TerraVolt Holdings, Inc. 10-K

Item 1. Business. We are a developer of large-scale infrastructure designed to power the digital economy. Our primary focus is the development of a “master-planned” data center campus in a business-friendly Northwestern U.S. location. Unlike traditional developments, our campus will be designed to be onsite-powered, meaning we intend to provide our tenants with dedicated, reliable energy generated on the property. At its simplest, a data center is a specialized, highly-secure building that houses the “brains” of the internet. It contains the physical hardware—servers, storage systems, and networking equipment—that allows businesses to process, store and share digital information. Data centers may be thought of as high-tech warehouses where the “goods” being stored are data. To function, our data center campuses will require four critical elements that we plan to provide: 1. Massive Power : Constant electricity to keep the machines running. 2. Connectivity : High-speed fiber optic lines to move data across the globe. 3. Permitting : All permits and approvals necessary to build and operate a data center on our campus. 4. Building Sites : Construction-ready building sites with all utilities. The industry generally classifies data centers into four categories based on who owns the equipment and how the space is used: 1. Enterprise : Built and used by a single company for its own needs. 2. Managed Services : A third party that handles the technology and infrastructure for a client. 3. Colocation (“Colo”) : Multiple companies rent space, cooling, and power within a single facility while owning their own servers. 4. Cloud : Massive facilities where providers such as Amazon or Microsoft host data and applications for the public. Our business model is focused on the infrastructure development stage of data center construction, where we provide “construction-ready” sites that are pre-permitted and approved, and fully-equipped with the power and utilities necessary for a data center company to build and operate its data center facilities. Our primary objectives include: 1. Providing Onsite Energy : We intend to offer a natural gas-powered energy platform that provides 24/7 “baseload” power. This is designed to avoid delays in connecting to the grid and to give our tenants greater reliability and protection against power grid fluctuations and service interruptions. 2. Creating Scalable Solutions : We intend to provide flexible building lots that allow our customers to start small and expand their footprints as their data needs grow. 3. Cultivating Strategic Partnerships : We intend to sell or lease our construction-ready building sites on our campus to large-scale technology and cloud service providers. By offering a “ready-to-build” platform, we aim to foster long-term relationships with companies that require massive, resilient data solutions. In a world where data is increasingly treated as a vital asset, we believe our approach of combining land development with onsite power generation addresses a critical gap in the current market. Plan of Operations In May 2025, we formed TerraVolt Infrastructure Inc. (“TerraVolt”), a wholly-owned subsidiary established to meet the demand for sustainable, baseload, powered land and infrastructure solutions for large-scale data center development. TerraVolt’s proposed solution is a Physical Infrastructure-as-a-Service (PIaaS) platform that will integrate onsite behind-the-meter (BTM) power with construction-ready data center building sites that include utilities and fiber connectivity. TerraVolt plans to provide a turnkey solution with power and utilities to hyperscalers, colocation providers, and data center developers seeking to deploy new capacity faster than with traditional power and transmission from a local electric utility company. We are currently focused on a location where onsite power production using natural gas turbines and reciprocating engines is allowed under local and state building codes and where there is direct access to a natural gas pipeline with capacity for delivery within a reasonable timeframe. 1 Highlights of Our Planned Data Center Campus Development: 1. High-Density Power Solution ● Natural Gas Pipeline Access : ability to build a tap/meter station on the property to interconnect directly into a major northwestern U.S. gas pipeline. ● Fuel Security : FIRM Gas Supply Contract for 55k million British thermal units (MMBTU) /day, negotiated for an initial 300 Megawatt (MW) to 350MW of power, with additional capacity available in 2030. ● Scalability : Pipeline expansion planned for 2030, adding 50k–100k MMBTU per day (sufficient for an additional 300MW-600MW of power). ● Self-Generation : Onsite BTM gas-fired power plant allowed in Electric Co-Op service territory, which eliminates utility oversight, studies or interconnection queuing. ● Speed to Market : Onsite gas pipeline Tap/Meter station build is estimated to take 12 to18 months. 2. Strategic Real Estate & Zoning ● Location : Directly on major east/west interstate highway, providing a major transportation routes to several northwest U.S. cities. ● Site Specs : Flat, buildable AG land (Out of 100/500-year flood zones). ● Zoning : Conversion to Light Industrial is projected to take less than 12 months for approvals and permits. ● Water Rights : secured AG water rights to be preserved for data center cooling requirements. 3. Connectivity & Fiber ● Latency : Situated on a major fiber artery running through the northwestern U.S. ● Local Access : Local fiber at the property border with access to direct east and west fiber routes. 4. Location Benefits ● Climate : a cool, semi-arid climate enables free-air cooling for much of the year, reducing data center cooling energy needs by up to 80% compared to warmer regions like the Southwest or Southeast. ● BTM Power : in Electric Co-Op service territory, expedited tariff changes and approvals to operate, no system impact or interconnection required, no FERQ approvals or oversight. ● Water : Direct onsite well access and water rights to the major aquifer. ● Tax Abatement : Construction materials and data center equipment. ● Transportation/Logistics : Direct interstate access, artery to nearby urban areas, and regional airports. ● Employees : Low wages/housing, growing workforce. Recruitment from nearby universities. ● Pro Business – Full local and state government data center project and policy support, and expedited land use, environmental approvals, zone changes, and permitting. ● Nuclear – potential participation in the northwest U.S. nuclear corridor for future Small Modular Reactors (SMRs) upgrade for additional clean baseload power. As of the date of this Report, we have commenced the initial phase of our planned onsite-powered data center campus development, which is focused on completing land-use applications, zone change requests, and supplemental site reports required by the local County Planning and Development Department. We anticipate securing land-use and conditional zone change approvals by year-end 2026. Concurrently, we are finalizing timelines and budgets for all necessary county and state environmental assessments. These studies cover the data center campus, the onsite power plant, electrical distribution systems, and critical utility infrastructure (water, sewer, fiber, and gas). We expect to file these reports before the end of 2026, with the aim of securing all necessary construction approvals by the second quarter of 2027. Additionally, we expect to submit to applicable state agencies all design and environmental documentation for the onsite natural gas power plant by mid-2026. 2 The Data Center Industry According to PricewaterhouseCoopers (“PwC”), the data center industry has entered a profound infrastructure investment supercycle, with total capital requirements projected to reach $3 trillion by 2030. Global data center capacity is expected to nearly double, growing from 103 GW to 200 GW between 2026 and 2030. This growth is fundamentally driven by the scaling of Artificial Intelligence (“AI”), which is anticipated to represent half of all workloads by 2030. Market fundamentals remain exceptionally tight. According to CBRE Group, Inc. (“CBRE”) and Jones Lang LaSalle (“JLL”), as of early 2026, global occupancy stands at 97%, with 77% of the current construction pipeline already pre-committed to tenants. The global market size was valued by PwC at approximately $386.71 billion in 2025 and is projected to exceed $1.1 trillion by 2035. Power availability, rather than location or real estate cost, has become the primary criterion for site selection. The U.S. electrical grid has been unable to keep pace with demand, resulting in multi-year delays for new connections. According to CBRE and JLL: ● Connection Delays : In major hubs, the wait time for a grid connection now averages four or more years. ● Expectation Gap : There is a widening “power expectation gap” of 1.5 to 2 years between the utilities’ projected delivery timelines and the immediate capacity needs of hyperscale providers. ● Projected Consumption : Data centers are expected to account for 8.9% to 12% of total U.S. electricity demand by 2030, up from approximately 4.4% in 2023. To mitigate grid volatility and interconnection delays, the industry is increasingly adopting “Power-First” infrastructure strategies, moving toward independent, off-grid operation. ● Off-Grid Adoption : Approximately one-third of data center leaders expect their facilities to be 100% onsite-powered by 2030. ● Onsite Evaluation : Roughly 73% of hyperscalers and colocation providers are actively evaluating or selecting onsite power providers to ensure predictable “time-to-power”. ● Economic Advantage : Onsite generation allows developers to pursue “power-advantaged” regions with an abundance of natural gas, such as Texas, which is projected to capture nearly 30% of total U.S. data center demand by 2028. Natural gas has emerged as the essential “bridge” and primary fuel source for onsite data center power. ● Dispatchability : Natural gas remains the preferred choice for data centers because it provides reliable, 24/7 dispatchable power without the intermittency associated with renewable sources. ● Microgrid Maturity : Microgrids powered by gas turbines and fuel cells are gaining momentum, enabling campuses to operate as independent “energy islands”. ● Hybrid Systems : Next-generation designs often combine natural gas with Battery Energy Storage Systems (BESS) and solar, positioning the data center as a dynamic asset that can support the grid while maintaining its own critical load. ● Grid Contribution : Currently, natural gas accounts for approximately 40% of U.S. power generation, and its role as the leading fuel source for data center electricity is expected to persist through the end of the decade. The data center industry continues have a significant economic impact throughout the U.S. and to be a significant catalyst for national growth. ● GDP and Employment : Between 2017 and 2021, data centers contributed $2.1 trillion to the U.S. GDP through direct and indirect effects. ● Labor Income : Direct employment in the sector grew by 17% from 2017 to 2021, significantly outperforming the broader U.S. employment growth of 2%. ● Sustainability Evolution : While traditional Renewable Energy Credits (RECs) are facing increased scrutiny, operators are shifting toward 24/7 Carbon-Free Energy (CFE) goals. This shift is driving interest in natural gas turbines that can eventually be converted to hydrogen and high-efficiency liquid cooling systems. 3 Competition As a new entrant into the data center marketplace, we will compete against the larger, more established and better capitalized companies that today control the majority of market share. However, the data center industry is undergoing a paradigm shift driven by the “time-to-power” bottleneck. As a new entrant focused on high-performance computing (HPC) and hyperscale requirements, we compete in a landscape increasingly defined by energy independence and the speed of infrastructure deployment. We compete with traditional data center REITs and developers, including Equinix, Digital Realty, CyrusOne, and Vantage Data Centers. However, our primary competitors now include a new wave of infrastructure developers focused on “behind-the-meter” (BTM) and “off-grid” power solutions to bypass utility interconnection delays, which can now exceed five to seven years in major hubs. Key competitors in this specialized space include: ● Tract and Quantum Loophole : Large-scale land and power “master developers” who prepare massive campuses for hyperscale tenants. ● Cloverleaf Infrastructure : Specifically focused on solving the power-grid interface for large-scale deployments. ● Crusoe Energy : Utilizing modular data centers powered by “behind-the-meter” energy sources, recently entering high-profile agreements to support AI startups like OpenAI. ● Joint Ventures : Large-scale energy-tech partnerships, such as the Chevron, Engine No. 1, and GE Vernova alliance, which aims to build “power foundries”—multi-gigawatt co-located natural gas power plants and data centers. We believe our strategic pivot to onsite natural gas power generation addresses the immediate, critical need for baseload power for hyperscale customers. We believe our plan for onsite power offers us the following competitive advantages: ● Reduced Time-to-Power : By generating power on-site, we bypass the increasingly congested and slow utility interconnection queues that hamper our larger, grid-dependent competitors. ● Baseload Reliability : Unlike intermittent renewable sources (solar/wind), our natural gas-fired turbines and engine system will provide 24/7 “always-on” power required for the relentless duty cycles of AI and large-scale Large Language Models (LLM) training. Many of our current and potential competitors may have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources, ownership of more data centers and data centers that are more broadly distributed geographically, access to less expensive power, and more robust interconnected hubs in certain geographic markets. All of these potential advantages could allow competitors to respond more quickly to new or changing opportunities. In addition, once we are operational, if our competitors offer space, power and/or interconnection services at rates below current market rates, or below the rates we are then charging our customers, we may lose potential customers or be pressured to reduce our rental rates below those we are then charging or have modelled in order to retain customers when our customers’ leases expire. As a developer of data center infrastructure, we also compete for the services of key third-party service providers, including engineers and contractors with expertise in the development of onsite power production and data centers. The competition for the services of specialized contractors and other third-party providers required for the development of onsite power production data centers is intense, increasing the cost of engaging such providers and the risk of delays in completing our development projects. Finally, we face competition from real estate developers in our sector and in other industries for the acquisition of additional properties suitable for power production and data center developments. Such competition may reduce the number of properties available for acquisition or development, increase the price of these properties and reduce the demand for data center space in the markets we seek to serve. 4 Risk Factors Emerging federal and state regulations aimed at protecting ratepayers could significantly increase our cost of doing business. In early 2026, several legislative proposals were introduced at both the federal and state levels to address the surge in demand for more AI data centers. We face emerging risks from: ● Moratoriums and Siting Restrictions : Concerns over grid reliability, noise, and water consumption have led some counties and states to deny building permits or to enact moratoriums on large-scale data center campuses. ● Sustainability Regulations : Stringent new sustainability standards and the devaluation of traditional carbon offsets may impact our ability to meet environmental targets. Sustainability regulations are evolving rapidly. Our strategic reliance on “Bring Your Own Power” (BYOP) and onsite power generation entails nascent operational risks and greater capital intensity. While BYOP offers a faster “time-to-power,” it introduces several critical risks: ● Capital Intensity : Average construction costs for onsite-powered facilities have risen significantly, contributing to a global infrastructure investment “supercycle” projected to reach $3 trillion by 2030. ● Technology Risk : Deploying large-scale microgrids utilizing natural gas turbines, fuel cells, and Battery Energy Storage Systems (BESS) involves complex engineering and integration risks that may lead to operational downtime or higher-than-expected maintenance costs. ● Supply Chain Volatility : The reliability of onsite power depends on a steady supply of natural gas. Any disruption to pipeline infrastructure or significant volatility in gas pricing could materially impact our operating margins. In early 2026, the gas power generation equipment market is experiencing a robust upward cycle. It is driven by a global shift away from coal, the need to stabilize grids reliant on intermittent renewables, and a massive surge in electricity demand from AI and data centers. Because of this demand, ● Natural Gas Generators (Industrial Gensets) are experiencing delivery times of 18 to 30 months. While faster than utility-scale turbines, lead times for industrial-grade natural gas engines (like those from Caterpillar) have roughly doubled since 2021. Companies are increasingly deploying “mobile gas turbines” as stopgap measures to get data centers online while awaiting permanent equipment. ● Support Infrastructure (Transformers & Switchgear), like generation equipment, due to market demand, and other components, such as electrical generation and distribution systems, are also experiencing lead times of 2+ years. Employees We currently have three full-time employees, two of whom are our executive officers. None of our employees is represented by a collective bargaining agreement, and we have never experienced any work stoppage. We believe we have good relations with our employees. Corporate History and Recent Developments We were incorporated pursuant to the laws of the State of Nevada on March 20, 2002 under the name Integrated Brand Solutions Inc., and on February 6, 2006, we changed our name to Upstream Biosciences Inc. From 2006 to December 2009, our company operated as a biotechnology company, and from 2010 until May 2013, our company had no operating business. On July 11, 2013, we changed our corporate name to RealSource Residential, Inc. Our initial business strategy in 2013 was to engage in various real estate related businesses. However, in 2016 we disposed of all of our real estate and other assets and on December 20, 2018, we changed our corporate name from RealSource Residential, Inc. to CalEthos, Inc. In early 2021, we determined there was a sizable opportunity to develop and manufacture high-performance computer systems for the cryptocurrency mining industry. During the development of our computer chip and system in Korea, we had also developed a plan to build a large-scale, clean-energy powered, containerized, immersion-cooled data center operation in Southern California to support the use of the systems we were developing for our company and for others. However, following the decline of the bitcoin market in early 2022, we decided to abandon our chip and system development efforts and we determined that we could develop a profitable business by offering wholesale data center colocation services to a larger customer base of hyperscale and enterprise IT companies, initially in Imperial County, California. After optioning parcels of land in Imperial County and working with the Imperial County planning department and other local regulatory agencies in seeking zoning changes and other required regulatory approvals required for the Company’s proposed data center campus, it became evident by May 2025 that the Company’s timelines for the receipt of such approvals would not be met. In May 2025, we formed TerraVolt to meet the demand for sustainable, baseload, powered land and infrastructure solutions for large-scale data centers development and end users. We are currently focusing on acquiring properties in states in which onsite power production utilizing natural gas fuel cells and turbines are allowed and in which we can acquire access to natural gas pipeline and capacity for delivery within a reasonable timeframe. 5 Item 1A. Risk Factors. We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.