint demands.
The Agentic AI Inflection
The industry is entering the era of agentic AI, transforming AI from an episodic tool into a persistent,
autonomous layer embedded across users and enterprises. This agentic layer executes complex and
multi-step tasks continuously thereby consuming 10 to 100 times more compute than a single chatbot
query, which means inference demand and the power and data center capacity required to serve it, is set
to grow by orders of magnitude. Unlike conventional generative AI, which is invoked episodically by a
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human prompt, agentic systems run persistently, chain together many model calls per task, and operate
continuously in the background of business processes. We expect agentic AI to be embedded across
organizations of all sizes and across substantially every industry vertical, from customer support and
software engineering to financial analysis, healthcare administration and scientific research. As agentic
adoption scales, inference will become the dominant share of AI compute consumption, a transition
already acknowledged by leading hyperscalers and accelerator vendors. We believe that, even in a
scenario where the pace of frontier model training were to moderate, the secular growth of inference
workloads driven by agentic deployment will continue to drive and potentially even accelerate long-term
demand for high-density, power-dense data center capacity.
Additionally, agentic AI exhibits a self-reinforcing dynamic: As agents are deployed, they generate
proprietary interaction data and task outcomes that are used to fine-tune and improve subsequent model
generations. This in turn drives broader and deeper enterprise adoption, a virtuous cycle that compounds
both training and inference workloads over time and requires significant addition of data center and power
capacity. According to Rystad Energy, a simple chat query uses roughly 0.3 watt-hours, a reasoning
model uses 5 to 20 times more, while an agentic workflow that calls multiple tools and iterates on its own
output can use 50 to 100 times more.
Power as the Binding Constraint
Power has emerged as the defining bottleneck of the AI infrastructure build-out – and the basis on which
we expect the next generation of data center developers will be differentiated. The data center
infrastructure required for large-scale Generative AI training differs materially from traditional enterprise
data center deployments. According to the Altman Solon Report, modern GPU clusters are characterized
by significantly higher rack power densities (often 50+ kW/rack), advanced liquid-cooling architectures,
and substantially larger power requirements, with leading AI training campuses increasingly designed to
support hundreds of MW of power capacity at a single site. Even as GPUs become more efficient, the
power needed to train ever-more capable frontier models, a proliferation of specialized models and
support accelerating AI adoption is outpacing those gains, further straining an already constrained grid.
According to BloombergNEF, data center power demand in the United States is expected to grow at a
16.8% CAGR over the next five years and will account for 8.6% of United States power demand by 2030.
Aggregate power demand from the AI build-out continues to compound, even as individual silicon
becomes more efficient, which has led to longer interconnection timelines, delays and higher all-in costs
as customers seek gigawatt-scale capacity. This dynamic has produced acute bottlenecks across the
value chain: from extended utility interconnection queues to multi-year delays in procuring long-lead
electrical equipment such as high-voltage transformers and switchgear facing extended delivery windows.
Power, rather than land or fiber, has become a binding constraint on the pace at which AI infrastructure
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can be brought online. According to the Altman Solon Report, the primary differentiation parameters for AI
infrastructure are scale and time to power:
In response to these constraints, an increasing number of utilities, regulators, and local jurisdictions are
moving toward frameworks that require new large-load data center capacity to be matched with
incremental, dedicated generation rather than drawing from existing grid headroom. This shift reflects a
recognition that the pace of AI-driven load growth cannot be sustainably absorbed by legacy grid
infrastructure alone, and that bringing gigawatt-scale data center capacity online without accompanying
generation risks reliability, affordability and community impact. As a result, the ability to co-develop or
contract for dedicated power generation alongside data center capacity is becoming a structural
prerequisite for participating in the next phase of large-scale build-out.
Rapid growth in power demand driven by data centers, manufacturing and electrification, combined with
the expected retirement of approximately 66 GW of legacy and aging fossil generation capacity is
expected to result in a total power generation capacity shortfall of approximately 98 GW by 2035. These
trends support the need for significant new power capacity additions. According to BloombergNEF, an
additional 71 GW of new generation capacity in the United States are required through 2035 to meet
worldwide data center demand alone.
With a primary consideration for data center development being the availability of reliable and reasonably-
priced power, we believe our access to grid interconnected sites and co-located power capabilities
present a meaningful competitive advantage from a speed-to-power and cost-of-power perspective. In
addition to expediting delivery timelines, earlier integration of power procurement and grid strategy can
reduce the all-in cost of compute, meaningfully improving our customers’ unit economics. We believe our
integrated business model is well positioned to address this critical bottleneck. Additionally, the ability to
match new power generation and transmission to new data center load is important for our community
relationships: financing and building new generation and transmission helps prevent significant increases
in retail electricity prices from new loads affecting our neighboring communities.
Cost Per Token as the Competitive Battleground
We believe the economics of agentic AI at enterprise scale will be won on cost per token, placing data
center design, power sourcing and operating efficiency at the heart of industry competitiveness. Agentic
AI is both power-intensive and cost-intensive at the workload level, and we believe that its proliferation will
drive token consumption to levels orders of magnitude above current run-rates. Just as cloud computing
was won on cost per compute hour, the AI era will be won on cost per unit of intelligence delivered.
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Critically, compressing the cost per token is not a zero-sum dynamic for infrastructure demand, it is the
mechanism by which the addressable market expands. As the all-in cost of serving a token falls through a
combination of hardware efficiency gains, model optimization, and more efficient power and data center
design, workloads that were previously uneconomic become viable, enterprise adoption deepens and
entirely new categories of agentic applications emerge. Each step-change in efficiency historically has
been met with a more-than-offsetting expansion in compute consumption, and we expect agentic AI to
amplify this dynamic given its 100x-1,000x compute intensity per task relative to conventional generative
AI.
For model providers, application developers and end customers to sustain the unit economics required to
deploy agentic systems at enterprise scale, the cost per token served must continue to stay optimized on
a sustained, multi-year trajectory. This places the economics of inference infrastructure, and by extension,
the design, power sourcing and operating efficiency of the underlying data center, at the center of industry
competitiveness and differentiation. We believe that data center developers that can deliver power-
efficient, purpose-built capacity at scale will be best positioned to participate in this expanding market,
particularly as hyperscalers deploy large capital investments with an eye on capital efficiency and on
selecting long-term partners in their infrastructure providers.
Our Vertically Integrated Approach
Our vertically integrated approach is designed to directly address the bottlenecks that increasingly
determine which projects get delivered and produces several distinct competitive advantages:
•Virtuous cycle of development – Our power generation development activity gives us a head start
in identifying sites for building large power and data center infrastructure and provides invaluable data
and insight on local grid dynamics. This foothold has allowed us to expedite data center development
adjacent to our existing power sites. The data center development will in turn create new load that we
can help to satisfy with additional power assets. We believe this flywheel effect can create a virtuous
cycle as we continue to expand both our power and data center footprints at these sites.
•One-stop-shop for generation and load – As mandates increasingly require new data center load
to be matched with new generation, our internal expertise to interact with utilities and regulatory
authorities and our ability to deliver both as a single counterparty is a meaningful differentiator. We
can resolve issues with utilities and authorities more effectively than developers who must coordinate
across multiple parties with conflicting incentives.
•Designed to support local grids and communities – By co-locating power generation with our
planned data center campuses, we believe we can support grid reliability and limit upward pressure
on retail electricity rates. We engage with local communities earlier and more substantively than
single-discipline developers, building the long-term relationships that large-scale infrastructure
requires.
•Cost certainty for our customers – On-site power enables our customers to lock in long-term,
predictable power costs for the duration of their lease, insulating their unit economics from fluctuating
utility rates. This cost stability becomes increasingly valuable to customers planning multi-year
capacity commitments. It also creates incremental investment opportunities for us.
•Flexible power design – Our development approach is designed to enable a range of generation
modalities, from grid-connected, behind-the-meter, renewable, traditional and bridge solutions.
•Tight execution – Our structure enables close coordination across sourcing, development,
construction and operations than is achievable across separate counterparties. With each deal cycle,
our handoffs sharpen and our execution speed accelerates.
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Our Execution Model
Delivering gigawatt-scale data center and power infrastructure on the timelines AI demands requires an
execution model engineered for the constraints of this build-out, not adapted from the playbooks of prior
cycles. Our integrated business is organized around three integrated phases of the project lifecycle: (i)
Development, including site origination, grid and interconnection strategy, permitting and community
engagement, commercial contract negotiation, design engineering, equipment procurement, and project
financing; (ii) Construction, including EPC management and commissioning; and (iii) Operations,
including performance under long-term customer contracts and ongoing asset management. Each phase
is designed to compound the advantages of the one before it, translating the structural benefits of our
integrated business into delivered GWs.
Development
Our development process is milestone-driven. Significant capital commitments are qualified against
measurable progress across land control, interconnection, permitting, customer offtake, equipment
availability and financing milestones, which gate spend behind de-risking events rather than calendar
dates. This discipline preserves optionality across a capital-intensive portfolio and ensures capital is
deployed against projects with demonstrated commercial visibility, minimizing speculative outlays.
We originate and advance projects using advanced transmission capacity analyses and grid modeling to
identify locations with robust transmission infrastructure and scalable power deliverability. We focus on
sites that can support campus-scale data center and power deployments without straining grid stability or
placing upward pressure on retail electricity rates – a discipline that is increasingly central to securing
interconnection and community support for projects of this scale.
As of the date of this prospectus, a majority of our sites are designed to be grid-connected for their
primary power supply, with co-located generation deployed where it accelerates energization, lowers all-in
power cost, or strengthens reliability for the customer. The selection between grid-only, hybrid, behind-
the-meter and bridge configurations is made on a site-by-site basis, informed by interconnection queue
position, customer load profile and the regulatory and offtake environment in the host market. We believe
this site-specific calibration is what allows our power-first model to translate into differentiated speed to
compute in practice, rather than as a slogan.
The same flexibility shapes our approach to data center design, which is engineered to serve both ends of
the AI workload spectrum. For customers training frontier models and others with high-density
requirements, our designs allow for the deployment of proprietary designs with greater rack density than
certain competing configurations, enabling more compute capacity within a given footprint and improving
infrastructure efficiency per unit of delivered compute. For customers operating inference workloads with
more frequent and variable refresh cycles, our building and MEP architecture is designed to adapt as
hardware generations, cooling requirements and use cases evolve. This dual-mode design capability lets
us serve the full breadth of hyperscaler workloads from a single integrated business.
Long-lead equipment has become one of the defining constraints of the AI build-out, with delivery
windows for high-voltage transformers, switchgear and gas turbines now extending multiple years. We
procure early, at portfolio scale and across multiple suppliers, and we structure vendor relationships that
we believe will allow equipment to be reallocated across sites as customer specifications and phasing
evolve. We believe this portfolio-level procurement posture, only available to developers operating at our
scale, will allow us to convert a market-wide bottleneck into a relative execution advantage.
We fund this development effort through a mature finance function with a track record of raising large-
scale project capital. Since inception through the date of this prospectus, we have raised approximately
$19 billion in project capital, including approximately $15 billion in project debt and nearly $4 billion in tax
equity financing. Most recently, in May 2026, one of our subsidiaries issued a $999.0 million aggregate
principal amount of 8.875% Senior Secured Notes due 2031 to finance our Cosmos Technology Campus,
demonstrating capital markets access for stand-alone digital infrastructure assets at scale. We finance
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primarily through project-level structures matched to milestone risk and with limited recourse to the
parent, and we have historically sought to maintain leverage discipline while retaining 100% ownership of
our projects. We have long-standing relationships with a broad group of leading banks and capital
providers, in addition to institutional relationships that our equity investors hold, to support capital
structure flexibility as we fund interconnection, long-lead equipment procurement and construction across
our portfolio.
Construction
According to our internal project records, we have delivered all of our power generation projects to date
on or ahead of the applicable contracted PPA schedules. Our construction organization leads construction
management, vendor selection, contract administration and on-site oversight across both data center and
power infrastructure. To compress mega-scale schedules and manage regional labor constraints, we
partner with multiple qualified engineering, procurement and construction (“EPC”) providers, including
Turner, DPR, Kiewit and SOLV Energy, and assign them across phases of the same site to parallelize
delivery. For our power generation projects, we typically segment construction scope across multiple
turnkey EPC contracts for each site, with separate agreements covering (i) photovoltaic solar and battery
energy storage system installation, (ii) high-voltage switchyard and interconnection facilities, and (iii)
where applicable, dedicated BESS balance-of-plant work.
For example, our Pelicans Jaw project, located in Kern County, California, is being developed on 3,200+
acres of leased land and comprises 440 MWac (573 MWdc) of PV and 239 MW / 954 MWh of BESS. The
project has a fixed-price 15-year PPA with San Diego Community Power, with basis risk and no shape
risk, is expected to qualify for a 50% ITC through the energy community and domestic content adders,
and achieved energization 17 months from NTP, demonstrating the execution timelines our integrated
business is designed to deliver. As used in this prospectus, “notice to proceed” or “NTP” refers to the
formal authorization from us, as the project owner, to the applicable EPC contractor to commence full
construction activities on a project. An NTP is typically issued after the execution of project-level financing
arrangements, receipt of key permits and interconnection approvals, and satisfaction of other conditions
precedent specified in the applicable construction contract. The issuance of an NTP represents a
significant project milestone because it triggers binding contractor mobilization costs and equipment
procurement commitments, commits us to material construction expenditures, and starts the clock on
guaranteed completion dates under our project-level financing and lease arrangements. Our Libra project,
located in Mineral and Lyon Counties, Nevada, comprises 700 MWac (910 MWdc) of PV and 700 MW /
2,800 MWh of BESS and has a fixed-price 25-year PPA with NV Energy, an investment-grade utility
offtaker. Libra is expected to qualify for a 50% ITC through the energy community and domestic content
adders and is our largest solar-plus-storage hybrid project to date.
This segmented approach allows us to select qualified contractors for each technical discipline while
preserving schedule flexibility and competitive pricing tension. Our principal EPC counterparties for power
infrastructure include SOLV Energy, Blattner Energy, Dashiell Corporation, CSI Electrical Contractors and
Rosendin Electric, each engaged on a project-by-project basis depending on technology, geography and
labor availability. Each EPC contract is structured on a turnkey, fixed-scope basis, with the contractor
assuming full responsibility for engineering, design, procurement, construction, installation,
commissioning and testing of the applicable project segment.
Key commercial protections we typically negotiate include: guaranteed milestone dates for mechanical
completion, substantial completion and final acceptance, with delay liquidated damages accruing daily for
any failure to achieve a guaranteed milestone by its guaranteed date; capacity liquidated damages if the
project fails to achieve a guaranteed capacity ratio upon testing; comprehensive workmanship and defect
warranties covering a warranty period of two to three years following substantial completion, with
extensions of up to one additional year for repairs performed during the warranty period (subject to an
overall cap of three years from substantial completion); serial defect and recurring defect provisions
requiring root-cause analysis and replacement of affected equipment classes; and parent company
guarantees from the EPC contractor's parent entity to backstop performance obligations.
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These terms are designed to provide bankable construction risk allocation that supports project-level debt
and tax equity financing. In 2025, we expanded our in-house data center capabilities through the
acquisition of Studio 151, a data center infrastructure design and construction management firm with a
dedicated team of more than 50 professionals focused exclusively on data centers and a delivery track
record spanning 15 facilities. The acquisition has deepened our in-house execution bench and tightened
coordination across design, procurement and commissioning, capabilities that are increasingly difficult to
source externally as the broader market competes for the same talent.
Operations
In our data center business, we lease turnkey facilities to hyperscale customers under long-term triple-net
leases with initial terms generally of 15 to 20 years and renewal rights that may extend the total lease
relationship depending on the lease and phase, under which we receive base rent and pass through
operating expenses, including real estate taxes, insurance, utilities and facility maintenance, to the tenant.
Base rent is calculated on a yield-on-cost basis and typically includes contractual escalators, providing
embedded revenue growth and cash flow visibility while transferring facility operating cost risk to the
tenant. Once rent commences under our data center leases, tenant remedies may include certain
reimbursable cure actions for events of default and rent abatements or credits for certain events, including
casualty events, failure to meet service levels and material interference, subject to the terms of the
applicable lease. In our power generation business, we execute long-term PPAs with utilities, corporations
and government entities, generally over 15 to 25 years, under which we deliver specified quantities of
electricity and, where applicable, energy storage capacity at fixed prices. Together, these contract
structures convert our delivered capacity into long-duration, contracted cash flows that support project-
level financing and underwrite returns across the asset lifecycle.
As a long-term owner and operator, we underwrite our assets on a multi-decade horizon. Durable
relationships with customers, communities, vendors and capital providers are central to that model, as is
a continuous discipline of innovation across siting, technology deployment and contract structures. We
believe these relationships and capabilities, compounded across each project we deliver, are the
foundation on which we intend to scale the data center portfolio.
Our Growth Strategies
Our growth strategy is to compound the advantages of our integrated business across each successive
build cycle, converting secured capacity into delivered GWs, extending our footprint at sites where we
already have a power and community foothold, and originating the next generation of gigawatt-scale
campuses ahead of demand. Our specific strategies are:
•Execute on our contracted backlog – Our most immediate growth lever is the conversion of our 8.8
GW-IT of data center capacity contracted into delivered, revenue-generating campuses. We are
progressing our first wave of data centers at the Cosmos Technology Campus, in Austin, Texas,
Milam County Buildings 1 and 2 in Milam County, Texas, and the PORTS-Pike Technology Campus in
Pike County, Ohio, while advancing the balance of our pipeline. Each phase that is delivered is
expected to convert contracted backlog into long-duration cash flows under our triple-net lease and
PPA structures, as applicable.
•Expand within our existing campuses – We intend to add incremental phases at sites where we
already have land control, interconnection, community relationships, and operating infrastructure in
place. Multi-phase expansion is a structurally attractive strategy due to its comparative lower friction,
higher certainty versus prospecting, and it is increasingly valued by hyperscale customers who
require the ability to scale a single campus into a contiguous, multi-gigawatt training or inference
cluster. We have multi-phase build-outs planned at our Milam, Pike, and other campuses. As
described in “—Our Vertically Integrated Approach,” we believe each incremental phase will reinforce
our virtuous cycle of development – additional load deepens utility coordination and creates the basis
for further on-site or nearby power generation, which in turn supports additional data center growth.
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•Originate the next generation of multi-gigawatt sites – We intend to grow our data center and
power pipelines by originating additional campus-scale sites in markets where transmission
infrastructure, power deliverability, and the regulatory environment support gigawatt-scale build-outs.
Our origination focus today for data centers is principally domestic, concentrated in the PJM, ERCOT,
and WECC footprints where we believe our development activities, grid analysis, and utility
relationships support our ability to identify and advance attractive campus-scale opportunities. Our
operating experience in markets such as CAISO and ERCOT informs our approach to interconnection
strategy and utility engagement across our integrated business. We intend to also pursue non-grid
connected and partial grid-connection data center sites, where the development opportunity and
potential value for our customers are attractive. We also selectively evaluate additional U.S. and
international markets where customer demand and our integrated model can be applied.
•Broaden and deepen our customer base – We intend to expand our footprint with existing
hyperscale customers as they scale their AI infrastructure commitments, while extending our data
center business to additional hyperscalers, sovereign customers, and large enterprises as the
addressable buyer set expands. As described in “—Our Market Opportunity,” the combination of
optimized cost per token, the emergence of agentic AI, and the early stage of enterprise adoption is
expected to materially expand the total addressable market for AI infrastructure over time. While 92%
of companies plan to increase AI spending over the next three years, just 1% of business leaders
classify their companies as mature on the AI deployment spectrum, indicating that even today’s
adopters are early in their multi-year investment cycle. We believe this trajectory will support both
deeper deployments with our existing customers and the emergence of new categories of customers
requiring large-scale, power-integrated infrastructure.
•Deploy automation to accelerate delivery timelines – We intend to expand the use of automation,
prefabrication, and technology-enabled workflows across our development, construction, and
commissioning processes to shorten delivery timelines and improve schedule predictability.
Standardizing repeatable workstreams across multi-phase campuses and applying automated quality
control at scale, building on the in-house design and construction capabilities established through our
acquisition and integration of Studio 151, are intended to reduce rework, compress critical path
activities, and support safer, more productive execution as we scale across multiple large projects in
parallel. We believe our strategic relationships with SoftBank, OpenAI, and NVIDIA will help us
provide differentiated visibility into emerging physical AI technologies that can be applied to our
development and operating model.
•Selectively pursue acquisitions to accelerate growth – We may pursue selective acquisitions that
expand our development pipeline, deepen our in-house capabilities or broaden our customer
relationships. Our 2025 acquisition of Studio 151, which has since been integrated into our data
center execution organization, demonstrates our ability to identify, transact and integrate
complementary capabilities. We believe our balance sheet, project finance experience, integrated
operating strategy and power expertise position us to evaluate and execute on additional
opportunities where they can accelerate the delivery of our existing pipeline or extend the scope of
our integrated model.
Across each of these strategies, our focus is the disciplined, repeatable build-out of a long-duration
integrated business. By combining power origination, grid execution and data center development within a
single integrated model, we believe we can consistently originate, underwrite and deliver gigawatt-scale
campuses supported by long-term contracted revenues. We intend to execute our growth strategies by
pacing growth against customer demand, interconnection availability and capital allocation discipline,
while preserving the flexibility to expand sites through incremental phases as the market evolves. Just as
prior generations of physical infrastructure underwrote prior eras of economic growth, we believe the AI
era will be underwritten by the power and data center providers that can deliver power, land and data
center capacity together at scale, and we have built our company to be one of them.
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Project Status, Milestones and Execution Risk
The following table provides project-specific detail for each of our material data center developments,
including current construction status, key remaining milestones, and expected timing for achieving
revenue-generating operations as of the date of this prospectus. Our ability to complete these projects
and achieve these milestones on the anticipated timelines (if at all) are subject to significant risks, and
delays or failures to do so could defer or reduce our expected revenue. See “Risk Factors—Risks Related
to Our Business and Operations” and “Risk Factors—Risks Related to Our Indebtedness and Liquidity.”
Project | Location | Capacity (MW- IT) | Tenant | Construction Status | Expected First Phase RFS | Expected Final Completion RFS | |||||||
Cosmos .................................................. | Travis County, TX (ERCOT) | 50 | SoftBank Group entity | Vertical construction; NTP issued March 2026 | Initial operations expected during 4th quarter of 2026 | Full RFS by May 2027 | |||||||
Milam County Building 1 ..................... | Milam County, TX (ERCOT) | 308 | OpenAI affiliate | Vertical construction; NTP issued April 2026 | 2027 | 2028 | |||||||
Milam County Building 2 ..................... | Milam County, TX (ERCOT) | 445 | OpenAI affiliate | Vertical construction; NTP issued April 2026 | 2028 | 2028 | |||||||
PORTS-Pike Technology Campus .... | Pike County, OH (PJM) | 8024 | OpenAI affiliate | Not started | 2028 | 2032 | |||||||
Borden County ...................................... | Borden County, TX (ERCOT) | 836 | N/A | N/A | N/A | N/A | |||||||
Scurry County ....................................... | Scurry County, TX (ERCOT) | 900 | N/A | N/A | N/A | N/A | |||||||
Construction and Interconnection Milestones
For our Cosmos and Milam County projects currently under construction, the principal remaining
execution milestones include: (i) completion of structural and envelope work (foundations, steel erection,
roof and dry-in); (ii) installation of mechanical and electrical systems (including HVAC cooling, power
distribution, and fire protection); (iii) energization of high-voltage interconnection infrastructure (substation
construction, 345kV load tie lines, and utility switchover); (iv) data hall fit-out (including network core build-
out, cable infrastructure, and rack deployment); and (v) final commissioning, testing, and achievement of
RFS status as defined under the applicable lease. For Cosmos, Austin Energy is completing substation
and transmission upgrades necessary for grid connection. For Milam County, high-voltage interconnection
is being delivered in phases: Phase 1-A (200 MW from Orion 1 via 34.5kV, targeted August 2026), Phase
1-B (230 MW from Orion 2 via 345kV, targeted December 2026), Phase 1-C (230 MW from Orion 3 via
345kV, targeted February 2027), and Phase 1-D (200 MW switchover from Orion 1, targeted March
2027), for a total initial campus load of approximately 660 MW.
Permitting
Permitting requirements and timelines vary by project and jurisdiction and may require federal, state, and
local-level approvals, including environmental permits, zoning and land use approvals, and building
permits. The Cosmos project has obtained all material permits necessary for construction. The Milam
County campus has obtained the necessary county development permit and Army Corps of Engineers
approval. No additional material permits are required for construction. In particular, the PORTS-Pike
Technology Campus, as well as planned 9.2 GW gas-fired generation facilities supporting the PORTS-
Pike Technology Campus being developed by an affiliate of SoftBank that is not our subsidiary, are
subject to extensive permitting and reviews, including environmental permits and other applicable local,
state and federal regulations. Further, the buildings are located across several thousand acres of private
property. Aquatic, wildlife, and cultural surveys have been completed for much of the property and
applications for federal, state and local permits, including permits relating to potential impacts to water
resources, are in various stages of preparation and review by governmental authorities; however, there is
no guarantee that such permits will be obtained in a timely manner in accordance with the current
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schedule for the PORTS-Pike Technology Campus, or at all. Additional permit applications are planned to
be submitted for other project areas as remaining site surveys and associated reports are delivered from
the various contractors supporting the development effort. There can be no assurance that future
legislation or ordinances will not require additional permits, in which case we would be required to comply
with any applicable new regulations. Air permits will be required for backup generation at the PORTS-Pike
Technology Campus, and the permitting timeline will be determined once the number and make/model of
the backup generation engines has been selected. Air and wastewater permits will also be required for
the neighboring 9.2 GW gas-fired generation facilities, which are the responsibility of the developer and
owner of such facilities. There can be no assurance that any of these projects will obtain all required
permits and approvals on our anticipated timeline, on the terms we currently expect, or at all, and delays
in permitting could impair our ability to commence or complete construction on schedule, increase project
costs, or lead to adverse actions under our leases, including and up to termination.
Execution Risk
Delays in achieving or failure to achieve RFS for a project could defer the commencement of lease
revenue from that project and extend the period during which we are incurring construction costs without
offsetting cash flows. For Cosmos, rent commencement for each phase is structured to occur on the
earlier of December 11, 2026 or the date the applicable phase achieves RFS, so rent is scheduled to
begin by December 11, 2026 even if RFS is delayed, subject to extension for force majeure and tenant-
caused delays. Under our data center leases, we are subject to specified construction milestones and
deadlines. If we fail to meet these requirements, the tenant may be entitled to remedies including
liquidated damages, rent credits, self-help rights, buy-out rights, or repayment of amounts advanced to
us. In the case of the Cosmos project, delays could also trigger obligations under the Energy Global
completion guaranty or impair our ability to service the $999.0 million Senior Secured Notes. For the
Milam County leases, the tenant holds a buy-out option that may become exercisable if delays in meeting
applicable RFS conditions persist for 365 days or more, and exercise of such option could result in a
transfer of project assets at a price materially below long-term ownership value. Our liquidity during the
construction period is dependent on timely achievement of these milestones and access to project-level
and corporate financing; material delays at multiple projects simultaneously could require additional equity
contributions or result in covenant defaults under our existing financing arrangements. The PORTS-Pike
leases are expected to commence in stages between 2028 and 2032, with rent commencement for the
first phase of Building 1 expected to occur on the date the RFS conditions to such phase has been
satisfied. If we fail to satisfy the RFS conditions by the applicable target RFS dates, tenant will be entitled
to a credit against base rent in an amount equal to one day of base rent per day for the first 90 days of
delay, and two days of base rent per day starting on the 91st day of delay, such credits classified as
liquidated damages under each lease. See “Risk Factors—Risks Related to Our Business and
Operations” and “Risk Factors—Risks Related to Our Indebtedness and Liquidity.”
Our Segments
We operate our business through three reportable segments: (i) Data Centers (“DC”), which includes the
development and commercialization of large-scale data center campuses, powered land opportunities
and related infrastructure solutions, with current campuses located primarily in the PJM and ERCOT
transmission regions; (ii) Standalone Power (“SP”), which includes the development, construction,
ownership and operation of grid-connected utility-scale solar photovoltaic and battery energy storage
system (“BESS”) projects, with current operating assets located in the CAISO (California) and ERCOT
(Texas) markets; and (iii) Solutions (“SLN”), which provides integrated design, engineering, construction
management and operations management solutions to our SP and DC segments (and, in the future, may
provide such solutions to our affiliates, third parties, and their respective projects). Our SP segment
currently generates substantially all of our revenue, while our DC segment is in a pre-revenue stage with
initial revenues expected to commence in late 2026.
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Our Relationship with SoftBank, OpenAI, and NVIDIA
SoftBank, OpenAI, and NVIDIA are strategic investors in our business. SoftBank is, and following this
offering will be, our controlling shareholder and is expected to beneficially own % of our outstanding
common stock following this offering, or % if the underwriters exercise their option to purchase
additional shares of common stock in full, based upon an assumed initial public offering price of
$ per share (which is the midpoint of the price range set forth on the cover page of this prospectus).
OpenAI is expected to be the beneficial owner of % of our outstanding common stock (on an as
converted basis) following this offering and the Closing Distribution, based upon an assumed initial public
offering price of $ per share (which is the midpoint of the price range set forth on the cover page of
this prospectus). NVIDIA is expected to be the beneficial owner of % of our outstanding common stock
following the closing of the Concurrent Private Placement and the settlement of the Prepaid Forward
Contract, based upon an assumed initial public offering price of $ per share (which is the midpoint of
the price range set forth on the cover page of this prospectus).
SoftBank and OpenAI, through their affiliates, are also customers at three of our data center campuses
through long-term data center leases - Cosmos (SoftBank), Milam County (OpenAI) and PORTS-Pike
Technology Campus (OpenAI) - and NVIDIA is a strategic investor and residual value guarantor at the
PORTS-Pike Technology Campus. We expect lease payments under these arrangements to constitute a
significant portion of our near-term data center revenue. Rent commencement under these leases is
subject to satisfaction of applicable RFS conditions, and delays in achieving RFS at Cosmos, the PORTS-
Pike Technology Campus, or Milam County could defer the commencement of lease revenue and extend
the period during which we incur construction costs without offsetting cash flows. Under the leases for the
PORTS-Pike Technology Campus, we are subject to specified construction milestones and deadlines, and
failure to meet these requirements may entitle the tenant to remedies including liquidated damages, rent
credits, and self-help rights. However, the tenant does not have termination rights under the leases for
failure to achieve the specified construction milestones. Furthermore, the deadlines are extendable on a
day-for-day basis for tenant delays, force majeure events, and utility delays. Under the leases for the
Milam County Data Center, we are subject to similar tenant contractual protections, with the differences
that the tenant has buy-out rights (at fair market value) following substantial delays beyond construction
deadlines and there are no extensions for utility delays. Because substantially all of our near-term data
center revenue is expected to be derived from these related-party leases, any significant delay in rent
commencement at PORTS-Pike Technology Campus or Milam County, and any termination of any of the
related leases, could have a material adverse effect on our cash flows, liquidity and ability to service our
indebtedness. In addition to lease payments, we have committed to minimum purchases of OpenAI
software and tools of $50.0 million in the aggregate through 2028. We believe these leases and
guarantees were negotiated on terms that reflect arm's-length dealing, informed in part by the
participation of independent counterparties with adverse economic interests who negotiated vigorously on
economic terms, including rent structure, guaranty structure and amount, and lease milestones. See
“Certain Relationships and Related Party Transactions—Review of Related Party Transactions” for
additional information regarding the negotiation process and board review and approvals of these
arrangements. For a more complete discussion of the foregoing relationships and arrangements,
including the net economic effects of lease payments, royalty arrangements and other payments among
us, SoftBank and OpenAI, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Related Party Cash Flows,” “Certain Relationships and Related Party
Transactions,” “Risk Factors—Risks Related to Our Corporate Structure and Ownership,” “Risk Factors—
Risks Related to Our Business and Operations,” “Principal Shareholders.”
Our Project-Level Structure and Indebtedness
We conduct substantially all of our power and data center operations through project-level subsidiaries.
These are special-purpose, project finance vehicles, each of which typically holds the assets, contracts,
permits, and financing arrangements for a single project or a defined group of related projects. Certain of
them receive, or are expected to receive, revenues, from rent under triple-net leases or from the sale of
electricity, capacity, renewable energy credits or other attributes generated by the applicable project.
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Holders of our common stock are structurally subordinated to all project-level and corporate indebtedness
and other liabilities of our subsidiaries. As of June 30, 2026, we had approximately $4.0 billion of
aggregate principal indebtedness outstanding, approximately $3.9 billion net of unamortized issuance
costs and discount, of which approximately $1.2 billion was current. Our project-level entities were parties
to over $3.6 billion of project-level debt and approximately $1.7 billion of tax equity financing
arrangements, and we expect to incur additional corporate-level indebtedness under the Credit Facility.
We and our subsidiaries also expect to incur a substantial amount of additional indebtedness to finance
the PORTS-Pike Technology Campus and other projects in the pipeline, all of which could be structurally
senior to our common stock. Our shareholders’ claims are junior in right of payment to all such
indebtedness and liabilities, and we rely on distributions to us by our subsidiaries, which depend on
project-level distributions permitted under project financing covenants. See “Description of Certain
Indebtedness—Structural Priority and Subordination” and “Risk Factors—Risks Related to Our
Indebtedness and Liquidity—Holders of our common stock are structurally subordinated to creditors of
our subsidiaries.”
We also use intermediate holding companies that own the equity interests in one or more project-level
entities. These companies serve operational, financing and administrative purposes—for example, acting
as borrowers under portfolio-level financing arrangements, holding development-stage assets before
project financing, or serving as the vehicle through which equity capital is contributed to project-level
entities.
Cash generated at the project level flows to SB Energy, Inc. through distribution mechanisms governed by
project-level financing agreements. These distributions are typically subject to cash sweep mechanisms,
debt service coverage ratio tests, reserve account requirements, and other restrictions imposed by project
lenders. As a result, the timing and amount of cash available to us from project-level entities may differ
materially from the revenues and earnings those entities generate.
As of June 30, 2026, our project-level entities were parties to over $3.6 billion of outstanding project debt
and approximately $1.7 billion of outstanding tax equity financing arrangements. These financing
arrangements are generally non-recourse to SB Energy, Inc. (subject to temporary limited sponsor
guaranties and credit support in certain cases) and are secured solely by the assets and cash flows of the
relevant project-level entity. As of June 30, 2026, on a consolidated basis, we had approximately $4.0
billion in aggregate principal amount of indebtedness outstanding (approximately $3.9 billion net of
unamortized issuance costs and discount), of which approximately $1.2 billion was classified as current.
Our largest near-term maturities include the Pelicans Jaw Facility, approximately $857.8 million
outstanding, maturing by March 2027, the Hickory Facilities, approximately $473.0 million outstanding,
maturing October 2027, and the Athos Storage Facility, approximately $361.9 million outstanding,
maturing by February 2027. We expect to address these maturities through term loan conversions upon
project completion, refinancings, and tax equity funding. As of June 30, 2026, our only material recourse
corporate indebtedness was the Hickory Facilities, which are obligations of SE Global Borrower, LLC and
are guaranteed and secured by specified subsidiaries and pledged equity interests; SB Energy, Inc. is not
itself a borrower or guarantor under those facilities. In connection with this offering, the Hickory Facilities
will be repaid in full with the proceeds of the initial borrowing under the Credit Facility, and the related
commitments, liens and guarantees will be terminated or released, and SB Energy, Inc. will become the
direct borrower under the Credit Facility. All other project-level financings are structured as non-recourse
to SB Energy, Inc., meaning that the lenders' recourse is limited to the assets and cash flows of the
applicable project-level subsidiary and the pledged equity interests in that subsidiary. See “Business—Our
Portfolio” for further detail on our project-level entities, “Management's Discussion and Analysis of
Financial Condition and Results of Operations—Liquidity and Capital Resources” for a discussion of
distributions received from project-level entities, and “Description of Certain Indebtedness” and “Risk
Factors—Risks Related to Our Indebtedness and Liquidity” for a discussion of our subordinated debt.
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Customer Contracts
Data Center Leases
Our signed data center leases commence in phases as each phase of the relevant facility achieves RFS
status and generally have initial terms of approximately 15 to 20 years from the first or last RFS date for
the facility. The tenant typically has the option to extend the lease for one or more renewal terms.
We are responsible for the turnkey construction of the relevant project in accordance with the terms of the
lease, as well as relevant zoning and permitting for the project. Each project is typically delivered in
phases, and for each phase rent will commence when the phase is accepted by the tenant as RFS. If we
fail to meet the RFS conditions by the specified outside date, the tenant may generally exercise their self-
help right to complete the project, and in some cases may be entitled to liquidated damages depending
on the duration of the delay. Further, certain of our data center leases contain buy-out options in the event
we fail to meet certain RFS conditions by the specified outside date, in which case the tenant may be
entitled to acquire the facility at a price equal to its fair market value.
Rent payable by the tenant is typically calculated based on a formula the results in a yield relative to an
agreed total project costs, including in certain cases land costs, management fees, financing costs, which
is subject to a cap and includes a reconciliation process to adjust the rent payable based on final
construction costs following completion of the project. Cost overruns in excess of any agreed cap on total
project costs are generally borne by us, unless the tenant expressly agrees otherwise. Rent is typically
payable monthly in advance and escalates generally at 2% to 3% per annum. In some cases rent may be
subject to certain adjustments, for example in the event of an improvement in the credit rating of the
tenant.
Our data center leases are typically structured as triple-net leases, under which operating costs,
insurance premiums, property taxes and management fees are passed through to our tenants.
Our data center leases include certain service requirements, including continuous availability of electricity,
a prescribed temperature and humidity range, availability of network connectivity and uptime, certain data
access and monitoring services, compliance requirements, on-site security and surveillance and other
requirements to prevent certain events or conditions that could cause a material interference with the
tenant’s operations within the data center campuses. Our failure to maintain these service levels as
required pursuant to any applicable service level agreements would entitle the tenant to certain remedies,
which may include rent credits or credits against service fees, step-in or self-help rights and, in the case
of prolonged or repeated service interruption events, the right to terminate the lease. Service credits are
generally calculated on a tiered or escalating basis, with the amount of the credit increasing in proportion
to the duration or severity of the service interruption event. In certain instances, customers could be
entitled to credits up to 100% of their monthly service fees for prolonged disruptions.
Our data center leases generally do not permit termination for convenience. Typically our tenants can
terminate the lease only upon certain events, including a prolonged service interruption affecting critical
services, if the property is subject to seizure under eminent domains laws, the occurrence of casualty
events (which result when a material portion of the project site is damaged, destroyed or rendered unfit
for normal use for any reason whatsoever), certain breaches of applicable sanctions regimes or sale or
change of control prohibited under the lease. We can generally terminate in the event of a default by a
tenant, in which case we may be entitled to liquidated damages determined as the present value of the
rent payable for the remainder of the term.
PORTS-Pike Technology Campus Leases
Data Center Leases
On August 17, 2026, 17 of our subsidiaries, each as landlord, and an affiliate of OpenAI, as tenant,
entered into individual lease agreements for the PORTS-Pike Technology Campus, resulting in 17 leases
covering approximately 8.0 GW-IT of critical IT capacity in the aggregate. Each lease has a 20-year initial
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term commencing on the applicable commencement date, includes four five-year extension options
exercisable by the tenant, and is structured as a triple-net lease with yield-on-cost rent, and phased
commencement tied to RFS conditions. The first nine of these leases (ordered by rent commencement)
include a yield-on-cost formula with a fixed yield used to calculated rent. The last eight of these leases
(ordered by rent commencement) include a yield-on-cost formula with a floating yield used to calculate
rent, with such yield set as a fixed spread to the cost of term debt realized for the asset, subject to a floor
and a cap. adjusting with for changes in interest rates within a set range. Additionally, in each of these 17
leases, there is a cost target for project capex. If actual capex exceeds the cost target, such incremental
cost overruns are able to be rentalized via the yield-on-cost formula, but at a slightly lower yield than the
headline yield. Conversely, if actual capex is lower than the cost target, a portion of the cost savings are
able to be rentalized, thereby increasing the overall effective yield.
Rent commencement for each phase and OpenAI’s associated obligations are conditioned on satisfaction
of the applicable RFS conditions. The leases are expected to commence in stages between 2028 and
2032, with rent commencement for the first phase of Building 1 expected to occur on the date the RFS
conditions to such phase have been satisfied. If we fail to meet the applicable RFS dates, OpenAI may be
entitled to remedies including, but not limited to, liquidated damages, self-help rights and limited step-in
rights.
Under each lease, the tenant has no general right to terminate for convenience, but does have customary
rights concerning casualty and condemnation events, prohibited sales or transfers, and prolonged service
interruptions caused by our fraud, willful misconduct or negligent acts.
Additionally, the tenant has termination rights for highly prolonged electrical outages and for our failure to
complete development events by milestone dates set forth in each respective lease. Such development
events typically include grid approval, securing financing arrangements, permits, safety and remediation
analysis, land surveys, site acquisition, environmental reports and energy pricing, and have deadlines tied
to the date that is 12 months prior to the target commencement date for the first phase of the applicable
building, subject to extension for force majeure and tenant delays.
NVIDIA Residual Value Guaranties
NVIDIA has provided residual value guaranties over the tenant’s obligations under the leases covering
each of the initial nine buildings, representing approximately 4.25 GW-IT of critical IT load, subject to a
declining guaranteed minimum value and an aggregate cap of $105 billion. The guaranties are residual
value guaranties and are triggered only upon tenant insolvency or an uncured monetary default under an
applicable lease. Following a trigger, NVIDIA may assume an applicable tenancy itself or through an
assignee or direct us to re-let (or, if unsuccessful in reletting, sell) the premises, and may defer that
election for up to one year while paying specified project agreement costs, other than during the first six
months following the trigger, when those costs are expected to be funded from the tenant security deposit
and project reserves. The guaranteed minimum value declines on a defined schedule over the 20-year
leases,and is intended to cover debt principal, accrued interest, invested equity, targeted equity returns
and committed transmission payments to AEP Ohio. The aggregate remedy cap is $105 billion across
related guaranties on the initial 4.25 GW-IT. The guaranty automatically terminates and NVIDIA is
released if OpenAI Group PBC achieves a certain designated credit rating or if specified replacement
guaranties or leases are provided. We did not offer and do not owe any compensation to NVIDIA for the
guaranties; such compensation is provided separately by OpenAI under a separate agreement.
NVIDIA also has an option, in its sole discretion, to provide guaranties for the remaining approximately
3.78 GW-IT of buildings. If NVIDIA does not provide such guaranties by a date certain, OpenAI is required
to secure a replacement guarantor meeting or exceeding a credit rating for A- from S&P or its equivalent
from Moody’s.
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Utility Service Agreements and Retail Electric Supply Agreements
Utility service for the 0.8 GW of load at the PORTS-Pike Technology Campus is covered by an Electric
Service Agreement and Letter of Agreement with AEP Ohio, which includes the condition that certain
transmission upgrades be completed. Utility service, the transmission expansion project, and allocation of
transmission costs to the PORTS-Pike Technology Campus for the 9.2 GW of transmission capacity are
covered under separate agreements. These agreements are at various stages of execution and are
subject to final regulatory approvals. For more information, see “Risk Factors—Risks Related to Our
Business and Operations”
These arrangements relate to utility service and transmission infrastructure and do not provide the retail
supply of energy or capacity. Power supply for the campus will require separate agreements with one or
more competitive retail electric service suppliers, including arrangements addressing the capacity
obligations associated with serving the campus, which have not been finalized or executed. A failure or
delay in any of these matters could delay or limit energization of all or a portion of the PORTS-Pike
Technology Campus and materially adversely affect its development and operation.
Power Agreements
Our power customer agreements consist of PPAs and other offtake arrangements and are structured on a
project-specific basis, generally ranging from 10 to 25 years and providing for the development,
construction and operation of utility-scale power generation and BESS facilities. These agreements
generally provide for fixed prices at which we deliver specified quantities of electricity, bundled RECs and,
where applicable, energy storage capacity, or in some cases prices tied to a locational marginal price.
While the substantial majority of our PPAs are structured on an “as produced” basis, under which we sell
electricity actually generated without a commitment to deliver specified volumes, a limited number of our
fixed-price contracts and hedges require us to deliver specified volumes of power at a fixed price.
These agreements provide that we will at all times retain operational control of the facility. We are
responsible for all related costs, including operations and maintenance costs, insurance, property taxes
and similar site-level expenses, and these costs are not separately passed through to offtakers. Further,
we are required to comply with applicable regulatory standards under the applicable regulatory regimes,
and bear costs associated with such compliance.
Our power customer agreements can generally only be terminated upon occurrence of certain events of
default by us, including an insolvency event, having insufficient collateral, failing to achieve commercial
operation by the specified outside date in an applicable agreement, continuous force majeure for 12 or
more months and continuous failure to meet certain specified percentages of expected generation or
storage capacity, which typically range from 80% to 85% energy capacity and 70% to 75% storage
capacity. Additionally, upon certain events, including natural disasters or other force majeure events,
planned outages, forced facility outages or pursuant to regulators' demands, all of our power generation
customer agreements allow buyers to request curtailment of energy deliveries of, in certain
circumstances, up to 100% of committed capacity through the submission of curtailment orders. If we
deliver excess capacity in contradiction with any valid curtailment request, we may be required to pay the
buyer delivery costs, settlement costs, or any penalties by ISOs or similar authorities imposed for such
excess delivery. Alternatively, in the event buyers request curtailment in contradiction to our agreements,
we may be entitled to payments for energy we could have produced but forewent. In the event we deliver
less energy than we may be required to under our agreements, we are required to pay our buyers
“shortfall damages” equal to a prescribed amount pursuant to a formula in the applicable agreement.
Upon a default by a buyer, including due to their bankruptcy, failure to make any undisputed payments
and failure to comply with certain obligations, we may be entitled to liquidated damages and, in the event
the event of default is not cured for a certain amount of time, terminate the agreement. Buyers also have
reciprocal terms, in addition to the ability to terminate upon failure to meet certain minimum performance
requirements for a certain amount of periods, failing to maintain performance security, abandoning the
facility and failing to maintain in effect any governmental approvals.
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Competition
The markets in which we operate are highly competitive and are characterized by rapid growth in demand
for power and data center infrastructure, significant capital requirements, long development timelines and
extensive permitting and regulatory processes. We compete with a broad range of market participants for
customer commitments, development sites, grid capacity, power generation equipment, construction
resources and financing capital. Our competitors include data center developers, cloud service providers,
colocation operators, renewable and conventional power project developers, vertically integrated utilities,
independent power producers, and large technology companies that may develop and operate their own
powered campuses or procure dedicated power supply directly. Key competitors that offer general
purpose cloud computing as part of a broader, diversified product portfolio include Amazon (AWS),
Google (Google Cloud Platform), IBM, Microsoft (Azure) and Oracle.
In our power generation business, we compete with other utility-scale solar and battery energy storage
developers and owners, including both independent power producers and vertically integrated utilities, for
PPAs, interconnection capacity, land rights and access to tax equity and project-level financing.
Competitors in this segment include companies such as Clearway Energy, NextEra Energy, AES
Corporation and other renewable energy developers and independent power producers with longer
operating histories, larger portfolios and in some cases, lower costs of capital. The renewable energy
development market remains competitive, with demand for renewable power supported by structural
trends including expected growth in electricity consumption from data centers, corporate decarbonization
objectives and increased electrification across multiple end-use sectors. Increased demand from
hyperscalers and constrained availability of firm, dispatchable generation in certain markets have
contributed to higher PPA prices in recent years.
In our data center business, we compete with developers of hyperscaler data center campuses, powered
shell providers and colocation operators seeking to meet increasing AI-driven demand for large-scale
compute infrastructure. Certain competitors have established operating portfolios, long-standing customer
relationships and access to lower-cost capital, which may provide advantages in securing tenant
commitments. Prominent data center providers in the United States include Digital Realty, Equinix and
various private operators such as QTS, Vantage Data Centers, Switch, CyrusOne, and Aligned Data
Centers. Private equity firms have also emerged as increasingly active competitors in the data center
market, deploying substantial capital to acquire, develop and scale data center platforms, which may
intensify competition for development sites, power capacity and tenant commitments. We also compete
with developers pursuing private power or on-site generation strategies, including natural gas-fired
generation, mobile generation and hybrid power solutions, as well as with alternative energy and
advanced power solutions such as battery storage systems, fuel cell-based systems, long-duration
storage technologies and nuclear generation developers. Driven by the proliferation of next-generation,
energy-intensive technologies such as high-performance computing, demand for energy capacity
continues to outpace supply, while grid interconnection bottlenecks have further constrained access to
power and digital infrastructure development.
We believe our competitive position is supported by several factors. We filed interconnection requests
before the current period of market saturation, and our portfolio of 8.8 GW-IT of data center capacity
contracted, provides us with near-term access to grid capacity that would be difficult for new entrants to
replicate within a comparable timeframe. Our management team has experience in both data center
design and large-scale power infrastructure development, having delivered approximately 3.0 GW of
operating solar power and BESS capacity and helped us raise approximately $19 billion in project capital
since inception through the date of this prospectus, including approximately $15 billion in project-level
debt and nearly $4 billion in tax equity financing. We have developed data center designs that we believe
can achieve approximately 80% greater density than certain competing designs, which we expect will
result in more efficient use of labor and shorter construction timelines. In addition, SoftBank and OpenAI
have made significant equity investments in our business, and OpenAI and SoftBank serve as anchor
tenants under data center lease agreements, which we believe provides revenue visibility and strategic
alignment with AI compute demand. We have also developed relationships with utilities such as Oncor
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and AEP through our years of renewable energy development, which we believe facilitate our ability to
navigate interconnection processes in key data center markets.
Competition is primarily based on the ability to deliver large-scale power capacity on accelerated
timelines, secure permits and regulatory approvals, obtain long-lead equipment, access utility
infrastructure, provide reliable and redundant power solutions and offer commercially attractive lease and
power pricing structures. Many of our competitors are significantly larger than we are and may have
greater financial, technical and operational resources, longer operating histories, established customer
relationships and existing portfolios of stabilized assets.
Intellectual Property
Our intellectual property is an important aspect of our business and our ability to compete effectively
depends in part upon establishing and protecting our rights in trademarks, trade secrets and other
intellectual property rights we own or license. We rely on a combination of trademark, trade secret, unfair
competition and other intellectual property laws, as well as confidentiality and license agreements and
other procedures and contractual provisions, to establish and protect our intellectual property and other
proprietary rights, both in the United States and in other jurisdictions. Such means may afford only limited
protection of our intellectual property and may not prevent third parties from independently developing
product and service offerings similar to or duplicative of our product and service offerings or prevent our
competitors from gaining access to our proprietary information and technology. These measures may also
not prevent, or provide meaningful protection in the event of any, misappropriation, infringement, or other
violation of intellectual property rights owned or licensed by us. In addition, our intellectual property rights
could be challenged, invalidated, circumvented, or infringed, misappropriated or otherwise violated.
Intellectual property laws vary by jurisdiction and we may be unable to maintain, protect or enforce our
proprietary rights adequately in all cases, and enforcing our rights may be costly and require significant
expenditure of resources, including costs associated with maintenance, monitoring, sending demand
letters, initiating administrative proceedings and filing lawsuits. We may also be unable to detect or
determine the full extent of any unauthorized use of our intellectual property rights.
We use the SB Energy name, logo and trademark and the sbenergy.com domain under a trademark
license from SoftBank Group Corp. to SBE Global, LP, which SBE Global is expected to assign to us in
connection with this offering under the assignment and Amendment No. 1 to the Amended and Restated
License Agreement.
For more information, see “Risk Factors—Risks Related to Intellectual Property, Data Privacy and
Cybersecurity,” “Risk Factors—Risks Related to Our Corporate Structure and Ownership—We license our
brand name and certain intellectual property from SoftBank, and such license will terminate automatically
if SoftBank ceases to control us, which could disrupt our business and require a costly rebranding” and
“Certain Relationships and Related Party Transactions—Certain Transactions with SoftBank—Trademark
License Agreement.”
Information Technology
We utilize information technology systems to support our business operations, including enterprise
resource planning systems, financial reporting and forecasting tools, project management platforms and
operational monitoring systems. We have implemented IT policies and governance frameworks structured
to improve our overall IT posture, and our IT systems are designed to be consistent with public market-
ready standards.
Our operations are subject to a National Security Agreement with the U.S. Department of the Treasury
and the DOE, which imposes compliance, cybersecurity and oversight requirements, including vendor
approval procedures for certain equipment and technology used in our projects. We maintain approved
vendor lists for SCADA, networking and other critical operational technology systems deployed at our
project sites, and we implement cybersecurity plans and protocols as required by applicable law and the
terms of such agreements.
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We also maintain global workforce compliance policies and processes to support our growing technology
infrastructure. Our information technology expenditures include IT, software and subscriptions, which
totaled approximately $7.2 million in our 2025 annual operating plan.
Despite our security measures, our information technology infrastructure may be vulnerable to
cyberattacks or security breaches and we may be unable to detect, investigate, remediate, or recover
from attacks or incidents in a timely manner, or to avoid a material adverse impact. For more information,
please see “Risk Factors—Risks Related to Intellectual Property, Data Privacy and Cybersecurity—We
and our third-party providers are exposed to security breaches, cybersecurity risks and other disruptions
to our information technology systems which may result in, and at times have resulted in damage to our
brand and reputation, material financial penalties and legal liability, which could adversely affect our
business, results of operations, financial condition.”
Data Privacy and Security Laws
Numerous state and federal laws, regulations and standards govern the collection, use, access to,
confidentiality and security of personal information, and could apply now or in the future to our operations
or the operations of our partners. Numerous federal and state laws and regulations, including data breach
notification laws and security laws and consumer protection laws and regulations govern the collection,
use, disclosure and protection of personal information. Privacy and security laws, regulations and other
obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can
result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and
restrictions on data processing. For more information, see “Risk Factors—Risks Related to Intellectual
Property, Data Privacy and Cybersecurity—Compliance with ever-evolving federal and state laws and
other requirements relating to the processing of information about individuals necessitates significant
expenditure and resources, and any failure by us or our vendors to comply may result in significant
liability, negative publicity and/or an erosion of trust, which could materially adversely affect our business,
results of operations and financial condition.”
Government Regulation
Our business is subject to extensive federal, state and local laws, regulations, and standards that
materially affect our operations and the manner in which we conduct business. The principal areas of
regulation applicable to our operations include:
FERC, PUCT and Electricity Market Regulation.
Our power generation and storage projects located or selling power within the continental U.S. outside of
the ERCOT portion of Texas are or, when operational, will be, subject to the jurisdiction of FERC under
the FPA and the rules and regulations of the applicable ISO or RTO in which our projects are located,
including CAISO and PJM. In addition, our power generation and storage projects located or selling
power within ERCOT are or, when operational will be, subject to the jurisdiction of the PUCT and the rules
and regulations of ERCOT. Each of CAISO, PJM and ERCOT have approved rules governing
interconnection procedures, wholesale electricity market participation, and transmission access.
Regulatory rules of such market operators are also evolving with respect to cost and timelines for new
large load interconnections, such as those required for data centers. Applicable regulatory requirements
of FERC and the RTO/ISO markets are discussed further in the “Risk Factors—Risks Related to
Governmental Regulation and Legal Matters” section. The Energy Policy Act of 2005 (“EPAct 2005”)
supplemented the FPA to vest FERC with authority to ensure the reliability of the bulk electric power
system and mandated that FERC assume both oversight and enforcement roles. Pursuant to this
mandate, FERC certified NERC as the nation’s Electric Reliability Organization to develop and enforce
mandatory reliability standards and requirements to address medium- and long-term reliability concerns.
Today, enforcement of electric reliability standards, including the protection of critical energy
infrastructure, is a major focus of NERC and FERC. EPAct 2005 also conferred authority on FERC to act
to limit the exercise of market power and market manipulation in wholesale power markets and
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strengthened FERC’s authority to impose civil and criminal penalties. FERC has broad remedial authority
in connection with violations of the FPA, its regulations and FERC orders, including to revoke a person’s
authorization to make wholesale sales at market-based rates or to establish other remedies for violations
of the FPA, including the imposition of civil penalties of up to approximately $1.58 million per violation per
day, adjusted for inflation annual and disgorgement of profits. In connection with that authority, FERC may
conduct investigations into suspected violations of the FPA, its regulations and FERC orders and initiate
proceedings to pursue allegations associated with such alleged violations. EPAct 2005 also directed
FERC to develop regulations to promote the development of transmission infrastructure, provided
incentives for transmitting utilities to serve renewable energy projects, and expanded and extended the
availability of U.S. federal tax credits to a variety of renewable energy technologies.
Public Utility Holding Company Act of 2005.
The Public Utility Holding Company Act of 2005 (“PUHCA”) provides FERC and state regulatory
commissions with access to the books and records of holding companies and other companies in holding
company systems; it also provides for the review of certain costs allocated among holding company
systems. Companies like us that are holding companies under PUHCA solely with respect to one or more
EWGs, i.e. entities that own and/or operate certain eligible generation facilities that make sales of electric
energy exclusively at wholesale, are generally exempt from requirements which give FERC access to
books and records.
State Utility Regulation.
While federal law provides the utility regulatory framework for our project subsidiaries’ sales of electric
energy, capacity and ancillary services at wholesale, there are also important areas in which state
regulatory control over traditional public utilities that fall under state jurisdiction may have an effect on our
projects. For example, the regulated electric utility buyers of electricity from our projects are generally
required to seek state public utility commission approval for the pass-through in retail rates of costs
associated with PPAs entered into with a wholesale seller. California, in which we have multiple operating
power generation projects and one operating storage project as of June 30, 2026, requires compliance
with certain operating and maintenance reporting requirements for wholesale generators. In addition,
states and other local agencies require a variety of environmental and other permits.
State law governs whether an independent generator or power marketer can sell electricity at retail in that
state. Some states, such as Florida, prohibit most sales at retail of electricity except by the state’s
franchised utilities. In other states, such as New Jersey and Pennsylvania, an independent generator may
sometimes sell retail electric power to a co-located or adjacent business customer. Some states and
regions, such as Massachusetts, New York and parts of Texas, permit retail power marketers to use the
facilities of the state’s franchised utilities to sell power to retail customers as competitors of the utilities.
Environmental Laws and Regulations.
Our operations are subject to numerous federal, state and local environmental laws and regulations,
including the Clean Air Act, the Clean Water Act, RCRA, CERCLA, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, NEPA, the Endangered Species Act and
analogous state laws. These laws govern, among other things, the generation, handling, transportation,
storage and disposal of hazardous and non-hazardous substances and wastes, emissions and other
discharges into the environment (including to air, surface water, groundwater and soil), the protection of
threatened and endangered species and their habitats, the protection of historic and cultural resources
and the assessment and remediation of contaminated sites. Our projects require various environmental
permits, including coverage under general permits for stormwater discharges associated with construction
activities and industrial operations, National Pollutant Discharge Elimination System permits for point
source discharges to waters of the United States, air quality permits for backup diesel generators, gas-
fired generation facilities and other stationary emission sources, spill prevention, control and
countermeasure plans for facilities with above-ground oil storage and state and local permits for
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hazardous materials storage, waste management, water use, wastewater discharge, fuel supply and
related infrastructure. We are required to perform environmental impact assessments and to obtain
conditional use permits, zoning approvals and other local authorizations in connection with the
development and construction of our projects. Our battery energy storage systems are additionally
subject to NFPA standards and applicable state and local fire codes governing the installation and
operation of energy storage systems.
State Renewable Portfolio Standards and Clean Energy Mandates.
Many states in which we operate have implemented renewable portfolio standard programs requiring
utilities to incorporate renewable energy into their generation portfolios over defined compliance periods.
Renewable energy generation under these programs is typically tracked through renewable energy
certificates, which are used by load-serving entities to demonstrate compliance with applicable
requirements. Corporate clean energy targets adopted by major technology companies, including
commitments to procure increasing amounts of clean energy, further drive demand for our power
generation services.
Tax Credits and Government Incentives.
We and our projects benefit from federal tax credits for renewable energy, including the ITC under the
Code, as amended by the IRA. The IRA introduced and extended several U.S. federal income tax credits
aimed at promoting clean energy development, and since its enactment, the IRA has driven substantial
investment in clean energy projects. We have structured certain of our projects to qualify for bonus ITC
adders, including the energy community adder and the domestic content adder. Under the OBBBA, which
was signed into law on July 4, 2025, the clean energy production credit and clean energy investment
credit under Sections 45Y and 48E of the Code, respectively, for solar and wind projects are subject to an
accelerated termination schedule. Solar and wind projects must either have begun construction on or
before July 4, 2026 or be placed in service on or before December 31, 2027 to qualify for these tax
credits. The OBBBA also created new limitations and FEOC restrictions relating to the direct or indirect
ownership, influence, or control of U.S. clean energy projects by, and the inclusion of equipment and
components within U.S. clean energy projects provided by, citizens of and entities organized under the
laws of certain non-U.S. countries, including the People’s Republic of China. While we are not an FEOC
(and do not expect to be an FEOC following this offering), these regulations may nonetheless be
applicable to us. Some of our data center projects have secured county-level property tax abatements. If
these abatements are rescinded or restructured, the operating costs for those data centers may increase.
State Data Center Regulation.
States in which we develop data center projects, including Texas, have enacted or are considering
legislation or regulations requiring large data centers to pay for transmission improvements and provide
backup power, and mandating remote disconnect capabilities for emergency load-shedding. Federal and
regional regulators are transitioning toward “grid-aware” load mandates, requiring large-scale AI additions
to prove they do not compromise system reliability. We may also be subject to state and local laws and
ordinances targeting community impacts associated with the future operation of our data center facilities.
National Security Regulation.
Our business is subject to oversight by CFIUS. We are party to National Security Agreements with the
U.S. Department of the Treasury and the DOE that impose compliance, security and oversight measures,
including vendor approval procedures, cybersecurity plans, inspection requirements and reporting
obligations, designed to ensure our operations align with U.S. national security interests.
Licensing, Permitting and Other Regulatory Requirements.
Our operations are also subject to licensing, permitting and inspection requirements for contractors and
engineers; building and electrical codes; wage and hour laws, including the Fair Labor Standards Act;
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worker safety and health regulations, including those promulgated by the Occupational Safety and Health
Administration; applicable reliability standards, rules and guidelines of the North American Electric
Reliability Corporation; and regulations governing the sourcing and transportation of equipment and
materials.
In addition, permitting requirements vary by project. For example, the Milam County campus does not
require county-level zoning approvals, and the county development permit and Army Corps of Engineers
approval have been obtained. The Borden County, Scurry County, and PORTS-Pike campuses are in
earlier permitting stages, with local development permit requirements and environmental reviews in
progress.
See the Risk Factors entitled “Our business is subject to extensive federal, state and local regulation and
changes in laws and regulations could adversely affect our operations,” The regulatory landscape for AI is
rapidly evolving, and unfavorable changes could adversely affect our business,” “We are subject to
environmental, health and safety laws and regulations that could result in liabilities, increased costs and
delays in permitting and construction,” “Our operations depend on the availability of water resources and
restrictions on water use or water scarcity could adversely affect our business,” and “We are subject to
risks associated with national security regulations due to our foreign ownership” for additional information
regarding risks we face related to government regulation.
Employees
As of June 30, 2026, we employed 223 full-time employees and 89 contractors. None of our employees or
contractors are represented by a labor union or are party to a collective bargaining agreement, and we
have had no labor-related work stoppages. We believe that we have good relationships with our
employees.
Facilities
Our corporate headquarters are located at 3 Lagoon Drive, Suite 280, Redwood City, California 94065.
We operate our business from our headquarters and from project offices located at or near our project
sites across the United States.
Our renewable energy project portfolio is spread across major U.S. markets, including operating and in-
construction projects in California, Texas and Nevada as well as development sites in additional states
throughout the United States. Our data center portfolio is currently located primarily in Texas and Ohio, as
well as development sites at additional states throughout the U.S.
We generally secure land for our renewable energy projects through long-term lease agreements with
landowners, and we own certain substation and interconnection facilities. For our data center projects, we
secure site control through a combination of land acquisition and long-term leases. A substantial majority
of the PORTS-Pike Technology Campus buildings are expected to be located on private property that we
have acquired or expect to acquire pursuant to binding arrangements. On February 26, 2026, our
subsidiary Pike County Portsmouth DC LLC entered into a lease with the DOE at the DOE Portsmouth
Site, on which one data center building is expected to be constructed.
We believe that our existing corporate offices and project facilities are adequate for our immediate needs
and that we will be able to obtain additional or substitute space, as needed, on commercially reasonable
terms.
Legal Proceedings
We are currently involved in, and may in the future from time to time become involved in, legal
proceedings, claims and investigations in the ordinary course of our business. Although the results of
these legal proceedings, claims and investigations cannot be predicted with certainty, we do not believe
that the final outcome of any matters that we are currently involved in are reasonably likely to have,
individually or in the aggregate, a material adverse effect on our business, financial condition, or results of
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operations. Regardless of final outcomes, however, any such proceedings, claims and investigations may
nonetheless impose a significant burden on management and employees and be costly to defend, with
unfavorable preliminary or interim rulings.
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MANAGEMENT
The following table sets forth the name, age as of the date of this prospectus, and position of the
individuals who currently serve as our directors and executive officers as of the date of this prospectus.
Name | Age | Position(s) | ||
Executive Officers and Employee Directors | ||||
Rich Hossfeld ................................. | 47 | Co-Chief Executive Officer and Director | ||
Abhijeet Sathe ............................... | 57 | Co-Chief Executive Officer and Director | ||
Gaetan Frotte ................................. | 55 | Chief Financial Officer | ||
Ryan Bates ..................................... | 48 | General Counsel | ||
Non-Employee Director Nominees | ||||
William Bice .................................... | 55 | Director Nominee | ||
Alex Clavel ..................................... | 52 | Director Nominee | ||
Ron Fisher ...................................... | 78 | Director Nominee | ||
Kimberly Johnson .......................... | 53 | Director Nominee | ||
Sachin Katti .................................... | 45 | Director Nominee | ||
Seiichi Morooka ............................. | 57 | Director Nominee | ||
Alexi Wellman ................................ | 56 | Director Nominee | ||
Executive Officers and Employee Directors
Rich Hossfeld has served as our Co-Chief Executive Officer and as a member of our board of directors
since our inception. Mr. Hossfeld has been involved in building our business since 2019, including through
his roles at our parent entities. Mr. Hossfeld has more than 20 years of experience across energy
infrastructure and technology leadership roles. Prior to joining the Company, Mr. Hossfeld was a partner
at True North Venture Partners. Mr. Hossfeld also held various commercial leadership roles for global
energy providers, including First Solar, and began his professional career as a corporate associate at
Cravath, Swaine & Moore LLP. Between 2019 and June 2026, Mr. Hossfeld was a member of the board
of directors and the audit committee of the board of directors of ESS Tech, Inc. (NYSE:GWH). Mr.
Hossfeld earned a Bachelor of Arts in Economics and Government from Claremont McKenna College and
a Juris Doctor from Duke University School of Law. We believe Mr. Hossfeld is qualified to serve as a
member of our board of directors due to his extensive executive leadership experience and his expertise
in the energy and infrastructure industry.
Abhijeet Sathe has served as our Co-Chief Executive Officer and as a member of our board of directors
since our inception. Mr. Sathe has been involved in building our business since 2019, including through
his roles at our parent entities. Mr. Sathe has more than 30 years of experience in engineering,
operations and renewable energy development. Before serving as Co-Chief Executive Officer, Mr. Sathe
held operational leadership roles, including as Chief Operating Officer, at SoftBank’s India renewable
energy business and served as Vice President of Global Design and Engineering at SunEdison from
March 2011 to January 2016, where he led global engineering teams across commercial and utility-scale
solar businesses. Mr. Sathe also held research and development and business roles at General Electric
Company, where he completed advanced management and leadership training. He began his career
working in Micro Electro Mechanical Systems (“MEMS”)-focused engineering roles at Endevco, Nayna
Networks and Silicon Microstructures. Mr. Sathe holds a Master of Science in Electrical Engineering from
the University of Hawaii at Manoa and a Bachelor of Science in Electrical, Electronics and
Communications Engineering from COEP Technological University. We believe Mr. Sathe is qualified to
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serve as a member of our board of directors due to his extensive executive leadership experience and his
expertise in the energy and infrastructure industry.
Gaetan Frotte has served as our Chief Financial Officer since our inception. Mr. Frotte has been involved
in building our business since February 2023, including through his roles at our parent entities. Prior to
joining the Company, Mr. Frotte served at NRG Energy, Inc. (NYSE: NRG) (“NRG Energy”) from August
2006 to February 2023, most recently as Senior Vice President and Treasurer, where he was responsible
for financing, cash management and insurance management. During his tenure at NRG Energy, Mr.
Frotte served as Interim Chief Financial Officer in 2021 and led the initial public offering of NRG Yield, Inc.
(now known as Clearway Energy, Inc.). Mr. Frotte also participated in green bond issuances and was part
of NRG Energy’s ESG annual report drafting and review team. In 2017, Mr. Frotte was involved in
proceedings related to the bankruptcy of GenOn Energy, then a wholly owned subsidiary of NRG Energy.
Mr. Frotte has served as a Company appointed member of the board of directors of Balanced Rock
Power, LLC, a renewable energy developer, since April 2026. Mr. Frotte holds an M.B.A. from the
University of Virginia Darden School of Business and a Master’s degree in Accounting and Business from
Institut Supérieur du Commerce in Paris, France.
Ryan Bates has served as our General Counsel since our inception. Mr. Bates has been involved in
building our business since 2020, including through his roles at our parent entities. Mr. Bates has more
than 20 years of legal experience, the last fifteen of which focused on renewables and the energy sector.
Prior to joining the Company, Mr. Bates held Assistant General Counsel positions at Clearway Energy
Group from August 2018 to May 2020 and NRG Energy from December 2014 to August 2018. Mr. Bates
worked as Senior Counsel in NRG Energy’s Solar Group of from September 2011 to November 2014. He
began his career as an Associate at Morrison & Foerster LLP. and, later, at Latham & Watkins LLP in the
Corporate and Project Finance groups. Mr. Bates has served on the Board of Directors of Big Brothers
Big Sisters of San Diego County since 2015. He earned a Bachelor of Science in Finance from the
University of Arizona and a Juris Doctor from Northwestern University Pritzker School of Law. We believe
Mr. Bates is qualified to serve in his role due to his extensive legal experience in the energy and
renewables sectors.
Non-Employee Director Nominees
William Bice is currently a director nominee and will become a member of our board of directors at or
prior to the launch of this offering. Mr. Bice is a retired partner of Milbank LLP, where he practiced until
March 2026 in the firm’s Global Project, Energy and Infrastructure Finance group in both the New York
and Tokyo offices. During his tenure at Milbank, Mr. Bice advised developers, lenders, private equity
sponsors, and asset owners on transactions involving power generation, electric transmission, and
renewable energy projects. Mr. Bice holds a Bachelor of Arts in Economics and Public Policy from Duke
University and a Juris Doctor from the University of Pennsylvania Law School. We believe Mr. Bice is
qualified to serve as a member of our board of directors due to his legal experience advising on energy
infrastructure, project finance, and corporate transactions.
Alex Clavel is currently a director nominee and will become the chairman of our board of directors at or
prior to the launch of this offering. Mr. Clavel has been involved in building our business since 2020,
including through his roles at our parent entities. Since 2023, Mr. Clavel has served as Chief Executive
Officer of SoftBank Investment Advisers, where he oversees the SoftBank Vision Funds. Prior to his
current role, Mr. Clavel held various positions at SoftBank Group International from 2015 to 2023,
including Chief Executive Officer, Managing Partner, and Head of Corporate Development & Investments,
based in Tokyo, Silicon Valley and New York. Prior to joining SoftBank, Mr. Clavel spent nearly 20 years in
investment banking at Morgan Stanley, where he was based in New York, Hong Kong, Shanghai and
Tokyo. Mr. Clavel served as a member of the board of directors of WeWork Inc. (NYSE: WE) from August
2022 to June 2024. Mr. Clavel holds an A.B. in East Asian Studies from Princeton University and is board
director of Prep for Prep. We believe Mr. Clavel is qualified to serve on our board of directors due to his
extensive experience in global investment management, corporate governance and strategic
transactions.
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Ron Fisher is currently a director nominee and will become a member of our board of directors at or prior
to the launch of this offering. Mr. Fisher currently serves as Senior Advisor to SoftBank Investment
Advisers and as a member of the board of directors of Arm Holdings plc (NASDAQ: ARM), a position he
has held since 2017. Mr. Fisher served as Executive Chairman of SoftBank Investment Advisers, which
manages the SoftBank Vision Funds, from 2018 to 2022. Prior to that role, Mr. Fisher served as Vice
Chairman and a member of the board of directors of SoftBank Group Corp., one of our parent entities,
from 1997 to 2022. Mr. Fisher joined SoftBank in 1995 as Managing Partner of SoftBank Capital, which
he founded. Mr. Fisher also served as Vice Chairman of Sprint Corporation from 2013 to 2021 and as a
member of the boards of directors of WeWork from 2017 to 2019 and Fanatics. Prior to joining SoftBank,
Mr. Fisher served as Chairman and Chief Executive Officer of Phoenix Technologies from 1990 to 1995
and held leadership positions at Interactive Systems Corporation. Mr. Fisher holds an M.B.A. from
Columbia Business School and a Bachelor of Commerce from the University of the Witwatersrand. We
believe Mr. Fisher is qualified to serve as a member of our board of directors due to his experience in
global technology investment and corporate governance and his service on public and private company
boards.
Kimberly Johnson is currently a director nominee and will become a member of our board of directors at
or prior to the launch of this offering. Ms. Johnson served as Chief Operating Officer of T. Rowe Price
Group, Inc. from 2022 to 2025. Prior to joining T. Rowe Price, Ms. Johnson served as Executive Vice
President and Chief Operating Officer of the Federal National Mortgage Association (“Fannie Mae”) from
2018 to 2022. Ms. Johnson previously served as Chief Risk Officer of Fannie Mae from 2015 to 2018 and
held other leadership positions at Fannie Mae beginning in 2006, including Senior Vice President of
Credit Risk and Vice President of Capital Markets. Prior to joining Fannie Mae, Ms. Johnson served as a
Director at Credit Suisse Group AG. Ms. Johnson has served as a member of the board of directors of Eli
Lilly and Company (NYSE: LLY) since February 2021. Ms. Johnson holds a B.A. in Economics from
Princeton University and an M.B.A. in Finance from Columbia Business School. We believe Ms. Johnson
is qualified to serve as a member of our board of directors due to her experience in financial operations,
enterprise risk management, and corporate governance, including as chief operating officer of financial
services companies.
Sachin Katti, Ph.D. is currently a director nominee and will become a member of our board of directors at
or prior to the launch of this offering. Dr. Katti currently serves as Vice President of Compute Strategy &
GPT Infrastructure at OpenAI, where he is responsible for OpenAI’s compute and AI infrastructure. Prior
to joining OpenAI in November 2025, Dr. Katti served at Intel Corporation from November 2021 to
November 2025, most recently as Chief Technology & AI Officer, where he was responsible for Intel’s AI
strategy, product roadmap, and Intel Labs, and previously as Senior Vice President and General Manager
of Intel’s Network and Edge Group. From 2019 to 2021, Dr. Katti served as Vice President of Telco &
Edge Strategy at VMware, Inc. Dr. Katti co-founded Uhana, an AI software company for mobile networks,
which was acquired by VMware in 2019, and Kumu Networks, a wireless technology company, where he
served as Chief Executive Officer from 2011 to 2016. Dr. Katti has served as an Adjunct Professor in
Electrical Engineering and Computer Science at Stanford University since January 2010. Dr. Katti holds a
Ph.D. from the Massachusetts Institute of Technology and a B.Tech in Electrical Engineering from the
Indian Institute of Technology Bombay. We believe Dr. Katti is qualified to serve as a member of our board
of directors due to his experience in artificial intelligence and technology leadership and his experience
building and leading technology companies.
Seiichi Morooka is currently a director nominee and will become a member of our board of directors at or
prior to the launch of this offering. Mr. Morooka currently serves as Corporate Officer and Head of the
CFO Office within the Finance Unit at SoftBank Group Corp. Mr. Morooka also serves as a member of
SoftBank Group’s Investment Committee. Mr. Morooka holds an M.A. from Rikkyo Universiry and a B.A.
from Waseda University. We believe Mr. Morooka is qualified to serve as a member of our board of
directors due to his experience in corporate and structured finance and investment management and his
knowledge of our business through his roles at our parent entities.
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Alexi Wellman is currently a director nominee and will become a member of our board of directors at or
prior to the launch of this offering. Ms. Wellman has served as Chief Executive Officer and Chief Financial
and Accounting Officer of Altaba Inc., a closed-end management investment company, since January
2022, and previously served as its Chief Financial and Accounting Officer from June 2017 to December
2021. Prior to joining Altaba, Ms. Wellman served as Vice President, Global Controller of Yahoo Inc.
beginning in October 2015 and as Vice President, Finance of Yahoo from November 2013 to October
2015. From December 2011 to June 2013, Ms. Wellman served as Chief Financial Officer of Nebraska
Book Company, Inc. From October 2004 to December 2011, Ms. Wellman served as a Partner at KPMG
LLP. Ms. Wellman currently serves as a director and chair of the audit committee of Werner Enterprises,
Inc. (NASDAQ: WERN) and ESS Tech, Inc. (NYSE: GWH). Ms. Wellman has also previously served as a
member of the boards of directors of Endurance International Group Holdings, Inc. (from April 2019 to
February 2021), Bilander Acquisition Corp. (NASDAQ: TWCB), Nebula Caravel Acquisition Corp., and
TWC Tech Holdings II Corp., each of which was a company with a class of securities registered under the
Exchange Act. Ms. Wellman holds a B.S. in Business Administration from the University of Nebraska-
Kearney. We believe Ms. Wellman is qualified to serve as a member of our board of directors due to her
experience in corporate finance and accounting, including as a public company chief executive officer and
chief financial officer, and her service on public company audit committees.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Composition of our Board of Directors
Upon the completion of this offering, our board of directors will consist of nine directors. Our Certificate of
Formation will fix the initial size of our board of directors at nine, and provide that, from and after the
Threshold Date, (i) the number of directors shall not be increased or decreased without the prior written
consent of SoftBank and (ii) our board of directors will be divided into three classes, as nearly equal in
number as possible, with the directors in each class serving for a three-year term, and one class being
elected each year by our shareholders. Until the Threshold Date, each of our directors will serve for a
term expiring at the next annual meeting of shareholders following his or her election, and each director’s
term will continue until the election and qualification of his or her successor, or his or her earlier death,
resignation or removal.
When considering whether directors have the experience, qualifications, attributes or skills, taken as a
whole, to enable our board of directors to satisfy its oversight responsibilities effectively in light of our
business and structure, the board of directors focuses primarily on each person’s background and
experience as reflected in the information discussed in each of the directors’ individual biographies set
forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to
the size and nature of our business.
Upon the completion of this offering, we will enter into the Shareholders’ Agreement, which will, among
other things, provide SoftBank with the right to designate a number of candidates for election to our board
of directors based on its and its controlled affiliates’ ownership of our outstanding shares of common
stock, provided that a certain number of such candidates must be “independent” under law or stock
exchange rules applicable to our directors at the time of such nomination. These designation rights will
range from the ability to designate up to six candidates so long as SoftBank and its controlled affiliates
beneficially own 50% or more of our outstanding shares of common stock down to the ability to designate
one candidate so long as they beneficially own more than 5% of our outstanding shares of common stock.
OpenAI has the right to designate one director so long as OpenAI and its controlled affiliates beneficially
own at least 5% of our outstanding shares of common stock. SoftBank has designated William Bice, Alex
Clavel, Ron Fisher, Kimberly Johnson, Seiichi Morooka and Alexi Wellman to serve on our board of
directors. OpenAI has designated Sachin Katti to serve on our board of directors. See “Certain
Relationships and Related Party Transactions—Shareholders’ Agreement” and “Description of Capital
Stock—Shareholders’ Agreement.”
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Classified Board of Directors
Our Certificate of Formation will fix the initial number of directors on our board at nine. Our Bylaws will
provide that, our board of directors will consist of not less than three nor more than twenty-one directors,
as fixed from time to time by resolution of our board of directors, subject to our Certificate of Formation
and the then-applicable terms of the Shareholders’ Agreement. Until the Threshold Date, each of our
directors will be elected annually at our annual meeting of shareholders. From and after the Threshold
Date, our board of directors will and be divided into three classes with staggered three-year terms. Upon
expiration of the term of a class of directors, directors for that class will be elected for three-year terms at
the annual meeting of shareholders in the year in which that term expires. At each annual meeting of
shareholders following the Threshold Date, a class of directors will be elected for a three-year term to
succeed the same class whose term is then expiring. As a result, following the Threshold Date, only one
class of directors will be elected at each annual meeting of our shareholders, with the other classes
continuing for the remainder of their respective three-year terms. Upon the Threshold Date, the board of
directors will be authorized to assign directors already in office to among three classes as follows:
•Class I directors will serve terms that expire at the first annual meeting of shareholders to be held
after the Threshold Date;
•Class II directors will serve terms that expire at the second annual meeting of shareholders to be held
after the Threshold Date; and
•the Class III directors will serve terms that expire at the third annual meeting of shareholders to be
held after the Threshold Date.
This classification of our board of directors may have the effect of delaying or preventing changes in
control of our company. See the section titled “Description of Capital Stock—Anti-Takeover Effects of
Provisions of Our Certificate of Formation, Bylaws and Texas Law.”
Each director’s term will continue until the election and qualification of his or her successor, or his or her
earlier death, resignation or removal. Our Certificate of Formation and Bylaws will provide that from and
after the Threshold Date, vacancies on our board of directors may be filled by a majority of our directors
then in office (even if less than a quorum). by a sole remaining director, or by election at an annual or
special meeting of shareholders called for that purpose, in each case subject to the then applicable terms
of the Shareholders Agreement. We expect that, from and after the Threshold Date, any additional
directorships resulting from an increase in the number of directors will be distributed among the three
classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.
The classification of our board of directors may have the effect of delaying or preventing changes in our
control or management. See the section titled “Description of Capital Stock—Anti-Takeover Effects of
Provisions of Our Certificate of Formation, Bylaws and Texas Law” for additional information.
Controlled Company Status
Immediately following this offering, we expect that SoftBank will control more than 50% of the voting
power of our outstanding common stock. As a result, we expect to be a “controlled company” within the
meaning of the corporate governance rules of Nasdaq and Nasdaq Texas. Under these rules, a company
of which more than 50% of the voting power for the election of directors is held by an individual, group or
another company is a “controlled company” and may elect not to comply with certain corporate
governance requirements, including the requirements that:
•a majority of our board of directors consists of “independent directors,” as defined under Nasdaq and
Nasdaq Texas listing rules;
•we have a nominating and corporate governance committee that is composed entirely of independent
directors with a written charter addressing the committee’s purpose and responsibilities;
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•we have a compensation committee that is composed entirely of independent directors with a written
charter addressing the committee’s purpose and responsibilities; and
•we perform annual performance evaluations of the nominating and corporate governance and
compensation committees.
We intend to rely on some or all of these exemptions, including exemptions from the requirements that a
majority of our board of directors consist of independent directors and that our compensation and
nominating committees be composed entirely of independent directors. As a result, although our audit
committee will be required to satisfy the applicable independence requirements within the applicable
transition periods, we may not have a board of directors with a majority of independent directors or a
compensation committee or nominating and corporate governance committee composed entirely of
independent directors unless and until such time as we are required to. Accordingly, you may not have the
same protections afforded to shareholders of companies that are subject to all of Nasdaq and Nasdaq
Texas corporate governance requirements. In the event that we cease to be a “controlled company” and
our shares continue to be listed on Nasdaq and Nasdaq Texas, we will be required to comply with these
requirements within the applicable transition periods.
Director Independence
Prior to the completion of this offering, our board of directors undertook a review of the independence of
our directors and considered whether any director has a material relationship with us that could
compromise that director’s ability to exercise independent judgment in carrying out that director’s
responsibilities. Our board of directors has affirmatively determined that , and are
each an “independent director,” as defined under the Exchange Act and the rules of Nasdaq and Nasdaq
Texas.
Lead Independent Director
Our board of directors will adopt, effective prior to the completion of this offering, corporate governance
guidelines that provide that one of our independent directors will serve as our lead independent director.
Our board of directors has appointed to serve as our lead independent director. As lead
independent director, will preside over periodic meetings of our independent directors, serve as
a liaison between the chairperson of our board of directors and the independent directors, provide
leadership to our board of directors if circumstances arise in which the role of Chief Executive Officer and
chairperson of our board of directors may be, or may be perceived to be, in conflict, and perform such
additional duties as our board of directors may otherwise determine and delegate.
Committees of Our Board of Directors
Our board of directors directs the management of our business and affairs, as provided by Texas law, and
conducts its business through meetings of the board of directors and standing committees. We will have a
standing audit committee, nominating and corporate governance committee and compensation
committee. In addition, from time to time, special committees may be established under the direction of
the board of directors when necessary to address specific issues.
Audit Committee
Our audit committee will be responsible for, among other things:
•appointing, compensating, retaining, evaluating, terminating and overseeing our independent
registered public accounting firm;
•discussing with our independent registered public accounting firm their independence from
management;
•reviewing with our independent registered public accounting firm the scope and results of their audit;
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•approving all audit and permissible non-audit services to be performed by our independent registered
public accounting firm;
•overseeing the financial reporting process and discussing with management and our independent
registered public accounting firm the interim and annual financial statements that we file with the
SEC;
•reviewing and monitoring our accounting principles, accounting policies, financial and accounting
controls and compliance with legal and regulatory requirements;
•reviewing our policies on risk assessment and risk management;
•reviewing related party transactions; and
•establishing procedures for the confidential anonymous submission of concerns regarding
questionable accounting, internal controls or auditing matters.
Upon the completion of this offering, our audit committee will consist of William Bice, Kimberly Johnson
and Alexi A. Wellman, with Alexi A. Wellman serving as chair. Rule 10A-3 of the Exchange Act and the
Nasdaq and Nasdaq Texas rules require that our audit committee have at least one independent member
upon the effective date of the registration statement and the listing of our common stock, have a majority
of independent members within 90 days after the listing date and be composed entirely of independent
members within one year after the listing date. Our controlled company status does not exempt us from
these audit committee requirements. Our board of directors has affirmatively determined that ,
and each meet the definition of “independent director” for purposes of serving on the audit
committee under Rule 10A-3 and Nasdaq and Nasdaq Texas rules. Each member of our audit committee
meets the financial literacy requirements of the Nasdaq and Nasdaq Texas listing standards. In addition,
our board of directors has determined that will qualify as an “audit committee financial expert,” as
such term is defined in Item 407(d)(5) of Regulation S-K. This designation does not impose on such
individual any duties, obligations or liabilities that are greater than are generally imposed on members of
our audit committee and our board of directors. Our board of directors will adopt a new written charter for
the audit committee, which will be available on our principal corporate website at www.sbenergy.com
substantially concurrently with the completion of this offering. The information on, or that can be accessed
through, any of our websites is deemed not to be incorporated in this prospectus or to be part of this
prospectus.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee will be responsible for, among other things:
•identifying individuals qualified to become members of our board of directors, consistent with criteria
approved by our board of directors and in accordance with the terms of the Shareholders’ Agreement;
•evaluating the overall effectiveness of our board of directors and its committees; and
•reviewing developments in corporate governance compliance and developing and recommending to
our board of directors a set of corporate governance guidelines and principles.
Upon the completion of this offering, our nominating and corporate governance committee will consist of
Ron Fisher, Seiichi Morooka and Alex Clavel. Because we will be a controlled company, our nominating
and corporate governance committee will not be required to be composed entirely of independent
directors unless and until we cease to be a controlled company, subject to applicable transition periods.
Our board of directors will adopt a new written charter for the nominating and corporate governance
committee, which will be available on our principal corporate website at www.sbenergy.com substantially
concurrently with the completion of this offering. The information on, or that can be accessed through, any
of our websites is deemed not to be incorporated in this prospectus or to be part of this prospectus.
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Compensation Committee
Our compensation committee will be responsible for, among other things:
•reviewing and approving the compensation of our directors, Co-Chief Executive Officers and other
executive officers; and
•appointing and overseeing any compensation consultants.
Upon the completion of this offering, our compensation committee will consist of Alex Clavel and Ron
Fisher . Because we will be a controlled company, our compensation committee will not be required to be
composed entirely of independent directors unless and until we cease to be a controlled company, subject
to applicable transition periods. Our board has determined that , and are “non-
employee directors” as defined in Rule 16b-3 of the Exchange Act. Our board of directors will adopt a new
written charter for the compensation committee, which will be available on our principal corporate website
at www.sbenergy.com substantially concurrently with the completion of this offering. The information on,
or that can be accessed through, any of our websites is deemed not to be incorporated in this prospectus
or to be part of this prospectus.
Risk Oversight
Our board of directors is responsible for overseeing our risk management process. Our board of directors
focuses on our general risk management strategy, the most significant risks facing us, and oversees the
implementation of risk mitigation strategies by management. Our board of directors is also apprised of
particular risk management matters in connection with its general oversight and approval of corporate
matters and significant transactions.
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves as a member of the board of directors or compensation committee
(or other committee performing equivalent functions) of any entity that has one or more executive officers
serving on our board of directors or compensation committee during the year ended December 31, 2025.
Director Compensation
In the year ended December 31, 2025, no compensation was paid to our non-employee members of our
board of directors. Rich Hossfeld and Abhijeet Sathe are each compensated as employees for their
service as our Co-Chief Executive Officers, and neither receives additional compensation for their service
as members of our board of directors. See the section titled “Executive Compensation—Summary
Compensation Table” for information regarding their compensation as our employees.
Non-Employee Director Compensation Policy
Before this offering, we did not have a formal policy to provide any cash or equity compensation to our
non-employee directors for their service on our board of directors or committees of our board of directors.
In connection with this offering, our board of directors intends to approve a non-employee director
compensation policy, pursuant to which our non-employee directors will be eligible to receive certain cash
retainers and equity awards for service on our board of directors and committees of our board of
directors.
Employee directors will receive no additional compensation for their service as a director.
Board Diversity
Our nominating and corporate governance committee will be responsible for reviewing with the board of
directors, on an annual basis, the appropriate characteristics, skills and experience required for the board
of directors as a whole and its individual members. Although our board of directors does not have a formal
written diversity policy with respect to the evaluation of director candidates, in its evaluation of director
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candidates, our nominating and corporate governance committee will consider factors including, without
limitation, issues of character, integrity, judgment, potential conflicts of interest, other commitments and
diversity, and with respect to diversity, such factors as gender, race, ethnicity, experience and area of
expertise, as well as other individual qualities and attributes that contribute to the total diversity of
viewpoints and experience represented on the board of directors.
Code of Ethics and Code of Conduct
Prior to the completion of this offering, we will adopt a written code of business conduct and ethics that
applies to our directors, officers and employees, including our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing similar functions. A copy of the
code will be posted on our website, www.sbenergy.com. In addition, we intend to post on our website all
disclosures that are required by law or Nasdaq and Nasdaq Texas listing standards concerning any
amendments to, or waivers from, any provision of the code. The information on, or that can be accessed
through, any of our websites is deemed not to be incorporated in this prospectus or to be part of this
prospectus.
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EXECUTIVE COMPENSATION
We are an “emerging growth company,” as defined in the JOBS Act, for purposes of the SEC’s executive
compensation disclosure rules. In accordance with such rules, we are required to provide our Summary
Compensation Table and our Outstanding Equity Awards at Fiscal Year End Table, as well as limited
narrative disclosures regarding executive compensation, for our last completed fiscal year, which ended
December 31, 2025. Further, our reporting obligations extend only to our “named executive officers,” who
are the individuals who served as our principal executive officers and our next two most highly
compensated officers serving at the end of the fiscal year ended December 31, 2025. Accordingly, our
named executive officers (“Named Executive Officers” or “NEOs”) are set forth below:
Name | Principal Position | |
Rich Hossfeld ................................... | Co-Chief Executive Officer and Director | |
Abhijeet Sathe .................................. | Co-Chief Executive Officer and Director | |
Gaetan Frotte ................................... | Chief Financial Officer | |
Ryan Bates ....................................... | Vice President, General Counsel, and Secretary | |
Summary Compensation Table
The table set forth below summarizes the compensation awarded to, earned by or paid to our NEOs for
the fiscal year ended December 31, 2025.
Name and Principal Position | Fiscal Year | Salary ($)(1) | Non-Equity Incentive Compensation ($)(2) | Option Awards ($) (3) | All Other Compensation ($)(4) | Total ($) | ||||||
Rich Hossfeld | ||||||||||||
Co-Chief Executive Officer and Director .......... | 2025 | $547,000 | $485,000 | $ - | $— | $1,032,000 | ||||||
Abhijeet Sathe | ||||||||||||
Co-Chief Executive Officer and Director .......... | 2025 | $547,000 | $485,000 | $ - | $14,000 | $1,046,000 | ||||||
Gaetan Frotte | ||||||||||||
Chief Financial Officer ..... | 2025 | $425,862 | $170,344 | $ - | $14,000 | $610,206 | ||||||
Ryan Bates | ||||||||||||
Vice President and General Counsel ............... | 2025 | $420,423 | $147,115 | $ - | $14,000 | $581,538 | ||||||
(1)Reflects base salary earned in respect of the applicable fiscal year.
(2)Reflects bonuses earned by the applicable NEO in respect of fiscal year 2025 performance, which amounts were paid in March of 2026.
(3)In connection with a strategic transaction consummated in July of 2024, the Board of Directors of Energy Global, (through its
Compensation Committee (the “Energy Global Compensation Committee”)) adopted the Energy Global Management LP Equity
Incentive Plan (the “2024 Plan”) which, pursuant to Energy Global’s Amended and Restated Agreement of Limited Partnership, dated as
of July 2, 2024 (the “LPA”), provided for the issuance of Series C Profits Units intended to constitute “profits interests” for tax purposes,
representing the right to receive a fixed 10% of the profits distributed by Energy Global after satisfaction of certain hurdles set forth in
the LPA (the “Management Pool”). This was effectuated through the issuance of 10,000,000 Series C Profits Units to Energy Global
Management, LP, a management aggregator, on July 2, 2024.
On July 2, 2024, the Energy Global Compensation Committee granted each of the NEOs one (1) unit interest in Energy Global
Management, LP (each, a “Profit Unit”), with each such Profit Unit representing, as of such date, the right to receive 20% of the
Management Pool, subject to dilution in the event that additional Profit Units were granted in the future to other members of
management. In March of 2025, as part of its overall compensation planning, the Energy Global Compensation Committee granted
additional Profit Units from the Management Pool to provide the opportunity for our additional employees to share in the Management
Pool. In connection therewith, the percentage of the Management Pool represented by the Profit Units held by each Named Executive
Officer was diluted, such that the percentage of the Management Pool represented by the Profit Units held by each Named Executive
Officer was reduced below 20%, with such dilution being effectuated through the issuance of additional Profits Units to each Named
Executive Officer. See Note 19 to the audited consolidated financial statements included elsewhere in this prospectus for a discussion
of the relevant assumptions used in calculating the value of outstanding Profit Units.
(4)Reflects $14,000 in 401(k) matching contributions for each NEO (other than Mr. Hossfeld).
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Employment Agreements with Our NEOs
Certain of the compensation paid to our NEOs reflected in the Summary Compensation Table was
provided pursuant to employment agreements with SB Energy DevCo (US), Inc. (“SB Energy DevCo”),
which are summarized below. For a discussion of the severance pay and other benefits to be provided to
our NEOs in connection with a termination of employment and/or change in control under arrangements
with each of our NEOs, please see “—Potential Payments Upon Termination or Change in Control” below.
Rich Hossfeld. Mr. Hossfeld is party to an employment agreement with SB Energy DevCo and SBE
Global, dated March 4, 2022, which sets forth the terms of his employment as Co-Chief Executive Officer
of SB Energy DevCo and SBE Global. Under his employment agreement, Mr. Hossfeld is entitled to an
initial annual base salary of $500,000 and is eligible to participate in an annual bonus plan with a target
annual bonus equal to 80% of his base salary, subject to the terms and conditions of the annual bonus
plan as determined by the compensation committee of the board of directors of SBE Global (the “SBE
Global Board”). Mr. Hossfeld’s employment agreement also includes a Duty of Loyalty, Confidential
Information and Invention Assignment Agreement containing confidentiality and invention assignment
provisions, as well as non-solicitation covenants relating to employees, independent contractors,
consultants, customers and development partners for a period of one year following termination (such
period, the “Restricted Period”).
Abhijeet Sathe. Mr. Sathe is party to an employment agreement with SB Energy DevCo and SBE Global,
dated March 4, 2022, which sets forth the terms of his employment as Co-Chief Executive Officer of SB
Energy DevCo and SBE Global. Under his employment agreement, Mr. Sathe is entitled to an initial
annual base salary of $500,000 and is eligible to participate in an annual bonus plan with a target annual
bonus equal to 80% of his base salary, subject to the terms and conditions of the annual bonus plan as
determined by the compensation committee of the SBE Global Board. Mr. Sathe’s employment
agreement also includes a Duty of Loyalty, Confidential Information and Invention Assignment Agreement
containing confidentiality and invention assignment provisions, as well as non-solicitation covenants
relating to employees, independent contractors, consultants, customers and development partners for the
Restricted Period.
Gaetan Frotte. Mr. Frotte is party to an employment agreement with SB Energy DevCo and SBE Global,
dated February 27, 2023, which sets forth the terms of his employment as Chief Financial Officer of SB
Energy DevCo and SBE Global. Under his employment agreement, Mr. Frotte is entitled to an initial
annual base salary of $400,000 and is eligible to participate in an annual bonus plan with a target annual
bonus equal to 40% of his base salary, subject to the terms and conditions of the annual bonus plan as
determined by Messrs. Hossfeld and Sathe. Mr. Frotte’s employment agreement also includes a Duty of
Loyalty, Confidential Information and Invention Assignment Agreement containing confidentiality and
invention assignment provisions, as well as non-solicitation covenants relating to employees, independent
contractors, consultants, customers and development partners for the Restricted Period.
Ryan Bates. Mr. Bates is party to an employment agreement with SB Energy DevCo and SBE Global,
dated March 4, 2022, which sets forth the terms of his employment as Vice President and General
Counsel of SB Energy DevCo and SBE Global. Under his employment agreement, Mr. Bates is entitled to
an initial annual base salary of $381,047 and is eligible to participate in an annual bonus plan with a
target annual bonus equal to 35% of his base salary, subject to the terms and conditions of the annual
bonus plan as determined by Messrs. Hossfeld and Sathe. Mr. Bates’ employment agreement also
includes a Duty of Loyalty, Confidential Information and Invention Assignment Agreement containing
confidentiality and invention assignment provisions, as well as non-solicitation covenants relating to
employees, independent contractors, consultants, customers and development partners for the Restricted
Period.
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Base Salaries
Each of our NEOs receives a base salary. Base salary is a key, fixed element of each NEO’s
compensation and is intended to recognize the NEO’s experience, skills, knowledge and responsibilities.
Each NEO’s base salary for 2025 is set forth in the Summary Compensation Table above.
Annual Bonuses
Each of our NEOs is eligible to receive an annual cash bonus under our annual cash bonus plan with a
target equal to a percentage of their base salary, which is based on certain performance metrics/goals,
including adjusted portfolio EBITDA, safety, and other performance metrics tied to project development.
The compensation committee of the SBE Global Board or Messrs. Hossfeld and Sathe, as applicable,
retains discretion to determine the performance metrics applicable to annual bonuses and the final bonus
amounts. Bonus payments earned under our annual bonus program for 2025 were paid in March 2026.
Equity-Based Incentive Awards
Energy Global Management LP granted our NEOs Profits Units intended to constitute “profits interests”
for federal income tax purposes pursuant to the 2024 Plan and the individual award agreements between
Energy Global Management LP and each NEO evidencing such grants.
The Profits Units (as defined in the 2024 Plan) granted to the NEOs generally vest with respect to 20% of
such Profits Units on the first anniversary of the vesting commencement date specified in the individual
award agreement (the “Vesting Start Date”) and 5% on each of the twelve subsequent quarterly
anniversaries of the Vesting Start Date following such first anniversary (up to 80% total), in each case,
subject to the Named Executive Officer’s continued provision of services to the Partnership Group (as
defined in the 2024 Plan) through the applicable date of vesting. Any unvested Profits Units will vest in
full upon a Valuation Event (defined in the 2024 Plan as the occurrence of a “liquidity event,” which is
expected to include this offering), subject to the NEO’s continued provision of services to the Partnership
Group through the consummation of such Valuation Event.
In the event of a termination for Cause (as defined in the applicable award agreement), the NEO will
forfeit all vested and unvested Profits Units and such NEO will not be entitled to any further payments,
distributions or other rights in respect of such forfeited Profits Units. In the event of a termination without
Cause or by the NEO for Good Reason (as defined in the applicable award agreement), the NEO will
immediately vest in the number of Profits Units that would have vested had such NEO’s service continued
through the date that is one year following the date of such termination, and any remaining unvested
Profits Units will be forfeited. In the event of a termination for any other reason, the Named Executive
Officer will forfeit all unvested Profits Units.
As a condition to the issuance of Profits Units, each NEO is required to execute a Duty of Loyalty,
Confidential Information, and Invention Assignment Agreement, which contains confidentiality and
invention assignment provisions, as well as non-solicitation covenants relating to employees, independent
contractors, consultants, customers and development partners for the Restricted Period (as described
above under “—Employment Agreements with Our NEOs”). In the event of a good faith determination by
the board of directors of Energy Global with the consent of the Plan Administrator (as defined in the 2024
Plan) that an NEO has committed any material breach of the restrictive covenants set forth in the
applicable award agreement or other agreement between the NEO and the Partnership Group, and has
not cured such breach within 30 days of the NEO’s receipt of notice identifying the breach (provided that
such breach is curable), such NEO will forfeit all vested and unvested Profits Units.
See “—Potential Payments Upon Termination or Change in Control” below for additional information on
the treatment of the Profits Units in connection with certain events.
Following the completion of this offering, we do not intend to make any further issuances of Profits Units
under the 2024 Plan.
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Retirement Plans
SB Energy DevCo sponsors a retirement plan intended to qualify for favorable tax treatment under
Section 401(k) of the Code, containing a cash or deferred feature that is intended to meet the
requirements of Section 401(k) of the Code, for the benefit of its employees, including our NEOs.
Participants may make pre-tax contributions to the plans from their eligible earnings up to the statutorily
prescribed annual limit on pre-tax contributions under the Code. Participants who are 50 years of age or
older may contribute additional amounts based on the statutory limits for catch-up contributions. All
employee contributions are allocated to each participant’s individual account and are then invested in
selected investment alternatives according to the participant’s directions. Pre-tax contributions by
participants to the plan and the income earned on those contributions are generally not taxable to
participants until withdrawn, and participant contributions are held in trust as required by law. No
minimum benefit is provided under the plan. During 2025, SB Energy DevCo made employer matching
contributions on behalf of eligible participating employees.
Clawback Policy
We intend to adopt a compensation recovery policy that is compliant with the Nasdaq and Nasdaq Texas
listing rules, as required by the Dodd-Frank Act, to be effective upon the completion of this offering.
Outstanding Equity Awards at Fiscal Year End Table
The table set forth below shows, for each of the NEOs, all equity-based awards that were outstanding as
of December 31, 2025.
Name | Number of securities underlying unexercised options (#) exercisable (1)(2) | Number of securities underlying unexercised options (#) unexercisable (1)(2)(3) | Option exercise price ($)(4) | Option expiration date(4) | ||||
Rich Hossfeld ................................................ | N/A | N/A | ||||||
Abhijeet Sathe ............................................... | N/A | N/A | ||||||
Gaetan Frotte ................................................ | N/A | N/A | ||||||
Ryan Bates ..................................................... | N/A | N/A | ||||||
(1)See footnote (3) to the Summary Compensation Table.
(2)Profits Units vest with respect to 20% on the first anniversary of July 2, 2024 and 5% on each of the twelve subsequent quarterly
anniversaries thereafter (up to 80% total), subject to the NEO’s continued employment through the applicable vesting date; 100% of the
unvested Profits Units will vest upon a Valuation Event.
(3)In connection with this offering, all unvested Profits Units held by our NEOs will accelerate and vest in full, subject to the NEO’s
continued provision of services to the Partnership Group through the consummation of this offering. For additional information, please
see “—Potential Payments Upon Termination or Change in Control” below.
(4)The Profits Units represent the right to receive distributions in connection with certain distribution events in excess of a specified
“threshold value.” The threshold value applicable to the Profits Units as of the applicable grant date was $0. The Profits Units are not
traditional stock options and therefore there is no exercise price or expiration date applicable to the Profits Units.
Potential Payments Upon Termination or Change in Control
Severance Benefits
Rich Hossfeld and Abhijeet Sathe. Pursuant to their respective employment agreements, if Messrs.
Hossfeld’s or Sathe’s employment is terminated by SB Energy DevCo without Cause or by the applicable
NEO for Good Reason (each as defined in the applicable employment agreement), in addition to certain
accrued and/or unpaid obligations, the applicable NEO is entitled to receive, (i) any unpaid annual bonus
for which the annual performance targets with respect to a calendar year ending prior to the date of
termination are satisfied but for which the right to payment has not yet vested (the “Accrued Bonus”), (ii)
severance pay equal to 12 months of the executive’s then-current base salary, payable in equal
installments in accordance with SB Energy DevCo’s regular payroll practices and (iii) if the executive
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timely elects Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) continuation coverage,
SB Energy DevCo will pay an amount equal to the employer’s portion of premium contributions for active
employees, with the executive paying at the current applicable employee rate, until the earlier of 12
months following termination or the date on which the executive becomes eligible for health insurance
coverage in connection with new employment or self-employment. Payment of the Accrued Bonus,
severance pay, and COBRA benefits is conditioned on the applicable NEO’s execution and delivery of a
general release of all claims within 21 days following the effective date of termination and the executive’s
continuing compliance with the Duty of Loyalty, Confidential Information, and Invention Assignment
Agreement.
Good Reason under Messrs. Hossfeld’s and Sathe’s employment agreements includes, without the
applicable NEO’s consent: (i) a material diminution in the NEO’s duties, responsibilities or position, (ii) a
material reduction in the NEO’s base salary or target annual bonus opportunity (provided that such NEO’s
failure to earn an annual bonus, or earning an annual bonus that is less than the target, in a given year
will not constitute Good Reason), (iii) a relocation of the NEO’s principal office to a location more than 50
miles from such NEO’s office location specified in the employment agreement, or (iv) a material breach of
SB Energy DevCo’s, SBE Global’s, or any of their subsidiaries’ or affiliates’ obligations under any other
material agreement with the NEO that has been approved by the SBE Global Board or a committee
thereof. No termination by the NEO for Good Reason shall be effective unless and until (A) the NEO has
given SB Energy DevCo written notice of the reasons for the termination for Good Reason no more than
30 calendar days following the initial existence of the conditions constituting Good Reason, and has given
SB Energy DevCo at least 30 calendar days in which to remedy such conditions, (B) SB Energy DevCo
has failed to remedy the same, and (C) the applicable NEO actually terminates employment within 30
calendar days after the expiration of the remedy period.
Gaetan Frotte and Ryan Bates. Pursuant to their respective employment agreements, Messrs. Frotte
and Bates are entitled to the same severance benefits as Messrs. Hossfeld and Sathe described above
upon a termination by SB Energy DevCo without Cause or by the applicable NEO for Good Reason (each
as defined in the applicable employment agreement), subject to the same release and restrictive
covenant compliance conditions, except that: (i) severance pay is equal to three months of the executive’s
then-current base salary, plus one additional month for each complete year of employment with SB
Energy DevCo, not to exceed a total period of six months (the “Severance Period”), (ii) COBRA
continuation coverage extends until the earlier of the end of the Severance Period or the date on which
the executive becomes eligible for health insurance coverage in connection with new employment or self-
employment, and (iii) the definition of Good Reason does not include a material diminution in the
executive’s duties, responsibilities, or position, but does include a carve-out providing that a
compensation adjustment tied to an executive’s voluntary relocation of his principal office in accordance
with company practices and policy shall not constitute Good Reason.
Equity-Based Incentive Awards
As described above under “—Equity-Based Incentive Awards,” all unvested Profits Units held by the
NEOs will vest in full upon a Valuation Event (which is expected to include this offering), subject to
continued service through consummation of such Valuation Event. In the event of a termination without
Cause or for Good Reason, the applicable NEO will receive accelerated vesting of the number of Profits
Units that would have vested had such NEO’s service continued for an additional one year following the
date of termination, and any remaining unvested Profits Units following such acceleration will be forfeited
without consideration.
In the event of a termination for Cause, the NEO will forfeit all vested and unvested Profits Units and shall
be entitled to no further payments, distributions or other rights in respect of such forfeited Profits Units. In
the event of a termination of a NEO’s employment for any other reason, all unvested Profits Units will be
forfeited without consideration.
With respect to Messrs. Hossfeld’s and Sathe’s award agreements, Good Reason includes, without the
NEO’s written consent: (i) a material diminution in the NEO’s duties, responsibilities, or title on behalf of
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Energy Global relating to the renewable energy business of SBE Global and its subsidiaries (as such
business was being conducted as of March 31, 2024); (ii) a material reduction in the NEO’s base salary or
target annual bonus opportunity (provided that such NEO’s failure to earn an annual bonus, or earning an
annual bonus that is less than the target, in a given year will not constitute Good Reason); (iii) a relocation
of the NEO’s principal office to a location more than 50 miles from the NEO’s current office location; or (iv)
the material breach of the Partnership Group’s obligations under any material agreement with the NEO
that has been approved by the board of directors of Energy Global. The same notice and cure
procedures described above with respect to the employment agreements apply to any termination for
Good Reason under the award agreements.
With respect to Messrs. Frotte’s and Bates’ award agreements, the same accelerated vesting and
forfeiture provisions described above apply, and the same notice and cure provisions apply, except that (i)
the definition of Good Reason does not include a material diminution in duties, responsibilities or title; (ii)
the material breach trigger under the Good Reason definition extends to obligations of the Partnership
Group’s affiliates under any other material agreement with the NEO; and (iii) a compensation adjustment
tied to an executive’s voluntary relocation in accordance with company practices does not qualify as Good
Reason.
Director Compensation
None of the individuals who served on our board of directors during the fiscal year ended December 31,
2025 received compensation in respect of such services as a member of our board of directors. The
compensation received by Messrs. Hossfeld and Sathe as our employees is presented in the Summary
Compensation Table.
Actions Taken in Connection with this Offering
Profits Units Conversion
The treatment of outstanding profits units in connection with this offering is still in the process of being
finalized.
2026 Long-Term Incentive Plan (the “2026 Plan”)
To incentivize our employees following the completion of this offering, we anticipate that our board of
directors will adopt the 2026 Plan for employees, consultants and directors prior to the completion of this
offering. We intend to finalize the 2026 Plan prior to the completion of this offering, but anticipate that the
2026 Plan will include the following material terms:
Purpose of the 2026 Plan
The purpose of the 2026 Plan is to enhance our ability to attract, retain and motivate service providers
who make (or are expected to make) important contributions to us, by providing these individuals with
equity ownership opportunities and/or equity-linked compensatory opportunities. Our board of directors
believes that equity awards are necessary to remain competitive and are essential to recruiting and
retaining the highly qualified employees who help us meet our goals.
Types of Awards Under the 2026 Plan
The 2026 Plan will allow for the grant of both equity-based and cash-based awards, including (i) stock
options (both incentive and non-qualified stock options), (ii) stock appreciation rights (“SARs”), (iii)
restricted stock awards, (iv) restricted stock units, (v) performance awards and (vi) other stock-based or
cash-based awards.
•Stock Options. Our compensation committee may grant options that are intended to qualify as
incentive stock options under Section 422 of the Code and non-qualified stock options that do not so
qualify. A stock option granted under the 2026 Plan will give the participant the right to purchase a
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specified number of shares of our common stock during a specified term (with a maximum term of ten
years from the date of grant) at an exercise price that will be determined by our compensation
committee but which will be no less than the fair market value of a share of our common stock on the
date of grant.
•Stock Appreciation Rights (“SARs”). A SAR represents the right to receive, upon exercise of the SAR,
an amount in cash, shares of common stock or a combination of both equal to (i) the excess of (a) the
fair market value of a share on the date of exercise less (b) the grant price of the SAR (which grant
price, other than with respect to substitute awards, will be no less than the fair market value of a
share of our common stock on the date of grant), multiplied by (ii) the number of shares as to which
such SAR is exercised. The term of SARs may not exceed ten years. SARs may be granted in
tandem with or in addition to an award or freestanding and unrelated to another award.
•Restricted Stock. A restricted stock award represents a grant of shares of common stock, subject to
the restrictions on transferability and risk of forfeiture imposed by our compensation committee. If a
participant has the right to receive dividends paid with respect to a restricted stock award, such
dividends shall not be paid to the participant until the underlying restricted stock award vests.
•Restricted Stock Units (“RSUs”). An RSU represents a right to receive, upon vesting and settlement of
the RSU, one share per vested unit or an amount per vested unit equal to the fair market value of one
share of common stock (or other security) as of the date of determination, or a combination thereof, at
the discretion of our compensation committee. If a participant has the right to receive dividends paid
with respect to any shares underlying RSUs, such dividends shall not be paid to the participant until
vesting of the RSUs.
•Performance Awards. Performance awards represent the right to receive either cash or shares of our
common stock based on the value as determined by our compensation committee, subject to the
achievement of the performance goals determined by our compensation committee.
•Other Stock-Based/Cash-Based Awards. Our compensation committee may grant other awards that
are convertible into or otherwise based on shares of our common stock, and/or are payable in cash or
shares of our common stock, subject to such terms and conditions as it determines.
Shares Available for Awards
Subject to adjustment as described below, the aggregate number of shares of common stock that will be
available for issuance under the 2026 Plan will be equal to % of the number of shares of common
stock outstanding as of immediately following the completion of this offering (the number of shares of
common stock determined to be reserved being referred to as the “2026 Plan Base Share Reserve”).
Under the 2026 Plan, the maximum number of shares of common stock issuable in respect of incentive
stock options is . Under the 2026 Plan, no non-employee member of our board of directors may be
paid compensation (including awards under the 2026 Plan, determined based on the fair market value of
such awards as of the grant date, as well as any retainer fees, but excluding any special committee fees
or any initial grants made shortly following the completion of this offering) totaling more than $ in
respect of any single fiscal year (the “Non-Employee Director Compensation Limit”).
Share Counting and Recycling Provisions
If any shares of common stock covered by any awards granted under the 2026 Plan are forfeited,
cancelled, or exchanged or if an award terminates or expires without a distribution of shares of common
stock to the participant, those shares will again be available for awards under the 2026 Plan. If two
awards are granted together in tandem, the shares of common stock underlying any portion of the tandem
award which is not exercised or otherwise settled in shares of common stock will again be available for
awards under the 2026 Plan. Any shares of common stock covered by an award that is settled in cash will
again be available for awards under the 2026 Plan. In addition, if (a) an award, by its terms, can only be
settled in cash or (b) a participant elects to give up the right to receive cash compensation in exchange for
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shares of common stock based on fair market value, such shares will not count against the aggregate
2026 Plan limit. Additionally, awards granted under the 2026 Plan upon assumption of, or substitution for,
outstanding awards previously granted by a company acquired by us or with respect to which we combine
will not count against the aggregate 2026 Plan limit. Any shares that (i) are tendered to or withheld by us
to satisfy payment of applicable tax withholding requirements in connection with the vesting or delivery of
an award, or (ii) are withheld by us upon exercise of a stock option pursuant to a “net exercise”
arrangement, will again be available for awards under the 2026 Plan.
Eligibility and Administration
Our employees, consultants and directors, and employees and consultants of our subsidiaries, will be
eligible to receive awards under the 2026 Plan. We expect to have approximately 350 employees
(including four executive officers), seven non-employee directors and 10 other individual service providers
who will be eligible to receive awards under the 2026 Plan.
The 2026 Plan will be administered by our compensation committee, which may delegate its duties and
responsibilities to one or more committees of our directors and/or officers (referred to collectively as the
plan administrator), subject to the limitations imposed under the 2026 Plan, Section 16 of the Exchange
Act, stock exchange rules and other applicable laws. The plan administrator will have the authority to take
all actions and make all determinations under the 2026 Plan, to interpret the 2026 Plan and award
agreements and to adopt, amend and repeal rules for the administration of the 2026 Plan as it deems
advisable. The plan administrator will also have the authority to determine which eligible service providers
receive awards, grant awards and set the terms and conditions of all awards under the 2026 Plan,
including any vesting and vesting acceleration provisions, subject to the conditions and limitations in the
2026 Plan.
Repricing
Other than in connection with certain corporate transactions or other adjustments specified in the 2026
Plan, stock options and SARs granted under the 2026 Plan may not be repriced, amended or substituted
for with new stock options or SARs having a lower exercise price or grant price, nor may any
consideration be paid upon the cancellation of any such “underwater” stock options or SARs.
Adjustments
In the event that our compensation committee determines that any dividend or other distribution (whether
in the form of cash, shares of common stock, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of shares of common stock or our other securities, issuance of warrants or other rights to
purchase shares of common stock or our other securities, or other corporate transaction or event affects
the shares of common stock such that an adjustment is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the 2026 Plan, then
our board of directors or compensation committee will equitably adjust any or all of (i) the number of our
shares of common stock or other securities (or number and kind of other securities or property) with
respect to which awards may be granted, including any appropriate adjustments to the individual
limitations applicable to awards set forth in the 2026 Plan, (ii) the number of our shares of common stock
or other securities (or number and kind of other securities or property) subject to outstanding awards, and
(iii) the grant or exercise price with respect to any award or, if deemed appropriate, make provision for a
cash payment to the holder of an outstanding award in consideration for the cancellation of such award,
which, in the case of stock options and SARs will equal the excess, if any, of the fair market value of the
share subject to each such stock option or SAR over the per share exercise price or grant price of such
stock option or SAR.
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Clawback
All awards granted under the 2026 Plan (including any proceeds received from such awards) are subject
to recoupment in accordance with any clawback policy that we adopt or are otherwise required to adopt or
as otherwise set forth in the applicable award agreement.
Amendments & Plan Term
Our board of directors may amend, alter, suspend, discontinue or terminate the 2026 Plan without further
approval by our shareholders, except where (i) the amendment would materially increase the benefits
accruing to participants under the 2026 Plan, (ii) the amendment would materially increase the number of
securities which may be issued under the 2026 Plan, (iii) the amendment would materially modify the
requirements for participation in the 2026 Plan, (iv) the amendment would increase the Non-Employee
Director Compensation Limit or (v) shareholder approval is required by applicable law or rules and
regulations. If any amendment, alteration, suspension, discontinuance or termination of the 2026 Plan
would impair the rights of any participant, holder or beneficiary of a previously granted award, the
amendment, alteration, suspension, discontinuance or termination will not be effective with respect to
such person without the written consent of the affected participant, holder or beneficiary.
Awards can be made under the 2026 Plan for a period of ten years from the date on which our board of
directors approves the 2026 Plan, subject to our board of directors’ ability to amend, alter, suspend,
discontinue or terminate the 2026 Plan or any portion thereof at any time, subject to the terms of the 2026
Plan.
The foregoing description of the 2026 Plan is not intended to be complete and is qualified in its entirety by
reference to the complete text of the 2026 Plan, a copy of which will be filed as an exhibit to the
registration statement of which this prospectus forms a part.
Federal Income Tax Consequences
The following is a brief summary of some of the federal income tax consequences of certain transactions
under the 2026 Plan based on federal income tax laws in effect on January 1, 2026. This summary is not
intended to be complete and does not describe state or local tax consequences. It is not intended to be
tax guidance to participants in the 2026 Plan.
Tax Consequences to Participants
Non-qualified Stock Options. In general, (1) no income will be recognized by a participant at the time a
non-qualified stock option is granted; (2) at the time of exercise of a non-qualified stock option, ordinary
income will be recognized by the participant in an amount equal to the difference between the exercise
price paid for the shares of common stock and the fair market value of the shares, if unrestricted, on the
date of exercise; and (3) at the time of sale of shares of common stock acquired pursuant to the exercise
of a non-qualified stock option, appreciation (or depreciation) in value of the shares after the date of
exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the
shares have been held.
Incentive Stock Options. No income generally will be recognized by a participant upon the grant or
exercise of an ISO. The exercise of an ISO, however, may result in alternative minimum tax liability. If
shares of common stock are issued to the participant pursuant to the exercise of an ISO, and if no
disqualifying disposition of such shares is made by such participant within two years after the date of
grant or within one year after the transfer of such shares to the participant, then upon sale of such shares,
any amount realized in excess of the exercise price will be taxed to the participant as a long-term capital
gain and any loss sustained will be a long-term capital loss.
If shares of common stock acquired upon the exercise of an ISO are disposed of prior to the expiration of
either holding period described above (i.e. disqualifying disposition), the participant generally will
recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair
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market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of
such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss)
realized by the participant generally will be taxed as short-term or long-term capital gain (or loss)
depending on the holding period.
SARs. No income will be recognized by a participant in connection with the grant of a SAR. When the
SAR is exercised, the participant normally will be required to include as taxable ordinary income in the
year of exercise an amount equal to the amount of cash received and the fair market value of any
unrestricted shares of common stock received on the exercise.
Restricted Stock. The recipient of restricted stock generally will be subject to tax at ordinary income
rates on the fair market value of the restricted stock (reduced by any amount paid by the participant for
such restricted stock) at such time as the shares are no longer subject to forfeiture or restrictions on
transfer for purposes of Section 83 of the Code (“Restrictions”). However, a recipient who so elects under
Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary
income on the date of transfer of the shares equal to the excess of the fair market value of such shares
(determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If
a Section 83(b) election has not been made, any dividends received with respect to restricted stock that is
subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to
the participant.
RSUs. No income generally will be recognized upon the grant of RSUs. The recipient of an award of
RSUs generally will be subject to tax at ordinary income rates on the fair market value of unrestricted
shares of common stock on the date that such shares (or other property in respect of the RSUs) are
transferred to the participant under the award (reduced by any amount paid by the participant for such
RSUs), and the capital gains/loss holding period for such shares will also commence on such date.
Performance Awards. No income generally will be recognized upon the grant of performance awards.
Upon payment or transfer made under the terms of a performance award, the recipient generally will be
required to include as taxable ordinary income in the year of receipt an amount equal to the amount of
any cash received and the fair market value of any unrestricted shares of common stock received.
Other Stock-Based Awards. No income generally will be recognized upon the grant of other stock-
based awards. Upon payment of other stock-based awards, the recipient generally will be required to
include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received
and/or the fair market value of any unrestricted shares of common stock received.
Tax Consequences to Us
To the extent that a participant recognizes ordinary income in the circumstances described above, we or
the subsidiary for which the participant performs services may be entitled to a corresponding deduction,
provided that, among other things, the income meets the test of reasonableness, is an ordinary and
necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G
of the Code and is not disallowed by the $1 million limitation on certain executive compensation under
Section 162(m) of the Code.
Prior to its amendment by the Tax Cuts and Jobs Act of 2017 (the “TCJA”), there was an exception to the
$1 million deduction limitation under Section 162(m) for performance-based compensation if certain
requirements set forth in Section 162(m) and the applicable regulations were met. The TCJA generally
amended Section 162(m) to eliminate this exception for performance-based compensation, effective for
taxable years following December 31, 2017. Therefore, compensation paid under the 2026 Plan to
individuals who are “covered employees” under Section 162(m) that exceeds $1 million for a given tax
year will not be deductible by us.
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2026 Employee Stock Purchase Plan (the “2026 ESPP”)
To provide our employees following this offering with the opportunity to purchase shares of our common
stock at a discount through accumulated payroll deductions during successive offering periods, we
anticipate that our board of directors will adopt the SB Energy, Inc. 2026 Employee Stock Purchase Plan
(the “2026 ESPP”) for employees of SB Energy, Inc. and its designated affiliates. The purpose of the 2026
ESPP is to provide employees with the opportunity to purchase shares of our common stock at a discount
through accumulated payroll deductions during successive offering periods and to promote our best
interests and enhance long-term performance. The rights granted under the 2026 ESPP are intended to
be treated as either (i) purchase rights granted under an “employee stock purchase plan,” as that term is
defined in Section 423 of the Code (i.e., rights granted under a “Section 423 Offering”), or (ii) purchase
rights granted under an employee stock purchase plan that is not subject to the requirements of Section
423 of the Code (i.e., rights granted under a “Non-423 Offering”). The administrator of the 2026 ESPP will
have discretion to grant purchase rights under either a Section 423 Offering or a Non-423 Offering.
Rights granted under a Section 423 Offering will be designed to allow eligible U.S. employees to
purchase our shares of our common stock in a manner that may qualify for favorable tax treatment under
Section 423 of the Code. Non-423 Offerings will permit the grant of purchase rights that do not qualify for
such favorable tax treatment in order to allow deviations necessary to permit participation by eligible
employees who are foreign nationals or employed outside of the United States while complying with
applicable foreign laws, which may be effectuated through one or more sub-plans.
Share Reserve
The number of shares of our common stock authorized and reserved for issuance under the 2026 ESPP
will be a number of shares of common stock which, together with the 2026 Plan Base Share Reserve,
does not exceed a maximum aggregate of % of the number of shares of common outstanding as of
immediately following the completion of this offering (such number of shares, the “2026 ESPP Share
Reserve”), and in no event will the 2026 ESPP Share Reserve exceed a maximum of % of the number
of shares of common outstanding as of immediately following the completion of this offering.
If there is any change in the outstanding shares of our common stock because of a merger, change in
control, consolidation, recapitalization or reorganization, or if our board of directors declares a stock
dividend, stock split distributable in shares of common stock or reverse stock split, other distribution (other
than ordinary or regular cash dividends) or combination or reclassification of the shares of common stock,
or if there is a similar change in our capital stock structure affecting the shares of our common stock
(subject to certain exclusions described in the 2026 ESPP), then the number and type of shares of our
common stock reserved for issuance under the 2026 ESPP will be equitably adjusted, and the
compensation committee will, subject to applicable law, make such adjustments to outstanding purchase
rights (such as the number and type of shares subject to a purchase right and the purchase price of a
purchase right) or to any provisions of 2026 ESPP as the compensation committee deems equitable to
prevent dilution or enlargement of rights or as may otherwise be advisable.
In connection with a change in control, the compensation committee will have the authority to provide for
any treatment of the 2026 ESPP and any then-current offering.
Administration
The 2026 ESPP will be administered by the compensation committee or, in the absence of the
compensation committee, by our board of directors. The compensation committee will have, among other
authority, the authority to interpret, reconcile any inconsistency in, correct any default in and apply the
terms of the 2026 ESPP, to determine eligibility and adjudicate disputed claims under the 2026 ESPP, to
determine the terms and conditions of purchase rights under the 2026 ESPP, and to make any other
determination and take any other action desirable for the administration of the 2026 ESPP. For purchase
rights granted under a Section 423 Offering, the compensation committee is authorized to adopt such
rules and regulations for administering the 2026 ESPP as it may deem necessary to comply with the
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requirements of Section 423 of the Code. To the extent not prohibited by applicable laws, the
compensation committee may delegate its authority to a subcommittee.
Eligibility; Offerings; Payroll Deductions.
Generally, the 2026 ESPP will be implemented through a series of offerings under which eligible
employees are granted purchase rights to purchase shares of our common stock on specified dates
during such offerings. Under the 2026 ESPP, the compensation committee may specify offerings with
durations of not more than 27 months and may specify shorter purchase periods within each offering.
Each offering will have one or more purchase dates on which shares of our common stock will be
purchased for employees participating in the offering. An offering under the 2026 ESPP may be
terminated under certain circumstances.
Generally, all regular employees, including executive officers, employed by us or by any of our designated
affiliates, may participate in the 2026 ESPP and may contribute, normally through payroll deductions, up
to 15% of their earnings (as defined in the 2026 ESPP) for the purchase of our common stock under the
2026 ESPP. The 2026 ESPP allows the compensation committee to determine minimum eligibility
requirements which, for any Section 423 Offering, will comply with the requirements of Section 423 of the
Code. We currently expect that approximately 350 employees (including four executive officers) will be
eligible to participate in the 2026 ESPP, subject to the applicable eligibility requirements
Unless otherwise determined by the compensation committee, shares of common stock will be purchased
for the accounts of employees participating in the 2026 ESPP at a price per share that is at least the
lesser of (i) 85% of the fair market value of a share of our common stock on the first date of an offering; or
(ii) 85% of the fair market value of a share of our common stock on the last day of an offering.
Limitations.
No employee may purchase shares of our common stock under the 2026 ESPP at a rate in excess of
$25,000 worth of our common stock based on the fair market value per share of our common stock at the
beginning of an offering for each year such a purchase right is outstanding. No employee will be eligible
for the grant of any purchase rights under the 2026 ESPP if immediately after such rights are granted,
such employee has voting power over 5% or more of our outstanding capital stock measured by vote or
value under Section 424(d) of the Code.
Transferability
The 2026 ESPP provides that rights granted under the 2026 ESPP are not transferable by the participant
other than by will or the laws of descent and distribution, and must be exercisable, during the participant’s
lifetime, only by the participant.
Amendment & Termination
The 2026 ESPP may be amended, altered, suspended and/or terminated at any time by our board of
directors; provided that approval of an amendment to the 2026 ESPP by our stockholders will be required
to the extent that stockholder approval of such amendment is required by applicable law. The
compensation committee may (subject to the provisions of Section 423 of the Code (for Section 423
Offerings) amend, alter, suspend and/or terminate any purchase right, prospectively or retroactively, but
(except as otherwise expressly provided in the 2026 ESPP) such amendment, alteration, suspension or
termination of a purchase right may not, without the written consent of a participant with respect to an
outstanding purchase right, materially adversely affect the rights of the participant with respect to the
purchase right.
Registration with the SEC
We intend to file a Registration Statement on Form S-8 relating to the issuance of the shares of common
stock under the 2026 Plan and the 2026 ESPP with the SEC pursuant to the Securities Act in connection
with the completion of this offering.
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2026 Plan Benefits
Because awards to be granted in the future under the 2026 Plan and the 2026 ESPP are at the discretion
of our compensation committee, it is not possible to determine the exact benefits or amounts to be
received under the 2026 Plan or the 2026 ESPP by eligible participants. All our executive officers and
directors are eligible to participate in the 2026 Plan and the 2026 ESPP and thus have a personal interest
in the approval of the 2026 Plan and the 2026 ESPP.
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PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to the beneficial ownership of our common stock as
of , 2026, both before and after giving effect to the completion of this offering, for:
•each person known by us to beneficially own more than 5% of our common stock;
•each of our named executive officers and directors; and
•all of our executive officers and directors as a group.
The number of shares beneficially owned by each shareholder as described in this prospectus is
determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares
as to which the individual or entity has sole or shared voting power or investment power. In computing the
number of shares beneficially owned by an individual or entity and the percentage ownership of that
person, shares of common stock subject to options, warrants or other rights held by such person that are
currently exercisable or will become exercisable within 60 days of , 2026 are considered
outstanding, although these shares are not considered outstanding for purposes of computing the
percentage ownership of any other person. The percentage of beneficial ownership prior to this offering is
based on shares of our common stock outstanding after giving effect to the Stock Split and the
OpenAI Warrant Exercises. The applicable percentage ownership after this offering is based on
shares of our common stock outstanding immediately following the completion of this offering, assuming
that the underwriters will not exercise their option to purchase additional shares of common stock. The
table below gives effect to the Closing Distribution and presents the shares of our common stock
distributed in the Closing Distribution as held by the limited partners of Energy Global receiving them.
Unless otherwise indicated, the address of all listed shareholders is 3 Lagoon Dr., Suite 280, Redwood
City, CA 94065.
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Each of the shareholders listed below has sole voting and investment power with respect to the shares
beneficially owned by such shareholder unless noted otherwise, subject to community property laws
where applicable.
Shares of Common Stock Beneficially Owned Before This Offering | Shares of Common Stock Beneficially Owned After This Offering | |||||||
Name of Beneficial Owner | Number | Percent | Number | Percent | ||||
Greater than 5% Shareholders: | ||||||||
SB Energy HoldCo, LLC(1) ............................. | ||||||||
SVF II Energy (DE) LLC(2) .............................. | ||||||||
Energy Global Management, LP(3) ............... | ||||||||
Named Executive Officers and Directors: ... | ||||||||
Rich Hossfeld(3) ................................................ | ||||||||
Abhijeet Sathe(3) .............................................. | ||||||||
Gaetan Frotte ................................................... | ||||||||
Ryan Bates ....................................................... | ||||||||
William Bice ...................................................... | ||||||||
Alex Clavel ....................................................... | ||||||||
Ron Fisher ........................................................ | ||||||||
Kimberly Johnson ............................................ | ||||||||
Sachin Katti ...................................................... | ||||||||
Seiichi Morooka ............................................... | ||||||||
Alexi Wellman .................................................. | ||||||||
All executive officers and directors as a group ( individuals) ............................... | ||||||||
*Represents beneficial ownership of less than 1.0%.
(1)Consists of common stock held by SB Energy HoldCo, LLC. SB Energy Global Holdings Limited is the sole shareholder of SB
Energy Global Holdings One Limited. SoftBank Group Capital Limited is the sole shareholder of SB Energy Global Holdings Limited.
SoftBank Group Capital Limited is controlled by SoftBank Group Corp., directly and through SoftBank Group Overseas GK. Accordingly,
each of the foregoing entities may be deemed to share beneficial ownership of the shares held by SB Energy Holdco, LLC. SoftBank
Group Corp. is a publicly traded company listed on the Tokyo Stock Exchange. The business address of each of SoftBank Group Corp.
and SoftBank Group Overseas GK is 1-7-1 Kaigan, Minato-ku, Tokyo 105-7537, Japan. The business address of each of SoftBank
Group Capital Limited, SB Energy Global Holdings Limited and SB Energy Global Holdings One Limited is 69 Grosvenor Street,
London, United Kingdom, W1K 3JP. The business address of SB Energy Holdco, LLC is 300 El Camino Real, Menlo Park, CA 94025.
(2)Consists of common stock held by SVF II Energy (DE) LLC. SoftBank Group Corp., which is a publicly traded company listed on
the Tokyo Stock Exchange, is the sole shareholder of SB Global Advisers Limited, which has been appointed as manager and is
responsible for making final decisions related to the acquisition, structuring, financing and disposal of SoftBank Vision Fund II-2 L.P.’s
investments, including as held by SVF II Energy (DE) LLC. SoftBank Vision Fund II-2 L.P. is the sole limited partner of SVF II
Aggregator (Jersey) L.P., which is the sole member of SVF II Holdings (DE) LLC, which is the sole member of SVF II Investment
Holdings (Jersey) L.P., which is the majority member of SVF II Investment Holdings LLC, which is the sole member of SVF II Investment
Holdings (Subco) LLC, which is the sole member of SVF II Energy (DE) LLC. The business address of SoftBank Group Corp. is 1-7-1
Kaigan, Minato-ku, Tokyo 105-7537 Japan. The business address of SB Global Advisers Limited is 69 Grosvenor Street, Mayfair,
London W1K 3JP, England, United Kingdom. The business address of each of SoftBank Vision Fund II-2 L.P., SVF II Aggregator
(Jersey) L.P. and SVF II Investment Holdings (Jersey) L.P. is c/o Gen II (Jersey) Limited, 47 Esplanade, St. Helier, Jersey, JE1 0BD.
The business address of each of SVF II Holdings (DE) LLC, SVF II Investment Holdings LLC, SVF II Investment Holdings (Subco) LLC
and SVF II Energy (DE) LLC is 1521 Concord Pike, Wilmington, DE 19803.
(3)Rich Hossfeld and Abhijeet Sathe are the managers of Energy Global Management, LP, and as such, may be deemed to share
beneficial ownership of the shares held of record by Energy Global Management, LP.
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CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
The following is a summary of certain relationships and related party transactions since January 1, 2023
to which we have been a participant in which the amount involved exceeded or will exceed $120,000 and
in which any of our directors, executive officers, holders of more than 5% of any class of our voting
securities, or any member of the immediate family of, or person sharing the household with, any of these
individuals, had or will have a direct or indirect material interest, other than compensation and other
arrangements that are described under the sections entitled “Management” and “Executive
Compensation.” The descriptions below are summaries of the material terms of the applicable
agreements and do not purport to be complete. Copies of the forms of the agreements referred to below
will be filed as exhibits to the registration statement of which this prospectus forms a part.
Agreements To Be Entered In Connection With This Offering
Shareholders’ Agreement
In connection with this offering, we will enter into the Shareholders’ Agreement with SoftBank and
OpenAI. The Shareholders’ Agreement will govern certain aspects of the relationship between us and
SoftBank and OpenAI following the completion of this offering, including matters related to preemptive
rights, rights related to the composition of our board of directors and its committees, information and other
rights, consultation rights and consent rights, among other matters, including during periods in which
SoftBank, OpenAI or their controlled affiliates beneficially own less than a majority of our outstanding
shares of common stock. The form of the Shareholders’ Agreement is attached as an exhibit to the
registration statement of which this prospectus forms a part.
Preemptive Rights
Pursuant to the Shareholders’ Agreement, if we propose to issue any shares of common stock, preferred
stock or options, warrants or other securities convertible into or exercisable for shares of our common
stock or preferred stock (other than (i) pursuant to an offer made to all common shareholders on the same
terms; or (ii) in connection with any incentive award plan otherwise approved by SoftBank to the extent
such approval is required under the Shareholders’ Agreement), SoftBank and its controlled affiliates shall
be entitled (but not obligated) to subscribe for a number of the securities we propose to issue that will
enable SoftBank and its controlled affiliates to maintain their proportional legal and economic interests in
our capital stock prior to such issuance.
Rights Related to Our Board of Directors
Pursuant to the Shareholders’ Agreement, each of SoftBank and OpenAI will have the right to designate a
certain number of candidates for election to our board of directors based on the level of their and their
controlled affiliates’ ownership of our outstanding shares of common stock, provided that a certain number
of such candidates must be “independent” under law or stock exchange rules applicable to our directors
at the time of such nomination. These designation rights will range from the ability to designate up to six
candidates so long as SoftBank and its controlled affiliates beneficially own 50% or more of our
outstanding shares of common stock down to the ability to designate one candidate so long as they own
more than 5% of our outstanding shares of common stock. OpenAI will be entitled to designate an
independent director so long as OpenAI and its controlled affiliates beneficially own more than 5% of our
outstanding shares of common stock. If OpenAI and its controlled affiliates beneficially own less than 5%
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of our outstanding shares of common stock, SoftBank will be entitled designate such director. SoftBank
and OpenAI’s designation rights are as follows:
SoftBank ownership of our outstanding common stock: | Number of SoftBank candidates for election to our board of directors: | Number of SoftBank candidates that must be independent: | ||
Greater than or equal to 50% .............................................................................. | 6 | 3 | ||
Less than 50% and greater than 40% ................................................................ | 4 | 3 | ||
Less than or equal to 40% and greater than 33% ............................................ | 3 | 2 | ||
Less than or equal to 33% and greater than 15% ............................................ | 2 | 1 | ||
Less than or equal to 15% and greater than 5% .............................................. | 1 | — | ||
SoftBank and OpenAI’s rights to designate candidates for election to our board of directors are based on
an nine-member board, including our Co-Chief Executive Officers, and, pursuant to the Shareholders’
Agreement, will be modified ratably to reflect any change in the number of directors on our board of
directors.
Our board of directors will make affirmative determinations with respect to each director’s independence.
To the extent SoftBank nominates a director as an independent director that our board of directors, upon
the reasonable advice of counsel, determines does not meet the applicable independence standards,
SoftBank will be required to propose a new nominee.
We must appoint to each committee a number of SoftBank-designated directors proportionate, rounded
up, to the number of directors SoftBank is entitled to nominate and in any event not less than one, subject
to SEC and exchange rules and applicable independence and eligibility requirements. At any time
SoftBank and its affiliates beneficially own 50% or more of our outstanding common stock, SoftBank will
have an approval right over the composition of all committees of our board, subject to those same rules
and requirements.
SoftBank has designated William Bice, Alex Clavel, Ron Fisher, Kimberly Johnson, Seiichi Morooka and
Alexi Wellman to serve on our board of directors. OpenAI has nominated Sachin Katti to serve on our
board of directors.
Information and Other Rights
The Shareholders’ Agreement also provides, among other things, that until the period in which SBG no
longer consolidated the Company for purposes of its consolidated financial statements or no longer
accounts for its investment in the Company under the equity method of accounting:
•to the extent permitted by applicable law, we will in a timely manner provide SoftBank with information
and data relating to our business and financial results so as to enable SoftBank and its controlled
affiliates to satisfy their respective ongoing financial reporting, audit and other legal and regulatory
requirements;
•to the extent permitted by applicable law, we will in a timely manner provide SoftBank with access to
our auditors, personnel, data, information and systems, in each case in the same manner as we do
immediately prior to the date of our listing on Nasdaq and on or prior to any reasonable deadline set
by SoftBank for receipt of such information, data or access;
•to the extent permitted by applicable law, we will consult with SoftBank in a timely manner (i) prior to
the disclosure and filing of our annual and quarterly earnings information and related periodic reports
and (ii) prior to the disclosure of any information that may reasonably be considered material to
SoftBank or in which SoftBank is named, in each case taking into account all of SoftBank’s
reasonable comments or advice prior to the filing thereof;
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•we will inform SoftBank promptly of any events or developments that might reasonably be expected to
materially affect our financial results; and
•we will also provide SoftBank with such information as SoftBank may reasonably request to facilitate
the compliance by SoftBank and its controlled affiliates with their respective global legal, regulatory
and tax obligations in a timely manner.
SoftBank Consultation Rights
The Shareholders Agreement also provides, among other things, that until the period in which SBG no
longer consolidated the Company for purposes of its consolidated financial statements or no longer
accounts for its investment in the Company under the equity method of accounting, if we propose to (i)
change our independent auditor to a firm outside of the professional services networks commonly referred
to as the “Big Four accounting firms” or (ii) make any material changes in our accounting policies, the
Shareholders’ Agreement requires us to provide SoftBank with prior written notice of such proposed
changes, consult with SoftBank in good faith regarding the rationale for such proposed changes, and use
our reasonable efforts to resolve any disagreement and obtain SoftBank’s consent to such proposed
changes.
In the event SoftBank has not provided its consent within 30 calendar days of being notified of such
proposed changes after good faith consultation by us, then we may adopt such changes upon a
determination by our board of directors that such changes are in the best interests of us and our
shareholders.
SoftBank Consent Rights
Until the Threshold Date, the Shareholders’ Agreement provides that SoftBank shall have a consent right
with respect to the following matters, in each case, to the fullest extent permitted by applicable law:
•until the Threshold Date, we must take all necessary corporate action, to the fullest extent permitted
by law, to ensure that the size of our board of directors is not increased or decreased without
SoftBank’s prior written consent;
•any contracts or arrangements that would purport to bind SoftBank or its affiliates where SoftBank or
such affiliates are not parties to such agreements, or that would involve the use or license of the
SoftBank brand outside of existing authorized license agreements;
•any action restricting SoftBank’s ability to transfer, assign, pledge or dispose of capital stock of our
company, or limiting the rights of SoftBank as a shareholder in a manner not applicable to our
shareholders generally, subject to Restricted Transfers;
•any action or inaction that could reasonably result in a default by SoftBank or its affiliates of any
agreement or undertaking to which SoftBank or its affiliates is a party;
•the adoption of any new equity incentive plan or expansion of an existing plan (provided that such
consent right shall not apply to any incentive plan in place at the time of completion of this offering,
including our 2026 Incentive Award Plan);
•the adoption, amendment or waiver of our dividend or distribution policy, including any change to the
timing, amount, priority, form or methodology for declaring or paying dividends; and
•voluntarily applying for, initiating or otherwise effecting the delisting or withdrawal of our equity
securities from trading on any national securities exchange, or voluntarily terminating, suspending or
otherwise effecting the deregistration of any class of our securities.
These consent rights terminate on the Threshold Date. We have also agreed not to propose any
amendment to our Certificate of Formation or Bylaws that would be inconsistent with the Shareholders’
Agreement, and not to propose any shareholder resolution or adopt or amend any policy for the purpose
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of removing, restricting, reducing or impeding SoftBank’s rights under that agreement, in each case
without SoftBank’s prior written consent. As among the parties, the terms of the Shareholders’ Agreement
will prevail over our Certificate of Formation and Bylaws in the event of any ambiguity or conflict, other
than with respect to the transfer restrictions in our Certificate of Formation and the indemnification rights
of directors.
We have agreed, to the fullest extent permitted by applicable law, to indemnify SoftBank, OpenAI, their
respective affiliates and their respective designated directors against losses, claims, damages, liabilities,
costs and expenses arising out of any action or proceeding in which the indemnitee is made or threatened
to be made a party by reason of its relationship with us, including its status as a controlling shareholder,
or any breach by us of the Shareholders’ Agreement, other than liabilities finally determined to have
resulted from the indemnitee’s willful misconduct, bad faith, fraud or receipt of an improper personal
benefit. We will be the indemnitor of first resort, and SoftBank and OpenAI will cease to be entitled to the
benefits of and to enforce the agreement once they beneficially own less than 5% of our then-outstanding
common stock.
Registration Rights Agreement
In connection with this offering, we will enter into a registration rights agreement with SoftBank, OpenAI,
NVIDIA and each other Person that from time to time becomes a party to the registration rights
agreement, including certain management holders (the “Registration Rights Agreement”). Pursuant to the
Registration Rights Agreement, we will provide SoftBank, OpenAI and NVIDIA (collectively, the
“Registration Rights Holders”), with certain registration rights that will obligate us to register the resale of
shares of our common stock or securities convertible into or exchangeable for shares of our common
stock (“Registrable Securities”) owned by the Registration Rights Holders after the completion of this
offering, provided that we will not be obligated to effect a registration, offer or sale when restricted from
doing so under an applicable lock-up entered into in connection with a registered offering of shares of our
common stock or securities convertible into or exchangeable for shares of our common stock (provided
further that such restriction will not exceed 180 days after the effective date of this offering or 60 days
after any other public offering). The form of the Registration Rights Agreement will be attached as an
exhibit to the registration statement of which this prospectus forms a part.
At the request of the Registration Rights Holders, we will use our commercially reasonable efforts to
register the resale of Registrable Securities owned by Registration Rights Holders after the closing of this
offering, or subsequently acquired, for public sale under the Securities Act on a registration statement on
Form S-1, or a short-form registration statement on Form S-3 if we are then eligible to use such form to
register the resale of Registrable Securities on the Registration Rights Holders’ behalf. The Registration
Rights Holders’ demand registration rights include the ability to conduct block trades and underwritten
offerings. There is no limit on the aggregate number of demand registrations that the Registration Rights
Holders may request, although the number of demands that may be made in any 12-month period is
limited as set forth in the Registration Rights Agreement. SoftBank’s registration rights will be pari passu
with those of NVIDIA and OpenAI, any cutbacks among SoftBank, NVIDIA and OpenAI will be made on a
pro rata basis, and we will not grant any of SoftBank, NVIDIA or OpenAI registration rights that are
superior to those of either of the other two; provided that, in the event of any such cutback, (a) shares
proposed to be sold by any selling shareholder that is not a Registration Rights Holder will be cut back in
full before any cutback is applied to the Registration Rights Holders and shares proposed to be sold by us
for our own account will be cut back first, (b) if a further cutback is required, shares proposed to be sold
by SoftBank, NVIDIA and OpenAI shall be cut back next on a pro rata basis relative to the value or
number of shares each proposed to include in such offering, and (c) shares proposed to be sold by us for
our own account shall be cut back first.
In addition, the Registration Rights Holders may require us to file and maintain the effectiveness of a
short-form registration statement on Form S-3 after we are eligible to use that form to register the resale
of Registrable Securities on the Registration Rights Holders’ or the relevant affiliates’ behalf. In the event
that the Registration Rights Holders request registration in connection with registered underwritten
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offerings, the Registration Rights Holders will retain the right to designate the underwriters for such
offerings.
We will also provide the Registration Rights Holders with “piggyback” registration rights that will entitle
Registration Rights Holders to include their Registrable Securities in future registrations effected by us of
our securities under the Securities Act. There is no limit on the number of these “piggyback” registrations
that the Registration Rights Holders may request. The Registration Rights Holders “piggyback” rights will
be subject to cutbacks on the number of Registrable Securities that the Registration Rights Holders may
include in registrations effected by us in connection with underwritten offerings, subject to the good faith
determination by the managing underwriters for such offerings that the number of Registrable Securities
to be offered by us and the Registration Rights Holders exceeds the number of Registrable Securities that
can reasonably be sold in the offering; provided that, in the case of an offering effected upon the demand
of one or more Registration Rights Holders, the Registration Rights Holders, including those exercising
piggyback rights, will be cut back pro rata on a pari passu basis among themselves based on the number
of shares initially requested, shares proposed to be sold by any selling shareholder that is not a
Registration Rights Holder will be cut back in full first, other selling shareholders will have second priority
and will be cut back pro rata based on the number of shares initially requested, and we will have third
priority. In the case of an offering initiated by us, (a) shares proposed to be sold by any selling
shareholder that is not a Registration Rights Holder will be cut back in full before any cutback is applied to
the Registration Rights Holders and Shares proposed to be sold by us for our own account will be cut
back first, (b) if a further cutback is required, shares proposed to be sold by SoftBank, NVIDIA and
OpenAI shall be cut back next on a pro rata basis relative to the value or number of shares each
proposed to include in such offering, and (c) shares proposed to be sold by us for our own account
shall be cut back first.
We will have the right to postpone a registration for a reasonable period, subject to customary
independent director determinations, not to exceed 60 days on any one occasion, and no more than twice
in any 12-month period. In addition, the Company may not postpone a registration for more than 60 days
in any 12-month period, subject to the ability to do so in the 15-day period before its quarterly earnings
release; provided that the number of days shall not exceed 120 days in any 12-month period.
We also have agreed to cooperate in these registrations and certain other financing transactions, subject
to certain limitations. All expenses payable in connection with such registrations will be paid by us, except
that the Registration Rights Holders will pay all of their own internal administrative and similar costs and
underwriting discounts and commissions applicable to the sale of their Registrable Securities.
The Registration Rights Agreement will contain customary indemnification and contribution provisions by
us for the benefit of the Registration Rights Holders and, in limited situations, by the Registration Rights
Holders for the benefit of us with respect to the information provided by the Registration Rights Holders
for inclusion in any registration statement, prospectus or related document.
Other Related Party Transactions
Certain Transactions with SoftBank
SoftBank and its affiliates have ownership interests in a broad range of companies. We have entered, and
may in the future enter, into commercial transactions in the ordinary course of our business with some of
these companies, including the purchase and sale of goods and services.
Capital Contributions
SoftBank is our ultimate parent company and, following this offering, will be our controlling shareholder.
As of the date of this prospectus, SoftBank and its affiliates hold a controlling equity interest in Energy
Global, representing aggregate cash contributions of approximately $3.2 billion.
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Intercompany Balances and Debt from Related Parties
As of June 30, 2026, December 31, 2025 and 2024, receivables from related parties were $0.3 million,
$0.2 million and $0.0 million, respectively, and represented amounts owed to us for bill payments made
on behalf of SB Energy Global Holdings Limited and its subsidiaries.
As of June 30, 2026, December 31, 2025 and 2024, payables to related parties were $4.0 million, $0.2
million and $18.4 million, respectively, and represented amounts owed to SB Energy Global Holdings One
Limited for a tax payment made on behalf of SBE US Holdings One, LLC.
As of June 30, 2026, December 31, 2025 and 2024, debt from related parties was $709.5 million, $709.5
million and $410.0 million, respectively, and represented intercompany revolving promissory notes
between us, as borrower, and SBE Global, our direct parent, as lender, bearing interest at annual rates of
6.000% and 7.272%, with approximately $410.0 million bearing interest at 7.272% and approximately
$299.5 million bearing interest at 6.000%.
Trademark License Agreement
On March 28, 2024, SBE Global entered into a First Amended and Restated License Agreement with
SoftBank, amending and restating a prior agreement dated May 9, 2022, pursuant to which SoftBank
grants to SBE Global and certain of its permitted affiliates a non-exclusive, non-transferable license to use
certain trademarks and domain names (including the “SB Energy” brand name) solely within the United
States in connection with the sale of electrical energy products and renewable energy credits, and
services related to renewable energy projects. Softbank is and remains the exclusive owner of the
licensed marks, and any goodwill arising from the use of the licensed marks by SBE Global and its
permitted affiliates belongs to Softbank.We have agreed with SoftBank and SBE Global on the form of an
assignment and amendment to the license agreement, which we expect to be executed in connection
with, and to become effective upon, the completion of this offering, and pursuant to which SBE Global will
assign the agreement to us with SoftBank’s consent, and SBE Global will continue as a permitted affiliate.
The license has an initial term of one year and automatically renews for additional one-year periods
unless either party provides written notice of non-renewal at least one month before the then-current term
expires. The license will automatically terminate if SBE Global, LP is no longer controlled by SoftBank,
and our rights under the license will automatically terminate if we are no longer controlled by SBE Global,
LP, in which case we are required to cease all use of the licensed marks immediately. Under the license
agreement, we are obligated to indemnify SoftBank against third-party infringement claims arising from
our use of the licensed marks, except to the extent such claims arise from SoftBank’s breach of the
agreement. This indemnity obligation is uncapped.The license agreement provides that, in consideration
of the use of the licensed names and trademarks, annual royalties will be payable to SoftBank equal to
the gross profit of each revenue-generating permitted affiliate multiplied by 1%, with gross profit
calculated under the methodology specified in the agreement on an entity-by-entity rather than a
consolidated basis. For the year ended December 31, 2025, $0.1 million was payable under the
trademark license agreement, calculated on an entity-by-entity basis pursuant to the letter agreement
dated June 11, 2026. For the year ended December 31, 2024, no fees were payable pursuant to such
agreement.
Data Center Lease, SoftBank Guaranty and Affiliate Commercial Arrangements
One of our subsidiaries entered into a lease agreement dated November 7, 2025 with an affiliate of
SoftBank as tenant for premises associated with Cosmos. The lease provides for a 15-year initial term,
with an option to renew for an additional 10-year period, and is structured as a triple-net lease with 100%
operating expense pass-through, rent based on a percentage return on total project cost with annual
escalators and limited tenant termination rights. Expected aggregate rent under the Cosmos lease is
approximately $2.5 billion over its 15-year initial term. The lease is expected to commence in stages
between 2026 and 2027, with rent commencement for the first phase expected to occur on the earlier of
December 11, 2026 or the date the applicable phase achieves RFS status.
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Under the lease, the tenant has no general right to terminate for convenience, but the following events
may give rise to tenant termination rights: (i) an event of fire or other casualty damaging the project site
(subject to certain provisions providing for landlord’s repair period), (ii) seizure under eminent domain or
condemnation of all or a material portion of the project site or (iii) violation by the landlord of sanctions
and anti-money laundering related representations, warranties or obligations set forth in the lease.
The lease also permits tenant to request change orders to modify the design documents or construction
schedules during the construction process, including increase or decrease of the total IT capacity, which
in turn may extend project timelines and delay rent commencement or reduce total rent payments under
the lease in the event that total data center capacity is reduced.
SoftBank Group Capital Limited, a SoftBank Group affiliate, delivered a guaranty dated November 7,
2025 in favor of our subsidiary for the obligations of the tenant under the lease, with anticipated aggregate
exposure of approximately $2.617 billion, and on March 25, 2026 our subsidiary and the tenant, with the
guarantor solely with respect to specified provisions, entered into a lease amendment that increased the
total costs recoverable under the lease and increased the anticipated aggregate guaranty exposure to
approximately $2.905 billion.
Under the trademark license agreement, $0.1 million was payable for 2025, calculated on an entity-by-
entity basis under a letter agreement dated June 11, 2026 that amended and restated the royalty
schedule for that year, and no royalties were payable for 2024 because we did not have positive
consolidated gross profit under the specified methodology.
There were no tax sharing obligations for the 2025 tax year. Our operations are also subject to a National
Security Agreement with CFIUS in connection with SoftBank’s ownership of our U.S. operations. See
“Risk Factors—Risks Related to Our Business and Operations.”
Cosmos Financing
On May 7, 2026, our subsidiary issued $999.0 million aggregate principal amount of 8.875% Senior
Secured Notes due 2031 to finance the Cosmos Technology Campus. One of our parent entities, Energy
Global, provided a completion guaranty for the benefit of the noteholders. Except for the completion
guaranty described above, none of SoftBank or its affiliates or our parent entities is a guarantor of the
notes.
National Security Agreement
On December 23, 2019, SoftBank and certain of its subsidiaries entered into a National Security
Agreement with CFIUS in connection with SoftBank’s ownership of our U.S. operations, as supplemented
on September 20, 2021. The National Security Agreement imposes certain compliance obligations on us,
including restrictions on vendors, cybersecurity requirements and project sale notification procedures.
See “Risk Factors—Risks Related to Our Business and Operations - We are subject to risks associated
with national security regulations due to our foreign ownership.”
Tax Sharing Agreement
On March 4, 2022, we entered into a U.S. State and Local Tax Sharing Agreement (“TSA”) with SB Group
US, Inc. that governs the respective rights, responsibilities and obligations of us and SB Group US, Inc.
with respect to certain state and local tax matters in jurisdictions and for taxable periods in which SB
Group US, Inc. is required to file tax returns on a consolidated, combined, unitary or other group basis
with us (the “Combined Returns”). Among other things, the TSA (i) allocates responsibility for the
preparation and filing of the Combined Returns and the payment of taxes due in connection therewith, (ii)
determines the appropriate allocation of any such tax liability between SB Group US, Inc. and us such
that each party pays their respective tax liability as if filed on a separate basis, (iii) requires compensation
to be paid by us to SB Group US, Inc. to the extent we use any tax attributes properly allocable to SB
Group US, Inc. to offset taxes otherwise allocable to us and vice versa, (iv) allocates responsibility for the
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conduct of tax contests arising with respect to the Combined Returns, and (v) ensures that the parties are
aligned on cooperating and coordinating with respect to the Combined Returns.
Transactions with OpenAI
Neither OpenAI nor any of its affiliates is selling shares in this offering, acting as an underwriter or
otherwise participating in the offering in any capacity other than as an existing equity and warrant holder
subject to customary lock-up arrangements. We are dependent on OpenAI as our anchor data center
tenant, representing a significant portion of our signed lease capacity, and any adverse change in
OpenAI’s financial condition, competitive position or willingness to perform its contractual obligations
could materially and adversely affect our business. For a more complete discussion of our relationship
with, and dependence upon, OpenAI, see “Risk Factors—Risks Related to Our Business and Operations”
and “Principal Shareholders.”
Equity Investment and Conversion
On January 9, 2026, an affiliate of OpenAI, made an equity investment of $500.0 million preferred equity
investment in Energy Global. Upon a Specified QPO, that investment will automatically convert into
common equity interests of Energy Global. Following the Corporate Conversion, Energy Global holds its
interest in shares of our common stock indirectly through SBE Global, and those shares will be distributed
to Energy Global’s limited partners in the Closing Distribution.
OpenAI Warrants
In January 2026 we issued warrants to OpenAI in connection with entry into the Foundation Agreement
and the Milam County data center facility lease arrangements. On August 17, 2026, we executed the
Amended and Restated Warrant Agreement with OpenAI concerning these warrants. As of the date of this
prospectus, the OpenAI Warrants consist of 3,991,809 warrants exercisable at $0.01 per share, which
vest in eight tranches and, following this offering, will be exercisable directly for shares of our common
stock.
Two of the eight tranches will have vested by the pricing of this offering. The first tranche of 868,934
OpenAI Warrants vested upon the execution of triple-net lease agreements for 800 MW-IT of load at our
Milam County, Texas data center project. The second tranche of 868,933 OpenAI Warrants vests upon
the pricing of a Specified QPO, which this offering is expected to constitute. Together, these 1,737,867
OpenAI Warrants will be net exercised in the OpenAI Warrant Exercises upon the completion of this
offering. Because the exercise price is nominal and exercise is on a net, or cashless, basis, the shares
issued are determined by a formula that divides the aggregate spread between the fair market value of a
share and the $0.01 exercise price by that fair market value — so the number of shares issued, and the
resulting dilution to investors in this offering, increases as our share price increases. Mechanically, these
vested warrants were exchanged for warrants to acquire equity interests in Energy Global, which are
exercised and contributed up through SBE Global to us, with the resulting shares distributed to Energy
Global's limited partners in the Closing Distribution and subject to the 180-day lock-up applicable to this
offering.
The remaining 2,253,942 OpenAI Warrants will be outstanding and unvested immediately following this
offering. From the pricing of this offering, the exchange mechanism described above ceases to apply to
any unvested OpenAI Warrants; if they later vest, they are exercisable directly for shares of our common
stock, at the same warrant-to-share ratio applicable to the warrants exchanged in connection with this
offering. Of these, 408,942 OpenAI Warrants vest upon satisfaction or waiver of all conditions precedent
to the initial funding under the initial project financing agreements for at least 753 MW-IT of load at the
Milam County project, subject to pro rata vesting for a lesser amount. The other five tranches of 369,000
OpenAI Warrants each vest only if our equity value reaches specified cumulative thresholds,
corresponding to equity valuations of $80 billion, $100 billion, $125 billion, $150 billion and $200 billion,
respectively, with the applicable per-share target established at the pricing of this offering. Once our
common stock is listed, fair market value for these purposes is determined by reference to the ten-
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trading-day volume weighted average price, meaning these tranches will vest, if at all, based on our
trading price after this offering.
Any unvested OpenAI Warrants are automatically cancelled on the expiration date, which is the later of
January 9, 2036 and the date on which any required antitrust or other regulatory approvals for exercise
are obtained. Exercise and issuance may be conditioned on those approvals, including under the HSR
Act. In addition, if we experience a change of control on or before January 9, 2032, all then-unvested
OpenAI Warrants automatically vest, and if a change of control occurs after that date, all then-unvested
OpenAI Warrants are automatically cancelled. Specified breaches of, or the early termination of, our
commercial arrangements with OpenAI can also cause unvested OpenAI Warrants to vest or be cancelled
on a pro rata basis.
As of the date of this prospectus, assuming full vesting and automatic exercise, the OpenAI Warrants
would result in the issuance of approximately shares of common stock (assuming a cashless
exercise based on an assumed initial public offering price of $ per share, which is the midpoint of the
estimated offering price range set forth on the cover page of this prospectus).
Following the completion of this offering, unvested OpenAI Warrants will represent the right to acquire up
to shares of our common stock, based on an assumed initial public offering price of $ per share,
which is the midpoint of the price range set forth on the cover page of this prospectus.For illustrative
purposes, the table below sets forth the assumed initial public offering price per share at various price
points, including the midpoint of the price range set forth on the cover page of this prospectus, and the
corresponding number of shares of common stock that would be issued upon the OpenAI Warrant
Exercises, assuming in each case that the number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same, and issuances of Class N common stock to NVIDIA in the
concurrent private placement and pursuant to the Prepaid Forward Contract, at each such price point.
Initial Public Offering Price | Shares of Common Stock to be Issued Upon Exercise of the OpenAI Warrants That Vest Upon This Offering | Shares of Common Stock to be Outstanding Immediately Following the Completion of This Offering | ||
Initial Public Offering Price | Shares of Class N Common Stock to be Issued in Concurrent Private Placement and Pursuant to the Prepaid Forward Contract | Shares of Class N Common Stock to be Outstanding Immediately Following the Completion of This Offering | ||
The warrant arrangement was intended as a material inducement for OpenAI to enter into the lease
arrangements and was agreed to be treated as a discount or allowance against payments under those
arrangements, including rent.
Valuation. The OpenAI Warrants are classified as liability instruments and are remeasured at fair value at
each reporting period, with changes in fair value reflected in our results of operations. The fair value of the
warrant liability is determined using a Monte Carlo simulation within an option pricing framework,
incorporating Level 3 inputs including the estimated fair value of the underlying equity interests, expected
volatility, contractual term, risk-free interest rate, expected distributions, and the probability and timing of
achievement of specified vesting milestones. As of the issuance date of January 9, 2026, the fair value of
the warrant liability was approximately $3.646 billion. As of June 30, 2026, the fair value of the warrant
liability was approximately $5.5 billion. Upon commencement of the related data center leases, the cost of
the warrants will be recognized as a reduction of lease revenue over the applicable lease term.
Dilution Sensitivity Analysis
The OpenAI Warrants are exercisable at $0.01 per share and may be exercised on a net, or cashless,
basis, in which case a portion of the warrant is cancelled in payment of the exercise price rather than
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cash being paid. Because the exercise price is nominal, a net exercise delivers substantially the full
number of shares underlying the warrants exercised, and the share count declines only marginally as our
share price falls. Investors in this offering should therefore expect dilution from the OpenAI Warrants to be
driven principally by how many tranches vest.
Shares issuable if the equity-value thresholds are met. Five tranches of 369,000 OpenAI Warrants
each — 1,845,000 OpenAI Warrants in the aggregate — vest only if the fair market value per common
unit of Energy Global reaches a level equivalent to an equity valuation of $80 billion, $100 billion, $125
billion, $150 billion and $200 billion, respectively. The per-share target for each threshold will be fixed at
the pricing of this offering, and after listing, fair market value is measured by the volume weighted
average price of our common stock over the ten trading days ending immediately before the relevant
date. Based on an assumed initial public offering price of $ per share and shares of common
stock outstanding on a fully diluted basis immediately following this offering, each threshold corresponds
to the approximate per-share price, and would result in the approximate cumulative issuance of shares of
our common stock, set forth below:
Equity valuation threshold | Approximate per- share price required | OpenAI Warrants vesting | Approximate cumulative shares issuable | Cumulative dilution | ||||
$80 billion ............... | $ | 369,000 | % | |||||
$100 billion ............. | $ | 369,000 | % | |||||
$125 billion ............. | $ | 369,000 | % | |||||
$150 billion ............. | $ | 369,000 | % | |||||
$200 billion ............. | $ | 369,000 | % | |||||
Each threshold is tested independently and cumulatively: reaching the $200 billion threshold means all
five tranches have vested and all 1,845,000 of these OpenAI Warrants become exercisable. If our
common stock never trades at the level corresponding to the $80 billion threshold, none of these tranches
vests and no shares are issued in respect of them.
Shares issuable on the project-milestone tranche. A further 408,942 OpenAI Warrants vest
independently of our share price, upon satisfaction or waiver of all conditions precedent to the initial
funding under the initial project financing agreements for at least 753 MW-IT of load at our Milam County,
Texas data center project, with pro rata vesting if that condition is satisfied for a lesser amount. At an
assumed initial public offering price of $ per share, vesting and exercise of this tranche would result
in the issuance of approximately shares of our common stock.
Maximum dilution. If every remaining tranche vests and is exercised, the 2,253,942 OpenAI Warrants
outstanding and unvested following this offering would result in the issuance of approximately
additional shares of our common stock, and the 3,991,809 OpenAI Warrants in the aggregate
would represent approximately % of our common stock on a fully diluted basis. Any OpenAI Warrants
that remain unvested are automatically cancelled on the expiration date, the later of January 9, 2036 and
the date required regulatory approvals for exercise are obtained. All then-unvested OpenAI Warrants
automatically vest upon a change of control occurring on or before January 9, 2032, and are automatically
cancelled upon a change of control occurring after that date.
Foundation Agreement and Governance Rights
The equity investments by SoftBank and OpenAI were made in connection with the Milam County data
center lease arrangements and the Foundation Agreement. The Foundation Agreement contains
covenants that continue following this offering and that restrict how we develop and contract for data
center projects. It gives OpenAI ride-along rights with respect to projects where OpenAI is the tenant and
consent and participation rights over specified materially important design contracts, makes OpenAI our
sole and exclusive provider of AI products and services subject to stated exceptions, allocates intellectual
property in jointly developed projects to OpenAI while we retain our power infrastructure technology, and
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obligates us to purchase a minimum of $10.0 million, $15.0 million and $25.0 million of OpenAI software
and services for 2026, 2027 and 2028, respectively. We are utilizing these AI-driven software and tools to
improve productivity across our Company and accelerate our project development and construction
timelines.OpenAI may terminate the Foundation Agreement in specified circumstances, including a
change of control involving a counterparty identified as a prohibited entity, and specified events accelerate
vesting of the OpenAI Warrants. The amended definition of “Lease Agreement” excludes any lease
agreement or other arrangement relating to the PORTS-Pike Technology Campus. For a description of
the risks associated with these rights, see “Risk Factors—Risks Related to Our Corporate Structure and
Ownership.”
Data Center Executory Contracts
On January 9, 2026, Milam County DC, LLC, one of our subsidiaries, as landlord, and Orion DC I, LLC,
an affiliate of OpenAI, as tenant, entered into two separate triple-net data center lease agreements for
data center buildings to be constructed in Milam County, Texas. Building 1 is designed for approximately
308 MW of critical IT capacity and Building 2 is designed for approximately 445 MW of critical IT capacity,
for a combined total of approximately 753 MW of critical IT capacity across the Milam County campus,
with each building comprising approximately 650,000 square feet. Each lease has an initial term of 15
years, with two 10-year extension options available to the tenant. Rent under each lease is structured on
a yield-on-cost basis with an annual escalator.
Each lease also grants the tenant a buy-out option, that may become exercisable if applicable RFS
conditions are not satisfied within specified periods after target RFS dates. Under such option, the tenant
may elect to purchase the applicable premises at a price determined in accordance with the terms of the
lease, subject to prior written notice and compliance with specified conditions precedent. If the tenant
exercises its buy-out option, we would transfer ownership of the applicable data center building, and the
lease with respect to such building would terminate upon consummation of the purchase. Tenant may
only elect to exercise the buy-out option in the event that the first data hall of the applicable data center
building is delayed beyond the target delivery date set forth in the applicable lease by 365 days or more.
An OpenAI affiliate and the tenant guarantor under each lease executed a joinder to each lease pursuant
to which it unconditionally guaranteed, and promised to pay and perform, all liabilities and obligations
owed by the tenant to our subsidiary under the applicable lease. One of our parent entities approved
completion guaranties in connection with the lease agreements, and those completion guaranties are for
the benefit of the tenant under the applicable lease. Pursuant to the Foundation Agreement, OpenAI has
been granted customary commercial rights to expansion capacity with respect to future development
opportunities, subject to the terms and procedures set forth in the Foundation Agreement.
In connection with the Milam County data center campus, we expect to deliver electricity to the tenant
from co-located power generation assets pursuant to on-site power supply agreements. Under our
vertically integrated model, we pair data center lease arrangements with dedicated power generation at
the same site, enabling us to provide the tenant with long-term, predictable power costs for the duration of
the lease and reducing the tenant’s exposure to wholesale market volatility. As of the date of this
prospectus, we had developed more than 1.3 GW of incremental power generation capacity in Milam
County, and these co-located power assets are expected to serve a substantial portion of the data center
campus’s total electricity needs.
On August 17, 2026, 17 of our subsidiaries, each as landlord, and an affiliate of OpenAI, as tenant,
entered into individual lease agreements for the PORTS-Pike Technology Campus, resulting in 17 leases
covering approximately 8.0 GW-IT of critical IT capacity in the aggregate. Each lease has a 20-year initial
term commencing on the applicable commencement date, includes four five-year extension options
exercisable by the tenant, and is structured as a triple-net lease with yield-on-cost rent, an annual
escalator and phased commencement tied to RFS conditions. Rent commencement for each phase and
the tenant’s associated obligations are conditioned on satisfaction of the applicable RFS conditions,
including completion and availability of the interconnection facilities and generation resources necessary
to serve the contracted load, as well as substantial completion and commissioning of the applicable
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buildings. NVIDIA has provided a residual value guaranty covering the initial nine buildings, representing
approximately 4.25 GW-IT of critical IT load, subject to a declining guaranteed minimum value and an
aggregate cap of $105 billion. The guaranty is not a guaranty of rent or other payment obligations, is
triggered only upon specified tenant insolvency or uncured monetary payment defaults under a lease, and
may terminate upon specified ratings upgrades of OpenAI or other events such as the 20th anniversary of
the commencement, or termination in accordance with its terms, of an applicable lease. NVIDIA also has
an option, in its sole discretion, to provide guaranties for the remaining approximately 3.78 GW-IT of
buildings. See “Business—Customer Contracts—Data Center Leases—PORTS-Pike Technology Campus
Leases” for a detailed description of such leases and guaranties.
AI Software and Services
In connection with our operations, we purchase AI software and services from OpenAI, including access
to ChatGPT Enterprise for use across our organization. We have committed to minimum purchases of
OpenAI software and tools of $10.0 million, $15.0 million, and $25.0 million for 2026, 2027, and 2028,
respectively. This arrangement is part of our broader commercial relationship with OpenAI, which also
includes the software and tools spending commitments under the Foundation Agreement described
above. Our use of ChatGPT Enterprise supports internal productivity, data analysis, and operational
workflows across our business. See “Risk Factors—Risks Related to Our Business and Operations—We
are substantially dependent on OpenAI as a tenant and strategic partner, and any adverse change in its
financial condition or willingness to perform its contractual obligations could materially and adversely
affect our business.” and “—Foundation Agreement and Governance Rights.”
Corporate Opportunities
Our Certificate of Formation will provide that, to the fullest extent permitted by law, we renounce any
interest or expectancy in, or in being offered an opportunity to participate in, any Covered Opportunity
presented to an Identified Person, which includes our directors and officers and SoftBank and each of its
affiliates, unless the opportunity is expressly offered in writing to such Identified Person solely in such
person’s capacity as our director or officer. For additional information, including the full definitions of these
terms, see “Description of Capital Stock—Conflicts of Interest.”
Director and Officer Indemnification and Insurance
As discussed elsewhere in this prospectus, our Certificate of Formation and Bylaws will provide that we
will indemnify each of our directors and officers to the fullest extent permitted by the TBOC. For further
information, see “Description of Capital Stock—Limitations on Liability and Indemnification of Officers and
Directors.” We have entered into, or will enter into prior to the completion of this offering, indemnification
and advancement agreements with each of our directors and executive officers in a form approved by our
shareholders, which provide for mandatory indemnification and advancement of expenses on terms that
are in certain respects broader than those provided by our Certificate of Formation, our Bylaws and the
TBOC. See “Description of Capital Stock—Limitations on Liability and Indemnification of Officers and
Directors.”
Review of Related Party Transactions
The related party arrangements described above, including the Cosmos lease, the Milam County leases,
the PORTS-Pike leases, the Foundation Agreement and the OpenAI Warrants, were negotiated at arm's
length among us, SoftBank and OpenAI in the context of a broader strategic relationship among the
parties. Although SoftBank is our controlling shareholder, the participation of independent third parties
with adverse economic interests—primarily OpenAI, as a data center tenant and warrant holder, and Ares,
as preferred equity investor with senior economic rights—imposed rigorous third-party controls on the
negotiation process and ensured that key commercial terms were subject to the scrutiny and approval of
counterparties whose interests were not aligned with those of SoftBank. Each of OpenAI and Ares was
separately represented by independent legal and financial advisors, negotiated vigorously on economic
terms including rent structure, lease milestones, warrant vesting conditions, preferred return and
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redemption mechanics, and exercised meaningful leverage over deal terms by virtue of its independent
capital commitment and contractual position. The presence of these independent counterparties required
us to justify and defend the commercial terms of each arrangement on a standalone basis, effectively
replicating the discipline of an arm's-length process.
In addition, our board of directors was actively involved in the review and approval of each arrangement.
With the assistance of outside legal counsel, management presented the board with detailed summaries
of the material terms, strategic rationale and available alternatives for each transaction over the course of
multiple meetings, and directors with a personal interest in or affiliation with the applicable counterparty
recused themselves from the relevant deliberations and votes. An independent fairness opinion regarding
powered land value was obtained in the board’s review of the Milam County leases. A third-party
appraisal was obtained in the board’s review of the PORTS-Pike Technology Campus leases. A third-party
valuation was obtained in the board’s review of the investment associated with the issuance of the
OpenAI Warrants. No independent fairness opinion, third-party valuation or benchmarking study was
obtained in connection with the board’s review and approval of the Cosmos lease. The board relied on
management presentations, outside legal counsel and the participation of counterparties with adverse
economic interests, including OpenAI and Ares, in negotiating the applicable terms. The OpenAI Warrants
were intended as a material inducement for OpenAI to enter into the Foundation Agreement and related
lease arrangements and were agreed to be treated as a discount or allowance against payments required
under those arrangements, including rent. In determining that the terms were appropriate, the board
considered the totality of the circumstances, including the arm's-length nature of the negotiations, the
independent controls imposed by OpenAI and Ares, SoftBank's role as financial sponsor, OpenAI's
position as data center tenant and counterparty to a multi-billion dollar development pipeline, the limited
number of counterparties capable of transacting at this scale and within the required timeframes, and our
need for committed capital and contracted revenue to execute our business plan.
Following the completion of this offering, all future related party transactions will be subject to the review
and approval procedures set forth in our Related Person Transaction Policy, as described below, which
requires that any related person transaction be reviewed and approved or ratified by a committee of our
board of directors composed solely of independent, disinterested directors or by the disinterested
members of the board of directors. Our audit committee will also periodically review and oversee all
related party transactions on an ongoing basis in accordance with its charter.
Review of Conflicts of Interest
Conflicts Arising from Dual Roles
SoftBank and OpenAI each serve in multiple capacities in relation to us. SoftBank is our controlling
shareholder and financial sponsor and, through affiliates, is also the tenant under our Cosmos Technology
Campus lease and the guarantor of that tenant’s obligations. OpenAI is a significant equity investor and
warrant holder, the anchor tenant under our Milam County data center leases, and our commercial
counterparty under the Foundation Agreement. Unlike companies whose major customers, investors and
commercial partners are unaffiliated third parties, the combination of ownership control, customer
concentration and commercial counterparty status in single related parties creates inherent conflicts that
may affect our operations, strategic decision-making and the enforcement of our contractual rights. For
example, our board of directors’ willingness or ability to enforce lease obligations or pursue remedies
against a tenant that is simultaneously our controlling shareholder (or a significant investor with board
designation rights) may be constrained in ways that would not apply with respect to an unaffiliated tenant.
Similarly, OpenAI’s interests as a tenant seeking favorable lease economics may at times diverge from its
interests as a warrant holder whose returns depend on our equity value, and both may differ from the
interests of our public shareholders.
Identification and Evaluation of Conflicts
We treat any proposed transaction, amendment or business decision in which SoftBank, OpenAI or their
respective affiliates is a counterparty, beneficiary or interested party as presumptively subject to
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heightened review under our Related Person Transaction Policy (described below). In connection with
any such matter, management is required to identify and disclose to the reviewing body the nature of the
conflict, including the related person’s direct or indirect interest in the transaction, the material terms and
approximate dollar value involved, and the strategic rationale and available alternatives. This process is
designed to ensure that potential conflicts are surfaced and evaluated before any commitment is made on
behalf of us.
Management of Conflicts
Following the completion of this offering, our Related Person Transaction Policy will require that any
related person transaction be reviewed and approved or ratified by our audit committee, which is
composed entirely of independent directors, or by the disinterested members of the board of directors. No
related person transaction may be entered into, amended or renewed without the prior approval of the
audit committee (or, where applicable, the disinterested directors), and directors affiliated with or
designated by the interested counterparty will recuse themselves from deliberations and voting on the
applicable matter. The audit committee's charter provides for periodic review and ongoing oversight of all
related person transactions for potential conflicts of interest, including the authority to establish standing
pre-approvals for categories of transactions that satisfy specified criteria and to revoke any such pre-
approval at any time. For significant related party matters, we expect to engage independent outside legal
counsel to advise the disinterested directors. In addition, our board of directors has appointed a lead
independent director who, among other responsibilities, serves as a liaison between independent
directors and management on matters involving related party conflicts.
Our Policy Regarding Related Party Transactions
Our board of directors recognizes that transactions with related persons present a heightened risk of
conflicts of interest, improper valuation, or the perception thereof. It is our policy that all transactions
between us and related persons be conducted on terms no less favorable to us than those that could be
obtained in arm’s length transactions with unrelated third parties. Prior to the completion of this offering,
our board of directors will adopt a written policy on transactions with related persons that is in conformity
with the requirements for issuers having publicly held common stock that is listed on Nasdaq and Nasdaq
Texas. Our Bylaws will separately require that any related party transaction in excess of $120,000 be
reviewed and approved, or ratified, by the audit committee, and that arrangements in effect and disclosed
in this prospectus as of the effectiveness of the registration statement will be deemed pre-
approved.Under the new policy:
•any related person transaction, and any material amendment or modification to a related person
transaction, must be reviewed and approved or ratified by a committee of the board of directors
composed solely of independent directors who are disinterested or by the disinterested members of
the board of directors; and
•any employment relationship or transaction involving an executive officer and any related
compensation must be approved by the compensation committee of the board of directors or
recommended by the compensation committee to the board of directors for its approval.
In connection with the review and approval or ratification of a related person transaction:
•management must disclose to the committee or disinterested directors, as applicable, the name of the
related person and the basis on which the person is a related person, the material terms of the related
person transaction, including the approximate dollar value of the amount involved in the transaction,
and all the material facts as to the related person’s direct or indirect interest in, or relationship to, the
related person transaction;
•management must advise the committee or disinterested directors, as applicable, as to whether the
related person transaction complies with the terms of our agreements governing our material
outstanding indebtedness that limit or restrict our ability to enter into a related person transaction;
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•management must advise the committee or disinterested directors, as applicable, as to whether the
related person transaction will be required to be disclosed in our applicable filings under the
Securities Act or the Exchange Act and related rules, and, to the extent required to be disclosed,
management must ensure that the related person transaction is disclosed in accordance with the
Securities Act and the Exchange Act and related rules; and
•management must advise the committee or disinterested directors, as applicable, as to whether the
related person transaction constitutes a “personal loan” for purposes of Section 402 of the Sarbanes-
Oxley Act.
In addition, the related person transaction policy provides that the committee or disinterested directors, as
applicable, in connection with any approval or ratification of a related person transaction involving a non-
employee director, should consider whether such transaction would compromise the director’s status as
an “independent,” “outside,” or “non-employee” director, as applicable, under the rules and regulations of
the SEC. The committee or disinterested directors, as applicable, must also determine that the terms of
the related person transaction are comparable to those that could be obtained in an arm’s length
transaction with an unrelated party and that the transaction is in, or not inconsistent with, the best
interests of the company and its shareholders. Transactions and arrangements with related persons that
are in effect as of the effectiveness of the registration statement of which this prospectus forms a part,
and that are disclosed in this prospectus, will be deemed pre-approved under, and exempt from the
review, approval and ratification requirements of, our Related Person Transaction Policy.
Limitations on Governance Mechanisms
Notwithstanding these procedures, we will be a “controlled company” under Nasdaq and Nasdaq Texas
rules following this offering and intend to rely on certain exemptions from corporate governance
requirements, including exemptions from the requirements that a majority of the board consist of
independent directors and that the compensation and nominating committees be composed entirely of
independent directors. As a result, SoftBank will have the ability to influence or determine the outcome of
matters submitted to a vote of the board or shareholders, including matters that do not require
disinterested director approval under our Related Person Transaction Policy. In addition, our Certificate of
Formation will contain a corporate opportunities waiver permitting SoftBank, OpenAI and their respective
affiliates to pursue business opportunities—including data center, power and AI infrastructure
opportunities—without offering them to us, even where those opportunities could be material to our
business. There can be no assurance that the governance mechanisms described above will be sufficient
to fully mitigate the conflicts inherent in these relationships or that transactions with related parties will be
on terms as favorable to us as those available from unaffiliated third parties. See “Risk Factors—Risks
Related to Our Corporate Structure and Ownership,” “Management—Controlled Company Status” and
“Description of Capital Stock—Conflicts of Interest.”
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DESCRIPTION OF CERTAIN INDEBTEDNESS
The following summarizes the material terms of our outstanding indebtedness as of June 30, 2026. As of
that date, on a consolidated basis, we had approximately $4.0 billion in aggregate principal amount of
indebtedness outstanding (approximately $3.9 billion net of unamortized issuance costs and discount), all
of which was secured. Except as otherwise noted, none of the indebtedness described below is a direct
obligation of, or guaranteed by, SB Energy, Inc.; each facility is an obligation solely of the applicable
subsidiary borrower, secured solely by that borrower’s assets (and, where applicable, its project-level
subsidiaries), with no recourse to SB Energy, Inc. or any non-guarantor affiliate. These summaries are
qualified in their entirety by reference to the underlying agreements filed as exhibits to this registration
statement.
New Credit Facility
In connection with this offering, SB Energy, Inc., as borrower, expects to enter into the Credit Facility with
Citibank, N.A., as administrative agent and collateral agent, and the lenders and issuing banks party
thereto.
The Credit Facility is expected to provide for (i) a senior secured revolving credit facility in an aggregate
committed amount of up to $1.875 billion (providing cash and letters of credit) and (ii) a separate senior
secured letter of credit facility in an aggregate committed amount of up to $1.125 billion, for aggregate
commitments of $3.0 billion, in each case maturing three and one-half years after the closing date. Letters
of credit may be issued under the revolving facility within the revolving commitments and under the letter
of credit facility up to its commitments.
Amounts repaid may be reborrowed, and no scheduled amortization is expected prior to maturity.
Borrowings and letters of credit under the Credit Facility are expected to be available for working capital
and general corporate and other lawful purposes, including refinancing existing indebtedness,
investments, acquisitions and capital expenditures. The Credit Facility is also expected to permit us to
request incremental revolving, letter of credit and term commitments of up to $500.0 million, plus an
unlimited additional amount subject to a pro forma secured net leverage ratio test, in each case subject to
lender participation and specified conditions.
Interest Rate and Fees. Borrowings under the Credit Facility are expected to bear interest at our option,
at a rate per annum equal to term SOFR or an alternate base rate, in each case plus an applicable
margin ranging from 1.75% to 2.25% for term SOFR borrowings and from 0.75% to 1.25% for alternate
base rate borrowings, determined by reference to our secured net leverage ratio. Until the first
compliance certificate is delivered following the closing date, the highest pricing level will apply. We also
expect to pay a commitment fee of 0.375% per annum on the undrawn portion of both the revolving
commitments and the letter of credit facility commitments, together with customary letter of credit and
agency fees.
Guarantees and Security. The Credit Facility is expected to be guaranteed by certain of our domestic
restricted subsidiaries and secured by a first-priority lien on substantially all personal property of SB
Energy, Inc. and those guarantors. The special purpose entities used for our project-level, tax equity and
similar financings are not expected to guarantee the Credit Facility, and the collateral is expected to
exclude real property and, in specified circumstances, the equity interests in and assets of those entities.
As a result, the assets available to satisfy claims under the Credit Facility are expected to represent a
limited portion of our consolidated assets.
Covenants. The Credit Facility is expected to contain customary affirmative covenants, including
financial reporting obligations, and negative covenants that limit or restrict, among other things, our ability
and the ability of our restricted subsidiaries to incur indebtedness, create liens, make investments and
acquisitions, dispose of assets, consummate mergers, enter into transactions with affiliates and make
restricted payments, including cash dividends on our common stock.
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In addition, the Credit Facility is expected to require us to maintain minimum liquidity, tested as of the last
day of each fiscal quarter, of at least $600.0 million, stepping down to $400.0 million after the first fiscal
quarter in which our cash flow available for debt service, as calculated under the Credit Facility, exceeds
$1.0 billion. For this purpose, liquidity consists of unrestricted cash and cash equivalents plus undrawn
revolving commitments. If we fail to comply with this covenant, we or a parent entity may cure the breach
by contributing equity capital within a specified period. We do not expect to be permitted to pay cash
dividends on our common stock prior to January 1, 2029, and thereafter our ability to do so will be subject
to specified baskets and leverage-based tests, including dividends of up to the greater of $255.0 million
and 2.50% of consolidated total assets and dividends in an unlimited amount if the total net leverage ratio
on a pro forma basis does not exceed 2.00 to 1.00, in each case so long as no event of default exists.
Each of these covenants is expected to be subject to exceptions, thresholds and baskets. See “Dividend
Policy.”
Events of Default. The Credit Facility is expected to contain customary events of default, including failure
to make payments when due, breach of representations and warranties, covenant defaults, cross-default
to other material indebtedness, bankruptcy and insolvency events, material judgment defaults and a
change of control.
Conditions Precedent. The closing of the Credit Facility is expected to be subject to customary
conditions precedent, including the execution and delivery of the definitive loan documentation and the
satisfaction of the related guarantee and collateral requirements; delivery of specified financial
statements, a solvency certificate and customary legal opinions and closing certificates; the payment of
fees and expenses; the pricing of this offering, which must generate gross proceeds of at least $3.0
billion; the completion of the Ares Redemption; and the repayment in full of the outstanding borrowings
under the Hickory Facilities and the termination of the related commitments, which are expected to occur
substantially concurrently with, and to be funded from, the initial borrowing under the Credit Facility. We
will have a limited period following the closing date to complete the repayment of the Hickory Facilities
and to obtain the release of the related liens and guarantees, during which we may not request new
borrowings or letters of credit thereunder.
The terms described above reflect the Credit Facility as finalized, but funding remains subject to
satisfaction of the conditions precedent described above, and there can be no assurance that the Credit
Facility will become effective. The description above is qualified in its entirety by reference to the
underlying agreements filed as an exhibit to this registration statement.
Hickory Credit Agreement
On October 18, 2023, SE Global Borrower, LLC (the “Global Borrower”), a Delaware limited liability
company and our indirect wholly owned subsidiary, entered into a credit agreement (as amended and
restated on October 22, 2025, the “Hickory Credit Agreement”) with Deutsche Bank Trust Company
Americas, as administrative agent and collateral agent, and Deutsche Bank AG, New York Branch, Banco
Santander, S.A., New York Branch, and Nomura Securities International, Inc., as coordinating lead
arrangers. The obligations under the Hickory Credit Agreement are obligations of the Global Borrower
and, while guaranteed by certain intermediate subsidiaries as described below, are non-recourse to SB
Energy, Inc.
Facilities. The Hickory Credit Agreement provides for (i) a senior secured term loan facility in an
aggregate principal amount of $263.0 million (the “Term Loan Facility”), (ii) a senior secured revolving
credit facility in an aggregate commitment amount of $262.0 million (the “Revolving Facility”), and (iii) a
letter of credit facility in an aggregate commitment amount of $475.0 million (the “LC Facility” and,
together with the Term Loan Facility and Revolving Facility, the “Hickory Facilities”).
Outstanding Balance. As of June 30, 2026, approximately $473.0 million was outstanding under the
Hickory Facilities (consisting of the Term Loan Facility and the Revolving Facility combined).
Maturity. The Hickory Facilities mature on October 18, 2027.
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Interest Rate. Borrowings under the Hickory Facilities bear interest at a rate per annum equal to the six-
month Term SOFR plus a margin of 375 basis points. The Global Borrower has entered into interest rate
swap agreements with an aggregate notional amount of approximately $197.2 million to hedge the
floating rate exposure, at weighted average fixed rates of approximately 3.76%, maturing on October 18,
2027.
Guarantees and Security. The obligations under the Hickory Credit Agreement are guaranteed by SB
Energy Global (as pledgor) and by SBE US Holdings One, LLC and SE US Holdings Three, LLC (as
subsidiary guarantors). The Hickory Facilities are secured by a first-priority lien on substantially all assets
of the Global Borrower and the subsidiary guarantors, including a pledge of the equity interests in the
Global Borrower and the subsidiary guarantors, pursuant to a Guarantee, Pledge and Security
Agreement. Funds are subject to a Depositary Agreement with East West Bank.
Covenants. The Hickory Credit Agreement contains customary affirmative and negative covenants for
project finance facilities, including financial covenants requiring the maintenance of minimum debt service
coverage ratios and minimum liquidity levels, as well as negative covenants that limit or restrict, among
other things, the incurrence of additional indebtedness, the creation of liens, investments, asset sales,
and the making of restricted payments. The Global Borrower is also required to deliver periodic financial
statements and compliance certificates.
Events of Default. The Hickory Credit Agreement contains customary events of default for project
finance facilities, including failure to make payments when due, breach of representations and warranties,
covenant defaults, cross-default to other material indebtedness, bankruptcy and insolvency events,
material judgment defaults, and change of control. Upon the occurrence of a change of control (including
a change in the ultimate ownership or control of the Global Borrower), the lenders may accelerate the
outstanding obligations.
Big Five Senior and Mezzanine Credit Facilities
On January 24, 2024, certain indirect subsidiaries of SE Global Holdings, LLC entered into senior and
mezzanine credit agreements (collectively, the “Big Five Credit Facilities”) with MUFG Bank, Ltd., as
administrative agent and sole arranger, to refinance a prior 6.00% Senior Secured Notes program with an
aggregate principal amount of $424.3 million. The obligations under the Big Five Credit Facilities are
solely obligations of the respective subsidiary borrowers described below and are not guaranteed by, and
are non-recourse to, SB Energy, Inc.The Big Five Credit Facilities consist of the following:
Senior Borrower 1 Term Loan. Big Five Holdco 1, LLC, a Delaware limited liability company, is the
borrower under a senior secured term loan facility in the principal amount of $162.2 million, together with
a debt service reserve letter of credit facility of $8.4 million. Borrowings bear interest at daily compounded
SOFR plus a margin of 200 basis points. The facility matures on January 29, 2034. As of June 30, 2026,
$162.2 million was outstanding. The facility is secured by 100% of the membership interests of certain
Class N Members pledged as collateral.
Senior Borrower 2 Term Loan. Big Five Holdco 2, LLC, a Delaware limited liability company, is the
borrower under a senior secured term loan facility on substantially identical terms to the Senior Borrower
1 Term Loan, with a principal amount of $162.2 million and a debt service reserve letter of credit facility of
$8.4 million. Borrowings bear interest at daily compounded SOFR plus a margin of 200 basis points,
maturing January 29, 2034. As of June 30, 2026, $162.2 million was outstanding. The facility is secured
by 100% of the membership interests of certain Class N Members pledged as collateral.
Big Five Holdco 1, LLC and Big Five Holdco 2, LLC (collectively, the “Senior Borrowers”) have jointly
entered into an interest rate swap agreement with an aggregate notional amount of $243.9 million at a
fixed rate of 3.95%, maturing June 30, 2043, to hedge the floating rate exposure under the senior
facilities.
Mezzanine Borrower 1 Term Loan. Big Five Intermediate Holdco 1, LLC, a Delaware limited liability
company, is the borrower under a mezzanine secured term loan facility in the principal amount of $50.0
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million, together with a project letter of credit facility of $15.0 million and a debt service reserve letter of
credit facility of $1.6 million. Borrowings bear interest at daily compounded SOFR plus a margin of 300
basis points. The facility matures on January 29, 2029, with the full principal due as a bullet payment at
maturity. As of June 30, 2026, $50.0 million was outstanding. The facility is secured by a pledge of 50% of
the membership interests of Big Five Pledgor, LLC (the “Senior Pledgor”).
Mezzanine Borrower 2 Term Loan. Big Five Intermediate Holdco 2, LLC, a Delaware limited liability
company, is the borrower under a mezzanine secured term loan facility on substantially identical terms to
the Mezzanine Borrower 1 Term Loan, with a principal amount of $50.0 million, together with a project
letter of credit facility of $17.0 million and a debt service reserve letter of credit facility of $1.6 million.
Borrowings bear interest at daily compounded SOFR plus a margin of 300 basis points, maturing January
29, 2029, with the full principal due as a bullet payment at maturity. As of June 30, 2026, $50.0 million
was outstanding. The facility is secured by a pledge of 50% of the membership interests of the Senior
Pledgor.
Big Five Intermediate Holdco 1, LLC and Big Five Intermediate Holdco 2, LLC (collectively, the
“Mezzanine Borrowers”) have jointly entered into an interest rate swap agreement with an aggregate
notional amount of $75.0 million at a fixed rate of 3.93%, maturing June 30, 2038, to hedge the floating
rate exposure under the mezzanine facilities.
Covenants and Events of Default. Each of the Big Five Credit Facilities contains customary affirmative
and negative covenants and events of default for project finance facilities, including restrictions on
indebtedness, liens, investments, asset sales, and restricted payments, as well as customary events of
default including failure to pay, breach of covenants, cross-default, and bankruptcy events.
Eiffel Term Loan
On December 6, 2023 (converting from an original construction financing dated March 31, 2023), Eiffel
Member B, LLC, our indirect subsidiary and sponsor of the Paris Farm Solar, LLC project, entered into a
senior secured term loan (the “Eiffel Term Loan”) with MUFG Bank, Ltd., as administrative agent, and
Delaware Trust Company, as collateral agent. The obligations under the Eiffel Term Loan are solely
obligations of the borrower and are secured solely by project-level assets. The Eiffel Term Loan is not
guaranteed by, and is non-recourse to, SB Energy, Inc.
Commitment and Outstanding Balance. The total commitment under the Eiffel Term Loan is $91.1
million. As of June 30, 2026, approximately $88.7 million was outstanding.
Maturity. The Eiffel Term Loan matures on December 6, 2033.
Interest Rate. Borrowings bear interest at a rate per annum equal to six-month Term SOFR plus a
margin of 175 basis points. The borrower has entered into an interest rate swap with a notional amount of
$65.8 million at a fixed rate of 3.45%, maturing October 31, 2033.
Security. The Eiffel Term Loan is secured by 100% of the membership interests of Paris Farm Project
Company (wholly-owned by Eiffel TE Holdco, LLC), a leasehold deed of trust, and a security agreement
covering project assets.
Amortization. The Eiffel Term Loan amortizes over its term with scheduled principal repayments of
approximately $1.6 million in 2026, $1.5 million in 2027, $1.4 million in 2028, $3.0 million in 2029, $4.6
million in 2030, and $77.4 million thereafter.
Orion Project Finance Facilities
Certain indirect subsidiaries of SE Global Holdings, LLC have entered into senior secured term loan and
letter of credit facilities to finance the Ben Milam Solar project portfolio (comprising Ben Milam Solar 1,
Ben Milam Solar 2, and Ben Milam Solar 3), each of which converted from construction loan facilities
upon project completion. The obligations under each of the Orion project finance facilities are solely
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obligations of the respective project-level subsidiary borrowers and are secured solely by the assets of
the applicable project. These facilities are not guaranteed by, and are non-recourse to, SB Energy, Inc.,
although SBE US Holdings One, LLC (an indirect subsidiary of SE Global Holdings, LLC) has provided
limited sponsor guarantees in connection with certain of these facilities.
Orion 1 Member B Term Loan. On October 30, 2024, Orion 1 Member B, LLC converted its
construction loan into a senior secured term loan facility with Mizuho Bank, Ltd., as administrative agent,
and U.S. Bank Trust Company N.A., as collateral agent. The facility provides for a term loan commitment
of $85.0 million and a letter of credit facility of $28.8 million. Borrowings bear interest at six-month Term
SOFR plus 162.5 basis points. The facility matures on October 29, 2029. As of June 30, 2026,
approximately $83.2 million was outstanding. The facility is secured by 100% of the membership interests
of Ben Milam 1 Project Company (wholly-owned by Orion 1 TE Holdco, LLC). SBE US Holdings One, LLC
has provided a Cash Diversion Guaranty and ITC Delta Guaranty. The borrower has entered into an
interest rate swap with a notional amount of $64.2 million at a fixed rate of 3.76%, maturing July 31, 2044
and October 31, 2044.
Orion 2 Member B Term Loan. On November 26, 2024, Orion 2 Member B, LLC converted its
construction loan into a senior secured term loan facility with MUFG Bank, Ltd., as administrative agent,
and U.S. Bank Trust Company N.A., as collateral agent. The facility provides for a term loan commitment
of $96.1 million and a letter of credit facility of $33.8 million. Borrowings bear interest at six-month Term
SOFR plus 187.5 basis points. The facility matures on November 26, 2034. As of June 30, 2026,
approximately $92.3 million was outstanding. The facility is secured by 100% of the membership interests
of Ben Milam 2 Project Company (wholly-owned by Orion 2 TE Holdco, LLC). The borrower has entered
into an interest rate swap with a notional amount of $71.1 million at a fixed rate of 4.17%, maturing March
31, 2044.
Orion 3 Member B Term Loan. On September 3, 2024, Orion 3 Member B, LLC converted its
construction loan into a senior secured term loan facility with Mizuho Bank, Ltd., as administrative agent,
and U.S. Bank Trust Company N.A., as collateral agent. The facility provides for a term loan commitment
of $98.2 million and a letter of credit facility of $37.1 million. Borrowings bear interest at six-month Term
SOFR plus 162.5 basis points. The facility matures on September 3, 2029. As of June 30, 2026,
approximately $95.6 million was outstanding. The facility is secured by 100% of the membership interests
of Ben Milam 3 Project Company (wholly-owned by Orion 3 TE Holdco, LLC). SBE US Holdings One, LLC
has provided a Cash Diversion Guaranty and ITC Delta Guaranty. The borrower has entered into an
interest rate swap with a notional amount of $73.8 million at a fixed rate of 3.37%, maturing August 31,
2044.
Covenants and Events of Default. Each of the Orion project finance facilities contains customary
affirmative and negative covenants and events of default for project finance facilities, consistent with
those described above with respect to the Hickory Facilities.
Pelicans Jaw Construction and Bridge Loans
On December 23, 2024, Pelicans Jaw Solar, LLC, our indirect subsidiary entered into a senior secured
construction loan, bridge loan, and letter of credit facility (the “Pelicans Jaw Facility”). The obligations
under the Pelicans Jaw Facility are solely obligations of Pelicans Jaw Solar, LLC and are secured solely
by project-level assets. The Pelicans Jaw Facility is not guaranteed by, and is non-recourse to, SB
Energy, Inc.
Commitment and Outstanding Balance. The total commitment under the Pelicans Jaw Facility is
approximately $1,028.3 million (consisting of construction and bridge loan commitments), together with a
letter of credit facility of $72.3 million. As of June 30, 2026, approximately $857.8 million was outstanding
under the Pelicans Jaw Facility.
Interest Rate. Borrowings under the Pelicans Jaw Facility bear interest at a rate per annum equal to
SOFR plus a margin of 175 basis points. The borrower has entered into forward-starting interest rate
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swap agreements with aggregate notional amounts of approximately $364.1 million at weighted average
fixed rates of approximately 4.20%, maturing September 28, 2046 and September 30, 2046.
Conversion and Maturity. The construction loan is expected to convert to a term loan upon the earlier
of the term loan conversion date, the tax equity final funding date, or March 31, 2027.
SE Cosmos 8.875% Senior Secured Notes due 2031
On May 7, 2026 (subsequent to the reporting date), SE Cosmos, LLC (the “Cosmos Issuer”), a Delaware
limited liability company and indirect subsidiary of Energy Global (and a direct wholly-owned subsidiary of
Cosmos Pledgor, LLC), issued $999.0 million aggregate principal amount of 8.875% Senior Secured
Notes due 2031 (the “Cosmos Senior Secured Notes”) in a private offering under Rule 144A and
Regulation S under the Securities Act. The Cosmos Senior Secured Notes were issued at a price of
99.500% of their principal amount, generating net proceeds of approximately $994.0 million, with a yield
to maturity of 9.002%. The Cosmos Senior Secured Notes are solely obligations of the Cosmos Issuer
and are not obligations of, or guaranteed by, us or any of our other subsidiaries.
Maturity. The Cosmos Senior Secured Notes mature on May 1, 2031.
Interest Rate. The Cosmos Senior Secured Notes bear interest at a fixed rate of 8.875% per annum,
payable semi-annually in arrears on May 1 and November 1 of each year.
Trustee and Collateral Agent. Wilmington Trust, National Association serves as trustee and collateral
agent for the Cosmos Senior Secured Notes.
Security. The Cosmos Senior Secured Notes are secured by a first-priority lien on substantially all
tangible and intangible assets of the Cosmos Issuer, including all project level assets from (i) a pledge of
the equity interests of the Cosmos Issuer held by Cosmos Pledgor, LLC, (ii) mortgages on real property of
the Cosmos Issuer, and (iii) a security agreement covering substantially all personal property of the
Cosmos Issuer.
Guarantees. The Cosmos Senior Secured Notes are guaranteed, jointly and severally, on a senior
secured basis by any future subsidiaries of the Cosmos Issuer. As of the issue date, the Cosmos Issuer
had no subsidiaries. Energy Global (our indirect parent) has provided a completion guarantee in respect
of the data center project in Austin, Texas, which constitutes a senior unsecured obligation of Energy
Global.
Use of Proceeds. The net proceeds of the Cosmos Senior Secured Notes were used to (i) repay in full
the outstanding bridge facility of $342.3 million, (ii) finance the construction of a data center project in
Austin, Texas, (iii) fund a debt service reserve account and (iv) pay transaction fees and expenses.
Covenants. The indenture governing the Cosmos Senior Secured Notes contains customary restrictive
covenants, including limitations on the incurrence of additional indebtedness, the creation of liens, asset
sales, restricted payments, and transactions with affiliates, as well as covenants requiring the Cosmos
Issuer to maintain its status as a special purpose entity.
Events of Default. The indenture contains customary events of default, including failure to pay principal
or interest when due, breach of covenants, cross-default to other material indebtedness, and bankruptcy
or insolvency events.
Optional Redemption. The Cosmos Senior Secured Notes are subject to optional redemption by the
Cosmos Issuer at the prices and on the terms specified in the indenture.
Libra Construction and Bridge Loans
On March 13, 2026, Libra Project Company and Libra Member B, LLC, indirect subsidiaries of SE Global
Holdings, LLC, entered into senior secured construction and bridge loan facilities (the “Libra Facility”). The
maturity date of the Libra Facility is the earlier of (a) the term loan conversion date, (b) 60 days prior to
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the earlier of the tax equity commitment expiration date and the tax credit commitment expiration date, (c)
60 days prior to the guaranteed completion date as defined in the applicable power purchase agreement,
and (d) March 31, 2028. The obligations under the Libra Facility are solely obligations of the borrowers
and are not guaranteed by, and are non-recourse to, SB Energy, Inc.
Commitment and Outstanding Balance. The total commitment under the Libra Facility is approximately
$2,446.3 million (consisting of construction and bridge loan commitments), together with a letter of credit
facility of $98.0 million. As of June 30, 2026, approximately $512.9 million was outstanding under the
Libra Facility.
Interest Rate. Borrowings under the Libra Facility bear interest at a rate per annum equal to SOFR plus
a margin of 162.5 basis points. The borrower has entered into forward-starting interest rate swap
agreements with aggregate notional amounts of approximately $772.6 million at weighted average fixed
rates of approximately 4.12%, maturing March 31, 2048 and March 31, 2053.
Athos Storage Construction and Bridge Loans
On March 19, 2026, Athos Storage, LLC and Athos Storage Member B, LLC, indirect subsidiaries of SE
Global Holdings, LLC, entered into senior secured construction and bridge loan facilities (the “Athos
Storage Facility”). The obligations under the Athos Storage Facility are solely obligations of the borrowers
and are not guaranteed by, and are non-recourse to, SB Energy, Inc.
Commitment and Outstanding Balance. The total commitment under the Athos Storage Facility is
approximately $679.4 million (consisting of construction and bridge loan commitments), together with a
letter of credit facility of $78.0 million. As of June 30, 2026, approximately $361.9 million was outstanding
under the Athos Storage Facility.
Interest Rate. Borrowings under the Athos Storage Facility bear interest at a rate per annum equal to
SOFR plus a margin of 175 basis points. The borrower has entered into forward-starting interest rate
swap agreement with a notional amount of approximately $215.0 million at a fixed rate of 4.02%, maturing
November 30, 2046.
Intercompany Notes
SB Energy, Inc. is a party to the Intercompany Notes payable to SBE Global with an outstanding balance
as of June 30, 2026 of approximately $709.5 million. The intercompany notes are a direct obligation of SB
Energy, Inc. Interest on the intercompany notes is paid in cash on an annual basis.
SB Energy, Inc. expects to repay in full the Intercompany Notes (plus accrued and unpaid interest),
funded with cash on hand, borrowings under the Credit Facility and/or other sources prior to or
substantially concurrently with the completion of this offering. This repayment is not conditioned on entry
into the Credit Facility, and we have, and expect to have, sufficient cash on hand to repay the notes in full
if the Credit Facility is not entered into.
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Summary of Indebtedness
The following table summarizes our material project-level and corporate indebtedness as of June 30,
2026, including the recourse or non-recourse status and any guarantees or similar obligations of SB
Energy, Inc. or its intermediate holding company subsidiaries:
Financing | Amount Outstanding | Interest Rate | Maturity | Recourse / Non-Recourse | Guarantor(s) / Recourse Obligations | |||||
Hickory Facilities ............ | $473.0M | Variable/SOFR + margin | October 2027 | Recourse (corporate) | SE Global Borrower, LLC (borrower); SBE US Holdings One, LLC (guarantor); SB Energy Global, LLC; SE US Holdings Three, LLC | |||||
Cosmos Senior Secured Notes ............... | $999.0M | 8.875% fixed | May 2031 | Non-recourse (project) | Energy Global provides uncapped completion guaranty for project completion only (not a guarantee of the notes) | |||||
Libra Facilities ................ | $512.9M | Variable/SOFR + margin | Earlier of (a) the fifth anniversary of the Term Conversion Date (as defined in the Libra Credit Facilities) or (b) the date upon which the principal balance becomes due and payable | Non-recourse (project) | SBE US Holdings One, LLC provides limited sponsor guarantees, including tax equity cash diversion, advance rate, step- up and backended equity guarantees, in each case subject to caps and termination upon specified project milestones | |||||
Pelicans Jaw Facilities .. | $857.8M | Variable/SOFR + margin | Earlier of (a) the fifth anniversary of the Term Conversion Date (as defined in the Pelicans Jaw Credit Facilities) or (b) the date upon which the principal balance becomes due and payable | Non-recourse (project) | SBE US Holdings One, LLC provides: bridge loan advance rate guaranty (up to ~$100M, provides limited sponsor guarantees, including bridge loan advance rate and domestic content adder guarantees, in each case subject to caps and termination upon specified project milestones | |||||
Athos Storage Facilities | $361.9M | Variable/SOFR + margin | Earlier of (a) the tenth anniversary of the Term Conversion Date (as defined in the Athos Storage Credit Facilities) or (b) the date upon which the principal balance becomes due and payable | Non-recourse (project) | SBE US Holdings One, LLC provides limited sponsor guarantees, including tax equity cash diversion and backended equity guarantees, in each case subject to caps and termination upon specified project milestones | |||||
Big Five Senior (Sycamore) ..................... | $324.3M | SOFR + 2.0% | January 2034 | Non-recourse (project) | None at SE Global Holdings level | |||||
Big Five Mezzanine (Sycamore) ..................... | $100.0M | SOFR + 3.0% | January 2029 | Non-recourse (project) | None at SE Global Holdings level | |||||
Orion 1, 2, 3 Project Financings ...................... | 1: $83.2M 2: $92.3M 3: $95.6M | Variable/SOFR + margin | 1: October 2029 2: November 2034 3: September 2029 | Non-recourse (project) | SBE US Holdings One, LLC provides limited sponsor guarantees including domestic content adder guarantees and tax equity cash diversion guarantees | |||||
Eiffel Term Loan ............. | $88.7M | Variable/SOFR + margin | December 2033 | Non-recourse (project) | Construction holdco and TE holdco guarantee, pledge and security agreements | |||||
Recourse Obligations and Aggregate Guaranteed Exposure
As of June 30, 2026, our only material recourse corporate indebtedness was the Hickory Facilities
(approximately $473.0 million outstanding), which are obligations of SE Global Borrower, LLC and are
guaranteed and secured by specified subsidiaries and pledged equity interests; SB Energy, Inc. is not
itself a borrower or guarantor under those facilities. In connection with this offering, the Hickory Facilities
will be repaid in full with the proceeds of the initial borrowing under the Credit Facility, and the related
commitments, liens and guarantees will be terminated or released, and SB Energy, Inc. will become the
direct borrower under the Credit Facility. In addition, the intercompany notes payable to SBE Global
(approximately $709.5 million outstanding as of June 30, 2026) are a direct obligation of SB Energy, Inc.
and are expected to be repaid in full by SB Energy, Inc., together with accrued and unpaid interest,
funded with cash on hand, borrowings under the Credit Facility and/or other sources prior to or
substantially concurrently with the completion of this offering. All other project-level financings are
structured as non-recourse to SB Energy, Inc., meaning that the lenders' recourse is limited to the assets
and cash flows of the applicable project-level subsidiary and the pledged equity interests in that
subsidiary. However, our intermediate holding company subsidiary, SBE US Holdings One, LLC, has
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provided limited sponsor guarantees in connection with certain project financings, including guarantees
covering tax equity cash diversions, advance rate shortfalls, domestic content adder risks, step-up basis
shortfalls, and backended equity contributions. These guarantees are generally capped in amount and
terminable upon achievement of specified project milestones (such as receipt of tax credit monetization
commitments or term conversion). In addition, Energy Global has provided an uncapped completion
guaranty in connection with the $999.0 million Cosmos Senior Secured Notes, obligating Energy Global to
fund any shortfall necessary to complete construction of the Cosmos Technology Campus. However,
many of these guarantees are expected to terminate or reduce as project milestones are achieved, and
the actual exposure at any given time may be significantly less than this theoretical maximum.
Structural Priority and Subordination
Our corporate and financing structure results in multiple layers of structural subordination. Project-level
creditors (including the holders of the Cosmos Senior Secured Notes and the lenders under the Libra,
Pelicans Jaw, Athos Storage, Big Five, Orion, and Eiffel facilities) have first-priority security interests in the
assets of the applicable project-level subsidiaries and are senior in right of payment to SB Energy, Inc.’s
equity interest in those subsidiaries. Following the closing of the Credit Facility, the lenders and issuing
banks thereunder will have direct claims against SB Energy, Inc. and the subsidiary guarantors, secured
by a first-priority lien on substantially all of their personal property, which claims will be senior to the
claims of our public shareholders but structurally subordinated to project-level creditors with respect to
project assets. Because the collateral securing the Credit Facility excludes all real property and, in
specified circumstances, the equity interests in the special purpose entities used for our project and tax
equity financings, the value available to the lenders under the Credit Facility, and in turn to our
shareholders, may be substantially less than our consolidated asset base. Our shareholders are
subordinated to all project-level and corporate indebtedness, and will receive distributions or value only
after all such creditors have been satisfied in full. In the event of a default at the project level, lenders may
foreclose on project assets or equity pledges, and we could lose our entire investment in the affected
project without any recovery for shareholders. See “Risk Factors—Risks Related to Our Indebtedness
and Liquidity.”
General
As of June 30, 2026, we were in compliance with all financial and other covenants under each of our
outstanding debt agreements. We have entered into various interest rate swap agreements across our
portfolio to manage exposure to fluctuations in floating interest rates, as described above with respect to
the individual facilities.
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DESCRIPTION OF CAPITAL STOCK
In connection with the completion of this offering, we will file the Certificate of Formation and adopt the
Bylaws, each of which will amend and restate the certificate of formation and bylaws adopted in
connection with the Texas Conversion. The following description summarizes important terms of our
capital stock and certain provisions of our Certificate of Formation and Bylaws, each of which will be in
effect upon the completion of this offering, and is qualified in its entirety by the provisions of applicable
law, including the TBOC, and our Certificate of Formation and Bylaws, the forms of which are filed as
exhibits to the registration statement of which this prospectus forms a part. The description of our capital
stock contained herein reflects the completion of the Texas Conversion and the Stock Split. In this
“Description of Capital Stock” section, “we,” “us,” “our” and “our company” refer to SB Energy, Inc. and not
any of its subsidiaries.
General
Upon completion of this offering, our authorized capital stock will consist of shares of common
stock, par value $0.0001 per share, shares of Class N common stock, par value $0.0001 per share,
and shares of preferred stock, par value $0.0001 per share, the rights and preferences of which the
board of directors may establish from time to time.
As of July 10, 2026 (the date we converted from a limited liability company to a corporation), there were
19,966,564.08 shares of our common stock outstanding held by one shareholder of record, and no shares
of our Class N common stock or preferred stock outstanding. After the transactions described under
“Prospectus Summary—Transactions in Connection with This Offering,” “Concurrent Private Placement
and Prepaid Forward Contract,” and the completion of this offering, we expect to have shares of our
common stock outstanding held by shareholders of record, shares of our Class N common
stock outstanding held by one shareholder of record, and no shares of our preferred stock outstanding.
Pursuant to our Certificate of Formation, our board of directors will have the authority, without shareholder
approval, except as required by the TBOC, the Certificate of Formation or the listing standards of Nasdaq
and Nasdaq Texas, to issue additional shares of our common stock. Unless our board of directors
determines otherwise, we will issue all shares of our capital stock in uncertificated form.
Common Stock
Dividend Rights
Holders of shares of our common stock and Class N common stock will be entitled to receive dividends
when, as and if declared by our board of directors out of funds legally available therefor, subject to any
statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of
dividends imposed by the terms of any outstanding stock. As a Texas corporation, we are subject to
certain restrictions on dividends under the TBOC. Generally, a Texas corporation may pay dividends to its
shareholders out of “surplus” unless the distribution would render the corporation insolvent. Surplus is
defined as the amount by which the net assets of a corporation exceed the stated capital of the
corporation as calculated in accordance with the TBOC. The value of a corporation’s assets can be
measured in a number of ways and may not necessarily equal their book value.
We currently intend to retain all available funds and any future earnings, if any, for the operation and
expansion of our business. Accordingly, following this offering, we do not expect to declare or pay any
cash dividends in the foreseeable future. In addition, because we are a holding company with no direct
operations, we will only be able to pay dividends from funds we receive from our subsidiaries, and the
Credit Facility will prohibit us from paying cash dividends on our common stock prior to January 1, 2029
and will thereafter permit dividends only subject to specified conditions. See “Dividend Policy” for
additional information.
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Voting Rights
Holders of our common stock will be entitled to one vote for each share held of record on all matters on
which shareholders are entitled to vote generally, including the election or removal of directors. Our
directors will be elected by a plurality voting standard, and the holders of our common stock will not have
cumulative voting rights in the election of directors. Under a plurality voting standard, the nominees who
receive the most votes cast “for” their election are elected to our board of directors until all board seats
are filled. Shareholders are entitled to “withhold” votes from a nominee, but a withheld vote has no legal
effect on the outcome of the election, and a nominee may be elected upon receiving a single vote cast
“for” his or her election. Because SoftBank will control a majority of the voting power of our outstanding
common stock and our shareholders will not have cumulative voting rights, SoftBank will be able to elect
all of the directors standing for election at any meeting of our shareholders. The rights, powers,
preferences, and privileges of holders of our common stock will be subject to those of the holders of any
shares of our preferred stock we may authorize and issue in the future. Except as otherwise provided in
our Certificate of Formation, holders of our common stock will not be entitled to any separate class votes,
as our Certificate of Formation will provide for an opt-out from class votes that would otherwise be
required under the TBOC.
No Preemptive or Similar Rights
Holders of our common stock and Class N common stock are not entitled to preemptive rights, and our
common stock is not subject to conversion, redemption, or sinking fund provisions. The common stock
will not be subject to future calls or assessments by us. The rights and privileges of holders of our
common stock are subject to any series of preferred stock that we may issue in the future, as described
below. Notwithstanding the foregoing, SoftBank has been granted contractual preemptive rights under
the Shareholders’ Agreement. See “Certain Relationships and Related Party Transactions—Shareholders’
Agreement—Preemptive Rights.”
Right to Receive Liquidation Distributions
On our liquidation, dissolution, or winding-up, the holders of our common stock and Class N common
stock will be entitled to share equally, identically, and ratably in all assets remaining after the payment of
any liabilities, liquidation preferences, and accrued or declared but unpaid dividends, if any, with respect
to any outstanding preferred stock.
Fully Paid and Non-Assessable
All shares of our common stock that will be outstanding upon the completion of this offering will be fully
paid and non-assessable.
Class N Common Stock
Except as described below, shares of our Class N common stock will have the same rights, powers,
preferences and privileges as, and will rank equally, share ratably and be identical in all respects with,
shares of our common stock, including with respect to dividends and other distributions and distributions
upon our liquidation, dissolution or winding up, unless different treatment is approved by the holders of a
majority of the outstanding shares of each class, voting as separate classes. Except as otherwise
required by the TBOC, holders of our Class N common stock will have no voting rights, and shares of
Class N common stock will not be included in the total voting power of our outstanding capital stock. Each
share of our Class N common stock will be convertible into one share of our common stock at the option
of the holder, subject to the ownership restrictions described below and the other terms of our Certificate
of Formation; provided that any such conversion at the option of the holder will require at least 60 days’
prior written notice to us or our transfer agent. Each share of Class N common stock will convert
automatically, without further action by the holder, upon any sale, assignment, transfer or other
disposition, whether or not for value and whether voluntary, involuntary or by operation of law, to any
person other than an affiliate of the holder. The shares of Class N common stock to be outstanding
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following this offering will be issued in the Concurrent Private Placement and in settlement of the Prepaid
Forward Contract.
Ownership Restrictions
Because we are a holding company under PUHCA with U.S. operating subsidiaries that are regulated by
FERC as “public utilities” under the FPA, our Certificate of Formation will restrict certain transfers of our
common stock and Class N common stock. Except through a Secondary Market Transaction, no person
may purchase or otherwise acquire, and no shareholder may transfer, shares of our common stock or
Class N common stock if, after giving effect to the purchase, acquisition or transfer, the holdings of the
transferee, together with those of its FERC Affiliates, would equal or exceed the Utility Control Threshold
or would include such person obtaining the right to appoint a non-independent member of our board of
directors or the appointment to our board of directors of a non-independent member affiliated or otherwise
associated with such person, in each case without the prior written consent of our board of directors (a
“Restricted Transfer”). The “Utility Control Threshold” is reached if a person, together with its FERC
Affiliates, directly or indirectly owns, controls or holds with power to vote 10% or more of our outstanding
voting securities, or if the applicable ownership percentages of us and any Company Public Utility
together equal or exceed 10%. A “Company Public Utility” is any of our direct or indirect subsidiaries that
is a public utility under the FPA, a “FERC Affiliate” is a person that is an affiliate, as defined in 18 C.F.R. §
35.36(a)(9), of another person before the effective date of the Restricted Transfer, and a “Secondary
Market Transaction” is a purchase or sale of our common stock by a third-party investor occurring on
Nasdaq or the New York Stock Exchange to which neither we nor any of our subsidiaries is a party, over
which neither we nor any of our subsidiaries has control and of which neither we nor any of our
subsidiaries would, in the ordinary course, have prior notice.
Unless the prior written consent of our board of directors is obtained, a purported Restricted Transfer will
not be effective to transfer record, beneficial, legal or any other ownership of the affected shares, we will
not register or give effect to any such transfer, and the transferee will not be entitled to any rights as a
shareholder with respect to those shares, including the right to vote or to receive dividends. In addition,
absent prior FERC authorization or an applicable blanket authorization, an investor and its FERC Affiliates
may be unable to acquire or vote a direct or indirect 10% or greater voting interest in us or to obtain the
right to appoint a non-independent member of our board of directors.
Warrants
Upon completion of this offering, the 2,253,942 unvested OpenAI Warrants will remain outstanding and
will become exercisable only upon satisfaction of the applicable vesting conditions. The OpenAI Warrants
that have vested, together with those vesting upon this offering, will be net exercised in connection with
this offering as described under “Certain Relationships and Related Party Transactions—Transactions
with OpenAI—OpenAI Warrants.” Because the exercise price is $0.01 per share and exercise may be on
a net basis, the total number of shares issuable upon exercise depends on the price or value of our
common stock at the time of exercise.
Preferred Stock
No shares of preferred stock will be issued or outstanding immediately following the completion of this
offering. Our Certificate of Formation will authorize our board of directors to establish one or more series
of preferred stock (including convertible preferred stock). Unless required by law or by the rules of an
applicable stock exchange, the authorized shares of preferred stock will be available for issuance without
further action by our shareholders.
Our board of directors will be able to determine, with respect to any series of preferred stock, the voting
powers (full or limited, or no voting powers), designations, preferences and relative, participating, optional
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or other special rights, and the qualifications, limitations, or restrictions thereof, of that series, including,
without limitation:
•the designation of the series;
•the number of shares of the series, which our board of directors may, except where otherwise
provided in the preferred stock designation, increase (but not above the total number of authorized
shares of the class) or decrease (but not below the number of shares then outstanding);
•whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;
•the dates at which dividends, if any, will be payable;
•the redemption rights and price or prices, if any, for shares of the series;
•the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the
series;
•the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of our affairs;
•whether the shares of the series will be convertible into shares of any other class or series, or any
other security, of us or any other corporation and, if so, the specification of the other class or series or
other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates
as of which the shares will be convertible, and all other terms and conditions upon which the
conversion may be made;
•restrictions on the issuance of shares of the same series or of any other class or series; and
•the voting rights, if any, of the holders of the series.
We will be able to issue a series of preferred stock that could, depending on the terms of the series,
impede or discourage an acquisition attempt or other transaction that some, or a majority, of the holders
of our common stock might believe to be in their best interests or in which the holders of our common
stock might receive a premium for their common stock over the market price of the common stock. In
addition, the issuance of preferred stock may adversely affect the rights of holders of our common stock
by restricting dividends on the common stock, diluting the voting power of the common stock, or
subordinating the liquidation rights of the common stock. As a result of these or other factors, the
issuance of preferred stock may have an adverse impact on the market price of our common stock.
Registration Rights
After the completion of this offering, the holders of up to shares of our common stock, or certain
transferees, including SoftBank, NVIDIA and OpenAI, will be entitled to certain rights with respect to the
registration of the offer and sale of shares of our common stock under the Securities Act. The Registration
Rights Holders will have the right to require us to register the resale of their shares of common stock or
securities convertible into or exchangeable for shares of our common stock and will also have customary
“piggyback” registration rights in connection with certain registrations of securities by us. In addition, the
Registration Rights Holders may require us to file and maintain an effective shelf registration statement
under the Securities Act. SoftBank’s registration rights will be pari passu with those of NVIDIA and
OpenAI, any cutbacks among SoftBank, NVIDIA and OpenAI will be made on a pro rata basis, and we will
not grant any of SoftBank, NVIDIA or OpenAI registration rights that are superior to those of either of the
other two. We will pay all expenses relating to such registrations, except that the Registration Rights
Holders will pay their own internal administrative and similar costs, the reasonable and documented fees
and disbursements of their counsel and underwriting discounts and commissions applicable to the sale of
their Registrable Securities. See “Certain Relationships and Related Party Transactions—Registration
Rights Agreement” for a more detailed description of these registration rights. If the offer and sale of these
shares of our common stock are registered, the shares will be freely tradable without restriction under the
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Securities Act, subject to Rule 144 limitations applicable to affiliates, and a large number of shares may
be sold into the public market.
Shareholders’ Agreement
We intend to enter into the Shareholders’ Agreement with SoftBank and OpenAI in connection with this
offering, which will govern certain aspects of the relationship between us, SoftBank and OpenAI following
the completion of this offering, including matters related to preemptive rights, rights related to the
composition of our board of directors and its committees, information and other rights, consultation rights
and consent rights, among other matters, including during periods in which SoftBank or its controlled
affiliates beneficially own less than a majority of our outstanding shares of common stock.
Pursuant to the Shareholders’ Agreement, we will be required to take all necessary action to cause our
board of directors and its committees to include director candidates designated by SoftBank in the slate of
director nominees recommended by the board of directors for election by our shareholders. SoftBank’s
designation rights will range from the ability to designate six candidates so long as they beneficially own
50% or more of our outstanding shares of common stock down to the ability to designate one candidate
so long as they beneficially own more than 5% of our outstanding shares of common stock. In addition,
SoftBank shall be entitled to proportional representation on each committee of our board of directors and
shall have an approval right over the composition of each committee so long as SoftBank and its
controlled affiliates beneficially own more than 50% of our outstanding shares of common stock. The
Shareholders’ Agreement also provides SoftBank with preemptive rights, registration rights, proportional
committee representation rights and certain consent and consultation rights. See “Certain Relationships
and Related Party Transactions—Shareholders’ Agreement” for a more detailed description of the terms
and provisions of the Shareholders’ Agreement. The form of the Shareholders’ Agreement is attached as
an exhibit to the registration statement of which this prospectus forms a part.
Anti-Takeover Effects of Certain Provisions of Our Certificate of Formation,
Bylaws, and Texas Law
Our Certificate of Formation and Bylaws will contain, and the TBOC contains, provisions, which are
summarized in the following paragraphs, that are intended to enhance the likelihood of continuity and
stability in the composition of our board of directors. These provisions are intended to avoid costly
takeover battles, reduce our vulnerability to a hostile change of control, and enhance the ability of our
board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us.
However, these provisions may have an anti-takeover effect and may delay, deter, or prevent a merger or
acquisition of us by means of a tender offer, a proxy contest, or other takeover attempt that a shareholder
might consider in its best interest, including those attempts that might result in a premium over the
prevailing market price for the shares of common stock held by shareholders.
Authorized but Unissued Capital Stock
Texas law does not require shareholder approval for any issuance of authorized shares. Accordingly, the
authorized but unissued shares of our common stock, Class N common stock and preferred stock are
available for future issuance without shareholder approval, subject to any limitations imposed by the
listing standards of Nasdaq and Nasdaq Texas and the agreements governing indebtedness we may
incur. The listing standards of Nasdaq and Nasdaq Texas, which would apply if and so long as our
common stock remains listed on Nasdaq and Nasdaq Texas, require shareholder approval of certain
issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of
shares of common stock. These additional shares may be issued in the future for a variety of corporate
finance transactions, acquisitions, and employee benefit plans. The existence of authorized but unissued
and unreserved common stock, Class N common stock and preferred stock could make it more difficult or
discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger, or
otherwise.
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Business Combinations
We will be subject to the affiliated business combinations provisions of Title 2, Chapter 21, Subchapter M
of the TBOC (Sections 21.601 through 21.610), which provides that a Texas corporation may not engage
in specified types of business combinations, including mergers, consolidations, and asset sales, with a
person, or an affiliate or associate of that person, who is an “affiliated shareholder,” for a period of three
years from the date that person became an affiliated shareholder. For purposes of this law, an “affiliated
shareholder” is generally defined as the holder of 20% or more of the corporation’s voting shares. These
provisions may have the effect of delaying, deferring, or preventing a change in control, and may
discourage bids for our common stock at a premium over its market price. The law’s prohibitions generally
do not apply if:
•the corporation’s board of directors approved the business combination or the transaction that
resulted in the shareholder becoming an affiliated shareholder before the affiliated shareholder’s
share acquisition date; or
•the business combination was approved by the affirmative vote of the holders of at least two-thirds of
the outstanding voting shares of the corporation not beneficially owned by the affiliated shareholder,
at a meeting of shareholders called for that purpose, not less than six months after the affiliated
shareholder’s share acquisition date.
Removal of Directors
Our shareholders may remove directors, with or without cause, by the affirmative vote of the holders of at
least a majority of the voting power of our outstanding shares entitled to vote in the election of directors,
provided that any director designated by SoftBank shall not be subject to removal without SoftBank's prior
written consent and any director designated by OpenAI shall not be subject to removal without OpenAI's
prior written consent, provided further that no such removal will limit or impair SoftBank and OpenAI’s
rights to designate candidates for election to our board of directors under the Shareholders’ Agreement.
No Cumulative Voting
Under Texas law, the right to vote cumulatively does not exist unless the certificate of formation
specifically authorizes cumulative voting. Our Certificate of Formation will not authorize cumulative voting.
Therefore, shareholders holding a majority in voting power of the shares of our capital stock entitled to
vote generally in the election of directors will be able to elect all of our directors.
Special Shareholder Meetings
Our Certificate of Formation will provide that special meetings of our shareholders may be called at any
time only by or at the direction of a majority of our entire board of directors, the chair of our board of
directors, our president or, from and after the Threshold Date, holders of outstanding shares of voting
stock having not less than 25% (or the highest percentage then permitted under the TBOC) of the voting
power of all outstanding shares of voting stock entitled to vote at the special meeting. If the TBOC is
amended to authorize corporate action further eliminating or limiting the ability of shareholders to call
special meetings, then the ability of shareholders to call special meetings shall be eliminated or limited to
the fullest extent permitted by the TBOC as so amended. Our Bylaws will prohibit the conduct of any
business at a special meeting other than the business specified in the notice of such meeting. Until the
Threshold Date, special meetings of our shareholders may also be called by holders of outstanding
shares of voting stock representing at least 20% of the voting power of all outstanding shares of voting
stock entitled to vote at the special meeting.
Requirements for Advance Notification of Director Nominations and Shareholder Proposals
Our Bylaws will establish advance notice procedures with respect to shareholder proposals and the
nomination of candidates for election as directors, other than nominations made by or at the direction of
our board of directors or a committee of our board of directors. In order for any matter to be “properly
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brought” before a meeting, a shareholder will have to comply with advance notice requirements and
provide us with certain information. Generally, to be timely, a shareholder’s notice must be received at our
principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date
of the immediately preceding annual meeting of shareholders. Our Bylaws will also specify requirements
as to the form and content of a shareholder’s notice. The advance notice, information, questionnaire and
other requirements in our Bylaws will not apply to any nomination made pursuant to the board designation
rights in the Shareholders’ Agreement for so long as that agreement remains in effect, and those rights
may be exercised without compliance with those requirements, so candidates designated by SoftBank
and OpenAI will not be subject to the procedures applicable to nominations by our other shareholders.
Our Bylaws will allow the chair of the meeting at a meeting of the shareholders to adopt rules and
regulations for the conduct of meetings which may have the effect of precluding the conduct of certain
business at a meeting if the rules and regulations are not followed. These provisions may also defer,
delay, or discourage a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s
own slate of directors or otherwise attempting to influence or obtain control of us.
Section 21.373 of the TBOC permits a “nationally listed corporation” (as defined by the TBOC) to
affirmatively elect to be governed by Section 21.373 under an amendment to the corporation’s governing
documents. If a nationally listed corporation elects to be governed by Section 21.373, a shareholder or
group of shareholders may submit a proposal on a matter to the shareholders of such corporation for
approval at a meeting of shareholders only if such shareholder or group of shareholders (i) holds the
lesser of (x) an amount of shares entitled to vote at such meeting with a market value of at least
$1,000,000 of us (determined as of the date of submission of the proposal) or (y) 3% of our voting shares
(as defined in the TBOC), (ii) satisfies certain continuous beneficial ownership requirements commencing
six months before the date of the meeting, (iii) continues to beneficially own such shares through the
ending at the conclusion of the meeting and (iv) solicits the holders of shares representing at least 67% of
the voting power of shares entitled to vote on the proposal and (v) satisfies all other applicable
requirements of, and complies with all applicable procedures set forth in the Bylaws. Section 21.373 does
not apply to director nominations or procedural resolutions ancillary to the conduct of the meeting, and our
Bylaws preserve the right of shareholders to request inclusion of proposals in our proxy statement
pursuant to Rule 14a-8 under the Exchange Act. Following the closing of this offering, we expect to be a
“nationally listed corporation” under Section 21.373 and we will adopt these requirements in our Bylaws
for submitting a shareholder proposal to go into effect immediately upon the completion of this offering
and the listing of our common stock on Nasdaq and Nasdaq Texas. We believe that the ownership and
solicitation requirements imposed by Section 21.373 of the TBOC will help ensure that proposals
submitted for shareholder action reflect the views of shareholders with meaningful, long-term interests in
us.
Shareholder Action by Written Consent
Our Certificate of Formation will provide that, from and after the Threshold Date, any action required or
permitted to be taken at an annual or special meeting of shareholders may be taken by written consent in
lieu of a meeting of shareholders only with the unanimous written consent of all holders of shares entitled
to vote on such action. Until the Threshold Date, any action required or permitted to be taken by our
shareholders may be authorized or taken by the written consent of the holders of outstanding shares of
voting stock having not less than the minimum voting power that would be necessary to authorize or take
such action at an annual or special meeting of the shareholders. As a result, following the Threshold Date,
a holder controlling a majority of our capital stock would not be able to amend our Bylaws or remove
directors without holding a meeting of our shareholders called in accordance with our Certificate of
Formation and/or Bylaws. Under the TBOC, shareholders of a Texas corporation may act by written
consent signed by less than all shareholders entitled to vote on the action only if the corporation’s
certificate of formation expressly authorizes action by less than unanimous written consent, and our
Certificate of Formation will contain that authorization until the Threshold Date.
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Amendment of Bylaws and Certificate of Formation Provisions
Our Certificate of Formation and Bylaws will provide that our board of directors is expressly empowered to
adopt, amend, alter or repeal, in whole or in part, our Bylaws both before and after the Threshold Date.
However, until the Threshold Date, our board may not adopt, amend or repeal certain specified Bylaw
provisions,including those relating to the board of directors,indemnification exclusive forum and
amendments, or adopt any Bylaw inconsistent with those provisions, except by resolution adopted by all
directors then serving on the board. Both before and after the Threshold Date, any adoption, amendment
or repeal of the Bylaws by shareholders will require the affirmative vote of holders of at least 66 2/3% of
the voting power of our then-outstanding voting stock, voting together as a single class, and from and
after the Threshold Date, those specified provisions may not be adopted, amended or repealed by
shareholders other than by that same 66 2/3% vote.
Our Certificate of Formation will require the approval of the holders of at least two-thirds of the voting
power of the outstanding shares of our capital stock in order to amend certain provisions of our Certificate
of Formation, including provisions relating to the Class N common stock, the restrictions on transfer of our
capital stock, our board of directors (including the classified board, the removal of directors and the filling
of board vacancies), advance notice to be given for director nominations, cumulative voting, shareholder
action by written consent and special meetings of shareholders, the ability to amend our Bylaws, anti-
takeover provisions, limitation of liability of directors and officers, indemnification, corporate opportunities,
and exclusive forum and waiver of jury trial, and any provision relating to the amendment of the foregoing.
For so long as any shares of Class N common stock remain outstanding, the affirmative vote or written
consent of the holders of a majority of the then-outstanding shares of Class N common stock, voting
separately as a class, will also be required to amend, alter, change, adopt or repeal, including by merger,
consolidation, reclassification or otherwise by operation of law, any provision of our Certificate of
Formation relating to the voting, conversion or other rights, powers, preferences, privileges or restrictions
of the Class N common stock, or that class-vote provision itself.
The foregoing provisions of our Certificate of Formation and Bylaws may have the effect of deterring
hostile takeovers or delaying or preventing changes in control of our management or of us, such as a
merger, reorganization, or tender offer. These provisions are intended to enhance the likelihood of
continued stability in the composition of our board of directors and its policies and to discourage certain
types of transactions that may involve an actual or threatened acquisition of our company. These
provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions
are also intended to discourage certain tactics that may be used in proxy fights. However, such provisions
could have the effect of discouraging others from making tender offers for our shares and, as a
consequence, they also may inhibit fluctuations in the market price of our shares that could result from
actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in
management.
Exclusive Forum
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Texas
Business Court, Third Business Court Division (the “Business Court”) (or, if the Business Court
determines that it lacks jurisdiction, the United States District Court for the Western District of Texas,
Austin Division, or, if that court lacks jurisdiction, the state district court of Travis County, Texas) shall, to
the fullest extent permitted by applicable law, be the sole and exclusive forum for any and all disputes,
claims, actions or proceedings, including: (a) any derivative action or proceeding brought on our behalf;
(b) any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former
director, officer or other employee, agent or shareholder to us or our shareholders, including a claim
alleging the aiding and abetting of such a breach of fiduciary duty; (c) any action asserting a claim arising
pursuant to any provision of the TBOC or our Certificate of Formation or Bylaws (as each may be
amended from time to time) or as to which the Business Court has jurisdiction; (d) any action to interpret,
apply, enforce or determine the validity of our Certificate of Formation or Bylaws (as either may be
amended from time to time); (e) any action asserting a claim related to or involving us that is governed by
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the internal affairs doctrine; (f) any action asserting an “internal entity claim” as that term is defined in
Section 2.115 of the TBOC; and (g) any other action within the jurisdiction of the Business Court, including
any claims within the supplemental jurisdiction of the Business Court. We believe that the Business Court
will provide an efficient forum for resolving corporate disputes, promote the consistent application of Texas
law, reduce litigation costs, and provide greater predictability in outcomes. This exclusive forum provision
does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other
claim for which the U.S. federal courts have exclusive jurisdiction. In addition, our Bylaws provide that, to
the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive
forum for the resolution of any complaint asserting a cause or causes of action arising under the
Securities Act unless we consent in writing to the selection of an alternative forum, and that this provision
may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such
complaint, and any other professional or entity whose profession gives authority to a statement made by
that person or entity and who has prepared or certified any part of the documents underlying the offering.
Our Certificate of Formation further provides that, to the fullest extent permitted by the TBOC and
applicable law, each person or entity that purchases, acquires, or continues to hold shares of our capital
stock shall be deemed to irrevocably and knowingly waive any right to a trial by jury for (a) any “internal
entity claim” as that term is defined in the TBOC as it presently exists or as it may be amended in the
future, and (b) any other claim subject to our exclusive forum provision. Section 2.115 of the TBOC
currently provides that an “internal entity claim” means a claim of any nature, including a derivative claim
in the right of an entity, that is based on, arises from, or relates to the “internal affairs” of the entity, as
defined by Section 1.105 of the TBOC. Section 1.105 of the TBOC, in turn, defines “internal affairs” as “(1)
the rights, powers, and duties of its governing authority, governing persons, officers, owners, and
members; and (2) matters relating to its membership or ownership interests.” The exclusive forum
provision described above includes, but is not limited to, any derivative action or proceeding brought on
behalf of us, any action asserting a claim for breach of a fiduciary duty by any current or former director,
officer, other employee, agent or shareholder, any other claim arising under the TBOC or within the
jurisdiction of the Texas Business Court, and any cause of action arising under the Securities Act. As a
result, we believe the jury trial waiver set forth in our Certificate of Formation will apply to claims brought
under Securities Act. Section 14 of the Securities Act provides that any condition, stipulation or provision
binding any person acquiring a security to waive compliance with any provision of the Securities Act or the
rules and regulations of the SEC is void, and it is unsettled whether a jury trial waiver would be held void
under Section 14 as applied to Securities Act claims. Additionally, while the exclusive forum provision
does not apply to claims brought under the Exchange Act, if such claims are determined to constitute
“internal entity claims” under the TBOC, the jury trial waiver in our Certificate of Formation would apply to
such claims.
To our knowledge, the scope of such provision, including its applicability to claims arising under the
federal securities laws, has not been finally adjudicated by any applicable federal or state court. At all
times, we intend to enforce the waiver to the fullest extent permitted by then-existing applicable law.
We believe the foregoing provisions of our Certificate of Formation and/or Bylaws as authorized by the
TBOC are enforceable and benefit us and our shareholders by providing increased consistency in the
application of Texas law with respect to the types of lawsuits to which they apply. However, there can be
no assurance that these provisions will be interpreted in the manner that we expect. See “Risk Factors—
Risks Related to Our Common Stock and This Offering—Our Bylaws will provide that the Texas Business
Court, Third Business Court Division will be the sole and exclusive forum for substantially all disputes
between us and our shareholders (excluding claims under the Exchange Act), which could limit our
shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or
employees.”
Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be
deemed to have notice of and consented to the exclusive forum provision and the waiver of jury trial
provision, in each case, as set forth in our Certificate of Formation and Bylaws, as applicable. However,
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these provisions may not, and do not, waive our compliance with our obligations under the federal
securities laws and the rules and regulations thereunder.
Conflicts of Interest
Texas law permits corporations to adopt provisions renouncing any interest or expectancy in certain
opportunities that are presented to the corporation or its officers, directors, or shareholders. Our
Certificate of Formation will provide that, to the fullest extent permitted by the TBOC, we renounce, on
behalf of ourselves and our subsidiaries, any interest or expectancy in, and waive any claim that we or
any of our subsidiaries was entitled to be offered an opportunity to participate in, any Covered
Opportunity. A “Covered Opportunity” is any matter, transaction or other opportunity or interest presented
to, acquired, created or developed by, or otherwise coming into the possession of, any Identified Person,
unless the opportunity is expressly offered in writing to such Identified Person solely in that person’s
capacity as our director or officer. An “Identified Person” is (i) any of our directors, officers, board
observers or board attendees, or any director, officer, board observer or board attendee of any of our
subsidiaries, whether or not such person is also an employee of ours or of any of our subsidiaries, (ii)
SoftBank and each of its affiliates, and (iii) OpenAI and each of its affiliates. As a result of this
renunciation, no Identified Person will have any duty to present any Covered Opportunity to us, each
Identified Person will have the right to hold and exploit any Covered Opportunity for its own account or to
transfer it to another person, and no Identified Person will be liable to us or our shareholders for breach of
any fiduciary or other duty by reason of not presenting, or by pursuing, acquiring or transferring, any
Covered Opportunity. Accordingly, SoftBank and its affiliates will be permitted to engage in the same or
similar businesses as we do, to do business with our customers and suppliers, and to employ or
otherwise engage our officers and employees, and will be able to compete with us and pursue business
opportunities that we would otherwise be able to pursue.
Limitations on Liability and Indemnification of Officers and Directors
The TBOC authorizes corporations to limit or eliminate the personal liability of directors and officers to
corporations and their shareholders for monetary damages for breaches of directors’ and officers’
fiduciary duties, subject to certain exceptions. Our Certificate of Formation will include a provision that
eliminates the personal liability of directors and officers for monetary damages for any breach of fiduciary
duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not
permitted under the TBOC. The effect of these provisions will be to eliminate, other than limited
exceptions, the rights of us and our shareholders, through shareholders’ derivative suits on our behalf, to
recover monetary damages from a director for breach of fiduciary duty as a director or officer, including
breaches resulting from grossly negligent behavior. However, exculpation will not apply to any director or
officer if such person is found liable under applicable law for: (i) a breach of the director’s or officer’s duty
of loyalty to our company or our shareholders; (ii) an act or omission not in good faith that constitutes a
breach of duty to the corporation or that involves intentional misconduct or a knowing violation of law; (iii)
a transaction from which such person received an improper benefit, regardless of whether the benefit
resulted from an action taken within the scope of such person’s duties; or (iv) an act or omission for which
the liability of the director or officer is expressly provided by an applicable statute. Any amendment,
modification, or repeal of the foregoing provisions will be prospective only (except to the extent such
amendment or change in law permits us to further limit or eliminate the liability of directors or officers) and
will not adversely affect any right or protection of a director or officer existing at the time of such
amendment, modification, or repeal with respect to any act or omission occurring prior thereto.
Our Bylaws will provide generally that we must indemnify and advance expenses to our directors and
officers to the fullest extent permitted by applicable law, and our Certificate of Formation will authorize us
to provide rights to indemnification and advancement of expenses to our current and former directors,
officers, employees and agents to the fullest extent permitted by the TBOC. We also have entered into
separate indemnification agreements with each of our directors and executive officers and will be
expressly authorized to carry directors’ and officers’ liability insurance providing indemnification for our
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directors, officers, and certain employees for some liabilities. We believe that these indemnification and
advancement provisions and insurance will be useful to attract and retain qualified directors and officers.
These limitation of liability, indemnification, and advancement provisions may discourage shareholders
from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions also may have
the effect of reducing the likelihood of derivative litigation against directors and officers, even though such
an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment
may be adversely affected to the extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions.
There is currently no pending material litigation or proceeding involving any of our directors, officers, or
employees for which indemnification is sought.
Dissenters’ Rights of Appraisal and Payment
Under the TBOC, with certain exceptions, our shareholders will have appraisal rights in connection with a
merger, a sale of all or substantially all of our assets not made in the usual and regular course of
business, an interest exchange, or a conversion. Pursuant to Section 10.354 of the TBOC, shareholders
who properly request and perfect appraisal rights will have the right to receive payment of the fair value of
their shares as agreed to between the shareholder and us or, if we are unable to reach agreement, as
determined by a court of appropriate jurisdiction in the State of Texas, including the Business Court if it
has jurisdiction.
Shareholders’ Derivative Actions
Under the TBOC, any of our shareholders may bring an action in our name to procure a judgment in our
favor, also known as a derivative action, provided that the shareholder bringing the action (i) is a holder of
our shares at the time of the transaction to which the action relates or such shareholder’s shares
thereafter devolved by operation of law, (ii) fairly and adequately represents our interests in enforcing our
rights, and (iii) complies with the demand requirements under the applicable provisions of the TBOC. The
TBOC and our governing documents include certain provisions which may limit our shareholders’ ability to
bring certain derivative claims against our officers and directors. For example, the TBOC permits
corporations to request a court, at the start of a transaction (including related party transactions) or
investigation of a derivative claim, to judicially determine the independence and disinterestedness of
directors on special committees reviewing transactions or individuals on panels reviewing derivative
claims.
Section 21.552 of the TBOC also empowers corporations with common shares listed on a national
securities exchange and corporations that have 500 or more shareholders that affirmatively elect to be
governed by Section 21.419 to establish a required ownership threshold to institute a derivative
proceeding, provided that such required ownership threshold does not exceed 3% of the outstanding
shares of the applicable corporation. Our Bylaws establish a 3% ownership threshold that a shareholder
must meet to institute a derivative claim against us.
Additionally, Section 21.419 of the TBOC sets forth certain presumptions of good faith for the benefit of a
corporation’s directors and officers with respect to their compliance with their respective duties to the
corporation, including the duty of care and duty of loyalty as those duties pertain to transactions with
interested persons. Specifically, Section 21.419 provides that, in taking or declining to take any action on
matters of our business, a director or officer is presumed to have acted (i) in good faith, (ii) on an informed
basis, (iii) in furtherance of the interests of the corporation and (iv) in obedience to the law and the
corporation’s governing documents. Section 21.419 applies to a corporation that has a class or series of
voting shares listed on a national securities exchange or includes a statement affirmatively electing to be
governed by this section of the TBOC in its governing documents. Under Section 21.419, neither a
corporation nor any of its shareholders has any cause of action against a director or officer as a result of
any act or omission in such person’s official capacity, unless the claimant rebuts one or more of these
presumptions and proves a breach of duty involving fraud, intentional misconduct, an ultra vires act or a
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knowing violation of law. Our Bylaws include a statement affirmatively electing to be governed by Section
21.419 of the TBOC and following the completion of this offering, we expect to be a corporation with a
class or series of voting shares listed on a national securities exchange such that Section 21.419 will
apply to us. We believe that Section 21.419, together with the related provisions in our governing
documents, will help protect our directors and officers who act in good faith from unwarranted lawsuits,
reduce litigation costs, and provide our directors and officers with greater freedom to make decisions that
they believe to be in our best interests and those of our shareholders.
Stock Exchange Listing
We have applied to list our common stock on Nasdaq and Nasdaq Texas under the symbol “SBE.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock and Class N common stock is Fidelity Stock
Transfer Solutions LLC. The transfer agent and registrar’s address is 245 Summer Street, Boston,
Massachusetts 02210, and its telephone number is (617) 563-5800.
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SHARES ELIGIBLE FOR FUTURE SALE
Immediately prior to this offering, there was no public market for our common stock, and we cannot
predict the effect, if any, that market sales of our common stock or the availability of our common stock for
sale will have on the market price of our common stock prevailing from time to time. Future sales of
substantial amounts of common stock in the public market, or the perception that such sales may occur,
could adversely affect the market price of our common stock. Although we have applied to have our
common stock listed on Nasdaq and Nasdaq Texas, we cannot assure you that there will be an active
public market for our common stock.
Upon the completion of this offering, we will have outstanding an aggregate of shares of
common stock, after giving effect to the Stock Split and OpenAI Warrant Exercises and assuming the
issuance of shares of common stock offered by us in this offering. Of these shares, all shares
sold in this offering will be freely tradable without restriction or further registration under the Securities Act,
except for any shares purchased by our “affiliates,” as that term is defined in Rule 144 under the
Securities Act, whose sales would be subject to the Rule 144 resale restrictions described below, other
than the holding period requirement.
The remaining shares of our common stock outstanding will be “restricted securities,” as that term is
defined in Rule 144 under the Securities Act, and include the shares distributed to the limited partners of
Energy Global in the Closing Distribution. These restricted securities are eligible for public sale only if they
are registered under the Securities Act or if they qualify for an exemption from registration under
Rules 144 or 701 under the Securities Act, which are summarized below. Shares issuable upon future
exercise of the unvested OpenAI Warrants are not outstanding until exercise; see “Certain Relationships
and Related Party Transactions—Transactions with OpenAI—OpenAI Warrants” for their treatment. The
shares distributed in the Closing Distribution will be restricted securities.
These remaining shares will generally become available for sale in the public market as follows:
•no restricted shares will be eligible for immediate sale upon the completion of this offering;
•up to restricted shares will be eligible for sale under Rule 144 or Rule 701, subject to the
volume limitations, manner of sale and notice provisions described below under “Rule 144,” upon
expiration of the lock-up agreements 180 days after the date of this prospectus, subject to early
termination or waiver as described under “Underwriting,” including the shares distributed to the limited
partners of Energy Global in the Closing Distribution;
•the remainder of the restricted shares will be eligible for sale from time to time thereafter upon
expiration of their respective holding periods under Rule 144, but could be sold earlier if the holders
exercise any available registration rights, as described below under “Registration Rights”; and
•the shares of Class N common stock issued to NVIDIA in the Concurrent Private Placement and
delivered to NVIDIA upon settlement of the Prepaid Forward Contract are restricted securities bearing
customary restrictive legends, are subject to the applicable lock-up arrangements, and will be eligible
for resale only pursuant to an effective registration statement or an available exemption; each share
of Class N common stock is convertible into one share of common stock as described under
“Description of Capital Stock.”
Lock-Up Agreements
See “Underwriting” for a description of the lock-up and market standoff agreements applicable to our
capital stock.
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Registration Rights
See the section titled “Certain Relationships and Related Party Transactions—Registration Rights
Agreement” for a description of these registration rights. If the offer and sale of these shares of our
common stock are registered, the shares will be freely tradable without restriction under the Securities
Act, subject to the Rule 144 limitations applicable to affiliates, and a large number of shares may be sold
into the public market.
Rule 144
Affiliate Resales of Restricted Securities
In general, beginning 90 days after the effective date of the registration statement of which this
prospectus is a part, a person who is an affiliate of ours, or who was an affiliate at any time during the
90 days before a sale, who has beneficially owned shares of our common stock for at least 180 days
would be entitled to sell in “broker’s transactions” or certain “riskless principal transactions” or to market
makers, a number of shares within any three-month period that does not exceed the greater of:
•1% of the number of shares of our common stock then outstanding; and
•the average weekly trading volume in our common stock on Nasdaq and Nasdaq Texas during the
four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
Affiliate resales under Rule 144 are also subject to the availability of current public information about us.
In addition, if the number of shares being sold under Rule 144 by an affiliate during any three-month
period exceeds 5,000 shares or has an aggregate sale price in excess of $50,000, the seller must file a
notice on Form 144 with the SEC and the Nasdaq concurrently with either the placing of a sale order with
the broker or the execution directly with a market maker.
Non-Affiliate Resales of Restricted Securities
Under Rule 144, a person who is not an affiliate of ours at the time of sale, and has not been an affiliate at
any time during the 90 days preceding a sale, and who has beneficially owned shares of our common
stock for at least six months but less than a year, is entitled to sell such shares subject only to the
availability of current public information about us. If such person has held our shares for at least one year,
such person can resell without regard to any Rule 144 restrictions, including the 90-day public company
requirement and the current public information requirement.
Non-affiliate resales are not subject to the manner of sale, volume limitation or notice filing provisions of
Rule 144.
Rule 701
In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who
purchases shares from us in connection with a compensatory stock or option plan or other written
agreement before the effective date of the registration statement of which this prospectus forms a part is
entitled to sell such shares 90 days after such effective date in reliance on Rule 144. Our affiliates can
resell shares in reliance on Rule 144 without having to comply with the holding period requirement, and
non-affiliates of the issuer can resell shares in reliance on Rule 144 without having to comply with the
current public information and holding period requirements.
The SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it
becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon
exercise of such options, including exercises after an issuer becomes subject to the reporting
requirements of the Exchange Act.
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Equity Plans
We intend to file one or more registration statements on Form S-8 under the Securities Act to register the
offer and sale of all shares of common stock issued or issuable under our 2026 Plan and ESPP. We
expect to file the registration statement covering shares offered pursuant to our 2026 Plan and ESPP
shortly after the date of this prospectus, permitting the resale of such shares by non-affiliates in the public
market without restriction under the Securities Act and the sale by affiliates in the public market subject to
compliance with the resale provisions of Rule 144. See “Executive Compensation” for a description of our
equity compensation plans.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK
The following discussion is a summary of the material U.S. federal income tax consequences to non-U.S.
holders (as defined below) of the ownership and disposition of our common stock issued pursuant to this
offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other
U.S. federal tax laws, such as estate and gift tax laws and any applicable state, local or non-U.S. tax
laws are not discussed. This discussion is based on the Code, Treasury regulations promulgated under
the Code, judicial decisions and published rulings and administrative pronouncements of the IRS in each
case in effect as of the date of this prospectus. These authorities may change or be subject to differing
interpretations. Any such change or differing interpretation may be applied retroactively in a manner that
could adversely affect a non-U.S. holder of our common stock. We have not sought and will not seek any
rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a
court will not take a contrary position to that discussed below regarding the tax consequences of the
ownership and disposition of our common stock. This discussion is limited to Non-U.S. Holders that hold
our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally,
property held for investment). This discussion does not address all U.S. federal income tax consequences
relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare
contribution tax on net investment income or any minimum tax consequences. In addition, it does not
address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:
•U.S. expatriates and former citizens or long-term residents of the United States;
•persons holding our common stock as part of a straddle, or other risk reduction strategy or as part of
a conversion transaction or other integrated investment;
•banks, insurance companies and other financial institutions;
•brokers, dealers, or traders in securities;
•“controlled foreign corporations,” “foreign controlled foreign corporations,” “passive foreign investment
companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
•entities or arrangements treated as partnerships for U.S. federal income tax purposes and other pass-
through entities (and investors in such entities);
•tax-exempt organizations or governmental organizations;
•persons deemed to sell our common stock under the constructive sale provisions of the Code;
•persons who hold or receive our common stock pursuant to the exercise of any employee stock
option or otherwise as compensation;
•tax-qualified retirement plans;
•“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the
interests of which are held by qualified foreign pension funds; and
•persons subject to special tax accounting rules as a result of any item of gross income with respect to
the common stock being taken into account in an applicable financial statement.
If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax
treatment of a partner in the partnership will depend on the status of the partner, the activities of the
partnership and certain determinations made at the partner level. Accordingly, partnerships holding our
common stock and the partners in such partnerships should consult their tax advisors regarding the U.S.
federal income tax consequences to them.
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This discussion is for informational purposes only and is not tax advice. Investors should consult their tax
advisors with respect to the application of the U.S. federal income tax laws to their particular situations as
well as any tax consequences of the ownership and disposition of our common stock arising under the
U.S. federal estate or gift tax laws or under the laws of any state, local, or non-U.S. taxing jurisdiction or
under any applicable income tax treaty.
Definition of a Non-U.S. Holder
For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is
neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S.
person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:
•an individual who is a citizen or resident of the United States;
•a corporation created or organized under the laws of the United States, any state thereof, or the
District of Columbia;
•an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more
“United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid
election in effect to be treated as a United States person for U.S. federal income tax purposes.
Distributions
As described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends
to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or
property on our common stock, such distributions will constitute dividends for U.S. federal income tax
purposes to the extent paid from our current or accumulated earnings and profits, as determined under
U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes
will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax
basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be
treated as described below under “— Sale or Other Taxable Disposition.”
Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder of
our common stock will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of
the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S.
Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying
qualification for the lower treaty rate). A Non-U.S. Holder that does not timely furnish the required
documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts
withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult
their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a
trade or business within the United States (and, if required by an applicable income tax treaty, the Non-
U.S. Holder maintains a permanent establishment or fixed base in the United States to which such
dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax
described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding
agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S.
Holder’s conduct of a trade or business within the United States.
Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis
at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be
subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax
treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should
consult their tax advisors regarding any applicable tax treaties that may provide for different rules.
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Sale or Other Taxable Disposition
Subject to the discussion below on information reporting, backup withholding and foreign accounts, a
Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other
taxable disposition of our common stock unless:
•the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the
United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a
permanent establishment or fixed base in the United States to which such gain is attributable);
•the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or
more during the taxable year of the disposition and certain other requirements are met; or
•our common stock constitutes a U.S. real property interest (a “USRPI”), by reason of our status as a
U.S. real property holding corporation (“USRPHC”), for U.S. federal income tax purposes.
Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net
income basis at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also
may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable
income tax treaty) on such effectively connected gain, as adjusted for certain items.
A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at
a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the
sale or other taxable disposition of our common stock, which may be offset by U.S. source capital losses
of the Non-U.S. Holder (even though the individual is not considered a resident of the United States),
provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
With respect to the third bullet point above, we believe we currently are not a USRPHC. Because the
determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs
relative to the fair market value of our non-U.S. real property interests and our other business assets,
there can be no assurance we currently are not a USRPHC and it is possible we may become one in the
future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable
disposition by a Non-U.S. Holder of our common stock will not be subject to U.S. federal income tax if our
common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established
securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or less of our
common stock throughout the shorter of the five-year period ending on the date of the sale or other
taxable disposition or the Non-U.S. Holder’s holding period.
Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties
that may provide for different rules.
Information Reporting and Backup Withholding
Payments of dividends on our common stock will not be subject to backup withholding, provided the
applicable withholding agent does not have actual knowledge or reason to know the holder is a United
States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form
W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns
are required to be filed with the IRS in connection with any distributions on our common stock paid to the
Non-U.S. Holder, regardless of whether such distributions constitute dividends or whether any tax was
actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within
the United States or conducted through certain U.S.-related brokers generally will not be subject to
backup withholding or information reporting, if the applicable withholding agent receives the certification
described above and does not have actual knowledge or reason to know that such holder is a United
States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of our
common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to
backup withholding or information reporting.
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Copies of information returns that are filed with the IRS may also be made available under the provisions
of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder
resides or is established.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules
may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability,
provided the required information is timely furnished to the IRS.
Additional Withholding Tax on Payments Made to Foreign Accounts
Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such sections commonly
referred to as the Foreign Account Tax Compliance Act, or “FATCA”) on certain types of payments made
to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax
may be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below)
gross proceeds from the sale or other disposition of, our common stock paid to a “foreign financial
institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial
institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either
certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes
identifying information regarding each substantial United States owner, or (3) the foreign financial
institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee
is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it
must enter into an agreement with the U.S. Department of the Treasury requiring, among other things,
that it undertake to identify accounts held by certain “specified United States persons” or “United States-
owned foreign entities” (each as defined in the Code), annually report certain information about such
accounts and withhold 30% on certain payments to non-compliant foreign financial institutions and certain
other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules.
Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA
generally applies to payments of dividends on our common stock. While withholding under FATCA would
have applied also to payments of gross proceeds from the sale or other disposition of stock on or after
January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross
proceeds entirely. The preamble to the proposed Treasury Regulations provides that taxpayers generally
may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.
Prospective investors should consult their tax advisors regarding the potential application of withholding
under FATCA to their investment in our common stock.
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UNDERWRITING
We are offering the shares of our common stock described in this prospectus through a number of
underwriters. J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are
acting as joint book-running managers of the offering and as representatives of the underwriters. We have
entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the
underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally
agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth
on the cover page of this prospectus, the number of shares of our common stock listed next to its name in
the following table:
Name | Number of Shares | |
J.P. Morgan Securities LLC ............................................................................................................ | ||
Goldman Sachs & Co. LLC ............................................................................................................. | ||
Morgan Stanley & Co. LLC ............................................................................................................. | ||
Citigroup Global Markets Inc. ......................................................................................................... | ||
Mizuho Securities USA LLC ........................................................................................................... | ||
BNP Paribas Securities Corp. ......................................................................................................... | ||
Jefferies LLC ..................................................................................................................................... | ||
Natixis Securities Americas LLC .................................................................................................... | ||
RBC Capital Markets, LLC ............................................................................................................. | ||
Nomura Securities International, Inc. ............................................................................................. | ||
WR Securities, LLC .......................................................................................................................... | ||
Huntington Securities, Inc. ............................................................................................................... | ||
ING Financial Markets LLC ............................................................................................................ | ||
MUFG Securities Americas Inc. ..................................................................................................... | ||
Santander US Capital Markets LLC .............................................................................................. | ||
SMBC Nikko Securities America, Inc. ........................................................................................... | ||
BTIG, LLC .......................................................................................................................................... | ||
Daiwa Capital Markets America Inc. ............................................................................................. | ||
Newmark Securities, LLC ................................................................................................................ | ||
Raymond James & Associates, Inc. .............................................................................................. | ||
Rosenblatt Securities Inc. ............................................................................................................... | ||
Total ..................................................................................................................................................... | ||
The underwriters are committed to purchase all the shares of our common stock offered by us if they
purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may also be increased or the offering may be
terminated.
The underwriters propose to offer the shares of our common stock directly to the public at the initial public
offering price set forth on the cover page of this prospectus and to certain dealers at that price less a
concession not in excess of $ per share. Any such dealers may resell shares to certain other
brokers or dealers at a discount of up to $ per share from the initial public offering price. After the
initial offering of the shares to the public, if all of the shares of our common stock are not sold at the initial
public offering price, the underwriters may change the offering price and the other selling terms. Sales of
any shares of our common stock made outside of the United States may be made by affiliates of the
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underwriters. The offering of the shares by the underwriters is subject to receipt and acceptance and
subject to the underwriters’ right to reject any order in whole or in part.
The underwriters have an option to buy up to additional shares of our common stock from us to
cover sales of shares by the underwriters which exceed the number of shares specified in the table
above. The underwriters have 30 days from the date of this prospectus to exercise this option to purchase
additional shares. If any shares are purchased with this option to purchase additional shares, the
underwriters will purchase shares in approximately the same proportion as shown in the table above. If
any additional shares of our common stock are purchased, the underwriters will offer the additional
shares on the same terms as those on which the shares are being offered.
The underwriting fee is equal to the public offering price per share of our common stock less the amount
paid by the underwriters to us per share of our common stock. The underwriting fee is $ per share.
The following table shows the per share and total underwriting discounts and commissions to be paid to
the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase
additional shares.
Without option to purchase additional shares exercise | With full option to purchase additional shares exercise | ||
Per Share ................................................................................................................. | $ | $ | |
Total ........................................................................................................................... | $ | $ | |
We estimate that the total expenses of this offering, including registration, filing and listing fees, printing
fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will
be approximately $ . We have agreed to reimburse the underwriters for up to $ of
expenses relating to the clearance of this offering with the Financial Industry Regulatory Authority.
A prospectus in electronic format may be made available on the websites maintained by one or more
underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to
allocate a number of shares to underwriters and selling group members for sale to their online brokerage
account holders. Internet distributions will be allocated by the representatives to underwriters and selling
group members that may make Internet distributions on the same basis as other allocations.
We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Securities and
Exchange Commission a registration statement under the Securities Act relating to, any shares of our
common stock or securities convertible into or exercisable or exchangeable for any shares of our
common stock, or publicly disclose the intention to make any offer, sale, pledge, loan, disposition or filing,
or (ii) enter into any hedging, swap or other arrangement that transfers all or a portion of the economic
consequences associated with the ownership of any shares of our common stock or any such other
securities (regardless of whether any of these transactions are to be settled by the delivery of shares of
our common stock or such other securities, in cash or otherwise), in each case without the prior written
consent of J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC for a
period of 180 days after the date of this prospectus, other than the shares of our common stock to be sold
in this offering.
The restrictions on our actions, as described above, do not apply to certain transactions, including (i) the
issuance of shares of our common stock or securities convertible into or exercisable for shares of our
common stock pursuant to the conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options (including net exercise) or the settlement of RSUs (including net
settlement), in each case outstanding on the date of the underwriting agreement and described in this
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prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, or other equity awards and
the issuance of shares of our common stock or securities convertible into or exercisable or exchangeable
for shares of our common stock (whether upon the exercise of stock options or otherwise) to our
employees, officers, directors, advisors, or consultants pursuant to the terms of an equity compensation
plan in effect as of the closing of this offering and described in this prospectus, or (iii) our filing of any
registration statement on Form S-8 relating to securities granted or to be granted pursuant to any plan in
effect on the date of the underwriting agreement and described in this prospectus or any assumed benefit
plan pursuant to an acquisition or similar strategic transaction.
Our directors and executive officers, and substantially all of our shareholders, (such persons, the “lock-up
parties”) have entered into lock-up agreements with the underwriters prior to the commencement of this
offering pursuant to which each lock-up party, with limited exceptions, for a period of 180 days after the
date of this prospectus (such period, the “restricted period”), may not (and may not cause any of their
direct or indirect affiliates to), without the prior written consent of J.P. Morgan Securities LLC, Goldman
Sachs & Co. LLC and Morgan Stanley & Co. LLC (except as otherwise described below), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any shares of our common stock or any securities convertible into or exercisable or
exchangeable for our common stock (including, without limitation, common stock or such other securities
which may be deemed to be beneficially owned by such lock-up parties in accordance with the rules and
regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant
(collectively with the common stock, the “lock-up securities”)), (2) enter into any hedging, swap or other
agreement or transaction that transfers, in whole or in part, any of the economic consequences of
ownership of the lock-up securities, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of lock-up securities, in cash or otherwise, (3) make any demand for, or exercise
any right with respect to, the registration of any lock-up securities, or (4) publicly disclose the intention to
do any of the foregoing. Such persons or entities have further acknowledged that these undertakings
preclude them from engaging in any hedging or other transactions or arrangements (including, without
limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination
thereof, forward, swap or any other derivative transaction or instrument, however described or defined)
designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition
or transfer (by any person or entity, whether or not a signatory to such agreement) of any economic
consequences of ownership, in whole or in part, directly or indirectly, of any lock-up securities, whether
any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery
of lock-up securities, in cash or otherwise.
Notwithstanding the restrictions described above and contained in the lock-up agreements between the
underwriters and the lock-up parties, the lock-up parties may:
(a)transfer or dispose of the lock-up party’s lock-up securities as a bona fide gift or gifts, including
without limitation to charitable organizations or educational institutions, or for bona fide estate
planning purposes,
(b)transfer or dispose of the lock-up party’s lock-up securities by will or intestacy,
(c)transfer or dispose of the lock-up party’s lock-up securities to any trust for the direct or indirect benefit
of such lock-up party or the immediate family of such lock-up party, or if such lock-up party is a trust,
to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust,
(d)transfers or dispose of the lock-up party’s lock-up securities to a partnership, limited liability company
or other entity of which such lock-up party and the immediate family of such lock-up party are the
legal and beneficial owner of all of the outstanding equity securities or similar interests,
(e)transfer or dispose of the lock-up party’s lock-up securities to a nominee or custodian of a person or
entity to whom a disposition or transfer would be permissible under clauses (a) through (d) above
(and, in the case of SoftBank, also clause (g) below),
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(f)if such lock-up party is a corporation, partnership, limited liability company, trust or other business
entity, transfer or dispose of the lock-up party’s lock-up securities (A) to another corporation,
partnership, limited liability company, trust or other business entity that is an affiliate (as defined in
Rule 405 promulgated under the Securities Act) of such lock-up party, or to any investment fund or
other entity controlling, controlled by, managing or managed by or under common control with such
lock-up party or affiliates of such lock-up party (including, for the avoidance of doubt, where such
lock-up party is a partnership, to its general partner or a successor partnership or fund, or any other
funds managed by such partnership), or (B) as part of a distribution to any direct or indirect members,
partners or shareholders of such lock-up party,
(g)transfer or dispose of the lock-up party’s lock-up securities by operation of law, such as pursuant to a
qualified domestic order, divorce settlement, divorce decree or separation agreement or other final
order of a court or regulatory agency or to comply with any regulations related to a lock-up party,
(h)transfer or dispose of the lock-up party’s lock-up securities to us from an employee, independent
contractor or service provider upon death, disability, termination of employment or cessation of
services, in each case, of such employee, independent contractor or service provider,
(i)transfer or dispose of the lock-up party’s lock-up securities as part of a transaction related to such
lock-up party’s lock-up securities that are acquired in this offering or that are acquired in open market
transactions after the closing date for this offering or to us pursuant to any contractual arrangement
that provides us with a right to purchase lock-up securities,
(j)transfer or dispose of the lock-up party’s lock-up securities to us in connection with (A) the vesting,
settlement, or exercise of RSUs, options, warrants or other rights to purchase shares of common
stock (including, in each case, by way of “net” or “cashless” exercise), including for the payment of
exercise price and tax and remittance payments due as a result of the vesting, settlement, or exercise
of such restricted stock units, options, warrants or rights, provided that any such shares of common
stock received upon such exercise, vesting or settlement shall be subject to the terms of the lock-up
agreement, and provided further that any such restricted stock units, options, warrants or rights are
held by such lock-up party pursuant to an agreement or equity awards granted under a stock
incentive plan or other equity award plan, each such agreement or plan which is described in this
prospectus, (B) the repurchase of shares of common stock issued pursuant to equity awards granted
under a stock incentive plan or other equity award plan, limited only to a plan that is described in this
prospectus, or (C) a right of first refusal that we have with respect to transfers of such shares or
securities;
(k)transfer or dispose of the lock-up party’s lock-up securities pursuant to a bona fide third-party tender
offer, merger, consolidation or other similar transaction that is approved by our board of directors and
made to all holders of our capital stock involving a Change of Control (as defined in the lock-up
agreement) of the Company in one transaction or a series of related transactions, to a person or
group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of
affiliated persons would hold at least a majority of our outstanding voting securities (or the surviving
entity); provided that in the event that such tender offer, merger, consolidation or other similar
transaction is not completed, such lock-up party’s lock-up securities shall remain subject to the
provisions of the lock-up agreement;
(l)transfer or dispose of the lock-up party’s lock-up securities in connection with any reclassification or
conversion of the shares of common stock; provided that any shares of common stock received upon
such conversion or reclassification will be subject to the restrictions set forth in the lock-up
agreement; or
(m)transfer or dispose of the lock-up party’s lock-up securities to one or more donor-advised funds as
described in Section 4966(d)(2) of the Code, or to any similar charitable giving vehicle;
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(n)exercise outstanding options, settle restricted stock units or other equity awards or exercise warrants
pursuant to plans or any other equity compensation arrangements described in this prospectus;
provided that any lock-up securities received upon such exercise, vesting or settlement shall be
subject to the terms of the lock-up agreement;
(o)convert outstanding preferred units, warrants to acquire preferred units or convertible securities into
shares of common stock or warrants to acquire shares of common stock; provided that any such
shares of common stock or warrants received upon such conversion shall be subject to the terms of
the lock-up agreement;
(p)establish trading plans pursuant to Rule 10b5-1 under the Exchange Act for the transfer or disposition
of shares of lock-up securities; provided that (1) such plans do not provide for the transfer or
disposition of lock-up securities during the restricted period and (2) no filing by any party under the
Exchange Act or other public announcement shall be required or made voluntarily in connection with
such trading plan, and any required filing under the Exchange Act made by any person regarding the
establishment of such plan during the restricted period shall include a statement that such lock-up
party is not permitted to transfer, sell or otherwise dispose of securities under such plan during the
restricted period in contravention of the lock-up agreement; and
(q)make any demand or requests for, exercise any right with respect to, or take any action in preparation
of the registration by us under the Securities Act of such lock-up party’s lock-up securities or other
securities; provided that (i) no public filing with the SEC or any other public announcement may be
made during the restricted period in relation to such registration, (ii) J.P. Morgan Securities LLC,
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC must have received prior written notice
from us and/or such lock-up party of a confidential submission of a registration statement with the
SEC during the restricted period at least five business days prior to such submission, and (iii) no lock-
up securities or other securities may be sold, distributed or exchanged prior to the expiration of the
restricted period.
In addition, SoftBank, NVIDIA and each of their respective affiliates may:
(a)take any action that is necessary or appropriate for the purposes of pledging, charging or granting any
lien, mortgage or other security interest (the “Pledge”) in respect of any of the lock-up party’s lock-up
securities to or for the benefit of lenders or finance counterparties (as well as any security agent,
securities intermediary and/or custodian) (collectively, the “Pledgees”) in connection with a bona fide
loan (including any margin loan) or other financing transaction provided to the lock-up party and/or its
affiliates (a “Financing Transaction”); provided that the terms of such Pledge require that, to the extent
the Pledgees enforce their security interest during the term of the restricted period by way of sale,
transfer, appropriation or other disposition, each purchaser or transferee (the “Purchaser”) shall
execute and deliver to the representatives (prior to or substantially contemporaneously with such
sale, transfer, appropriation or other disposition) a lock-up letter in respect of the remainder of the
restricted period (which, for the avoidance of doubt, shall contain exceptions substantially similar to
the exceptions contained in this clause (a) and (b) below); and
(b)take any action to permit the Pledgees to enforce their security interest under a Financing Transaction
by selling, transferring, appropriating or otherwise disposing of the lock-up securities; provided that in
the case of any such sale, transfer, appropriation or other disposition each Purchaser shall execute
and deliver to the representatives (prior to or substantially contemporaneously with such sale,
transfer, appropriation or other disposition) a lock-up letter in respect of the remainder of the restricted
period (which, for the avoidance of doubt, shall contain exceptions substantially similar to the
exceptions contained in clause (a) above and this clause (b).
Unless otherwise described below, in the case of any transfer or distribution pursuant to clause (a), (b),
(c), (d), (e), (f), (g) and (m), such transfer shall not involve a disposition for value and in the case of any
transfer or distribution pursuant to clause (a), (b), (c), (d), (e), (f), (g) and (m), each donee, devisee,
transferee or distributee shall execute and deliver to J.P. Morgan Securities LLC, Goldman Sachs & Co.
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LLC and Morgan Stanley & Co. LLC a lock-up agreement. In the case of any transfer or distribution
pursuant to clause (b), (c), (d), (e), (f), (i) and (j), no filing by any party (donor, donee, devisee, transferor,
transferee, distributer or distributee) under the Exchange Act, or other public announcement shall be
required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on
a Form 5 made after the expiration of the restricted period referred to above). In the case of any transfer
or distribution pursuant to clause (a), (g), (h) and (m) it shall be a condition to such transfer that no public
filing, report or announcement shall be voluntarily made and if any filing under Section 16(a) of the
Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial ownership
of shares of common stock in connection with such transfer or distribution shall be legally required during
the restricted period, such filing, report or announcement shall clearly indicate in the footnotes thereto the
nature and conditions of such transfer;
In the case of any transfer or distribution by SoftBank and its affiliates pursuant to clause (a), (b), (c), (d),
(e), (g) and (m), such transfer shall not involve a disposition for value, and in the case of any transfer or
distribution pursuant to clause (b), (c), (d), (e), (i) and (j), no filing by any party (donor, donee, devisee,
transferor, transferee, distributer or distributee) under the Exchange Act, or other public announcement
shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a
filing on a Form 5 made after the expiration of the restricted period referred to above). In the case of any
transfer or distribution pursuant to clause (a), (f) (g), (h) and (m) it shall be a condition to such transfer
that no public filing, report or announcement shall be voluntarily made and if any filing under Section 16(a)
of the Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial
ownership of shares of common stock in connection with such transfer or distribution shall be legally
required during the restricted period, such filing, report or announcement shall clearly indicate in the
footnotes thereto the nature and conditions of such transfer.
In the case of any transfer or distribution by OpenAI and its affiliates pursuant to clause (b), (c), (d), (e)
and (f), no filing by any party (donor, donee, devisee, transferor, transferee, distributer or distributee)
under the Exchange Act, or other public announcement shall be required or shall be made voluntarily in
connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of
the restricted period referred to above). In the case of any transfer or distribution pursuant to clause (a),
(g), (h), (i), (j) and (m) it shall be a condition to such transfer that no public filing, report or announcement
shall be voluntarily made and if any filing under Section 16(a) of the Exchange Act, or other public filing,
report or announcement reporting a reduction in beneficial ownership of shares of common stock in
connection with such transfer or distribution shall be legally required during the restricted period, such
filing, report or announcement shall clearly indicate in the footnotes thereto the nature and conditions of
such transfer.
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, in their joint
discretion, may release the securities subject to any of the lock-up agreements with the underwriters
described above, in whole or in part at any time. In certain circumstances, the release of securities
subject to lock-up agreements with certain holders from the lock-up restrictions described above will
trigger a pro rata release of securities subject to lock-up agreements with SoftBank, OpenAI and NVIDIA.
These agreements are subject to certain exceptions.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the
Securities Act.
We have applied to list our common stock on the Nasdaq and Nasdaq Texas under the symbol “SBE.”
In connection with this offering, the underwriters may engage in stabilizing transactions, which involves
making bids for, purchasing and selling shares of common stock in the open market for the purpose of
preventing or retarding a decline in the market price of the common stock while this offering is in
progress. These stabilizing transactions may include making short sales of common stock, which involves
the sale by the underwriters of a greater number of shares of common stock than they are required to
purchase in this offering, and purchasing shares of common stock on the open market to cover positions
created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not
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greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked”
shorts, which are short positions in excess of that amount. The underwriters may close out any covered
short position either by exercising their option to purchase additional shares, in whole or in part, or by
purchasing shares in the open market. In making this determination, the underwriters will consider, among
other things, the price of shares available for purchase in the open market compared to the price at which
the underwriters may purchase shares through the option to purchase additional shares. A naked short
position is more likely to be created if the underwriters are concerned that there may be downward
pressure on the price of the common stock in the open market that could adversely affect investors who
purchase in this offering. To the extent that the underwriters create a naked short position, they will
purchase shares in the open market to cover the position.
The underwriters have advised us that, pursuant to Regulation M of the Exchange Act, they may also
engage in other activities that stabilize, maintain or otherwise affect the price of our common stock,
including the imposition of penalty bids. This means that if the representatives of the underwriters
purchase common stock in the open market in stabilizing transactions or to cover short sales, the
representatives can require the underwriters that sold those shares as part of this offering to repay the
underwriting discount received by them.
These activities may have the effect of raising or maintaining the market price of the common stock or
preventing or retarding a decline in the market price of the common stock, and, as a result, the price of
the common stock may be higher than the price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue them at any time. The underwriters may
carry out these transactions on Nasdaq or Nasdaq Texas, in the over-the-counter market or otherwise.
Prior to this offering, there has been no public market for our common stock. The initial public offering
price will be determined by negotiations between us and the representatives of the underwriters. In
determining the initial public offering price, we and the representatives of the underwriters expect to
consider a number of factors including:
•the information set forth in this prospectus and otherwise available to the representatives;
•our prospects and the history and prospects for the industry in which we compete;
•an assessment of our management;
•our prospects for future earnings;
•the general condition of the securities markets at the time of this offering;
•the recent market prices of, and demand for, publicly traded common stock of generally comparable
companies; and
•other factors deemed relevant by the underwriters and us.
Neither we nor the underwriters can assure investors that an active trading market will develop for shares
of our common stock, or that the shares will trade in the public market at or above the initial public offering
price.
Directed Share Program
At our request, the underwriters will reserve up to 5% of the shares of common stock being offered by this
prospectus for sale at the initial public offering price to our directors, officers, certain employees and
certain other individuals associated with us. The sales will be made by J.P. Morgan Securities LLC
through a directed share program. We do not know if these persons will choose to purchase all or any
portion of these reserved shares of common stock, but any purchases they do make will reduce the
number of shares of common stock available to the general public. Any reserved shares of common stock
not so purchased will be offered by the underwriters to the general public on the same terms as the other
shares of common stock. Shares of common stock purchased by our directors, officers and employees in
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the directed share program will be subject to the lock-up restrictions described in this prospectus. We
have agreed to indemnify J.P. Morgan Securities LLC against certain liabilities and expenses, including
liabilities under the Securities Act, in connection with the sales of reserved shares of common stock.
Other Relationships
Certain of the underwriters and their affiliates have provided in the past to us and our subsidiaries and
may provide from time to time in the future certain commercial banking, financial advisory, investment
banking and other services for us and such affiliates in the ordinary course of their business, for which
they have received and may continue to receive customary fees and commissions. In addition, certain of
the underwriters and/or certain of their affiliates are lenders, arrangers, agents, depositaries and/or
agents under our and our subsidiaries corporate credit facilities and project level financing agreements
and accordingly, are entitled to fees and expenses in connection therewith.
“Wolfe | Nomura Alliance” is the marketing name used by Wolfe Research Securities and Nomura
Securities International, Inc. in connection with certain equity capital markets activities conducted jointly
by the firms. Both Nomura Securities International, Inc. and WR Securities, LLC are serving as
underwriters in the offering described herein. In addition, WR Securities, LLC and certain of its affiliates
may provide sales support services, investor feedback, investor education, and/or other independent
equity research services in connection with this offering.
Offerings Outside the United States
This offering includes public offerings in Japan and the United Kingdom. We do not currently intend to list
our common stock on any stock exchange in Japan or the United Kingdom.
Subject to applicable law, the underwriters may offer shares of our common stock outside of the United
States, Japan and the United Kingdom. The underwriters may use one or more affiliates in order to offer
and sell shares outside of the United States. No shares of our common stock will be offered or sold in any
jurisdiction except by or through brokers or dealers duly registered under the applicable securities laws of
that jurisdiction, or in circumstances where any exemption from such registration requirements is
available.
Selling Restrictions
General
Other than in the United States, no action has been taken by us or the underwriters that would permit a
public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose
is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor
may this prospectus or any other offering material or advertisements in connection with the offer and sale
of any such securities be distributed or published in any jurisdiction, except under circumstances that will
result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose
possession this prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the offering and the distribution of this prospectus. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any
jurisdiction in which such an offer or a solicitation is unlawful.
Notice to Prospective Investors in Canada
The shares of our common stock may be sold only to purchasers purchasing, or deemed to be
purchasing, as principal that are accredited investors, as defined in National Instrument 45-106
Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as
defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the shares of our common stock must be made in accordance with an
exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities
laws.
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Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies
for rescission or damages if this prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser
within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The
purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult with a legal advisor.
Notice to Prospective Investors in the European Economic Area
In relation to each Member State of the European Economic Area (each a “Relevant State”), no shares of
our common stock have been offered or will be offered pursuant to the offering to the public in that
Relevant State prior to the publication of a prospectus in relation to the shares of our common stock
which has been approved by the competent authority in that Relevant State or, where appropriate,
approved in another Relevant State and notified to the competent authority in that Relevant State, all in
accordance with the Prospectus Regulation, except that the shares of our common stock may be offered
to the public in that Relevant State at any time:
•to any qualified investor as defined under Article 2 of the Prospectus Regulation;
•to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of
the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such
offer; or
•in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
•provided that no such offer of the shares of our common stock shall require us or any underwriter to
publish a prospectus pursuant to Article 3 of the Prospectus Regulation, supplement a prospectus
pursuant to Article 23 of the Prospectus Regulation or publish an Annex IX document pursuant to
Article 1(4) of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to the shares of our
common stock in any Relevant State means the communication in any form and by any means of
sufficient information on the terms of the offer and any shares of our common stock to be offered so as to
enable an investor to decide to purchase or subscribe for any shares of our common stock, and the
expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
Notice to Prospective Investors in the United Kingdom
This prospectus has been prepared on the basis that the offering of the shares of common stock falls
within one of the exceptions specified in Part 1 of Schedule 1 of the Public Offers and Admissions to
Trading Regulations 2024 (the “POATRs”) and accordingly there will not be a prospectus prepared or
published for the purposes of the POATRs. This prospectus does not constitute a prospectus for the
purposes of the POATRs.
Each underwriter has represented and agreed that it has not made and will not make an offer of the
shares of common stock which are the subject of this prospectus to the public in the United Kingdom
except that it may make an offer:
(a)at any time to any legal entity which is a qualified investor as defined in paragraph 15 of Schedule 1
to the POATRs;
(b)at any time to fewer than 150 persons (other than qualified investors as defined in paragraph 15 of
Schedule 1 to the POATRs) in the United Kingdom subject to obtaining the prior consent of the
relevant underwriter nominated by the Company for any such offer; or
(c)at any time in any other circumstances falling within Part 1 of Schedule 1 to the POATRs.
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For the purposes of this provision, the expression an offer of the shares of common stock to the public in
relation to any shares of common stock means the communication in any form and by any means of
sufficient information on the terms of the offer and the shares of common stock to be offered so as to
enable an investor to decide to buy or subscribe for the shares of common stock and the expression
“POATRs” means the Public Offers and Admissions to Trading Regulations 2024.
Each underwriter has represented and agreed that:
(a)it has only communicated or caused to be communicated and will only communicate or cause to be
communicated an invitation or inducement to engage in investment activity (within the meaning of
section 21 of the UK Financial Services and Markets Act 2000, as amended (“FSMA”) in connection
with the issue or sale of shares of common stock in circumstances in which section 21(1) of FSMA
does not, apply to us; and
(b)it has complied and will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the shares of common stock in, from or otherwise involving, the United
Kingdom.
Notice to Prospective Investors in Switzerland
This prospectus does not constitute an offer to the public or a solicitation to purchase or invest in any
shares of our common stock. No shares of our common stock have been offered or will be offered to the
public in Switzerland, except that offers of shares of our common stock may be made to the public in
Switzerland at any time under the following exemptions under the Swiss Financial Services Act (“FinSA”):
•to any person which is a professional client as defined under the FinSA;
•to fewer than 500 persons (other than professional clients as defined under the FinSA), subject to
obtaining the prior consent of the representatives for any such offer; or
•in any other circumstances falling within Article 36 FinSA in connection with Article 44 of the Swiss
Financial Services Ordinance,
•provided that no such offer of shares of our common stock shall require us or any underwriter to
publish a prospectus pursuant to Article 35 FinSA.
The shares of our common stock have not been and will not be listed or admitted to trading on a trading
venue in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the shares of our common
stock constitutes a prospectus as such term is understood pursuant to the FinSA and neither this
prospectus nor any other offering or marketing material relating to the shares of our common stock may
be publicly distributed or otherwise made publicly available in Switzerland.
Notice to Prospective Investors in Australia
This prospectus:
•does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations
Act 2001 (Cth) (the “Corporations Act”);
•has not been, and will not be, lodged with the Australian Securities and Investments Commission
(“ASIC”), as a disclosure document for the purposes of the Corporations Act and does not purport to
include the information required of a disclosure document for the purposes of the Corporations Act;
and
•may only be provided in Australia to select investors who are able to demonstrate that they fall within
one or more of the categories of investors, available under section 708 of the Corporations Act
(“Exempt Investors”).
291
The shares of our common stock may not be directly or indirectly offered for subscription, purchased or
sold, and no invitations to subscribe for or buy the shares of our common stock may be issued, and no
draft or definitive offering memorandum, advertisement or other offering material relating to any shares of
our common stock may be distributed in Australia, except where disclosure to investors is not required
under Chapter 6D of the Corporations Act or is otherwise in compliance with all applicable Australian laws
and regulations. By submitting an application for the shares of our common stock, you represent and
warrant to us that you are an Exempt Investor.
As any offer of shares of our common stock under this prospectus will be made without disclosure in
Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia
within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under
Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the shares of
our common stock you undertake to us that you will not, for a period of 12 months from the date of issue
of the shares of our common stock, offer, transfer, assign or otherwise alienate those shares of our
common stock to investors in Australia except in circumstances where disclosure to investors is not
required under Chapter 6D.2 of the Corporations Act or where a compliant disclosure document is
prepared and lodged with ASIC.
Notice to Prospective Investors in Hong Kong
The shares of our common stock have not been offered or sold and will not be offered or sold in Hong
Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities
and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) of Hong Kong and any rules
made thereunder; or (b) in other circumstances which do not result in the document being a “prospectus”
as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong
Kong) (the “CO”) or which do not constitute an offer to the public within the meaning of the CO. No
advertisement, invitation or document relating to the shares of our common stock has been or may be
issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong
Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the
public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with
respect to shares of our common stock which are or are intended to be disposed of only to persons
outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made
thereunder.
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, no shares of our common stock have been or will be offered or sold and no shares of our
common stock have been or will be made the subject of an invitation for subscription or purchase, and no
prospectus or any other document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the shares of our common stock, has been or will be circulated or distributed,
whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as
defined in Section 4A of the Securities and Futures Act 2001 of Singapore, as modified or amended from
time to time (the “SFA”)) pursuant to Section 274 of the SFA or (ii) to an accredited investor (as defined in
Section 4A of the SFA) pursuant to and in accordance with the conditions specified in Section 275 of the
SFA.
Notice to Prospective Investors in Taiwan
The shares of our common stock have not been and will not be registered with the Financial Supervisory
Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued
or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the
meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the
Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer,
sell, give advice regarding or otherwise intermediate the offering and sale of shares of our common stock
in Taiwan.
292
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an “Exempt Offer” in accordance with the Offered Securities Rules of the Dubai
Financial Services Authority (the “DFSA”). This prospectus is intended for distribution only to persons of a
type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any
other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with
Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set
forth herein and has no responsibility for the prospectus. The securities to which this prospectus relates
may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities
should conduct their own due diligence on the securities. If you do not understand the contents of this
prospectus, you should consult an authorized financial advisor.
Notice to Prospective Investors in the United Arab Emirates
The shares of our common stock have not been, and are not being, publicly offered, sold, promoted or
advertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in
compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre)
governing the issue, offering and sale of securities. Further, this prospectus does not constitute a public
offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is
not intended to be a public offer. This prospectus has not been approved by or filed with the Central Bank
of the United Arab Emirates, the Securities and Commodities Authority, Financial Services Regulatory
Authority (FSRA) or the Dubai Financial Services Authority (DFSA).
Notice to Prospective Investors in the Abu Dhabi Global Market
The Abu Dhabi Global Market (ADGM), including the Financial Services Regulatory Authority and the
Registration Authority does not accept any responsibility for the content of the information included in this
prospectus, including the accuracy or completeness of such information. The liability for the content of
this prospectus lies with the issuer of this prospectus and other persons, such as experts, whose opinions
are included in this prospectus with their consent. The ADGM has also not assessed the suitability of the
securities to which this prospectus relates to any particular investor or type of investor. The securities to
which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective
purchasers of the securities offered should conduct their own due diligence on the securities If you do not
understand the contents of this prospectus or are unsure whether the securities to which this prospectus
relates are suitable for your individual investment objectives and circumstances, you should consult an
authorized financial adviser.
Notice to Prospective Investors in Brazil
The offer and sale of the shares of our common stock have not been and will not be registered with the
Brazilian Securities Commission (Comissão de Valores Mobiliários, or “CVM”) and, therefore, will not be
carried out by any means that would constitute a public offering in Brazil under CVM Resolution No. 160,
dated 13 July 2022, as amended, or unauthorized distribution under Brazilian laws and regulations. The
shares of our common stock will be authorized for trading on organized non-Brazilian securities markets
and may only be offered to Brazilian Professional Investors (as defined by applicable CVM regulation),
who may only acquire the shares of our common stock through a non-Brazilian account, with settlement
outside Brazil in non-Brazilian currency. The trading of these shares of our common stock on regulated
securities markets in Brazil is prohibited.
293
CONCURRENT PRIVATE PLACEMENT AND PREPAID
FORWARD CONTRACT
The following section describes the Concurrent Private Placement and the Prepaid Forward Contract.
See “Use of Proceeds,” “Capitalization,” “Description of Capital Stock,” and “Shares Eligible for Future
Sale—Lock-Up Agreements” for additional information regarding the transactions described below and
see “Prospectus Summary—Transactions in Connection with This Offering,” for a summary of the other
transactions connected to this offering.
Prepaid Forward Contract. On August 17, 2026, Energy Global entered into a Prepaid Forward Contract
with NVIDIA, under which NVIDIA prepaid $1,500,000,000 to Energy Global. Energy Global contributed
those proceeds to us, and we entered into a related issuance agreement with Energy Global under which
we irrevocably agreed to issue the required equity securities or make cash payments to satisfy the
settlement obligations. Upon or immediately prior to the closing of this offering, the Prepaid Forward
Contract will settle by delivery to NVIDIA of a number of shares of our Class N common stock equal to the
$1,500,000,000 purchase amount divided by 90% of the final initial public offering price per share. Each
share of Class N common stock is convertible into one share of common stock, at the holder’s election or
automatically upon a transfer to a person that is not an affiliate, subject to customary anti-dilution
adjustments and to the ownership and restrictions in our Certificate of Formation. The Prepaid Forward
Contract terminates automatically upon delivery of those shares. The shares are being sold in a
transaction exempt from registration, will not be registered in this offering, will be “restricted securities”
bearing customary restrictive legends and will be subject to applicable lock-up arrangements. See
“Shares Eligible for Future Sale—Lock-Up Agreements” and “Underwriting” for additional information
regarding the lock-up arrangements.
Concurrent Private Placement. On August 17, 2026, we entered into a Share Purchase Agreement with
NVIDIA Corporation. Simultaneously with the closing of this offering, NVIDIA will purchase from us in a
private placement shares of our Class N common stock at a price per share equal to the initial public
offering price in this offering before underwriting discounts and expenses. The number of shares will equal
$1,500,000,000 divided by that price, rounded down to the nearest whole share, with the aggregate
purchase price correspondingly reduced for the fractional share (such that the aggregate investment by
NVIDIA following this offering across the Prepaid Forward Contract and the Concurrent Private Placement
will amount to $3,000,000,000). NVIDIA will pay the purchase price by wire transfer against delivery of
uncertificated shares registered in NVIDIA’s name. We will receive the full purchase price and will not pay
any underwriting discounts or commissions with respect to the shares sold in the Concurrent Private
Placement. The shares are being sold in a transaction exempt from registration, will not be registered in
this offering, will be “restricted securities” bearing customary restrictive legends and will be subject to
applicable lock-up arrangements. See “Shares Eligible for Future Sale—Lock-Up Agreements” and
“Underwriting” for additional information regarding the lock-up arrangements.
The foregoing descriptions are summaries of material terms and do not purport to be complete. Each
description is qualified in its entirety by reference to the applicable agreements filed as exhibits to the
registration statement of which this prospectus forms a part.
294
LEGAL MATTERS
Latham & Watkins LLP, Houston, Texas, which has acted as our counsel in connection with this offering,
will pass upon the validity of the issuance of the shares of our common stock offered by this prospectus.
Certain legal matters related to this offering will be passed upon for the underwriters by Davis Polk &
Wardwell LLP, New York, New York.
EXPERTS
The financial statements of SB Energy, Inc. and its subsidiaries (formerly SE Global Holdings, Inc.) as of
December 31, 2025 and 2024, and for each of the two years in the period ended December 31, 2025,
included in this Prospectus, have been audited by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report. Such financial statements are included in reliance upon
the report of such firm given their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under
the Securities Act with respect to the shares of common stock offered hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules filed with the registration statement. For further
information about us and the common stock offered hereby, we refer you to the registration statement and
the exhibits filed with the registration statement. Statements contained in this prospectus regarding the
contents of any contract or any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and each such statement is qualified in all respects by reference to the full text
of such contract or other document filed as an exhibit to the registration statement. The SEC also
maintains an internet website that contains reports, proxy statements and other information about
registrants, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
Upon the closing of this offering, we will be subject to the information and reporting requirements of the
Exchange Act and, in accordance therewith, we will file periodic reports, proxy statements and other
information with the SEC. These reports, proxy statements and other information will be available for
review at the SEC’s website referred to above.
We also maintain a website at www.sbenergy.com, through which you may access these materials free of
charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
Information contained on, or that can be accessed through, our website is not a part of and is not
incorporated into, this prospectus and the inclusion of our website address in this prospectus is an
inactive textual reference only.
F-1
Index to Consolidated Financial Statements
Consolidated Financial Statements as of and for the Years Ended December 31,
2025 and 2024
SB Energy, Inc. | |
Report of Independent Registered Public Accounting Firm ................................................................ | |
Consolidated Balance Sheets ................................................................................................................. | |
Consolidated Statements of Operations and Comprehensive Loss ................................................. | |
Equity ........................................................................................................................................................... | |
Consolidated Statements of Cash Flows ............................................................................................... | |
Notes to Consolidated Financial Statements ........................................................................................ | |
Condensed Consolidated Financial Statements as of and for the Six Months
Ended June 30, 2026 and 2025 (Unaudited)
SB Energy, Inc. | |
Condensed Consolidated Balance Sheets (unaudited) ........................................................................ | |
Member's Equity (unaudited) .................................................................................................................... | |
Condensed Consolidated Statements of Cash Flows (unaudited) ..................................................... | |
Notes to Condensed Consolidated Financial Statements (unaudited) .............................................. | |
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors of SB Energy, Inc.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SB Energy, Inc. and its subsidiaries
(formerly SE Global Holdings, Inc.) (the “Company”) as of December 31, 2025 and 2024, the related
consolidated statements of operations and comprehensive loss, changes in redeemable noncontrolling
interests and member’s equity, and cash flows for each of the two years in the period ended December
31, 2025, and the related notes to the consolidated financial statements (collectively referred to as the
“financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2025, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
San Francisco, California
June 22, 2026
We have served as the Company’s auditor since 2021.
F-3
SB Energy, Inc.
Consolidated Balance Sheets
In thousands except units, unless otherwise stated
December 31, 2025 | December 31, 2024 | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents ............................................................................................................ | $131,857 | $362,717 | ||
Restricted cash ................................................................................................................................. | 86,856 | 211,461 | ||
Accounts receivable, net (net of allowance for credit losses of $108 and $108, respectively, as of December 31, 2025 and 2024) ...................................................................... | 15,567 | 17,757 | ||
Receivables from related parties ................................................................................................... | 195 | 14 | ||
Advances to suppliers, current ....................................................................................................... | 30,954 | — | ||
Prepaid and other current assets ................................................................................................... | 40,769 | 31,432 | ||
Total current assets ............................................................................................................................ | 306,198 | 623,381 | ||
Non-current assets | ||||
Property, plant and equipment, net ................................................................................................ | 4,863,079 | 3,362,240 | ||
Operating lease right-of-use assets .............................................................................................. | 201,032 | 202,133 | ||
Goodwill ............................................................................................................................................. | 10,993 | — | ||
Other intangible assets .................................................................................................................... | 18,496 | 16,496 | ||
Advances to suppliers, non-current ............................................................................................... | 19,245 | 599 | ||
Equity method investments ............................................................................................................. | 33,763 | 22,532 | ||
Derivative asset ................................................................................................................................ | 16,549 | 13,789 | ||
Income taxes receivable .................................................................................................................. | 411 | 248 | ||
Other non-current assets ................................................................................................................ | 112,798 | 33,788 | ||
Total non-current assets ................................................................................................................... | 5,276,366 | 3,651,825 | ||
Total assets .......................................................................................................................................... | $5,582,564 | $4,275,206 | ||
Liabilities, redeemable noncontrolling interests and member's equity | ||||
Current liabilities | ||||
Accounts payable ............................................................................................................................. | $39,059 | $64,698 | ||
Accrued expenses and other current liabilities ............................................................................ | 646,939 | 151,949 | ||
Payables to related parties ............................................................................................................. | 188 | 18,426 | ||
Debt, net, current .............................................................................................................................. | 193,281 | 234,675 | ||
Derivative liabilities, current ............................................................................................................ | 17,399 | 28,404 | ||
Operating lease liabilities, current .................................................................................................. | 13,833 | 11,668 | ||
Total current liabilities ....................................................................................................................... | 910,699 | 509,820 | ||
Non-current liabilities | ||||
Debt, net, non-current ...................................................................................................................... | 1,910,172 | 1,221,965 | ||
Debt from related parties ................................................................................................................. | 709,520 | 410,000 | ||
Derivative liabilities, non-current .................................................................................................... | 63,028 | 105,414 | ||
Operating lease liabilities, non-current .......................................................................................... | 201,972 | 200,065 | ||
Deferred tax liability .......................................................................................................................... | 25,375 | 16,105 | ||
Asset retirement obligations ........................................................................................................... | 63,680 | 58,042 | ||
Other non-current liabilities ............................................................................................................. | 101,373 | 996 | ||
Total non-current liabilities .............................................................................................................. | 3,075,120 | 2,012,587 | ||
Total liabilities ...................................................................................................................................... | $3,985,819 | $2,522,407 | ||
Commitments and contingencies (Note 14) | ||||
Redeemable noncontrolling interests .................................................................................................. | 4,052 | 6,011 | ||
Member's equity | ||||
Contributed capital (19,966,564 units outstanding as of December 31, 2025 and 2024) ..... | 1,764,518 | 1,105,986 | ||
(Accumulated deficit) retained earnings ....................................................................................... | (594,129) | 143,879 | ||
Total member's equity ....................................................................................................................... | 1,170,389 | 1,249,865 | ||
Noncontrolling interests ................................................................................................................... | 422,304 | 496,923 | ||
Total liabilities, redeemable noncontrolling interests and member's equity ...................... | $5,582,564 | $4,275,206 | ||
See accompanying Notes to Consolidated Financial Statements. See Note 3. Equity method investment
and variable interest entities for information on our consolidated VIEs.
F-4
SB Energy, Inc.
Consolidated Statements of Operations and Comprehensive Loss
In thousands, except units and per-unit amounts
Year Ended December 31, | ||||
2025 | 2024 | |||
Revenue ............................................................................................................. | $213,467 | $232,243 | ||
Operating costs and expenses | ||||
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below ................................................................. | 81,393 | 55,213 | ||
Depreciation, amortization and accretion ...................................................... | 94,080 | 73,314 | ||
General and administrative ............................................................................. | 679,566 | 169,095 | ||
Operating loss ..................................................................................................... | $(641,572) | $(65,379) | ||
Interest income .................................................................................................. | 14,638 | 18,964 | ||
Interest expense ................................................................................................ | (162,392) | (127,554) | ||
Losses in equity method investment .............................................................. | (1,740) | (14,203) | ||
Other income (expense), net ........................................................................... | 12,176 | (617) | ||
Loss before income taxes ................................................................................ | (778,890) | (188,789) | ||
Income tax expense ......................................................................................... | (9,202) | (15,262) | ||
Net loss and comprehensive loss .................................................................. | $(788,092) | $(204,051) | ||
Less: Net loss and comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling interests .................................. | (50,084) | (310,155) | ||
Net income (loss) and comprehensive income (loss) attributable to SB Energy, Inc. ............................................................................................................ | $(738,008) | $106,104 | ||
Net income (loss) per unit - basic and diluted ................................................... | $(36.96) | $5.31 | ||
Weighted-average units outstanding - basic and diluted ................................. | 19,966,564 | 19,966,564 | ||
See accompanying Notes to Consolidated Financial Statements.
F-5
SB Energy, Inc.
Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Member's Equity
In thousands, unless otherwise stated
Redeemable noncontrolling interests | Contributed capital | (Accumulated deficit) retained earnings | Total member's equity | Non-controlling interests | Total equity | |||||||
Balance as of December 31, 2023 ....... | $7,929 | $— | $37,775 | $37,775 | $234,899 | $272,674 | ||||||
Capital contributions ................................... | — | 966,999 | — | 966,999 | 719,359 | 1,686,358 | ||||||
Capital distributions .................................... | (2,816) | (1,320) | — | (1,320) | (111,461) | (112,781) | ||||||
Stock-based compensation ....................... | — | 140,307 | — | 140,307 | — | 140,307 | ||||||
Equity financing costs ................................ | — | — | — | — | (34,821) | (34,821) | ||||||
Net income (loss) ........................................ | 898 | — | 106,104 | 106,104 | (311,053) | (204,949) | ||||||
Balance as of December 31, 2024 ....... | $6,011 | $1,105,986 | $143,879 | $1,249,865 | $496,923 | $1,746,788 | ||||||
Capital contributions ................................... | — | 496,539 | — | 496,539 | — | 496,539 | ||||||
Capital distributions .................................... | (2,697) | (512,058) | — | (512,058) | (23,691) | (535,749) | ||||||
Stock-based compensation ....................... | — | 674,051 | — | 674,051 | — | 674,051 | ||||||
Equity financing costs ................................ | — | — | — | — | (106) | (106) | ||||||
Net loss ......................................................... | 738 | — | (738,008) | (738,008) | (50,822) | (788,830) | ||||||
Balance as of December 31, 2025 ....... | $4,052 | $1,764,518 | $(594,129) | $1,170,389 | $422,304 | $1,592,693 | ||||||
See accompanying Notes to Consolidated Financial Statements
F-6
SB Energy, Inc.
Consolidated Statements of Cash Flows
In thousands, unless otherwise stated
Year Ended December 31, | ||||
2025 | 2024 | |||
Cash flow from operating activities | ||||
Net loss ............................................................................................................................. | $(788,092) | $(204,051) | ||
Adjustments to reconcile net loss to cash used in operating activities | ||||
Non-cash (income) / expenses: | ||||
Depreciation, amortization and accretion expense .............................................. | 94,080 | 73,314 | ||
Amortization of deferred financing cost .................................................................. | 16,352 | 19,767 | ||
Stock-based compensation expense ..................................................................... | 674,051 | 140,307 | ||
Unrealized loss in equity method investment ........................................................ | 1,740 | 14,203 | ||
Income tax expense .................................................................................................. | — | (1,278) | ||
Deferred income taxes .............................................................................................. | 9,270 | 16,105 | ||
Changes in fair value of derivatives ........................................................................ | (56,149) | (135,588) | ||
Non-cash lease expense .......................................................................................... | 3,460 | 3,142 | ||
Interest and fees on loans to related parties ......................................................... | — | 1,782 | ||
Changes in operating assets and liabilities | ||||
Accounts receivable .................................................................................................. | 462 | (8,555) | ||
Receivable from related parties ............................................................................... | — | 18,484 | ||
Prepaid and other current assets ............................................................................ | 4,473 | (7,989) | ||
Other non-current assets .......................................................................................... | (7,108) | (28,674) | ||
Accounts payable ...................................................................................................... | 23,356 | 118 | ||
Accrued expenses and other current liabilities ..................................................... | 606 | 27,749 | ||
Payables to related parties ....................................................................................... | (18,139) | — | ||
Operating lease liabilities ......................................................................................... | 1,868 | 3,088 | ||
Income taxes (payable) receivable ......................................................................... | (164) | 1,577 | ||
Payroll liabilities ......................................................................................................... | — | 628 | ||
Other non-current liabilities ...................................................................................... | (115) | — | ||
Net cash used in operating activities ..................................................................... | $(40,049) | $(65,871) | ||
Cash flows from investing activities | ||||
Payments for property, plant and equipment .............................................................. | (1,092,981) | (601,195) | ||
Deposits ............................................................................................................................ | (62,247) | (10,322) | ||
Advances to suppliers .................................................................................................... | (26,955) | — | ||
Investments in unconsolidated affiliate ........................................................................ | (12,971) | (36,735) | ||
Business combination, net cash acquired ................................................................... | 156 | — | ||
Net cash used in investing activities ..................................................................... | $(1,194,998) | $(648,252) | ||
Cash flows from financing activities | ||||
Capital contributions ....................................................................................................... | 496,571 | 1,219,849 | ||
Capital distributions ........................................................................................................ | (538,447) | (115,597) | ||
Proceeds from debt ........................................................................................................ | 670,100 | 1,473,567 | ||
Proceeds of debt - related parties ................................................................................ | 299,520 | — | ||
Repayment of debt ......................................................................................................... | (22,991) | (1,466,529) | ||
Payment for deferred financing costs .......................................................................... | (20,696) | (66,611) | ||
Payment of equity financing costs ................................................................................ | (4,475) | (23,221) | ||
Net cash provided by financing activities ............................................................. | $879,582 | $1,021,458 | ||
Net (decrease) increase in cash and cash equivalents and restricted cash ............... | (355,465) | 307,335 | ||
Cash and cash equivalents and restricted cash at the beginning of the period ......... | 574,178 | 266,843 | ||
F-7
SB Energy, Inc.
Consolidated Statements of Cash Flows
In thousands, unless otherwise stated
Year Ended December 31, | ||||
2025 | 2024 | |||
Cash and cash equivalents and restricted cash at the end of period ................ | $218,713 | $574,178 | ||
Supplemental cash flow information | ||||
Cash and cash equivalents ................................................................................................. | $131,857 | $362,717 | ||
Restricted cash ..................................................................................................................... | 86,856 | 211,461 | ||
Total cash and cash equivalents and restricted cash ................................................ | $218,713 | $574,178 | ||
Cash paid for interest on loans .......................................................................................... | $111,317 | $99,330 | ||
Supplemental disclosure of noncash investing and financing activities | ||||
Property, plant and equipment additions within accounts payable and accrued expenses .......................................................................................................................... | $722,393 | $147,007 | ||
Operating lease right-of-use assets acquired through lease liability ...................... | $2,204 | $51,018 | ||
Asset retirement obligations additions ......................................................................... | $1,141 | $16,129 | ||
Asset retirement obligations remeasurements ........................................................... | $834 | $— | ||
Noncash capital contributions from parent ................................................................. | $674,019 | $606,816 | ||
Borrowing conversion and reassignment .................................................................... | $— | $277,035 | ||
See accompanying Notes to Consolidated Financial Statements
F-8
SB Energy, Inc.
Notes to Consolidated Financial Statements
Note 1. Organization and nature of operations
SB Energy, Inc. (formerly SE Global Holdings, Inc.) (together with its subsidiaries, the “Company” or “SB
Energy”) was formed as a Delaware limited liability company on January 23, 2024. The Company is a
wholly owned subsidiary of SBE Global, LP (the “Parent” or “SBE Global”).
On January 9, 2026, the Company amended its limited liability company agreement pursuant to which the
outstanding unit was split into 19,966,564 membership units (“Units”). The issuance was made solely to
increase the number of units outstanding and did not result in any change in the Parent’s economic
ownership, voting rights, liquidation rights, or other substantive rights. The Company accounted for the
issuance as an in-substance recapitalization. All unit and per-unit amounts presented in these financial
statements and accompanying notes have been retrospectively adjusted to reflect the increased number
of units outstanding as if the issuance had occurred as of the earliest period presented.
Prior to the formation of SB Energy, for period from January 1, 2024 through January 22, 2024, the
consolidated financial statements of the Company represent the consolidated financial statements of SB
Energy Global, LLC.
On February 16, 2024, SBE Global transferred its wholly owned subsidiary, SB Energy Global, LLC (a
business under common control), to SB Energy. SB Energy Global, LLC controls several renewable
projects and represents a business as defined under Accounting Standards Codification (“ASC”) Topic
805 Business Combination. In accordance with ASC Topic 805 Business Combinations, combining two
entities under common control that have not been previously presented together represents a change in
reporting entity requiring retrospective combination. As such, SB Energy and SB Energy Global, LLC will
be presented on a combined basis in the financial statements of SB Energy as though the transfer had
occurred on January 1, 2024.
The Company is a leading, integrated data center and power infrastructure company backed by
investments from SoftBank Group and OpenAI. The Company is headquartered in Redwood City,
California and develops, constructs, owns, and operates advanced renewable projects in the United
States.
The Company's wholly owned subsidiaries, organized as Delaware limited liability companies, include:
Venus Buyer, LLC (“Venus Buyer”), SE DC Holdco, LLC (“DC Holdco”), SE DC DevCo, LLC (“DC
DevCo”), SE Global Intermediate Holdings, LLC (“SE Global Intermediate”), SE Borrower, LLC (“SE
Borrower”), SE Global Borrower, LLC (“Global Borrower”), SBE US Holdings One, LLC (“SBE”), Big Five
Holdco 1, LLC (“Senior Borrower 1”), Big Five Holdco 2, LLC (“Senior Borrower 2”), Big Five Intermediate
Holdco 1, LLC (“Mezzanine Borrower 1”) and Big Five Intermediate Holdco 2, LLC (“Mezzanine Borrower
2”). Senior Borrower 1, Senior Borrower 2, Mezzanine Borrower 1 and Mezzanine Borrower 2 are
collectively referred to as “Big Five Borrowers”.
Note 2. Summary of significant accounting principles and policies
Basis of presentation and use of estimates
Basis of presentation. The Company's consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States (“US GAAP”). The ASC
established by the Financial Accounting Standards Board (“FASB”) is the source of authoritative US
GAAP to be applied by nongovernmental entities.
The consolidated financial statements include the Company's accounts and operations and those of its
subsidiaries. All intercompany transactions and balances have been eliminated in the consolidated
financial statements.
The Company operates on a calendar year from January 1 to December 31, and is presenting
consolidated financial statements for the years ended December 31, 2025 and 2024.
F-9
SB Energy, Inc.
Notes to Consolidated Financial Statements
Use of estimates. The preparation of consolidated financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses that are
reported and disclosed in the consolidated financial statements and accompanying notes. These
estimates are based on management's best knowledge of current events, historical experience, actions
the Company may undertake in the future and on various other assumptions that are believed to be
prudent and reasonable under the circumstances. Significant estimates and assumptions are used for, but
not limited to: valuation of equity method investments, fair value of assets acquired, and liabilities
assumed from the business combination, fair value of derivative instruments, operating lease right-of-use
assets and liabilities, asset retirement obligations, hypothetical liquidation at book value method of equity
accounting, and fair value measurement of equity awards.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiaries in which it has a controlling financial interest or variable interest entities (“VIEs”), for which it
is the primary beneficiary.
A controlling financial interest is typically determined when a company holds a majority of the voting
equity interest in an entity.
The Company consolidates VIEs when it is the primary beneficiary. VIEs are entities that lack sufficient
equity to finance their activities without additional financial support from other parties or whose equity
holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make
decisions; (b) obligation to absorb expected losses; or (c) right to receive expected residual returns. VIEs
must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the
reporting entity that has (a) the power to direct activities of the VIE that most significantly impact the VIE's
economic performance and (b) the obligation to absorb losses of the VIE that could potentially be
significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the
VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. A VIE can
have only one primary beneficiary but may not have a primary beneficiary if no party meets the criteria
described above.
When evaluating whether the Company is the primary beneficiary of a VIE, and must therefore
consolidate the entity, the Company performs a qualitative analysis that considers the design of the VIE,
the nature of its involvement and the variable interests held by other parties. If that evaluation is
inconclusive as to which party absorbs a majority of the entity's expected losses or residual returns, a
quantitative analysis is performed to determine the primary beneficiary. See Note 3. Equity method
investment and variable interest entities for additional information.
Equity method investments
The Company uses the equity method of accounting for investments in which the Company does not
control but when it has the ability to exercise significant influence. The Company records the equity
method investments at historical cost and subsequently adjusts the carrying amount each period for its
share of earnings or losses of the investee and other adjustments required by the equity method of
accounting. Dividends and other distributions received from the equity method investments are recorded
as reductions in the cost of such investments.
Investments are evaluated for impairment when facts or circumstances indicate that the fair value of the
investment is less than its carrying value. An impairment is recognized when a decline in fair value is
determined to be other-than-temporary. The Company reviews several factors to determine whether a
loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment;
(ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial
conditions and near term prospects of the affiliates; and (v) ability to hold the security for a period of time
sufficient to allow for any anticipated recovery in fair value.
F-10
SB Energy, Inc.
Notes to Consolidated Financial Statements
Asset acquisition
When the Company acquires other entities, if the assets acquired and liabilities assumed do not
constitute a business, the transaction is accounted for as an asset acquisition. Assets are recognized
based on the cost, which generally includes the transaction costs of the asset acquisition, and no gain or
loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’
carrying amounts on the Company’s books. If the consideration given is not in the form of cash (that is, in
the form of noncash assets, liabilities incurred, or equity interests issued), measurement is based on
either the cost to the acquiring entity or the fair value of the assets (or net assets) acquired, whichever is
more clearly evident and, thus, more reliably measurable. The cost of a group of assets acquired in an
asset acquisition is allocated to the individual assets acquired or liabilities assumed based on their
relative fair value and does not give rise to goodwill.
Business combination
The Company accounts for business combinations in accordance with ASC Topic 805 Business
Combinations, under which the identifiable assets acquired and liabilities assumed are recognized at their
acquisition date fair values and any excess of consideration transferred over the fair value of the
identifiable net assets acquired is recognized as goodwill. Transaction costs are expensed as incurred,
and contingent consideration, if any, is measured at fair value at the acquisition date and subsequently
remeasured through earnings unless classified as equity. The determination of fair value requires the use
of significant judgments and estimates.
Non-controlling interests, redeemable non-controlling interests and hypothetical liquidation at
book value (“HLBV”)
The Company finances the construction of the solar power plants and battery projects through tax equity
structures, in which part of the necessary funds is provided by a tax partner. The Company secures tax
equity financing for its solar power plants in construction through its subsidiaries, which are direct owners
of the respective solar power plant. The Company reflects tax equity financing as non-controlling interests
and redeemable non-controlling interests.
Non-controlling interests and redeemable non-controlling interests thus represent the portion of net assets
in consolidated subsidiaries that are not owned by the Company. The Company has determined for
certain of its consolidated subsidiaries, the allocation of economics between controlling and third party
non-controlling interests and redeemable non-controlling interests does not correspond to ownership
percentages. In order to reflect the substantive profit sharing arrangements, the Company has determined
that the appropriate methodology for determining the value of non-controlling interests and redeemable
non-controlling interests is a balance sheet approach using the HLBV method.
Under the HLBV method, the amount reported as non-controlling interests and redeemable non-
controlling interests on the consolidated balance sheets represents the amounts the third party investors
could hypothetically receive at each balance sheet reporting date based on the liquidation provisions of
the respective operating partnership agreements. HLBV assumes that the proceeds available for
distribution are equivalent to the unadjusted, stand-alone net assets of each respective partnership. The
third party non-controlling interests and redeemable non-controlling interests in the consolidated
statements of operations and comprehensive loss are determined based on the difference in the carrying
amounts of non-controlling interests and redeemable non-controlling interests on the consolidated
balance sheets between reporting dates, adjusted for any capital transactions between the Company and
third party investors that occurred during the respective period. Non-controlling interests are reported as a
component of equity in the consolidated balance sheets. The redeemable non-controlling interests are
presented as temporary equity in the mezzanine section of the consolidated balance sheets since the
third party investors have the right to redeem their interests in certain operating partnerships for cash or
other assets.
F-11
SB Energy, Inc.
Notes to Consolidated Financial Statements
Where, prior to the commencement of operating activities for a respective solar power plant, HLBV results
in an immediate change in the carrying value of non-controlling interests and redeemable non-controlling
interests (due to the recognition of ITCs or other adjustments as required by the Code) on the
consolidated balance sheets, the Company records the impact (sometimes referred to as a “Day 1 gain”)
to income in the same period.
Cash and cash equivalents and restricted cash
Cash and cash equivalents consist of cash on deposit and money market securities with an original
maturity of three months or less and that are readily convertible to cash.
Restricted cash consists primarily of funds held within the Company's wholly owned subsidiaries that are
restricted for specific uses by the terms of the financing agreements, amended and restated limited
liability company agreements (“LLCAs”) and PPAs. The restricted cash amounts are established for the
purpose of paying principal and interest on debt, lease and property taxes and all the remaining costs
required for the achievement of final completion of the construction or providing the PPA off-takers with
control over such reserve accounts. As of December 31, 2025 and 2024, the balance of restricted cash
was $86,856 thousand and $211,461 thousand, respectively.
Significant risks and uncertainties including business and credit concentrations
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Company. Management considers available reasonable and supportive forward-
looking information including indicators like external credit rating (as far as available) and macro-
economic information (such as regulatory changes, government directives, market interest rate, etc.).
Financial instruments that potentially expose the Company to concentrations of credit risk consist
primarily of cash and cash equivalents, restricted cash, receivables from related parties, advances to
suppliers, accounts receivable, and derivatives. All of the Company's cash and cash equivalents are held
with financial institutions that management believes to have high credit quality. The energy industry may
impact the Company’s overall exposure to credit risk, either positively or negatively, in that the customers
may be similarly affected by changes in economic, industry or other conditions. The Company performs
ongoing credit evaluations of its suppliers and customers' financial conditions. See Note 21. Segments for
further information on concentration of customers.
The Company uses interest rate swaps to manage interest rate risk. The Company is exposed to credit
risk associated with its derivative assets, which consist primarily of interest rate swaps. These derivative
assets are subject to the risk of loss in the event that counterparties fail to perform under the terms of the
contracts. The Company enters into derivative contracts with counterparties it believes to be creditworthy
and monitors counterparty exposure on an ongoing basis; however, the failure of a counterparty to
perform in accordance with the terms of a derivative contract could have an adverse effect on the
Company’s financial condition, results of operations, and cash flows. More than 60% of the derivative
assets are concentrated in a single lender as of December 31, 2025.
Our largest advance to a supplier is approximately $17 million. The Company generally does not require
collateral or security against advances to suppliers; however, the Company believes that the credit risk
posed by such supplier concentration is offset by the creditworthiness of its supplier base. The Company
is exposed to credit losses in the event of noncompliance by counterparties to its contractual obligations,
resulting in financial loss and general business risk of non-performance of contract obligations, which is
applicable to any contract of any type and a risk of actual cost of performance exceeding the contracted
cost, with such instances subject to change orders or renegotiation. The maximum amount of loss due to
credit risk, should these suppliers fail to perform, is any losses associated with the Company's obligations
towards its customers, being in a form of liquidated damages or any losses associated with replacing
these customers and the risk of the advance payments not being returned.
The Company maintains its cash in bank accounts with major financial institutions with high credit
standings. Cash deposits held in the United States are insured by the federal deposit insurance
F-12
SB Energy, Inc.
Notes to Consolidated Financial Statements
corporation (“FDIC”) for up to $250 thousand per account. As of December 31, 2025 and 2024, the
Company's cash balance held in financial institutions amounted to $218,713 thousand and $574,178
thousand, respectively, which was not fully insured by the FDIC. Nonetheless, management believes that
using major financial institutions with high credit ratings mitigates the credit risk sufficiently.
Property, plant and equipment
Property, plant and equipment is recorded at cost less accumulated depreciation. The cost of property,
plant and equipment comprises its purchase price and any directly attributable costs, including interest
costs capitalized during the period the asset is brought to its working condition and location for its
intended use. The Company expenses repair and maintenance costs as incurred which are included in
cost of operations in the consolidated statements of operations and comprehensive loss.
Depreciation on property, plant and equipment is calculated using the straight-line method over the
estimated useful lives of the respective assets. The estimated useful lives of the Company's property,
plant and equipment are as follows:
Land ..................................................................... | N/A |
Solar systems .................................................... | 35 years |
Leasehold improvements ................................. | Shorter of remaining lease term or estimated useful life |
Land is carried at cost and is not depreciated. Improvements to property, plant and equipment deemed to
extend the useful economic life of an asset are capitalized. Additional capacity added to property, plant
and equipment is depreciated over the remaining estimated useful life of the related asset. Repair and
maintenance costs are expensed as incurred and are included in cost of operations in the consolidated
statements of operations and comprehensive loss.
Construction in progress
Construction in progress (“CIP”) represents the accumulated cost of solar plants, data centers, and
battery energy storage systems that have not been placed into service as of the reporting date. CIP is
reclassified to property, plant and equipment when the project begins its commercial operations or is
placed into service, whichever is earlier. Advances to suppliers are recognized as prepayments when paid
and subsequently reclassified to CIP upon commencement of construction. CIP includes capitalized
interest cost, which includes debt issuance costs. Interest costs are capitalized to CIP while the solar
plants are under construction, as prescribed under ASC Topic 835 Interest. All of the interest costs were
incurred as a direct result of the construction activities. Under ASC Topic 835 Interest, the capitalization
period covers the duration of the activities required to get the asset ready for its intended use, provided
that expenditures for the asset have been made and interest cost is being incurred. The capitalization
periods begins when the following conditions are met: expenditures for the asset have been made,
activities that are necessary to get the asset ready for its intended use are in progress, and interest cost is
being incurred.
Revenues earned during testing or commissioning period of the solar power plant are recorded to CIP.
CIP is assessed for impairment in accordance with the impairment of long-lived assets policy. There were
no indicators of impairment as of December 31, 2025 and 2024.
Goodwill
The Company has three reportable segments, Standalone Power (“SP”), Data Centers (“DC”) and
Solutions (“SLN”), which also are the Company's reporting units. The entire goodwill balance as of
December 31, 2025 is related to the DC reporting unit. Goodwill is not amortized and is tested for
impairment at least annually or more often if and when circumstances indicate goodwill is not recoverable.
Generally, the Company assesses qualitative factors to determine whether it is more likely than not the
fair value of a reporting unit is less than its carrying value. Qualitative factors considered in the
F-13
SB Energy, Inc.
Notes to Consolidated Financial Statements
assessment include industry and market conditions, overall financial performance and other relevant
factors affecting the reporting unit. If, after assessing the qualitative factors, it is determined that it is not
more likely than not that the fair value of the reporting unit is less than its carrying value, then performing
a quantitative impairment test is unnecessary. However, if concluded otherwise, then the Company is
required to perform a quantitative goodwill impairment test. The quantitative impairment test, which is
used to identify both the existence of impairment and the amount of impairment loss, compares the fair
value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit
exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying value
of the reporting unit exceeds its fair value, any excess of the reporting unit goodwill carrying value over
the respective implied fair value is recognized as an impairment loss. The Company has not recognized
an impairment loss for the year ended December 31, 2025. The Company had no goodwill recorded for
the year ended December 31, 2024.
Impairment of long-lived assets
The Company evaluates long-lived assets for impairment when events or changes in circumstances
indicate that the carrying amount may no longer be fully recoverable. An impairment loss is required to be
recognized if the carrying value of the asset exceeds the undiscounted future net cash flows associated
with that asset. The impairment loss to be recognized is the amount by which the carrying value of the
long-lived asset exceeds the asset's fair value. In most instances, the fair value is determined by
discounting estimated future cash flows using an appropriate discount rate. The Company has not
recognized an impairment loss for the years ended December 31, 2025 and 2024.
Asset retirement obligations
Upon the expiration of the land lease arrangements for the solar power plants located on leasehold lands,
the Company is obligated to remove the structures and foundations, devise a plan ensuring the financial
resources will be available to fully decommission the site and restore the land to the same or better
condition.
Management estimates site restoration costs using inputs provided by an independent party to calculate
the fair valuation of the expected obligation. Subsequent revisions to the decommissioning plan and cost
estimate may be required based on changes in construction techniques and technology and changing
scrap values. The Company records the fair value of the liability for asset retirement obligations (“ARO”)
in the period in which it is incurred if it can be reasonably estimated, with the offsetting associated asset
retirement cost capitalized as part of the carrying amount of the long-lived assets. The asset retirement
cost is depreciated over the remaining useful life of the solar plant. The liability is accreted to its present
expected future value each period based on a credit adjusted risk free interest rate. Upon the
extinguishment of the obligation, the liability is eliminated and a gain or loss is recognized based on the
actual cost to retire. See Note 16. Asset retirement obligations for additional information.
Leases
All leases are evaluated at commencement to determine whether they represent finance or operating
leases. For the years ended December 31, 2025 and 2024, the lease liabilities presented in the
consolidated balance sheets are operating leases.
Short-term operating leases with an initial term of 12 months or shorter are not recorded on the
consolidated balance sheets but are expensed on a straight-line basis over the lease term. Long-term
operating leases with a greater than 12-month term are included on the consolidated balance sheets as
right-of-use assets and lease liabilities. Right-of-use assets represent the right to use an underlying asset
for the lease term and operating lease liabilities represent the obligation to make lease payments arising
from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date
based on the present value of lease payments over the term. As the rate implicit in the least is generally
not readily determinable, the Company uses an incremental borrowing rate by leveraging internally
available information to determine the present value of lease payments. The Company calculates the
F-14
SB Energy, Inc.
Notes to Consolidated Financial Statements
straight-line rent amount over the period from the lease commencement date through the lease end date
and records the straight-line amount as rent expense which is included in cost of operations in the
consolidated statements of operations and comprehensive loss every period. See Note 17. Leases for
further discussion.
Land easements
The Company has entered into various land easements for a defined term, which are prepaid or paid
overtime, and give the Company certain rights as to the use of the land for solar activity. The land
easements are evaluated under ASC Topic 842 Leases and classified as leases if the criteria is met. If the
easements are not classified as leases, they are capitalized into CIP until the construction is complete.
Costs incurred after construction is complete are recorded to cost of operations on the consolidated
statements of operations and comprehensive loss.
Fair value of financial instruments
The Company applies authoritative guidance for fair value measurements for its financial assets and
liabilities. The guidance defines fair value as an exit price representing the amount that would be received
upon the sale of an asset or paid to transfer a liability in an orderly transaction between market
participants. The guidance also establishes a fair value hierarchy, which prioritized the inputs used in
measuring fair value. The standard describes three levels of inputs that may be used to measure fair
value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in
active markets. The Company’s restricted cash balance for all periods presented uses Level 1 fair
value inputs.
Level 2—Inputs reflect quoted prices for identical assets or liabilities in markets that are not active;
quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are
observable for the assets or liabilities; or inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
Level 3—Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation
techniques used to determine fair value. These assumptions are required to be consistent with market
participant assumptions that are reasonably available.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value.
In accordance with ASC Topic 820 Fair Value Measurement, assets and liabilities are to be measured
based on the following valuation techniques:
•Market approach—Prices and other relevant information generated by market transactions involving
identical or comparable assets or liabilities.
•Income approach—converting the future amounts based on the market expectations to its present
value using the discounting methodology.
•Cost approach—Replacement cost method.
The valuation techniques and inputs used in our fair value measurements are described in Note 13. Fair
value measurements.
Advances to suppliers
The Company makes prepayments to certain suppliers and such amounts are recorded in advances to
suppliers in the consolidated balance sheets. Advances to suppliers expected to be utilized within twelve
months as of each balance sheet date are recorded as current assets and the portion expected to be
utilized after 12 months are classified as non-current assets in the consolidated balance sheets.
F-15
SB Energy, Inc.
Notes to Consolidated Financial Statements
Provisions and contingencies
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will be required to settle the obligation, and a reasonable
estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, considering the risks and uncertainties surrounding
the obligation. When a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
Contingent liabilities are disclosed in the notes to consolidated financial statements, unless possibility of a
loss is remote. See Note 14. Commitments and contingencies for further discussion.
Revenue recognition
The Company applies the guidance in ASC Topic 606 Revenue from Contracts with Customers when
recognizing revenue associated with its contracts with customers.
The Company recognizes revenue from the satisfaction of performance obligations under our PPAs to
provide electricity to our end customers as the electricity is provided over the term of the agreement in the
amount invoiced, which reflects the amount of consideration to which the Company has the right to
invoice, and which corresponds to the value transferred under such arrangements.
The Company's policies with respect to its various revenue streams are detailed below. See Note 6.
Revenue for further discussion.
PPAs and Merchant Revenue
The majority of the Company's revenues are obtained through PPAs. PPAs are accounted for as
executory contracts under ASC Topic 606 Revenue from Contracts with Customers. In applying ASC
Topic 606 Revenue from Contracts with Customers, the Company determines whether the sale of energy,
capacity, and other attributes or services represent a single performance obligation based on the terms of
contracts. Generally, the promise to transfer energy and capacity represents a performance obligation
that is satisfied over time and meets the criteria to be accounted for as a series of distinct goods or
services. Revenue is recognized each period, as electricity is produced by the solar facility and delivered
to the off-takers at the rate billable per MWh (“Megawatt-hour”) under the terms of the PPAs.
Merchant revenue represents sales of electricity that are not subject to long‑term PPAs and is generated
when electricity produced in excess of contracted volumes is sold into the wholesale energy CAISO and
ERCOT markets at prevailing market prices. Merchant sales similarly represent a single performance
obligation to deliver electricity and are recognized over time as electricity is delivered to the market, based
on settlement prices and the amount of consideration to which the Company has the right to invoice,
which corresponds directly with the value transferred to the customer.
Renewable Energy Credits (“RECs”)
RECs are usually sold through long-term PPAs or through REC contracts with counterparties. Revenue
from the sale of self-generated RECs is recognized when the related energy is generated and
simultaneously delivered even in cases where there is a certification lag. In a bundled contract to sell
energy, capacity and/or self-generated RECs, all performance obligations are deemed to be delivered at
the same time and hence, timing of recognition of revenue for all performance obligations are the same.
In such cases, it is unnecessary to allocate transaction price to multiple performance obligations. For
uncontracted RECs, revenue is recognized when control of the RECs is transferred to the customer,
which typically corresponds to the point in time at which the legal title is transferred.
Athos I Project Company and Athos II Project Company sell the RECs that they generate to the off-takers.
Per the production guarantee term defined in the PPAs, Athos I Project Company and Athos II Project
F-16
SB Energy, Inc.
Notes to Consolidated Financial Statements
Company guarantee to deliver the guaranteed annual energy production listed in the PPAs to the off
takers. In the event Athos I Project Company and Athos II Project Company fail to deliver guaranteed
energy production, Athos I Project Company and Athos II Project Company will either provide the
replacement RECs or pay the replacement price.
For the years ended December 31, 2025 and 2024, the Company recorded $0 and $653 thousand of
REC shortfall, respectively, which offsets the gross REC revenue of $17,151 thousand and $13,751
thousand, respectively.
Swap Settlements
To manage the financial exposures related to commodity price fluctuations, the Athos I Project Company
and Athos II Project Company entered into swap agreements to hedge against power purchase price
fluctuation. These swap agreements require monthly settlements in which the Athos I Project Company
and Athos II Project Company receive a fixed-price based on specified quantities of electricity and pays
the counterparty a variable market price based on the same specified quantity of electricity. These
contracts are accounted for as derivatives, and the Company has not applied hedge accounting. Cash
settlements received represent realized gains, while cash settlements paid represent realized losses
related to our commodity derivative instruments. The swap settlement gains and losses are presented as
a net amount in revenue in the consolidated statements of operations and comprehensive loss. In
addition to cash settlements, the Company also recognizes fair value changes on our commodity
derivative instruments in each reporting period in revenue on the consolidated statements of operations
and comprehensive loss. The changes in fair value result from settlements that may occur during each
reporting period, as well as the relationships between contract prices and the associated forward curves.
See Note 13. Fair value measurements for further discussion.
Certain of the Company’s solar plant project entities use energy-related financial instruments, specifically
energy swaps, to manage earnings variability arising from fluctuations in market energy prices. These
contracts are short-term in nature and are not designated as cash flow or fair value hedges. The solar
plant project entities settle these energy swap contracts on a monthly basis and recognize the resulting
settlement as the difference between the market price of energy and the agreed contract price as part of
revenue in the consolidated statements of operations and comprehensive loss.
General and administrative expenses
General and administrative expenses include costs for corporate, finance and other support staff
expense, professional fees and other corporate expenses.
Stock-based compensation
The Company accounts for profit units granted to certain employees and non-employee directors by
Energy Global, LP, an indirect parent entity of the Company, as share-based compensation under ASC
Topic 718 Compensation—Stock Compensation. Share-based compensation cost is measured based on
the fair value of the awards and is recognized on a straight-line basis over the requisite service period.
Equity-classified awards are measured at grant-date fair value and are not subsequently remeasured,
while liability-classified awards that settle in cash, or include an election to be settled in cash, are
remeasured at fair value at each reporting date through settlement or maturity, with changes in fair value
recognized in general and administrative expense in the consolidated statements of operations and
comprehensive loss. The Company recognizes forfeitures as they occur.
The fair value of profit units is estimated on the grant date utilizing an option pricing model, which
contains significant unobservable inputs that are believed to be consistent with those used by principal
market participants. See Note 19. Long-term incentive plan for additional information.
F-17
SB Energy, Inc.
Notes to Consolidated Financial Statements
Debt issuance costs
Transaction costs incurred in connection with obtaining loans are deferred as debt issuance costs and
amortized over the term of the respective loan using the effective interest rate method, as prescribed
under ASC Topic 470 Debt. The amortization of debt issuance costs are capitalized as part of CIP per
ASC Topic 835 Interest. Subsequent to the solar plant being placed into service, and CIP being
reclassified to property, plant and equipment, amortization of debt issuance costs is recorded as part of
interest expense in the consolidated statements of operations and comprehensive loss.
Income taxes
The Company elected to be taxed as a corporation for U.S. federal income tax purposes and therefore is
subject to entity-level U.S. federal income tax. Income tax expense recognized at the entity level reflects:
(i) U.S. federal income taxes imposed on us and on any corporate subsidiaries that are subject to entity-
level income tax; (ii) state and local income taxes in jurisdictions that impose entity-level taxes on
corporations or pass-through entities; and (iii) changes in deferred tax assets and liabilities, including as a
result of temporary differences between the tax basis and financial statement carrying value of our assets
and liabilities.
Income taxes are recorded under the asset and liability method, as prescribed under ASC Topic 740
Income Taxes, whereby deferred tax assets and liabilities are recognized for differences between the
financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using the enacted tax rates expected to be applied to taxable income
in the years in which those temporary differences are expected to be recovered or settled.
The Company recognizes the effect of income tax positions only if those positions are more likely than not
of being sustained. Recognized income tax positions are measured at the largest amount that is greater
than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in
which the change in judgment occurs. The Company records interest related to unrecognized tax benefits
in interest expense and penalties in general and administrative expenses.
ITCs are determined using the “flow-through” method. Transferable ITCs are accounted for as a
component of the tax provision, with expected proceeds factored into their realizability. See Note 12.
Income taxes for additional information.
Earnings (loss) per unit
Basic net income (loss) per unit is computed by dividing net income (loss) attributable to SB Energy, Inc.
by the weighted-average number of membership units outstanding during the period. Diluted net income
(loss) per unit is computed by giving effect to all potentially dilutive units during the period, if any. See
Note 20. Net income (loss) per unit for additional information.
Segment information
The Company determines its reportable segments in accordance with ASC Topic 280 Segment Reporting,
using the management approach. Under this approach, reportable segments are based on the internal
financial information that is regularly reviewed by the Company’s chief operating decision maker
(“CODM”) to assess performance and allocate resources. See Note 21. Segments for additional
information.
Correction of immaterial errors
The Company has made certain revisions to previously disclosed amounts for correcting immaterial errors
in our consolidated financial statements as of and for the year ended December 31, 2025. Specifically, the
Company revised contractual obligations for construction projects and remaining performance obligations
as of December 31, 2025. Additionally, the Company revised its disclosure related to the adoption of ASU
No. 2025-07, Derivatives and Hedging. The Company determined the changes are both quantitatively and
qualitatively immaterial both individually and in the aggregate.
F-18
SB Energy, Inc.
Notes to Consolidated Financial Statements
Recent accounting pronouncements adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (ASC Topic 280): Improvements
to Reportable Segment Disclosures. The amendments require disclosure of significant segment expenses
that are regularly provided to the CODM and included within each reported measure of segment profit or
loss, an amount and description of its composition for other segment items, and the title and position of
the CODM. The amendments also require all existing annual disclosures about a reportable segment's
profit or loss and assets to be provided in interim periods and clarify that entities with a single reportable
segment must apply the disclosure requirements under ASC Topic 280 Segment Reporting in their
entirety. The Company adopted ASU 2023-07 for the year ended December 31, 2025 on a retrospective
basis. See Note 21. Segments for the disclosures required by this standard.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (ASC Topic 740): Improvements to
Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring (1)
consistent categories and greater disaggregation of information in the effective tax rate reconciliation and
(2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve
the effectiveness of income tax disclosures. This guidance is effective for annual periods beginning after
December 15, 2024 and the Company adopted this guidance retrospectively on January 1, 2025. The
Company has enhanced its tax disclosures as required under this guidance as reflected in Note 12.
Income taxes.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (ASC Topic 815) and
Revenue from Contracts with Customers (ASC Topic 606): Derivative Scope Refinements and Scope
Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which
refines the scope of ASC Topic 815 and clarifies which contracts are subject to derivative accounting. The
guidance also provides clarification under ASC Topic 606 for share-based payments from a customer in a
revenue contract. The amendments in ASU No. 2025-07 are effective for fiscal years beginning after
December 15, 2026, and interim reporting periods, with early adoption permitted. The Company elected
to early adopt ASU No. 2025-07 effective December 31, 2025. The adoption of this ASU had no material
impact on the Company's consolidated financial position, results of operations or cash flows.
Recent accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive
Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which requires more detailed disclosures, on an annual and interim basis, about specified
categories of expenses (including employee compensation, depreciation, and amortization) included in
certain expense captions presented in the consolidated statements of operations and comprehensive
loss. This guidance as further clarified through ASU No. 2025-01, Income Statement—Reporting
Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) will be effective for
annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning
after December 15, 2027. Early adoption is permitted. Upon adoption, the guidance can be applied either
prospectively or retrospectively. The Company is currently evaluating the impact this amended guidance
may have on its consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (ASC Topic 805) and
Consolidation (ASC Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable
Interest Entity, which provides clarifying guidance on determining the accounting acquirer in certain
transactions involving VIEs. The update aims to improve consistency and comparability in financial
reporting. The guidance will be effective for annual periods beginning after December 15, 2026, including
interim periods within those annual periods. Early adoption is permitted. Upon adoption, the guidance will
be applied prospectively. The Company is currently evaluating the impact this amended guidance may
have on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope
Improvements. ASU 2025-11 is intended to improve the navigability of the guidance in ASC Topic 270
F-19
SB Energy, Inc.
Notes to Consolidated Financial Statements
Interim Reporting and clarify when it applies. ASU 2025-11 is effective for interim reporting periods within
annual reporting periods beginning after December 15, 2027, and early adoption is permitted. Upon
adoption, the guidance can be applied either prospectively or retrospectively. The Company is currently
evaluating the impact this amended guidance may have on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. ASU 2025-12
represents changes to the ASC that clarify, correct errors in or make other improvements to a variety of
topics that are intended to make it easier to understand and apply. The guidance will be effective for fiscal
years beginning after December 15, 2026 and interim periods within those annual periods. Early adoption
is permitted. The amendments to ASC Topic 260 Earnings per Share are required to be applied
retrospectively. All other amendments may be applied prospectively or retrospectively on an issue-by-
issue basis. The Company is currently evaluating the impact this amended guidance may have on its
consolidated financial statements.
Note 3. Equity method investment and variable interest entities
Equity method investment - Balanced Rock Power, LLC
Balanced Rock Power, LLC (“BRP”) develops solar and energy storage facilities that generate renewable
power. On July 31, 2023, the Company executed an Amended and Restated Limited Liability Company
Agreement and Subscription Agreement with Balanced Rock Power Holdco, LLC (“BRP Management”)
and SG Energy BRP, LLC (“Electra”), through which US Development has agreed to make certain
contributions to BRP, formed January 29, 2021, in exchange for the issuance of the units of BRP's
membership interests.
As of December 31, 2025, the Company held 27.9% economic interest and voting rights and has shared
governance and development rights of BRP. During 2025, the Company made an additional contribution
of $12,971 thousand. During 2024, the Company made an additional contribution of $36,735 thousand.
The Company recognizes only its share of the profits and losses based on the HLBV methodology.
As of December 31, 2025 and 2024, the carrying value of the Company’s equity method investment in
BRP was $33,763 thousand and $22,532 thousand, respectively. For the years ended December 31,
2025 and 2024, the Company recognized losses in equity method investment of $1,740 thousand and
$14,203 thousand, respectively, in the consolidated statements of operations and comprehensive loss.
Variable interest entities
The Company has a controlling financial interest in certain entities which have been identified as VIEs
under ASC Topic 810 Consolidations. These arrangements are primarily related to tax equity
arrangements entered into with third parties in order to monetize certain tax credits associated with solar
and energy storage facilities. Under the Company’s arrangements that have been identified as VIEs, the
third-party investors are allocated earnings, tax attributes and distributable cash in accordance with the
respective limited liability company agreements. Many of these arrangements also provide a mechanism
to facilitate achievement of the investor’s specified return by providing incremental cash distributions to
the investor at a specified date if the specified return has not yet been achieved.
As of December 31, 2025 and 2024, the Company's consolidated VIEs included the following:
•Orion 1 TE Holdco, LLC
•Orion 2 TE Holdco, LLC
•Orion 3 TE Holdco, LLC
•SE Athos TE Holdco, LLC
•SE Titan & Aragorn TE Holdco, LLC
•SE Titan & Aragorn TE Holdco, LLC
F-20
SB Energy, Inc.
Notes to Consolidated Financial Statements
•SE Juno TE Holdco, LLC
•Eiffel TE Holdco, LLC
The following table presents the assets and liabilities of the Company's consolidated VIEs as of
December 31, 2025 and 2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||
Assets | ||||
Cash and cash equivalents ........................................................................................... | $31,662 | $26,519 | ||
Restricted cash ............................................................................................................... | 8,761 | 35,318 | ||
Accounts receivable ....................................................................................................... | 11,441 | 13,598 | ||
Receivable from related parties, net ............................................................................ | 564 | — | ||
Prepaid and other current assets ................................................................................. | 6,701 | 8,601 | ||
Total current assets ................................................................................................... | 59,129 | 84,036 | ||
Property, plant and equipment, net .............................................................................. | 2,873,546 | 2,962,014 | ||
Operating lease right-of-use assets ............................................................................. | 146,575 | 148,908 | ||
Other non-current assets ............................................................................................... | 6,660 | 7,738 | ||
Total assets ............................................................................................................. | $3,085,910 | $3,202,696 | ||
Liabilities | ||||
Accounts payable ........................................................................................................... | $7,201 | $3,268 | ||
Accrued expenses and other current liabilities .......................................................... | 8,149 | 25,333 | ||
Payables to related parties ............................................................................................ | 1,394 | 169 | ||
Derivative liabilities, current .......................................................................................... | 17,399 | 28,404 | ||
Operating lease liabilities, current ................................................................................ | 9,309 | 9,141 | ||
Total current liabilities ............................................................................................... | 43,452 | 66,315 | ||
Debt from related parties ............................................................................................... | — | 8,451 | ||
Derivative liabilities, non-current .................................................................................. | 47,701 | 99,996 | ||
Operating lease liabilities, non-current ........................................................................ | 148,217 | 147,672 | ||
Asset retirement obligations .......................................................................................... | 62,519 | 58,040 | ||
Total liabilities ......................................................................................................... | $301,889 | $380,474 | ||
Note 4. Asset acquisitions
Holville acquisition
On November 12, 2024, the Company, through its subsidiary US Development, entered into a
membership interest purchase and sale agreement (“Holville MIPA”) with Samsung C&T Renewables,
LLC (“Samsung”) to acquire 100% of the membership interests in Holville Solar, LLC (“Holville”) for a
purchase price of $10,000 thousand, with payments subject to agreed upon terms and cancelable at the
Company’s option.
As of December 31, 2024, the total accumulated project cost of the Holville acquisition, including
payments for the Holville MIPA, was $1,246 thousand. At December 31, 2024 the Company determined it
would not pursue further development of Holville and recorded an impairment loss, writing off the
accumulated cost of $1,246.
On February 5, 2025, the Company entered into a mutual agreement with the landowners to terminate
their collective lease options in exchange for a release payment to the Company of $15,200 thousand.
The Company received the full payment on March 12, 2025 and recognized as other income (expense),
net in the consolidated statements of operations and comprehensive loss for the year ended December
31, 2025.
F-21
SB Energy, Inc.
Notes to Consolidated Financial Statements
Libra acquisition
On December 31, 2024, the Company through its subsidiary, Venus Buyer, LLC, entered into a
membership interest purchase agreement (“Libra MIPA”) with Arevia Power Portfolio, LLC (“Arevia”) to
acquire 100% of the membership interests in Libra Project Company, a development-stage solar project,
from Arevia for the total purchase price of $291,672 thousand.
As of December 31, 2025, $52,672 thousand in a closing payment out of the total purchase price of
$291,672 thousand was made to Arevia, with $239,000 thousand of the remaining purchase price to be
paid comprised of the following (in thousands):
Milestone required for future payment | Amount | |
Notice to proceed payment .............................................................................................................. | $174,000 | |
Commercial operation date payment ............................................................................................. | 65,000 | |
Total remaining purchase price ....................................................................................................... | $239,000 | |
The components of the remaining purchase price of $239,000 thousand are tied to future construction
milestones and are contingent upon achievement of these milestones. As of December 31, 2025, the
Company concluded that the achievement of these milestones is probable in accordance with ASC Topic
450 Contingencies and these amounts have been accrued. $174,000 thousand is presented as accrued
expenses and other current liabilities and $65,000 thousand is presented as other non-current liabilities
on the Company's consolidated balance sheets.
Louis Energy interconnection acquisition
On November 21, 2025, DC DevCo, the Company's wholly owned subsidiary, entered into a purchase
and sale agreement (“Louis Energy PSA”) and bill of sale and assignment agreement (“Louis Energy
BSA”) with Louis Energy Texas Inc. (“Louis Energy Texas”) to acquire ERCOT load interconnection
application at Galvani substation, for a total purchase price of $23,000 thousand. Subject to the Louis
Energy PSA and Louis Energy BSA, Louis Energy Texas has agreed to sell, assign and transfer the rights
to commercial contract, improved property, interconnection study agreement and load interconnection
request to Wind Energy Transmission Texas to DC DevCo. On November 21, 2025, the Company paid
the entire purchase of $23,000 thousand to Louis Energy Texas.
Note 5. Business combination
Studio 151 acquisition
On November 24, 2025 (the “Closing Date”), DC Holdco, the Company's wholly owned subsidiary,
entered into a membership interest purchase agreement (“Studio 151 MIPA”) with the sellers to acquire
100% of the membership interests in Studio 151, LLC (“Studio 151”). Studio 151 is a private engineering
and project-delivery services firm specializing in construction management, engineering services, and
project consulting for complex infrastructure markets.
The acquisition date fair value of the purchase consideration was $12,000 thousand, which consisted of
the cash paid to sellers in accordance with the Studio 151 MIPA. The Company incurred $200 thousand
of acquisition-related costs. These expenses are included in general and administrative expense on the
Company’s consolidated statements of operations and comprehensive loss for the year ended December
31, 2025.
Beginning at the Closing Date, the Company made additional quarterly cash payments of $500 thousand
to each seller for each of the eight consecutive calendar quarters after the Closing Date (the “Quarterly
Payments”), totaling $8,000 thousand, subject to each seller’s continued employment as of each payment
date. Quarterly Payments will be ceased for any seller who resigns, is terminated for cause, or otherwise
ceases continuous service before the final payment date. If both sellers cease continuous service under
F-22
SB Energy, Inc.
Notes to Consolidated Financial Statements
such conditions, no further Quarterly Payments are owed. If a seller is terminated without cause,
Quarterly Payments for that seller will continue as though the seller had remained in continuous service.
In addition, sellers are entitled to receive up to an aggregate of $20,000 thousand ($10,000 thousand to
each seller) in deferred cash consideration (“Deferred Cash Consideration”). The Deferred Cash
Consideration amount is earned pro rata over twelve consecutive calendar quarters following the Closing
Date, with 1/12 of each seller’s Deferred Cash Consideration becoming earned each quarter, provided
that such seller remains employed and in continuous service as of the applicable earning date. If a seller
resigns, is terminated for cause, or otherwise ceases continuous service before the final earning date, all
unearned portions are forfeited. If a seller is terminated without cause, earning continues on schedule as
if the seller had remained in continuous service.
The purchase consideration of $12,000 thousand was recorded as of the acquisition date. Both the
Quarterly Payments and the Deferred Cash Consideration were determined to be compensation rather
than consideration transferred; therefore, they are recorded as cost of operations as the related services
are rendered following the consummation of the transaction.
For the year ended December 31, 2025, the Company consolidated Studio 151 net assets of $1,007
thousand and recorded goodwill of $10,993 thousand on the Company's consolidated balance sheets.
The goodwill is attributable to the workforce of Studio 151, and it is not deductible for tax purposes.
Note 6. Revenue
Disaggregated Revenue
The following table presents the Company's revenue disaggregated by revenue stream for the years
ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31, | ||||
2025 | 2024 | |||
Energy revenue ..................................................................................................... | $125,830 | $87,454 | ||
REC revenue .......................................................................................................... | 17,151 | 13,098 | ||
Total revenue from contracts with customers ...................................... | $142,981 | $100,552 | ||
Derivative revenue ................................................................................................ | 70,486 | 131,691 | ||
Total revenue .................................................................................................. | $213,467 | $232,243 | ||
Derivative revenue includes net unrealized gains of $63,300 thousand and net realized gains of $7,186
thousand for the year ended December 31, 2025, and net unrealized gains of $119,300 thousand and net
realized gains of $12,391 thousand for the year ended December 31, 2024.
Remaining Performance Obligations (“RPO”)
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially
unsatisfied performance obligations as of the end of the reporting period. The Company has elected to
apply the optional disclosure exemptions under ASC 606 and, accordingly, does not disclose the value of
remaining performance obligations for contracts with an original expected duration of one year or less or
for variable consideration that qualifies for exclusion from the disclosure.
As of December 31, 2025, the Company did not have any remaining performance obligations required to
be disclosed. For projects that had commenced as of the period ended December 31, 2025, substantially
all consideration is variable and is excluded from the remaining performance obligation disclosure
because revenue is recognized in the amount to which the Company has the right to invoice or because
the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or, in certain
arrangements, to a wholly unsatisfied distinct good or service within a series of distinct goods or services.
F-23
SB Energy, Inc.
Notes to Consolidated Financial Statements
Contract Balances
The Company did not record any contract assets as none of its right to payment was subject to something
other than passage of time. The Company also did not record any contract liabilities as it recognizes
revenue only at the amount to which it has the right to invoice for the electricity and RECs delivered;
therefore, there are no advanced payments or billings in excess of electricity or RECs delivered.
Note 7. Accounts receivable
The Company recognized revenue and has outstanding balances due from customers included in
accounts receivable in the consolidated balance sheets as of December 31, 2025 and 2024. On an
ongoing basis, the Company evaluates accounts receivable based on customer and industry credit
conditions, collections, and historical payment performance. The Company's strategy regarding collection
efforts varies based on individual customer circumstances.
As of December 31, 2025 and 2024, the Company had an allowance for credit losses of $108 thousand
and $108 thousand, respectively, for accounts receivable deemed uncollectible from a single customer
due to the customer’s adverse liquidity position at the time.
Energy sales that have been delivered but not billed by period end are estimated. Accrued unbilled
revenues are based on estimates of delivered energy since the date of the last meter reading. Estimated
amounts are adjusted when actual usage is known and billed. As of December 31, 2025 and 2024, the
Company estimated the unbilled receivables to be $11,611 thousand and $8,395 thousand, respectively.
The following table presents the Company's accounts receivable balance and the allowance for credit
losses as of December 31, 2025 and 2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||
Billed trade receivable ........................................................................................... | $3,711 | $4,616 | ||
Unbilled trade receivable ...................................................................................... | 11,611 | 8,395 | ||
Other receivable ..................................................................................................... | 353 | 4,854 | ||
Total trade receivable ............................................................................................ | 15,675 | 17,865 | ||
Less: allowance for credit losses .................................................................... | (108) | (108) | ||
Accounts receivable, net .................................................................................. | $15,567 | $17,757 | ||
Note 8. Property, plant and equipment, net
The following table presents property, plant and equipment by asset category as of December 31, 2025
and 2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||
Land ......................................................................................................................... | $83,157 | $31,683 | ||
Solar systems ......................................................................................................... | 3,106,149 | 3,107,743 | ||
Leasehold improvements ..................................................................................... | 820 | 820 | ||
Asset retirement obligations ................................................................................. | 50,962 | 48,986 | ||
Construction in progress ....................................................................................... | 1,892,436 | 353,250 | ||
Total property, plant and equipment .................................................................... | 5,133,524 | 3,542,482 | ||
Less: accumulated depreciation ..................................................................... | (270,445) | (180,242) | ||
Property, plant and equipment, net ............................................................... | $4,863,079 | $3,362,240 | ||
F-24
SB Energy, Inc.
Notes to Consolidated Financial Statements
For the years ended December 31, 2025, and 2024, the Company recorded depreciation expense of
$90,203 thousand and $70,276 thousand, respectively, which is included in depreciation, amortization
and accretion on the consolidated statements of operations and comprehensive loss.
Note 9. Intangible assets
On June 12, 2024, Pelicans Jaw Solar, LLC executed a first amended and restated mitigation agreement
with RES Environmental Operating Company LLC (“RES”). For projects that affect endangered species,
an Incidental Take Permit (“ITP”) is issued to allow the project to proceed with certain unavoidable
impacts on protected species, under the condition that those impacts are mitigated by actions like habitat
preservation or restoration. The mitigation agreement ensures that the compensatory mitigation required
by the ITP is properly implemented. As part of the services, RES has to find and secure a conservation
easement to meet the mitigation requirements by California Department of Fish and Wildlife. On October
4, 2024, RES secured the easement and funded the endowment on behalf of Pelicans Jaw Solar, LLC. As
of December 31, 2024, Pelicans Jaw Solar, LLC paid $16,496 thousand to RES. Although conservation
easements by their nature impose perpetual land-use restrictions, the ITP granted to Pelican Jaw Solar,
LLC is specific to the project and is not transferable to any future or separate project following
decommissioning. Accordingly, the intangible asset is considered to have a finite useful life and, upon the
project reaching its commercial operation date, will be amortized on a straight-line basis over the
estimated useful life of the project. For the year ended December 31, 2025, no amortization expense has
been recorded as the project is not yet in service. Regular annual evaluation will be conducted for
potential impairment.
On November 4, 2025, Libra Solar, LLC executed an easement purchase agreement (“Libra EPA”) with
Southwest Critical Materials, LLC (“Libra EPA Seller”) to acquire certain easements on and through the
over, under, across, within and through property located in Lyon County, Nevada. In consideration of the
grant of the easements, Libra Solar, LLC paid $2,000 thousand to Libra EPA Seller. The easement is
recorded as an intangible asset in the consolidated balance sheet and will be amortized over the useful
life of the associated asset.
Note 10. Consolidated Balance Sheets Components
Prepaid and other current assets
Prepaid and other current assets consists of the following as of December 31, 2025 and 2024 (in
thousands):
December 31, 2025 | December 31, 2024 | |||
Security deposit ...................................................................................................... | $4,547 | $14,705 | ||
Prepaid expense .................................................................................................... | 13,695 | 16,368 | ||
Vendor credit .......................................................................................................... | 20,877 | — | ||
Other current assets .............................................................................................. | 1,650 | 359 | ||
Total prepaid and other current assets ........................................................ | $40,769 | $31,432 | ||
F-25
SB Energy, Inc.
Notes to Consolidated Financial Statements
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consists of the following as of December 31, 2025 and
2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||
Accrued compensation and benefits .................................................................. | $11,383 | $10,615 | ||
Accrued interest ..................................................................................................... | 18,824 | 26,136 | ||
Accrued contingent consideration related to Libra asset acquisition ............ | 174,000 | 60 | ||
Accrued equipment purchase liability ................................................................. | 40,060 | — | ||
Accrued construction project costs ..................................................................... | 386,797 | 100,446 | ||
Other accrued expenses ...................................................................................... | 15,875 | 14,692 | ||
Total accrued expenses and other current liabilities ............................... | $646,939 | $151,949 | ||
Note 11. Debt
Debt is categorized as either long-term or short-term. Short-term debt represents debt with an original
contractual maturity of one year or less, and the current portion of the long-term debt. The long-term debt
represents debt with an original contractual maturity greater than one year. The carrying value of the debt
approximates fair value. See Note 13. Fair value measurements for further discussion.
The following table shows debt as of December 31, 2025 and 2024 (in thousands, except rates):
Maturity Date | Interest Rate | December 31, 2025 | December 31, 2024 | |||||
IP Backlog Land Loan ....................................................... | August 2055 | 4.5% | $37,016 | $37,087 | ||||
Senior Borrower 1 Term Loan .......................................... | January 2034 | SOFR + 2% | 162,167 | 162,167 | ||||
Senior Borrower 2 Term Loan .......................................... | January 2034 | SOFR + 2% | 162,167 | 162,167 | ||||
Mezzanine Borrower 1 Term Loan ................................... | January 2034 | SOFR + 3% | 50,000 | 50,000 | ||||
Mezzanine Borrower 2 Term Loan ................................... | January 2034 | SOFR + 3% | 50,000 | 50,000 | ||||
Eiffel Term Loan .................................................................. | December 2033 | SOFR + 1.75% | 89,323 | 90,110 | ||||
Orion 1 Member B Term Loan .......................................... | October 2029 | SOFR + 1.625% | 83,339 | 84,979 | ||||
Orion 2 Member B Term Loan .......................................... | November 2034 | SOFR + 1.875% | 92,837 | 93,880 | ||||
Orion 3 Member B Term Loan .......................................... | September 2029 | SOFR + 1.625% | 96,984 | 98,176 | ||||
Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan(1) ...................................................................... | SOFR + 1.75% | 719,850 | 188,650 | |||||
Global Borrower Term Loan and Global Borrower Revolving Loan ................................................................... | October 2027 | SOFR + 3.75% | 435,985 | 443,235 | ||||
SE Borrower Term Loan .................................................... | September 2026 | 12.0% | 60,549 | 60,549 | ||||
Angela Bridge Loan(2) ........................................................ | SOFR + 1.25% | 127,900 | — | |||||
Total principal of debt ......................................................... | 2,168,117 | 1,521,000 | ||||||
Less: unamortized issuance costs and discount ........... | (64,664) | (64,360) | ||||||
Total debt, net of unamortized issuance costs and discount .................................................................... | $2,103,453 | $1,456,640 | ||||||
Less: debt, net, current (3) ................................................. | 193,281 | 234,675 | ||||||
Total debt, net, non-current ......................................... | $1,910,172 | $1,221,965 | ||||||
(1)The maturity date for the Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan is the earlier of the term loan conversion date,
tax equity final funding date, or March 31, 2027.
(2)The maturity date for the Angela Bridge Loan is the earlier of the sale lease-back date, funding date, or March 31, 2026.
(3)As of December 31, 2025 and 2024, the debt, net, current balance includes unamortized issuance costs and discount of $1,787
thousand and $10,806 thousand, respectively.
Pursuant to the financing agreements described below, the Company is required to maintain minimum
liquidity amounts and debt-service coverage ratio (“DSCR”). As of December 31, 2025, the Company was
in compliance with all financial covenants.
F-26
SB Energy, Inc.
Notes to Consolidated Financial Statements
The Company's future principal repayments for each of the next five years and thereafter subsequent to
December 31, 2025, are as follows (in thousands):
After December 31, 2025 | Principal | |
2026 .................................................................................................................................................... | $195,068 | |
2027 .................................................................................................................................................... | 1,168,378 | |
2028 .................................................................................................................................................... | 18,423 | |
2029 .................................................................................................................................................... | 296,332 | |
2030 .................................................................................................................................................... | 35,590 | |
Thereafter ........................................................................................................................................... | 454,326 | |
Principal repayments ................................................................................................................... | $2,168,117 | |
IP Backlog Land Loan
On September 10, 2020, the Company, through its wholly owned subsidiary, IP Backlog Land Holdings,
LLC, entered into a loan agreement (“IP Backlog Land Loan”) for a total loan amount of $37,010
thousand. As of December 31, 2025 and 2024, the principal outstanding on the loan was $37,016
thousand and $37,087 thousand, respectively, including capitalized interest of $0 thousand and $167
thousand, respectively.
The obligations under the IP Backlog Land Loan are secured by a Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Fixture Filing on substantially all of the assets of IP Backlog Land
Holdings, LLC, a subsidiary of the Company.
Senior Borrower 1 Term Loan
On January 24, 2024, Senior Borrower 1 entered into a financing agreement with certain lenders for a
total loan commitment of $162,167 thousand (“Senior Borrower 1 Term Loan) and a letter of credit facility
of $8,405 thousand. On May 10, 2024, the omnibus amendment and project letter of credit facility joinder
agreement was signed by and among Senior Borrower 1, Senior Borrower 2 and certain of the Class B
Members to increase the letter of credit facility commitment by $100,510 thousand. As of December 31,
2024, the total commitment under the letter of credit facility is $108,915 thousand. At closing, Senior
Borrower 1 also drew down $162,167 thousand in cash. Also pursuant to the agreements, 100% of the
membership interests of the Class B Members were pledged as collateral in the event of default.
The obligations under the Senior Borrower 1 Term Loan are secured by a first priority lien on substantially
all of the assets of Senior Borrower 1 and Senior Borrower 2, as well as SE Big Five Pledgor, LLC and SE
Big Five Borrower, LLC, which are both subsidiaries of the Company.
Senior Borrower 2 Term Loan
On January 24, 2024, Senior Borrower 2 entered into a financing agreement with certain lenders for a
total loan commitment of $162,167 thousand (“Senior Borrower 2 Term Loan”) and a letter of credit facility
of $8,405 thousand. At closing, Senior Borrower 2 also drew down $162,167 thousand in cash. Also
pursuant to the agreements, 100% of the membership interests of the Class B Members were pledged as
collateral in the event of default.
The obligations under the Senior Borrower 2 Term Loan are secured by a first priority lien on substantially
all of the assets of Senior Borrower 1 and Senior Borrower 2, as well as SE Big Five Pledgor, LLC and SE
Big Five Borrower, LLC, which are both subsidiaries of the Company.
Mezzanine Borrower 1 Term Loan
On January 24, 2024, Mezzanine Borrower 1 entered into a financing agreement with certain lenders for a
total loan commitment of $50,000 thousand (“Mezzanine Borrower 1 Term Loan”) and a letter of credit
facility of $15,000 thousand. At closing, Mezzanine Borrower 1 also drew down $50,000 thousand in cash.
F-27
SB Energy, Inc.
Notes to Consolidated Financial Statements
Also pursuant to the agreements, 50% of the membership interests of Senior Pledgor were pledged as
collateral in the event of default. As of December 31, 2025 and 2024, unamortized financing cost was
$1,344 thousand and $1,795 thousand, respectively.
The obligations under the Mezzanine Borrower 1 Term Loan are secured by a first priority lien on
substantially all of the assets of Mezzanine Borrower 1 and Mezzanine Borrower 2.
Mezzanine Borrower 2 Term Loan
On January 24, 2024, Mezzanine Borrower 2 entered into a financing agreement with certain lenders for a
total loan commitment of $50,000 thousand (“Mezzanine Borrower 2 Term Loan”) and a letter of credit
facility of $17,000 thousand. At closing, Mezzanine Borrower 2 also drew down $50,000 thousand in cash.
Also pursuant to the agreements, 50% of the membership interests of Senior Pledgor were pledged as
collateral in the event of default.
The obligations under the Mezzanine Borrower 2 Term Loan secured by a first priority lien on substantially
all of the assets of Mezzanine Borrower 1 and Mezzanine Borrower 2.
Eiffel Term Loan
On March 31, 2023, the Paris Farm Project Company entered into a financing agreement with certain
lenders for a total commitment of $78,535 thousand, of which the Paris Farm Project Company drew
down $61,553 thousand in cash (“Eiffel Construction Loan”). Interest was payable based on SOFR plus
113bps. On December 6, 2023, the Company, through its wholly owned subsidiary, Eiffel Member B, LLC
converted the Eiffel Construction Loan into a term loan (“Eiffel Term Loan”) and the total commitment on
the Eiffel Term Loan was $91,071 thousand. Eiffel Construction Loan had an outstanding principal of
$61,553 thousand at the time of conversion. During the year ended December 31, 2024, Eiffel Member B,
LLC made additional draws of $29,518 thousand on the Eiffel Term Loan. Pursuant to the agreements,
100% of the membership interests of the Paris Farm Project Company, wholly-owned by Eiffel TE Holdco,
LLC, were pledged as collateral in the event of default. During the year ended December 31, 2024, the
Eiffel Member B, LLC repaid $962 thousand on the Eiffel Term Loan. Eiffel Member B, LLC also paid the
total interest of $4,262 thousand for the year ended December 31, 2024. During 2025, the Eiffel Member
B, LLC repaid $786 thousand on the Eiffel Term Loan. Eiffel Member B, LLC also paid the total interest of
$5,884 thousand for the year ended December 31, 2025.
The obligations under the Eiffel Term Loan are secured by a first priority lien on substantially all of the
assets of Eiffel Member B, LLC, Eiffel Construction Holdco, LLC, and Eiffel TE Holdco, LLC, which are
subsidiaries of the Company.
Orion 1 Member B Term Loan
The Ben Milam 1 Project Company entered into a financing agreement with certain lenders dated August
4, 2023, for a total loan commitment of $255,720 thousand (“Ben Milam 1 Construction Loan”) and a letter
of credit facility of $31,808 thousand. As per the terms of the financing agreements, on the earlier of the
substantial completion closing date or the loan maturity date of November 1, 2024, the principal amount
of Ben Milam 1 Construction Loan was to be converted to a term loan. Interest was payable based on
SOFR plus 137.5bps. On October 30, 2024, Orion 1 Member B, LLC converted the Ben Milam 1
Construction Loan into Orion 1 Member B Term Loan with a letter of credit facility of $28,750 thousand.
Pursuant to the agreements, 100% of the membership interests of the Ben Milam 1 Project Company,
wholly-owned by Orion 1 TE Holdco, LLC, were pledged as collateral in the event of default. During 2025,
the Orion 1 Member B, LLC repaid $1,640 thousand on the Orion 1 Member B Term Loan. Orion 1
Member B, LLC also paid the total interest of $5,116 thousand for the year ended December 31, 2025.
The obligations under the Orion 1 Member B Term Loan are secured by a first priority lien on substantially
all of the assets of Orion 1 Member B, LLC, Orion 1 Construction Holdco, LLC, and Orion 1 TE Holdco,
LLC, which are subsidiaries of the Company.
F-28
SB Energy, Inc.
Notes to Consolidated Financial Statements
Orion 2 Member B Term Loan
The Ben Milam 2 Project Company entered into a financing agreement with certain lenders dated
November 16, 2024 date, for a total commitment of $314,414 thousand (“Ben Milam 2 Construction
Loan”) and a letter of credit facility of $56,344 thousand. As per the terms of the financing agreements, on
the earlier of the substantial completion closing date or the loan maturity date of October 31, 2024, the
principal amount of Ben Milam 2 Construction Loan was to be converted to a term loan. Interest was
payable based on SOFR plus 125bps. On November 26, 2024, Orion 2 Member B, LLC converted the
Ben Milam 2 Construction Loan into Orion 2 Member B Term Loan with the total loan commitment of
$96,122 thousand and a letter of credit facility of $33,756 thousand. Ben Milam 2 Construction Loan had
the outstanding principal of $93,880 thousand at the time of conversion. Orion 2 Member B Term Loan
matures on November 26, 2034. Pursuant to the agreements, 100% of the membership interests of the
Ben Milam 2 Project Company, wholly-owned by Orion 2 TE Holdco, LLC, were pledged as collateral in
the event of default. During 2025, the Orion 2 Member B, LLC repaid $1,043 thousand on the Orion 2
Member B Term Loan. Orion 2 Member B, LLC also paid the total interest of $5,100 thousand for the year
ended December 31, 2025.
The obligations under the Orion 2 Member B Term Loan are secured by a first priority lien on substantially
all of the assets of Orion 2 Member B, LLC, Orion 2 Construction Holdco, LLC, and Orion 2 TE Holdco,
LLC, which are subsidiaries of the Company.
Orion 3 Member B Term Loan
The Ben Milam 3 Project Company entered into a financing agreement with certain lenders dated June
15, 2023, for a total loan commitment of $333,200 thousand (“Ben Milam 3 Construction Loan”) and a
letter of credit facility of $37,183 thousand. As per the terms of the financing agreements, on the earlier of
the substantial completion closing date or the loan maturity date of October 31, 2024, the principal
amount of Ben Milam 3 Construction Loan was to be converted to a term loan. Interest was payable
based on SOFR plus 137.5bps. On September 3, 2024, Orion 3 Member B, LLC converted the Ben Milam
3 Construction Loan into Orion 3 Member B Term Loan with the total loan commitment of $98,176
thousand and a letter of credit facility of $37,050 thousand. Pursuant to the agreements, 100% of the
membership interests of Ben Milam 3 Project Company, wholly-owned by Orion 3 TE Holdco, LLC, were
pledged as collateral in the event of default. During 2025, the Orion 3 Member B, LLC repaid $1,192
thousand on the Orion 3 Member B Term Loan. Orion 3 Member B, LLC also paid the total interest of
$5,986 thousand for the year ended December 31, 2025.
The obligations under the Orion 3 Member B Term Loan are secured by a first priority lien on substantially
all of the assets of Orion 3 Member B, LLC, Orion 3 Construction Holdco, LLC, and Orion 3 TE Holdco,
LLC, which are subsidiaries of the Company.
Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan
Pelicans Jaw Solar, LLC entered into a financing agreement with certain lenders dated December 23,
2024, for a total loan commitment of $1,028,308 thousand (“Pelicans Jaw Construction Loan”) and
(“Pelicans Jaw Bridge Loan”) and a letter of credit facility of $72,313 thousand. During 2025, Pelicans Jaw
Solar, LLC made additional draws of $296,786 thousand on the Pelicans Jaw Construction Loan and
$234,414 thousand on the Pelicans Jaw Bridge Loan.
The obligations under the Pelican Jaw Construction/Bridge Loan are secured by a first priority lien on
substantially all of the assets of Pelicans Jaw Solar, LLC, Pelicans Jaw TE Holdco, LLC, Pelicans Jaw
Member B, LLC, and Pelicans Jaw Construction Holdco, LLC, which are subsidiaries of the Company.
Global Borrower Term Loan and Global Borrower Revolving Loan
On October 18, 2023, Global Borrower entered into a financing agreement (“Global Borrower Credit
Agreement”) with certain lenders, for a total term loan commitment of $200,000 thousand (“Global
Borrower Term Loan”), revolving loan commitment of $200,000 thousand (“Global Borrower Revolving
F-29
SB Energy, Inc.
Notes to Consolidated Financial Statements
Loan”) and a letter of credit facility commitment of $200,000 thousand. During 2024, Global Borrower
signed various amendments to the Global Borrower Credit Agreement to increase the term loan
commitment to $262,963 thousand, revolving loan commitment to $212,037 thousand and letter of credit
facility commitment to $225,000 thousand. Global Borrower Term Loan and Global Borrower Revolving
Loan mature on October 18, 2027. During 2024, Global Borrower made total draws of $262,963 thousand
on the Global Borrower Term Loan and $180,272 thousand on the Global Borrower Revolving Loan.
On October 22, 2025, Global Borrower amended the agreement with certain lenders to increase Global
Borrower Revolving Loan commitment to $262,037 thousand and the letter of credit facility commitment to
$475,000 thousand.
SE Borrower Term Loan
On March 6, 2024, SE Borrower entered into a financing agreement with certain lenders, for a total term
loan commitment of $134,000 thousand (“SE Borrower Term Loan”). SE Borrower Term Loan matures on
September 6, 2026. During the year ended December 31, 2024, SE Borrower made total draws of
$60,549 thousand.
The obligations under the SE Borrower Term Loan are secured by a first priority lien on substantially all of
the assets of SE Borrower, as well as Aratina Holdings, LLC, Aratina Pledgor, LLC, and Aratina Borrower,
LLC, which are subsidiaries of the Company.
Angela Bridge Loan
Angiola East, LLC entered into a financing agreement with certain lenders dated May 12, 2025, for a total
loan commitment of $140,572 thousand (“Angela Bridge Loan”). The initial draw of Angela Bridge Loan at
closing was $61,000 thousand. During 2025, Angiola East, LLC made additional draws of $66,900
thousand.
The obligations under the Angela Bridge Loan are secured by all of the assets of Angiola East, LLC, as
defined within the Angela Bridge Loan agreement.
Note 12. Income taxes
The components of loss before income taxes, determined by tax jurisdiction, are as follows (in
thousands):
Year Ended December 31, | ||||
2025 | 2024 | |||
United States .......................................................................................................... | $(778,890) | $(188,789) | ||
F-30
SB Energy, Inc.
Notes to Consolidated Financial Statements
Total income taxes for the years ended December 31, 2025 and 2024 is allocated as follows (in
thousands):
Year Ended December 31, | ||||
2025 | 2024 | |||
Current: | ||||
United States .......................................................................................................... | $(68) | $(839) | ||
State and Local ...................................................................................................... | — | (4) | ||
Total current tax benefit .................................................................................... | $(68) | $(843) | ||
Deferred: | ||||
State and Local ...................................................................................................... | 9,270 | 16,105 | ||
Total deferred tax expense .............................................................................. | $9,270 | $16,105 | ||
Income tax expense ........................................................................................... | $9,202 | $15,262 | ||
Reconciliation of effective tax rate
The income tax expense attributable to loss before income taxes was $9,202 thousand and $15,262
thousand for the years ended December 31, 2025 and 2024, respectively. These tax expenses (benefits)
differed from the amounts computed by applying the U.S. federal income tax rate of 21.0% to loss before
income taxes as a result of the following items (in thousands):
Year ended December 31, 2025 | Year ended December 31, 2024 | |||||||
Amount | Effective Rate | Amount | Effective Rate | |||||
US federal statutory income tax benefit ............... | (163,567) | 21.0% | (39,645) | 21.0% | ||||
Domestic Federal: | ||||||||
Tax credits ............................................................ | 82 | 0.0% | (5,509) | 2.9% | ||||
Non taxable or non deductible: | ||||||||
Equity compensation ..................................... | 141,550 | (18.2)% | 29,464 | (15.6)% | ||||
Taxes attributable to non-controlling interests ........................................................... | 10,518 | (1.4)% | 65,133 | (34.5)% | ||||
Other reconciling items ...................................... | 2,451 | (0.3)% | 272 | (0.1)% | ||||
Changes in valuation allowance ............................ | 8,898 | (1.1)% | (50,447) | 26.7% | ||||
Domestic State: | ||||||||
State income taxes, net of federal effect ......... | 9,270 | (1.2)% | 15,994 | (8.5)% | ||||
Total income tax expense attributable to loss before income taxes ................................... | $9,202 | (0.7)% | $15,262 | (8.1)% | ||||
F-31
SB Energy, Inc.
Notes to Consolidated Financial Statements
The following table details the amount of income taxes paid, net of refunds, for the years ended
December 31, 2025 and 2024 (in thousands):
Year Ended December 31, | ||||
2025 | 2024 | |||
Income taxes paid (net of refunds) | ||||
US Federal .............................................................................................................. | $— | $345 | ||
US State and Local ................................................................................................ | 30 | — | ||
Total ................................................................................................................... | $30 | $345 | ||
Deferred tax balances
The significant components of net deferred tax assets as of December 31, 2025 and 2024 are as follows
(in thousands):
December 31, 2025 | December 31, 2024 | |||
Deferred tax asset: | ||||
Net operating loss carryforward ...................................................................... | $48,490 | $14,443 | ||
Investment tax credit carryforward ................................................................. | 44,888 | 44,503 | ||
Interest expense carryforward ........................................................................ | 68,932 | 50,742 | ||
Development assets and CIP ......................................................................... | — | 744 | ||
Other ................................................................................................................... | 2,126 | 1,558 | ||
Total deferred tax asset ........................................................................................ | 164,436 | 111,990 | ||
Deferred tax liability: | ||||
Derivative liability .............................................................................................. | (342) | (2,343) | ||
Basis difference in the equity method investment ....................................... | (158,407) | (109,255) | ||
Other ................................................................................................................... | (1,446) | — | ||
Total deferred tax liability ...................................................................................... | (160,195) | (111,598) | ||
Less: valuation allowance ................................................................................ | (29,616) | (16,497) | ||
Total net deferred tax liability ......................................................................... | $(25,375) | $(16,105) | ||
On December 31, 2025, the Company had U.S. federal and state net operating loss carryforwards of
approximately $224,906 thousand and $18,045 thousand, respectively. On December 31, 2024, the
Company had U.S. federal and state net operating loss carryforwards of approximately $64,246 thousand
and $13,619 thousand, respectively. The U.S. federal net operating losses have an indefinite life
carryforward and the state net operating losses expire between 2040 and 2044.
The Company maintained a valuation allowance against net federal deferred tax assets as of December
31, 2025 and 2024 as it is more likely than not that such amounts will not be realized. During the years
ended December 31, 2025 and 2024, the valuation allowance has changed by $13,119 thousand and
$50,447 thousand, respectively.
On December 31, 2025, the Company has a federal ITC carryforward of $44,888 thousand, which can be
carried forward for 20 years, expiring between 2041 - 2044. The Company uses the flow-through method
of accounting for ITCs under which the current and deferred tax expense from the credits (net of valuation
allowance) is recognized as a reduction in tax expense for the year.
On July 4, 2025, the U.S. signed into law the H.R.1 legislation commonly referred to as the OBBBA. The
OBBBA contains significant tax provisions, such as permanent extension of certain expiring provisions of
F-32
SB Energy, Inc.
Notes to Consolidated Financial Statements
the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business provisions.
The legislation has multiple effective dates, with certain provisions effective in 2025 and others
implemented through 2027. The OBBBA did not result in any material adjustments to the Company’s total
income tax provision for the year ended December 31, 2025, and the Company has adjusted our deferred
tax balances to reflect the impacts of the OBBBA enactment. However, given the complexity of tax laws,
related regulations and interpretations, the Company’s current estimates may require revision as
additional information becomes available regarding the application of the OBBBA provisions.
The Company's major taxing jurisdictions include U.S., Federal, California and Texas. The Company is
not currently under any income tax examinations. The Company's tax years 2022 and forward are open to
examination. The Company does not have any unrecognized tax benefits during any of the periods
presented and does not expect this to change in the next twelve months.
The Company does not have any unrecognized tax benefits during any periods presented and does not
expect this to significantly change in the next twelve months. There were no interest and penalties
recorded in the statement of operations during any period and no amounts accrued for interest and
penalties on December 31, 2025 or 2024.
Note 13. Fair value measurements
Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The following is a
description of the valuation techniques that the Company uses to measure the fair value of the derivative
instruments on a recurring basis.
SE Athos I, LLC and SE Athos II, LLC entered into swap arrangements with two separate hedging parties.
Each of the swaps has a contractual term of 7 years and is effective upon the effective date of the
agreement, being April 1st, 2022 for Athos I and May 13th, 2022 for Athos II. The swaps hedge the
floating price per megawatt hour (MWh) against a contractual fixed price based on the underlying capacity
of the solar plant, projected at 338.7MWh and 270.9MWh of direct current, respectively. As of December
31, 2025 and 2024, the power price swaps are presented as derivative liabilities on the Company's
consolidated balance sheets. As of December 31, 2025, the remaining life of the swaps are 3.2 years for
SE Athos I, LLC, and 3.3 years SE Athos II, LLC.
The fair values of the power price swaps are based on a discounted cash flow method under the income
approach. Forecasted net settlement payments, to or from the Company, are estimated based on
forecasted prices, the fixed price, and the contractual hourly quantity. The fair value is then calculated by
discounting the forecasted net settlement payments based on discount rates commensurate with the term
and risk in each settlement payment. The forward power prices are based on observable market data
obtained from an independent third party (Standard & Poor's) and are constructed using CAISO SP15 on
peak and off peak forward price curves derived from Standard & Poor's market data. The Company does
not apply adjustments to the observable forward price inputs. The forecasted net settlement cash flows
are discounted using market based discount rates that reflect observable yield curves and credit spreads
applicable to the Company and the respective counterparties, with discount rates applied based on which
party is obligated to make the net settlement payment. As the valuation techniques utilize observable
inputs and do not rely on significant unobservable inputs, the Company classifies the power price swap
derivative instruments as Level 2 within the fair value hierarchy.
The Company is exposed to interest rate risk primarily through its variable rate indebtedness, the majority
of which bears interest at SOFR plus an applicable margin. The Company uses interest rate swaps to
manage interest rate risk. The fair value of the interest rate swaps is calculated as the net of the
discounted future cash flows of the pay and receive legs of the swaps. Mid-market interest rates on the
valuation date are used to create the forward curve for the floating legs and discount curve.
F-33
SB Energy, Inc.
Notes to Consolidated Financial Statements
The following table presents the list of interest rate swap contracts as of December 31, 2025 (in
thousands):
Subsidiary | Effective Date | Floating rate | Fixed rate | Termination date | Notional amount |
Eiffel Member B, LLC ....... | December 6, 2023 | 6-month term SOFR floating rate index | 3.45% | October 31, 2033 | $66,548 |
Ben Milam 1 ...................... | August 4, 2023 | 6-month term daily compounding SOFR floating rate index | 3.76% | July 31, 2044 | $64,879 |
Ben Milam 2 ...................... | November 16, 2023 | 6-month term daily compounding SOFR floating rate index | 4.17% | January 31, 2044 | $72,091 |
Ben Milam 3 ...................... | June 15, 2023 | 6-month term daily compounding SOFR floating rate index | 3.37% | August 31, 2044 | $73,787 |
Senior Borrower 1 and Senior Borrower 2 ............ | January 29, 2024 | 6-month term daily compounding SOFR floating rate index | 3.95% | January 25, 2034 | $243,909 |
Mezzanine Borrower 1 and Mezzanine Borrower 2 .......................................... | January 29, 2024 | 6-month term daily compounding SOFR floating rate index | 3.93% | January 25, 2029 | $75,000 |
Global Borrower ................ | November 19, 2025 | 3-month term daily compounding SOFR floating rate index | 3.79% | October 18, 2027 | $138,060 |
Global Borrower ................ | November 21, 2025 | 3-month term daily compounding SOFR floating rate index | 3.71% | October 18, 2027 | $59,167 |
Pelicans Jaw Solar, LLC . | September 30, 2026 | 6-month term daily compounding SOFR floating rate index | 4.20% | September 30, 2049 | $319,989 |
Pelicans Jaw Solar, LLC . | September 30, 2026 | 6-month term daily compounding SOFR floating rate index | 4.21% | September 30, 2049 | $44,087 |
Venus Buyer ...................... | March 5, 2025 | 6-month term daily compounding SOFR floating rate index | 3.96% | July 31, 2055 | $573,403 |
The following table presents the estimated fair values of the Company's asset and liability financial
instruments as of December 31, 2025 (in thousands):
Fair Value Measurement Using | ||||||||
Fair Value as of December 31, 2025 | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Non-current derivative asset - interest rate swaps ...................................................................... | $16,549 | $— | $16,549 | $— | ||||
Total assets ......................................................... | $16,549 | $— | $16,549 | $— | ||||
Liabilities: | ||||||||
Current derivative liability - power price swaps | $17,399 | $— | $17,399 | $— | ||||
Non-current derivative liability - interest rate swaps ...................................................................... | 15,327 | — | 15,327 | — | ||||
Non-current derivative liability - power price swaps ...................................................................... | 47,701 | — | 47,701 | — | ||||
Total liabilities ..................................................... | $80,427 | $— | $80,427 | $— | ||||
F-34
SB Energy, Inc.
Notes to Consolidated Financial Statements
The following table presents the estimated fair values of the Company's asset and liability financial
instruments as of December 31, 2024 (in thousands):
Fair Value Measurement Using | ||||||||
Fair Value as of December 31, 2024 | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Non-current derivative asset - interest rate swaps ...................................................................... | $13,789 | $— | $13,789 | $— | ||||
Total assets ......................................................... | $13,789 | $— | $13,789 | $— | ||||
Liabilities: | ||||||||
Current derivative liability - power price swaps | $28,404 | $— | $— | $28,404 | ||||
Non-current derivative liability - interest rate swaps ...................................................................... | 5,418 | — | 5,418 | — | ||||
Non-current derivative liability - power price swaps ...................................................................... | 99,996 | — | — | 99,996 | ||||
Total liabilities ..................................................... | $133,818 | $— | $5,418 | $128,400 | ||||
As of December 31, 2025, the discount rate ranges between 4.21% and 4.37%, with a weighted average
rate of 4.29%, and the floating price is between $12.25 and $64.42 for the Athos I Project Company. The
discount rate ranges between 3.97% and 4.10%, with a weighted average rate of 4.03%, and the floating
price is between $12.43 and $64.42 for Athos II Project Company.
As of December 31, 2024, the discount rate ranges between 5.06% and 5.16% and the floating price is
between $14.70 and $80.67 for the Athos I Project Company. The discount rate ranges between 4.80%
and 4.90%, and the floating price is between $14.95 and $80.77 for Athos II Project Company.
The following table presents a summary of the changes in the fair value of the Company's Level 3
financial instruments (in thousands):
December 31, 2025 | December 31, 2024 | |||
Beginning balance ............................................................................................. | $128,400 | $247,700 | ||
Unrealized mark to market gain on derivative ................................................... | (91,704) | (65,699) | ||
Settlements ............................................................................................................. | 28,404 | (53,601) | ||
Transfer from Level 3 to Level 2(1) ....................................................................... | (65,100) | — | ||
Closing balance .................................................................................................. | $— | $128,400 | ||
(1)During the year ended December 31, 2025, the power price swap derivative instrument fair value was reclassified from Level 3 to Level
2 due to the Company utilizing observable inputs for fair value measurement.
The carrying amounts of the Company's financial instruments, including cash and cash equivalents,
restricted cash, accounts receivable, accounts payable, and accrued expenses, approximate fair value
due to the short-term nature of these instruments. The carrying value of the Company's outstanding debt
under its various loans and revolving credit facilities approximates fair value because the interest rates on
these instruments are variable and reset frequently, and therefore approximate current market rates for
instruments with similar terms and maturities. See Note 11. Debt for further information.
Note 14. Commitments and contingencies
On December 14, 2023, the Juno Project Company, Titan Project Company and Aragorn Project
Company received an open letter from the Public Utility Commission of Texas for an investigation of non-
F-35
SB Energy, Inc.
Notes to Consolidated Financial Statements
compliance with the ERCOT operating guides. The Company believes that it is probable that the
investigation will result in an immaterial financial loss.
On April 19, 2024, the Company, on behalf of the Athos I Project Company and Athos II Project Company
voluntarily submitted a letter to the California Air Resources Board (“CARB”) to disclose the
noncompliance identified during the Company's review of the CARB regulation for reducing sulfur
hexafluoride emission from gas insulated switchgear for data years in 2021 and 2022. The self-disclosed
violations related to the requirement to submit annual greenhouse gas emissions data reports for the data
years 2021 and 2022. The Company believes that it is probable that the investigation will result in an
immaterial financial loss.
The Company has entered into PPAs providing annual delivery of a minimum amount of electricity at fixed
prices. The Company has certain interconnection tax security obligations with the transmission owner. In
connection with the financing agreement dated March 31, 2023, the Company entered into irrevocable
standby letters of credit to establish the debt service reserve letters of credit. As collateral for PPAs,
interconnection tax security obligations, debt service reserve, module procurement, cluster study and
resource adequacy agreements, the Company entered into letter of credit agreements (“LCs”) as a
safeguard for the following types of agreements as of December 31, 2025 and 2024 (in thousands):
December 31, 2025 | December 31, 2024 | |||
PPAs ........................................................................................................................ | $462,632 | $292,208 | ||
Financial derivatives .............................................................................................. | 8,907 | 3,907 | ||
Equity contribution obligation ............................................................................... | 16,000 | — | ||
Interconnection performance obligations ........................................................... | 143,686 | 53,663 | ||
Debt service reserve ............................................................................................ | 46,155 | 56,155 | ||
Cluster study agreement ..................................................................................... | 7,500 | 7,500 | ||
Resource adequacy agreement .......................................................................... | — | 1,800 | ||
Total LCs used .................................................................................................... | $684,880 | $415,233 | ||
Total LC commitment ........................................................................................ | $981,176 | $615,546 | ||
As of December 31, 2025 and 2024, the total surety bonds was $170,591 thousand and $80,699
thousand, respectively.
As of December 31, 2025 and 2024, the Company had no unconditional purchase obligations. As of
December 31, 2025, the Company had firm construction commitments of $2,312,840 thousand through
2028.
Note 15. Related party transactions
As of December 31, 2025 and 2024, the receivables from related parties of $195 thousand and $14
thousand, respectively, represent the amounts owed to the Company for bill payments made on behalf of
SB Energy Global Holding Limited and its subsidiaries.
As of December 31, 2025 and 2024, the payables to related parties of $188 thousand and $18,426
thousand, respectively, represent amounts owed to SB Energy Global Holdings One Limited for the tax
payment made on behalf of SBE US Holdings One, LLC.
As of December 31, 2025 and 2024, the debt from related parties of $709,520 thousand and $410,000
thousand, respectively, represent the intercompany revolving promissory notes between the Company as
the borrower and SBE Global, LP, the Company's direct parent, as lender at the annual interest rate of
6%.
F-36
SB Energy, Inc.
Notes to Consolidated Financial Statements
The Company entered into a U.S. State and Local Tax Sharing Agreement (“TSA”) with SB Group US,
Inc. that governs the respective rights, responsibilities and obligations of the Company and SB Group US,
Inc. with respect to certain state and local tax matters in jurisdictions and for taxable periods in which SB
Group US, Inc. is required to file tax returns on a consolidated, combined, unitary or other group basis
with the Company (the “Combined Returns”). Among other things, the TSA (i) allocates responsibility for
the preparation and filing of the Combined Returns and the payment of taxes due in connection therewith,
(ii) determines the appropriate allocation of any such tax liability between SB Group US, Inc. and the
Company, (iii) requires compensation to be paid by the Company to SB Group US, Inc. to the extent the
Company uses any tax attributes properly allocable to SB Group US, Inc. to offset taxes otherwise
allocable to the Company and vice versa, (iv) allocates responsibility for the conduct of tax contests
arising with respect to the Combined Returns, and (v) ensures that the parties are aligned on cooperating
and coordinating with respect to the Combined Returns.
On November 7, 2025, the Company executed a lease agreement (the “Cosmos Lease”), primarily for
data centers and office buildings, that had not yet commenced, with a related party. The aggregate
amount of estimated future undiscounted lease payments associated with such lease is $2,183,000
thousand. The lease will commence in stages between June 26, 2026 and February 5, 2027 based on
achievement of Ready for Service (“RFS”) status for several construction phases. The initial lease term is
15 years with an option for renewal for an additional 10 year period.
In connection with the execution of the Cosmos Lease, SoftBank Group Capital Limited, a SoftBank
Group affiliate, (the “Guarantor”), an affiliate of the related party, entered into a guaranty agreement (the
“Guaranty”) with the Company. Pursuant to the Guaranty, the Guarantor has irrevocably and
unconditionally guaranteed to the Company the full and prompt payment and performance of all
obligations of the related party arising under the Cosmos Lease. The Guarantor and the Company
anticipate that the maximum aggregate exposure under the Guaranty is approximately $2,617,000
thousand.
Note 16. Asset retirement obligations
The Company has AROs arising from a contractual liability to perform certain asset retirement activities at
the time that it disposes of its solar power plants. The liability is initially measured at fair value and is
subsequently adjusted for accretion expense and any changes in the amount or timing of the estimated
cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the
solar power plant and are depreciated over the asset's remaining useful life. Asset retirement cost is
recognized under property, plant and equipment, net on the consolidated balance sheets.
The following table presents the liability balance of the AROs and activity for years ended December 31,
2025 and 2024 (in thousands):
Balance as of December 31, 2023 ............................................................................................. | $39,073 | |
Additional obligations incurred ........................................................................................................ | 16,129 | |
Accretion expense ............................................................................................................................ | 2,840 | |
Balance as of December 31, 2024 ............................................................................................. | $58,042 | |
Additional obligations incurred ........................................................................................................ | 1,141 | |
Change in estimates ......................................................................................................................... | 834 | |
Accretion expense ............................................................................................................................ | 3,663 | |
Balance as of December 31, 2025 ............................................................................................. | $63,680 | |
Note 17. Leases
The Company leases the land at the site of its solar power plants. The land lease agreements have terms
ranging from 20 to 35 years with an ability to extend for periods of 5 to 10 years. The Company's lease
terms may include options to extend or terminate the lease when it is reasonably certain that the
F-37
SB Energy, Inc.
Notes to Consolidated Financial Statements
Company will exercise any such options. The extension periods are included in the life of the right-of-use
asset and lease liabilities up until the 35 years of useful life of the solar assets.
The Company accounts for the land leases as operating leases. Lease expense is recognized on a
straight-line basis over the expected lease term. At times, the Company enters into operating land leases
that are subject to annual changes to the lease payment based upon annual escalations between 1% to
5% per year until the end of the production term or based upon the lease schedule presented in the lease
agreements.
Information relating to the lease term and discount rate as of December 31, 2025 and 2024 were as
follows:
December 31, 2025 | December 31, 2024 | ||
Weighted-average remaining lease term (in years): | |||
Operating leases ..................................................................................................... | 31.98 | 32.9 | |
Weighted-average discount rate: | |||
Operating leases ..................................................................................................... | 6.45% | 6.44% | |
During the years ended December 31, 2025 and 2024, the Company recognized ground lease expenses
of $15,104 thousand and $14,684 thousand, respectively, which is included in cost of operations on the
consolidated statements of operations and comprehensive loss.
Operating lease information was as follows (in thousands):
Year Ended December 31, | |||
2025 | 2024 | ||
Cash paid for operating lease liabilities ............................................................... | $12,137 | $9,987 | |
The future lease payments included in the measurement of the Company's operating lease liabilities as of
December 31, 2025, were as follows (in thousands):
After December 31, 2025 | Leases | |
2026 .................................................................................................................................................... | $13,937 | |
2027 .................................................................................................................................................... | 14,190 | |
2028 .................................................................................................................................................... | 14,430 | |
2029 .................................................................................................................................................... | 13,874 | |
2030 .................................................................................................................................................... | 14,098 | |
Thereafter ........................................................................................................................................... | 487,383 | |
Total lease obligation ........................................................................................................................ | $557,912 | |
Less: imputed interest ...................................................................................................................... | (342,107) | |
Total operating lease liabilities .................................................................................................. | 215,805 | |
Operating lease liabilities, current .................................................................................................. | $13,833 | |
Operating lease liabilities, non-current .......................................................................................... | $201,972 | |
F-38
SB Energy, Inc.
Notes to Consolidated Financial Statements
Note 18. Member's equity
The membership equity of the Company is 100% owned by its parent entity, SBE Global. SBE Global's
limited liability company interests are generally consistent with ordinary equity ownership interests. During
the years ended December 31, 2025 and 2024, the Company received $496,571 thousand and $500,490
thousand in cash capital contributions from the SBE Global, and $674,019 and $606,816 in non-cash
contributions, respectively. During the years ended December 31, 2025 and 2024, the Company made
$512,058 thousand and $1,320 thousand in distributions to SBE Global, respectively. Distributions are to
be made to SBE Global at the sole discretion of the Parent, with no restrictions.
Note 19. Long-term incentive plan
Common A Profit Units
Effective July 2, 2024, SB Energy Holdco, LLC (“SB Partner”) and the 2022 Series C profit unit and Series
D profit unit holders (collectively, the “Profit Unit Holders”) entered into a securities purchase agreement
(“July 2024 Profit Unit SPA”) to purchase the outstanding vested and unvested profit units in exchange for
a combination of upfront cash payments, deferred cash payments with vesting conditions over three
years, and rollover units with vesting conditions over three years. As of the closing date of July 2, 2024,
the management of SB Partner determined the total number of 2022 Series C profit units (“2022 Series C
Profit Units”) and Series D profit units (“Series D Profit Units”) outstanding and applied the redemption
price $232.86 per 2022 Series C Profit Unit and $447.87 per Series D Profit Unit to calculate the total
value to the Profit Unit Holders for the upfront cash payments, deferred cash payments and rollover units.
The total value of the acquired units was $335,250 thousand, which represents upfront cash payments of
$137,942 thousand (41%), deferred cash payments of $87,599 thousand (26%) and rollover units of
$109,709 thousand (33%).
Pursuant to the July 2024 Profit Unit SPA, $137,942 thousand in cash was transferred to the Profit Unit
Holders upfront on the closing date of July 2, 2024 without any vesting conditions and $87,599 thousand
was deferred and vested over the period of three years. The deferred cash payments are paid in six equal
installments over three years after the closing date of July 2, 2024 and are subject to 5% accrued interest.
Pursuant to the July 2024 Profit Unit SPA, some of the 2022 Series C Profit Units and Series D Profit
Units were rolled over into common A units (“Common A Profit Units”) issued by Energy Global, LP to the
Common A Profit Unit holders. The Common A Profit Units vest over three years contingent on continued
employment. The Common A Profit Units are accounted as equity of Energy Global, LP in accordance
with ASC Topic 718 Compensation - Stock Compensation.
The total number of Common A Profit Units converted was 1,097,095 with the price per unit of $100.00 for
the total value of $109,710 thousand. During the years ended December 31, 2025 and 2024, 11,938 units
and 21,498 units were forfeited, respectively. The unvested units outstanding at December 31, 2025 had
a weighted-average remaining contractual term of 19 months.
The Company determined that the exchange of 75% of the 2022 Series C Profit Units for Common A
Profit Units, upfront cash and deferred cash payments is a Type III modification in accordance with ASC
Topic 718 Compensation - Stock Compensation because the vesting condition was deemed improbable
and is now considered probable. During the years ended December 31, 2025 and 2024, compensation
expense of $6,652 thousand and $9,290 thousand was recognized, respectively. The remaining 25% of
2022 Series C Profit Units were already legally vested and repurchased for $8,640 thousand.
The Company also determined that the exchange of 20% of Series D Profit Units (which are subject to a
performance condition) for Common A Profit Units and deferred cash payments is a Type III modification
in accordance with ASC Topic 718 Compensation - Stock Compensation because the vesting condition
was deemed improbable and is now considered probable. During the years ended December 31, 2025
and 2024, compensation expense of $20,046 thousand and $10,023 thousand was recognized,
respectively. $101,817 thousand of compensation expense was recognized for vested Series D Profit
F-39
SB Energy, Inc.
Notes to Consolidated Financial Statements
Units. Further, $37,758 thousand and $19,177 thousand of compensation expense was recognized for
unvested units during the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025 and 2024, unvested compensation cost that will be recognized over the
remaining vesting period is $102,516 thousand and $168,432 thousand, respectively. The weighted
average recognition period remaining at December 31, 2025 is 0.7 years.
2024 Series C Profit Units
Effective July 2, 2024, Energy Global, LP, an indirect parent entity of the Company, established its Long-
term Incentive Plan (“2024 LTIP”) with the aim of issuing equity interests to employees or other service
providers eligible to be designated as plan participants. The units under 2024 LTIP are available in one
class namely 2024 Series C Profit Units and are not transferable by the participants. The 2024 LTIP
authorizes and reserves the number of common units that may be issued pursuant to awards under the
plan to 10,000,000 2024 Series C Profit Units, which can be adjusted.
Eighty percent of the 2024 Series C Profit Units are subject to a service-based vesting condition that
commenced on July 2, 2024, and the remaining twenty percent vest upon occurrence of a liquidity event,
which is a performance-based vesting condition. The service-based vesting condition is satisfied over a
four year period, with a one year cliff vest and ratable quarterly vesting thereafter. Upon a liquidity event,
all unvested units, including any unvested service-based units, will vest, provided the participants remain
in continuous service through the consummation of the liquidity event.
The 2024 LTIP is accounted for in accordance with ASC Topic 718 Compensation - Stock Compensation,
and the 2024 Series C Profit Units are accounted for as a liability of the grantor, Energy Global, LP. These
liability-classified awards are remeasured to fair value as of each reporting period-end date until the
award’s settlement or expiration. Any changes to the fair value of liability-classified awards are recorded
as compensation expense in general and administrative expense in the consolidated statements of
operations and comprehensive loss, with a corresponding credit to equity as a capital contribution. The
Company recognizes forfeitures as they occur. The Company recognizes compensation expense related
to these liability-classified awards using a straight-line method.
The fair value of the 2024 Series C Profit Units is estimated at each reporting date using an option pricing
method. As the 2024 Series C Profit Units are profit interests in a private partnership, observable market
prices are not available. Accordingly, management employs a valuation technique that incorporates
unobservable inputs, reflecting the classification of the fair value measurement within Level 3 of the fair
value hierarchy in accordance with ASC Topic 820 Fair Value Measurement. The fair value of the 2024
Series C Profit Units was determined by allocating the total equity value of Energy Global, LP using the
option-pricing method, as described in the AICPA Accounting and Valuation Guide entitled, Valuation of
Privately-Held Company Equity Securities Issued as Compensation. Because Energy Global, LP is not
publicly traded, the Company must estimate the fair value of its equity. The Company considers numerous
objective and subjective factors to determine the fair value of awards at each meeting in which awards
are approved. The factors considered include, but are not limited to: (i) the results of contemporaneous
independent third-party valuations, (ii) the prices, rights, preferences, and privileges of Energy Global,
LP’s outstanding equity, (iii) the lack of marketability of the equity, (iv) actual operating and financial
performance and estimated trends and prospects for its future performance, current business conditions
and financial projections, (v) the likelihood of achieving a liquidity event, such as an initial public offering,
direct listing, or sale, given prevailing market conditions; and (vi) precedent transactions. The option-
pricing model treats the 2024 Series C Profit Units as call options on the total equity value of the Energy
Global, LP, with exercise (or strike) prices based on the value thresholds at which the allocation amount of
the various holders of securities changes. These strike prices are based on liquidation preferences of the
various classes of units and their participation prices. The fair value of the options associated with each
strike price were estimated using the option pricing model. Significant assumptions used in the option
pricing model include expected volatility, expected term to a liquidity event, risk-free interest rate, and a
discount for lack of marketability.
F-40
SB Energy, Inc.
Notes to Consolidated Financial Statements
The following significant assumptions were used in estimating the fair value of 2024 Series C Profit Units
as of December 31, 2025 (dollar amounts in thousands):
December 31, 2025 | |
Equity value of Energy Global, LP .................................................................................................................... | $29,768,938 |
Risk-free interest rate .......................................................................................................................................... | 3.5% |
Expected volatility ................................................................................................................................................ | 20.0% |
Expected term to liquidity .................................................................................................................................... | 0.75 years |
Discount for lack of marketability ....................................................................................................................... | 5.0% |
There were an immaterial number of 2024 Series C Profit Units outstanding as of December 31, 2024.
The following table summarizes profit unit activity under the 2024 LTIP and July 2024 Profit Unit SPA
during the years ended December 31, 2025 and 2024:
2022 Series C Profit Units | Series D Profit Units | Common A Profit Units | 2024 Series C Profit Units | ||||||||||||
Units (whole units) | Weighted- average grant date fair value (per unit) | Units (whole units) | Weighted- average grant date fair value (per unit) | Units (whole units) | Weighted- average grant date fair value (per unit) | Units (whole units) | Weighted- average grant date fair value (per unit) | ||||||||
Unvested as of December 31, 2023 ......... | 108,947 | $55.72 | 400,937 | $71.12 | — | — | |||||||||
Redeemed ........................... | (108,947) | (400,937) | 1,097,095 | $100.00 | — | ||||||||||
Granted ................................ | — | — | — | 5 | $4.14 | ||||||||||
Forfeitures ........................... | — | — | (21,498) | $100.00 | — | ||||||||||
Unvested as of December 31, 2024 ......... | — | — | 1,075,597 | $100.00 | 5 | $4.14 | |||||||||
Granted ................................ | — | — | — | 10,957,995 | $80.92 | ||||||||||
Forfeitures ........................... | — | — | (11,938) | $100.00 | (150,000) | $71.64 | |||||||||
Vested .................................. | — | — | (535,029) | $100.00 | (2,490,555) | $73.41 | |||||||||
Unvested as of December 31, 2025 ......... | — | — | 528,630 | $100.00 | 8,317,445 | $83.34 | |||||||||
The total fair value of the 2024 Series C Profit Units that vested during the year ended December 31,
2025 was $607,841 thousand.
The following table presents the plan stock-based compensation expense, which is included in general
and administrative expense on the consolidated statements of operations and comprehensive loss (in
thousands):
Year Ended December 31, | ||||
2025 | 2024 | |||
Stock-based compensation expense – 2024 Series C Profit Units ............... | $607,841 | $— | ||
Stock-based compensation expense - Deferred cash payment and Common A Profit Units .......................................................................................... | 66,210 | 38,490 | ||
Stock-based compensation expense – Series D Profit Units ......................... | — | 101,817 | ||
Total plan compensation expenses .............................................................. | $674,051 | $140,307 | ||
As of December 31, 2025, the total unrecognized compensation expense related to unvested 2024 Series
C Profit Units was $1,766,958 thousand. This amount reflects fair value of unvested units as of December
31, 2025 multiplied by the proportion of the requisite service period remaining, which is expected to be
recognized over a weighted-average remaining requisite service period of 2.6 years.
F-41
SB Energy, Inc.
Notes to Consolidated Financial Statements
Note 20. Net income (loss) per unit
Basic net income (loss) per unit is computed by dividing net income (loss) attributable to SB Energy, Inc.
by the weighted-average number of membership units (“Units”) outstanding during the period, as
retroactively adjusted for the January 9, 2026 in-substance recapitalization discussed in Note 1. Diluted
net income (loss) per unit is computed by giving effect to all potentially dilutive Units during the period, if
any. The Company had no potentially dilutive units outstanding for the periods presented; therefore basic
and diluted net income (loss) per unit is the same. The profit interests described in Note 19. Long-term
incentive plan were issued by Energy Global, LP, an indirect parent entity of the Company, and have not
been treated as potential Units of the Company in the calculation below.
The following table sets forth the computation of basic and diluted net income (loss) per unit (in
thousands, except units and per-unit amounts):
Year Ended December 31, | ||||
2025 | 2024 | |||
Numerator: | ||||
Net income (loss) attributable to SB Energy, Inc. ............................................. | $(738,008) | $106,104 | ||
Denominator: | ||||
Weighted-average Units outstanding - basic and diluted ................................ | 19,966,564 | 19,966,564 | ||
Net income (loss) per Unit - basic and diluted ........................................... | $(36.96) | $5.31 | ||
Note 21. Segments
The Company’s segment structure reflects how management currently operates and allocates resources.
The Company’s businesses are organized into three reportable segments: SP, DC and SLN. Corporate
represents the remaining non-segment operations consisting primarily of general corporate expenses,
unallocated overhead, and capital expenditures not allocated to our operating segments. No operating
segments have been aggregated.
SP includes the development, construction, ownership, and operation of grid-connected utility-scale solar
photovoltaic and battery energy storage system projects while DC includes the development and
commercialization of large-scale data center campuses, powered land opportunities, and related
infrastructure solutions. SLN represents intercompany services provided to SP and DC segments for the
development, construction and operation of portfolio projects within those segments. Development and
construction services are charged to DC and SP at a mark-up.
The Company’s CODM is the Leadership Team, comprised of the co-Chief Executive Officers and the
Chief Financial Officer. The CODM evaluates segment performance and allocates resources based on
Total Segment Adjusted EBITDA. The CODM uses Total Segment Adjusted EBITDA to evaluate the
operating performance of each reportable segment, monitor execution against operating plans and
budgets, and determine the level and timing of capital and resource deployment.
SP derives revenue primarily from the sale of energy, capacity, and related environmental attributes
(including renewable energy certificates) under PPAs and related market arrangements. DC is a distinct
reportable segment whose business activities include the development and commercialization of powered
land, data center campuses, and related infrastructure solutions. SLN is a third distinct reportable
segment whose purpose is to provide billable services related to the development, construction and
operations of project companies in SP and DC. For the years ended December 31, 2025 and 2024, all
reportable segment revenue was attributable to SP and SLN. The DC reportable segment was pre-
revenue for the years ended December 31, 2025 and 2024. Differences between the Company's measure
of segment profit or loss (Total Segment Adjusted EBITDA) and consolidated income before income taxes
are presented in the reconciliations below.
F-42
SB Energy, Inc.
Notes to Consolidated Financial Statements
All revenues from external customers and long-lived assets were attributable to the United States for each
period presented. Revenue from customers representing 10% or more of consolidated revenue for the
years ended December 31, 2025 and 2024 was as follows:
Year Ended December 31, | |||||
2025 | 2024 | Segment | |||
Customer A ................................................................................... | 16% | * | SP | ||
Customer B ................................................................................... | 13% | 19% | SP | ||
Customer C ................................................................................... | 10% | 15% | SP | ||
Customer D ................................................................................... | 29% | 16% | SP | ||
Customer E ................................................................................... | * | 13% | SP | ||
Customer F ................................................................................... | * | 12% | SP | ||
*Customer did not represent 10% or more of revenue.
The following tables present segment information, including revenue and cost information regularly
provided to and reviewed by the CODM by segment, and a reconciliation to total consolidated income (in
thousands). Certain expenses, such as corporate costs and prospecting and development expenses,
have not been allocated to SP, DC or SLN and are shown separately to reconcile to the applicable
consolidated amounts. The CODM reviews significant segment expenses in the aggregate within
segment costs which are disclosed below.
Year Ended December 31, | ||||
2025 | 2024 | |||
DC revenue ............................................................................................................ | $— | $— | ||
SP revenue ............................................................................................................ | 213,467 | 232,243 | ||
SLN revenue ........................................................................................................... | 62,366 | 25,715 | ||
Subtotal ............................................................................................................... | $275,833 | $257,958 | ||
Elimination of revenue from transactions with other operating segments .... | (62,366) | (25,715) | ||
Total revenue from contracts with customers ............................................ | $213,467 | $232,243 | ||
Year ended December 31, 2025 | |||||
DC | SP | SLN | |||
Revenue ........................................................................................ | $— | $213,467 | $— | ||
Revenue from transactions with other operating segments . | — | — | 62,366 | ||
Segment costs(1) ..................................................................... | — | (65,969) | (42,179) | ||
Unrealized change in fair value of power price swap derivatives ................................................................................ | — | (63,300) | — | ||
Other segment items(2) ........................................................... | — | 13,480 | 2,069 | ||
Total Segment Adjusted EBITDA ......................................... | $— | $97,678 | $22,256 | ||
F-43
SB Energy, Inc.
Notes to Consolidated Financial Statements
Year ended December 31, 2024 | |||||
DC | SP | SLN | |||
Revenue ........................................................................................ | $— | $232,243 | $— | ||
Revenue from transactions with other operating segments . | — | — | 25,715 | ||
Segment costs(1) ..................................................................... | — | (48,524) | (37,746) | ||
Unrealized change in fair value of power price swap derivatives ................................................................................ | — | (119,300) | — | ||
Other segment items(2) ........................................................... | — | 16,242 | — | ||
Total Segment Adjusted EBITDA ......................................... | $— | $80,661 | $(12,031) | ||
(1)Segment costs are comprised of total operating expenses and exclude pre-operating period expenses, unallocated overhead deemed
unrelated to segments, and stock-based compensation expense. It also excludes depreciation, amortization, and accretion, which are
presented separately in the consolidated statements of operations. Also excluded are intercompany eliminations of $54,869 thousand
and $25,783 thousand for the years ended December 31, 2025 and 2024, respectively.
(2)Other segment items for each reportable segment are comprised of (i) certain revenue and expense items classified in other income
(expense), net in the consolidated statement of operations, including proceeds from the mutual termination of lease options related to
the Holville project opportunity of $15,200 thousand in the year ended December 31, 2025, and (ii) test power sale proceeds in the year
ended December 31, 2024, which eliminate upon consolidation.
Year Ended December 31, | |||
2025 | 2024 | ||
Total Segment Adjusted EBITDA: | |||
DC ......................................................................................................................... | $— | $— | |
SP ......................................................................................................................... | 97,678 | 80,661 | |
SLN ....................................................................................................................... | 22,256 | (12,031) | |
Total Segment Adjusted EBITDA ................................................................ | $119,934 | $68,630 | |
Elimination of intersegment (revenue) expense, net .................................... | (6,538) | — | |
Test power sale proceeds ................................................................................. | — | (14,444) | |
Pre-operating period expenses ........................................................................ | (7,586) | (5,099) | |
Unallocated overhead ....................................................................................... | (26,043) | (18,415) | |
Depreciation, amortization and accretion ....................................................... | (94,080) | (73,314) | |
Interest expense, net of interest income ........................................................ | (147,754) | (108,590) | |
Stock-based compensation expense .............................................................. | (674,051) | (140,307) | |
Unrealized change in fair value of power price swap derivatives ............... | 63,300 | 119,300 | |
Losses in equity method investment ............................................................... | (1,740) | (14,203) | |
Other non-cash items, net ................................................................................ | (4,332) | (2,347) | |
Income tax expense ........................................................................................... | (9,202) | (15,262) | |
Net loss and comprehensive loss ................................................................... | $(788,092) | $(204,051) | |
Our total project assets for each segment as of December 31, 2025 and 2024 are as follows (in
thousands):
As of December 31, 2025 | |||||||||
DC | SP | SLN | Corporate | Consolidated | |||||
Total current assets ................................ | $4,154 | $151,724 | $45,511 | $104,809 | $306,198 | ||||
Property, plant and equipment, net ..... | 342,977 | 4,519,437 | 665 | — | 4,863,079 | ||||
Other non-current assets ...................... | 75,871 | $334,669 | $2,029 | 718 | 413,287 | ||||
Total assets .......................................... | $423,002 | $5,005,830 | $48,205 | $105,527 | $5,582,564 | ||||
F-44
SB Energy, Inc.
Notes to Consolidated Financial Statements
As of December 31, 2024 | |||||||||
DC | SP | SLN | Corporate | Consolidated | |||||
Total current assets ................................ | $— | $251,628 | $9,463 | $362,290 | $623,381 | ||||
Property, plant and equipment, net ..... | — | 3,361,534 | 706 | — | 3,362,240 | ||||
Other non-current assets ...................... | — | 286,791 | 2,546 | 248 | 289,585 | ||||
Total assets .......................................... | $— | $3,899,953 | $12,715 | $362,538 | $4,275,206 | ||||
F-45
SB Energy, Inc.
Notes to Consolidated Financial Statements
Note 22. Condensed financial information of registrant (parent company only)
SB Energy, Inc.
(Parent Company Only)
Condensed Balance Sheets
In thousands, unless otherwise stated
December 31, 2025 | December 31, 2024 | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents ..................................................................... | $87,650 | $— | ||
Accounts receivable and other current assets ...................................... | 1,128 | — | ||
Total current assets .................................................................................... | 88,778 | — | ||
Non-current assets | ||||
Investment in subsidiaries ........................................................................ | 1,817,677 | 1,694,582 | ||
Other non-current assets .......................................................................... | 738 | 298 | ||
Total non-current assets ........................................................................... | 1,818,415 | 1,694,880 | ||
Total assets ................................................................................................... | $1,907,193 | $1,694,880 | ||
Liabilities and member's equity | ||||
Current liabilities | ||||
Other current liabilities ............................................................................... | 1,909 | 18,910 | ||
Total current liabilities ............................................................................... | 1,909 | 18,910 | ||
Non-current liabilities | ||||
Debt - related party .................................................................................... | 709,520 | 410,000 | ||
Deferred tax liability ................................................................................... | 25,375 | 16,105 | ||
Total non-current liabilities ....................................................................... | 734,895 | 426,105 | ||
Total liabilities .............................................................................................. | $736,804 | $445,015 | ||
Member's equity | ||||
Contributed capital (19,966,564 units outstanding as of December 31, 2025 and 2024) .................................................................................... | 1,764,518 | 1,105,986 | ||
(Accumulated deficit) retained earnings ................................................. | (594,129) | 143,879 | ||
Total member's equity ................................................................................ | 1,170,389 | 1,249,865 | ||
Total liabilities and member's equity ..................................................... | $1,907,193 | $1,694,880 | ||
The accompanying notes are an integral part of these condensed financial statements.
F-46
SB Energy, Inc.
Notes to Consolidated Financial Statements
SB Energy, Inc.
(Parent Company Only)
Condensed Statements of Operations and Comprehensive Loss
In thousands, unless otherwise stated
Year Ended December 31, | ||||
2025 | 2024 | |||
Total operating costs and expenses ................................................... | $(4,724) | $(728) | ||
Equity in income (loss) of consolidated subsidiaries ............................ | (693,321) | 146,585 | ||
Interest income ...................................................................................... | 1,930 | — | ||
Interest expense .................................................................................... | (32,018) | (24,600) | ||
Other expense (income), net ............................................................... | (768) | (118) | ||
Income (loss) before income taxes ........................................................ | (728,901) | 121,139 | ||
Income tax expense .............................................................................. | (9,106) | (15,035) | ||
Net income (loss) and comprehensive income (loss) attributable to SB Energy, Inc. ........................................................................................ | $(738,007) | $106,104 | ||
The accompanying notes are an integral part of these condensed financial statements.
SB Energy, Inc.
(Parent Company Only)
Condensed Statements of Cash Flows
In thousands, unless otherwise stated
Year Ended December 31, | ||||
2025 | 2024 | |||
Cash flows from operating activities | ||||
Net cash provided by (used in) operating activities ................................... | $(53,339) | $50 | ||
Cash flows from investing activities | ||||
Payments for property, plant and equipment ...................................................... | (50) | |||
Investment in subsidiaries ...................................................................................... | (158,390) | — | ||
Net cash used in investing activities .............................................................. | $(158,390) | $(50) | ||
Cash flows from financing activities | ||||
Capital contributions ............................................................................................... | 495,000 | — | ||
Capital distributions ................................................................................................. | (495,141) | — | ||
Proceeds of debt - related parties ........................................................................ | 299,520 | — | ||
Net cash provided by financing activities ..................................................... | $299,379 | $— | ||
Net (decrease) increase in cash and cash equivalents and restricted cash ....... | 87,650 | — | ||
Cash and cash equivalents and restricted cash at the beginning of the period . | — | — | ||
Cash and cash equivalents and restricted cash at the end of period ........ | $87,650 | $— | ||
Supplemental disclosure of noncash investing and financing activities | ||||
Noncash capital contributions from parent ............................................................... | $658,675 | $1,105,986 | ||
The accompanying notes are an integral part of these condensed financial statements.
F-47
SB Energy, Inc.
Notes to Consolidated Financial Statements
Notes to Condensed Financial Statements of Registrant (Parent Company Only)
1.Basis of Presentation
These condensed parent company-only financial statements have been prepared in accordance with Rule
12-04, Schedule I of Regulation S-X, as the restricted net assets (as defined in Rule 4-08(e)(3) of
Regulation S-X) of the subsidiaries of SB Energy, Inc. exceed 25% of the consolidated net assets of the
Company. Under the terms of the Credit Agreement dated October 18, 2023, entered into by SE Global
Borrower, LLC (the “Borrower”), a wholly owned subsidiary of the Company, the Borrower and its
subsidiaries are subject to restrictions on dividends, distributions, loans and advances. These restrictions
limit the ability to make dividends, distributions or other payments, or transfer assets to the Company,
except under specified conditions, including compliance with financial covenants, debt service
requirements and liquidity thresholds. Accordingly, as of December 31, 2025, all of the consolidated net
assets of SE Global Borrower, LLC are considered restricted net assets as defined in Rule 4‑08(e)(3) of
Regulation S‑X.
These condensed parent company financial statements have been prepared using the same accounting
principles and policies described in the notes to the consolidated financial statements, with the only
exception being that the parent company accounts for its subsidiaries using the equity method.
2.Related Party Transactions
On March 6, 2024, SB Energy, Inc. entered into an intercompany agreement with SB Energy Global, LLC
and SBE Global, LP to assume a revolving promissory note due with interest previously issued to SB
Energy Global, LLC by SBE Global, LP with an outstanding balance of $410,000 thousand as of the date
of assumption by SB Energy, Inc. On March 18, 2025, SB Energy, Inc. and SBE Global, LP, entered into
an intercompany agreement to amend this note, which bears interest at 7.272% per annum.
On November 26, 2025, SB Energy, Inc. entered into a separate intercompany agreement with SBE
Global, LP for an additional revolving promissory note, which bears interest at 6.000% per annum.
Both of the above notes have a maturity date of January 1, 2030 or sooner if certain contractual
covenants are violated. The notes are revolving facilities that may be prepaid in part or full at any time
without any penalty. As of December 31, 2025 and 2024, the intercompany promissory notes have a
combined outstanding principal of $709,520 thousand and $410,000 thousand, respectively, in the
condensed balance sheets. Additionally, for the years ended December 31, 2025 and 2024,
corresponding related-party interest expense of $32,018 thousand and $24,600 thousand, respectively, is
recorded in the condensed statements of operations and comprehensive loss.
Note 23. Subsequent events
Subsequent events have been evaluated through June 22, 2026, which was the date the consolidated
financial statements were available to be issued.
Pelicans Jaw Bridge Loan
From January 1, 2026 and through the date these consolidated financial statements were available to be
issued, Pelicans Jaw Solar, LLC made additional draws of $82,900 thousand on the Pelicans Jaw Bridge
Loan.
OpenAI Arrangement
On January 9, 2026, the Company issued 8,554,600 warrants to OpenAI Infra a related party. Upon
vesting, each warrant provides the holder with the right to acquire a Series B common unit of Energy
Global, LP, a parent of the Company, at an exercise price of $0.01 per unit. The warrants vest in tranches
upon the achievement of specified milestones, including one for consummation of the Company's initial
public offering. The warrants have a ten-year term; vested warrants will mandatorily convert in connection
with the offering. In connection with the warrant issuance, OpenAI Infra made an equity investment in
F-48
SB Energy, Inc.
Notes to Consolidated Financial Statements
Energy Global, LP, and is expected to be the beneficial owner of more than 5% of the Company's
outstanding common stock following the initial public offering.
Data Center Executory Contracts
On January 9, 2026, the Company's wholly owned subsidiary, Milam County DC, LLC, entered into two
triple-net data center lease agreements with Orion DC I, LLC, an affiliate of OpenAI, as tenant, for data
center buildings to be constructed in Milam County, Texas. Building 1 is designed for approximately 308
MW of critical IT capacity and Building 2 is designed for approximately 445 MW of critical IT capacity, for a
combined total of approximately 753 MW of critical IT capacity across the Milam County campus, with
each building comprising approximately 650,000 square feet. Each lease has a 15-year initial term with
two 10-year tenant extension options, and rent is structured on a yield-on-cost basis with an annual
escalator. The leases had not yet commenced as of the date the consolidated financial statements were
available to be issued. In connection with the execution of the lease agreements, an OpenAI affiliate
executed a joinder to each lease pursuant to which it unconditionally guaranteed all liabilities and
obligations owed by the tenant to the Company's subsidiary under the applicable lease.
SE Borrower Term Loan
On January 22, 2026, SE Borrower fully repaid the outstanding principal of SE Borrower Term Loan of
$60,549 thousand and the accrued interest through the payoff date of $444 thousand for the total payoff
amount of $60,993 thousand.
Angela Lease Arrangement
On February 25, 2025, the Company's wholly owned subsidiary, Angela SLB Pledgor Parent, LLC and
Angela SLB Master Lessee, LLC, were organized as a Delaware limited liability company. On May 9,
2025, Angela SLB Master Lessee, LLC (“Angela Lessee”), the Company's wholly owned subsidiary,
executed Master Lease Agreement with certain lessor to sell Angiola East, LLC's assets and lease back
Angiola East, LLC's assets. On February 11, 2026, Angela Lessee executed the bill of sell and received
total sale lease-back proceeds of $224,083 thousand from the lessor. As the transaction doesn’t qualify as
a sale for accounting purposes, the proceeds will be accounted for as a financial liability. Concurrently,
Angiola East, LLC fully repaid the outstanding principal of Angela Bridge Loan of $133,100 thousand and
the payments of the interest plus legal expense of $460 thousand for the total payoff amount of $133,560
thousand. In connection with the transaction, $73,227 thousand of the sale lease-back proceeds were
transferred to SBE and $15,242 thousand were transferred to Angiola East, LLC's restricted cash. The
proceeds will be used for future lease prepayments and expected project costs.
Libra Project Financing Arrangement
On March 13, 2026, Libra Project Company and Libra Member B, LLC, the Company's wholly owned
subsidiaries, entered into a financing agreement with certain lenders to obtain the construction loan and
bridge loan at Libra Project Company for a total loan commitment of $2,446,292 thousand and a letter of
credit facility of $98,000 thousand. As of the closing date, $239,000 thousand of the remaining purchase
price from the Libra Project Company's asset acquisition was still outstanding. The proceeds from the
initial draw at closing were $415,150 thousand. Part of the proceeds from the draw were used to pay the
lender fees of $55,603 thousand and the outstanding notice to proceed payment to Arevia Power Portfolio
from the Libra Project Company's asset acquisition of $174,000 thousand. At the same time, the
Company terminated the pre-hedging agreement that was put in place to hedge the project interest rate
exposure.
The Company expects to achieve substantial completion in the second half of 2027. Borrowings under the
construction and bridge facilities bear interest at variable rates based on SOFR plus an applicable margin
of approximately 1.625% (or a lower margin for base rate borrowings), with margins increasing modestly
during the term loan phase following conversion. Interest is payable periodically or, during construction,
may be capitalized and added to the outstanding principal balance. Upon satisfaction of specified
completion conditions, the construction loans are expected to be converted into an amortizing term loan.
F-49
SB Energy, Inc.
Notes to Consolidated Financial Statements
The facilities are secured by substantially all project assets and are subject to customary project finance
covenants, including minimum debt service coverage requirements and restrictions on additional
indebtedness, liens and distributions.
Athos Storage Financing Arrangement
On March 19, 2026, Athos Storage, LLC and Athos Storage Member B, LLC, the Company's wholly
owned subsidiaries, entered into financing agreements with certain lenders to obtain the construction loan
and bridge loan at Athos Storage, LLC for a total loan commitment of $679,400 thousand and a letter of
credit facility of $78,044 thousand. The proceeds from the initial draw at closing were $181,250 thousand.
Part of the proceeds from the draw were used to pay the lender fees of $15,489 thousand and the equity
reimbursement of $64,003 thousand to SBE.
The Company expects to achieve substantial completion in the first quarter of 2027. Borrowings bear
interest at variable rates based on SOFR or a base rate, plus applicable margins of approximately 1.75%
for construction loans and approximately 1.5% to 2.25% for bridge loans. Interest is payable quarterly, at
maturity, and upon prepayment or conversion, and may be capitalized during the construction period.
Construction and bridge loan balances are due at maturity or are expected to convert into longer-term
facilities upon satisfaction of specified completion conditions.
SE Cosmos Financing Arrangement
On March 31, 2026, SE Cosmos, LLC, the Company's wholly owned subsidiary, entered into a financing
agreement with certain lenders to obtain a bridge loan for a total loan commitment of $425,000 thousand.
The proceeds from the initial draw at closing were $342,250 thousand. Part of the proceeds from the draw
were used to pay the lender fees of $7,049 thousand and outstanding project costs of $67,259 thousand.
The bridge facility has a contractual maturity of July 31, 2026, which may be extended to September 30,
2026 subject to certain conditions. Borrowings bear interest at variable rates based on SOFR or a base
rate plus an applicable margin of approximately 1.75% to 2.75%, subject to periodic step-ups during the
term of the facility. All outstanding amounts, including accrued interest, are due at maturity, unless earlier
repaid or refinanced.
SE Cosmos Senior Secured Notes
On April 30, 2026, SE Cosmos, LLC entered into a purchase agreement and related financing
arrangements to issue $999,000 thousand aggregate principal amount of 8.875% senior secured notes
due 2031, which settled on May 7, 2026. Part of the proceeds was used to repay in full the outstanding
principal including the accrued interest of the bridge loan of $342,691 thousand, and the lender fees of
$12,728 thousand. $140,381 thousand of the proceeds was transferred to SE Cosmos, LLC's reserve
account for the debt service reserve and construction reserve, and $503,200 thousand was distributed to
the SE Cosmos, LLC. The notes are secured by first‑priority liens on substantially all assets of SE
Cosmos, LLC, including pledged equity and the project assets, pursuant to a security agreement with a
collateral agent.
Energy Global, LP Capital Contribution
On May 15, 2026, and May 18, 2026, Energy Global, LP contributed $500,000 thousand and $200,000
thousand, respectively, of the proceeds to its wholly owned subsidiary, SB Energy, Inc. On June 22, 2026,
Energy Global, LP contributed $640,000 thousand to its wholly owned subsidiary, SB Energy, Inc. These
contributions are to support data center infrastructure development and construction, renewable energy
project development, debt repayment and general working capital needs.
Pelicans Jaw TE Holdco MC funding
On June 1, 2026, Pelicans Jaw TE Holdco, LLC received Class A investor (FNBC Leasing Corporation)
equity contributions of $134,290 thousand pursuant to the executed Equity Capital Contribution
Agreement (“ECCA”) and Membership Interest Purchase Agreements dated as of May 9, 2025. This
F-50
SB Energy, Inc.
Notes to Consolidated Financial Statements
consideration represents 20% of the total contributions the Class A investor has committed to provide to
Pelicans Jaw Solar, LLC. $12,522 thousand of the proceeds were used towards payment of the tax equity
investor fee to JP Morgan Chase Bank N.A. The mechanical completion funding represents the initial
monetization of tax equity proceeds and execution of the financing structure established under the ECCA,
supporting project capitalization and advancement toward completion.
Note 24. Subsequent event (Unaudited)
Corporate Reorganization
On July 10, 2026, SE Global Holdings, LLC converted its legal structure from a Delaware limited liability
company, to a Delaware corporation named SE Global Holdings, Inc., pursuant to the provisions of the
Delaware Limited Liability Company Act and the General Corporation Law of the State of Delaware. In
connection with the corporate conversion, the Company entered into the following series of transactions
to implement the related reorganization:
•The Company was renamed to SE Global Holdings, Inc.;
•The Company authorized 100,000 thousand shares of common stock and 10,000 shares of preferred
stock; and,
•The Company’s Members’ equity as of July 10, 2026 was reclassified into common stock and
additional paid-in capital, with each LLC unit being converted 1:1 for common stock. Given the
common stock issued only has a nominal par value, substantially all contributed capital is reclassified
to additional paid-in capital. This non-cash reclassification within stockholders’ equity did not affect
total equity or total capitalization.
On August 28, 2026, SE Global Holdings, Inc. converted its legal structure from a Delaware corporation to
a Texas corporation, pursuant to the provisions of the Texas Business Organization Code. On August 31,
2026, the Company changed its name to SB Energy, Inc. The financial statements presented herein
reflect the LLC legal structure of the Company that existed as of December 31, 2025, prior to the name
change and conversion. The conversion did not have any impact on the Company’s capitalization.
F-51
SB Energy, Inc.
Condensed Consolidated Balance Sheets
In thousands, except units, unless otherwise stated
(unaudited)
June 30, 2026 | December 31, 2025 | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents ............................................................................ | $1,199,139 | $131,857 | ||
Restricted cash .................................................................................................. | 1,016,391 | 86,856 | ||
Accounts receivable, net (net of allowance for credit losses of $0 and $108 as of June 30, 2026 and December 31, 2025, respectively) ........... | 23,006 | 15,567 | ||
Receivables from related parties .................................................................... | 306 | 195 | ||
Advances to suppliers, current ....................................................................... | 78,030 | 30,954 | ||
Derivative assets, current ................................................................................ | 1,813 | — | ||
Prepaid and other current assets ................................................................... | 212,677 | 40,769 | ||
Total current assets ........................................................................................... | 2,531,362 | 306,198 | ||
Non-current assets | ||||
Property, plant and equipment, net ................................................................ | 6,841,446 | 4,863,079 | ||
Operating lease right-of-use assets ............................................................... | 213,510 | 201,032 | ||
Goodwill .............................................................................................................. | 10,993 | 10,993 | ||
Other intangible assets .................................................................................... | 18,496 | 18,496 | ||
Advances to suppliers, non-current ............................................................... | 26,255 | 19,245 | ||
Equity method investments ............................................................................. | 27,035 | 33,763 | ||
Derivative assets, non-current ........................................................................ | 60,887 | 16,549 | ||
Income taxes receivable .................................................................................. | 2,406 | 411 | ||
Deferred lease incentive .................................................................................. | 3,646,246 | — | ||
Other non-current assets ................................................................................. | 143,572 | 112,798 | ||
Total non-current assets .................................................................................. | 10,990,846 | 5,276,366 | ||
Total assets .......................................................................................................... | $13,522,208 | $5,582,564 | ||
Liabilities, redeemable noncontrolling interests and member's equity | ||||
Current liabilities | ||||
Accounts payable .............................................................................................. | $289,697 | $39,059 | ||
Accrued expenses and other current liabilities ............................................. | 377,112 | 646,939 | ||
Payables to related parties .............................................................................. | 3,975 | 188 | ||
Debt, net, current .............................................................................................. | 1,197,859 | 193,281 | ||
Derivative liabilities, current ............................................................................. | 10,704 | 17,399 | ||
Operating lease liabilities, current .................................................................. | 14,125 | 13,833 | ||
Warrant liability, current .................................................................................... | 2,040,815 | — | ||
Financial liability, current .................................................................................. | 1,972 | — | ||
Total current liabilities ...................................................................................... | 3,936,259 | 910,699 | ||
Non-current liabilities | ||||
Debt, net, non-current ...................................................................................... | 2,694,016 | 1,910,172 | ||
Debt from related parties ................................................................................. | 709,520 | 709,520 | ||
Derivative liabilities, non-current ..................................................................... | 48,866 | 63,028 | ||
Operating lease liabilities, non-current .......................................................... | 217,231 | 201,972 | ||
Deferred tax liability .......................................................................................... | — | 25,375 | ||
Asset retirement obligations ............................................................................ | 65,649 | 63,680 |
F-52
SB Energy, Inc.
Condensed Consolidated Balance Sheets
In thousands, except units, unless otherwise stated
(unaudited)
June 30, 2026 | December 31, 2025 | |||
Warrant liability, non-current ............................................................................ | 3,445,302 | — | ||
Financial liability, non-current .......................................................................... | 152,203 | — | ||
Other non-current liabilities ............................................................................. | 139,706 | 101,373 | ||
Total non-current liabilities .............................................................................. | 7,472,493 | 3,075,120 | ||
Total liabilities ..................................................................................................... | $11,408,752 | $3,985,819 | ||
Commitments and contingencies (Note 13) | ||||
Redeemable noncontrolling interests ................................................................. | 3,254 | 4,052 | ||
Member's equity | ||||
Contributed capital (19,966,564 units outstanding as of June 30, 2026 and December 31, 2025) ................................................................................. | 5,371,682 | 1,764,518 | ||
Accumulated deficit ........................................................................................... | (3,803,001) | (594,129) | ||
Total member's equity ....................................................................................... | 1,568,681 | 1,170,389 | ||
Noncontrolling interests ................................................................................... | 541,521 | 422,304 | ||
Total liabilities, redeemable noncontrolling interests and equity ......... | $13,522,208 | $5,582,564 | ||
See accompanying Notes to Condensed Consolidated Financial Statements. See Note 3. Equity method
investment and variable interest entities for information on our consolidated VIEs.
F-53
SB Energy, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
In thousands, except units and per-unit amounts
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Revenue ....................................................... | $94,586 | $52,661 | $138,659 | $83,322 | ||||
Operating costs and expenses | ||||||||
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below ............................ | 21,474 | 20,353 | 40,656 | 39,122 | ||||
Depreciation, amortization and accretion ...................................................... | 24,509 | 23,485 | 48,100 | 46,935 | ||||
General and administrative ....................... | 475,478 | 131,634 | 601,507 | 177,807 | ||||
Operating loss .............................................. | $(426,875) | $(122,811) | $(551,604) | $(180,542) | ||||
Interest income ........................................... | 7,013 | 4,329 | 8,518 | 9,216 | ||||
Interest expense ......................................... | (30,910) | (40,151) | (86,872) | (98,646) | ||||
(Loss) gain in equity method investment | (3,558) | 5,179 | (6,729) | 3,574 | ||||
Change in fair value of warrant liability ... | (2,618,881) | — | (2,573,056) | — | ||||
Other income (expense), net .................... | (6,666) | (305) | (7,890) | 13,691 | ||||
Loss before income taxes ......................... | (3,079,877) | (153,759) | (3,217,633) | (252,707) | ||||
Income tax benefit (expense) ................... | 25,263 | (1,487) | 25,369 | (3,139) | ||||
Net loss and comprehensive loss ........... | $(3,054,614) | $(155,246) | $(3,192,264) | $(255,846) | ||||
Less: Net income (loss) and comprehensive loss attributable to redeemable noncontrolling interests and noncontrolling interests ...................... | (4,165) | (13,594) | 16,608 | (40,316) | ||||
Net loss and comprehensive loss attributable to SB Energy, Inc. ................. | $(3,050,449) | $(141,652) | $(3,208,872) | $(215,530) | ||||
Net loss per unit - basic and diluted ............. | $(152.78) | $(7.09) | $(160.71) | $(10.79) | ||||
Weighted-average units outstanding - basic and diluted ............................................. | 19,966,564 | 19,966,564 | 19,966,564 | 19,966,564 | ||||
See accompanying Notes to Condensed Consolidated Financial Statements.
F-54
SB Energy, Inc.
Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Member's Equity
In thousands, unless otherwise stated
(unaudited)
Redeemable noncontrolling interests | Contributed capital | Accumulated deficit | Total member's equity | Non- controlling interests | Total equity | ||||||||
Balance as of December 31, 2025 ... | $4,052 | $1,764,518 | $(594,129) | $1,170,389 | $422,304 | $1,592,693 | |||||||
Capital contributions .... | — | 1,413,001 | — | 1,413,001 | — | 1,413,001 | |||||||
Capital distributions ...... | (323) | (452) | — | (452) | (5,924) | (6,376) | |||||||
Stock-based compensation ................ | — | 122,081 | — | 122,081 | — | 122,081 | |||||||
Net income (loss) ......... | (31) | — | (158,423) | (158,423) | 20,803 | (137,620) | |||||||
Balance as of March 31, 2026 ........................ | $3,698 | $3,299,148 | $(752,552) | $2,546,596 | $437,183 | $2,983,779 | |||||||
Capital contributions .... | — | 1,605,112 | — | 1,605,112 | 134,297 | 1,739,409 | |||||||
Capital distributions ...... | (750) | — | — | — | (7,303) | (7,303) | |||||||
Stock-based compensation ................ | — | 467,422 | — | 467,422 | — | 467,422 | |||||||
Equity financing cost .... | — | — | — | — | (18,186) | (18,186) | |||||||
Net income (loss) ......... | 306 | — | (3,050,449) | (3,050,449) | (4,470) | (3,054,919) | |||||||
Balance as of June 30, 2026 ........................ | $3,254 | $5,371,682 | $(3,803,001) | $1,568,681 | $541,521 | $2,110,202 | |||||||
Redeemable noncontrolling interests | Contributed capital | Retained earnings (Accumulated deficit) | Total member's equity | Non- controlling interests | Total equity | ||||||||
Balance as of December 31, 2024 .... | $6,011 | $1,105,986 | $143,879 | $1,249,865 | $496,923 | $1,746,788 | |||||||
Capital contributions ..... | — | 492,481 | — | 492,481 | — | 492,481 | |||||||
Capital distributions ...... | (572) | (495,851) | — | (495,851) | (3,843) | (499,694) | |||||||
Stock-based compensation ................ | — | 35,758 | — | 35,758 | — | 35,758 | |||||||
Equity financing costs .. | — | — | — | — | (25) | (25) | |||||||
Net income (loss) .......... | 21 | — | (73,878) | (73,878) | (26,743) | (100,621) | |||||||
Balance as of March 31, 2025 ........................ | $5,460 | $1,138,374 | $70,001 | $1,208,375 | $466,312 | $1,674,687 | |||||||
Capital contributions ..... | — | 2,519 | — | 2,519 | — | 2,519 | |||||||
Capital distributions ...... | (752) | (14,518) | — | (14,518) | (4,899) | (19,417) | |||||||
Stock-based compensation ................ | — | 126,705 | — | 126,705 | — | 126,705 | |||||||
Equity financing costs .. | — | — | — | — | (81) | (81) | |||||||
Net income (loss) .......... | 526 | — | (141,652) | (141,652) | (14,120) | (155,772) | |||||||
Balance as of June 30, 2025 ........................ | $5,234 | $1,253,080 | $(71,651) | $1,181,429 | $447,212 | $1,628,641 | |||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
F-55
SB Energy, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands, unless otherwise stated
(unaudited)
Six Months Ended June 30, | ||||
2026 | 2025 | |||
Cash flows from operating activities | ||||
Net loss | $(3,192,264) | $(255,846) | ||
Adjustments to reconcile net loss to cash used in operating activities | ||||
Non-cash (income) / expenses: | ||||
Depreciation, amortization and accretion expense ................................. | 48,100 | 46,935 | ||
Amortization of deferred financing cost .................................................... | 7,331 | 8,638 | ||
Stock-based compensation expense ........................................................ | 589,503 | 162,462 | ||
Unrealized loss (gain) in equity method investment ............................... | 6,729 | (3,574) | ||
Deferred income taxes ................................................................................ | (25,375) | — | ||
Changes in fair value of derivatives .......................................................... | (67,008) | 12,521 | ||
Change in fair value of warrant liability ..................................................... | 2,573,056 | — | ||
Non-cash lease expense ............................................................................ | 1,825 | — | ||
Loss on extinguishment of debt ................................................................. | 6,805 | — | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable ..................................................................................... | (7,439) | (7,615) | ||
Receivable from related parties ................................................................. | (111) | — | ||
Prepaid and other current assets .............................................................. | 9,492 | 263 | ||
Other non-current assets ............................................................................ | 3,413 | (3,252) | ||
Accounts payable ......................................................................................... | (20,266) | 14,065 | ||
Accrued expenses and other current liabilities ........................................ | 7,574 | (9,408) | ||
Payables to related parties ......................................................................... | 3,785 | (15,896) | ||
Operating lease liabilities ............................................................................ | 1,247 | 4,161 | ||
Income taxes receivable ............................................................................. | (1,994) | 3,108 | ||
Other non-current liabilities ......................................................................... | — | (2,816) | ||
Net cash used in operating activities ....................................................... | $(55,597) | $(46,254) | ||
Cash flows from investing activities | ||||
Payments for property, plant and equipment ................................................ | (1,672,483) | (357,455) | ||
Advances to suppliers ...................................................................................... | (33,760) | (6,831) | ||
Investments in unconsolidated affiliate .......................................................... | — | (7,971) | ||
Net cash used in investing activities ....................................................... | $(1,706,243) | $(372,257) | ||
Cash flows from financing activities | ||||
Capital contributions ......................................................................................... | 1,905,439 | 495,000 | ||
Capital distributions .......................................................................................... | (14,752) | (520,435) | ||
Proceeds from debt .......................................................................................... | 2,396,050 | 255,600 | ||
Proceeds from financing obligations .............................................................. | 222,774 | — | ||
Payment of financing obligations .................................................................... | (67,308) | — | ||
Repayment of debt ........................................................................................... | (538,594) | (18,289) | ||
Payment for deferred financing costs ............................................................ | (105,073) | (7,361) | ||
Payment of equity financing costs .................................................................. | (39,879) | (618) | ||
Net cash provided by financing activities ............................................... | $3,758,657 | $203,897 | ||
F-56
SB Energy, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands, unless otherwise stated
(unaudited)
Six Months Ended June 30, | ||||
2026 | 2025 | |||
Net increase (decrease) in cash and cash equivalents and restricted cash | 1,996,817 | (214,614) | ||
Cash and cash equivalents and restricted cash at the beginning of the period ....................................................................................................................... | 218,713 | 574,178 | ||
Cash and cash equivalents and restricted cash at the end of period .. | $2,215,530 | 359,564 | ||
Supplemental cash flow information | ||||
Cash and cash equivalents ............................................................................. | $1,199,139 | $224,023 | ||
Restricted cash .................................................................................................. | 1,016,391 | 135,541 | ||
Total cash and cash equivalents and restricted cash ............................. | $2,215,530 | $359,564 | ||
Cash paid for interest on loans ....................................................................... | $78,198 | $49,331 | ||
Supplemental disclosure of noncash investing and financing activities | ||||
Property, plant and equipment additions within accounts payable and accrued expenses ............................................................................................. | $636,749 | $79,858 | ||
Operating lease right-of-use assets acquired through lease liability ........ | $14,304 | $— | ||
Noncash capital contributions from parent ................................................... | $1,836,474 | $162,462 | ||
See accompanying Notes to Condensed Consolidated Financial Statements.
F-57
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1. Organization and nature of operations
SB Energy, Inc. (formerly SE Global Holdings, LLC) (together with its subsidiaries, the “Company” or “SB
Energy”) was formed as a Delaware limited liability company on January 23, 2024. The Company is a
wholly owned subsidiary of SBE Global, LP (the “Parent” or “SBE Global”).
On January 9, 2026, the Company amended its limited liability company agreement pursuant to which the
outstanding unit was split into 19,966,564 membership units (“Units”). The issuance was made solely to
increase the number of units outstanding and did not result in any change in the Parent’s economic
ownership, voting rights, liquidation rights, or other substantive rights. The Company accounted for the
issuance as an in-substance recapitalization. All unit and per-unit amounts presented in these financial
statements and accompanying notes have been retrospectively adjusted to reflect the increased number
of units outstanding as if the issuance had occurred as of the earliest period presented.
The Company is a utility-scale solar, energy storage, and technology platform backed by investments
from SoftBank Group and OpenAI. The Company is headquartered in Redwood City, California and
develops, constructs, owns, and operates advanced renewable projects and data centers in the United
States.
The Company's wholly owned subsidiaries, organized as Delaware limited liability companies, include:
Venus Buyer, LLC (“Venus Buyer”), SE DC Holdco, LLC (“DC Holdco”), SE DC DevCo, LLC (“DC
DevCo”), SE Global Intermediate Holdings, LLC (“SE Global Intermediate”), SE Borrower, LLC (“SE
Borrower”), SE Global Borrower, LLC (“Global Borrower”), SBE US Holdings One, LLC (“SBE”), Big Five
Holdco 1, LLC (“Senior Borrower 1”), Big Five Holdco 2, LLC (“Senior Borrower 2”), Big Five Intermediate
Holdco 1, LLC (“Mezzanine Borrower 1”) and Big Five Intermediate Holdco 2, LLC (“Mezzanine Borrower
2”). Senior Borrower 1, Senior Borrower 2, Mezzanine Borrower 1 and Mezzanine Borrower 2 are
collectively referred to as “Big Five Borrowers”.
Note 2. Summary of significant accounting principles and policies
Basis of presentation and use of estimates
Basis of presentation. The Company's condensed consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim
financial information and in accordance with Rule 10-01 of Regulation S-X and reflect all adjustments,
consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair
statement of the financial results for the interim periods presented.
The condensed consolidated financial statements include the Company's accounts and operations and
those of its subsidiaries. All intercompany transactions and balances have been eliminated in the
condensed consolidated financial statements. The accompanying condensed consolidated interim
financial statements are unaudited and should be read in conjunction with the annual consolidated
financial statements, and the notes thereto for the fiscal year ended December 31, 2025. Interim results of
operations are not necessarily indicative of results that may be expected for the full fiscal year or any
future period.
Use of estimates. The preparation of condensed consolidated financial statements requires the use of
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses
that are reported and disclosed in the condensed consolidated financial statements and accompanying
notes. These estimates are based on management's best knowledge of current events, historical
experience, actions the Company may undertake in the future and on various other assumptions that are
believed to be prudent and reasonable under the circumstances. Significant estimates and assumptions
are used for, but not limited to: valuation of equity method investments, fair value of assets acquired, and
liabilities assumed from the business combination, fair value of derivative instruments, fair value of
warrant liabilities, operating lease right-of-use assets and liabilities, asset retirement obligations,
F-58
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
hypothetical liquidation at book value method of equity accounting, and fair value measurement of equity
awards.
Basis of consolidation
The condensed consolidated financial statements include the financial statements of the Company and its
subsidiaries in which it has a controlling financial interest or variable interest entities (“VIEs”), for which it
is the primary beneficiary.
A controlling financial interest is typically determined when a company holds a majority of the voting
equity interest in an entity.
The Company consolidates VIEs when it is the primary beneficiary. VIEs are entities that lack sufficient
equity to finance their activities without additional financial support from other parties or whose equity
holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make
decisions; (b) obligation to absorb expected losses; or (c) right to receive expected residual returns. VIEs
must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the
reporting entity that has (a) the power to direct activities of the VIE that most significantly impact the VIE's
economic performance and (b) the obligation to absorb losses of the VIE that could potentially be
significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the
VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. A VIE can
have only one primary beneficiary but may not have a primary beneficiary if no party meets the criteria
described above.
When evaluating whether the Company is the primary beneficiary of a VIE, and must therefore
consolidate the entity, the Company performs a qualitative analysis that considers the design of the VIE,
the nature of its involvement and the variable interests held by other parties. If that evaluation is
inconclusive as to which party absorbs a majority of the entity's expected losses or residual returns, a
quantitative analysis is performed to determine the primary beneficiary. See Note 3. Equity method
investment and variable interest entities for additional information.
Significant risks and uncertainties including business and credit concentrations
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Company. Management considers available reasonable and supportive forward-
looking information including indicators like external credit rating (as far as available) and macro-
economic information (such as regulatory changes, government directives, market interest rate, etc.).
Financial instruments that potentially expose the Company to concentrations of credit risk consist
primarily of cash and cash equivalents, restricted cash, receivables from related parties, advances to
suppliers, accounts receivable, and derivatives. All of the Company's cash and cash equivalents are held
with financial institutions that management believes to have high credit quality. The energy industry may
impact the Company’s overall exposure to credit risk, either positively or negatively, in that the customers
may be similarly affected by changes in economic, industry or other conditions. The Company performs
ongoing credit evaluations of its suppliers and customers' financial conditions. See Note 20. Segments for
further information on concentration of customers.
The Company uses interest rate swaps to manage interest rate risk. The Company is exposed to credit
risk associated with its derivative assets, which consist primarily of interest rate swaps. These derivative
assets are subject to the risk of loss in the event that counterparties fail to perform under the terms of the
contracts. The Company enters into derivative contracts with counterparties it believes to be creditworthy
and monitors counterparty exposure on an ongoing basis; however, the failure of a counterparty to
perform in accordance with the terms of a derivative contract could have an adverse effect on the
Company’s financial condition, results of operations, and cash flows. More than 45% of the interest rate
swap derivative assets are concentrated in a single lender as of June 30, 2026.
F-59
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Our largest advance to a supplier is approximately $43,864 thousand as of June 30, 2026. The Company
generally does not require collateral or security against advances to suppliers; however, the Company
believes that the credit risk posed by such supplier concentration is offset by the creditworthiness of its
supplier base. The Company is exposed to credit losses in the event of noncompliance by counterparties
to its contractual obligations, resulting in financial loss and general business risk of non-performance of
contract obligations, which is applicable to any contract of any type and a risk of actual cost of
performance exceeding the contracted cost, with such instances subject to change orders or
renegotiation. The maximum amount of loss due to credit risk, should these suppliers fail to perform, is
any losses associated with the Company's obligations towards its customers, being in a form of liquidated
damages or any losses associated with replacing these customers and the risk of the advance payments
not being returned.
The Company maintains its cash in bank accounts with major financial institutions with high credit
standings. Cash deposits held in the United States are insured by the federal deposit insurance
corporation (“FDIC”) for up to $250 thousand per account. As of June 30, 2026 and December 31, 2025,
the Company's cash balance held in financial institutions amounted to $2,215,530 thousand and
$218,713 thousand, respectively, which was not fully insured by the FDIC. Management believes that
using major financial institutions with high credit ratings mitigates the credit risk sufficiently.
Leases
The Company evaluates contracts at inception to determine whether an arrangement contains a lease in
accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”). The
Company acts as a lessor in certain lease arrangements related to the Cosmos and Milam County data
center facilities.
Lease commencement occurs when the underlying asset is made available for use to the lessee. Upon
commencement, the Company will classify its leases and recognize lease income in accordance with the
provisions of ASC 842 based on the terms and conditions of the applicable lease arrangements. See Note
15. Leases for further information on the Company's lessor arrangements.
The Company evaluates sale-leaseback transactions under ASC 842 and ASC Topic 606, Revenue from
Contracts with Customers (“ASC 606”) when it sells an asset and leases back the same asset from the
buyer-lessor, or when it purchases an asset and leases back the same asset to the seller-lessee.
If the transfer of the underlying asset qualifies as a sale under ASC 606, the Company accounts for the
sale or purchase of the asset in accordance with the applicable US GAAP standard and accounts for the
leaseback in accordance with ASC 842. If the transfer does not qualify as a sale, the transaction is
accounted for as a financing arrangement. When the Company is the seller-lessee, it does not
derecognize the underlying asset and recognizes the proceeds received as a financial liability. When the
Company is the buyer-lessor, it does not recognize the underlying asset and accounts for amounts paid
as a financing receivable. See Note 10. Debt for further information on the Company's financing
arrangement.
Warrants
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are
required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or
modified warrants that do not meet all of the criteria for equity classification, the warrants are required to
be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The
Company accounts for the Warrants issued in connection with the Milam County data center facility lease
arrangements and related agreements as liability-classified instruments under ASC Topic 815-40,
Contracts in Entity's Own Equity, since they are not indexed to the Company's own equity, requiring
liability classification.
F-60
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Deferred offering costs
Deferred offering costs consist primarily of investment banking, accounting, legal, advisory and other fees
directly related to the Company’s issuance and proposed issuances of equity securities. Deferred offering
costs that are considered direct and incremental to the equity offering are capitalized in the Company’s
condensed consolidated balance sheet as other non-current assets and will be charged against gross
proceeds of the offering as a reduction to contributed capital. All other costs related to the equity offering
that are not considered direct and incremental to the equity offering are expensed as incurred. If the
equity offering is abandoned, any previously deferred offering costs are expensed immediately in the
period the equity offering is abandoned. The Company had $5,406 thousand of deferred offering costs
capitalized as of June 30, 2026, which is included in other non-current assets on the condensed
consolidated balance sheets. The Company had no deferred offering costs capitalized as of
December 31, 2025.
Recent accounting pronouncements adopted
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with
Customers (Topic 606): Derivative Scope Refinements and Scope Clarification for Share-Based Noncash
Consideration from a Customer in a Revenue Contract, which refines the scope of ASC Topic 815 and
clarifies which contracts are subject to derivative accounting. The guidance also provides clarification
under ASC Topic 606 for share-based payments from a customer in a revenue contract. The amendments
in ASU No. 2025-07 are effective for fiscal years beginning after December 15, 2026, and interim
reporting periods, with early adoption permitted. The Company elected to early adopt ASU No. 2025-07
effective December 31, 2025.
Recent accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive
Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which requires more detailed disclosures, on an annual and interim basis, about specified
categories of expenses (including employee compensation, depreciation, and amortization) included in
certain expense captions presented in the condensed consolidated statements of operations and
comprehensive loss. This guidance as further clarified through ASU No. 2025-01 will be effective for
annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning
after December 15, 2027. Early adoption is permitted. Upon adoption, the guidance can be applied either
prospectively or retrospectively. The Company is currently evaluating the impact this amended guidance
may have on its condensed consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation
(Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which
provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs.
The update aims to improve consistency and comparability in financial reporting. The guidance will be
effective for annual periods beginning after December 15, 2026, including interim periods within those
annual periods. Early adoption is permitted. Upon adoption, the guidance will be applied prospectively.
The Company is currently evaluating the impact this amended guidance may have on its condensed
consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope
Improvements. ASU 2025-11 is intended to improve the navigability of the guidance in ASC Topic 270,
Interim Reporting and clarify when it applies. ASU 2025-11 is effective for interim reporting periods within
annual reporting periods beginning after December 15, 2027, and early adoption is permitted. Upon
adoption, the guidance can be applied either prospectively or retrospectively. The Company is currently
evaluating the impact this amended guidance may have on its condensed consolidated financial
statements.
F-61
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. ASU 2025-12
represents changes to the ASC that clarify, correct errors in or make other improvements to a variety of
topics that are intended to make it easier to understand and apply. The guidance will be effective for fiscal
years beginning after December 15, 2026 and interim periods within those annual periods. Early adoption
is permitted. The amendments to ASC Topic 260, Earnings per Share are required to be applied
retrospectively. All other amendments may be applied prospectively or retrospectively on an issue-by-
issue basis. The Company is currently evaluating the impact this amended guidance may have on its
condensed consolidated financial statements.
In May 2026, the FASB issued ASU No. 2026-02, Environmental Credits and Environmental Credit
Obligations (Topic 818). ASU 2026-02 establishes recognition, measurement, presentation and disclosure
requirements for environmental credits and related environmental credit obligations. The guidance is
effective for public business entities for annual reporting periods beginning after December 15, 2027 and
interim reporting periods within those annual reporting periods. The requirements will be applied
retrospectively, and early adoption is permitted. The Company is currently evaluating the impact this
amended guidance may have on its condensed consolidated financial statements.
Note 3. Equity method investment and variable interest entities
Equity method investment - Balanced Rock Power, LLC
Balanced Rock Power, LLC (“BRP”) develops solar and energy storage facilities that generate renewable
power. On July 31, 2023, the Company executed an Amended and Restated Limited Liability Company
Agreement and Subscription Agreement with Balanced Rock Power Holdco, LLC (“BRP Management”)
and SG Energy BRP, LLC (“Electra”), through which the Company's wholly owned subsidiary, SE US
Development, LLC (“US Development”) has agreed to make certain contributions to BRP, formed January
29, 2021, in exchange for the issuance of the units of BRP's membership interests.
As of June 30, 2026 and December 31, 2025, the Company held 27.9% economic interest and voting
rights and has shared governance and development rights of BRP. During the three and six months
ended June 30, 2026, the Company made no additional contributions. During the three months ended
June 30, 2025, the Company made no additional contribution. During the six months ended June 30,
2025, the Company made an additional contribution of $7,971 thousand. The Company recognizes only
its share of the profits and losses based on the hypothetical liquidation at book value (“HLBV”)
methodology.
As of June 30, 2026 and December 31, 2025, the carrying value of the Company’s equity method
investment in BRP was $27,035 thousand and $33,763 thousand, respectively. The Company recognized
$3,558 thousand of loss and $5,179 thousand of gain for the three months ended June 30, 2026 and
2025, respectively, and $6,729 thousand of loss and $3,574 thousand of gain for the six months ended
June 30, 2026 and 2025, respectively, in equity method investment in the condensed consolidated
statements of operations and comprehensive loss.
Variable interest entities
The Company has a controlling financial interest in certain entities which have been identified as VIEs
under ASC Topic 810, Consolidations. These arrangements are primarily related to tax equity
arrangements entered into with third parties in order to monetize certain tax credits associated with solar
and energy storage facilities. Under the Company’s arrangements that have been identified as VIEs, the
third-party investors are allocated earnings, tax attributes and distributable cash in accordance with the
respective limited liability company agreements. Many of these arrangements also provide a mechanism
to facilitate achievement of the investor’s specified return by providing incremental cash distributions to
the investor at a specified date if the specified return has not yet been achieved.
As of June 30, 2026, the Company's consolidated VIEs included the following:
•Orion 1 TE Holdco, LLC
F-62
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
•Orion 2 TE Holdco, LLC
•Orion 3 TE Holdco, LLC
•SE Athos TE Holdco, LLC
•SE Titan & Aragorn TE Holdco, LLC
•SE Juno TE Holdco, LLC
•Eiffel TE Holdco, LLC
•Pelicans Jaw TE Holdco, LLC
As of December 31, 2025, the Company's consolidated VIEs included the following:
•Orion 1 TE Holdco, LLC
•Orion 2 TE Holdco, LLC
•Orion 3 TE Holdco, LLC
•SE Athos TE Holdco, LLC
•SE Titan & Aragorn TE Holdco, LLC
•SE Juno TE Holdco, LLC
•Eiffel TE Holdco, LLC
F-63
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table presents the assets and liabilities of the Company's consolidated VIEs as of June 30,
2026 and December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||
Assets | ||||
Cash and cash equivalents ............................................................................. | $12,573 | $31,662 | ||
Restricted cash .................................................................................................. | 147,469 | 8,761 | ||
Accounts receivable ......................................................................................... | 18,214 | 11,441 | ||
Receivable from related parties, net .............................................................. | 900 | 564 | ||
Prepaid and other current assets ................................................................... | 11,055 | 6,701 | ||
Total current assets ...................................................................................... | 190,211 | 59,129 | ||
Property, plant and equipment, net ................................................................ | 3,765,191 | 2,873,546 | ||
Operating lease right-of-use assets ............................................................... | 195,460 | 146,575 | ||
Other intangible assets .................................................................................... | 16,496 | — | ||
Other non-current assets ................................................................................. | 20,411 | 6,660 | ||
Total assets ................................................................................................ | $4,187,769 | $3,085,910 | ||
Liabilities | ||||
Accounts payable .............................................................................................. | $677 | $7,201 | ||
Accrued expenses and other current liabilities ............................................. | 11,680 | 8,149 | ||
Payables to related parties .............................................................................. | 1,602 | 1,394 | ||
Debt, net, current .............................................................................................. | 843,241 | — | ||
Derivative liabilities, current ............................................................................. | 10,704 | 17,399 | ||
Operating lease liabilities, current .................................................................. | 13,134 | 9,309 | ||
Total current liabilities .................................................................................. | 881,038 | 43,452 | ||
Derivative liabilities, non-current ..................................................................... | 44,284 | 47,701 | ||
Operating lease liabilities, non-current .......................................................... | 199,643 | 148,217 | ||
Asset retirement obligations ............................................................................ | 64,447 | 62,519 | ||
Other non-current liabilities ............................................................................. | 40,182 | — | ||
Total liabilities ............................................................................................ | $1,229,594 | $301,889 | ||
Note 4. Asset acquisitions
Holville acquisition
On November 12, 2024, the Company through its subsidiary, US Development, entered into a
membership interest purchase and sale agreement (“Holville MIPA”) with Samsung C&T Renewables,
LLC (“Samsung”) to acquire 100% of the membership interests in Holville Solar, LLC (“Holville”) for a
purchase price of $10,000 thousand, with payments subject to agreed upon terms and cancelable at the
Company’s option.
As of December 31, 2024, the total accumulated project cost of the Holville acquisition, including
payments for the Holville MIPA, was $1,246 thousand. At December 31, 2024 the Company determined it
would not pursue further development of Holville and recorded an impairment loss, writing off the
accumulated cost of $1,246 thousand.
On February 5, 2025, the Company entered into a mutual agreement with the landowners to terminate
their collective lease options in exchange for a release payment to the Company of $15,200 thousand.
The Company received the full payment on March 12, 2025 and recognized as other income (expense),
F-64
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
net in the condensed consolidated statements of operations and comprehensive loss for the six months
ended June 30, 2025.
Libra acquisition
On December 31, 2024, the Company through its subsidiary, Venus Buyer, LLC, entered into a
membership interest purchase agreement (“Libra MIPA”) with Arevia Power Portfolio, LLC (“Arevia”) to
acquire 100% of the membership interests in Libra Project Company, a development-stage solar project,
from Arevia for the total purchase price of $291,672 thousand.
As of December 31, 2025, $52,672 thousand in a closing payment out of the total purchase price of
$291,672 thousand was made to Arevia. During the three and six months ended June 30, 2026, the
Company paid an additional $0 and $174,000 thousand of the remaining purchase price to Arevia upon
the achievement of a construction milestone.
The remaining purchase price of $65,000 thousand is tied to the future commercial operation date
milestone and is contingent upon the achievement of this construction milestone. The Company
concluded that the achievement of this milestone is probable in accordance with ASC Topic 450
Contingencies. As of June 30, 2026 and December 31, 2025, the remaining purchase price of $65,000
thousand is presented as other non-current liabilities on the Company's condensed consolidated balance
sheets.
Louis Energy interconnection acquisition
On November 21, 2025, DC DevCo, the Company's wholly owned subsidiary, entered into a purchase
and sale agreement (“Louis Energy PSA”) and bill of sale and assignment agreement (“Louis Energy
BSA”) with Louis Energy Texas Inc. (“Louis Energy Texas”) to acquire ERCOT load interconnection
application at Galvani substation, for a total purchase price of $23,000 thousand. Subject to the Louis
Energy PSA and Louis Energy BSA, Louis Energy Texas has agreed to sell, assign and transfer the rights
to commercial contract, improved property, interconnection study agreement and load interconnection
request to Wind Energy Transmission Texas to DC DevCo. On November 21, 2025, the Company paid
the entire purchase price of $23,000 thousand to Louis Energy Texas.
Cosmos property acquisition
On March 20, 2026, the Company, through its subsidiary, SE Cosmos LLC, entered into a purchase and
sale agreement (“Cosmos PSA”) with Karlin River Place, LLC (“Karlin”) to acquire real property and its
related improvements located in Austin, Texas (the “Cosmos Property”). The Cosmos Property consists of
land, building, structures, utility infrastructure, personal property, as well as related permits and licenses.
During the year ended December 31, 2025, the Company deposited earnest money of $1,000 thousand
with a title company related to the Cosmos Property. On March 5, 2026, the Company made an additional
deposit of $19,000 thousand related to the Cosmos Property. On March 20, 2026 the transaction closed
and the Company paid a closing payment of $265,622 thousand to Karlin, in addition to both earnest
money deposits applied at closing.
F-65
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 5. Revenue
Disaggregated Revenue
The following table presents the Company's revenue disaggregated by revenue stream for the three and
six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Energy revenue .............................................. | $26,171 | $32,632 | $50,465 | $53,932 | ||||
REC revenue .................................................. | 4,500 | 5,421 | 7,592 | 7,867 | ||||
Data center rental revenue ........................... | $653 | $— | $653 | $— | ||||
Total revenue from contracts with customers ................................................ | $31,324 | $38,053 | $58,710 | $61,799 | ||||
Derivative revenue ......................................... | 63,262 | 14,608 | 79,949 | 21,523 | ||||
Total revenue .......................................... | $94,586 | $52,661 | $138,659 | $83,322 | ||||
Derivative revenue includes net unrealized gains of $53,893 thousand and net realized gains of $9,369
thousand for the three months ended June 30, 2026, and net unrealized gains of $8,374 thousand and
net realized gains of $6,234 thousand for the three months ended June 30, 2025. Derivative revenue
includes net unrealized gains of $67,370 thousand and net realized gains of $12,579 thousand for the six
months ended June 30, 2026, and net unrealized gains of $11,874 thousand and net realized gains of
$9,649 thousand for the six months ended June 30, 2025.
Remaining Performance Obligations (“RPO”)
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially
unsatisfied performance obligations as of the end of the reporting period. The Company has elected to
apply the optional disclosure exemptions under ASC 606 and, accordingly, does not disclose the value of
remaining performance obligations for contracts with an original expected duration of one year or less or
for variable consideration that qualifies for exclusion from the disclosure.
As of June 30, 2026, the Company did not have any remaining performance obligations required to be
disclosed. For projects that had commenced as of the period ended June 30, 2026, substantially all
consideration is variable and is excluded from the remaining performance obligation disclosure because
revenue is recognized in the amount to which the Company has the right to invoice or because the
variable consideration is allocated entirely to a wholly unsatisfied performance obligation or, in certain
arrangements, to a wholly unsatisfied distinct good or service within a series of distinct goods or services.
Contract Balances
The Company did not record any contract assets as none of its right to payment was subject to something
other than passage of time. The Company also did not record any contract liabilities as it recognizes
revenue only at the amount to which it has the right to invoice for the electricity and RECs delivered;
therefore, there are no advanced payments or billings in excess of electricity or RECs delivered.
Note 6. Accounts receivable
The Company recognized revenue and has outstanding balances due from customers included in
accounts receivable in the condensed consolidated balance sheets as of June 30, 2026 and
December 31, 2025. On an ongoing basis, the Company evaluates accounts receivable based on
customer and industry credit conditions, collections, and historical payment performance. The Company's
strategy regarding collection efforts varies based on individual customer circumstances.
F-66
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
As of December 31, 2025, the Company had an allowance for credit losses of $108 thousand for
accounts receivable deemed uncollectible from a single customer due to the customer’s adverse liquidity
position at the time. The Company did not have an allowance for credit losses as of June 30, 2026.
Energy sales that have been delivered but not billed by period end are estimated. Accrued unbilled
revenues are based on estimates of delivered energy since the date of the last meter reading. Estimated
amounts are adjusted when actual usage is known and billed. As of June 30, 2026 and December 31,
2025, the Company estimated the unbilled receivables to be $16,173 thousand and $11,611 thousand,
respectively.
The following table presents the Company's accounts receivable balance and the allowance for credit
losses as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||
Billed trade receivable ........................................................................................... | $4,694 | $3,711 | ||
Unbilled trade receivable ...................................................................................... | 16,173 | 11,611 | ||
Other receivable ..................................................................................................... | 2,139 | 353 | ||
Total trade receivable ............................................................................................ | 23,006 | 15,675 | ||
Less: allowance for credit losses .................................................................... | — | (108) | ||
Accounts receivable, net .................................................................................. | $23,006 | $15,567 | ||
Note 7. Property, plant and equipment, net
The following table presents property, plant and equipment by asset category as of June 30, 2026 and
December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||
Land ......................................................................................................................... | $136,732 | $83,157 | ||
Solar systems ......................................................................................................... | 3,247,791 | 3,106,149 | ||
Leasehold improvements ..................................................................................... | 820 | 820 | ||
Asset retirement obligations ................................................................................. | 50,962 | 50,962 | ||
Construction in progress ....................................................................................... | 3,721,611 | 1,892,436 | ||
Total property, plant and equipment .................................................................... | 7,157,916 | 5,133,524 | ||
Less: accumulated depreciation ..................................................................... | (316,470) | (270,445) | ||
Property, plant and equipment, net ............................................................... | $6,841,446 | $4,863,079 | ||
Depreciation expense on property, plant and equipment was $23,450 thousand and $22,531 thousand for
the three months ended June 30, 2026 and 2025, respectively, and $46,025 thousand and $45,040
thousand for the six months ended June 30, 2026 and 2025, respectively.
Note 8. Intangible assets
On June 12, 2024, Pelicans Jaw Solar, LLC executed a first amended and restated mitigation agreement
with RES Environmental Operating Company LLC (“RES”). For projects that affect endangered species,
an Incidental Take Permit (“ITP”) is issued to allow the project to proceed with certain unavoidable
impacts on protected species, under the condition that those impacts are mitigated by actions like habitat
preservation or restoration. The mitigation agreement ensures that the compensatory mitigation required
by the ITP is properly implemented. As part of the services, RES has to find and secure a conservation
easement to meet the mitigation requirements by California Department of Fish and Wildlife. On October
4, 2024, RES secured the easement and funded the endowment on behalf of Pelicans Jaw Solar, LLC. As
of June 30, 2026 and December 31, 2025, the related intangible asset had a carrying value of $16,496
F-67
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
thousand. Although conservation easements by their nature impose perpetual land-use restrictions, the
ITP granted to Pelicans Jaw Solar, LLC is specific to the project and is not transferable to any future or
separate project following decommissioning. Accordingly, the intangible asset is considered to have a
finite useful life and, upon the project reaching its commercial operation date, will be amortized on a
straight-line basis over the estimated useful life of the project. For the six months ended June 30, 2026
and 2025, no amortization expense has been recorded as the project is not yet in service. Regular annual
evaluation will be conducted for potential impairment.
On November 4, 2025, Libra Solar, LLC executed an easement purchase agreement (“Libra EPA”) with
Southwest Critical Materials, LLC (“Libra EPA Seller”) to acquire certain easements on and through the
over, under, across, within and through property located in Lyon County, Nevada. In consideration of the
grant of the easements, Libra Solar, LLC paid $2,000 thousand to Libra EPA Seller. The easement is
recorded as an intangible asset in the condensed consolidated balance sheet and will be amortized over
the useful life of the associated asset.
Note 9. Condensed consolidated balance sheet components
Prepaid and other current assets
Prepaid and other current assets consists of the following as of June 30, 2026 and December 31, 2025 (in
thousands):
June 30, 2026 | December 31, 2025 | |||
Security deposit ...................................................................................................... | $29,857 | $4,547 | ||
Prepaid expense .................................................................................................... | 39,495 | 13,695 | ||
Prepayments for engineering, procurement and construction ........................ | 142,966 | — | ||
Vendor credit .......................................................................................................... | — | 20,877 | ||
Other current assets .............................................................................................. | 359 | 1,650 | ||
Total prepaid and other current assets ........................................................ | $212,677 | $40,769 | ||
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consists of the following as of June 30, 2026 and
December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||
Accrued compensation and benefits .................................................................. | $8,767 | $11,383 | ||
Accrued interest ..................................................................................................... | 44,790 | 18,824 | ||
Accrued contingent consideration related to Libra asset acquisition ............ | — | 174,000 | ||
Accrued equipment purchase liability ................................................................. | 61 | 40,060 | ||
Accrued construction project costs ..................................................................... | 157,919 | 386,797 | ||
Other accrued expenses ...................................................................................... | 165,575 | 15,875 | ||
Total accrued expenses and other current liabilities ............................... | $377,112 | $646,939 | ||
Note 10. Debt
Debt is categorized as either long-term or short-term. Short-term debt represents debt with an original
contractual maturity of one year or less, and the current portion of the long-term debt. The long-term debt
represents debt with an original contractual maturity greater than one year. The carrying value of the debt
approximates fair value. See Note 12. Fair value measurements for further discussion.
F-68
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table shows debt as of June 30, 2026 and December 31, 2025 (in thousands, except rates):
Maturity Date | Interest Rate | June 30, 2026 | December 31, 2025 | |||||
SE Cosmos Bridge Loan and SE Cosmos Senior Secured Notes .......... | April 2031 | 8.875% | $999,000 | $— | ||||
Libra Construction Loan and Libra Bridge Loan(1) ........................................ | SOFR + 1.625% | 512,850 | — | |||||
Athos Storage Construction Loan and Athos Storage Bridge Loan(2) ...... | SOFR + 1.75% | 361,850 | — | |||||
IP Backlog Land Loan .......................... | August 2055 | 4.5% | 36,958 | 37,016 | ||||
Senior Borrower 1 Term Loan ............ | January 2034 | SOFR + 2% | 162,167 | 162,167 | ||||
Senior Borrower 2 Term Loan ............ | January 2034 | SOFR + 2% | 162,167 | 162,167 | ||||
Mezzanine Borrower 1 Term Loan ..... | January 2034 | SOFR + 3% | 50,000 | 50,000 | ||||
Mezzanine Borrower 2 Term Loan ..... | January 2034 | SOFR + 3% | 50,000 | 50,000 | ||||
Eiffel Term Loan .................................... | December 2033 | SOFR + 1.75% | 88,730 | 89,323 | ||||
Orion 1 Member B Term Loan ............ | October 2029 | SOFR + 1.625% | 83,226 | 83,339 | ||||
Orion 2 Member B Term Loan ............ | November 2034 | SOFR + 1.875% | 92,332 | 92,837 | ||||
Orion 3 Member B Term Loan ............ | September 2029 | SOFR + 1.625% | 95,558 | 96,984 | ||||
Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan(3) ............... | SOFR + 1.75% | 857,750 | 719,850 | |||||
Global Borrower Term Loan and Global Borrower Revolving Loan ....... | October 2027 | SOFR + 3.75% | 472,985 | 435,985 | ||||
SE Borrower Term Loan ...................... | September 2026 | 12.0% | — | 60,549 | ||||
Angela Bridge Loan(4) .......................... | SOFR + 1.25% | — | 127,900 | |||||
Total principal of debt ........................... | 4,025,573 | 2,168,117 | ||||||
Less: unamortized issuance costs and discount .......................................... | (133,698) | (64,664) | ||||||
Total debt, net of unamortized issuance costs and discount ......... | $3,891,875 | $2,103,453 | ||||||
Less: debt, net, current (5) ................... | 1,197,859 | 193,281 | ||||||
Total debt, net, non-current ............ | $2,694,016 | $1,910,172 | ||||||
___________________
(1)The maturity date for the Libra Construction Loan and Libra Bridge Loan is the earlier of the (a) term loan conversion date, (b) 60 days
prior to the earlier of the tax equity commitment expiration date and the tax credit commitment expiration date, (c) 60 days prior to the
guaranteed completion date as defined in the Power Purchase Agreement, and (d) March 31, 2028.
(2)The maturity date for the Athos Storage Construction Loan and Athos Storage Bridge Loan is the earlier of the (a) term loan conversion
date, (b) 60 days prior to the preferred equity investor funding commitment expiration, (c) 60 days prior to tax credit purchaser
commitment expiration, (d) 60 days prior to the guaranteed commercial operation date as defined under each Offtake Agreement, (e) 60
days prior to the expected commercial operation date under the Calpine Offtake Agreement, (f) the occurrence of the tax credit
purchase final funding date, and (g) February 26, 2027.
(3)The maturity date for the Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan is the earlier of the term loan conversion date,
tax equity final funding date, and March 31, 2027.
(4)The maturity date for the Angela Bridge Loan is the earlier of the sale leaseback date, funding date, and March 31, 2026.
(5)As of June 30, 2026 and December 31, 2025, the debt, net, current balance includes unamortized issuance costs and discount of
$31,780 thousand and $1,787 thousand, respectively.
Pursuant to the financing agreements described below, the Company is required to maintain minimum
liquidity amounts and debt-service coverage ratio (“DSCR”). As of June 30, 2026, the Company was in
compliance with all financial covenants.
SE Cosmos Bridge Loan and SE Cosmos Senior Secured Notes
On March 31, 2026, SE Cosmos, LLC, the Company's wholly owned subsidiary, entered into a financing
F-69
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
agreement with certain lenders to obtain a bridge loan for a total loan commitment of $425,000 thousand
(“SE Cosmos Bridge Loan”). The proceeds from the initial draw of $342,250 thousand were received on
April 1, 2026. Part of the proceeds from the draw were used to pay the lender fees of $7,049 thousand
and outstanding project costs of $67,259 thousand.
On April 30, 2026, SE Cosmos, LLC entered into a purchase agreement and related financing
arrangements to issue $999,000 thousand aggregate principal amount of 8.875% senior secured notes
due 2031, which settled on May 7, 2026 (“SE Cosmos Senior Secured Notes”). Part of the proceeds were
used to repay in full the outstanding principal including the accrued interest of the SE Cosmos Bridge
Loan of $342,691 thousand, and the lender fees of $12,728 thousand. $140,381 thousand of the
proceeds was transferred to SE Cosmos, LLC's reserve account for the debt service reserve and
construction reserve, and $503,200 thousand was distributed to the SE Cosmos, LLC.
The notes are secured by first‑priority liens on substantially all assets of SE Cosmos, LLC, including
pledged equity and the project assets, pursuant to a security agreement with a collateral agent.
Libra Construction Loan and Libra Bridge Loan
On March 13, 2026, Libra Project Company and Libra Member B, LLC, the Company's wholly owned
subsidiaries, entered into a financing agreement with certain lenders for a total loan commitment of
$2,446,292 thousand (“Libra Construction Loan” and “Libra Bridge Loan”) and a letter of credit facility of
$98,000 thousand. The initial draw of the loan at closing on March 13, 2026 was $415,150 thousand on
the Libra Construction Loan. During the three months ended June 30, 2026, the Company made $97,700
thousand in additional draws on the Libra Construction Loan and no additional draws on the Libra Bridge
Loan.
The obligations under the Libra Construction Loan or the Libra Bridge Loan are secured by substantially
all project assets and are subject to customary project finance covenants, including minimum debt service
coverage requirements and restrictions on additional indebtedness, liens and distributions.
Athos Storage Construction Loan and Athos Storage Bridge Loan
On March 19, 2026, Athos Storage, LLC and Athos Storage Member B, LLC, the Company's wholly
owned subsidiaries, entered into financing agreements with certain lenders for a total loan commitment of
$679,400 thousand (“Athos Storage Construction Loan” and “Athos Storage Bridge Loan”) and a letter of
credit facility of $78,044 thousand. The initial draw of the loan at closing on March 19, 2026 was $181,250
thousand on the Athos Storage Construction Loan. During the three months ended June 30, 2026, the
Company made $105,350 thousand in additional draws on the Athos Storage Construction Loan and
$75,250 thousand in an initial draw on the Athos Storage Bridge Loan.
The obligations under the Athos Storage Construction Loan or the Athos Storage Bridge Loan are
secured by substantially all project assets and are subject to customary project finance covenants,
including minimum debt service coverage requirements and restrictions on additional indebtedness, liens
and distributions.
Pelicans Jaw Construction Loan and Pelicans Jaw Bridge Loan
During the six months ended June 30, 2026, Pelicans Jaw Solar, LLC made additional draws of $137,900
thousand on the Pelicans Jaw Bridge Loan.
Global Borrower Term Loan and Global Borrower Revolving Loan
During the six months ended June 30, 2026, Global Borrower made additional draws of $37,000 thousand
on the Global Borrower Revolving Loan.
F-70
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
SE Borrower Term Loan
On January 22, 2026, SE Borrower fully repaid the outstanding principal of SE Borrower Term Loan of
$60,549 thousand and the accrued interest through the payoff date of $444 thousand for the total payoff
amount of $60,993 thousand.
Angela Bridge Loan
During the six months ended June 30, 2026, Angiola East, LLC made additional draws of $5,200
thousand, and subsequently, fully repaid the outstanding principal of the Angela Bridge Loan of $133,100
thousand.
Other Financing Arrangements
Angela Lease Arrangement
In February 2026, the Company, through certain consolidated subsidiaries, entered into a sale-leaseback
transaction related to the Angiola East renewable energy project, which includes a solar photovoltaic
facility and battery energy storage system located in Tulare County, California. The Company determined
that the transaction did not qualify for sale accounting under ASC 606 and is accounted for as a financing
arrangement. Accordingly, the Company continues to recognize the project assets and accounts for the
proceeds received as a financing obligation. No gain or loss on the transaction was recognized.
The Company received aggregate proceeds of approximately $224,083 thousand and incurred related
transaction expenses of $2,600 thousand during the six months ended June 30, 2026 and none during
the three months ended June 30, 2026. A portion of the proceeds was used to repay outstanding project
indebtedness and related costs, with the remaining proceeds transferred to the Company or restricted for
project costs and future payments under the financing arrangement.
The arrangement includes a 20-year term, semiannual base rent payments during years 1 through 15
with a rent-free period during years 16 through 20, an early purchase option in year 6, an end-of-term
purchase option, and a renewal option at then-current fair market rental value.
During the three and six months ended June 30, 2026, the Company made $67,308 thousand of principal
payments under the arrangement. As of June 30, 2026, the carrying amount of the financing obligation
was $154,175 thousand. The effective interest rate used to amortize the financing obligation was 1.20%,
and the Company recognized $550 thousand and $891 thousand of interest expense during the three and
six months ended June 30, 2026, respectively.
Note 11. Income taxes
The Company's income tax provision consists of the following amounts for the three and six months
ended June 30, 2026 and 2025 (in thousands, except percentages):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Loss before income taxes ........................... | $(3,079,877) | $(153,759) | $(3,217,633) | $(252,707) | |||
Income tax benefit (expense) ..................... | $25,263 | $(1,487) | $25,369 | $(3,139) | |||
Effective income tax rate ............................. | 0.8% | (1.0)% | 0.8% | (1.2)% | |||
The change in the effective tax rate from the three and six months ended June 30, 2025 to the three and
six months ended June 30, 2026 was driven by a change in unfavorable permanent differences mainly
related to non-deductible equity compensation and state tax expense.
F-71
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 12. Fair value measurements
Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The following is a
description of the valuation techniques that the Company uses to measure the fair value of the derivative
instruments on a recurring basis.
Power price swaps
SE Athos I, LLC and SE Athos II, LLC entered into power swap arrangements with two separate hedging
parties. Each of the swaps has a contractual term of 7 years and is effective upon the effective date of the
agreement, being April 1, 2022 for Athos I and May 13, 2022 for Athos II. The swaps hedge the floating
price per megawatt hour (MWh) against a contractual fixed price based on the underlying capacity of the
solar plant, projected at 338.7MWh and 270.9MWh of direct current, respectively. As of June 30, 2026
and December 31, 2025, the power price swaps are presented as derivative liabilities on the Company's
condensed consolidated balance sheets. As of June 30, 2026, the remaining lives of the swaps are 2.8
years for SE Athos I, LLC, and 2.8 years SE Athos II, LLC.
The fair values of the power price swaps are based on a discounted cash flow method under the income
approach. Forecasted net settlement payments, to or from the Company, are estimated based on
forecasted prices, the fixed price, and the contractual hourly quantity. The fair value is then calculated by
discounting the forecasted net settlement payments based on discount rates commensurate with the term
and risk in each settlement payment. The forward power prices are based on observable market data
obtained from an independent third party (Standard & Poor's) and are constructed using CAISO SP15 on
peak and off peak forward price curves derived from Standard & Poor's market data. The Company does
not apply adjustments to the observable forward price inputs. The forecasted net settlement cash flows
are discounted using market based discount rates that reflect observable yield curves and credit spreads
applicable to the Company and the respective counterparties, with discount rates applied based on which
party is obligated to make the net settlement payment. As the valuation techniques utilize observable
inputs and do not rely on significant unobservable inputs, the Company classifies the power price swap
derivative instruments as Level 2 within the fair value hierarchy.
Certain of the Company's Top-Bottom 4 (“TB4”) capacity arrangements with respect to battery energy
storage systems contain embedded fixed for floating energy price swaps. These swaps serve as
contractual provisions that exchange a variable energy settlement amount for a fixed payment. As of
March 31, 2026, certain permits required for construction had not yet been obtained, and their absence
could have delayed or prevented completion. While that milestone remained uncertain, the predominant
underlying of the arrangements was that party-specific construction and development milestone rather
than a market price. Accordingly, the embedded swaps qualified for the ASC 815-10-15-59(e) scope
exception, introduced by ASU 2025-07, and were not accounted for as derivatives. This position changed
during the second quarter of 2026, as the outstanding permits were obtained and no item arising in the
ordinary course of business remained that would prevent completion of construction, and thus the
predominant underlying became the market price on which the swaps settle. The embedded swaps,
therefore, no longer qualified for the scope exception and became subject to derivative accounting under
ASC Topic 815. Each of the swaps has a contractual term of 15 years and is effective upon the effective
date of the agreement, being December 1, 2026. As of June 30, 2026, the power price swaps are
presented as derivative assets on the Company's condensed consolidated balance sheets.
The fair values of the TB4 swap agreements are determined using a discounted cash flow method under
the income approach, in which forecasted monthly net settlement amounts calculated from the contractual
fixed prices, the contract capacity, and forecasted hourly power prices are discounted at rates
commensurate with the term and the credit risk of the party obligated to make each payment. Forecasted
prices are based on observable CAISO SP15 forward curves where available and, for later periods for
which a true forward curve is not available, on forward price curves derived from Standard & Poor's
market data. The Company applies additive rather than multiplicative scaling because the instruments
settle on intraday price spreads, and a significant portion of low-hour prices are negative. Given the
F-72
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
significance of the long-dated price forecasts, and hourly shaping assumptions, the Company classifies
these swap agreements as Level 3 within the fair value hierarchy. As of June 30, 2026, the discount rate
ranges between 4.59% to 5.72%, the on peak price forecast ranges between $6.25 to $65.90, and the off
peak price forecast ranges between $22.30 to $71.36.
Interest rate swaps
The Company is exposed to interest rate risk primarily through its variable rate indebtedness, the majority
of which bears interest at SOFR plus an applicable margin. The Company uses interest rate swaps to
manage interest rate risk. The fair value of the interest rate swaps is calculated as the net of the
discounted future cash flows of the pay and receive legs of the swaps. Mid-market interest rates on the
valuation date are used to create the forward curve for the floating legs and discount curve.
The following table presents the list of interest rate swap contracts as of June 30, 2026 (in thousands):
Subsidiary | Execution Date | Floating rate | Fixed rate | Termination date | Notional amount |
Eiffel Member B, LLC ............ | December 7, 2023 | 6-month term SOFR floating rate index | 3.45% | October 31, 2033 | $65,784 |
Ben Milam 1 ............................ | October 29, 2024 | 6-month term daily compounding SOFR floating rate index | 3.76% | July 31, 2044 | $48,118 |
Ben Milam 1 ............................ | October 29, 2024 | 6-month term daily compounding SOFR floating rate index | 3.76% | October 31, 2044 | $16,039 |
Ben Milam 2 ............................ | November 26, 2024 | 6-month term daily compounding SOFR floating rate index | 4.17% | March 31, 2044 | $71,092 |
Ben Milam 3 ............................ | June 15, 2023 | 6-month term daily compounding SOFR floating rate index | 3.37% | August 31, 2044 | $73,787 |
Senior Borrower 1 and Senior Borrower 2 .................. | January 25, 2024 | 6-month term daily compounding SOFR floating rate index | 3.95% | June 30, 2043 | $243,909 |
Mezzanine Borrower 1 and Mezzanine Borrower 2 .......... | January 25, 2024 | 6-month term daily compounding SOFR floating rate index | 3.93% | June 30, 2038 | $75,000 |
Global Borrower ..................... | November 19, 2025 | 3-month term daily compounding SOFR floating rate index | 3.79% | October 18, 2027 | $138,060 |
Global Borrower ..................... | November 19, 2025 | 3-month term daily compounding SOFR floating rate index | 3.71% | October 18, 2027 | $59,167 |
Pelicans Jaw Solar, LLC ....... | December 23, 2024 | 6-month term daily compounding SOFR floating rate index | 4.20% | September 30, 2046 | $319,990 |
Pelicans Jaw Solar, LLC ....... | May 13, 2025 | 6-month term daily compounding SOFR floating rate index | 4.21% | September 30, 2046 | $29,391 |
Pelicans Jaw Solar, LLC ....... | May 13, 2025 | 6-month term daily compounding SOFR floating rate index | 4.21% | September 28, 2046 | $14,696 |
Libra Solar, LLC ..................... | March 16, 2026 | 3-month term daily compounding SOFR floating rate index | 4.11% | March 31, 2048 | $670,310 |
Libra Solar, LLC ..................... | March 16, 2026 | 3-month term daily compounding SOFR floating rate index | 4.13% | March 31, 2048 | $68,378 |
Libra Solar, LLC ..................... | May 6, 2026 | 3-month term daily compounding SOFR floating rate index | 4.37% | March 31, 2053 | $16,934 |
Libra Solar, LLC ..................... | May 6, 2026 | 3-month term daily compounding SOFR floating rate index | 4.37% | March 31, 2053 | $16,934 |
Athos Storage, LLC ............... | March 19, 2026 | 3-month term daily compounding SOFR floating rate index | 4.02% | November 30, 2046 | $214,950 |
F-73
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table presents the estimated fair values of the Company's asset and liability financial
instruments as of June 30, 2026 (in thousands):
Fair Value Measurement Using | ||||||||
Fair Value as of June 30, 2026 | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Current derivative asset - power price swaps ................................................................ | $1,813 | $— | $— | $1,813 | ||||
Non-current derivative asset - interest rate swaps ................................................................ | 9,887 | — | 9,887 | — | ||||
Non-current derivative asset - power price swaps ................................................................ | 51,000 | — | — | 51,000 | ||||
Total assets ................................................... | $62,700 | $— | $9,887 | $52,813 | ||||
Liabilities: | ||||||||
Current derivative liability - power price swaps ................................................................ | $10,704 | $— | $10,704 | $— | ||||
Current warrant liability(1) ............................... | 2,040,815 | — | — | 2,040,815 | ||||
Non-current derivative liability - interest rate swaps ........................................................ | 9,027 | — | 9,027 | — | ||||
Non-current derivative liability - power price swaps ...................................................... | 39,839 | — | 39,839 | — | ||||
Non-current warrant liability(1) ........................ | 3,445,302 | — | — | 3,445,302 | ||||
Total liabilities ............................................... | $5,545,687 | $— | $59,570 | $5,486,117 | ||||
__________________
(1)See Note 17. Warrant liability for further information on warrant liability and the Company's valuation of the warrant liability as of the end
of the reporting period.
The following table presents the estimated fair values of the Company's asset and liability financial
instruments as of December 31, 2025 (in thousands):
Fair Value Measurement Using | ||||||||
Fair Value as of December 31, 2025 | Level 1 | Level 2 | Level 3 | |||||
Assets: | ||||||||
Non-current derivative asset - interest rate swaps ................................................................ | $16,549 | $— | $16,549 | $— | ||||
Total assets ................................................... | $16,549 | $— | $16,549 | $— | ||||
Liabilities: | ||||||||
Current derivative liability - power price swaps ................................................................ | $17,399 | $— | $17,399 | $— | ||||
Non-current derivative liability - interest rate swaps ........................................................ | 15,327 | — | 15,327 | — | ||||
Non-current derivative liability - power price swaps ...................................................... | 47,701 | — | 47,701 | — | ||||
Total liabilities ............................................... | $80,427 | $— | $80,427 | $— | ||||
F-74
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table presents a summary of the changes in the fair value of the Company's Level 3 TB4
swaps (in thousands):
TB4 Swap Derivatives | ||
Balance as of December 31, 2025 ............................................................................................. | $— | |
Total gains or losses recognized in earnings ........................................................................... | 52,813 | |
Balance as of June 30, 2026 ....................................................................................................... | $52,813 | |
The carrying amounts of the Company's financial instruments, including cash and cash equivalents,
restricted cash, accounts receivable, accounts payable, and accrued expenses, approximate fair value
due to the short-term nature of these instruments. The carrying value of the Company's outstanding debt
under its various loans and revolving credit facilities approximates fair value because the interest rates on
these instruments are variable and reset frequently, and therefore approximate current market rates for
instruments with similar terms and maturities. See Note 10. Debt for further information.
Note 13. Commitments and contingencies
On December 14, 2023, the Juno Project Company, Titan Project Company and Aragorn Project
Company received an open letter from the Public Utility Commission of Texas for an investigation of non-
compliance with the ERCOT operating guides. The Company believes that it is probable that the
investigation will result in an immaterial financial loss.
On April 19, 2024, the Company, on behalf of the Athos I Project Company and Athos II Project Company
voluntarily submitted a letter to the California Air Resources Board (“CARB”) to disclose the
noncompliance identified during the Company's review of the CARB regulation for reducing sulfur
hexafluoride emission from gas insulated switchgear for data years in 2021 and 2022. The self-disclosed
violations related to the requirement to submit annual greenhouse gas emissions data reports for the data
years 2021 and 2022. The Company believes that it is probable that the investigation will result in an
immaterial financial loss.
The Company has entered into Power Purchase Agreements (“PPAs”) providing annual delivery of a
minimum amount of electricity at fixed prices. The Company has certain interconnection tax security
obligations with the transmission owner. In connection with the financing agreement dated March 31,
2023, the Company entered into irrevocable standby letters of credit to establish the debt service reserve
letters of credit. As collateral for PPAs, interconnection tax security obligations, debt service reserve,
module procurement, cluster study and resource adequacy agreements, the Company entered into letter
F-75
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
of credit agreements (“LCs”) as a safeguard for the following types of agreements as of June 30, 2026
and December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||
PPAs ........................................................................................................................ | $535,905 | $462,632 | ||
Financial derivatives .............................................................................................. | 8,907 | 8,907 | ||
Equity contribution obligation ............................................................................... | 17,000 | 16,000 | ||
Interconnection performance obligations ........................................................... | 453,865 | 143,686 | ||
Debt service reserve ............................................................................................. | 46,155 | 46,155 | ||
Cluster study agreement ...................................................................................... | 7,500 | 7,500 | ||
Investment tax credits for Athos Storage ........................................................... | 62,496 | — | ||
Rent reserve ........................................................................................................... | 7,340 | — | ||
Equipment reserve ................................................................................................ | 2,440 | — | ||
Total LCs used .................................................................................................... | $1,141,608 | $684,880 | ||
Total LC commitment ........................................................................................ | $1,435,744 | $981,176 | ||
As of June 30, 2026 and December 31, 2025, the total surety bonds were $267,448 thousand and
$170,591 thousand, respectively.
As of June 30, 2026, the Company had no unconditional purchase obligations. As of June 30, 2026, the
Company had firm construction commitments totaling $6,259,410 thousand for the remainder of 2026
through 2028.
Note 14. Related party transactions
As of June 30, 2026 and December 31, 2025, the receivables from related parties of $306 thousand and
$195 thousand, respectively, represent the amounts owed to the Company for bill payments made on
behalf of SB Energy Global Holding Limited and its subsidiaries.
As of June 30, 2026 and December 31, 2025, the payables to related parties of $3,975 thousand and
$188 thousand, respectively, represent amounts owed to SB Energy Global Holdings One Limited for the
tax payment made on behalf of SBE US Holdings One, LLC, a wholly owned subsidiary of the Company.
As of June 30, 2026 and December 31, 2025, the debt from related parties of $709,520 thousand
represents the intercompany revolving promissory notes between the Company as the borrower and SBE
Global, LP, the Company's direct parent, as lender at the annual interest rates of 6.0% and 7.3%, with
approximately $410,000 thousand bearing interest at 7.3% and approximately $299,520 thousand bearing
interest at 6.0%.
U.S. State and Local Tax Sharing Agreement
The Company entered into a U.S. State and Local Tax Sharing Agreement (“TSA”) with SB Group US,
Inc. that governs the respective rights, responsibilities and obligations of the Company and SB Group US,
Inc. with respect to certain state and local tax matters in jurisdictions and for taxable periods in which SB
Group US, Inc. is required to file tax returns on a consolidated, combined, unitary or other group basis
with the Company (the “Combined Returns”). Among other things, the TSA (i) allocates responsibility for
the preparation and filing of the Combined Returns and the payment of taxes due in connection therewith,
(ii) determines the appropriate allocation of any such tax liability between SB Group US, Inc. and the
Company, (iii) requires compensation to be paid by the Company to SB Group US, Inc. to the extent the
Company uses any tax attributes properly allocable to SB Group US, Inc. to offset taxes otherwise
allocable to the Company and vice versa, (iv) allocates responsibility for the conduct of tax contests
F-76
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
arising with respect to the Combined Returns, and (v) ensures that the parties are aligned on cooperating
and coordinating with respect to the Combined Returns.
Cosmos Lease
On November 7, 2025, the Company executed a lease agreement (the “Cosmos Lease”), primarily for
data centers and office buildings, with a related party. The Cosmos Lease provides for phased
commencement based on the achievement of Ready for Service (“RFS”) conditions for the applicable
construction phases. As of June 30, 2026, the data center phases subject to the RFS conditions had not
commenced. The lease is expected to commence in stages between December 2026 and June 2027
based on achievement of RFS status for several construction phases.
The aggregate amount of estimated future undiscounted lease payments associated with such lease is
$2,183,000 thousand. The initial lease term is 15 years with an option for renewal for an additional 10
year period.
In connection with the execution of the Cosmos Lease, SoftBank Group Capital Limited, a SoftBank
Group affiliate, (the “Guarantor”), an affiliate of the related party, entered into a guaranty agreement (the
“Guaranty”) with the Company. Pursuant to the Guaranty, the Guarantor has irrevocably and
unconditionally guaranteed to the Company the full and prompt payment and performance of all
obligations of the related party arising under the Cosmos Lease. The Guarantor and the Company
anticipate that the maximum aggregate exposure under the Guaranty is approximately $2,905,000
thousand.
Transactions with OpenAI
On January 9, 2026, the Company issued warrants to OpenAI Infra Holdings, LLC (“OAI”), an affiliate of
OpenAI, Inc. The warrants were issued at a nominal exercise price and have a ten-year term. Certain of
the warrants are subject to vesting conditions tied to the achievement of operational and performance
milestones. See Note 17. Warrant liability for more information on the warrants.
On January 9, 2026, Milam County DC, LLC, as landlord, and Orion DC I, LLC, an affiliate of OpenAI, as
tenant, entered into two separate triple-net data center lease agreements for data center buildings to be
constructed in Milam County, Texas. Building 1 is designed for approximately 308 MW of critical IT
capacity and building 2 is designed for approximately 445 MW of critical IT capacity, with each building
comprising approximately 650,000 square feet. Each lease has an initial term of 15 years, with two 10-
year extension options available to the tenant. Rent under each lease is structured on a yield-on-cost
basis with an annual escalator. See Note 15. Leases for more information on the Milam County leases.
Note 15. Leases
Lessee Arrangements
The Company leases the land at the site of its solar power plants. The land lease agreements have terms
ranging from 20 to 35 years with an ability to extend for periods of 5 to 10 years. The Company's lease
terms may include options to extend or terminate the lease when it is reasonably certain that the
Company will exercise any such options. The extension periods are included in the life of the right-of-use
asset and lease liabilities up until the 35 years of useful life of the solar assets.
The Company accounts for the land leases as operating leases. Lease expense is recognized on a
straight-line basis over the expected lease term. At times, the Company enters into operating land leases
that are subject to annual changes to the lease payment based upon annual escalations between 1% to
5% per year until the end of the production term or based upon the lease schedule presented in the lease
agreements.
During the six months ended June 30, 2026, the Company entered into a new land lease agreement that
commenced on February 28, 2026, and expires on December 31, 2062.
F-77
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Information relating to the lease term and discount rate as of June 30, 2026 and December 31, 2025 were
as follows:
June 30, 2026 | December 31, 2025 | ||
Weighted-average remaining lease term (in years): | |||
Operating leases ..................................................................................................... | 31.8 | 32.0 | |
Weighted-average discount rate: | |||
Operating leases ..................................................................................................... | 6.04% | 6.45% | |
The Company recognized ground lease expenses of $2,973 thousand and $3,578 thousand for the three
months ended June 30, 2026 and 2025, respectively, and $6,962 thousand and $7,543 thousand during
the six months ended June 30, 2026 and 2025, respectively, which is included in cost of operations on the
condensed consolidated statements of operations and comprehensive loss.
Operating lease information was as follows (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Cash paid for operating lease liabilities ........ | $3,710 | $2,533 | $5,425 | $5,037 | |||
The future lease payments included in the measurement of the Company's operating lease liabilities as of
June 30, 2026, were as follows (in thousands):
Years Ending December 31, | Leases | |
Remainder of 2026 (remaining six months) ................................................................................ | $8,111 | |
2027 ................................................................................................................................................... | 15,083 | |
2028 ................................................................................................................................................... | 15,344 | |
2029 ................................................................................................................................................... | 14,809 | |
2030 ................................................................................................................................................... | 15,057 | |
Thereafter ......................................................................................................................................... | 532,818 | |
Total lease obligation ...................................................................................................................... | $601,222 | |
Less: imputed interest .................................................................................................................... | (369,866) | |
Total operating lease liabilities ................................................................................................ | $231,356 | |
Operating lease liabilities, current ................................................................................................ | $14,125 | |
Operating lease liabilities, non-current ........................................................................................ | $217,231 | |
Lessor Arrangements
As of June 30, 2026, the Company entered into three data center arrangements related to the Cosmos
and Milam County data center facilities. The arrangements provide for the development and future lease
of data center facilities, related land or campus rights and associated power infrastructure. The Cosmos
facility is expected to become available in phases beginning in the second half of 2026, while the Milam
County facilities are expected to become available in phases beginning in 2027 and 2028, respectively.
As of June 30, 2026, the applicable data center facilities and related infrastructure were under
construction and had not been delivered or made available for the customer’s use. Accordingly, the
related leases had not commenced for purposes of ASC 842 and no lease income related to these data
center components was recognized during the six months ended June 30, 2026.
F-78
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The arrangements include initial lease terms of approximately 15 years following the applicable
commencement dates. The Cosmos arrangement provides the customer with one 10-year renewal
option, and the Milam County arrangements provide the customers with two 10-year renewal options. The
Milam County arrangements also include contingent buy-out rights if specified ready-for-service
conditions are not satisfied within contractually specified periods of time.
Note 16. Member's equity
The membership equity of the Company is 100% owned by its parent entity, SBE Global. SBE Global's
limited liability company interests are generally consistent with ordinary equity ownership interests.
During the three months ended June 30, 2026 and 2025, the Company received $1,605,142 thousand
and $0 thousand in cash capital contributions from SBE Global, and received $467,392 thousand and
$129,224 thousand in non-cash contributions, respectively. During the three months ended June 30, 2026
and 2025, the Company made $0 thousand and $14,518 thousand in distributions to SBE Global,
respectively.
During the six months ended June 30, 2026 and 2025, the Company received $1,771,142 thousand and
$495,000 thousand in cash capital contributions from SBE Global, respectively, and received $1,836,474
thousand and $162,462 thousand in non-cash contributions, respectively. During the six months ended
June 30, 2026 and 2025, the Company made $452 thousand and $510,369 thousand in distributions to
SBE Global, respectively. Distributions are to be made to SBE Global at the sole discretion of the Parent,
with no restrictions.
Note 17. Warrant liability
On January 9, 2026, in connection with the Milam County data center facility lease arrangements with
OAI, and the related agreement (the “Foundation Agreement”), the Company entered into a two‑tier
warrant arrangement pursuant to a common unit purchase warrant agreement. Under the two-tier
structure, OAI initially received 8,554,600 warrants from the Company (the “Warrant(s)”) that vest upon
achievement of specified milestones. Upon vesting, the Warrants automatically exchange for a fully
vested warrant to acquire common units of Energy Global LP, a parent of the Company (the “TopCo
Warrant(s)”).
The Warrants vest over time based on the achievement of specified performance conditions, including
execution of lease agreements, project development milestones, and equity valuation thresholds.
The Warrants were determined to be liability-classified instruments. Accordingly, the Company recognized
a warrant liability of $3,646,246 thousand based on the fair value of the Warrants on the issuance date.
The warrant liability is subsequently remeasured at fair value each reporting period, with changes in fair
value reflected in the Company's condensed consolidated statements of operations and comprehensive
loss.
The Warrants were measured using a Monte Carlo simulation within an option pricing framework for the
valuation at the issuance date of the Warrants.
As of June 30, 2026, the Company estimated the fair value of its warrant liabilities using a valuation
model that first requires an estimate of the total equity value of Energy Global, LP. In determining the total
equity value, the Company considered two separate indications of value: an initial public offering
indication and a transaction indication. The Company incorporated these two indications into a probability-
weighted expected return method (“PWERM”), under which the estimated total equity value was
calculated by weighting the value derived under each indication based on management's estimate of the
likelihood of each outcome. As a corroborative analysis, the Company also considered a market approach
based on enterprise value-to-EBITDA multiples of comparable public companies.
F-79
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The valuation incorporated Level 3 inputs, including expected volatility, contractual term, risk‑free interest
rate and expected distributions. The significant assumptions used as of June 30, 2026 and the issuance
date of the Warrants were as follows (dollar amounts in thousands):
January 9, 2026 | June 30, 2026 | ||
Equity value of Energy Global, LP ................................................................ | $29,768,938 | $44,500,000 | |
Expected dividend yield ................................................................................. | —% | —% | |
Risk-free interest rate ..................................................................................... | 3.5% | 3.8% | |
Expected volatility (Transaction indication) ................................................. | 20.0% | 28.0% | |
Expected volatility (IPO indication) ............................................................... | N/A | 26.0% | |
Contractual term .............................................................................................. | 10 years | 9.5 years | |
The following table presents a summary of changes in fair value of the Company's Level 3 warrant liability
(in thousands):
Warrant liability | |
Balance at December 31, 2025 .................................................................................................... | $— |
Issuance of warrants ..................................................................................................................... | 3,646,246 |
Settlements ..................................................................................................................................... | (733,186) |
Change in fair value ...................................................................................................................... | (45,824) |
Balance at March 31, 2026 ............................................................................................................ | $2,867,236 |
Change in fair value ...................................................................................................................... | 2,618,881 |
Balance at June 30, 2026 .............................................................................................................. | $5,486,117 |
As of June 30, 2026, the fair value of the warrant liability was $5,486,117 thousand, which is included on
the condensed consolidated balance sheets. The Company recognized a loss on the change in fair value
of the warrant liability of $2,618,881 thousand for the three months ended June 30, 2026 and $2,573,056
thousand for the six months ended June 30, 2026, which is included within changes in fair value of
warrant liability in the condensed consolidated statements of operations and comprehensive loss.
As of June 30, 2026, an aggregate of 868,934 Warrants were vested and exercisable. These Warrants
were automatically exchanged for TopCo Warrants. As such, the settlement of these vested Warrants
represent a capital contribution of $733,186 thousand from Energy Global LP. An additional 2,780,587
unvested Warrants are subject to operational and performance vesting conditions tied to project-related
commercial and financing milestones for which the Company determined achievement of these specific
milestones is probable. The remaining 4,905,079 unvested Warrants are subject to other operational and
performance vesting conditions for which achievement is not currently considered probable, or are subject
to vesting only upon consummation of a qualified public offering, which is not considered probable until
such offering occurs. No Warrants have been exercised as of June 30, 2026.
The corresponding initial cost of $3,646,246 thousand was accounted for as a lease incentive provided to
OAI. Accordingly, the incentive will begin to be recognized as a reduction of revenue at lease
commencement. As of June 30, 2026, the related leases had not commenced, see Note 15. Leases for
additional information on the Company's lessor arrangements.
Note 18. Long-term incentive plan
Common A Profit Units
Effective July 2, 2024, SB Energy Holdco, LLC (“SB Partner”) and the 2022 Series C profit unit and Series
D profit unit holders (collectively, the “Profit Unit Holders”) entered into a securities purchase agreement
(“July 2024 Profit Unit SPA”) to purchase the outstanding vested and unvested profit units in exchange for
a combination of upfront cash payments, deferred cash payments with vesting conditions over three
F-80
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
years, and rollover units with vesting conditions over three years. As of the closing date of July 2, 2024,
the management of SB Partner determined the total number of 2022 Series C profit units (“2022 Series C
Profit Units”) and Series D profit units (“Series D Profit Units”) outstanding and applied the redemption
price $232.86 per 2022 Series C Profit Unit and $447.87 per Series D Profit Unit to calculate the total
value to the Profit Unit Holders for the upfront cash payments, deferred cash payments and rollover units.
The total value of the acquired units was $335,250 thousand, which represents upfront cash payments of
$137,942 thousand (41%), deferred cash payments of $87,599 thousand (26%) and rollover units of
$109,710 thousand (33%).
Pursuant to the July 2024 Profit Unit SPA, $137,942 thousand in cash was transferred to the Profit Unit
Holders upfront on the closing date of July 2, 2024 without any vesting conditions and $87,599 thousand
was deferred and vested over the period of three years. The deferred cash payments are paid in six equal
installments over three years after the closing date of July 2, 2024 and are subject to 5% accrued interest.
Pursuant to the July 2024 Profit Unit SPA, some of the 2022 Series C Profit Units and Series D Profit
Units were rolled over into common A units (“Common A Profit Units”) issued by Energy Global, LP to the
Common A Profit Unit holders. The Common A Profit Units vest over three years contingent on continued
employment. The Common A Profit Units are accounted for as equity of Energy Global, LP in accordance
with ASC Topic 718 Compensation - Stock Compensation (“ASC 718”).
The total number of Common A Profit Units converted was 1,097,095 with the price per unit of $100.00 for
the total value of $109,710 thousand as of the closing date of July 2, 2024.
The Company determined that the exchange of 75% of the 2022 Series C Profit Units for Common A
Profit Units, upfront cash and deferred cash payments is a Type III modification in accordance with ASC
718 because the vesting condition was deemed improbable and is now considered probable.
The Company also determined that the exchange of 20% of Series D Profit Units (which are subject to a
performance condition) for Common A Profit Units and deferred cash payments is a Type III modification
in accordance with ASC 718 because the vesting condition was deemed improbable and is now
considered probable.
As of June 30, 2026, unvested compensation cost that will be recognized over the remaining vesting
period is $71,648 thousand. The weighted average recognition period remaining at June 30, 2026 is 0.4
years.
2024 Series C Profit Units
Effective July 2, 2024, Energy Global, LP, an indirect parent entity of the Company, established its Long-
term Incentive Plan (“2024 LTIP”) with the aim of issuing equity interests to employees or other service
providers eligible to be designated as plan participants. The units under 2024 LTIP are available in one
class namely 2024 Series C Profit Units and are not transferable by the participants. The 2024 LTIP
authorizes and reserves the number of common units that may be issued pursuant to awards under the
plan to 10,000,000 2024 Series C Profit Units, which can be adjusted.
Eighty percent of the 2024 Series C Profit Units are subject to a service-based vesting condition that
commenced on July 2, 2024, and the remaining twenty percent vest upon occurrence of a liquidity event,
which is a performance-based vesting condition. The service-based vesting condition is satisfied over a
four year period, with a one year cliff vest and ratable quarterly vesting thereafter. Upon a sale liquidity
event, all unvested units, including any unvested service-based units, will vest, provided the participants
remain in continuous service through the consummation of the liquidity event. Upon an initial public
offering event, the majority of the unvested units, including any unvested service-based units, will vest,
provided the participants remain in continuous service through the consummation of the liquidity event.
The 2024 LTIP is accounted for in accordance with ASC 718 and the 2024 Series C Profit Units are
accounted for as a liability of the grantor, Energy Global, LP. These liability-classified awards are
remeasured to fair value as of each reporting period-end date until the award’s settlement or expiration.
F-81
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Any changes to the fair value of liability-classified awards are recorded as compensation expense in
general and administrative expense in the condensed consolidated statements of operations and
comprehensive loss, with a corresponding credit to equity as a capital contribution. The Company
recognizes forfeitures as they occur. The Company recognizes compensation expense related to these
liability-classified awards using a straight-line method.
The fair value of the 2024 Series C Profit Units is estimated at each reporting date using an option pricing
method. As the 2024 Series C Profit Units are profit interests in a private partnership, observable market
prices are not available. Accordingly, management employs a valuation technique that incorporates
unobservable inputs, reflecting the classification of the fair value measurement within Level 3 of the fair
value hierarchy in accordance with ASC Topic 820, Fair Value Measurement. The fair value of the 2024
Series C Profit Units was determined by allocating the total equity value of Energy Global, LP using the
option-pricing method, as described in the AICPA Accounting and Valuation Guide entitled, Valuation of
Privately-Held Company Equity Securities Issued as Compensation. Because Energy Global, LP is not
publicly traded, the Company must estimate the fair value of its equity. Refer to Note 17. Warrant liability
for further information on the valuation methodology for determining the fair value of Energy Global, LP.
The Company considers numerous objective and subjective factors to determine the fair value of awards
at each meeting in which awards are approved. The factors considered include, but are not limited to: (i)
the results of contemporaneous independent third-party valuations, (ii) the prices, rights, preferences, and
privileges of Energy Global, LP’s outstanding equity, (iii) the lack of marketability of the equity, (iv) actual
operating and financial performance and estimated trends and prospects for its future performance,
current business conditions and financial projections, (v) the likelihood of achieving a liquidity event, such
as an initial public offering, direct listing, or sale, given prevailing market conditions; and (vi) precedent
transactions. The option-pricing model treats the 2024 Series C Profit Units as call options on the total
equity value of Energy Global, LP, with exercise (or strike) prices based on the value thresholds at which
the allocation amount of the various holders of securities changes. These strike prices are based on
liquidation preferences of the various classes of units and their participation prices. The fair value of the
options associated with each strike price were estimated using the option pricing model. Significant
assumptions used in the option pricing model include expected volatility, expected term to a liquidity
event, risk-free interest rate, and a discount for lack of marketability.
The following significant assumptions were used in estimating the fair value of the 2024 Series C Profit
Units as of June 30, 2026 (dollar amounts in thousands):
June 30, 2026 | |
Equity value of Energy Global, LP ............................................................................................... | $44,500,000 |
Risk-free interest rate .................................................................................................................... | 3.8% |
Expected volatility (Transaction indication) ................................................................................ | 28.0% |
Expected volatility (IPO indication) .............................................................................................. | 26.0% |
Expected term to liquidity .............................................................................................................. | 0.2 years |
Discount for lack of marketability ................................................................................................. | 3.0% |
F-82
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table summarizes profit unit activity under the 2024 LTIP and July 2024 Profit Unit SPA
during the six months ended June 30, 2026:
2024 Series C Profit Units | Common A Profit Units | ||||||
Units (whole units) | Weighted- average grant date fair value (per unit) | Units (whole units) | Weighted- average grant date fair value (per unit) | ||||
Unvested as of December 31, 2025 ........... | 8,317,445 | $83.34 | 528,630 | $100.00 | |||
Granted ............................................................... | 363,500 | $227.46 | — | ||||
Forfeitures .......................................................... | (10,300) | $93.63 | — | ||||
Vested ................................................................. | (1,035,830) | $75.08 | (352,420) | $100.00 | |||
Unvested as of June 30, 2026 ..................... | 7,634,815 | $91.31 | 176,210 | $100.00 | |||
The following table presents the plan stock-based compensation expense, which is included in general
and administrative expense on the condensed consolidated statements of operations and comprehensive
loss (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Stock-based compensation expenses – 2024 Series C Profit Units ............................. | $449,487 | $110,262 | $555,126 | $129,577 | ||||
Stock-based compensation expenses – Deferred cash payment and Common A Profit Units ........................................................ | 17,935 | 16,443 | 34,377 | 32,885 | ||||
Total plan compensation expenses ........ | $467,422 | $126,705 | $589,503 | $162,462 | ||||
As of June 30, 2026, the total unrecognized compensation expense related to unvested 2024 Series C
Profit Units was $2,344,041 thousand. This amount reflects fair value of unvested units as of June 30,
2026 multiplied by the proportion of the requisite service period remaining, which is expected to be
recognized over a weighted-average remaining requisite service period of 2.2 years.
Note 19. Net loss per unit
Basic net income (loss) per unit is computed by dividing net income (loss) attributable to SB Energy, Inc.
by the weighted-average number of membership units (“Units”) outstanding during the period, as
retroactively adjusted for the January 9, 2026 in-substance recapitalization discussed in Note 1.
Organization and nature of operations. Diluted net income (loss) per unit is computed by giving effect to
all potentially dilutive Units during the period, if any. The Company had no potentially dilutive units
outstanding for the periods presented; therefore, basic and diluted net income (loss) per unit is the same.
The Company’s Warrants as described in Note 17. Warrant liability and awards under the long-term
incentive plan as described in Note 18. Long-term incentive plan relate to equity interests or warrants of
Energy Global, LP or other parent entities and are not exercisable for, or convertible into, Units of the
Company. Accordingly, these instruments are not considered potential Units of SB Energy, Inc. for
purposes of calculating diluted net loss per unit.
F-83
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following table sets forth the computation of basic and diluted net loss per unit (in thousands, except
units and per-unit amounts):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Numerator: | ||||||||
Net loss attributable to SB Energy, Inc. ....... | $(3,050,449) | $(141,652) | $(3,208,872) | $(215,530) | ||||
Denominator: | ||||||||
Weighted-average Units outstanding - basic and diluted ............................................. | 19,966,564 | 19,966,564 | 19,966,564 | 19,966,564 | ||||
Net loss per Unit - basic and diluted ...... | $(152.78) | $(7.09) | $(160.71) | $(10.79) | ||||
Note 20. Segments
The Company’s segment structure reflects how management currently operates and allocates resources.
The Company’s businesses are organized into three reportable segments: Standalone Power (“SP”),
Data Centers (“DC”) and Solutions (“SLN”). Corporate represents the remaining non-segment operations
consisting primarily of general corporate expenses, unallocated overhead, and capital expenditures not
allocated to our operating segments. No operating segments have been aggregated.
SP includes the development, construction, ownership, and operation of grid-connected utility-scale solar
photovoltaic and battery energy storage system projects while DC includes the development and
commercialization of large-scale data center campuses, powered land opportunities, and related
infrastructure solutions. SLN represents intercompany services provided to SP and DC segments for the
development, construction and operation of portfolio projects within those segments. Development and
construction services are charged to DC and SP at a mark-up.
The Company’s CODM is the Leadership Team, comprised of the co-Chief Executive Officers and the
Chief Financial Officer. The CODM evaluates segment performance and allocates resources based on
Total Segment Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”). The
CODM uses Total Segment Adjusted EBITDA to evaluate the operating performance of each reportable
segment, monitor execution against operating plans and budgets, and determine the level and timing of
capital and resource deployment.
SP derives revenue primarily from the sale of energy, capacity, and related environmental attributes
(including renewable energy certificates) under PPAs and related market arrangements. DC is a distinct
reportable segment whose business activities include the development and commercialization of powered
land, data center campuses, and related infrastructure solutions. SLN is a third distinct reportable
segment whose purpose is to provide billable services related to the development, construction and
operations of project companies in SP and DC. For the three and six months ended June 30, 2025, all
reportable segment revenue was attributable to SP and SLN. The DC reportable segment was pre-
revenue for the three and six months ended June 30, 2025. Differences between the Company's measure
of segment profit or loss (Total Segment Adjusted EBITDA) and consolidated net loss are presented in the
reconciliations below.
All revenues from external customers and long-lived assets were attributable to the United States for each
period presented. Revenue from customers representing 10% or more of total consolidated revenue from
contracts with customers for the six months ended June 30, 2026 and 2025 was as follows:
Six Months Ended June 30, | ||||||
2026 | 2025 | Segment | ||||
Customer A .................................................................................. | 27% | 30% | SP | |||
Customer B .................................................................................. | 24% | 21% | SP | |||
F-84
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following tables present segment information, including revenue and cost information regularly
provided to and reviewed by the CODM by segment, and a reconciliation to total consolidated income (in
thousands). Certain expenses, such as corporate costs and prospecting and development expenses have
not been allocated to SP, DC or SLN and are shown separately to reconcile to the applicable consolidated
amounts. The CODM reviews significant segment expenses in the aggregate within segment costs which
are disclosed below.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
DC revenue ..................................................... | $653 | $— | $653 | $— | ||||
SP revenue ..................................................... | 93,933 | 52,661 | 138,006 | 83,322 | ||||
SLN revenue .................................................... | 23,676 | 9,801 | 52,810 | 14,225 | ||||
Subtotal ........................................................ | 118,262 | 62,462 | 191,469 | 97,547 | ||||
Elimination of revenue from transactions with other operating segments ...................... | (23,676) | (9,801) | (52,810) | (14,225) | ||||
Total revenue ................................................ | $94,586 | $52,661 | $138,659 | $83,322 | ||||
Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||||||
DC | SP | SLN | DC | SP | SLN | ||||||
Revenue ............................... | $653 | $93,933 | $— | $653 | $138,006 | $— | |||||
Revenue from transactions with other operating segments ............ | — | — | 23,676 | — | — | 52,810 | |||||
Segment costs(1) ............. | (619) | (16,097) | (15,377) | (619) | (31,462) | (30,004) | |||||
Unrealized change in fair value of power price swap derivatives ............. | — | (53,893) | — | — | (67,370) | — | |||||
Other segment items(2) .. | — | (28) | 450 | — | 92 | 293 | |||||
Total Segment Adjusted EBITDA ............................... | $34 | $23,915 | $8,749 | $34 | $39,266 | $23,099 | |||||
Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | ||||||||||
DC | SP | SLN | DC | SP | SLN | ||||||
Revenue ............................... | $— | $52,661 | $— | $— | $83,322 | $— | |||||
Revenue from transactions with other operating segments ............ | — | — | 9,801 | — | — | 14,225 | |||||
Segment costs(1) ............. | — | (17,436) | (10,412) | — | (32,597) | (20,691) | |||||
Unrealized change in fair value of power price swap derivatives ............. | — | (8,374) | — | — | (11,874) | — | |||||
Other segment items(2) .. | — | 906 | — | — | 15,200 | — | |||||
Total Segment Adjusted EBITDA ............................... | $— | $27,757 | $(611) | $— | $54,051 | $(6,466) | |||||
__________________
(1)Segment costs are comprised of total operating expenses and exclude pre-operating period expenses, unallocated overhead deemed
unrelated to segments, and stock-based compensation expense. It also excludes depreciation, amortization, and accretion, which are
presented separately in the consolidated statements of operations. Also excluded intercompany eliminations of $16,556 thousand and
$9,801 thousand for the three months ended June 30, 2026 and 2025, respectively, and $32,205 thousand and $14,225 thousand for
the six months ended June 30, 2026 and 2025, respectively.
(2)Other segment items for each reportable segment are comprised of (i) certain revenue and expense items classified in other income
(expense), net in the condensed consolidated statement of operations, such as the Holville release payment of $15,200 thousand in the
six months ended June 30, 2025, and (ii) test power sale proceeds in the six months ended June 30, 2026, which eliminate upon
consolidation.
F-85
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Total Segment Adjusted EBITDA: | |||||||
DC .................................................................. | $34 | $— | $34 | $— | |||
SP .................................................................. | 23,915 | 27,757 | 39,266 | 54,051 | |||
SLN ................................................................ | 8,749 | (611) | 23,099 | (6,466) | |||
Total Segment Adjusted EBITDA ......... | $32,698 | $27,146 | $62,399 | $47,585 | |||
Elimination of intersegment (revenue) expense, net ................................................. | (7,120) | — | (20,605) | — | |||
Test power sale proceeds .......................... | 28 | — | (92) | — | |||
Pre-operating period expenses ................. | (5,220) | (2,095) | (9,062) | (3,578) | |||
Unallocated overhead ................................. | (8,539) | (7,067) | (13,898) | (13,121) | |||
Depreciation, amortization and accretion | (24,509) | (23,485) | (48,100) | (46,935) | |||
Interest expense, net of interest income .. | (23,897) | (35,822) | (78,354) | (89,430) | |||
Stock-based compensation expense ....... | (467,422) | (126,705) | (589,503) | (162,462) | |||
Unrealized change in fair value of power price swap derivatives ................................ | 53,893 | 8,374 | 67,370 | 11,874 | |||
(Loss) gain in equity method investment . | (3,558) | 5,179 | (6,729) | 3,574 | |||
Change in fair value of warrant liability .... | (2,618,881) | — | (2,573,056) | — | |||
Other non-cash items, net .......................... | (7,350) | 716 | (8,003) | (214) | |||
Income tax benefit (expense) .................... | 25,263 | (1,487) | 25,369 | (3,139) | |||
Net loss and comprehensive loss ............ | $(3,054,614) | $(155,246) | $(3,192,264) | $(255,846) | |||
Our total project assets for each segment as of June 30, 2026 and December 31, 2025 are as follows (in
thousands):
As of June 30, 2026 | |||||||||
DC | SP | SLN | Corporate | Consolidated | |||||
Total current assets ....................... | $952,451 | $479,459 | $50,072 | $1,049,380 | $2,531,362 | ||||
Property, plant and equipment, net .................................................... | 1,778,039 | 5,062,722 | 685 | — | 6,841,446 | ||||
Other non-current assets ............. | 3,727,038 | 412,282 | 1,758 | 8,322 | 4,149,400 | ||||
Total assets ................................. | $6,457,528 | $5,954,463 | $52,515 | $1,057,702 | $13,522,208 | ||||
As of December 31, 2025 | |||||||||
DC | SP | SLN | Corporate | Consolidated | |||||
Total current assets ....................... | $4,154 | $151,724 | $45,511 | $104,809 | $306,198 | ||||
Property, plant and equipment, net .................................................... | 342,977 | 4,519,437 | 665 | — | 4,863,079 | ||||
Other non-current assets ............. | 75,871 | 334,669 | 2,029 | 718 | 413,287 | ||||
Total assets ................................. | $423,002 | $5,005,830 | $48,205 | $105,527 | $5,582,564 | ||||
Note 21. Subsequent events
Subsequent events have been evaluated through August 31, 2026, which was the date the condensed
consolidated financial statements were available to be issued.7
F-86
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Corporate Reorganization
On July 10, 2026, SE Global Holdings, LLC converted its legal structure from a Delaware limited liability
company, to a Delaware corporation named SE Global Holdings, Inc., pursuant to the provisions of the
Delaware Limited Liability Company Act and the General Corporation Law of the State of Delaware. In
connection with the corporate conversion, the Company entered into the following series of transactions
to implement the related reorganization:
•The Company was renamed to SE Global Holdings, Inc.;
•The Company authorized 100,000 thousand shares of common stock and 10,000 thousand shares of
preferred stock; and,
•The Company’s Members’ equity as of July 10, 2026 was reclassified into common stock and
additional paid-in capital, with each LLC unit being converted 1:1 for common stock. Given the
common stock issued only has a nominal par value, substantially all contributed capital is reclassified
to additional paid-in capital. This non-cash reclassification within stockholders’ equity did not affect
total equity or total capitalization.
On August 28, 2026, SE Global Holdings, Inc. converted its legal structure from a Delaware corporation to
a Texas corporation, pursuant to the provisions of the Texas Business Organization Code. On August 31,
2026, the Company changed its name to SB Energy, Inc. The financial statements presented herein
reflect the LLC legal structure of the Company that existed as of June 30, 2026, prior to the name change
and conversion. The conversion did not have any impact on the Company’s capitalization.
NVIDIA Investment
On August 17, 2026, Energy Global, LP entered into a prepaid forward contract with NVIDIA Corporation
(“NVIDIA”), pursuant to which NVIDIA agreed to invest $1,500,000 thousand in exchange for the right to
receive equity securities of SB Energy upon certain future financing, liquidity or other specified events. On
August 17, 2026, Energy Global, LP received the $1,500,000 thousand investment, which was
immediately contributed to the Company.
On August 17, 2026, in connection with the prepaid forward contract, SB Energy entered into an issuance
agreement with Energy Global, LP pursuant to which SB Energy irrevocably and unconditionally agreed
to issue equity securities at the initial public offering price, multiplied by 90%, or make cash payments, as
applicable, necessary to satisfy the settlement obligations under the prepaid forward contract.
On August 17, 2026, the Company entered into a share purchase agreement with NVIDIA Corporation
under which NVIDIA agreed to purchase shares of a newly authorized and designated class of non-voting
Class N common stock, par value $0.0001 per share, in a private placement simultaneously with the
closing of this offering. The number of shares will equal $1,500,000 thousand divided by the per-share
initial public offering price before underwriting discounts and expenses, rounded down to the nearest
whole share. The shares will be restricted securities with customary registration rights.
The Company is currently in the process of evaluating the accounting for the above transactions and the
related impacts on its financial statements.
PORTS Arrangements
On August 17, 2026, subsidiaries of the Company entered into 17 20-year lease agreements with OpenAI
for data center capacity across the PORTS-Pike Technology Campus in Pike County, Ohio (the “PORTS-
Pike Technology Campus” or “PORTS”). Under the agreement, the Company will develop, construct, own
and operate the data center campus, which is expected to become operational in phases beginning in
2028. The lease is structured as a triple-net lease consistent with our other data center leases, with rent
structured on a yield-on-cost basis with an annual escalator and phased commencement tied to RFS
conditions.
F-87
SB Energy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
On August 17, 2026, NVIDIA entered into a residual value guaranty of the OpenAI tenant’s lease
obligations at PORTS, covering the initial 4.25 GW-IT at a guaranteed value of $24,705,882 thousand per
GW-IT, with an option, in its sole discretion, to guarantee the remaining 3.78 GW-IT by a future date
certain. The guaranty is triggered only upon tenant insolvency or an uncured monetary default under a
lease. The guaranteed minimum value holds constant and then declines on a defined schedule over the
20-year lease, and the aggregate remedy cap is $105,000,000 thousand across related guaranties on the
initial 4.25 GW-IT. The guaranty automatically terminates upon specified credit-rating or replacement-
guaranty or lease events.
The Company is currently in the process of evaluating the accounting for the above transactions and the
related impacts on its financial statements.
OAI Warrants Amendment
On August 17, 2026, the Company entered into an amended and restated warrant agreement with
OpenAI Infra Holdings, LLC, amending and restating the Warrants issued January 9, 2026. In connection
with the amendment, 4,562,791 warrant shares were forfeited and cancelled. The amended and restated
warrant agreement covers 3,991,809 warrant shares at a $0.01 exercise price, with a ten-year exercise
period expiring January 9, 2036, and a revised vesting schedule, that includes milestones related to the
Company’s initial public offering.
The Company is currently in the process of evaluating the accounting for the above transactions and the
related impacts on its financial statements.
SB Energy, Inc.
Shares
Common Stock
J.P. Morgan | Goldman Sachs & Co. LLC | Morgan Stanley |
Citigroup | Mizuho |
BNP PARIBAS | Jefferies | Natixis | RBC Capital Markets | Wolfe | Nomura Alliance |
Huntington Capital Markets | ING | MUFG | Santander | SMBC Nikko |
BTIG | Daiwa Capital Markets America Inc. | Newmark Securities | Raymond James | Rosenblatt |
Through and including , 2026 (the 25th day after the date of this prospectus), all dealers effecting
transactions in these securities, whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an
underwriter and with respect to an unsold allotment or subscription.
II-1
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other expenses of issuance and distribution.
The following table sets forth all fees and expenses, other than the underwriting discounts and
commissions payable solely by SB Energy, Inc. (the “registrant”) in connection with the offer and sale of
the securities being registered. All amounts shown are estimated except for the SEC registration fee, the
Financial Industry Regulatory Authority, Inc., or FINRA, filing fee and the exchange listing fee.
Amount to be paid | |
SEC registration fee ........................................................................................................................... | $ * |
FINRA filing fee ................................................................................................................................... | * |
Exchange listing fee ........................................................................................................................... | * |
Accounting fees and expenses ........................................................................................................ | * |
Legal fees and expenses .................................................................................................................. | * |
Printing and engraving expenses .................................................................................................... | * |
Transfer agent and registrar fees .................................................................................................... | * |
Blue sky fees and expenses ............................................................................................................. | * |
Miscellaneous expenses ................................................................................................................... | * |
Total ...................................................................................................................................................... | $ * |
*To be completed by amendment.
Item 14. Indemnification of directors and officers.
The TBOC permits the certificate of formation of a corporation to eliminate the personal liability of the
corporation’s directors and officers to the corporation or its shareholders for monetary damages for any
act or omission by such person in the performance of his or her duties, except that there will be no
limitation of liability to the extent the director or officer has been found liable under applicable law for: (i)
breach of such person’s duty of loyalty owed to the corporation or its shareholders; (ii) an act or omission
not in good faith that constitutes a breach of duty of such person to the corporation or that involves
intentional misconduct or a knowing violation of the law; (iii) a transaction from which such person
received an improper benefit, regardless of whether the benefit resulted from an action taken within the
scope of such person’s duties; or (iv) an act or omission for which the liability of such person is expressly
provided by an applicable statute.
Our Certificate of Formation will provide that no director or officer of the registrant shall be personally
liable to it or its shareholders for monetary damages for any breach of fiduciary duty as a director or
officer, notwithstanding any provision of law imposing such liability, to the fullest extent permitted by the
TBOC, as it exists or as amended from time to time.
The TBOC provides that a corporation must indemnify a director or former director against reasonable
expenses actually incurred by the person in connection with a proceeding in which the person is a
respondent because the person is or was a director, or is or was serving as a representative of another
enterprise or organization or an employee benefit plan while serving as a director, if the director or former
director is wholly successful, on the merits or otherwise, in the defense of the proceeding. If a court
determines that a director, former director or representative is entitled to indemnification, the court will
order indemnification by the corporation and award the person expenses incurred in securing the
indemnification. The TBOC also permits corporations to indemnify present or former directors where
indemnification is not mandated by the TBOC; however, such permissive indemnification is subject to
certain limitations and a required determination that the director has satisfied specified standards of
II-2
conduct. The TBOC also allows us to indemnify persons who are not directors, including our officers,
employees and agents, subject to certain limitations and procedures set forth in the TBOC. Under the
TBOC, officers must be indemnified to the same extent as directors are required to be indemnified and
that a court may also order indemnification under various circumstances.
We have also entered into, or will enter into prior to the completion of this offering, indemnification
agreements with each of our directors and executive officers. The indemnification agreements provide, or
will provide, among other things, for indemnification to the fullest extent permitted by the TBOC and our
Certificate of Formation and Bylaws against (i) any and all direct and indirect liabilities and reasonable
expenses, including judgments, fines, penalties, interest and amounts paid in settlement of any claim with
our approval and reasonable counsel fees and disbursements and (ii) any liabilities incurred as a result of
serving as a director, officer, employee, or agent (including as a trustee, fiduciary, partner, or manager or
in a similar capacity) of another enterprise or an employee benefit plan at our request. The
indemnification agreements also provide for, or will provide for, the advancement or payment of expenses
to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such
indemnification under applicable law and our Certificate of Formation and Bylaws or the terms of the
indemnification agreements.
We expect to maintain standard policies of insurance that provide coverage (i) to our directors and officers
against loss arising from claims made by reason of breach of duty or other wrongful act and (ii) to us with
respect to indemnification payments that we may make to such directors and officers. The TBOC and our
Bylaws permit us to purchase insurance on behalf of existing or former officers, employees, directors or
agents against any liability asserted against and incurred by that person in such capacity, or arising out of
that person’s status in such capacity, whether or not the we would have the power to indemnify such
person under the TBOC.
The underwriting agreement will provide for indemnification by the underwriters of us and our officers and
directors, and by us of the underwriters, for certain liabilities arising under the Securities Act or otherwise
in connection with this offering.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers, or persons controlling us under any of the foregoing provisions, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent sales of unregistered securities.
On January 23, 2024, in connection with the formation of SE Global Holdings, LLC (the registrant’s
predecessor) as a Delaware limited liability company, SE Global Holdings, LLC issued 100% of its
membership interests to SBE Global, which was its sole member.
In January 2026, the registrant's predecessor issued a warrant to purchase up to 8,554,600 units at an
exercise price of $0.01 per unit to OpenAI Infra Holdings, LLC. In August 2026, the registrant entered into
the Amended and Restated OpenAI Warrant Agreement covering 3,991,809 shares of its common stock
at an exercise price of $0.01 per share, reflecting the forfeiture and cancellation of 4,562,791 of the
original warrant shares. Of the 3,991,809 OpenAI Warrants outstanding, 1,737,867 will be net exercised
in connection with this offering, and 2,253,942 will remain unvested following this offering. The sales and
issuances described above were made without registration under the Securities Act in reliance on the
exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D
thereunder. The securities were not registered and are subject to transfer restrictions as described in the
applicable governing documents.
Item 16. Exhibits and financial statements schedules.
(a)Exhibits
The exhibits filed herewith are set forth immediately preceding the signature pages hereof on the Index to
Exhibits filed as a part of this Registration Statement.
II-3
(b)Financial Statement Schedules
All schedules have been omitted because the information required to be set forth in the schedules is
either not applicable or is shown in the financial statements or notes thereto.
Item 17. Undertakings.
(a)The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified
in the underwriting agreement certificates in such denominations and registered in such names as
required by the underwriters to permit prompt delivery to each purchaser.
(b)Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question
whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
(c)The undersigned hereby further undertakes that:
(1)For purposes of determining any liability under the Securities Act the information omitted from the
form of prospectus filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the
time it was declared effective.
(2)For the purpose of determining any liability under the Securities Act each post-effective
amendment that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3)For the purpose of determining liability of the registrant under the Securities Act of 1933 to any
purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in
a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering
required to be filed pursuant to Rule 424 under the Securities Act;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv)Any other communication that is an offer in the offering made by the undersigned registrant to
the purchaser.
II-4
INDEX TO EXHIBITS
Exhibit No. | Description | |
1.1* | Form of Underwriting Agreement. | |
2.1** | ||
2.2** | ||
3.1** | ||
3.2 | ||
3.3** | ||
3.4 | ||
3.5 | ||
4.1 | ||
4.2** | ||
5.1** | ||
10.1^** | ||
10.2^** | ||
10.3^** | ||
10.4^** | ||
10.5^** | ||
10.6^** | ||
10.7^** | ||
10.8^** | ||
10.9^** | ||
10.10^** | ||
10.11^** | ||
10.12^** | ||
10.13^** | ||
10.14^** | ||
10.15^** | ||
II-5
10.16^** | ||
10.17^** | ||
10.18^** | ||
10.19^** | ||
10.20^** | ||
10.21^** | ||
10.22^** | ||
10.23** | ||
10.24** | ||
10.25 | ||
10.26** | ||
10.27** | ||
10.28^#** | ||
10.29^#** | ||
10.30^#** | ||
10.31^#** | ||
10.32†* | Energy Global Management LP Equity Incentive Plan. | |
10.33†* | Energy Global Management LP Equity Incentive Plan Form of Award Agreement. | |
10.34†* | SB Energy, Inc. Form of 2026 Equity Incentive Award Plan and forms of option and restricted stock unit agreements thereunder. | |
10.35* | Form of Shareholders Agreement. | |
10.36* | Form of Indemnification Agreement. | |
10.37 | ||
10.38 | ||
10.39 | ||
10.40 | ||
10.41 | ||
10.42* | Employment Agreement, dated as of March 4, 2022, by and among Richard Hossfeld, as the Executive, SB Energy DevCo (US), Inc. and SBE Global, LP. | |
10.43* | Employment Agreement, dated as of March 4, 2022, by and among Abhijeet Sathe, as the Executive, SB Energy DevCo (US), Inc. and SBE Global, LP. | |
10.44* | Employment Agreement, dated as of February 27, 2023, by and among Gaetan Frotte, as the Executive, SB Energy DevCo (US), Inc. and SBE Global, LP. | |
II-6
10.45* | Employment Agreement, dated as of March 4, 2022, by and among Ryan Bates, as the Executive, SB Energy DevCo (US), Inc. and SBE Global, LP. | |
21.1 | ||
23.1 | ||
23.2** | ||
24.1** | ||
99.1** | ||
99.2** | ||
99.3** | ||
99.4** | ||
99.5** | ||
99.6** | ||
99.7** | ||
107** | ||
*To be filed by amendment.
**Previously filed.
^ This filing excludes schedules or similar attachments pursuant to Item 601(a)(5) of Regulation S-K, which the registrant agrees to
furnish supplementary to the Securities and Exchange Commission upon request by the Commission.
†Indicates a management contract or compensatory plan or arrangement.
# Portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K because they both (i) are not material and (ii)
contain the type of information that the Company customarily and actually treats as private or confidential. Such omitted information is
indicated by brackets “[***]” in this exhibit.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in
Redwood City, California on September 21, 2026.
SB Energy, Inc. | ||
By: | /s/ Rich Hossfeld | |
Rich Hossfeld | ||
Co-Chief Executive Officer | ||
By: | /s/ Abhijeet Sathe | |
Abhijeet Sathe | ||
Co-Chief Executive Officer | ||
***
II-8
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement on
Form S-1 has been signed by the following persons in the capacities set forth opposite their names and
on the date indicated above.
Signature | Title | Date | ||
/s/ Rich Hossfeld | Co-Chief Executive Officer and Director (Principal Executive Officer) | September 21, 2026 | ||
Rich Hossfeld | ||||
/s/ Abhijeet Sathe | Co-Chief Executive Officer and Director (Principal Executive Officer) | September 21, 2026 | ||
Abhijeet Sathe | ||||
/s/ Gaetan Frotte | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | September 21, 2026 | ||
Gaetan Frotte |