Form 8-K/A

8-K/A — GridAI Technologies Corp.

Accession: 0001104659-26-042177

Filed: 2026-04-13

Period: 2025-09-30

CIK: 0001604191

SIC: 2834 (PHARMACEUTICAL PREPARATIONS)

Item: Financial Statements and Exhibits

Documents

8-K/A — tm2611367d1_8ka.htm (Primary)

EX-23.1 — EXHIBIT 23.1 (tm2611367d1_ex23-1.htm)

EX-99.1 — EXHIBIT 99.1 (tm2611367d1_ex99-1.htm)

EX-99.2 — EXHIBIT 99.2 (tm2611367d1_ex99-2.htm)

EX-99.3 — EXHIBIT 99.3 (tm2611367d1_ex99-3.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K/A — FORM 8-K/A

8-K/A (Primary)

Filename: tm2611367d1_8ka.htm · Sequence: 1

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0001604191

2025-09-30

iso4217:USD

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UNITED STATES

SECURITIES AND

EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

September 30, 2025

GridAI Technologies Corp.

(Exact name of Registrant as Specified in its Charter)

Delaware

001-37853

46-4993860

(State or other Jurisdiction of

Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

777 Yamato Road, Suite 502

Boca Raton, FL 33431

(Address

of Principal Executive Offices) (Zip Code)

(561) 589-5444

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name or former address, if changed since

last report.)

Check the appropriate box below if the Form 8-K

filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b)

of the Act:

Title

of each class

Trading

Symbol(s)

Name of each exchange on which

registered

Common Stock, par value $0.0001 per share

GRDX

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant

is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the

Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨

EXPLANATORY NOTE

On October 6, 2025, GridAI Technologies Corp.

(f/k/a Entero Therapeutics, Inc.), a Delaware corporation (the “Company” or “we”), filed a Current Report on Form

8-K (the “Initial 8-K”) disclosing, amongst other things, the completion of its previously announced share exchange agreement

(the “Share Exchange Agreement”) with GridAI Corp, a Nevada corporation (“GridAI”),

and the stockholders of all of the issued and outstanding shares of GridAI.

The Company is amending the Initial 8-K to include

[certain risk factors related to GridAI’s business and consummation of the transactions contemplated by the Share Exchange Agreement

(the “Risk Factors”), an overview of GridAI’s business (the “Business Section”),] historical financial statements

of GridAI and the unaudited pro forma combined financial information giving effect to the Share Exchange Agreement as of September 30,

2025.

The pro forma financial information included herein

has been presented for informational purposes only. It does not purport to represent the actual results of operations that we and GridAI

would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended

to project the future results of operations that the combined company may achieve.

The Business Section and Risk Factors are filed

as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet as of September 30, 2025 and the unaudited pro forma condensed combined statement

of operations for the nine months ended September 30, 2025 are filed with this Current Report on Form 8-K/A as Exhibit 99.2 and incorporated

herein by reference.

(b) Financial Statements of Businesses Acquired.

The audited financial statements of GridAI from

inception to September 30, 2025 are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and incorporated herein by reference.

No.

Description

23.1

Consent of Macias Gini & O’Connell LLP

99.1

Audited Financial Statements of GridAI Corp. as of September 30, 2025

99.2

Unaudited Pro Forma Condensed Combined Balance Sheet. as of September 30, 2025 and the Unaudited Pro Forma Condensed Combined Statement of Operations for the period ended September 30, 2025

99.3

Business Section and Risk Factors

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the

Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the

undersigned hereunto duly authorized.

GRIDAI TECHNOLOGIES CORP.

Date: April 13, 2026

By:

/s/ Jason D. Sawyer

Name:

Jason D. Sawyer

Title:

Chief Executive Officer

EX-23.1 — EXHIBIT 23.1

EX-23.1

Filename: tm2611367d1_ex23-1.htm · Sequence: 2

Exhibit 23.1

Consent of Independent Auditor

We hereby consent to the inclusion in the form

8-K/A of GridAI Technologies Corp. dated on April 13, 2026, the consolidated financial statements of Grid AI, Corp. as of September 30,

2025, and the period from inception (April 16, 2024) through September 30, 2025. Our report on the financial statements of Grid AI, Corp.

contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.

/s/ Macias Gini & O’Connell

LLP

Irvine, California

April

13, 2026

EX-99.1 — EXHIBIT 99.1

EX-99.1

Filename: tm2611367d1_ex99-1.htm · Sequence: 3

Exhibit 99.1

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

GRID AI CORP. AND SUBSIDIARIES

TABLE OF CONTENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

INDEPENDENT AUDITORS' REPORT

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet

Consolidated Statement of Operations

and Comprehensive Loss

Consolidated Statement of Changes

in Stockholders' Deficit

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial

Statements

Independent Auditor’s Report

To Board of Directors and Shareholders of

GridAI Corp.

Opinion

We have audited the accompanying consolidated

balance sheet of GirdAI, Corp. and Subsidiaries (the “Company”) as of September 30, 2025, and the related consolidated

statement of operations and comprehensive loss, shareholders’ deficit, and cash flow for the period from inception (April 16,

2024) through September 30, 2025, and the related notes (collectively referred to as the “financial statements”). In

our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as

of September 30, 2025, and the results of its operation and its cash flow for the period from inception (April 16, 2024) through

September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing

standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described

in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent

of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter – Substantial Doubt

About the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements,

the Company has incurred losses from operations, has a net capital deficiency, and has stated that substantial doubt exists about the

Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s

plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Responsibilities of Management’s for

the Financial Statements

Management is responsible for the preparation

and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United

States of America and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation

of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements,

management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about

the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are

issued or available to be issued.

Auditor’s Responsibilities for the

Audit of the Financial Statements

Our objectives are to obtain reasonable assurance

about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and

to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance

and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material

if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user

based on the consolidated financial statements.

In performing an audit in accordance with GAAS,

we:

· Exercise professional judgment and maintain professional

skepticism throughout the audit.

· Identify and assess the risks of material misstatement

of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures

include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

· Obtain an understanding of internal control relevant

to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

· Evaluate the appropriateness of accounting policies

used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the

financial statements.

· Conclude whether, in our judgment, there are

conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going

concern for a reasonable period of time.

We are required to communicate with those charged

with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal

control-related matters that we identified during the audit.

Macias Gini & O’Connell LLP

Irvine, California

April 13, 2026

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

As of September 30, 2025

September 30

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$ 332,969

Prepaid expenses

11,125

Subscription receivable

447,935

Trade receivable

37,372

Other receivables

138,145

Other current

assets

206,043

Total current assets

1,173,589

Developed technologies, net

563,116

Trade name, net

156,317

Customer relationships, net

90,854

Goodwill

225,001

Total Other Assets

1,035,288

TOTAL ASSETS

$ 2,208,877

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable and accrued expenses

$ 1,079,668

Notes payable

310,000

Income tax payable

71,140

Deferred consideration payable

7,000,000

Due to related

party

269,898

TOTAL CURRENT LIABILITIES

8,730,706

STOCKHOLDERS' DEFICIT

Common stock, $0.01 par value, 100,000,000 authorized,

38,000,000 issued and outstanding as of September 30, 2025

380,000

Additional paid-in capital

—

Accumulated deficit

(5,508,419 )

Cumulative translation

adjustment

237,047

Total equity attributable

to GridAI

(4,891,372 )

Non-controlling

interest

(1,630,457 )

Total deficit

(6,521,829 )

TOTAL LIABILITIES AND STOCKHOLDERS'

DEFICIT

$ 2,208,877

See accompanying notes to

the consolidated financial statements.

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE

LOSS

APRIL 16, 2024 (INCEPTION) TO PERIOD ENDED

SEPTEMBER 30, 2025

For

the Period From April

16, 2024 to September 30,

2025

REVENUE

$ 138,697

Operating expenses

Cost of services

320,548

General and administrative expenses

4,957,068

Total operating expenses

5,277,616

LOSS FROM OPERATIONS

(5,138,919 )

Other income (expense)

Foreign exchange loss

(202,761 )

Other income (expense)

1,515

Financing costs

(4,334 )

Total other income (expense)

(205,580 )

Current tax benefit

(92,748 )

Net Loss

(5,251,751 )

Other comprehensive loss

Cumulative translation

adjustment

237,047

Other comprehensive loss

$ (5,014,704 )

Net loss attributable to non-controlling interests

$ (1,964,181 )

Net loss attributable to Grid AI Corp.

$ (3,287,570 )

See accompanying notes to

the consolidated financial statements.

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'

DEFICIT

APRIL 16, 2024 (INCEPTION) TO PERIOD ENDED

SEPTEMBER 30, 2025

Common

stock

Additional

Paid-

in Capital

Accumulated

deficit

Non-

controlling

interest

Other

comprehensive

income

Total

Balance at inception

—

$ —

—

$ —

Purchase of AMPx

—

281,000

—

281,000

Net loss attributable to Grid AI Corp.

—

(3,287,570 )

—

(3,287,570 )

Net loss attributable to non-controlling

interests

—

(1,964,181 )

—

(1,964,181 )

Cumulative translation adjustment

—

237,047

Shares issued as founders shares

32,273,400

322,734

(322,734 )

—

Sales of warrants - cash

—

4,168,479

—

4,168,479

Stock-based compensation

—

1,043,396

—

1,043,396

Shares issued for warrants conversion

5,726,600

57,266

(57,266 )

—

Purchase of additional

interest in AMPX

—

(4,831,875 )

(2,220,849 )

52,724

—

(7,000,000 )

Consolidated balance as of September 30,

2025

38,000,000

$ 380,000

$ —

$ (5,508,419 )

$ (1,630,457 )

$ 237,047

$ (6,521,829 )

See accompanying notes to

the consolidated financial statements.

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

APRIL 16, 2024 (INCEPTION) TO PERIOD ENDED

SEPTEMBER 30, 2025

For

the period from

April 16, 2024 to

September 30, 2025

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$ (5,251,751 )

Adjustments to reconcile net loss

to net cash used in operating activities:

Depreciation and amortization

51,713

Stock-based compensation

1,043,396

Deferred tax

(215,500 )

Changes in operating assets and

liabilities:

Trade receivable

55,968

Other receivables

(41,891 )

Other current assets

(71,975 )

Prepaid expenses

(11,028 )

Income taxes payable

71,140

Trade and other payables

389,275

Due to related party

280,983

Net cash used in operating activities

(3,699,670 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of AMPX, net of cash acquired

of $375,569

(124,431 )

Net cash used

in investing activities

(124,431 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from notes payable

310,000

Proceeds from sales of warrants

3,720,544

Net cash provided

by financing activities

4,030,544

Effect on Foreign Exchange Rate on Changes on Cash

126,526

NET INCREASE IN CASH

332,969

CASH AT BEGINNING OF YEAR

—

CASH AT END OF YEAR

$ 332,969

See accompanying notes to

the consolidated financial statements.

GRID AI CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

APRIL 16, 2024 (INCEPTION) TO PERIOD ENDED

SEPTEMBER 30, 2025

SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR:

Taxes

$ 59,745

Interest

$ —

NONCASH INVESTING AND FINANCING ACTIVITIES:

Deferred contingent payable

$ 7,000,000

Subscription receivable

$ 447,935

Total assets acquired in AMPx business acquisition

$ 1,388,972

Total liabilities assumed in AMPx business acquisition

$ 983,541

Founder shares issues to Grid AI Corp. founders

$ —

See accompanying notes to

the consolidated financial statements.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

1. ORGANIZATION AND NATURE OF OPERATIONS

Nature of Operations

Virtual Communities Inc. was formed in April 2024

and, prior to February 28, 2025, did not have any operations. On September 30, 2025, Virtual Communities Inc. changes its name

to Grid AI Corp. (“GridAI” or the “Company”).

On February 28, 2025, the Company acquired

a 51% controlling interest in AMPx UK Holdings (“AMPx”), which became its primary operating subsidiary (see Note 11). As

a result, the Company’s operations since inception primarily consist of the activities of AMPx since the acquisition date.

The Company is a grid-edge technology company

focused on developing software platforms that support the optimization and management of electrical loads and distributed energy resources.

The Company’s core technologies include

Dynamic Load Shaping (“DLS”) and an Aggregation Management Platform (“AMP”), which are designed to manage and

optimize energy usage and grid interaction, including applications related to large-scale energy demand environments.

On September 30, 2025, GridAI was acquired

by GridAI Technologies, Inc. (formerly Entero Therapeutics, Inc.) and became a wholly owned subsidiary of GridAI Technologies.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s consolidated financial statements

have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Financial

Accounting Standards Board (FASB) has established the Accounting Standards Codification (ASC) as the sole source of authoritative GAAP.

The consolidated financial statements are presented for the period from inception (April 16, 2024) through September 30, 2025.

The Company did not have substantive operations prior to March 1, 2025.

Principles of Consolidation

The accompanying consolidated financial statements

include the accounts of GridAI and its subsidiaries, AMP UK Holdings, AMPx Hardware Limited, AMPx Limited, AMPx Czech s.r.o, and Amp

X Australia Pty Ltd. Intercompany account balances and transactions have been eliminated in consolidation.

Risks and Uncertainties

The Company operates in an early-stage, evolving

business environment and is subject to a number of risks and uncertainties that could affect its operations and financial condition.

The Company has a limited operating history and has incurred recurring losses from operations. Its ability to achieve profitability is

dependent on the successful development and commercialization of its technology platform, the ability to generate sufficient revenues,

and access to additional financing.

The Company operates internationally through

subsidiaries located in multiple jurisdictions, including the United Kingdom, Czech Republic, and Australia. As a result, the Company

is exposed to risks associated with foreign operations, including changes in economic conditions, foreign currency fluctuations, regulatory

requirements, tax laws, and political environments in the jurisdictions in which it operates.

In addition, the Company’s future results

may be impacted by its ability to attract and retain qualified personnel, execute its business strategy, and manage growth. The Company’s

operations may also be affected by general economic conditions, capital market conditions, and industry-specific developments.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

These factors, among others, could materially affect the Company’s

financial position, results of operations, and cash flows.

Use of Estimates

The preparation of consolidated financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,

the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses.

These estimates and assumptions are based on

historical experience and other factors that management believes to be reasonable under the circumstances. Actual results could differ

materially from those estimates.

Significant estimates and assumptions reflected

in the consolidated financial statements include, but are not limited to:

· the fair value of assets acquired

and liabilities assumed in business combinations, including developed technology, customer

relationships, and trade name intangible assets;

· the valuation of goodwill and the

assessment of potential impairment;

· the fair value and classification

of deferred consideration payable;

· the determination of useful lives

for intangible assets and related amortization;

· revenue recognition, including the

identification of performance obligations and timing of revenue recognition under ASC 606;

· the assessment of allowance for credit

losses on receivables; and

· foreign currency translation and

related estimates.

These estimates are inherently uncertain and

may change as additional information becomes available.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern. As of September 30, 2025, the Company had cash of

approximately $333,000, has incurred losses from operations since inception, and has negative working capital. The Company also has significant

obligations, including deferred consideration payable in connection with the acquisition of AMPx. These conditions raise substantial

doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are

issued. Management’s plans include raising additional capital and obtaining financial support from its parent company. However,

such plans are not considered probable of being effectively implemented or sufficient to alleviate the substantial doubt. Accordingly,

substantial doubt about the Company’s ability to continue as a going concern exists and is not alleviated. The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash

The Company maintains its cash in bank deposit

accounts which may at times exceed insurance limits provided by banks. Financial instruments that potentially expose the Company to concentrations

of credit risk consist of cash. The Company maintains its cash balances with financial institutions in foreign jurisdictions and with

financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC

insurance limits. 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.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL

16, 2024 (INCEPTION) TO SEPTEMBER 30, 2025

Trade Receivable and other current assets

The Company records accounts receivable when

it has the unconditional right to issue an invoice and receive payment regardless of whether revenue has been recognized. Accounts receivable

are recorded at the invoiced amount, net of allowance for credit losses. Effective January 1, 2025, the Company adopted Accounting

Standards Update 2025-05-Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Account Receivable and Contract

Assets for Private Companies and Certain Not for Profit Entities which permits consideration of subsequent cash collections when estimating

the allowance for credit losses. Other current assets primarily consisted of various other receivables. The Company evaluates the collectability

of its receivables based on historical experience, current economic conditions, and specific customer circumstances. As of April 16,

2024 (inception) and September 30, 2025, the Company determined that no allowance for credit losses was required.

Business Combinations

The Company accounts for its business combinations

under the provisions of ASC Topic 805 Business Combinations, which requires that the acquisition method of accounting be used for all

business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition

at their respective fair values. Any excess fair value of the net tangible and intangible assets acquired over the purchase price is

recorded as bargain purchase gain in the statements of operations at the acquisition closing date. During the measurement period, which

extends no later than one year from the acquisition date, the Company may record certain adjustments to the carrying value of the assets

acquired and liabilities assumed. After the measurement period, all adjustments are recorded in the consolidated statements of operations

as operating expenses or income. Acquisition-related expenses are recognized separately from the business combinations and are expensed

as incurred.

Fair value measurements

The Company’s financial instruments consist

mainly of cash equivalents, other receivables, prepaid expenses and other current assets, accounts payable, accrued expenses and other

current liabilities. The carrying amounts of cash equivalents, other receivables, prepaid expenses and other current assets, accounts

payable, accrued expenses and other current liabilities approximate their estimated fair value due to their short-term maturities.

ASC 820-10 (Topic 820, "Fair Value Measurements

and Disclosures") defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value

measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon

sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820-10 also prioritizes, within the measurement

of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair

value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements

is defined as follows:

a. Level

1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical

assets or liabilities in active markets;

b. Level

2 – inputs to the valuation methodology include quoted prices for similar assets and

liabilities in active markets, and inputs that are observable for the asset or liability

other than quoted prices, either directly or indirectly including inputs in markets that

are not considered to be active; and

c. Level

3 – inputs to the valuation methodology are unobservable and significant to the fair

value measurement.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

Fair value is a market-based measure considered

from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not

readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset

or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during

periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may change for many instruments.

This condition could cause an instrument to be reclassified within levels in the fair value hierarchy. The Company notes that all cash

is held is considered a Level 1 instrument.

The Company estimates the fair value of notes

payable and deferred consideration payable based on a discounted cash flows analysis, based on the Company’s current estimated

incremental borrowing rate for similar instruments with comparable terms and maturities. The notes payable and deferred consideration

payable fair value estimates are considered a Level 2 within the fair value hierarchy. Because the notes payable and deferred consideration

payable are short-term in nature, the estimated the fair value approximates carrying value.

As of September 30, 2025, the Company did

not have any Level 3 instruments.

Foreign Currency Translation

The Company’s consolidated financial statements

are presented in US dollars. Each subsidiary entities of the Company has its own respective functional currency determined based on the

primary economic environment in which it operates, and items included in the respective financial statements of each entity are measured

using that functional currency. A currency other than the functional currency is referred to as a foreign currency and subsidiaries with

a functional currency other than the US dollar are referred to as a foreign operation.

Transactions in foreign currencies are initially

recorded in the functional currency at the rate in effect at the date of the transaction. Monetary assets and liabilities denominated

in foreign currencies are retranslated at the spot rate of exchange in effect at the reporting date. Non-monetary items that are measured

in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary

items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

All exchange differences are recorded in profit and loss.

The financial statements of subsidiaries that

have a functional currency other than the US dollar were translated into US dollars as follows: assets and liabilities – at

the closing rate at the date of the statements of financial position, and income and expenses – at the average rate for the

period. All resulting changes are recognized in other comprehensive loss as foreign currency translation adjustments.

Goodwill

Goodwill represents the excess of the purchase

price of an acquired business over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is not amortized

but is subject to periodic review for impairment.

The Company evaluates goodwill for impairment

annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events or circumstances

could include, among other factors, operating losses, changes in projected cash flows, or adverse changes in market conditions. If the

carrying value of goodwill exceeds its estimated fair value, an impairment loss is recognized in the consolidated statements of operations.

As of September 30, 2025, the Company has not recognized any impairment charges related to goodwill.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL SATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

Intangible Assets

Intangible assets acquired in business combinations,

including developed technology, customer relationships, and trade names, are recorded at fair value at the acquisition date. Developed

technology and other intellectual property are considered finite-lived intangible assets and are amortized on a straight-line basis over

their estimated useful lives of 10 years. Customer relationships and trade names are also amortized on a straight-line basis over their

estimated useful lives of 8 years and 10 years, respectively.

Intangible assets are evaluated for impairment

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Revenue Recognition

The Company follows a single principle-based

five-step model when accounting for revenue arising from contracts with customers, which is based on the requirements of FASB Topic 606,

Revenue from Contracts with Customers (“ASC 606 ”).

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.

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. The company has one lease agreement with

a term of 12 months or less.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL

16, 2024 (INCEPTION) TO SEPTEMBER 30, 2025

Income Taxes

Current income tax

Current income tax assets and liabilities are

measured at the amount expected to be received from or paid to taxing authorities, based on tax rates and laws that have been enacted

as of the reporting date in the jurisdictions where the Company operates. Current income tax related to items recognized directly in

equity is also recorded in equity.

Deferred income tax

Deferred income taxes are recognized using the

liability method for temporary differences between the financial reporting basis and the tax basis of assets and liabilities. Deferred

tax liabilities are recorded for all taxable temporary differences, and deferred tax assets are recorded for deductible temporary differences,

net operating loss carryforwards, and tax credit carryforwards to the extent it is more likely than not that they will be realized.

Deferred tax assets and liabilities are measured

using tax rates expected to apply in the periods when the temporary differences reverse, based on tax laws enacted at the reporting date.

Deferred tax related to items recognized directly in equity is also recorded in equity.

Deferred tax assets and liabilities are offset

when the Company has a legally enforceable right to offset current tax assets against current tax liabilities and the deferred taxes

relate to the same taxable entity and jurisdiction.

Uncertain Tax Position

The Company follows the provisions of income

tax guidance which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be

taken in income tax returns. The guidance requires that a position taken or expected to be taken in a tax return be recognized in the

financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax positions

that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of

tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company has not recognized any liability

for uncertain tax positions as of September 30, 2025 or April 16, 2024 (inception).

Accounting for Warrants

The Company accounts for stock-based compensation

arrangements with employees and non-employee consultants using a fair value method which requires the recognition of compensation expense

for costs related to all stock-based payments, including common stock warrants. As September 30, 2025, each Grid AI warrant was

converted into Grid AI common stock.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which includes amendments that further enhance

income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid

by jurisdiction. The amendments are effective for all public entities for fiscal years beginning after December 15, 2024. The Company

adopted ASU 2023-09 on January 1, 2025 and the adoption did not have a material effect on the Company’s financial statement

disclosures.

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.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

In May 2025, the FASB issued ASU 2025-03,

Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable

Interest Entity. ASU 2025-03 clarifies the determination of the accounting acquirer in certain equity-based acquisitions when the legal

acquiree is a variable interest entity (“VIE”) that meets the definition of a business. This guidance is effective for the

Company beginning in the first quarter of 2027, with early adoption permitted, and must be applied prospectively to relevant transactions.

The Company has not entered into such transactions to date and does not expect a material impact upon adoption.

In November 2024, the FASB issued ASU 2024-04, Induced

Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible

debt should be accounted for as induced conversions. The guidance is effective for the Company beginning in the first quarter of 2026,

with early adoption permitted, and may be applied prospectively or retrospectively. While the Company has outstanding convertible debt,

no induced conversions have been undertaken. Management does not expect the adoption of ASU 2024-04 to have a material impact unless

future inducement transactions occur.

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.

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires expanded disclosures of rate reconciliation categories,

significant reconciling items, and disaggregated income taxes paid, net of refunds. The guidance is effective for the Company beginning

with the 2025 annual report, with early adoption permitted, and should be applied prospectively, with retrospective adoption also permitted.

The Company is evaluating enhancements to its income tax disclosures in preparation for adoption.

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

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.

3. REVENUE

Revenue Recognition

The Company recognizes revenue in accordance

with ASC 606, Revenue from Contracts with Customers, which applies a five-step model to determine the timing and amount of revenue recognition.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

The Company generates revenue from software-based

energy orchestration services provided through its proprietary platform. These services include monitoring, optimization, dispatch management,

and related support services for energy storage systems and distributed energy resources.

Identification of Performance Obligations

The Company’s contracts with customers

primarily consist of Energy Storage System (“ESS”) Services Agreements and platform service agreements. Under these arrangements,

the Company provides a series of integrated services, including system monitoring, optimization, dispatch management, and platform access.

Management has concluded that these services are not distinct within the context of the contract and represent a single performance obligation

consisting of a stand-ready obligation to provide continuous services over the contract term.

Transaction Price

The transaction price under these agreements

generally consists of fixed monthly service fees. In certain arrangements, the Company may also earn variable consideration in the form

of revenue-sharing arrangements tied to participation in energy market programs. Such amounts are recognized when it is probable that

a significant reversal of revenue will not occur and are typically constrained until the underlying market event occurs and the associated

revenue is known.

Timing of Revenue Recognition

Revenue is recognized over time as the Company

satisfies its performance obligations, as customers simultaneously receive and consume the benefits of the services provided. Revenue

is recognized on a ratable basis over the contract term, which reflects the continuous nature of the Company’s stand-ready service

obligations.

Principal vs. Agent Considerations

The Company evaluates whether it acts as principal

or agent in its arrangements. The Company has concluded that it acts as principal, as it controls the services prior to transfer to the

customer, is primarily responsible for fulfilling the service obligations, and has discretion in establishing pricing. Accordingly, revenue

is recognized on a gross basis.

4. TRADE RECEIVABLE

As of September 30,

2025, trade receivables of $37,372, had no allowance for credit losses. Other receivable of $138,145 had no allowance for credit

losses as of September 30, 2025. As of April 16, 2024 (inception), the Company had $0 trade

receivables.

5. OTHER CURRENT ASSETS

The following tables disaggregates

the balance of other receivables and other current assets on the consolidated balance sheet as of September 30, 2025:

Refundable deposits

2,016

VAT paid on purchases

203,673

GST recoverable

354

$ 206,043

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

6. INTANGIBLE ASSETS

As of September 30, 2025, intangible assets were comprised of

the following:

Intangible

asset

Estimated

useful life

(years)

Acquisition

date

fair value

Accumulated

amortization

Net

Book Value at

September 30, 2025

DLS developed technology

$ 578,000

$ (33,717 )

$ 544,283

AMP developed technology

20,000

(1,167 )

18,833

Customer relationships

98,000

(7,146 )

90,854

Trade name

166,000

(9,683 )

156,317

$ 862,000

$ (51,713 )

$ 810,287

The future remaining amortization expense for the following five years

is as follows:

2025

(remaining)

$ 22,163

2026

88,650

2027

88,650

2028

88,650

2029

88,650

Thereafter

433,524

$ 810,287

7. 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.

The Company conducts operations in the United

Kingdom and the Czech Republic through its subsidiaries. Income earned in these jurisdictions is subject to local taxation at statutory

rates.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

For the period ended September 30, 2025,

the provision / (benefit) for income taxes consists of the following:

September 30,

2025

Current:

Foreign

$ 122,752

Deferred:

Foreign

(215,500 )

Total

$ (92,748 )

As of September 30, 2025,

deferred tax assets and (liabilities) are comprised of:

Deferred Tax Assets

Net Operating Loss Carryforwards

$ 936,073

Total deferred tax assets before valuation allowance

936,073

Valuation Allowance

(733,501 )

Total deferred tax assets, net of valuation allowance

202,572

Deferred Tax Liabilities

Intangibles

(202,572 )

Total deferred tax liabilities, net

$ —

The reconciliation of the Federal

statutory income tax provision to the Company’s effective income tax provision is as follows for the periods indicated:

Income tax benefit at statutory rates

21.00 %

Change in Valuation Allowance

(13.59 )%

Foreign Rate Differential

3.41 %

Non-controlling interest

(9.10 )%

Total Tax Expense (Benefit)

1.72 %

At September 30, 2025, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $1,387,578, which are indefinite-lived

and may be carried forward indefinitely under current U.S. tax law. The Company also had U.K. NOL carryforwards of $2,578,727, which are

not subject to expiration under current U.K. tax legislation.

8. DEFERRED CONSIDERATION PAYABLE

On September 30, 2025, GridAI, per their

original purchase agreement with AMPx UK Holdings, exercised their option to purchase an additional 24% interest in AMPx for $7,000,000

as deferred consideration payable. The deferred consideration payable of $2,000,000 was due to be paid on October 15, 2025. Subsequent

to September 30, 2025, the Company paid $750,000 towards the payable, with the remaining balance due June 1, 2026 or within

thirty days following the date revenue is first earned by AMPx. The terms of the deferred consideration do not include an interest component.

This transaction was recorded as a reduction in non-controlling interest on the consolidated balance sheet recorded on September 30,

2025.

GRID AI CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

9. NOTES PAYABLE

The Company borrowed $310,000 by issuing two

promissory notes payable to third parties on September 11, 2025. The notes bear interest at 2% and mature with accrued interest

on the earlier of the Company receiving financing of at least $1.5 million or January, 1 2026. There were no corresponding conversion

or covenant provisions. See Note 14 Subsequent Events for further disclosure.

10. RELATED PARTY TRANSACTIONS

In the ordinary

course of business, the Company enters into transactions with related parties. Related parties include the former owners of AMPX,

who retained a non-controlling interest of approximately 24%. As of September 30, 2025, amounts

due to related parties totaled $269,898 and primarily relate to advances and operating expenses paid on behalf of the Company. The Company

also recorded deferred consideration payable of $7,000,000 to the former controlling owners of AMPX in connection with the acquisition,

which is considered a related party transaction.

11. BUSINESS ACQUISITION

On February 28, 2025, the Company acquired

51% interest in AMPx limited for $500,000. The acquisition is expected to give the Company access to grid-edge technology focused on

developing software platforms that support the optimization and management of electrical loads and distributed energy resources. The

transaction was accounted for under the acquisition method of accounting in accordance with ASC 805. The Company has performed a preliminary

allocation of the purchase price to the identifiable assets acquired and liabilities assumed. The allocation is based on management’s

initial estimates of the fair values as of the acquisition date. In accordance with ASC 805, the Company may record adjustments to the

provisional amounts during the measurement period, which ends no later than one year from the acquisition date. Goodwill acquired in

the acquisition represents the excess of purchase consideration over the fair value of net assets acquired and is primarily attributable

to the assembled workforce, which does not qualify for separate recognition.

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:

Amount

Cash paid

$ 500,000

Purchase consideration

$ 500,000

GRID AI , CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL 16, 2024 (INCEPTION)

TO SEPTEMBER 30, 2025

Assets acquired:

Cash and cash equivalents

$ 375,569

Accounts receivable

301,971

Developed technology

598,000

Customer relationship

98,000

Trade name

166,000

Goodwill

225,001

Total assets

$ 1,764,541

Liabilities assumed:

Accounts payable and accrued expenses

768,041

Deferred tax liability

215,500

Total liabilities

$ 983,541

Net assets acquired

781,000

Non-controlling interest

281,000

Purchase consideration

$ 500,000

As part of the acquisition, the Company acquired

intangible assets, which are included in the developed technology, customer relationships, and tradename line items on the consolidated

balance sheet as of September 30, 2025. See Note 6 - Intangible Assets for more information on estimated useful lives and fair values.

12. OPERATING LEASES

As of September 30, 2025,

the Company leases office space under a short-term operating lease with a term of 6 months. The lease qualifies as a short-term lease,

and therefore, no ROU asset or lease liability is recorded on the balance sheet.

Lease payments under

the short-term lease are recognized on a straight-line basis as lease expense within general and administrative expenses in the statement

of income. Total lease expense for the from inception to the period ended September 30, 2025 was

$30,344.

13. STOCKHOLDERS’ EQUITY

The

Company has Common stock with $0.01 par value, 100,000,000 authorized, 38,000,000 issued and outstanding as of September 30, 2025. During

the period ended September 30, 2025, the Company converted 2,491,232 of outstanding warrants into 5,726,600 to common shares of the Company.

The warrants contained conversion terms to convert into common shares at a ratio of one warrant to one common share. Upon conversion

of the warrants on September 30, 2025, the warrants converted at a ratios of 2.11 to 2.30 which was treated as a modification and resulted

in a deemed dividend to the warrant holders for the excess shares. The deemed dividend was a charge to APIC and resulted in no additional

compensation expense as the Company was in a retained deficit position at conversion. In addition, the Company recognized stock-based

compensation expense of $1,043,396 for 521,698 warrants issued to employees and third parties that were vested at issuance. The

Company also issued 1,448,968 warrants for cash of $4,168,479 to investors, in which $447,935 recorded as subscription receivable for

cash received on October 1, 2025. Each warrant was valued at $2.00 per warrant based on the value that warrants were sold to third parties.

GRID AI , CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD FROM APRIL

16, 2024 (INCEPTION) TO SEPTEMBER 30, 2025

14. SUBSEQUENT EVENTS

The notes payable due on the earlier of January

1, 2026 or the date the Company receives financing of at least $1.5 million were canceled on February 23, 2026. The Company and the lenders

agreed that the notes proceeds of $310,000 could be used to pay the exercise price for warrants that were issued to the lenders in a

separate transaction. There was a de minimis accrued interest associated with the notes payable.

On September 30, 2025, the Company was acquired

by Grid AI Technologies Corp, publicly owned entity, pursuant to the terms of a Share Exchange Agreement (the “Grid AI Agreement”)

dated September 30, 2025. Under the terms of the Grid AI Agreement, each Seller transferred to Grid AI Technologies Corp all of the issued

and outstanding shares of the Company in exchange for the portion of the equity interests of the Grid AI Technologies Corp. The combined

fair value of the equity consideration issued to the Sellers was estimated at $27.1 million, consisting of $2.1 million attributable

to the common stock issued and $25.0 million attributable to the Series H Preferred Stock. No cash consideration was paid.

EX-99.2 — EXHIBIT 99.2

EX-99.2

Filename: tm2611367d1_ex99-2.htm · Sequence: 4

Exhibit 99.2

GRID AI TECHNOLOGIES

CORP.

Pro Forma Consolidated

Balance Sheets (unaudited)

As of September 30, 2025

Grid AI

Technologies

Corp

GridAI, Corp

Adjustments

Consolidated

September

30,

2025

September

30,

2025

September

30,

2025

September

30,

2025

ASSETS

Current Assets:

Cash and cash equivalents

$ 2,180,789

$ 332,969

—

$ 2,513,758

Subscription receivable

—

447,935

—

447,935

Trade receivable

—

37,372

—

37,372

Prepaid expenses

98,175

11,125

—

109,300

Assets of disposal

group held-for-sale

83,170,009

—

83,170,009

Other receivables

—

138,145

—

138,145

Other

current assets

—

206,043

—

206,043

Total

Current Assets

85,448,973

1,173,589

—

86,622,562

Other Assets:

Developed technology,

net

—

563,116

18,002,884

Note 3

18,566,000

Customer relationships

—

90,854

2,215,146

Note 3

2,306,000

DLS developed technology

727,000

Note 3

727,000

Trade name

—

156,317

656,683

Note 3

813,000

Goodwill

1,684,182

225,001

18,911,030

Note 4

19,136,031

Investment GridAI

27,110,586

—

(27,110,586 )

Note 5

—

Deposits

49,122

—

49,122

Total

Other Assets

28,843,890

1,035,288

11,808,829

41,688,007

Total

Assets

$ 114,292,863

$ 2,208,877

$ 11,808,829

$ 128,310,569

LIABILITIES

AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

Accounts payable

$ 3,474,909

$ 1,079,668

—

$ 4,554,577

Accrued expenses

410,324

—

410,324

Deferred consideration-

short term

—

7,000,000

—

7,000,000

Accrued dividend

payable

1,564,753

—

1,564,753

Line of credit

700,000

310,000

—

1,010,000

Operating lease

liabilities - current

135,609

—

135,609

Liabilities held-for-sale

23,672,708

—

23,672,708

Income tax payable

—

71,140

—

71,140

Due to related party

—

269,898

—

269,898

Other

current liabilities

59,482

—

59,482

Total

Liabilities

30,017,785

8,730,706

—

38,748,491

Mezzanine Equity:

Series G preferred

stock- Par value $0.0001 per share; 13,000 shares designated; 12,373.226 shares issued and outstanding at September 30, 2025 and

December 31, 2024, respectively.

61,681,100

—

61,681,100

Stockholders’

Equity (Deficit):

Series B preferred

stock- Par value $0.0001 per share; 1,731.6 shares authorized; 475.56 shares issued and outstanding at September 30, 2025 and December

31, 2024, respectively.

255

—

255

Series C preferred stock- Par value

$0.0001 per share; 25,000 shares authorized; 0 shares issued and outstanding at September 30, 2025 and December 31, 2024.

—

Series D preferred stock- Par value

$0.0001 per share; 50 shares designated; 0 shares issued and outstanding at September 30, 2025 and December 31, 2024.

—

Series E preferred stock- Par value

$0.0001 per share; 50 shares designated; 0 shares issued and outstanding at September 30, 2025 and December 31, 2024.

—

Series F preferred stock- Par value

$0.0001 per share; 2,333 shares designated; 0 shares issued and outstanding at September 30, 2025 and December 31, 2024.

—

Series H preferred

stock-Par value $0.0001 per share, 38,801.546 shares designated and 28,604.5 shares issued and outstanding at September 30, 2025

and 0 at December 31, 2024

—

Common stock - Par value $0.0001 per

share; 100,000,000 shares authorized; 2,547,147 and 1,584,650 shares issued and outstanding at September 30, 2025 and December 31,

2024, respectively.

—

380,000

(380,000 )

Note 6

—

Additional paid-in

capital

228,392,426

—

228,392,426

Accumulated deficit

(205,798,707 )

(5,508,419 )

5,508,419

Note 6

(205,798,707 )

Cumulative translation

adjustment

—

237,047

(237,047 )

Note 6

Non-controlling

interest

(1,630,457)

6,917,457

Note 7

5,287,000

Total

Stockholders’ Equity (Deficit)

22,593,978

(6,521,829 )

11,808,829

Note 6

27,880,978

Total

Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit)

$ 114,292,863

$ 2,208,877

$ 11,808,829

$ 128,310,569

GRID AI TECHNOLOGIES CORP.

Pro Forma Consolidated Statement of Operations

(unaudited)

For the period January 1, 2025 to September 30,

2025

GridAI

Technologies Corp

September 30,

2025

Grid AI Corp

September 30,

2025

Adjustments

Combined

ProForma

Revenue

$ —

$ 138,697

—

$ 138,697

Operating expenses:

Cost of services

—

320,548

—

320,548

Research and development expenses

32,080

—

32,080

General and administrative expenses

2,362,967

4,957,068

1,672,425

Note 8

8,992,450

Total operating expenses

2,395,037

5,277,616

1,672,425

9,345,078

Loss from operations

(2,395,037 )

(5,138,919 )

(1,672,425 )

(9,174,301 )

Other (expense) income:

Interest income (expense), net

(90,037 )

—

(90,037 )

Foreign exchange loss

—

(202,761 )

—

(202,761 )

Other income (expense), net

(108,818 )

1,515

—

(107,303 )

Financing costs

(4,334 )

—

(4,334 )

Total other income (expense)

(198,855 )

(205,580 )

—

(404,435 )

Current tax benefit

—

(92,748 )

—

(92,748 )

Loss from continued operations

$ (2,593,892 )

$ (5,251,751 )

$ (1,672,425 )

$ (9,518,068 )

Loss from discontinued operations net of tax

(816,808 )

—

(816,808 )

Net loss

$ (3,410,700 )

$ (5,251,751 )

$ (1,672,425 )

$ (10,589,048 )

Preferred stock dividends

(254,172 )

—

(254,172 )

Net loss applicable to common shareholders

$ (3,664,882 )

$ (5,251,751 )

$ (1,672,425 )

$ (10,598,048 )

Weighted average shares outstanding, basic and diluted

1,609,863

—

424,348

2,034,211

Loss per share, basic and diluted

$ (2.28 )

—

$ (5.21 )

Loss per share from discontinued operations, basic and diluted

$ (0.51 )

—

$ (0.40 )

Note 1 – Basis of Presentation

The unaudited pro forma condensed consolidated balance sheet as of

September 30, 2025 gives effect to the acquisition of Grid AI Corp. (“GridAI”) as if the transaction had occurred on

September 30, 2025. The unaudited pro forma condensed consolidated statements of operations for the period from January 1, 2025

to September 30, 2025 reflect the combined results of the Company and GridAI for such period. GridAI’s substantive operations

commenced on February 28, 2025; accordingly, no material operating activity is reflected for GridAI prior to that date, consistent

with the financial statement footnote disclosure.

Note 2 – Purchase Price Allocation

The acquisition has been accounted for as a business combination under

ASC 805. The preliminary purchase price allocation resulted in the recognition of identifiable intangible assets and goodwill as follows:

· Developed technology: $18,566,000

· Customer relationships: $2,306,000

· DLS developed technology: $727,000

· Trade name: $813,000

· Goodwill: $17,542,703

These amounts represent the excess of purchase consideration over the

fair value of identifiable net assets acquired.

Note 3 – Intangible Asset Adjustments

The pro forma adjustments reflect the recognition of intangible assets

to their estimated fair values in accordance with ASC 805. These adjustments adjust the carrying value of intangible assets to the following

fair values as determined in the purchase price allocation:

· Developed technology: $18,566,000

· Customer relationships: $2,306,000

· DLS developed technology: $727,000

· Trade name: $813,000

These amounts are reflected within “Developed technology, net,”

“Customer relations,” and “Trade name” in the pro forma balance sheet.

Note 4 – Goodwill Recognition

Goodwill of $17,542,703 represents the excess of the purchase consideration

over the fair value of identifiable net assets acquired. The goodwill recognized is primarily attributable to expected synergies, assembled

workforce, and future economic benefits from GridAI.

Note 5 – Elimination of Investment in GridAI

The pro forma adjustments include the elimination of the historical

investment in GridAI of $27,110,586, which is replaced by the underlying assets and liabilities of GridAI in consolidation.

Note 6 – Equity Adjustments

The pro forma adjustments reflect:

· Elimination of GridAI historical equity balances, including:

o Additional paid-in capital: $(4,831,875)

o Accumulated deficit: $3,289,116

o Cumulative translation adjustment: $(240,078)

· Recognition of non-controlling interest of $5,287,000 representing the portion

of GridAI not acquired.

Note 7 – Non-Controlling Interest

The pro forma balance sheet reflects non-controlling interest of $5,287,000,

representing the equity interest retained by minority shareholders in GridAI following the acquisition.

Note 8– Intangible Asset Amortization

The pro forma adjustment of $1,672,425 reflects incremental amortization expense related to the identifiable intangible assets recognized

in the acquisition of GridAI, as if the acquisition had occurred on January 1, 2025. This adjustment is reflected within general and administrative

expenses in the unaudited pro forma condensed consolidated statement of operations.

This adjustment represents the difference between amortization based

on the preliminary fair values assigned to the acquired intangible assets and the historical amortization recorded by GridAI and is reflected

within general and administrative expenses.

EX-99.3 — EXHIBIT 99.3

EX-99.3

Filename: tm2611367d1_ex99-3.htm · Sequence: 5

Exhibit 99.3

Business Description

Grid AI Corp. (“Grid AI” or the “Company”)

develops software and services designed to accelerate power availability and optimize energy infrastructure for artificial intelligence

(AI) data centers and other large energy users. The Company is currently in the development stage of an AI data center platform. This

platform aims to use and optimize distributed energy resources, including battery energy storage systems, on-site generation, and grid

interconnections. Currently, there is no revenue generated from this AI data center platform. The Company’s commercial pipeline

has recently been re-established and is continuing to develop through consulting-led engagements and targeted business development initiatives.

Current discussions are primarily with battery energy storage system (BESS) providers and energy infrastructure participants, including

companies such as Mango Power and Nomad Transportable Power Systems. While prior trial deployments, including in Australia, have not yet

resulted in significant commercial revenue, these efforts have informed management’s strategy to focus on lower-friction, near-term

opportunities that can be pursued with limited incremental cost. Market conditions vary significantly by geography, and the Company is

prioritizing regions and use cases where its platform can be more readily adopted.The Company does not have any major customers at the

present time and in the future aims to primarily serve AI data center developers, hyperscalers (large-scale cloud service providers that

operate extensive computing, storage, and networking infrastructure to support enterprise applications and AI workloads), and energy infrastructure

developers in North America and Australia.

Notwithstanding the early-stage nature of commercialization,

the Company continues to prioritize development of its data center energy orchestration platform, which remains its core strategic focus

and is expected to serve as the foundation for future revenue generation.

GridAI is a wholly owned subsidiary of GridAI

Technologies, Inc.

Legacy Technologies

Prior to GridAI’s acquisition of AMP X UK

Holdings (“AMP X”) in February 2025, AMP X had developed and operated two principal technology platforms focused on residential

and distributed energy management: DLS developed technology and ALICE Home Energy Management Systems (HEMS). While the Company currently

supports these technologies, there is very minimal revenue and the Company’s current focus is on data centers. DLS (Dynamic Load

Shaping) is the Company’s front-of-meter optimization platform designed to manage and optimize large-scale distributed energy resources,

such as utility-scale battery energy storage systems and solar arrays, by determining when to charge, hold, or discharge energy based

on market and grid conditions.

ALICE is the Company’s home energy management

system (HEMS) platform, which enables residential users to optimize energy usage across devices such as batteries, solar systems, and

household appliances through data-driven orchestration.

While historical deployments and trial activity,

including in Australia, have not yet resulted in significant commercial revenue, management believes these efforts have provided valuable

operational insight and market feedback that inform the Company’s current strategy. The Company is actively evaluating lower-friction,

near-term commercial opportunities related to these technologies, which may be pursued on a limited, low-cost basis as part of its broader

development efforts.

Management has not assumed that all previously contemplated pipeline

opportunities related to these legacy platforms will be realized; however, based on current market dynamics and increasing demand for

energy optimization solutions, management believes it is reasonable that certain opportunities, including those that may be delayed, could

be achieved. Accordingly, management continues to monitor the commercial viability of these platforms and incorporate such assessments

into its broader strategic planning and impairment analyses.

Strategic Pivot and Operational Restructuring

Following its acquisition of Amp X, Grid AI assessed

the commercial viability of the above platform offerings, in particular the potential for ALICE. This assessment was informed through

discussions with potential customers, investors active in the sector (including venture capital and private equity firms), and executives

of adjacent companies and competitors, as well as feedback from trial deployments. Based on this outreach and market feedback, management

determined that, while customers recognized the technical capabilities of the platform, many were unwilling to replace existing deployed

systems that were viewed as sufficiently effective.The Company is currently re-evaluating these opportunities across different geographic

markets, including the United States, United Kingdom, and Australia, where market conditions, customer needs, and adoption dynamics may

differ from prior deployments.

Following the above assessment, management initiated a strategic pivot

in 2025:

· Reduced headcount to lower cash burn

· Scaled back DLS and Alice to minimum support levels

· Focused on new technology in a fundamentally new market: energy orchestration

for hyperscale AI data center campuses

This pivot represents a significant shift in both market focus and

technological architecture.

AI Data Center Developed Technology

Following GridAI’s acquisition of AMP X

in February 2025, Grid AI commenced development of a new technology platform focused on AI-optimized energy orchestration for large-scale

data center campuses.

The Company plans to generate revenue from its

AI data center platform through:

· Base platform fees for operational visibility

and orchestration

· Performance-based fees tied to power cost optimization

The platform is designed to deliver AI-optimized

infrastructure by integrating data center operations with advanced energy systems. Core functionality includes data integration across

site-level assets (including engines, battery systems, substations, and building systems), real-time monitoring through a centralized

“single pane of glass” dashboard, historical data access, and reporting capabilities.

The platform also incorporates a proprietary digital

twin model of each site, enabling simulation of energy usage, asset behavior, and grid interactions under various scenarios. This is supported

by forecasting models for load, generation, and market conditions, which inform optimization decisions.

Based on management’s experience to date,

including discussions with data center operators, energy infrastructure participants, and industry consultants, the Company has not identified

a direct competitor offering an equivalent fully integrated solution combining data center orchestration and energy optimization at scale;

however, the Company operates in a broader competitive landscape that includes partial or adjacent solutions.

In addition, the platform includes a co-optimization

engine that participates in energy markets (including day-ahead, real-time, and reserve markets, where applicable) while prioritizing

uninterrupted data center operations. An orchestration control layer ensures that energy assets operate in accordance with both market

commitments and the operational requirements of the data center.

Target customers include enterprise and government

entities operating large data center campuses.

Based on current projections:

A majority of the Company’s projected 2026 revenues are expected to be derived from the AI data center technology.

· The contribution from this platform is expected to increase substantially in subsequent years.

The Company markets its legacy technologies and intends to pursue commercial

deployment of its AI data center platform through direct sales and strategic partnerships with energy developers, system integrators,

engineering firms, and other industry participants. The Company has commenced early-stage development activities related to its data center

orchestration platform in connection with a potential future deployment at a customer site. As of the date of this Current Report on Form 8-K,

the platform has not yet been commercially deployed. Initial development and integration activities are ongoing, and any future commercial

deployment will depend on the progress of customer projects, including construction and operational readiness milestones, as well as the

availability of customer funding.

Competition

The Company operates in a competitive and rapidly

evolving market that includes energy management software providers, virtual power plant (“VPP”) platforms, battery system

integrators, utilities, engineering firms, and in-house customer-developed solutions. The Company also competes with emerging technology

providers focused on distributed energy resource optimization and artificial intelligence-driven grid management.

Competition is driven by several factors, including

software functionality, scalability, interoperability with third-party hardware and market platforms, speed of deployment, regulatory

expertise, customer relationships, and pricing. The Company’s solutions must integrate with a wide range of third-party systems,

including batteries, control systems, and energy market infrastructure, which are often not standardized and may change over time.

The markets in which the Company operates are

highly competitive and include both established industry participants with significant financial, technical, and commercial resources,

as well as new entrants seeking to capitalize on the growth of distributed energy and AI-driven energy optimization. Some competitors

offer vertically integrated solutions, including hardware, software, and energy services, while others provide point solutions that compete

with specific components of the Company’s platform.

The Company’s ability to compete successfully

depends on its ability to continue to innovate, expand its platform capabilities, maintain reliable system performance, and effectively

execute its go-to-market strategy. The Company also competes based on its ability to convert pilot programs and non-binding arrangements

into long-term commercial contracts, scale deployments across multiple jurisdictions, and adapt to evolving regulatory frameworks and

market rules.

In addition, customers may elect to develop in-house

energy management systems or partner with alternative providers, which may reduce demand for the Company’s solutions. As a result,

the Company may face pricing pressure, longer sales cycles, and increased customer acquisition costs. If the Company is unable to compete

effectively, it may lose market share, which could adversely affect its business, operating results, and financial condition.

Sources and Availability of Raw Materials

The Company’s business is primarily software-based

and does not rely on raw materials. Customer deployments may depend on third-party equipment and services, including battery systems,

generation assets, and grid infrastructure.

Dependence on Major Customers

The Company is in an early stage of commercialization

and expects that a limited number of customers may account for a significant portion of revenue in the near term. Amp Z is a current customer

with whom the Company has been engaged in ongoing collaboration since October 1, 2025; however, as of the date of this report, the

parties remain under a letter of intent and have not yet finalized a definitive commercial agreement. The Company has not generated material

revenue from Amp Z to date. Accordingly, the Company does not have any major customers at the present time.

Patents, Trademarks, and Agreements

The Company relies on proprietary software, trade

secrets, trademarks, and contractual protections. The Company does not currently rely on material labor agreements.

Government Approvals

The Company’s software platform itself generally

does not require direct government approvals to operate. However, the Company’s solutions are deployed within regulated energy markets

and are therefore indirectly subject to a range of federal, state, and local regulatory requirements.

Customer deployments may require regulatory approvals,

permits, interconnection agreements, and market participation approvals, which are typically obtained by customers, utilities, or project

partners. These approvals may relate to grid interconnection, participation in wholesale electricity markets, local permitting, and compliance

with applicable energy regulations.

The Company’s platform is designed to operate

within complex and evolving regulatory frameworks, including those governing distributed energy resources, virtual power plants, and wholesale

market participation. Changes in laws, regulations, market rules, or regulatory interpretations could impact the ability of customers

to deploy the Company’s solutions, participate in energy markets, or realize the expected economic benefits of the platform.

In addition, the Company relies on integrations

with third-party systems and market operators, including utilities, grid operators, and energy market platforms, which are themselves

subject to regulatory oversight. Delays in obtaining required approvals, changes in regulatory requirements, or limitations imposed by

regulators or market operators could adversely affect the Company’s business, operating results, and financial condition.

Effect of Government Regulation

The Company operates in regulated energy markets.

Regulatory changes affecting energy storage, distributed energy resources, interconnection, or energy markets could impact the Company’s

business.

Environmental Compliance

The Company’s operations are primarily software-based

and are not expected to incur material environmental compliance costs. Customer projects may be subject to environmental regulations that

could affect project timing.

Employees

As of April 13, 2026, the Company had 18

full-time employees.

Risks Related to Our Business and Industry

Our limited operating history

makes evaluating our business and prospects difficult.

Prior to GridAI’s acquisition of AMP X UK

Holdings (“AMP X”) in February 2025, AMP X had developed and operated two principal technology platforms focused on residential

and distributed energy management: DLS developed technology and ALICE Home Energy Management Systems (HEMS). While the Company currently

supports these technologies, there is very minimal revenue and the Company’s current focus is on data centers. While

we are looking to develop a data center platform, we have a limited history operating our business at its current scale and under our

current strategy, and therefore a limited history upon which you can base an investment decision.

Further, the company’s ability to execute

its business plan depends on successfully completing customer deployments, integrating with third-party hardware and software systems,

and scaling its platform and personnel. Delays in implementation, customer adoption, or integration with external systems could adversely

affect operating results. Our operating results may fluctuate significantly, which could make our future results difficult to predict

and could cause our operating results to fall below expectations.

The distributed generation

industry is emerging and our distributed generation offerings may not receive widespread market acceptance.

The implementation and use of

distributed generation at scale is still not widespread, and we cannot be sure that any potential customers will accept our services and

solutions broadly. Enterprises may be unwilling to adopt our offerings over traditional or competing power sources for any number of reasons,

including the perception that our technology is unproven, lack of confidence in our business model, unavailability of back-up service

providers to operate and maintain the energy storage systems, and lack of awareness of our related products and services. Because this

is an emerging industry, broad acceptance of our products and services is subject to a high level of uncertainty and risk. If the market

develops more slowly than we anticipate, our business may be adversely affected.

If renewable energy technologies

are not suitable for widespread adoption, or if sufficient demand for our software-enabled services does not develop or takes longer to

develop than we anticipate, we may not be able to generate sufficient revenue or revenue at all to be financially successful.

The market for renewable, distributed energy generation

is emerging and rapidly evolving, and its future success is uncertain. If renewable energy generation proves unsuitable for widespread

commercial deployment or if demand for our renewable energy products and services fails to develop sufficiently, our revenue, market share

and profitability would be adversely impacted.

Many factors may influence the widespread adoption

of renewable energy generation and demand for our products and services, including, but not limited to the cost-effectiveness of renewable

energy technologies as compared with conventional and competitive technologies, the performance and reliability of renewable energy products

as compared with conventional and non-renewable products, fluctuations in economic and market conditions that impact the viability of

conventional and competitive alternative energy sources, increases or decreases in the prices of oil, coal and natural gas, continued

deregulation of the electric power industry and broader energy industry, and the availability or effectiveness of government subsidies

and incentives. You should consider our prospects in light of the risks and uncertainties emerging companies encounter when introducing

new products and services into a nascent industry.

Our market estimates and

assumptions may prove inaccurate.

While we anticipate being able to generate revenue

and garnering customers, market estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and

estimates that may prove to be inaccurate. Even if the markets in which we compete meet our size estimates and forecasted growth, our

business could fail to grow at similar rates, if at all. The assumptions relating to our market opportunities include, but are not limited

to (i) general declines in the cost of renewable energy generation assets; (ii) growing deployment of renewable energy assets

and energy storage systems; and (iii) continued complexity of the electrical grid and resulting demand for stability and resiliency.

Our expected market opportunities are also based on the assumption that our existing and future offerings will be more attractive to our

customers and potential customers than competing products and services. If these assumptions prove inaccurate, our business, financial

condition and results of operations could be adversely affected.

We expect to face significant competition

in our industry.

We expect to face significant competition in our

industry and market. The Company operates in a competitive and rapidly evolving market that includes energy management software providers,

virtual power plant (“VPP”) platforms, battery system integrators, utilities, engineering firms, and in-house customer-developed

solutions. The Company also competes with emerging technology providers focused on distributed energy resource optimization and artificial

intelligence-driven grid management.

Competition is driven by several factors, including

software functionality, scalability, interoperability with third-party hardware and market platforms, speed of deployment, regulatory

expertise, customer relationships, and pricing. The Company’s solutions must integrate with a wide range of third-party systems,

including batteries, control systems, and energy market infrastructure, which are often not standardized and may change over time.

The markets in which the Company operates are

highly competitive and include both established industry participants with significant financial, technical, and commercial resources,

as well as new entrants seeking to capitalize on the growth of distributed energy and AI-driven energy optimization. Some competitors

offer vertically integrated solutions, including hardware, software, and energy services, while others provide point solutions that compete

with specific components of the Company’s platform.

The Company’s ability to compete successfully

depends on its ability to continue to innovate, expand its platform capabilities, maintain reliable system performance, and effectively

execute its go-to-market strategy. The Company also competes based on its ability to convert pilot programs and non-binding arrangements

into long-term commercial contracts, scale deployments across multiple jurisdictions, and adapt to evolving regulatory frameworks and

market rules.

We cannot assure that we will be able to compete

successfully with other players in the market. In such event, our business may be negatively impacted.

We plan to use artificial intelligence in

our business, and challenges with properly managing its use could result in harm to our brand, reputation, business or customers, and

adversely affect our results of operations.

We plan to use AI-enabled software and services

offerings and incorporating AI in internal tools that support our business. This emerging technology presents a number of risks inherent

in its use. AI algorithms are based on machine learning and predictive analytics, which can create accuracy issues, unintended biases,

and discriminatory outcomes that could harm our brand, reputation, business, or customers. Additionally, no assurance can be made that

the usage of AI will assist us in being more efficient or offset the costs of its implementation. Further, dependence on AI to make certain

business decisions may introduce additional operational vulnerabilities by producing inaccurate outcomes, recommendations, or other suggestions

based on flaws in the underlying data or other unintended results. Our competitors or other third parties may incorporate AI into their

business, services, and products more rapidly or more successfully than us, which could hinder our ability to compete effectively and

adversely affect our results of operations. Implementing the use of AI successfully, ethically and as intended, will require significant

resources. In addition, the use of AI may increase regulatory, cybersecurity, and data privacy risks, such as intended, unintended, or

inadvertent transmission of proprietary or sensitive information. The technologies underlying AI and their use cases are rapidly developing,

and it is not possible to predict all of the legal, operational or technological risks related to the use of AI. Our obligation to comply

with emerging AI initiatives, laws, and regulations, including under proposed or enacted legislation regulating AI in jurisdictions such

as the U.S. and European Union, could entail significant costs, negatively affect our business, or limit our ability to incorporate certain

AI capabilities into our business.

Our future growth will depend on developing

and commercializing our AI data center platform.

Following GridAI’s acquisition of AMP X

in February 2025, Grid AI commenced development of a new technology platform focused on AI-optimized energy orchestration for large-scale

data center campuses. However, as of today, this platform is still in an early stage of commercialization and has not been deployed. We

cannot assure that this platform will ever be successfully deployed. In such event, our business may be unable to achieve anticipated

financial growth.

Furthermore, we may also introduce new technologies

or products that do not work in the future, are not delivered on a timely basis, are not developed according to product and/or cost specifications,

or are not well received by customers. There may be fewer opportunities than we expect due to a decline in business or economic conditions

or a decreased demand in these markets or for our new products from our expectations, our inability to successfully execute our sales

and marketing plans, or for other reasons. In addition to our current growth opportunities, our future growth may be reliant on our ability

to identify and develop potential new growth opportunities. This process is inherently risky and may result in investments in time and

resources for which we do not achieve any return or value. These risks are enhanced by attempting to introduce multiple breakthrough technologies

and products simultaneously.

Our growth opportunities and those opportunities

we may pursue are subject to rapidly changing and evolving technologies and industry standards, and may be replaced by new technology

concepts or platforms. If we do not develop innovative and reliable product offerings and enhancements in a cost-effective and timely

manner that are attractive to customers in these markets; if we are otherwise unsuccessful in competing in these new product categories;

if the new product categories in which we invest our limited resources do not emerge as expected or do not produce the growth or profitability

we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our business

and results of operations may be adversely affected.

Risks Relating to Our Operations

Our business strategy may not achieve anticipated benefits. Our

failure to do so could adversely affect our business, financial condition, and results of operations.

The Company plans to generate revenue from its AI data center platform through base platform fees for operational visibility and orchestration

and performance-based fees tied to power cost optimization. Target customers include enterprise and government entities operating large

data center campuses.

The Company has initiated development of its data center orchestration platform in connection with a potential future deployment at a

customer site. Initial development and integration activities are underway. As of the date of this report, the platform has not yet been

commercially deployed.

Any future commercial deployment is expected to occur as customer projects progress through construction and operational readiness milestones.

The timing and extent of such deployment will depend on a number of factors, including project development timelines and the availability

of customer funding. There can be no assurance that the platform will be successfully commercialized. Customer acceptance of our software

and service offerings is critical to our future success. We cannot assure that customers will be attracted to our platform and software

solutions. If market demand for the types of AI-driven energy software and services we are developing and will seek to develop in the

future does not grow as anticipated, or if competitors offer more attractive products, our revenue growth and market position could be

adversely affected. As with all software offerings, there is also a risk that our solutions could be vulnerable to cybersecurity threats

or contain errors, bugs, or other issues affecting their functionality, which could negatively affect customer satisfaction and adoption.

In addition, continuing to execute on the new

strategy requires investment in new capabilities and resources, particularly in software development, data management, and AI. We may

face challenges in recruiting, retaining, and training employees who have the necessary skill sets to support our new business model.

A failure to build or acquire these capabilities in a timely manner could delay the successful execution of the strategy and weaken our

competitive position.

We currently have no major customers.

We have no major customers. Even if we acquire

customers in the future, the loss of any one of our significant customers, their inability to perform under their contracts, their termination

or failure to renew their contracts with us, or their default in payment could cause our revenue and our working capital to decline materially.

We cannot assure that we will be successful in acquiring or retaining customers in the future. In such event, we may be unable to generate

revenue, and our business, results of operations and financial condition could be materially and adversely affected.

If we are unable to attract and retain key

employees and hire qualified management, technical, engineering and sales personnel, our ability to compete and successfully grow our

business could be adversely affected.

We believe that our success and our ability to

reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering, and finance personnel.

Key leaders include Marshall Chapin, Mike Krastev and Vaclav Moulis. Executive leadership and senior management transitions, reductions

in workforce and employee turnover can be time-consuming, difficult to manage, create instability, cause disruption to our business and

result in the loss of institutional knowledge. Any of these outcomes could impede the execution of our day-to-day operations and our ability

to fully implement our business strategy. These effects could also make it more difficult to attract and retain talent. The failure to

successfully hire and retain key executives and employees or the further loss of any key executives, senior management or employees could

have a significant impact on our operations, including declining product identity and competitive differentiation, eroding employee morale

and productivity or an inability to maintain internal controls, regulatory or other compliance related requirements, any and all of which

could in turn adversely impact our business, financial condition, and results of operations.

In addition, our ability to manage our growth

effectively, including our ability to expand our market presence, is impacted by our ability to successfully retain our management team,

and hire and train new personnel. Our success in hiring, attracting and retaining senior management and other experienced and highly skilled

employees will depend in part on our ability to provide competitive compensation packages and a high-quality work environment and maintain

a desirable corporate culture. To help attract, retain, and motivate qualified employees, we use stock-based awards, such as restricted

stock units and performance-based cash incentive awards, and in the case of our executive officers, we also use performance stock units.

Further sustained declines in our stock price, or lower stock price performance relative to our competitors, can further reduce the retention

value of our stock-based awards. We may not be able to attract, integrate, train, motivate or retain current or additional highly qualified

personnel, and our failure to do so could adversely affect our business, financial condition and operating results.

Furthermore, there is continued and increasing

competition for talented individuals in our field. In addition to longstanding competition for highly skilled and technical personnel,

we face increased competitive pressures and employee cost inflation in tighter labor markets. Industry competition and cross-industry

labor market pressures may negatively affect our ability to attract and retain our executive officers and other key technology, sales,

marketing and support personnel and drive increases in our employee costs, both of which could adversely affect our business, financial

condition and results of operations.

Any failure to offer high-quality technical

support services may adversely affect our relationships with our customers and adversely affect our financial results.

Our customers depend on our support organization

to resolve any technical issues relating to our hardware and software-enabled services. In addition, our sales process is highly dependent

on the quality of our software and service offerings, on our business reputation and on strong recommendations from our existing customers.

Any failure to maintain high-quality and highly-responsive technical support, or a market perception that we do not maintain high-quality

and highly-responsive support, could adversely affect our reputation, our ability to sell our products to existing and prospective customers,

and our business, financial condition and results of operations.

We offer technical support

services with our software and service offerings and may be unable to respond quickly enough to accommodate short-term increases in demand

for support services, particularly as we increase the size of our customer base. We also may be unable to modify the format of our support

services to compete with changes in support services provided by competitors. It is difficult to predict demand for technical support

services and if demand increases significantly, we may be unable to provide satisfactory support services to our customers. Additionally,

increased demand for these services, without corresponding revenue, could increase costs and adversely affect our business, financial

condition and results of operations.

Severe weather events, including the effects

of climate change, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.

Our business, including our customers and suppliers,

may be exposed to severe weather events and natural disasters, such as tornadoes, tsunamis, tropical storms (including hurricanes), earthquakes,

windstorms, hailstorms, severe thunderstorms, flooding, wildfires and other fires, extreme heatwaves, drought and power shut-offs causing,

among other things, disruptions to our supply chain or utility interconnections and/or damage to energy storage systems installed at our

customers’ sites. Such damage or disruptions may prevent us from being able to satisfy our contractual obligations or may reduce

demand from our customers for our energy storage systems causing our operating results to vary significantly from one period to the next.

We may incur losses in our business in excess of: (1) those experienced in prior years, (2) the average expected level used

in pricing, or (3) current insurance coverage limits.

The incidence and severity of severe weather conditions

and other natural disasters are inherently unpredictable. Climate change is projected to affect the occurrence of certain natural events,

such as an increase in the frequency or severity of wind and thunderstorm events, and tornado or hailstorm events due to increased convection

in the atmosphere; more frequent wildfires and subsequent landslides in certain geographies; higher incidence of deluge flooding; and

the potential for an increase in severity of the hurricane events due to higher sea surface temperatures. Changing market dynamics, global

policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere

as a result of climate change have the potential to disrupt our business, the business of our suppliers and the business of our customers,

and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. Additionally, climate change

and the occurrence of severe weather events may adversely impact the demand, price, and availability of insurance. Due to significant

variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our business.

Increased scrutiny from stakeholders and

regulators regarding sustainability practices and disclosures, including those related to sustainability, and disclosure could result

in additional costs and adversely impact our business and reputation.

Companies across all industries are facing increased

scrutiny regarding their sustainability practices and disclosures and some institutional and individual investors are using sustainability

screening criteria in making investment decisions. Our disclosures on these matters or a failure to satisfy evolving stakeholder expectations

for sustainability practices and reporting, which may conflict with one another, may potentially harm our reputation and impact employee

retention, customer relationships and access to capital. For example, certain market participants use third-party benchmarks or scores

to measure a company’s sustainability practices in making investment decisions and customers and supplies may evaluate our sustainability

practices or require that we adopt certain sustainability policies as a condition of awarding contracts. In addition, our failure or perceived

failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the timelines we announce,

or at all, could expose us to government enforcement actions and private litigation. Furthermore, complying or failing to comply with

existing or future federal, state, local, and foreign legislation and regulations applicable to our sustainability efforts, which may

conflict with one another, could cause us to incur additional compliance and operational costs, suffer reputational harm or to become

the target of litigation, investigations or other proceedings initiated by government authorities or private actors, which could materially

and adversely affect our business, financial condition and results of operations.

Our ability to achieve any goal or objective,

including with respect to environmental and diversity initiatives and compliance with sustainability reporting standards, is subject to

numerous risks, many of which are outside of our control. Examples of such risks include the availability and cost of technologies and

products that meet sustainability and ethical supply chain standards, evolving regulatory requirements affecting sustainability standards

or disclosures, our ability to recruit, develop and retain diverse talent in our labor markets, and our ability to develop reporting processes

and controls that comply with evolving standards for identifying, measuring and reporting sustainability metrics. Methodologies for reporting

sustainability data may be updated and previously reported sustainability data may be adjusted to reflect improvement in availability

and quality of third-party data, changes in assumptions, changes in the nature and scope of our operations and other changes in circumstances.

Our processes and controls for reporting sustainability matters across our operations and supply chain are evolving along with multiple

disparate standards for identifying, measuring, and reporting sustainability metrics, including sustainability-related disclosures that

may be required by the SEC, European and other regulators, and such standards may change over time, which could result in significant

revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. As sustainability

best-practices, reporting standards and disclosure requirements continue to develop, we may incur increasing costs related to sustainability

monitoring and reporting.

A failure of our information technology

(“IT”) and data security infrastructure could adversely affect our business and operations.

The efficient operation of our business depends

on our IT systems. We rely upon the capacity, reliability and security of our IT and data security infrastructure and our ability to effectively

manage our business data, accounting, financial, legal and compliance functions, communications, supply chain, order entry and fulfillment,

and expand and routinely update this infrastructure in response to the changing needs of our business. Our existing IT systems and any

new IT systems we utilize may not perform as expected. If we experience a problem with the functioning of an important IT system or a

security breach of our IT systems, including during system upgrades or new system implementations, the resulting disruptions could adversely

affect our business.

Despite our implementation of reasonable security

measures, our IT systems, like those of other companies, are vulnerable to damages from computer viruses, natural disasters, fire, power

loss, telecommunications failures, personnel misconduct, human error, unauthorized access, physical or electronic security breaches, cyber-attacks

(including malicious and destructive code, phishing attacks, ransomware, and denial of service attacks), and other similar disruptions.

Such attacks or security breaches may be perpetrated by bad actors internally or externally (including computer hackers, persons involved

with organized crime, or foreign state or foreign state-supported actors). Cybersecurity threat actors employ a wide variety of methods

and techniques that are constantly evolving, increasingly sophisticated, and difficult to detect and successfully defend against. Moreover,

we may not have the current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems

over long periods of time. Additionally, it may take considerable time for us to investigate and evaluate the full impact of incidents,

particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full and reliable information about the

incident to our customers, partners, regulators, and the public. Geopolitical tensions or conflicts, such as Russia’s invasion of

Ukraine, may further heighten the risk of cyber-attacks. The emergence and maturation of AI capabilities may also lead to new and/or more

sophisticated methods of attack, including fraud that relies upon “deep fake” impersonation technology or other forms of generative

automation that may scale up the efficiency or effectiveness of cyber-attacks. We have experienced such incidents in the past, and any

future incidents could expose us to claims, litigation, regulatory or other governmental investigations, administrative fines and potential

liability. Any system failure, accident or security breach could result in disruptions to our operations. A material network breach in

the security of our or our service providers’ IT systems could include the theft of our trade secrets, customer information, human

resources information or other confidential data, including but not limited to personally identifiable information. Although past incidents

have not had a material adverse effect on our business operations or financial performance, to the extent that any disruptions or security

breach results in a loss or damage to our data, or an inappropriate disclosure of confidential, proprietary or customer information, it

could cause significant damage to our reputation, affect our relationships with our customers and strategic partners, lead to claims against

us from governments and private plaintiffs, and otherwise adversely affect our business. We cannot guarantee that future cyberattacks,

if successful, will not have a material effect on our business or financial results.

Many governments have enacted laws requiring companies

to provide notice of cyber incidents involving certain types of data, including personal data. If an actual or perceived cybersecurity

breach of security measures, unauthorized access to our system or the systems of the third-party vendors that we rely upon, or any other

cybersecurity threat occurs, we may incur liability, costs, or damages, contract termination, our reputation may be compromised, our ability

to attract new customers could be negatively affected, and our business, financial condition, and results of operations could be materially

and adversely affected. Any compromise of our security could also result in a violation of applicable domestic and foreign security, privacy

or data protection, consumer and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial

exposure, including potential contractual liability. In addition, we may be required to incur significant costs to protect against and

remediate damage caused by these disruptions or security breaches in the future. Further, our contracts may not fully protect us from

liabilities, damages, or claims and, although we carry cyber insurance, we cannot be certain that our coverage will be adequate for liabilities

actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer

will not deny coverage as to any future claim. In addition, any data breach, security incident, or compromise of protected personal information

may also result in notification requirements or other disclosure obligations and may subject us to civil fines and penalties, litigation,

regulatory investigations or enforcement actions or claims for damages under applicable privacy laws.

Our failure to adequately secure, protect

and enforce our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property

rights may be costly.

The Company’s intellectual property is primarily

software-based and may be inherently difficult to protect, as patents and formal protections in this area can be limited and enforcement

may be uncertain. The Company relies in part on trade secrets, proprietary know-how, and contractual protections, which may be vulnerable

to unauthorized use, employee misappropriation, or other forms of intellectual property theft. In addition, litigation to enforce intellectual

property rights is often complex, time-consuming, and costly, and there can be no assurance that the Company will be successful in protecting

its intellectual property.

Monitoring unauthorized use of

proprietary technology can be difficult and expensive. For example, many of our software developers reside in California and we cannot

legally prevent them from working for a competitor.

Also, litigation may be necessary

to enforce our intellectual property rights, protect our trade secrets, or determine the validity and scope of the proprietary rights

of others. Such litigation may result in our intellectual property rights being challenged, limited in scope or declared invalid or unenforceable.

We cannot be certain that the outcome of any litigation will be in our favor, and an adverse determination in any such litigation could

impair our intellectual property rights and may adversely affect our business, prospects and reputation.

We rely primarily

on patent, trade secret and trademark laws, and non-disclosure, confidentiality, and other types of contractual restrictions to establish,

maintain, and enforce our intellectual property and proprietary rights. However, our rights under these laws and agreements afford

us only limited protection and the actions we take to establish, maintain, and enforce our intellectual property rights may not be adequate.

For example, our trade secrets and other confidential information could be disclosed in an unauthorized manner to third parties, our owned

or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed, or misappropriated or our intellectual

property rights may not be sufficient to provide us with a competitive advantage, any of which could have a material adverse effect on

our business, financial condition and results of operations. Additionally, we rely on our brand names, trade names and trademarks to distinguish

our products and services. In the event that our trademarks are successfully challenged and we lose rights to use those trademarks, we

could be forced to rebrand our products and services, which could result in the loss of goodwill and brand recognition. In addition, the

laws of some countries do not protect proprietary rights as fully as do the laws of the U.S. As a result, we may not be able to protect

our proprietary rights adequately abroad.

We may face claims that our use

of such technology or components infringes or otherwise violates the rights of others, which would subject us to the risks described above.

We may seek indemnification from our licensors or suppliers under our contracts with them, but our rights to indemnification or our suppliers’

resources may be unavailable or insufficient to cover our costs and losses.

Regulatory Risks

Negative attitudes toward renewable energy

projects from the U.S. government, other lawmakers and regulators, and activists could adversely affect our business, financial condition

and results of operations.

Parties with an interest in other energy sources,

including lawmakers, regulators, policymakers, environmental and advocacy organizations or other activists may invest significant time

and money in efforts to delay, repeal or otherwise negatively influence laws, regulations and programs that promote renewable energy.

Many of these parties have substantially greater resources and influence than we have. Further, changes in U.S. federal, state or local

political, social or economic conditions, including changes in U.S. Presidential administrations or deprioritization of these laws, programs

and regulations, could result in their modification, delayed adoption or repeal. Any failure to adopt, delay in implementing, expiration,

repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other

energy sources over renewable energy, could adversely affect our business, financial condition and results of operations.

The installation and operation of our energy

storage systems are subject to environmental laws and regulations in various jurisdictions, and there is uncertainty with respect to the

interpretation of certain environmental laws and regulations to our energy storage systems, especially as these regulations evolve over

time.

We are subject to national, state and local environmental

laws and regulations, as well as environmental laws in those foreign jurisdictions in which we operate. Environmental laws and regulations

can be complex and are evolving. These laws can give rise to liability for administrative oversight costs, cleanup costs, property damage,

bodily injury, fines and penalties. We are committed to compliance with applicable environmental laws and regulations, including health

and safety standards, and we routinely review the operation of our energy storage systems for health, safety and compliance. Our energy

storage systems, like other battery technology-based products of which we are aware, produce small amounts of hazardous wastes and air

pollutants, and we seek to handle these materials in accordance with applicable regulatory standards.

Maintaining compliance with laws and regulations

can be challenging given the changing patchwork of environmental laws and regulations that prevail at the U.S. federal, state, regional

and local levels and in foreign countries in which we operate. Most existing environmental laws and regulations preceded the introduction

of battery technology and were adopted to apply to technologies existing at the time, namely large, coal, oil or gas-fired power plants.

Currently, there is generally little guidance from these agencies on how certain environmental laws and regulations may, or may not, be

applied to our technology.

In many instances, our technology is moving faster

than the development of applicable regulatory frameworks. It is possible that regulators could delay or prevent us from conducting our

business in some way pending agreement on, and compliance with, shifting regulatory requirements. Such actions could delay the sale to

and installation by customers of energy storage systems, require their modification or replacement, result in fines, or trigger claims

of performance warranties and defaults under customer contracts that could require us to refund hardware or service contract payments,

any of which could adversely affect our business, financial performance and reputation.

Changes in the U.S. trade environment, including

the imposition of import tariffs, could adversely affect the amount or timing of our revenues, results of operations or cash flows.

The United States has imposed significant new

tariffs on nearly all products and components imported into the United States and could propose additional tariffs or increases to those

already in place. Escalating trade tensions, particularly between the United States and China, have led to increased tariffs and trade

restrictions, including tariffs applicable to certain materials and components for products used in storage or solar energy projects and

the renewable energy market more broadly, such as module supply and availability. More specifically, in March 2018, the United States

imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports pursuant to Section 232 of the Trade Expansion Act of

1962 and has imposed additional tariffs on steel and aluminum imports pursuant to Section 301 of the Trade Act of 1974. In February 2025,

the United States expanded the Section 232 tariffs on steel and aluminum, raising them to 25% on both metals and eliminating previously

available country-level and importer-specific exclusions and exemptions. In June 2025, Section 232 tariffs on steel and aluminum

were further increased to 50%, and the scope was broadened to cover the steel and aluminum content of a wider range of derivative products.

To the extent we source products that contain overseas supplies of steel and aluminum, these tariffs and any additional or increased tariffs

could result in interruptions in the supply chain and negatively affect costs and our gross margins.

Additionally, in January 2018, the United

States adopted a tariff on imported solar modules and cells pursuant to Section 201 of the Trade Act of 1974. The tariff was initially

set at 30%, with a gradual reduction over four years to 15%. In 2022, the United States extended the Section 201 solar tariffs for

an additional four years, which declined to a rate of 14% in 2025. The Section 201 solar tariffs expired on February 7, 2026.

While this tariff did not apply directly to the components we import, it may have indirectly affected us by affecting the financial viability

of solar energy projects, which could in turn reduce demand for our products. Furthermore, in July 2018, the United States adopted

a 10% tariff on a long list of products imported from China under Section 301 of the Trade Act of 1974, including, inverters and

power optimizers, which became effective on September 24, 2018 and has been increased several times since then. In June 2019,

the Office of the U.S. Trade Representative increased the rate of such tariffs from 10% to 25%. In September 2024, Section 301

tariffs on Chinese solar cells and modules were increased from 25% to 50%, and in January 2025, new 50% Section 301 tariffs

took effect on Chinese polysilicon and solar wafers. The Section 301 tariff on lithium-ion non-electric vehicle batteries from China,

including those used in energy storage systems, increased from 7.5% to 25% effective January 1, 2026. While these tariffs are not

directly applicable to our products, they could negatively affect the solar energy projects in which our products are used, which could

lead to decreased demand for our products. In 2025, the United States broadly imposed additional 10% tariffs on Chinese goods under the

International Emergency Economic Powers Act of 1977.

In addition, the United States currently imposes

antidumping and countervailing duties on certain imported crystalline silicon photovoltaic (“PV”) cells and modules from China

and Taiwan. Such antidumping and countervailing duties can change

over time pursuant to annual reviews conducted

by the U.S. Department of Commerce (“USDOC”), and an increase in duty rates could have an adverse impact on our operating

results.

In February 2022, Auxin Solar Inc., a U.S.

producer of crystalline silicon PV products, petitioned the USDOC to investigate alleged circumvention of antidumping and countervailing

duties on crystalline silicon PV cell and module imports assembled and completed in Cambodia, Malaysia, Thailand, and Vietnam. In August 2023,

USDOC issued a final determination that certain Chinese producers are circumventing antidumping and countervailing duties by shipping

crystalline silicon PV cells and modules through Cambodia, Malaysia, Thailand, and Vietnam for minor processing. However, that two-year

moratorium has since expired. In 2024, USDOC initiated a second solar antidumping and countervailing duties case involving these same

four countries, and final antidumping and countervailing duties orders were issued in June 2025. Also in 2025, the United States

also initiated an antidumping and countervailing duties case for Chinese anode material, which could affect battery prices, and USDOC

initiated antidumping and countervailing duties investigations into imports of solar cell and modules from India, Indonesia, and

Laos. The timing and progress of many of our customers’ projects depend upon the supply of batteries, PV cells and modules. As a

result, the imposition and collection of antidumping and countervailing duties, the expanded scope of antidumping and countervailing duties

investigations to additional countries and battery materials, and the stacking of multiple tariff authorities on such products, it could

adversely affect our business, financial condition and results of operations.

Tariffs, and the possibility of additional or

increased tariffs in the future, have created uncertainty in the industry, particularly in light of the recent change in U.S. Presidential

administration. This has resulted in, and may continue to result in, some project delays. If the price of solar systems or energy storage

systems in the United States increases, the use of these products could become less economically feasible and could reduce our gross margins

or reduce the demand of such systems manufactured and sold, which in turn may decrease demand for our products. Additionally, existing

or future tariffs may negatively affect key customers, suppliers, and manufacturing partners. Such outcomes could adversely affect the

amount or timing of our revenues, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price

fluctuations or supply shortages, or cause our customers to advance or delay their purchase of our products. It is difficult to predict

what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and

we may be unable to quickly and effectively react to such actions.

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