What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-28 · 90 added, 79 removed, 250 unchanged (40% of the section changed)

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The following discussion and analysis compares our consolidated

results of operations for the three months ended March 31, 2026 (the “2026 Quarter”) with those for the three months ended

March 31, 2025 (the “2025 Quarter”).

results of operations for three months ended June 30, 2026 (the “2026 Quarter”) with those for the three months ended June

30, 2025 (the “2025 Quarter”) and our consolidated results of operations for the six months ended June 30, 2026 (the

“2026 Period”) with those for the six months ended June 30, 2025 (the “2025 Period”).

Cautionary Note Regarding Forward-Looking Statements

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business on development and marketing efforts to build data centers and expand our AI data center customer base.

January 22, 2026, the Company entered into a Joint Venture Agreement (the “JVA”) by and among the Company, BAIF and DC Estate

Solutions, which (i) amends and restates the MOU and (ii) supplements the SPV SPA.

Pursuant to the SPA, DC Estate Solutions acquired the

equity interests of five special purpose vehicles (the “SPVs”):

(i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres

SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW.

As a result of the

acquisition of the SPVs, DC Estate Solutions also acquired the Spain Leases.

Effective January 22, 2026, the Company entered

into a Joint Venture Agreement (the “JVA”) by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates

the MOU and (ii) supplements the SPV SPA.

Pursuant to the SPV SPA, DC Estate Solutions acquired the equity interests of five special purpose

vehicles (the “SPVs”):

(i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos

SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW.

As a result of the acquisition of the SPVs, DC Estate

Solutions also acquired the Spain Leases.

Pursuant to the JVA, DC Estate Solutions shall

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(i) $250,000 USD, which was previously paid upon the execution

of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPA, (iii) $375,000 USD paid on the effectiveness of a

notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD payable

in monthly installments of $125,000 USD commencing on March 1, 2026.

The funds shall be distributed by DC Estate Solutions to BAIF.

Company also agreed to grant to BAIF, or its assignee, a non-qualified option to purchase up to 250,000,000 shares of the Company’s

of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPV SPA, (iii) $375,000 USD paid on the effectiveness of

a notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD

payable in monthly installments of $125,000 USD commencing on March 1, 2026.

The funds shall be distributed by DC Estate Solutions to

The Company also agreed to grant to BAIF, or its assignee, a non-qualified option to purchase up to 250,000,000 shares of the Company’s

common stock (the “First Mora Option”) at an exercise price of $0.02 per share.

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of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the

Company’s restricted common stock to BAIF or its assignees with the such shares being fully paid and non-assessable on the date

of execution of the Second Addendum.

Company’s restricted common stock to BAIF or its assignees with such shares being fully paid and non-assessable on the date of execution

of the Second Addendum.

Effective April 7, 2025 (the “Effective

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Limited (“ACL”) closed on a Share Exchange Agreement dated April 7, 2025 (the “Share Exchange”) and an employment

agreement between the Company and Mr.

agreement between the Company and Dr.

Niclas Adler (the “Employment Agreement”).

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Among other material breaches,

without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the

closing of the Share Exchange and remain encumbered and subject to liens.

without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the closing

of the Share Exchange and remain encumbered and subject to liens.

On June 3, 2026, the Company entered into a non-binding

term sheet with Ibersun Generacion, S.L.

(“Ibersun”) pursuant to which the Company was to acquire 51% of the equity interests

The Company subsequently terminated the term sheet.

Business Strategy

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Our strategy is focused on hyperscale cloud-based

providers and enterprises, including potential customers that we believe have significant data center infrastructure needs that have

not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance

on technology infrastructure in their operations.

We believe our capabilities for serving the needs of large hyperscale providers and

enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in

new markets where our customers are located or plan to be located in the future.

There are no assurances that we will raise sufficient

capital to execute our business plan or satisfy our liabilities.

See the “Risk Factors” in our Form 10-K for the fiscal year

ended December 31, 2025 and Form 8-K Current Report dated April 13, 2026.

providers and enterprises, including potential customers that we believe have significant data center infrastructure needs that have not

yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology

infrastructure in their operations.

We believe our capabilities for serving the needs of large hyperscale providers and enterprises will

continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where

our customers are located or plan to be located in the future.

There are no assurances that we will raise sufficient capital to execute

our business plan or satisfy our liabilities.

See the “Risk Factors” in our Form 10-K for the fiscal year ended December 31,

2025 and Form 8-K Current Report dated April 13, 2026.

Products and Services

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and impacts, see Note 1 to the unaudited condensed consolidated financial statements.

Three Months Ended March 31, 2026 Compared

to the Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared to

the Three Months Ended June 30, 2025

Results of operations

Our operating expenses for the three months ended

March 31, 2026 (the “2026 Quarter”) was $14,242,832 compared to $22,115,041, for the three months ended March 31, 2025 (the

“2025 Quarter”), a decrease of 36%.

In the 2026 Quarter, the Company incurred stock-based compensation expense of $13,218,936

compared to $21,679,711 for the 2025 Quarter.

The stock-based compensation for the 2026 quarter was for common stock options issued as

acquisition costs related to the DC Estates Solutions formation while the 2025 Quarter was related to the amendment of options to the

officers of the Company.

Our other income for the 2026 Quarter was $8,523,765

compared to other income of $1,243,060 for the 2025 Quarter.

Other income in the 2026 quarter was comprised of $1,201,433 in interest

expense, of which $830,699 is for the day one loss on the derivative liability valuation and $9,724,722 for the gain on the change in

fair value of derivative liabilities.

Other income in the 2025 Quarter was comprised of $11,187 in interest expense and $1,254,247 for

the gain on the change in fair value of derivative liabilities.

Our operating expenses for the 2026 Quarter were

$1,322,122 compared to $3,262,408, for the 2025 Quarter, a decrease of 61%.

In the 2026 Quarter, the Company incurred stock-based compensation

expense of $37,000 compared to $26,250 for the 2025 Quarter.

The stock-based compensation for the 2026 Quarter was related to shares issued

to our newly elected board member services performed.

Our other expense for the 2026 Period was $1,983,014

compared to other expense of $564,873 for the 2025 Quarter.

Other expenses in the 2026 Period were comprised primarily of $1,277,679 in

interest expense and $705,807 for the loss on the change in fair value of derivative liabilities.

Other expenses in the 2025 Period were

comprised of $20,377 in interest expense, $396,443 for the loss on the change in fair value of derivative liabilities and $148,053 on

the loss on settlement of debt.

Six Months Ended June 30, 2026 Compared to

the Six Months Ended June 30, 2025

Results of operations

Our operating expenses for the 2026 Period were

$15,564,954 compared to $25,377,549, for the 2025 Period, a decrease of 39%.

In the 2026 Period, the Company incurred stock-based compensation

expense of $13,255,936 compared to $24,273,137 for the 2025 Period.

The stock-based compensation for the 2026 period was related to common

shares issued for acquisition related costs and shares issued to our director compared to the 2025 Period which was related to the amendment

of options to the officers of the Company and issuance of shares to an outside consultant.

Our other income for the 2026 Period was $6,540,751

compared to other income of $678,187 for the 2025 Period.

Other income in the 2026 Period was comprised primarily of $2,479,112 in interest

expense and $9,018,915 for the gain on the change in fair value of derivative liabilities.

Other income in the 2025 Period was comprised

of $31,564 in interest expense, $857,804 for the gain on the change in fair value of derivative liabilities and $148,053 on the loss on

settlement of debt.

Liquidity and Capital Resources

As of May 15, 2026, the Company had approximately

As of August 14, 2026, the Company had approximately

$25,000 of cash on hand.

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On October 15, 2025, we entered into

a binding memorandum of understanding with BAIF to acquire 5 properties in Spain and we are now seeking to raise at least $5,000,000 to

commence our HPC hosting operations and develop our gas powered AI data centers and generate revenue.

We require significant funding to

develop our HPC operations.

a binding memorandum of understanding with BAIF to acquire five properties in Spain and we are now seeking to raise at least $5,000,000

to commence our HPC hosting operations and develop our gas powered AI data centers and generate revenue.

We require significant funding

to develop our HPC operations.

Furthermore, potential legal proceedings relating to SAPL and its affiliates may cause us to incur significant

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We have received cash proceeds of $1,327,000 from the issuance of convertible

notes payable during 2025 and an additional $373,500 in 2026 through April 13, 2026.

notes payable during 2025 and an additional $700,500 in 2026 through August 14, 2026.

Subject to receiving funding, we expect that our

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we are unable to quantify the expected increases in operating expenses in future periods.

We have received cash proceeds of $365,500 from

the issuance of convertible notes payable during three months ending March 31, 2026 and an additional $[125,000] in 2026 through May [15],

Subject to receiving funding, we expect that our operating expenses will increase as we attempt to develop our new HPC operations

and we will devote additional resources toward new business opportunities.

However, as set forth elsewhere in this report, our ability

to develop our business and achieve our operational goals is dependent upon our ability to raise significant additional working capital.

As the availability of this capital is unlikely, at this time, we are unable to quantify the expected increases in operating expenses

in future periods.

On September 4, 2025, the Company also entered

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We have received cash proceeds of $702,125 from the issuance

of common shares during three months ending March 31, 2026 and an additional $70,000 through May 15, 2026 related to the sale of an aggregate

of 70,781,966 shares of common stock under the ELOC Agreement and expect to continue to utilize it to fund current operational needs.

of common shares during six months ended June 30, 2026.

Summary of cash flows

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Net cash provided by (used in) operating activities

$ (1,181,372 )

Net cash used in investing activities

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Operating Activities

During the 2026 Quarter, cash used in operating

During the 2026 Period, cash used in operating

activities of $1,181,372 primarily resulted from the net loss of $9,024,203 offset by stock-based compensation of $13,255,936, amortization

of debt discount of $361,546, day one interest expense from derivative liabilities of $830,699 and the gain on the change in the fair

value of derivative liabilities of $9,724,722.

During the 2025 Quarter, cash provided by operating

of debt discount of $752,794, interest expense from derivative liabilities, default provisions and true-up obligations of $1,647,450 and

the gain on the change in the fair value of derivative liabilities of $9,018,915.

During the 2025 Period, cash used in operating

activities of $43,487 primarily resulted from the Prepaid AI hosting services (customer deposits), offset by the net loss of $24,699,362

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Investing Activities

During the 2026 Quarter, the Company advanced

During the 2026 Period, the Company used $425,500

of cash for the development of the leased assets in the joint venture with DC Estate Solutions under the JVA.

During the 2025 Quarter, the Company advanced

$183,000 of cash for working capital needs in connection with the business acquisition of SAPL for purposes of financing the construction

of the HPC facility.

During the 2025 Period, the Company paid $47,915

of cash for assets in the construction of the HPC facility as well as $183,000 in connection with the acquisition of SAPL.

Financing Activities

During the 2026 Quarter, the Company received

$782,135 in cash proceeds in connection with the sale of shares of common stock of the Company pursuant to the ELOC Agreement, and $365,500

in proceeds from convertible notes payable, offset by repayments of convertible notes of $42,420.

During the 2025 Quarter, the Company received

$300,000 in cash proceeds in connection with the sale of shares of common stock of the Company, offset by repayments of related party

advances of $9,900.

During the 2026 Period, the Company received $852,135

in cash proceeds in connection with the sale of shares of common stock of the Company pursuant to the ELOC Agreement and private placements,

and $700,500 in proceeds from convertible notes payable, offset by repayments of convertible notes of $177,420.

During the 2025 Period, the Company received $300,000

in cash proceeds in connection with the sale of shares of common stock of the Company, offset by repayments of related party advances

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis