GridAI Technologies (NASDAQ: GRDX) posts Q1 2026 loss and flags going-concern risk
GridAI Technologies Corp. reported a larger quarterly loss and raised doubt about its ability to continue as a going concern. For the three months ended March 31, 2026, the company generated revenue of $38,208 but posted a net loss of $3,438,702, or $0.82 per share attributable to common shareholders.
Cash and cash equivalents were $385,542 against total current liabilities of $16,231,727, and operating activities used $1,786,751 of cash in the quarter. Total assets were $47,965,678, including $24,118,676 of goodwill and $21,262,575 of definite-lived intangibles, while accumulated deficit reached $212,105,618.
Management explicitly states that recurring losses, negative operating cash flows, minimal cash, and reliance on raising new equity or debt create substantial doubt about continuing as a going concern for at least one year. The company is exploring strategic options, including mergers, sales, or even liquidation, but notes there is no assurance any transaction or financing will be completed.
Positive
- None.
Negative
- Going-concern uncertainty: Management discloses substantial doubt about the company’s ability to continue as a going concern for at least one year, citing recurring losses, negative operating cash flows, minimal cash of $385,542, and dependence on new financing or strategic transactions that may not materialize.
- High leverage and fixed obligations: The balance sheet includes $2,355,416 of notes payable, $6,250,000 of deferred consideration from the GridAI acquisition, and $1,729,084 of accrued preferred dividends, increasing financial risk amid already weak liquidity.
- Large ongoing losses: The company reported a net loss of $3,438,702 for the quarter and an accumulated deficit of $212,105,618, indicating a long history of unprofitable operations with no profitability inflection evident in the provided data.
Insights
GridAI shows severe liquidity strain and explicit going-concern risk.
GridAI ended the quarter with only $385,542 of cash versus current liabilities of $16.23M and used $1.79M of cash in operating activities over three months. That imbalance indicates acute near-term funding pressure.
Debt and fixed obligations are meaningful: notes payable of $2.36M, deferred consideration of $6.25M, accrued preferred dividends of $1.73M and an 18% revolving facility that later went into default. These sit on top of an accumulated deficit of about $212.1M.
Management formally concludes that its current plans do not alleviate "substantial doubt" about continuing as a going concern one year from issuance of the statements. They are evaluating options such as capital raises, debt restructurings, mergers, sales, or liquidation, but outcomes, timing, and terms are inherently uncertain.
Key Figures
Key Terms
going concern financial
Series H Non-Voting Convertible Preferred Stock financial
In-Process Research and Development financial
ASC 606 financial
non-controlling interest financial
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
From the transition period from to
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) | (I.R.S Employer Identification No.) |
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(Address of principal executive offices) | | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | | Trading Symbol | | Name of Each Exchange on Which Registered |
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| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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 | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
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TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION | | |
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Item 1. | Unaudited Condensed Consolidated Financial Statements | 1 |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 |
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Item 4. | Controls and Procedures | 41 |
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PART II. OTHER INFORMATION | | |
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Item 1. | Legal Proceedings | 42 |
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Item 1A. | Risk Factors | 42 |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 42 |
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Item 3. | Defaults Upon Senior Securities | 42 |
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Item 4. | Mine Safety Disclosures | 42 |
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Item 5. | Other Information | 42 |
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Item 6. | Exhibits | 43 |
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SIGNATURES | | |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “target”, “potential”, “will”, “would”, “could”, “should”, “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:
| ● | our ability to maintain compliance with the applicable listing requirements of The Nasdaq Capital Market; |
| ● | our ability to satisfy our existing payment obligations and other payment obligations as they become due, including those related to the acquisition of First Wave Bio, Inc. |
| ● | statements regarding the impact of geopolitical events, including the war in Ukraine and the Middle East, and their effects on our operations, access to capital, research and development and clinical trials and potential disruption in the operations and business of third-party vendors, contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”), other service providers, and collaborators with whom we conduct business; |
| ● | the availability of capital to satisfy our working capital requirements; |
| ● | our current and future capital requirements and our ability to raise additional funds to satisfy our capital needs; |
| ● | our ability to consummate our disposal of our IMGX subsidiary and related liabilities; |
| ● | the accuracy of our estimates regarding expense, future revenue and capital requirements; |
| ● | our ability to continue operating as a going concern; |
| ● | our plans to develop and commercialize our product candidates, including Adrulipase, |
| ● | our ability to initiate and complete our clinical trials and to advance our principal product candidates into additional clinical trials, including pivotal clinical trials, and successfully complete such clinical trials; |
| ● | regulatory developments in the U.S. and foreign countries; |
| ● | the performance of our third-party vendor(s), CROs, CDMOs and other third-party non-clinical and clinical development collaborators and regulatory service providers; |
| ● | our ability to obtain and maintain intellectual property protection for our core assets; |
| ● | the size of the potential markets for our product candidates and our ability to serve those markets; |
| ● | the rate and degree of market acceptance of our product candidates for any indication once approved; |
| ● | the success of competing products and product candidates in development by others that are or become available for the indications that we are pursuing; |
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| ● | the loss of key scientific, clinical and nonclinical development, and/or management personnel, internally or from one of our third-party collaborators; and |
| ● | other risks and uncertainties, including those listed under Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K. |
Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K and for the reasons described elsewhere in this Quarterly Report on Form 10-Q. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and consumer products, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources and we have not independently verified the data from third party sources. In some cases, we do not expressly refer to the sources from which these data are derived.
In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “GridAI,” the “Company,” “we,” “us,” “our” and similar references are to GridAI Technologies Corp. and its subsidiaries on a consolidated basis.
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PART I
FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. We have consolidated such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these unaudited condensed consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued by filing with the SEC.
These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the SEC on May 1, 2026.
The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026.
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GRIDAI TECHNOLOGIES CORP.
Condensed Consolidated Balance Sheets (unaudited)
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| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (unaudited) | | | | |
ASSETS | | | | | | |
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Current Assets: | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Accounts receivable | | | | | | |
Other current receivables | | | | | | |
Other current assets | | | — | | | |
Prepaid expenses | | | | | | |
Total Current Assets | | | | | | |
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Other Assets: | | | | | | |
Developed technology, net | | | | | | |
Customer relations, net | | | | | | |
Trade name, net | | | | | | |
Goodwill | | | | | | |
Total Other Assets | |
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Total Assets | | $ | | | $ | |
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LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY | | | | | | |
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Current Liabilities: | | | | | | |
Accounts payable | | $ | | | $ | |
Accrued expenses | | | | | | |
Due to related parties | | | | | | |
Accrued dividend payable | |
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Deferred consideration | | | | | | |
Notes payable | | | | | | |
Operating lease liabilities | | | | | | |
Other current liabilities | |
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Total Current Liabilities | |
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Deferred tax liability | | | | | | |
Total Liabilities | |
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Mezzanine Equity: | | | | | | |
Series G preferred stock- Par value $ | | | | | | |
Stockholders’ Equity: | | | | | | |
Series B preferred stock- Par value $ | |
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Series C preferred stock- Par value $ | |
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Series D preferred stock- Par value $ | | | | | | |
Series E preferred stock- Par value $ | | | | | | |
Series F preferred stock- Par value $ | | | | | | |
Series H preferred stock- Par value $ | | | | | | |
Common stock - Par value $ | | | | | | |
Additional paid-in capital | |
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Shareholder receivable | | | ( | | | — |
Accumulated deficit | |
| ( | | | ( |
Non-controlling interest | | | | | | |
Cumulative translation adjustment | | | | | | |
Total Stockholders’ Equity | |
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Total Liabilities, Mezzanine Equity and Stockholders’ Equity | | $ | | | $ | |
See accompanying notes to unaudited condensed consolidated financial statements
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GRIDAI TECHNOLOGIES CORP.
Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Revenue | | | | | | — |
Cost of services | | | ( | | | — |
Gross loss | | | ( | | | — |
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Operating expenses: | | | | | | |
Research and development expenses | | $ | | | $ | |
General and administrative expenses | |
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Total operating expenses | | | | | | |
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Loss from operations | |
| ( | | | ( |
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Other (expenses) income: | |
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Interest expense | |
| ( | |
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Other income (expense), net | |
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Total other expenses | | | ( | | | ( |
Loss from continued operations | | | ( | | | ( |
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Income tax benefit | | | | | | — |
Loss from continued operations | | | ( | | | ( |
Loss from discontinued operations net of tax | | | — | | | ( |
Net loss | | $ | ( | | $ | ( |
| | | | | | |
Non Controlling Interest | | | ( | | | — |
Preferred stock dividends | | | ( | | | ( |
Net loss applicable to common shareholders | | $ | ( | | $ | ( |
| | | | | | |
Basic weighted average shares outstanding | | | | | | |
Diluted weighted average shares outstanding | | | | | | — |
Loss per share - basic and diluted | | $ | ( | | $ | ( |
Loss per share from discontinued operations- basic and diluted | | $ | — | | $ | ( |
See accompanying notes to unaudited condensed consolidated financial statements
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GRIDAI TECHNOLOGIES CORP.
Condensed Consolidated Statements of Mezzanine Equity and Changes in Stockholders’ Equity (Deficit) (unaudited)
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| | Series G Convertible | | Series B Convertible | | | | | | | Additional | | | | | Total | ||||||||
| | Preferred Stock | | Preferred Stock | | Common Stock | | Paid In | | Accumulated | | Stockholders’ | ||||||||||||
| | Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | Capital | | Deficit | | Deficit | ||||||
Balance, December 31, 2024 | | | | $ | | | | | $ | — | | | | $ | | | $ | | | $ | ( | | $ | ( |
Deemed dividend of Series B preferred stock | | — | | | — | | — | |
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| — | |
| — | |
| ( | |
| — | |
| ( |
Issuance of common stock from RSU vest | | — | | | — | | — | | | — | | | | | | | | — | | | — | | | |
Net loss | | — | | | — | | — | |
| — |
| — | |
| — | |
| — | |
| ( | |
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Balance, March 31, 2025 | | | | $ | | | | | $ | — |
| | | $ | | | $ | | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | | Non | | Cumulative | | Total | ||||
| | Series G Convertible | | Series B Convertible | | Series H Convertible | | | | | | | Paid In | | Shareholder | | Accumulated | | Controlling | | transaction | | Shareholders’ | |||||||||||||||
| | Preferred Stock | | Preferred Stock | | Preferred Stock | | Common Stock | | Capital | | Receivable | | Deficit | | Interest | | adjustment | | Equity | ||||||||||||||||||
Balance, December 31, 2025 | | | | $ | | | | | $ | — | | | | $ | | | | | $ | | | $ | | | | — | | $ | ( | | $ | | | $ | | | $ | 24,942,986 |
Issuance of common stock for exercise of warrants |
| — | | | — | | — | |
| — | | — | | | — | | | | | | | | | | | ( | | | — | | | — | | | — | |
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Issuance of warrants tissued with Promissory Notes | | — | | | — | | — | | | — | | — | | | — | | — | | | — | | | | | | — | | | — | | | — | | | — | | | |
Stock based compensation-RSU | | — | | | — | | — | | | — | | — | | | — | | | | | | | | | | | — | | | — | | | — | | | — | | | |
Deemed dividend of Series B preferred stock |
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| — | | — | | | — | | — | |
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| ( | |
| — | |
| — | | | — | | | — | |
| ( |
Issuance of common stock from RSU vested |
| — | | | — | | — | | | — | | — | | | — | | | | | | | | ( | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock for services | | — | | | — | | — | | | — | | — | | | — | | | | | | | | | | | — | | | — | | | — | | | — | | | |
Cumulative translation adjustment | | — | | | — | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | — | | | — | | | | | | |
Non-controlling interest-Grid AI | | — | | | — | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Net loss | | — | | | — | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | ( | | | ( | | | — | | | ( |
Balance, March 31, 2026 | | | | $ | | | | | $ | — | | | | $ | | | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | | | $ | | | $ | |
See accompanying notes to unaudited condensed consolidated financial statements
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GRIDAI TECHNOLOGIES CORP.
Condensed Consolidated Statements of Cash Flows (unaudited)
| | | | | | |
| | Three Months Ended March 31, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Amortization | |
| | | | — |
Debt Amortization | |
| | | | — |
Change in right-of-use assets | | | — | | | |
Impairment of right-of-use assets | | | — | | | |
Stock-based compensation | |
| | | | — |
Changes in assets and liabilities: | | | | | | |
Other Current Assets | |
| ( | | | — |
Accounts receivable | |
| ( | | | — |
Prepaid expenses | | | ( | | | ( |
Lease liabilities | |
| — | | | ( |
Deposits | | | — | | | |
Accounts payable | | | | | | ( |
Due to related parties | | | ( | | | — |
Deferred tax liability | | | ( | | | — |
Accrued expenses | | | | | | |
Other current liabilities | | | | | | — |
Other liabilities | |
| — | | | |
Net cash used in operating activities | | | ( | | | ( |
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Cash flows from financing activities: | | | | | | |
Proceeds from warrant exercises | |
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Proceeds from promissory notes | | | | | | — |
Repayments of note payable | | | — | | | |
Net cash provided by financing activities | | | | | | |
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Effect of exchange rate changes on cash | | | ( | | | — |
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Net decrease in cash, cash equivalents | |
| (333,123) | | | ( |
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Cash, cash equivalents beginning balance | |
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Cash, cash equivalents ending balance | | $ | | | $ | |
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Supplemental disclosures of cash flow information: | | | | | | |
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Non-cash investing and financing activities: | | | | | | |
Accrued dividends on Series B preferred stock | | $ | | | $ | |
Warrants granted with promissory | | | | | | — |
Promissory notes settled for warrants exercise | | | | | | — |
Shareholder receivable | | | | | | — |
See accompanying notes to unaudited condensed consolidated financial statements
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GRIDAI TECHNOLOGIES CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2026
Note 1 - The Company and Basis of Presentation
The Company
GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.) (the “Company”) and its wholly-owned subsidiary, GridAI Corp., are collectively referred to as the “Company.” Historically, the Company focused on the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.
In May 2024, the Company previously changed its name from First Wave Biopharma, Inc. to Entero Therapeutics, Inc. The Company’s historical development pipeline consisted of gut-restricted GI clinical drug candidates, including the biologic Adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients. The Company is evaluating strategic alternatives related to its historical gastrointestinal therapeutic assets while continuing development activities related to Adrulipase.
The Company terminated its license agreement with Sanofi on February 26, 2025, and no further payments have been made related to its Capeserod program, a selective 5-HT4 receptor partial agonist. The Company is also exploring strategic alternatives for its Niclosamide program, an oral small molecule with antiviral and anti-inflammatory properties.
On September 30, 2025, the Company completed a share exchange transaction with GridAI Corp., a Nevada corporation (“GridAI”), and the stockholders of GridAI (the “Sellers”), pursuant to which GridAI became a wholly-owned subsidiary of the Company (the “GridAI Acquisition”). Following the GridAI Acquisition, the Company expanded its operations to include an artificial intelligence-driven energy technology platform focused on distributed energy resource optimization and grid-edge applications. In connection with the GridAI Acquisition, the Company subsequently changed its corporate name from Entero Therapeutics, Inc. to GridAI Technologies Corp. on October 1, 2025.
Pursuant to the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of GridAI in exchange for (i) an aggregate of
See Note 3 – Business Combination – GridAI Acquisition for additional information regarding the transaction.
As of December 31, 2025, the Company’s consolidated subsidiaries include First Wave Bio, Inc., GridAI Corp., AMPX UK Holdings, and AMPX Limited. AMPX UK Holdings is a majority-owned subsidiary of the Company and is the parent of AMPX Limited. These entities are included in the Company’s condensed consolidated financial statements.
The Company is also engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.
Risks and Uncertainties
The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use as In-Process Research and Development (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with ImmunogenX, LLC (“IMGX”) which included intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). The IMGX transaction was subsequently rescinded on December 31, 2025, and the Company no longer holds the related intellectual property or patents.
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As of March 31, 2026, the Company’s intangible assets primarily relate to technologies and intellectual property acquired in connection with the GridAI transaction. Intangible assets related to IPR&D are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written off, and the Company will record a noncash impairment loss in its Consolidated Statements of Operations. For those technologies that reach commercialization, the related intangible assets will be amortized over their estimated useful lives.
For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying condensed consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. As of March 31, 2026, the Company had cash and cash equivalents of $
The Company has been, and is expected to continue, exploring various potential strategies available including but not limited to raising capital, restructuring its indebtedness and identifying and evaluating potential strategic alternatives but there can be no assurance that these efforts will be successful, that the Company will be able to raise necessary capital on acceptable terms, reach agreement with lenders, or that the strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. The Company is evaluating all potential strategic options, including a merger, reverse merger, sale, wind-down, liquidation and dissolution or other strategic transaction. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stakeholder value or that it will make any cash distributions to stockholders. Any failure in these efforts could force the Company to delay, limit or terminate operations, make reductions in its workforce, discontinue research and development programs, liquidate all or a portion of assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.
Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. If the Company is not able to obtain necessary capital, it may be required to terminate operations, liquidate all or a portion of assets and/or seek bankruptcy protection. As a result, the Company concluded that its plans at this stage do not alleviate substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of Grid AI and its wholly owned subsidiaries and FWB (First Wave Biopharma). Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of our management, the accompanying unaudited condensed consolidated financial statements of Grid AI, and it’s subsidiaries, included herein have been prepared in accordance with accounting principles generally accepted in the United States of America “(GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X under the Securities Act. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the U.S Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Filed with SEC on May 1, 2026. The consolidated Balance Sheet as of December 31, 2025 was derived from the audited financial statements included in Company’s Annual Report on Form 10K. The interim results for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the fiscal year.
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Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements
Use of Estimates
The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.
Segment Information
The Company operates through
The Chief Executive Officer (“CEO”), as the Company’s chief operating decision maker, reviews financial information and allocates resources between these two operating segments based on their respective business activities, strategic priorities, and capital requirements. This approach enables the CEO to assess the performance of each segment and make decisions regarding resource allocation and strategic direction.
Reverse Stock Split
On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.
All share and per share amounts have been retroactively restated to reflect the reverse stock split referenced above.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less from date of purchase to be cash equivalents. A portion of the Company’s cash and cash equivalents is held by foreign subsidiaries and is denominated in foreign currencies, including British Pound Sterling and Czech Koruna.
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. In addition, the Company maintains cash balances in foreign financial institutions in jurisdictions in which it operates, including the United Kingdom and the Czech Republic. The Company may from time to time have cash in banks in excess of FDIC insurance limits. Cash held outside the United States may not be subject to U.S. federal deposit insurance and may be subject to foreign exchange risk and local regulatory restrictions. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.
Equity-Based Payments to Non-Employees
Equity-based payments to non-employees are measured at fair value on the grant date per ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.
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Fair Value Measurements
The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.
As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.
Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has
Digital Assets
The Company is evaluating the planned acceptance of stable-coins as a form of consideration in future transactions. Under U.S. GAAP, digital assets similar to stable-coins are potentially classified within the scope of ASU 2023-08 (ASC 350-60, Crypto Assets) and would be measured at fair value with changes recognized in earnings. Digital assets that do not meet the scope criteria would continue to be accounted for as indefinite-lived intangible assets under ASC 350 and measured at cost, less impairment. The Company is currently assessing the appropriate classification and measurement for any such digital assets based on their specific characteristics. As of March 31, 2026, the Company did
Impairment of Long-Lived Assets
The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. The recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through March 31, 2026.
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Income Taxes
Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company operates in foreign jurisdictions, primarily in the United Kingdom, through its AMPX subsidiaries. The Company accounts for income taxes in these jurisdictions in accordance with ASC 740, including the recognition of deferred tax assets and liabilities based on local tax laws and enacted rates. Deferred tax liabilities arising from taxable temporary differences in foreign jurisdictions are evaluated in conjunction with available net operating loss carryforwards and other tax attributes. In certain foreign jurisdictions, net operating loss carryforwards are available to offset deferred tax liabilities, and accordingly, no valuation allowance has been recorded where such offsets are expected to be realized.
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As at March 31, 2026 and December 31 2025, the Company does not have any significant uncertain tax positions.
Leases
Leases are recorded on the balance sheet as right of use assets and lease obligations. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a term of 12 months or less at inception are expensed monthly over the lease term. The lease term is determined by assuming the exercise of renewal options that are reasonably certain. The implicit interest rate or the incremental borrowing rate is used in determining the present value of future payments.
Loss Per Share
Basic loss or earnings per share (“EPS”) is computed by dividing the loss attributable to common shareholders by the weighted average number of shares of Common Stock outstanding. Diluted EPS reflects the potential dilution that could occur from shares of Common Stock issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options is excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.
The dilutive effect of stock options and warrants is determined using the treasury stock method. Stock options and warrants to purchase shares of Common Stock of the Company during 2026 and 2025 were not included in the computation of diluted EPS because the Company has incurred a loss in 2026 and 2025 and the effect would be anti-dilutive. Prefunded warrants were also evaluated for inclusion in earnings per share; however, they were determined to be anti-dilutive for the three months ended March 31, 2026 and the year ended December 31, 2025. See Note 19.
Research and Development
The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use, as In-Process R&D (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with IMGX which included the intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). Subsequent to the acquisition, the Company rescinded the IMGX transaction, which was completed on December 31, 2025. As a result, the Company no longer holds the related intellectual property or patents and derecognized associated assets of approximately $
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Intangible assets related to IPR&D are considered definite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off, and the Company will record a noncash impairment loss on its Condensed Consolidated Statements of Operations. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. The impairment test for indefinite-lived intangible assets is a one-step test that compares the fair value of the intangible asset to its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.
Following the acquisition of Grid AI Corp. on September 30, 2025, the Company’s research and development activities also include technology and platform development related to energy optimization and digital infrastructure solutions. Costs associated with these activities, primarily consisting of professional fees and personnel-related expenses, are expensed as incurred. During the quarter ended March 31, 2026, certain of these costs were classified within research and development expense, while other costs continued to be classified within operating expenses based on their nature.
For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.
Stock-Based Compensation
The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.
For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.
The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.
Assets Held for Sale and Discontinued Operations
Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. A newly acquired business in a business combination that has met the held for sale criteria should be measured at fair value less costs to sell. This is because the business has been recently acquired and its carrying value has been adjusted to its fair value. Depreciation and amortization of assets cease upon designation as held for sale.
Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes, and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements.
As of March 31, 2026, the Company does not have any assets or liabilities classified as held for sale and has not presented any discontinued operations.
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Revenue Recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Energy generation revenue
Energy generation revenue is generated primarily from contracts with various non-affiliated parties under long-term power purchase agreements (“PPAs”) or feed-in tariffs. The Company recognizes energy revenue when persuasive evidence of an arrangement exists, and energy has been generated and transmitted to the grid. The price of energy is fixed or determinable and the collectability of the resulting receivable is reasonably assured.
Engineering, procurement & construction (“EPC”) revenue
The Company recognizes revenue for sale of EPC and development services over time based on the estimated progress to completion using a cost-based input method. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize.
Cost-based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy EPC and development services contracts and, therefore, reflect the transfer of goods or services to a customer under such contracts. Costs incurred towards contract completion may include costs associated with direct materials, labor, subcontractors, and other indirect costs related to contract performance.
Management fee and other revenues
Operation and maintenance (“O&M”) services are transferred over time when customers receive and consume the benefits provided by the Company’s performance under the terms of service arrangements. Revenues from O&M services are recognized when the work completed to date does not require re-performances and the costs of O&M services are expensed when incurred.
Accounts Receivable
Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for expected credit losses, which is based on management’s assessment of the collectability of customer accounts, historical experience, and current economic conditions. The Company evaluates expected credit losses in accordance with ASC 326, Financial Instruments – Credit Losses (“CECL”), using a combination of historical loss experience, current conditions, and reasonable and supportable forecasts. The Company considers factors such as customer creditworthiness, aging of receivable balances, historical write-off experience, and current economic trends in assessing expected credit losses. As of March 31, 2026 and December 31, 2025 the Company did not record any allowance for credit losses.
Notes Payable and Warrants
The Company accounts for notes payable in accordance with applicable guidance under ASC 470, Debt. Notes payable are initially recorded at their principal amount, net of any discounts, and are subsequently measured at amortized cost using the effective interest method.
In connection with certain financing arrangements, the Company has issued warrants to purchase its common stock. The Company evaluates such warrants to determine whether they should be classified as equity or as a liability in accordance with ASC 480 and ASC 815. Warrants that meet the criteria for equity classification are recorded in additional paid-in capital, while warrants that require liability classification are recorded at fair value with changes in fair value recognized in earnings.
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Foreign Currency
The Company’s functional currency is the U.S. dollar. For foreign subsidiaries, the functional currency is generally the local currency. The Company operates through subsidiaries in multiple jurisdictions, including the United Kingdom, Czech Republic, and Australia, whose functional currencies are primarily the British Pound Sterling, Czech Koruna, and Australian Dollar, respectively. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date, while income and expense accounts are translated at average exchange rates during the period. Resulting translation adjustments are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity.
Foreign currency transaction gains and losses are recognized in the condensed consolidated statements of operations as incurred. Transactions denominated in currencies other than the functional currency are recorded at the exchange rate in effect at the date of the transaction, and monetary assets and liabilities are remeasured at exchange rates in effect at the reporting date, with resulting gains and losses recognized in the condensed consolidated statements of operations.
Recent Accounting Pronouncements
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). ASU 2025-04 revises the definition of “performance condition” for share-based consideration payable to a customer, removes the policy election to account for forfeitures as they occur for awards with service conditions, and clarifies that ASC 606 variable consideration guidance does not apply to such awards. This guidance is effective for the Company beginning in the first quarter of 2027, with early adoption permitted, and may be applied on a modified retrospective or retrospective basis. The Company does not currently issue share-based consideration to customers and does not expect the adoption of ASU 2025-04 to have a material impact, but will continue to monitor for applicability.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) (“ASU 2025-03”), which clarifies the requirements for determining the accounting acquirer in the acquisition of a variable interest entity. ASU 2025-03 is effective beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of ASU 2025-03, however, does not expect it to have a material impact on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosures of specified expense categories, qualitative descriptions of remaining amounts in expense captions, and disclosure of selling expenses and the Company’s definition thereof. This guidance is effective for the Company beginning with the 2027 annual report, with early adoption permitted. The Company is evaluating its reporting processes to ensure compliance with the new disclosure requirements.
Management has reviewed the above standards and, based on the Company’s current operations and transactions, does not expect their adoption to have a material impact on the Company’s condensed consolidated financial statements.
The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.
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Note 3 – Business Acquisitions
IMGX Acquisition (subsequently rescinded)
On March 13, 2024, the Company acquired ImmunogenX, Inc. (“IMGX”) pursuant to an Agreement and Plan of Merger. The transaction was accounted for as a business combination under ASC 805, with the Company identified as the accounting acquirer.
On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to a Rescission Agreement, as amended. As a result of the rescission, the Company no longer holds the assets and liabilities associated with IMGX, and IMGX is no longer a subsidiary of the Company. The Company also cancelled substantially all of the equity consideration previously issued in connection with the IMGX acquisition, including the applicable shares of common stock, Series G Preferred Stock, assumed options and assumed warrants.
As of March 31, 2026, the Company had no assets or liabilities classified as held for sale related to IMGX. See Note 4 - Discontinued Operations and Assets Held for Sale.
Acquisition of Grid AI Corp.
On September 30, 2025, the Company completed the acquisition of Grid AI Corp. (“Grid AI”), a Nevada corporation, pursuant to a Share Exchange Agreement dated September 30, 2025, by and among the Company and the shareholders of Grid AI. Under the terms of the agreement, the shareholders of Grid AI transferred all of the issued and outstanding shares of Grid AI to the Company in exchange for equity interests of the Company.
The acquisition of Grid AI was undertaken to expand the Company’s operations into AI-driven energy optimization, distributed energy resource management, battery storage and energy orchestration solutions.
At closing, the Company issued to the sellers
The combined fair value of the equity consideration issued to the sellers was estimated at approximately $
Transaction costs related to the acquisition were not material and were expensed as incurred.
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Purchase Price Allocation
The transaction was accounted for under the acquisition method of accounting in accordance with ASC 805. The preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:
| | | |
Assets acquired: | | | |
Cash and cash equivalents | | $ | |
Trade receivable and other current assets | |
| |
Prepaid expenses | |
| |
Subscription receivable | |
| |
Developed technology | |
| |
Customer relationships | |
| |
Trade name | |
| |
Total assets | | $ | |
Liabilities assumed: | |
| |
Accounts payable | |
| |
Tax payable | | | |
Deferred consideration | |
| |
Notes payable | |
| |
Due to related parties | |
| |
Deferred tax liability | | | |
Total liabilities | | $ | |
Goodwill recorded: | |
| |
Goodwill | | $ | |
Net assets acquired | | $ | |
The purchase price allocation remains preliminary and subject to adjustment during the measurement period, which extends through September 30, 2026. During the measurement period, the Company may record adjustments to the provisional amounts recognized for assets acquired and liabilities assumed based on additional information obtained about facts and circumstances that existed as of the acquisition date. No measurement period adjustments were recorded during the three months ended March 31, 2026.
The excess of the fair value of the consideration transferred over the fair value of the identifiable net assets acquired was recorded as goodwill of approximately $
All intangible assets acquired are subject to amortization and their associated estimated acquisition date fair values are as follows:
| | | | | |
| | Estimated | | Acquisition Date | |
Intangible Asset | | Useful Life | | Fair Value | |
Developed technology |
| | $ | | |
Customer relationships |
| | $ | | |
Trade name |
| | $ | | |
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Note 4 – Discontinued Operations, Assets Held for Sale
The Company previously completed a merger with ImmunogenX, LLC (“IMGX”) and, during the year ended December 31, 2024, initiated a plan to dispose of certain IMGX assets and liabilities. As a result, such assets and liabilities were classified as held for sale and the results of IMGX were presented as discontinued operations.
On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to a Rescission Agreement, as amended. As a result of the rescission, the Company no longer holds the assets and liabilities associated with IMGX, IMGX is no longer a subsidiary of the Company, and the Company no longer classifies any IMGX-related amounts as held for sale.
As of March 31, 2026, the Company had no assets or liabilities classified as held for sale and had no discontinued operations related to IMGX.
The following table summarizes the Company’s loss from discontinued operations:
| | | | | | |
| | Three Months Ended | | Three Months Ended | ||
| | March 31, | | March 31, | ||
| | 2026 | | 2025 | ||
Operating expenses: |
| | |
| | |
Research and development expenses | | $ | — | | | — |
General and administrative expenses | |
| — | |
| — |
Total operating expenses | |
| — | |
| — |
Interest expense | |
| — | |
| ( |
Other (expense) income | |
| — | |
| — |
Loss from discontinued operations | | $ | — | | | ( |
As of March 31, 2026, the Company had no assets or liabilities classified as held for sale. Assets and liabilities held for sale as of March 31, 2025 were as follows:
| | | | | |
| | 2026 | | 2025 | |
Assets held for sale: | | | | | |
Prepaid expenses and other current assets | | $ | — | | |
Property and equipment, net | |
| — | | |
Goodwill and intangible assets | |
| — | | |
Total assets held for sale | | $ | — | | |
Liabilities held for sale: | |
| | | |
Accounts payable | | $ | — | | |
Accrued expenses and other current liabilities | |
| — | | |
Debt | |
| — | | |
Deferred tax liability | |
| — | | |
Total liabilities held for sale | | $ | — | | |
As of December 31, 2025, the Company completed the rescission of the IMGX transaction and derecognized the related assets and liabilities previously classified as held for sale.
Note 5 - Fair Value Disclosures
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. The carrying value of the deferred consideration and note payable approximates their fair value as of March 31, 2026.
At March 31, 2026 and December 31, 2025, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.
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Note 6 – Property, Equipment and Leasehold Improvements
Property, equipment and leasehold improvements consisted of the following:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Computer equipment and software | | $ | | | $ | |
Office equipment | |
| | |
| |
Leasehold improvements | |
| | |
| |
Total property, plant, and equipment | |
| | |
| |
Less accumulated depreciation | |
| ( | |
| ( |
Property, plant and equipment, net | | $ | — | | $ | — |
Depreciation expense was $
Note 7 – Goodwill
Goodwill is as follows:
| | | |
Balance on December 31, 2024 | | $ | |
Goodwill associated with Grid AI acquisition | |
| |
Balance at December 31, 2025 | | $ | |
Goodwill adjustments during the three months ended March 31, 2026 | |
| — |
Balance at March 31, 2026 | | $ | |
The goodwill recognized in connection with the Grid AI acquisition is primarily attributable to expected synergies from integrating Grid AI’s operations with the Company’s existing platform, including anticipated growth in AI-driven energy optimization solutions, expansion into new markets, and assembled workforce.
The Company did
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Note 8 – Intangible Assets
The following identifiable intangible assets were recognized as part of the Grid AI acquisition and are not classified as held for sale. These assets are amortized on a straight-line basis over their estimated useful lives:
| | | | | |
| | Estimated | | March 31, | |
| | Useful Life | | 2026 | |
Developed Technology | | | $ | | |
Less: accumulated amortization | | | | | ( |
Developed Technology, net | | | | $ | |
Customer Relationships | | | $ | | |
Less: accumulated amortization | | | | | ( |
Customer Relations, net | | | | $ | |
Trade Name | | | $ | | |
Less: accumulated amortization | | | | | ( |
Trade Name, net | | | | $ | |
| | | |
| | Estimated | |
Year ending December 31, | | Amortization Expense | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
2030 and thereafter |
| | |
Total | | $ | |
Amortization expense related to intangible assets was approximately $
Note 9 - Accrued Expenses
Accrued expenses consisted of the following:
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
Professional fees |
| $ | |
| $ | |
Consulting |
| | |
| | |
Accrued interest |
| | |
| | |
Lease obligation fee | | | | | | |
Total accrued expenses | | $ | | | $ | |
Note 10 – Capital Stock
The Company’s certificate of incorporation, as amended and restated, authorizes the issuance of up to
On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock were converted automatically into one issued and outstanding share of common stock, without any change in the number of authorized shares of common stock or the par value per share.
All share and per share amounts have been retroactively restated to reflect the reverse stock split referenced above.
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Common Stock
The Company had
Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders. The Company’s certificate of incorporation and amended and restated bylaws do not provide for cumulative voting rights.
The holders of common stock are entitled to receive dividends, if any, as may be declared by the Board out of legally available funds. Upon liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in all assets legally available for distribution after payment of liabilities and satisfaction of any preferential rights of outstanding preferred stock.
Holders of common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock that the Company may designate and issue.
Preferred Stock
The Board of Directors is authorized to divide the preferred stock into any number of series, fix the designation and number of shares of each series, and determine or change the designation, relative rights, preferences and limitations of any series of preferred stock.
Series B Preferred Stock
On July 16, 2020, the Company designated approximately
As of March 31, 2026 and December 31, 2025, the Company had accrued dividends payable related to the Series B Preferred Stock of approximately $
Series C Preferred Stock
On January 5, 2021, the Company designated
Series D Preferred Stock
On July 15, 2022, the Company designated
Series E Preferred Stock
On July 15, 2022, the Company designated
Series F Preferred Stock
On November 28, 2022, the Company designated
Series H Preferred Stock
On September 30, 2025, the Company designated
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Each share of Series H Preferred Stock has a liquidation preference of $
The Series H Preferred Stock was issued to the shareholders of Grid AI Corp. as part of the consideration for the acquisition of Grid AI Corp. (See Note 3).
The Series H Preferred Stock is convertible into shares of the Company’s common stock, subject to stockholder approval, achievement of defined milestone events relating to the business of AMPX and certain beneficial ownership limitations. Following stockholder approval, each share is convertible at a stated conversion ratio, initially 1-for-1,000, subject to adjustment, and issuable in multiple tranches upon achievement of defined milestone events relating to the business of AMPX.
The Series H Preferred Stock does not have voting rights, except as required by law or as otherwise provided in the applicable Certificate of Designation, and is not redeemable.
As of and through March 31, 2026,
Mezzanine Equity
Series G Preferred Stock
As of March 31, 2026 and December 31, 2025, the Company had
On March 13, 2024, the Company issued
On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to the Rescission Agreement, as amended. In connection with the rescission,
Following stockholder approval, each share of Series G Preferred Stock is convertible into
The Series G Preferred Stock is classified as mezzanine equity because the shares may become redeemable for cash at the option of the holder upon the occurrence of certain events outside the control of the Company.
Holders of Series G Preferred Stock are entitled to receive dividends on an as-if-converted basis consistent with dividends declared on shares of common stock.
August 2025 Reverse Stock Split
On August 18, 2025, the Company effected a reverse stock split of its issued and outstanding common stock at a ratio of 1-for-3. As a result of the reverse stock split, every three shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, without any change to the par value per share or the number of authorized shares. The reverse stock split proportionately adjusted the number of shares underlying the Company’s outstanding warrants and pre-funded warrants, and the corresponding exercise prices of such warrants were adjusted in accordance with their terms.
September 2025 Registered Direct Offering
During September 2025, the Company completed a registered direct offering consisting of shares of common stock, pre-funded warrants and common warrants. The Company received gross proceeds of approximately $
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Pre-Funded Warrant Exercises
During the year ended December 31, 2025 and the three months ended March 31, 2026, holders exercised
Common Stock Issuances
During the three months ended March 31, 2026, warrants and pre-funded warrants to purchase an aggregate of
Common warrant exercises during the period resulted in cash proceeds of approximately $
During the three months ended March 31, 2026, the Company issued an aggregate of
During the three months ended March 31, 2026 the Company issue an aggregate of
During the three months ended March 31, 2025, the Company issued an aggregate of
In addition, certain warrant exercises during the period resulted in shareholder receivables of approximately $
The Company had
Note 11 – Warrants
Warrant activity for the three months ended March 31, 2026 and 2025 was as follows:
| | | | | | | |
| | | | Weighted | | Weighted | |
| | | | Average | | Average | |
| | Number of | | Exercise Price | | Remaining | |
| | Warrants | | Per Share | | Term in Years | |
Warrants outstanding and exercisable on January 1, 2026 |
| | | $ | |
| |
Issued during the period |
| | | | |
| |
Cancelled during the period | | — | | | — | | — |
Expired during the period |
| ( | | | |
| — |
Exercised during the period |
| ( | | | |
| — |
Warrants outstanding and exercisable on March 31, 2026 |
| | | $ | |
| |
| | | | | | | |
Warrants outstanding and exercisable on January 1, 2025 |
| | | $ | |
| |
Issued during the period |
| — | | | — |
| — |
Expired during the period | | ( | | | | | — |
Exercised during the period |
| — | | | — |
| — |
Warrants outstanding and exercisable on March 31, 2025 |
| | | $ | |
| |
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During the three months ended March 31, 2026, the Company issued warrants to purchase an aggregate of
The weighted-average grant date fair value of warrants granted during the three months ended March 31, 2026 was approximately $
The grant date fair values of the warrants issued during the three months ended March 31, 2026 were calculated using the Black-Scholes option pricing model with the following assumptions:
| | | |
| | 2026 | |
Expected life (in years) |
|
| |
Volatility |
| % | |
Risk-free interest rate |
| % | |
Dividend yield |
| | % |
During the three months ended March 31, 2026, warrants to purchase
The outstanding warrants expire from 2026 through 2033.
Note 12 – Equity Incentive Plan
The Company’s Board of Directors and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which became effective on May 12, 2014. The Company’s Board of Directors and stockholders also adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which became effective on September 11, 2020. Following the adoption of the 2020 Plan, no new awards have been or will be granted under the 2014 Plan.
The 2020 Plan provides for the issuance of equity-based awards, including stock options and restricted stock units, to employees, directors and consultants. As of January 1, 2026, the number of shares of common stock available for issuance under the 2020 Plan automatically increased to
The following table summarizes the Company’s stock option activity:
| | | | | | | | | | |
| | | | Weighted | | Remaining | | | | |
| | | | Average | | Contract | | | | |
| | Number | | Exercise | | Life | | Intrinsic | ||
| | of Shares | | Price | | (Years) | | Value | ||
Outstanding as of January 1, 2026 |
| | | $ | | | | $ | — | |
Granted | | — | | | — | | — | | | — |
Exercised | | — | | | — | | — | | | — |
Expired | | — | | | — | | — | | | — |
Cancelled | | — | | | — | | — | | | — |
Outstanding as of March 31, 2026 |
| | | $ | — | | — | | | — |
Exercisable as of March 31, 2026 |
| | | $ | | | | $ | — | |
| | | | | | | | | | |
Outstanding as of January 1, 2025 |
| | | $ | | | — | | $ | — |
Acquired from IMGX |
| — | | | — | | — | | | — |
Expired | | ( | | | | | — | | | — |
Outstanding as of March 31, 2025 |
| | | | | | | | — | |
Exercisable as of March 31, 2025 |
| | | $ | | | | $ | — | |
There were
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Restricted Stock Units
Restricted stock unit awards (“RSUs”) represent the right to receive shares of the Company’s common stock upon satisfaction of applicable vesting conditions under the Company’s 2020 Omnibus Equity Incentive Plan.
RSU activity for the three months ended March 31, 2026 was as follows:
| | | | | | | |
| | | | Weighted- | | Weighted-Average | |
| | | | Average | | Remaining | |
| | Number | | Grant Date | | Recognition | |
| | of Shares | | Fair Value | | Period (Years) | |
Non-vested Outstanding at December 31, 2025 |
| | | $ | | | — |
Awarded |
| | | | | | — |
Vested |
| ( | | | — | | — |
Non-vested Outstanding at March 31, 2026 | | — | | $ | — | | — |
| | | | | | | |
Non-vested Outstanding at December 31, 2024 |
| | | $ | | | |
Awarded |
| — | | | — | | — |
Vested |
| — | | | — | | — |
Cancelled |
| ( | | $ | | | — |
Non-vested Outstanding at March 31, 2025 | | — | | $ | — | | — |
During the three months ended March 31, 2026, the Board approved the grant of
Stock - Based Compensation Expense
The total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows:
| | | | | | |
| | Three months ended March 31, | ||||
| | 2026 | | 2025 | ||
Research and development | | $ | — | | $ | — |
General and administrative | | | | | | — |
Total stock-based compensation expense | | $ | | | $ | — |
As of March 31, 2026, the Company had
Note 13 – Agreements
License Agreement with Sanofi
On September 13, 2023, the Company entered into a License Agreement with Sanofi pursuant to which the Company obtained certain exclusive worldwide rights to develop and commercialize Capeserod for gastrointestinal indications.
Under the terms of the agreement, the Company paid Sanofi an upfront payment of $
The upfront payment was recorded as research and development expense during the year ended December 31, 2023.
On February 26, 2025, the Company provided notice of termination to Sanofi. The License Agreement was terminated effective February 2025 and no additional payments were due to Sanofi.
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Note 14 – Leases
The Company previously leased office space consisting of approximately
During 2025, the Company ceased use of the leased premises and defaulted under the lease arrangement. In connection with the default, the Company fully impaired the related right-of-use (“ROU”) asset and continued to recognize the associated lease liability.
As of March 31, 2026, the Company had an operating lease liability of approximately $
The default was accounted for in accordance with ASC 842 and resulted in:
| ● | a decrease in ROU assets of approximately $ |
| ● | recognition of additional accrued obligations of approximately $ |
As of March 31, 2026, the weighted-average remaining lease term and weighted-average discount rate under operating leases were as follows:
| | | |
| | March 31, |
|
| | 2026 |
|
Lease term and discount rate |
| | |
Weighted-average remaining lease term (years) |
| | |
Weighted-average discount rate |
| | % |
Future minimum lease payments under non-cancelable operating leases as of March 31, 2026 were as follows:
| | | |
Year | | Amount | |
2026 | | $ | |
Total lease payments | | $ | |
Less: imputed interest | | $ | ( |
Present value of lease liabilities | | $ | |
In connection with the lease default, the Company recognized:
| ● | a decrease in ROU assets of approximately $ |
| ● | lease liabilities of approximately $ |
| ● | additional accrued obligations of approximately $ |
The Company recognized a loss on lease termination of approximately $
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Note 15 – Debt
The debt balances presented on the condensed consolidated balance sheets as of March 31, 2026 consist of deferred consideration of $
Deferred Consideration
In connection with the acquisition of Grid AI Corp., the Company recognized deferred consideration payable of $
Notes Payable
Notes payable activity during the period ended March 31, 2026:
| | | | | | | | | | | | |
| | Revolving | | Promissory notes | | Promissory | | | | |||
| | line of credit | | with warrants | | Notes | | Total | ||||
Principal balance December 31, 2025 | | $ | | | $ | | | $ | | | $ | |
Additions | |
| — | |
| | |
| — | | $ | |
Debt settlement (non-cash) | |
| — | |
| ( | |
| ( | | $ | ( |
Net movement in debt discount | |
| — | |
| ( | |
| — | | $ | ( |
Total notes payable as of March 31, 2026 | | $ | | | $ | | | $ | | | $ | |
All outstanding debt was classified as current as of March 31, 2026.
Revolving Line of Credit
Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025, pursuant to which the lender agreed to make available borrowings up to $
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Promissory Note with Warrants
During the period from October 17, 2025 through December 26, 2025, the Company entered into financing arrangements that included promissory notes issued together with warrants to purchase shares of the Company’s common stock. The aggregate principal amount of the notes issued was $
During the three months ended March 31, 2026, the Company recognized additional amortization of debt discount of approximately $
The promissory notes are unsecured and mature one year and one day from their respective issuance dates.
Note 16 - Related Party Transactions
The Company has related party transactions with AMP Solar Group Ltd. (“AMP Solar Group”), which holds a
The Company also has amounts payable to related parties, including North York and Strategic EP LLC, related to services provided under arrangements predating the Grid AI acquisition. These obligations are non-interest bearing and are included within notes payable on the condensed consolidated balance sheets.
The Company has entered into consulting and service arrangements with certain members of management, including the Chief Executive Officer and Chief Financial Officer, either directly or through affiliated entities. During the three months ended March 31, 2026, the Company incurred expenses related to these arrangements, which were recorded within general and administrative expenses in the condensed consolidated statements of operations. As of March 31, 2026, amounts due to related parties associated with these arrangements were not material.
Consulting Agreement and Equity Compensation
On December 19, 2025, the Compensation Committee of the Board of Directors approved an Amended and Restated Consulting Agreement between the Company and Access Alternative Group S.A. (the “Consultant”), an entity affiliated with the Company’s Chief Executive Officer, pursuant to which the Consultant provides services to the Company, including services in connection with the duties of the Chief Executive Officer.
Under the terms of the Consulting Agreement, the Company agreed to pay the Consultant base compensation of $
The Consultant is also eligible to receive certain additional compensation, including cash and equity-based compensation upon the achievement of specified milestones.
In connection with the Consulting Agreement, the Compensation Committee approved the grant of
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Note 17- Commitments and Contingencies
Legal Matters
The Company was previously engaged in discussions with Ellenoff Grossman & Schole LLP (“EGS”) regarding certain outstanding legal fees and litigation initiated by EGS against the Company relating to unpaid legal fees. On May 12, 2026, the Company entered into a Settlement Agreement and General Releases with EGS to resolve the matter. Pursuant to the settlement agreement, the Company agreed to pay EGS an aggregate settlement amount of $
Revolving Loan Agreement
On January 27, 2025, the Company entered into a Revolving Loan Agreement pursuant to which the lender agreed to provide up to $
Government Grant
During 2025, AMPX, a subsidiary of the Company, applied for government grants related to research and development expenditure tax credits in the United Kingdom.
During the three months ended March 31, 2026, the Company recognized government grant income of $
The related receivable was collected in May 2026.
Note 18 - Income Taxes
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.
The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Although the Company believes that it has adequately reserved for uncertain tax positions (including interest and penalties), it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustments to these reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. Carryforward attributes that were generated in tax years prior to those that remain open for examination may still be adjusted by relevant tax authorities upon examination if they either have been, or will be, used in a future period.
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In applying the estimated annual effective tax rate approach prescribed under ASC 740 - 270 and based on present evidence and conclusions around the realizability of deferred tax assets, the Company determined that any deferred tax benefits related to the forecasted tax rate and pretax activity during the first quarter of 2026 are partially realizable primarily due to foreign deferred tax assets and research and development tax credits recognized during the period. Therefore, the appropriate amount of income tax benefit to recognize related to deferred tax assets generated during the three months ended March 31, 2026 was $
The Company’s effective income tax rate was approximately
Note 19 - Net Loss per Common Share
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the periods presented, all potentially dilutive securities have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.
All shares of Common Stock that may potentially be issued in the future are as follows:
| | | | |
| | March 31, 2026 | | December 31, 2025 |
Series G convertible preferred stock | | | | |
Common stock warrants |
| |
| |
Stock options |
| |
| |
RSUs not yet issued |
| |
| |
Convertible preferred stock |
| |
| |
Series H preferred stock | | | | |
Restricted stock not yet issued |
| |
| |
Total shares of common stock issuable |
| |
| |
Note 20 – Employee Benefit Plans
401(k) Plan
Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan which complies with Section 401(k) of the Internal Revenue Code and covers substantially all eligible employees of the Company.
Employees may contribute from
Employer contributions under the 401(k) plan amounted to approximately $
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Note 21 - Segments
The Company applies the provisions of ASC 280, Segment Reporting, which requires segment information to be reported based on the “management approach,” reflecting the manner in which the Company’s Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance.
In 2025, in connection with the acquisition of Grid AI Corp. on September 30, 2025, the Company reassessed its operating and reportable segments. Based on this assessment, the Company determined that it operates through
| ● | AI Segment – consisting of the Company’s artificial intelligence–driven energy technology platform focused on distributed energy resource optimization and grid-edge applications through Grid AI Corp. and its subsidiaries. |
| ● | GI Segment – consisting of the Company’s legacy biotechnology operations, including the development of targeted, non-systemic therapies for gastrointestinal diseases. The Company’s Chief Executive Officer, Jason D. Sawyer, has been identified as the CODM. The CODM reviews operating results on both a segment basis and a condensed consolidated basis to evaluate performance and allocate resources. |
The measure of segment profit or loss is loss from operations, as reported in the condensed consolidated statements of operations. This measure is used by the CODM to assess performance and make resource allocation decisions. Segment assets are measured as total assets, as reported in the condensed consolidated balance sheets. The Company’s segments differ with respect to the nature of products and services, regulatory environments, and customer bases. As such, management has concluded that aggregation of these segments is not appropriate under ASC 280.
The following represents selected information for the Company’s reportable segments:
| | | | | | |
| | March 31, 2026 | | December 31, 2025 | ||
Total assets by reportable segments: |
| | |
| | |
AI segment | | $ | | | $ | |
GI segment | |
| | |
| |
Total assets by reportable segments | | $ | | | $ | |
| | | | | | |
| | Three Months Ended | | Three Months Ended | ||
| | March 31, 2026 | | March 31, 2025 | ||
Loss from operations by reportable segment: |
| | |
| | |
AI segment | | $ | ( | | $ | — |
GI segment | | | ( | | | ( |
Total operating loss by reportable segments | | $ | ( | | $ | ( |
For the three months ended March 31, 2025, prior to the acquisition of Grid AI Corp., the Company operated through one reportable segment, its legacy GI Segment. Accordingly, no AI Segment results are presented for that period.
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Operations by reportable segment for the three months ended March 31, 2026 are as follows:
| | | | | | | | | |
| | GridAI Technologies | | Grid AI Corp | | | | ||
| | Corp (GI Segment) | | (AI Segment) | | Total | |||
Revenue | | $ | — | | | | | | |
Cost of Services | | | — | | | | | | |
Gross Loss | | | — | | | ( | | | ( |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Research and development expenses | | $ | | | $ | | | $ | |
General and administrative expenses | | | | |
| | |
| |
Total operating expenses | | | | |
| | |
| |
Loss from operations | | | ( | |
| ( | |
| ( |
| | | | | | | | | |
Other expenses: | | | | | | | | | |
Interest Income (expense), net | | | ( | | | | | | ( |
Other income (expense), net | | | — | | | | | | |
Total other income (expense) | | | ( | | | | | | ( |
Loss from continuing operations | | | ( | |
| ( | |
| ( |
Income tax benefit | | | — | |
| ( | |
| ( |
Net loss | | $ | ( | | $ | ( | | $ | ( |
For the three months ended March 31, 2025, prior to the acquisition of Grid AI Corp., the Company operated through one reportable segment, its legacy GI Segment. Accordingly, no AI Segment results are presented for that period.
Note 22 - Subsequent Events
Revolving Loan Agreement
On May 14, 2026, the Company entered into a Debt Settlement and Subscription Agreement with 1396974 BC Ltd. in connection with amounts outstanding under the Revolving Loan Agreement dated January 27, 2025. Pursuant to the agreement, the parties acknowledged aggregate indebtedness of approximately $
Settlement Agreement - Ellenoff Grossman & Schole LLP
On May 12, 2026, the Company entered into a Settlement Agreement and General Releases with Ellenoff Grossman & Schole LLP (“EGS”) in connection with litigation previously filed by EGS against the Company relating to unpaid legal fees. Under the terms of the settlement agreement, the Company agreed to pay EGS an aggregate settlement amount of $
Equity Awards
Subsequent to March 31, 2026, the Company issued
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Financing Transactions
On May 8, 2026, May 11, 2026 and May 12, 2026, the Company entered into securities purchase agreements with certain purchasers pursuant to which the Company agreed to sell in private placements an aggregate of (i)
On May 11, 2026, the Company entered into an additional securities purchase agreement with certain purchasers pursuant to which the Company agreed to sell in a private placement an aggregate of (i)
The pre-funded warrants issued in connection with the additional financing have an exercise price of $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this interim report. Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. As discussed in the section titled “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS,” The following discussion and analysis contains forward-looking statements including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” included in this Report and in our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on May 1, 2026.
Overview
GridAI Technologies Corp., formerly known as Entero Therapeutics, Inc., is a diversified technology and life sciences company operating through two reportable segments: (i) an artificial intelligence-driven energy technology business focused on distributed energy resource optimization and grid-edge applications through Grid AI Corp. and its subsidiaries, and (ii) a legacy gastrointestinal biopharmaceutical business focused primarily on Adrulipase.
On September 30, 2025, we completed the acquisition of Grid AI Corp., a Nevada corporation. Following the acquisition, Grid AI Corp. became a wholly owned subsidiary of the Company. Grid AI Corp., through its subsidiaries, including AMPX UK Holdings and AMPX Limited, is focused on AI-driven energy optimization, distributed energy resource management, battery storage, energy orchestration, and related technology solutions.
Prior to the Grid AI acquisition, we operated primarily as a clinical-stage biopharmaceutical company focused on targeted, non-systemic therapies for gastrointestinal diseases. Our continuing legacy biopharmaceutical activities are centered on Adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in patients with exocrine pancreatic insufficiency, including patients with cystic fibrosis and chronic pancreatitis.
In March 2024, we completed a merger with ImmunogenX, Inc., which became ImmunogenX, LLC following the transaction. IMGX was developing Latiglutenase for celiac disease and CypCel, a metabolic marker compound. In March 2025, we entered into a rescission agreement with IMGX and the former shareholders of IMGX. The rescission transaction was completed on December 31, 2025. As a result, IMGX is no longer a subsidiary of the Company, and the Company no longer holds any ownership interest in IMGX.
Following the rescission of the IMGX transaction, the Company no longer owns or develops the Latiglutenase and CypCel programs. The Company also terminated its license agreement with Sanofi for Capeserod effective in 2025, and no further payments are due to Sanofi. The Company is no longer actively pursuing the Niclosamide program.
For the three months ended March 31, 2026, our results reflect the Company’s post-Grid AI acquisition structure, including the operations of Grid AI and AMPX, together with our continuing legacy Adrulipase-related activities and public company costs.
Our Product Candidates and Technology Platforms
Following the acquisition of Grid AI Corp., our business includes both AI-driven energy technology activities and legacy biopharmaceutical development activities.
Our Grid AI business is focused on AI-driven energy optimization, distributed energy resource management, battery storage, energy orchestration, and related technology solutions. Through Grid AI Corp. and its subsidiaries, including AMPX UK Holdings and AMPX Limited, we are developing and commercializing technology intended to optimize energy infrastructure and grid-edge applications.
Our continuing legacy biopharmaceutical activities are focused primarily on Adrulipase, an oral, non-systemic biologic therapy being developed for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). Adrulipase is designed as a recombinant lipase enzyme intended to enable the digestion of fats and other nutrients. Our goal is to provide CF and CP patients with a non-animal-derived therapy that may reduce daily pill burden.
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In July 2023, we announced topline results from our Phase 2b monotherapy bridging study using a new enteric microgranule formulation of Adrulipase. Although the primary efficacy endpoint was not achieved, data from the study indicated that the enhanced Adrulipase formulation was safe and well tolerated and demonstrated improvement over prior formulations of Adrulipase. We continue to evaluate next steps for the Adrulipase program, subject to available capital and strategic priorities.
Our former Latiglutenase and CypCel programs were part of the IMGX business. Following the completion of the IMGX rescission transaction on December 31, 2025, we no longer own or develop those programs.
Our Capeserod program was in-licensed from Sanofi in September 2023. On February 26, 2025, we notified Sanofi of our intent to terminate the license agreement. The agreement was terminated in 2025, and no further payments are due to Sanofi. We are no longer developing Capeserod.
Our Niclosamide programs previously involved proprietary oral and topical formulations for multiple gastrointestinal conditions, including inflammatory bowel disease indications. We are no longer actively pursuing these programs.
Nasdaq Listing Requirements
On September 6, 2024, the Company received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share, because the closing bid price of the Company’s common stock had remained below $1.00 per share for 30 consecutive business days.
The Company was initially provided 180 calendar days, or until March 5, 2025, to regain compliance. On March 6, 2025, Nasdaq granted the Company an additional 180-day compliance period, or until September 1, 2025, to regain compliance with the minimum bid price requirement.
On September 2, 2025, the Company received written notice from Nasdaq that it had regained compliance with the minimum bid price requirement.
In addition, on January 7, 2025, the Company received a notice from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rule 5620(a) due to the failure to hold an annual meeting of stockholders within twelve months of the Company’s fiscal year end. The Company submitted a compliance plan to Nasdaq and subsequently regained compliance with the annual meeting requirement during 2025.
On April 22, 2026, The Nasdaq Stock Market LLC notified the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of the delayed filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Nasdaq advised the Company that it had 60 calendar days to submit a plan to regain compliance and that Nasdaq could grant an exception period until October 12, 2026. On May 1, 2026, the Company filed its Annual Report on Form 10-K for the year ended December 31, 2025. On May 4, 2026, Nasdaq notified the Company that, based on the filing of the Form 10-K, the Company had regained compliance with Nasdaq Listing Rule 5250(c)(1) and that the matter was closed.
Although the Company has regained compliance with the foregoing Nasdaq listing requirements, there can be no assurance that the Company will continue to maintain compliance with all applicable Nasdaq continued listing standards in the future.
Revolving Loan Agreement
Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 with 1396974 BC Ltd. pursuant to which the lender agreed to make loans to the Company. Under the Revolving Loan Agreement, all outstanding principal, accrued and unpaid interest and other amounts were due in full on January 31, 2026.
As of March 31, 2026, the Company had not repaid the amounts due under the Revolving Loan Agreement. On April 1, 2026, the Company received a demand letter from the lender asserting that the Company was in default and demanding payment of $1,014,675, consisting of $700,000 of principal, interest, and default amounts.
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On May 14, 2026, the Company entered into a Debt Settlement and Subscription Agreement with the lender. Under the settlement agreement, the Company agreed to satisfy the outstanding obligation through (i) a cash payment of $800,000, consisting of $700,000 of principal and $100,000 of accrued interest, and (ii) the issuance of 71,482 shares of common stock at a deemed price of $3.25 per share, in satisfaction of remaining accrued interest obligations of $232,315.
Pursuant to the agreement, the Company paid $800,000 in cash and issued 71,482 shares of common stock at a deemed price of $3.25 per share in full satisfaction of the outstanding balance. As a result, the indebtedness has been fully satisfied and extinguished, and the Company no longer has access to borrowings under the revolving loan agreement.
Rescission Agreement with ImmunogenX
In March 2025, the Company entered into a rescission agreement with ImmunogenX, LLC (“IMGX”) and the former shareholders of IMGX to unwind the Company’s March 2024 acquisition of IMGX. The rescission transaction was completed on December 31, 2025.
As a result of the rescission, IMGX is no longer a subsidiary of the Company, and the Company no longer holds any ownership interest in IMGX. The Company also no longer owns or develops the Latiglutenase and CypCel programs that were previously part of the IMGX business.
In connection with the rescission, the Company returned or cancelled the equity consideration previously issued to the former IMGX shareholders, including common stock and Series G preferred stock, and cancelled the assumed IMGX options and warrants. Following the closing of the rescission transaction, the Company retained certain agreed obligations, while IMGX and/or its former shareholders remained responsible for certain IMGX liabilities, including secured debt obligations.
For the three months ended March 31, 2026, IMGX was not included in the Company’s consolidated results.
Liquidity and Capital Resources
To date, we have generated limited revenues and have experienced net losses and negative cash flows from our activities.
As of March 31, 2026, we had cash and cash equivalents of approximately $386,000 and an accumulated deficit of approximately $212.1 million. We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. Following the acquisition of Grid AI Corp. and the rescission of the IMGX transaction, our liquidity needs include public company costs, operating costs related to the Grid AI and AMPX business, debt service, professional fees, and costs related to maintaining and developing our remaining Adrulipase program.
We remain dependent on obtaining additional working capital funding from the sale of equity and/or debt securities, warrant exercises, strategic transactions, commercial arrangements, or other sources of financing in order to continue operations and execute our business plan. Without adequate funding, we may not be able to meet our obligations as they become due. These conditions raise substantial doubt about our ability to continue as a going concern.
Our primary sources of liquidity have been capital raises through equity and debt financings. During 2025 and 2026, we also entered into promissory note arrangements and other financing transactions to fund working capital needs. Our ability to raise additional capital may be affected by market conditions, our operating performance, our Nasdaq listing status, the trading price of our common stock, our capital structure, and broader macroeconomic and geopolitical conditions.
We expect to incur expenditures in the foreseeable future related to the operation and development of the Grid AI and AMPX business, maintenance of our public company infrastructure, professional fees, financing costs, debt service, and, subject to available capital, development activities related to Adrulipase. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet obligations, and our ability to pursue our business strategies.
We may seek funds through additional equity and/or debt financings, warrant exercises, strategic or commercial arrangements, asset sales, or other sources of financing. Future equity or equity-linked financings may be dilutive to existing stockholders. There can be no assurance that additional financing will be available on acceptable terms or at all.
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Debt Obligations
Revolving line of credit
Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 with 1396974 BC Ltd., pursuant to which the lender agreed to make loans to the Company. Under the Revolving Loan Agreement, the lender made an initial advance of $700,000 to the Company. The Revolving Note bears interest at a rate of 18% per annum.
All outstanding principal, accrued interest and other amounts under the Revolving Loan Agreement were due on January 31, 2026. The Company did not repay the amounts due at maturity. On April 1, 2026, the Company received a demand letter from the lender asserting that the Company was in default and demanding payment of $1,014,675.
On May 14, 2026, the Company entered into a Debt Settlement and Subscription Agreement with the lender. Under the settlement agreement, the Company agreed to satisfy the outstanding obligation through a cash payment of $800,000, consisting of $700,000 of principal and $100,000 of accrued interest, and the issuance of 71,482 shares of common stock at a deemed price of $3.25 per share in satisfaction of remaining accrued interest obligations of $232,315. Following the settlement, the Company no longer has access to the revolving loan facility.
Promissory notes
As of March 31, 2026, the Company had outstanding promissory notes and related financing obligations classified as current liabilities. These obligations included promissory notes issued in connection with financing arrangements entered into during 2025 and 2026, including notes issued together with warrants to purchase shares of the Company’s common stock.
The Company continues to evaluate repayment, refinancing, restructuring, settlement, or equity-linked alternatives with respect to its outstanding indebtedness. There can be no assurance that the Company will be able to refinance or settle these obligations on acceptable terms or at all.
IMGX debt obligations
In connection with the rescission of the IMGX transaction completed on December 31, 2025, IMGX is no longer a subsidiary of the Company. Accordingly, IMGX debt obligations, including the former IMGX revolving credit facility, promissory notes, and EIDL loan, are no longer obligations of the consolidated Company, except for any obligations expressly retained by the Company under the rescission arrangements.
Financial Operations Overview
The Company operates through two reportable segments: (i) its artificial intelligence-driven energy technology business (“AI Segment”) and (ii) its legacy biotechnology operations focused on gastrointestinal therapies (“GI Segment”). The AI Segment consists of operations conducted through Grid AI Corp. and its subsidiaries, including AMPX, while the GI Segment reflects the Company’s retained biopharmaceutical development activities, including Adrulipase. Management evaluates performance and allocates resources across these segments based on strategic priorities and expected returns.
Revenue
Historically, the Company’s legacy GI Segment did not generate revenue from the sale of approved biopharmaceutical products. Following the acquisition of Grid AI Corp. on September 30, 2025, the Company began generating revenue within its AI Segment from operations conducted through Grid AI Corp. and AMPX.
For the three months ended March 31, 2026, the Company recognized revenue of $38,208, all of which was attributable to the AI Segment. The GI Segment did not generate product revenue during the period.
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Looking forward, the Company expects its revenue profile to differ from prior periods as a result of the inclusion of Grid AI Corp. and AMPX. With respect to the Company’s retained legacy biopharmaceutical operations, the Company has not generated revenue from product sales and does not expect to do so unless and until a product candidate receives regulatory approval and is successfully commercialized. The Company may also seek to generate revenue in the future from strategic relationships, licensing arrangements, milestone payments, service arrangements, grants, or other sources, although there can be no assurance that any such revenue will be realized.
Research and Development Expense
Research and development expenses for the three months ended March 31, 2026 related primarily to the Company’s AI Segment and consisted primarily of costs associated with the development of the Company’s artificial intelligence-driven energy optimization platforms, digital infrastructure solutions, and related technology initiativs. A smaller portion of research and development expenses related to the Company’s retained biopharmaceutical development activities, including Adrulipase.
Following the discontinuation of certain legacy biotechnology programs and the completion of the rescission transaction involving ImmunogenX, LLC on December 31, 2025, Adrulipase is the Company’s only remaining active biotechnology development program. The Company no longer owns or develops the Latiglutenase or CypCel programs, and is no longer developing Capeserod or Niclosamide.
Research and development expenses generally include internal and external costs incurred in connection with product development, regulatory activities, consultants, professional fees and personnel-related expenses, contractors, contract, contract development and manufacturing organizations, drug substance, drug product, clinical materials, preclinical activities, non-clinical activities, and other costs associated with maintaining or evaluating retained development assets in the GI and AI Segments.
For the three months ended March 31, 2026, research and development expenses were $631,380, consisting of $627,756 incurred by the AI Segment and $3,624 incurred by the GI Segment. Research and development activities during the period were primarily attributable to the AI Segment.
Management expects the level and composition of research and development expense to depend on available capital, strategic priorities, and future decisions regarding the Adrulipase program.
General and Administrative Expense
General and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation, related to executive, finance, business development, legal, compliance and other administrative functions. General and administrative expenses also include legal fees relating to corporate, transactional, governance and intellectual property matters, insurance, information technology costs, professional fees for accounting, auditing, tax and other advisory services, public company costs, including corporate communications and investor relations expenses, and facility-related costs.
General and administrative expenses increased in importance during 2025 as a result of the Company’s acquisition of Grid AI Corp., the integration of the Grid AI Corp. and AMPX business, changes in management and board composition and the continued requirements of operating as a public company.
We expect general and administrative expenses to remain significant and they may increase in future periods as we continue to support the operation and integration of the Grid AI Corp. and AMPX business, satisfy public company reporting and compliance obligations and incur costs associated with corporate governance, legal, accounting, finance, investor relations and information technology infrastructure.
General and administrative expenses may also increase in connection with business development initiatives, financing activities, strategic transactions, integration efforts and the expansion of our administrative and operational infrastructure, including the engagement of additional personnel, consultants and outside service providers. General and administrative expenses support both the AI Segment and the GI Segment and are managed on a consolidated basis.
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Liquidity and Capital Resources
To date, we have not generated revenue from product sales and have experienced net losses and negative cash flows from operations. Our historical operations were funded primarily through sales of equity securities, equity-linked securities and debt financings. In 2025, our business changed significantly as a result of the acquisition of Grid AI Corp. and the completion of the rescission transaction involving ImmunogenX, LLC. Notwithstanding those transactions, as of March 31, 2026, we remained dependent on external sources of capital to fund our operations, satisfy our obligations and execute our business plan. Our capital requirements reflect the combined needs of both the AI Segment and the GI Segment, including funding for platform development, operations and integration activities within the AI Segment and potential future development activities within the GI Segment.
As of March 31, 2026, we had cash and cash equivalents of approximately $0.4 million working capital deficit of approximately $13.6 million, and an accumulated deficit of approximately $212.1 million. We have not yet achieved profitability and expect to continue to incur losses for the foreseeable future. Our future capital needs will depend on a number of factors, including the operating requirements of the GridAI and AMPX business, our corporate overhead, debt service obligations, public company costs and the extent to which we seek to preserve, resume or advance development activities relating to Adrulipase.
Our liquidity has been, and we expect will continue to be, dependent on access to outside capital. We may seek additional funds through public or private offerings of equity or debt securities, exercises of outstanding warrants, strategic transactions, commercial partnerships, licensing arrangements, asset sales or other financing alternatives. The availability and terms of financing will depend on many factors, including market conditions, our operating performance, investor sentiment, Nasdaq listing status, the trading price of our Common Stock, our capital structure and broader macroeconomic and geopolitical conditions.
In January 2025, we entered into a revolving loan arrangement that provided for borrowings of up to $2.0 million. The facility bears interest at a high rate and matures on January 31, 2026. As of April 1, 2026, the Company was in default under the revolving loan arrangement as a result of its failure to repay amounts due at maturity, and the lender has issued a demand for repayment of the outstanding amounts. On May 14, 2026, GridAI Technologies Corp. entered into a Debt Settlement and Subscription Agreement with 1396974 BC Ltd. to settle the outstanding indebtedness, consisting of principal and accrued interest related to a revolving loan agreement dated January 27, 2025. Pursuant to the agreement, the Company paid $800,000 in cash and issued 71,482 shares of common stock at a deemed price of $3.25 per share in full satisfaction of the outstanding balance. As a result, the indebtedness has been fully satisfied and extinguished, and the Company no longer has access to borrowings under the revolving loan agreement.
During 2025, we also completed the acquisition of Grid AI Corp., which expanded our operations beyond our legacy life sciences activities to include software-enabled energy orchestration and grid-edge platform activities through Grid AI Corp. and AMPX. In addition, on December 31, 2025, we completed the rescission transaction involving ImmunogenX, LLC, pursuant to which that business ceased to be our subsidiary. Following the rescission, we no longer held any ownership interest in ImmunogenX, although we retained certain liabilities as set forth in the related transaction documents. As a result of these transactions, our liquidity and capital resource profile at year-end 2025 differed materially from prior periods.
We expect to continue to incur substantial expenditures in the foreseeable future, including expenditures relating to operation and integration of the Grid AI Corp. and AMPX business, maintenance of our public company infrastructure, professional fees, debt service and evaluation of strategic and financing alternatives. In addition, although Adrulipase remains our principal retained legacy biopharmaceutical asset, any meaningful advancement of that program would require substantial additional capital for manufacturing, clinical development, regulatory activities and related support functions.
Because we do not currently generate revenue from approved pharmaceutical product sales and because the Grid AI Corp. and AMPX business remains in an early stage within our consolidated structure, we expect to continue to rely on external capital resources. If we are unable to obtain additional financing when needed, on acceptable terms or at all, we may be required to delay, reduce or terminate operating activities, defer strategic initiatives, reduce headcount, dispose of assets, restructure obligations or pursue other alternatives that may materially adversely affect our business, financial condition and results of operations.
Our access to capital may also be adversely affected by factors beyond our control, including inflation, interest rates, capital markets volatility, geopolitical conflicts, supply chain disruption and changing investor sentiment toward small-cap public companies, biotechnology issuers, emerging energy technology companies or issuers with complex capital structures.
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Based on our cash position, operating plans, debt obligations and expected cash requirements, management concluded that substantial doubt existed regarding our ability to continue as a going concern for a period of one year from the date of issuance of the financial statements, unless we are able to obtain additional capital or otherwise improve liquidity. The accompanying financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.
Our ability to issue additional securities will depend on market conditions, the availability of effective registration statements or applicable exemptions from registration, stockholder approval requirements, Nasdaq rules and the terms of our existing securities and financing arrangements. Future equity or equity-linked financings may be dilutive to existing stockholders and may include rights, preferences or privileges senior to those of our Common Stock.
Condensed Consolidated Results of Operations for the Three Months Ended March 31, 2026 and 2025
The following table summarizes our consolidated results of operations for the periods indicated:
| | | | | | | | | |
| | Three Months Ended | | | | ||||
| | March 31, | | Increase | |||||
| | 2026 | | 2025 | | (Decrease) | |||
Revenue |
| $ | 38,208 |
| $ | — |
| $ | 38,208 |
Cost of Service |
| | 651,948 |
| | — |
| | 651,948 |
Gross Margin |
| | (613,740) |
| | — |
| | (613,740) |
Operating expenses: |
| | |
| | |
| | |
Research and development expenses | | $ | 631,380 | | $ | 15,827 | | $ | 615,553 |
General and administrative expenses | |
| 2,369,378 | |
| 805,559 | |
| 1,563,819 |
Total operating expenses | |
| 3,000,758 | |
| 821,386 | |
| 2,179,372 |
Loss of operations | |
| (3,614,498) | |
| (821,386) | |
| (2,793,112) |
Other (expense) income: | |
| | |
| | |
| |
Interest expense, net | |
| (522,100) | |
| (17,902) | |
| (504,198) |
Other income (expense) | |
| 400,267 | |
| (108,817) | |
| 509,084 |
Total other expense | |
| (121,833) | |
| (126,719) | |
| 4,886 |
Loss from continued operations | | $ | (3,736,330) | | $ | (948,105) | | $ | (2,788,225) |
Loss from discontinued operations | |
| — | |
| (311,515) | |
| 311,515 |
Income tax benefit | |
| (297,629) | |
| — | |
| (297,629) |
Net loss | | $ | (3,438,702) | | $ | (1,259,620) | | $ | (2,179,082) |
Revenues
Historically, we did not generate revenue from the sale of approved biopharmaceutical products and devoted substantially all of our time and efforts to acquiring and developing our product candidates, including Adrulipase, Niclosamide, Capeserod and Latiglutenase.
Following the acquisition of Grid AI Corp. on September 30, 2025, the Company began generating revenue within its AI Segment from energy technology operations conducted through Grid AI Corp. and AMPX. Accordingly, during the three months ended March 31, 2026, the Company recognized revenue of $38,208 related to software-enabled energy orchestration, optimization, dispatch, monitoring and related service offerings. No revenue was recognized during the three months ended March 31, 2025.
With respect to our legacy GI Segment operations, we have not generated revenue from product sales and do not expect to do so unless and until a product candidate receives regulatory approval and is successfully commercialized.
Cost of Services
Cost of Services for the three months ended March 31, 2026 was approximately $652,000, compared to no cost of services for the three months ended March 31, 2025. The increase was attributable to costs associated with revenue-generating operations within the AI Segment following the acquisition of Grid AI Corp.
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Research and Development Expense
Research and development expenses for the three months ended March 31, 2026 totaled $631,380, an increase of approximately $616,000, or 3,889%, compared to approximately $16,000 recorded for the three months ended March 31, 2025. The increase in research and development expenses was primarily attributable to the acquisition of the Company’s AI Segment in September 2025, which resulted in increased technology and platform development activities related to artificial intelligence-driven energy optimization platforms, digital infrastructure solutions, and related personnel and professional service costs.
General and Administrative Expense
General and administrative expenses for the three months ended March 31, 2026 totaled approximately $2.4 million, an increase of approximately $1.6 million, or 194%, compared to approximately $0.8 million recorded for the three months ended March 31, 2025.
The increase in general and administrative expenses was primarily attributable to costs associated with the acquisition and integration of Grid AI Corp. and AMPX, increased professional fees, public company expenses, financing activities, legal and accounting costs, compensation-related expenses, and the operational and administrative infrastructure required to support the Company’s expanded business activities following the Grid AI acquisition.
Total other Income (Expense)
Total other expense for the three months ended March 31, 2026 totaled approximately $0.1 million, compared to approximately $0.1 million for the three months ended March 31, 2025. This has remained consistent with the three months ended March 31, 2025. Interest expense of approximately $0.5 million was partially offset by other income of approximately $0.4 million, primarily related to a tax credit receivable.
Loss from Continuing Operations
Loss from continuing operations for the three months ended March 31, 2026 totaled approximately $3.7 million, an increase of approximately $2.8 million, or 294%, compared to a loss from continuing operations of approximately $0.9 million for the three months ended March 31, 2025.
The increase was primarily attributable to increased research and development expenses, higher general and administrative expenses, increased interest expense and costs associated with newly acquired revenue-generating AI operations, government grant income and Research and Development tax credit.
Loss from discontinued operations
There was no loss from discontinued operations for the three months ended March 31, 2026. Loss from discontinued operations for the three months ended March 31, 2025 was approximately $0.3 million related primarily to the ImmunogenX business, which had previously been classified as held for sale and was ultimately disposed of through the rescission transaction completed on December 31, 2025. As a result, this line item reflects the operating results and other effects of that disposal group for the applicable periods.
Income Tax Benefit
Income tax benefit for the three months ended March 31, 2026 was approximately $0.3 million, compared to no income tax benefit for the three months ended March 31, 2025 The increase was primarily attributable to the recognition of deferred tax benefits associated with the Company’s operations.
Net income (loss)
As a result of the factors above, our net loss for the three months ended March 31, 2026 totaled approximately $3.4 million, an increase of approximately $2.2 million, or 173%, compared to a net loss of approximately $1.3 million for the three months ended March 31, 2025.
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Cash Flows for the three months Ended March 31, 2026 and 2025
The following table summarizes our cash flows for the periods indicated:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Net cash (used in) provided by: |
| | |
| | |
Operating activities | | $ | (1,786,751) | | $ | (818,635) |
Investing activities | |
| — | |
| — |
Financing activities | |
| 1,453,628 | |
| 700,000 |
Net (decrease) increase in cash, cash equivalents and restricted cash | | $ | (333,123) | | $ | (118,635) |
Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 was approximately $1.8 million, primarily attributable to our net loss of approximately $3.4 million. Non-cash adjustments included amortization of approximately $0.6 million, stock-based compensation of approximately $0.7 million, and amortization of debt discount of approximately $0.3 million. Changes in operating assets and liabilities included approximately $0.6 million related to accrued expenses, approximately $0.2 million related to accounts payable, and approximately $0.1 million related to other current liabilities. These were partially offset by approximately $0.5 million related to other current assets, approximately $0.3 million related to deferred tax liabilities, and approximately $0.02 million related to accounts receivables.
Net cash used in operating activities for the three months ended March 31, 2025 was approximately $0.8 million, primarily attributable to our net loss of approximately $1.3 million. This was partially offset by a net increase in other assets and liabilities of approximately $0.4 million and the impairment of right-of-use assets of $0.1 million. These offsets were partially reduced by a decrease in accounts payable of approximately $0.1 million, and an increase in prepaid expenses of approximately $0.1 million.
Investing Activities
There was no cash provided by investing activities during the three months ended March 31, 2025 and March 31, 2026
Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2026 was approximately $1.5 million. This was primarily attributable to proceeds from warrant exercises of approximately $1.1 million and proceeds from promissory notes of approximately $0.1 million. These inflows were partially offset by repayments of promissory notes of approximately $0.7 million.
Net cash provided by financing activities of approximately $0.7 million for the three months ended March 31, 2025 was due to net proceeds of approximately $0.7 million from the draw from the revolver loan.
Critical Accounting Policies and Estimates
Our accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of our condensed consolidated financial statements are summarized in Note 2 to the condensed consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of those policies are considered to be particularly important to the presentation of our financial results because they require us to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
During the three months ended March 31, 2026, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Significant Judgments and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a - 15(b) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10 - Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a - 15(e) and 15d - 15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective at the reasonable assurance level due to the existence of a material weakness in internal control over financial reporting related to the integration of Grid AI Corp., including insufficient accounting resources and processes to ensure the timely and accurate preparation and review of financial information.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a - 15(d) or 15d - 15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10 - Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On March 17, 2025, Ellenoff Grossman & Schole LLP (“EGS”) initiated an action against the Company by filing a summons and complaint in the Supreme Court of the State of New York, New York County. The complaint alleges that the Company owes to EGS $749,301.00 in fees for legal services EGS allegedly provided to the Company between September 2023 to January 2025, which amounts had been previously accrued within accounts payable in the company’s financial statements as of December 31, 2025 and March 31, 2026, a period of time prior to the appointment of certain new directors to the Board and of Mr. Paolone as Interim Chief Executive Officer. EGS’s lawsuit alleges breach of contract, account stated, and quantum meruit claims. On May 12, 2026, Ellenoff Grossman & Schole LLP and GridAI Technologies Corp. entered into a Settlement Agreement and General Release to resolve the action filed by EGS in the Supreme Court of the State of New York, New York County, relating to alleged unpaid legal fees. Under the terms of the settlement, the Company agreed to pay EGS a total of $360,000, consisting of an initial payment of $100,000, which has been paid, and the remaining balance in three equal installment payments over a one-year period. Upon receipt of the initial payment, EGS agreed to dismiss the action with prejudice. The settlement agreement includes mutual releases of claims related to the dispute and contains customary confidentiality, non-disparagement, and default provisions. The Company expressly denied any admission of liability in connection with the settlement.
ITEM 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. For a detailed discussion of the risks and uncertainties related to our business, please refer to the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the quarter ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)
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ITEM 6. EXHIBITS
(b)Exhibits
Exhibit | | Description |
3.1 | | Amended and Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on October 21, 2024). |
3.2 | | Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022). |
31.1* |
| Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
| Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
| Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* |
| Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101) |
*filed herewith
**furnished, not filed, herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GRIDAI TECHNOLOGIES CORP. | |
| | |
| By | /s/ Jason Sawyer |
| | Jason Sawyer |
| | Chief Executive Officer and Chairman |
| | (Principal Executive Officer) |
| By | /s/ Anna Skowron |
| | Anna Skowron |
| | Interim Chief Financial Officer |
Date: May 27, 2026 | | (Principal Financial and Accounting Officer) |
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