Fermi Inc Aktie

Good day, everyone, and welcome to the Fermi America's Second Quarter 2026 Earnings Call.

[Operator Instructions]

It is now my pleasure to hand the floor over to your host, Barry Sievert. Sir, the floor is yours.

Good morning, and thank you for joining Fermi America's Second Quarter 2026 Earnings Conference Call. With me today are our Chairman of the Board, Marius Haas, our Chief Commercial Officer, Anna Bofa, our Chief Operating Officer, Jacobo Ortiz and our Chief Financial Officer, Rob Masson.

Before we begin, I'd like to remind you that today's call contains forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those we anticipate. For a discussion of these risks, please refer to our most recent annual report on Form 10-K and our subsequent reports on Form 10-Q. Any non-GAAP measures we reference today are intended to provide a supplemental perspective on the company's ongoing operations.

With that, I'll turn the call over to Marius.

Thank you, Barry, and good morning, everyone. Thank you for joining us. One quarter ago, on our first quarter call, I did something that Chairman doesn't always do. I gave you a list, a focused 90-day plan built around 5 specific commitments, and I ask you to hold us to it. I told you the new leadership team would execute and that you should measure us not on our words, but by what we deliver. Several of you questioned why I established self-imposed aggressive deadlines on the team at a time when there was external distractions and internal transitions. Yes, it was a risk. But I have a very strong philosophy that an exceptionally talented team with a clear mission with clear priorities and well-understood timelines can achieve extraordinary things.

with clarity comes alignment, passion and focus. The focus eliminates the irrelevant noise. The passion was always about doing what is right for our shareholders. Today, roughly 90 days later, I'm here to report to you on our progress. And I'll say it plainly. Fermi is in a much stronger place now than it was then. To date, we've delivered on all 5 commitments, including the one that matters most.

Let me take you through our results. First, a quick reconnect to the macro backdrop because it frames the problem for me is working to solve. Power is the binding constraint on AI compute, not capital, not demand. Across hyperscalers, neo cloud providers, and frontier model developers the same bottleneck keeps surfacing access to large-scale, reliable electricity on a timeline that matches the pace of AI and data center development. Delays are being reported across announced projects worldwide, driven by grid interconnection queues and equipment availability.

Fermi was created to relieve that constraint, and this past quarter shows you how we are doing it. Objective number one of our 90-day plan was to secure a binding customer agreement. And I will say this was, by far, the most important objective. And the team delivered. We signed a binding agreement representing up to 650 megawatts of power. We are now in the process of finalizing the backstop agreement that sits behind it. Anna will walk you through the details in a moment.

I'll simply say this: the caliber of the counterparties now standing behind our advanced energy and AI ecosystem speaks directly to the value we've discussed with you since our IPO.

Objective number two was to select the right CEO for the next stage of Fermi's growth. With this in mind, we've appointed Lee McIntire effective this Tuesday. Lee has served on our Board since September of 2025 and already has a detailed working knowledge of the company and the project. More than that, he has built his entire career delivering large-scale projects, and that's the most important task in front of us right now, getting power to the site.

Lee has led some of the most demanding engineering and construction organizations in the world, including Bechtel, McDermott, and TerraPower, and he ran large-scale project delivery inside all of them. So when it comes to getting first power to the site in 2027, I can't think of anyone more equipped than Lee. He will work alongside Anna, Jacobo, Rob and me. We'll keep running the business exactly as we ran it this quarter. Our strategy has not changed and the pace will only accelerate.

The third objective was to advance strategic partnerships. Again, we delivered. During the quarter, we announced EPC partnerships with Primoris for balance of plant on Phase I and TSK for early works engineering on Phase II. These are 2 of the most capable and highly respected contractors in the industry. More recently, we also entered into a strategic alliance with HillCore, a premier and highly experienced infrastructure and power provider around the globe, which will accelerate our ability to deliver power at speed for large-scale customers.

The alliance will bring an incremental 2.6 gigawatts to the Project Matador campus within the next 3 years. There is no site we know of that has equipment and the ability to deliver 4.8 gigawatts during this time period. The demand for the power delivery is already here, and we have the team and the equipment to deliver.

Fourth, we've told you we'd enhance our liquidity. In July, we delivered an upsized $431 million convertible notes offering with significantly strengthened our balance sheet. Importantly, we did it at a low coupon and with a cap call structure built to protect our shareholders from dilution. Rob will take you through it.

The fifth and final objective in our 90-day plan was to move the site closer to power. On this front, we've made substantial progress, and we are still gaining momentum. Three Siemens Energy F-class turbines arrived at the port of Houston in July and have cleared customs. We've also progressed site development. Jacobo will give you full operational picture shortly.

Now let me put these 5 milestones into context. Any one of them a binding customer agreement, a CEO, significant partnerships, a strengthened balance sheet, turbines on the ground would have made for a notable quarter on their own. We challenged the team to stretch and they delivered all of them in a single quarter. That's the story for this quarter. Our leadership team kept its focus on the plan and executed it with excellence. That was the institutional discipline Fermi 2.0 was built to deliver. The board and I are extremely proud of how the team came together and without doubt, delivered an excellent quarter. With the site advancing and the commercial picture coming into focus, let me hand it to Anna.

Thanks, Marius, and good morning, everyone. I'll start with the most important thing I can tell you about this quarter. The market didn't just validate our project in concept. It's signed up for it. This is only the beginning. Customers need large-scale, reliable power on accelerated timelines, and that is exactly what Fermi is built to deliver. Over recent months, we've been actively engaged with roughly a dozen prospective customers and strategic partners. These discussions have been specific and substantive around capacity planning, delivery sequencing and the commercial frameworks required to move from interest to signature. Within that broader process, TensorWave stood out as a particularly strategic first customer for Fermi. For us, this was an ecosystem entry strategy.

First, speed matters. TensorWave is a highly entrepreneurial organization, operating in one of the fastest-growing parts of the AI infrastructure market. They have the ability to make decisions quickly and critically their demand curve aligns with our power delivery curve.

Second, we believe TensorWave gives Fermi a unique position inside the broader AI ecosystem. A direct relationship with the hyperscaler is incredibly valuable, and we are nurturing those too. but it's fundamentally a relationship with one customer. TensorWave sits between the semiconductor ecosystem and the ultimate users of that compute, giving Fermi exposure across multiple layers of the market. Compute is the foundation of the AI stack. And TensorWave's proximity to that layer gives us earlier visibility into where demand is forming, what infrastructure those workloads require and which customers are likely to need capacity next.

Through one anchor relationship, we gain connectivity not only to TensorWave, but also to the chip ecosystem and to multiple hyperscalers, enterprises and AI companies that may ultimately consume that capacity. For us, that is strategically important. We want Fermi to become a place where the broader AI infrastructure ecosystem comes together, not simply a campus serving a single customer.

Third, the multiphase nature of the relationship reinforces that opportunity. The deal has the potential to bring multiple workloads and end users on to the campus over time, giving more customers and partners direct exposure to Fermi's capabilities. The phased approach also matters from an execution standpoint.

By phasing the development, we can match capital deployment more closely with delivery time lines. while reducing complexity and preserving our ability to move quickly towards first revenue. And by pairing TensorWave with a highly capable data center partner, we gained direct visibility into who can design and construct these facilities quickly and efficiently, capabilities that can be reused across future Fermi customers.

Fourth, this transaction validates the unique nature of what we are building. Fermi combines large blocks of power, secured infrastructure, accelerated delivery and permitted land. TensorWave gave us the opportunity to establish commercial terms that we believe solidly reflect the value of that offering while remaining competitive for the customer. So our decision to partner with TenseRave was deliberate. We were looking for an anchor customer that could move at our speed, consume power on our delivery timeline, support economics that appropriately reflect the value of this differentiated asset and importantly, expand Fermi's connectivity across the broader AI ecosystem.

Let me turn to the agreement itself. We have signed a binding agreement with TensorWave, representing up to 650 megawatts of capacity if all expansion options are exercised. The agreement is structured in 3 phases. The initial phase is a 15-year commitment for 222 megawatts of gross power through a turnkey data center solution and represents approximately $6.5 billion of revenue to Fermi over the initial term.

We are finalizing the backstop agreement supporting certain obligations under the lease. We will identify that counterparty once the agreement is complete, which we anticipate in the coming days. A commitment of this scale follows extensive diligence across our power strategy, permitting, secured equipment, land control, construction plan, delivery schedule and execution capabilities. So when we talk about validation, we need something very specific: a sophisticated customer and their partners have evaluated what we are billing agreed to commercial terms we believe are competitive and reflect the value of our offering and made a long-term commitment to the campus.

And importantly, we believe this first commitment strengthens the ecosystem around Fermi and creates a stronger foundation from which to scale as we continue discussions with multiple other customers. With that, I'll turn it over to Jacobo to walk through what this looks like on the ground.

Thank you, Anna, and good morning. My focus this morning is simple. Everything Marius and Anna just described is backed by real steel on the ground and by an experienced team that is ready to execute. Over the last 12 weeks, we have refined our execution plan and strengthened our APC relationships with world-class contractors, and our team is ready to start construction as soon as project finance is in place. We remain committed to speed to power as customers sign leases while maintaining the capital discipline that matches major expenditures to commercial progress. Our execution team has been working with TensorWave to deliver its turnkey project on time to minimize execution risk, Fermi is partnering with a well-known data center contractor with access to critical components and deep multi-project experience executing these kind of projects reliably.

We will announce this partnership shortly. First, let me take you through power delivery and then our strategic alliance with Hillcore. Fermi, plans to deliver 640 megawatts of nameplate capacity by the fourth quarter of 2027. With the first 210 megawatts available July 1, 2027. Additionally, Phase I includes 6 Siemens SGT-800s turbines led by Primoris plus 3 GE 6B units and 17 TM2500s led by relevant power solutions, all in simple cycle along with 200 megawatts of utility power from Xcel.

We continue to make progress on our '28, '29 power delivery objectives, 3 seamless class units rated up to 728 megawatts in simple cycle mode, each more than 242 megawatts arrived at the Port of Houston a few weeks ago.

TSK, Spain's largest power-focused EPC firm is delivering the fast start engineering for those turbines. The F-class units are among the most widely used heavy-duty turbines in the market. They ramp up up to 40 megawatts a minute, reach full speed in about 5 minutes and carry a global fleet reliability, nearly 99%. That combination of high output, fast start and reliability is exactly what AI and advanced computing required. Our project has them, and we are ready to execute.

Now switching gears because speed to power is central to our strategy, I am excited to walk you through our strategic alliance with Hillcore Energy Partners in more detail. Hillcore and its affiliates, including JV driver, bring more than 35 years of heavy industrial and power generation experience, spanning natural gas, steam biomass and power boiler facilities from project development and construction through commissioning and operations. The alliance between our 2 companies brings approximately 2.6 gigawatts of additional power to the site under a build, own, operate, transfer structure, doubling project Matador's total power output to 4.8 gigawatts.

Think of Hillcore as a tenant that pays rent and delivers incremental power to the Fermi private grid. This accelerates and grows our revenue stream by expanding our total power supply to meet customers' growing demand faster than a self-build strategy only. And Fermi keeps 100% of the income it generates from base rent. Under the agreement, Hillcore finances builds, owns and operates their facility. So Fermi adds dedicated, behind the meter power with no upfront capital outlay. Fermi will be the anchor off taker, but we only commit as tenant leases are signed and each block of power is triggered by contracted demand from attendant, each power purchase agreement is matched to the term the lease that triggers it and field costs are passed through to the tenant as well.

That matching takes stranded capacity risk off the table and construction operating and performance risk sits with Hillcore. Importantly, we hold an option to acquire the facility at fair market value after year 10. First power is targeted within 24 months of the notice to proceed and the Hillcore build-out importantly runs in parallel with our own, doubling our capacity to 4.8 gigawatts of total power available.

We have an amazing site, a 6-gig air permit, power equipment and experienced construction team and trusted strategic partners ready to deliver Project Matador's mention. Power is the gating asset for AI and firming is ready to deliver what our customer needs, more power now. Fermi is where AI gets power. With that, Rob will take you through our strengthened financial position. Thank you.

Thank you, Jacobo. The headline for me since our last earnings call is a significantly stronger balance sheet and it centers on the convertible notes we issued last month. We closed an upsized offering of more than $430 million of a 5% convertible senior notes due 2031. That figure includes the full exercise of the initial purchasers' option for an additional $56 million, a clear signal of the demand for this paper. Net proceeds after the cap call were approximately $382 million.

I'll walk you through the rationale on 4 parts. First, timing. We're focused on our operations and not on timing the market. We raised capital with prudence in mind to provide the operational flexibility and financial runway to focus on strategic objectives. Second, negotiating position, a stronger balance sheet lets us advance customer and partnership discussions from a position of strength, not under financing pressure.

Third, structure. We deliberately designed the structure with our shareholders in mind. We believe the convertible note paired with a cap call protects our current shareholders from dilution ahead of catalyst until the stock price more than doubles.

And fourth, cost of capital, a 5% coupon over a 5-year term is an attractive rate and a timeline that fits our development and power delivery plan. Tied back to the 90-day plan, this checks the liquidity objective, and it is one source among several. As we move into the next phase, our message on funding the project in capital is consistent. Thoughtful sourcing, disciplined deployment match to commercial progress. With that, I'll turn it back to Marius for closing remarks.

Thank you, Rob. Fermi 2.0 has always been about the convergence of 2 things: a tangible asset base of over $1.5 billion that we have already built into the ground; and the institutional capability now deployed to realize its full value. This quarter, you watch those 2 things come together. In a single quarter, we delivered a binding customer agreement with one of the leading names in AI compute, a new strategic alliance and premier contractors enhanced liquidity on shareholder-friendly terms. Hired the right CEO to lead the next stage of Fermi's growth and deliver major on-the-ground project milestones that protect our speed to power advantage. But I want to end where I began with the team because the most important thing about this quarter is not a single milestone. It's that we set ambitious goals and made tremendous progress.

That is the entire point of Fermi 2.0. This is a business that does not wobble when the headlines do. The engineers pouring the foundations the teams managing our supply chain and permitting, the commercial team signing agreements. They showed you this quarter what institutional discipline and excellent execution looks like. We believe we have the single most valuable power and compute site in the market. And as a team, we are aligned around one overarching objective maximizing long-term value for our shareholders. The road ahead is demanding. We have to scale this amazing business, complete the current customer agreement, add new ones that are already far along in the process and focus on flawless power delivery to the site. But we began the second half of this year with a signed anchor customer, a further strengthened leadership team that has proven it can execute better liquidity, power moving toward the site and we begin with momentum.

We are pleased with where we are but never fully satisfied. We can always do better, and we will. We look forward to updating you on our continued progress as we execute the Fermi 2.0 vision. Operator, we're now ready to take questions.

[Operator Instructions]

Your first question is coming from Paul Golding from Macquarie.

Congrats on all the progress. I wanted to ask initially just on TensorWave and the lease agreement there. How should we think about the power pass-through component of that? What is the $6.5 billion comprised of? And maybe how you're thinking of hedging power that you'd be delivering directly from your private grid perspective, given that, that is a unique aspect of your project.

Operator, we can hear you. Operator, are you there?

Yes, your line is live.

I think we're ready for the next question.

Your next question is coming from Nick Amicucci from Evercore ISI.

Just wanted to kind of drill in on -- you guys had outlined during -- with the announcement of the TensorWave deal, $1.5 billion already spent. Just as we think about the spending ramp towards the initial 222 megawatts as well as the incremental like the $640 million. If we could just kind of frame how much spend is left to occur.

Yes, I'd be happy to take that. So if we think about cash for the quarter, we decreased by about 50% just in line with what we talked about on the general preparation. When we think about the deal we just signed, there's specific cash flows that will be associated with that. And we talked before about disciplined capital deployment. So we're going to match our outflows to real signed deals and inflows. And you heard Jacobo talk about the same thing. We have the site, as we talked about through Phase 0 complete into Phase I, and that will match up well with the new TensorWave deal. Is that question or do you have a follow-up on that? I want to make sure I hit it all.

No, that's fair enough. I think that covers it. Thanks, Great. And then as we think about to, I guess, just obviously, now the full management team seemingly in place. And as we think about kind of this somewhat of a shift towards a turnkey solution on the data center side as opposed to kind of just renting like access to the power. As we kind of think about that, I guess, what -- where what gives you guys confidence in the ability to kind of execute on that further more all embracing kind of build-out, if you would.

Your next question is coming from John Hodulik from UBS.

Our plan is to work with a world-class data center partner to deliver that aspect of the commitment. And we have already been in talks to contract that opportunity, and we feel fully confident that we are working with the right partner to deliver that data center.

Nick, this is Marius. I'll add a little bit more to it from a context perspective. As you had mentioned, about the team. There is no doubt that what we're going to continue to do is add and scale the critical key components of the organization to ensure the flawless delivery of what we have committed to our tenants and our customers. We have deployed our executive compensation for officers as you saw we have deployed our long-term incentive program for our employees as well as our short-term incentive program. So we have everything in place in order to be able to scale this organization and clearly understand that we will need to functions in order to deliver the full scope of what we're talking about, having doing a turnkey solution as our first offering clearly puts us in a position of putting our arms around what a total offering could look like and will give us the experience and will give us the opportunity to be able to do this on an ongoing basis, although as Anna indicated, that's not going to be the pervasive model going forward. Does that make sense?

Perfect. That's very clear.

Your next question is coming from John Hodulik from UBS.

Congrats on all the milestones. First, a couple of follow-ups on the TensorWave deal. Can you guys give us a total CapEx number you think required to fulfill at -- the first phase of that contract? And maybe if there's been any spending already to fulfill that deal? And also, is there a way that you guys could give us a sense for what the margins are expected on the $6.5 billion? And then lastly, just when do you expect, sort of, full commencement of the first, sort of, 200 megawatts?

And then if I could follow up, maybe a question for Anna. You talked about some discussions with other tenants. Any other color you can provide in terms of how far along you might be with a second tenant. I guess following up on that last question is sort of the neo clouds, the sort of category that we could expect going forward of potential tenants? Or just any other color on sort of what we could expect, sort of, down the road or timing or or quality of potential tenants you may be talking to?

Yes, I'd be happy to start. We'll talk overall about the market. Generally, if you think about it in 2 phases, a typical battery CapEx project runs in the range or the power side runs in the range of $3 million to $4 million per megawatt of gross power capacity, and you can think about this one in that range. And the data center itself, typical CapEx when you're talking about a turnkey solution, you'll find in the market is about $10 million to $12 million per megawatt. And again, we -- this project is going to be in that range. We're not disclosing overall total cost figure for the project. And we're sharing precise number now, not to set expectations. But I think if you think of those market comps, that's what we're looking at in this project. So kind of right in the middle of what you'd expect.

Yes. And I can take the second part of your question. So in terms of the commencement. So we anticipate the build and the, sort of, revenue commencement to start in phases. We anticipate that somewhere to be around the end of Q3, early Q4 of '27. And again, it's a phased delivery. So once the first part of the build is ready, the customer will then start paying rent all the way up until the full 220-megawatt build is complete.

In terms of your other question around just color on other customers, we are absolutely engaged with additional customers and have conversations that are very far along. In terms of neo clouds, we are absolutely focused on working with customers that are ready and available to take the capacity that we have, but we are absolutely also speaking with hyperscalers. One of the thing that was interesting about this deal for us is as we've been discussing opportunities with the hyperscalers. There is an interesting path on this deal where they could potentially get capacity sooner by partnering with TensorWave and the fact that they have sort of these 3 potential buildings. And so we are both having conversations where hyperscalers could work directly with us to come to the site, and they're very interested in that and potentially take the opportunity with the multi-buildings that TensorWave now has available to them that could potentially move them to site a little bit faster.

But again, one of the things that is really clear is that there is tremendous demand. There is very few kind of opportunities like Fermi. There are very few kind of sites that have no permitting issues that do have capacity. And so that has really attracted all of the hyperscalers to engage with us, and we're very pleased with how those conversations are moving forward.

Your next question is coming from Stephen Gengaro from Stifel.

Thank you, congrats on busy 90 days. I think two for me and maybe a follow-up on the prior question. The expectation, I think, that we had a while back where that you do kind of $700 million to $900 million of EBITDA per gigawatt deployed on an annual basis. And I'm just curious if that's still, kind of, a reasonable expectation going forward? And then the other question I had was when you think about the TensorWave contract and others, can you talk about like, sort of, the risk parameters around it and sort of the key hurdles we should be watching as far as time to power and what you could be liable for based on timing?

I can take the -- start with the risk and then, sort of, discuss the first part of the question. So in terms of the risk parameters, one of the things that you do when you are engaged in the process of driving towards an agreement as you look and see how do you reduce your risks. So part of our, sort of, ability to bring in a data center partner is absolutely a reduction in risk on the deal construct. And that's why we did the diligence to identify who we thought was the best potential partner. And most crucially, we identified a partner who could meet the timeline.

So what you do is you ensure that you line up the delivery of the power, the delivery of the data center and ultimately, where you land in terms of the agreement of when those two pieces come together to reduce that risk. And so that's the approach that we took on the TensorWave deal to ensure that we had the ability to have line of sight into making sure that what we signed up for that we could deliver, and we're absolutely confident in our ability to do that alongside the data center partner.

And on the -- I can just talk about the EBITDA side. While we're not really in a position or going to talk about that specifically, I think you'll see from the overall contract value and the type of contract this is, it's very similar to other market deals that have been announced out there and the expectations on the profit side are the same. We have a modified net structure here. So it's a very good structure, and we're pleased with this as our first contract out of the gate.

It's Marius. Just to add to it, just a couple of things that you should be looking forward to, and this is around the corner here is obviously the announcement of the backstop with a leading IT and restructure provider. Obviously, project financing would be step number two. That then triggers our ability to go move everything to the site and get ready to deliver on the power. So a number of those key deliverables are clearly what the team will be focused on, but those are all well in motion and around the corner.

Yes. And just -- we'll add to that further. Again, we just want to be really clear of how we've reduced the risk. And of course, on a deal like this, having an investment-grade backstop is a key part of that, particularly as you go into project finance. And so we have done a lot of work to ensure that, that is lined up and ready to go. And as mentioned earlier, we hope to be able to announce that partner here in the coming days.

If I could just add one quick one. You mentioned -- you implied earlier, I thought as far as the CapEx that you're going to match outflows and inflows. Does that mean there's not a lot of, sort of, Fermi cash needed to build this out that the customer is going to sort of be providing some of the working capital? How do we think about that?

Yes. I think what we meant by that is we've been staging and we talked about waiting to do the next phase of development until we had a contract and we were going to execute. So fire marched ahead early on. We secured assets, which has given us the competitive advantage for speed to power. We developed the site in such a way that our timelines could match up well meaning power would no longer be the timing factor in being able to stand up and deliver to the customers. That's what we're talking about. I think each project itself then has capital deployment required with it. We'll look at various funding sources to do that, the normal ones. And so we're just talking about as we commence projects we will then put all the capital behind to build out that specific project and keep Project Matador on track.

Your next question is coming from Paul Golding from Macaquarie Research.

Just wanted to provide another opportunity to pose that question again on power pass-through from the top of the queue, how that's being treated in the TensorWave arrangement, and how you're hedging fuel given the private grid component of the site?

Yes. And sorry for the technical difficulty earlier. So to be clear, the way that the, kind of, deal is structured is that take a base rent, we take a fixed power charge. And then that variable energy charge that does carry risk because it can go up, is a full pass-through on to the customer. And that is something that we plan to carry forward throughout all of our deals, we will always take that variable energy charge and have it be a full pass through on to the customer to reduce that risk.

Yes. So there's no reason to hedge. We're not in that business. And as we said, no commodity risk, just to -- for us on that piece.

Great. And maybe if I could just add a follow-up while I have you. Just thinking about other components of the project like cooling infrastructure, anything relating to, sort of, more developed Tier 3 infrastructure for the site itself. I think initially, the project concept for some of these shelves was to, sort of, be more of a basic shell. Do you see -- this is obviously a turnkey project, do you see opportunity or demand in the marketplace for some of those more basic shelves? Or is the demand really leaning towards the turnkey solution heavily?

We talked last time about the different models and that in Fermi 2.0, we're changing our approach and so we talked before about the different options. You have powered land, and we see some demand for that. You've got the powered shell, which is, sort of, in the middle. And then you have this turnkey solution. And our real perspective is that each customer has their own desires. These are large customers and we're there, Fermi, to meet them as a good partner and deliver on that. So you'll expect us to be available across the spectrum of these things and just happens the first deal is the full turnkey.

If you think about in this case, we're going to build all the way up to the chips. So electrical and mechanical infrastructure, including the switchgear, battery energy storage and chilled water and liquid cooling systems, all on this. But that's that one spectrum. Again, we have the other 2 options as well if you think about the buckets.

Yes. And just to add to that a little bit. To be clear, we are engaging and working with a leading greatest center partner on this piece. So we, as Fermi, will, of course, partner to deliver this. The other thing to give you a little bit more color is, as Rob said, we are just matching the customer need and the customer demand. And as you look out in the market, what's been interesting is, of course, you have hyperscalers who often can do the [ power shell ] and do it themselves. But what you're seeing is there are data center partners that are just able to deliver things more quickly or they just have those long lead items that are required already lined up. And so it's been interesting to just see, kind of, where things are landing where hyperscalers are more open to a turnkey option, but in some cases, they again, can do it themselves, and we fully plan to be able to do both of those. We're just, again, trying to meet the customer where they're at and see what they need and deliver on that. I want to cover.

I want to add something. And with our Hillcore alliance, we're doubling the amount of power that is available for us to lease to our tenants. And we can't stress how transformational that is for the industry and for our project. Again, we're going from 2.2 gigs to 4.8 gigawatts available faster than we could self-perform it. That is transformational.

Your next question is coming from Nicholas Hasson from Ocean Wall.

I have a question for you, really just to come back to that point on the uniqueness of the Hillcore structure. Can you give us an idea of just how unusual that structure is? And also its repeatability as well going forward for Fermi?

Thank you, Nick. No, we're very excited. This is truly a one-of-a-kind transaction. As we were thinking how can we accelerate our development of total power at the site, so that we could serve our customers faster. It became evident that partnering with a power developer on site, leveraging the land, the gas, the permit so that they could stand [indiscernible] power concurrently with our own program on site was just a very efficient way of having more power online to meet the demand that is out there, which is phenomenal. So we like it. We're moving in that direction with 17 gigawatts of runway, we are going to keep exploring it.

Again, think about the fact that they're bringing their turbines, their capital and their people. We're doing the same thing. So again, being able to bring all that power online faster accelerates our speed to power. And obviously, it also accelerates and grows our revenue faster. So that -- think about the net present value of bringing that online is phenomenal.

Okay. And just one last question and it's a great comment -- a great comment from Marius about not wobbling when the headlines do. This has been an extraordinary week for Fermi. How should we now think about sequencing? Was this always the plan or do everything come together a lot faster than had been expected.

Marius, you want to -- in the middle of [indiscernible] yes, sorry.

Yes, Nick. No, thank you. No, the only thing I was going to add to Jacobo's [indiscernible], which is critically important on the Hillcore component is yes, we're doubling our power capacity in the near term, which is by far what almost every tenant and potential tenant is asking for. I mean the core question now is how fast can you deliver power in '27. That is literally the question we're getting from virtually every tenant right now, especially with projects around the globe as we indicated, not going forward at the pace that was expected or not getting the regulatory approvals as was expected or could not get equipment as expected. So they're not all knocking on the door coming and having the conversations with the team.

Look, Nick, as you know, this was a Herculean task by the organization to go get all these done, but we were very, very convinced that these were the levers that would drive the maximum shareholder value for our shareholders. And so hence, we knew we needed to do this, and we needed to do it quick. And again, I'm proud as can be as to how the team has come together and executed on these. And I don't think I'm going to put out another list of 90-day priorities just because we do need a little bit of a breather. But the clear focus right now is how do we deliver power and how do we ensure that every commitment we're making to TensorWave, but also the tenants that literally are around the corner that we will deliver flawlessly the power that they need.

Your next question is coming from Judy [indiscernible] from Mizuho.

This is Judy on for Vikram. Congratulations on the quarter here. Just on the TensorWave IG backstop that you talked about, will it be for the full 15 years? And also on the same lease, the optionality for 650 megawatt, when does it expire?

Yes. So that backstop will be for the full 15 years. And in terms of when -- what was the second part of the question?

Does it expire?

Does it expire? No, it does not expire. So part of the negotiation is that backstop fully guarantees that full 15 years, and that ensures that, again, we reduce any, sort of, risk, and it's exactly what we need to take to the next part of the process, which is the project finance piece, so we thought we can start executing on the project.

Yes. So as you recall -- as you recall, it's a 330-acre campus that TensorWave is signed up for. It will be 3 phases. Obviously, we're talking about the first phase, but I know that Anna is already accelerating the conversations on Phase 2 and 3, and it will truly be driven by our ability to deliver power. It's really the power schedule delivery. That will dictate when 2 and 3 come up in production.

Yes, that's exactly right. To be clear, there is demand already for that kind of Phase II and Phase III. And so we're actually actively collaborating with both the backstop provider Tensorwave and potential hyperscalers to see how we can, kind of, move that along very quickly.

Understood. And on the Hillcore deal that you released recently, could you give us details on the equipment contracts they have, like what did they own in terms of turbines, ancillary equipment to get to that 2.6 gigawatt incremental by 2028. And also on the same thing, whatever the land fees dollar per square foot that you guys will be getting from them, when does that start?

Yes. Thank you for the question. So they have a GE set of power equipment. So they're going to be bringing online in different phases. Phase 1 could be between 360 and 720 megawatts within that 24 window. We're being conservative. So from that perspective, they have the equipment, the capital, the experience and demand power to stand up that equipment at the same time that we are standing up ours. I wanted to also add something that Nick asked, which is important as for our strategy. Our strategy will continue to be that Fermi will continue buying equipment, standing it up to meet customers' demand, but if there is a way to accelerate that like we are, it's revenue as well faster that we're getting. So we're going to do that as well.

Understood. And if I could just one last one here. In considering the CEO, could you talk about the external interest that is involved, I believe, Lee has been on the Board since 2025 here?

Yes. No, happy to. Yes, obviously, Lee has a phenomenal background perfect experience for what this next phase of Fermi 2.0 needs. We've had good response from the external search. We just think that this is such an important part of our future that we're not going to race to announce a long-term CEO if it isn't the perfect candidate. And then again, when we looked at what do we need to do right now, there was no better person to drive that agenda for firming. So our search with Heidrick will continue. We expect that now it is clear. We have clear demand. We have tenants. The stabilization of the organization is clear that we'll actually have a broader pool of candidates that will be interested in helping us and joining us in this journey. But we're not going to put a time line on it. We think Lee is going to be a great and phenomenal leader. And when we find the right person long term, we will make that announcement.

Your next question is coming from Derrick Whitfield from Texas Capital.

Congrats on meeting your 90-day initiatives. I wanted to start with the customer mix. With respect to the prospective tenant backlog, Anna, could you speak to or characterize how that list has changed over the last 90 days?

Yes. I would say that we've been in a fortunate position where there is, again, so much demand across the market that we've had to prioritize who we want to focus on. So we are absolutely still engaged with the top hyperscalers. And TensorWave, as I outlined earlier, really stood out to us because we believe it gives us access to the whole ecosystem. And because of the structure of the deal, it gives us the ability to point one of these hyperscalers to that first phase, second phase, third phase, that potentially could get them capacity sooner. And so in terms of, kind of, line of sight and what you can expect.

We do anticipate to have other deals that we'll be able to announce in the coming months. just given the kind of stage of those conversations, the need for capacity and the limited options that those partners have. So we're really excited about the progress. And again, we've been able to really prioritize the partners that we think are a great fit for us and hope to be able to bring more information as those deals move forward.

Terrific. And as my follow-up, I wanted to just focus on the regulatory environment. While you guys are directionally remodel Citizen under the bring your own generation mantra, do you expect any regulatory hurdles associated with the initial slug of grid power based on Governor Abbott's data center audit?

So again, what we've been seeing in the last couple of weeks in particular, since that announcement is just a validation of Fermi's initial thesis and hypothesis. And from the customer perspective, they recognize that, too, we had tremendous outreach when that announcement came up with people, sort of, asking if they could speed things up because folks have realized that Fermi's behind-the-meter solution is, sort of, the future, and we are very fortunate to have that behind-the-meter solution, and we're very fortunate to also have a partnership with Xcel with our grid connection that is not impacted by that announcement. And so we are sitting in a really unique position to be one of the few players in the United States that has the ability to continue to move projects forward in a timely fashion and deliver the capacity that we have.

If I could add to that, Anna, it's -- Fermi's grid connection is through Xcel because we sit on SPS. We're not in ERCOT. So the Governor's directive is squarely aimed at protecting Texas rate payers from the cost of new grid dependent demand. Fermi does not create and is not dependent on the grid, we're actually, as you stated in your question, we're island that off the grid from that perspective. So we sold power without putting any of it on the public grid or the average Texan spill. So we believe that our offer and what's happening in the environment only strengthens our thesis on our business case, and it makes our site even more attractive. It's another reason to come to our site.

And thank you, that concludes our Q&A session. I'll now hand the conference back to Marius Haas for closing remarks. Please go ahead.

Thank you all for your questions, and thank you again for joining us. Before we close, I want to say one more thing about our people. Everything you heard this morning, the binding agreement, the alliance, the turbines on the ground was delivered by the Fermi employees and the contractor teams. We are grateful for their dedication and focus. I'm looking forward to working with Lee as he steps in as CEO. This will include setting a date for our Annual Shareholder Meeting later this year. And finally, we'll keep you updated as we continue to advance toward a first power and finalize additional customer agreements. Thank you, and have a great day.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Good afternoon. Thank you for standing by, and welcome to the Neugebauer and Fermi Analysts Live Town Hall. [Operator Instructions] Legal disclaimers for this call are on the screen, and you are encouraged to read them in their entirety.

I'd now like to turn the call over to Toby Neugebauer, the co-founder and largest shareholder of Fermi America for live opening remarks.

Well, good afternoon, everybody. And I almost want to correct something. My wife is the largest shareholder. I just get to speak for her today. When I think about June 30, and I think it's the #1 question, we anticipated June 30 to be a big day for Fermi. We anticipated at the time of our departure that this would be the day that we would announce 2 tenants. And we always -- our friend, Nick, with Evercore always say, Toby likes to announce things on holidays. And this one was the birthday of one of our key negotiators for tenant 1 and tenant 2.

And so before we just start this call, I really do think as shareholders, we have to move on beyond are we getting a tenant. That's not what this call is about. That should not be what's in your thought process. Again, we were planning on June 30 being the announcement of our first 2 tenants, but at least our first one. As I was reflecting on if it's not about the tenant, then what is the call about? And what is Toby want? And what is Toby worried about? And I didn't sleep last night, and I came up with a slide that really sums up what I think we're all worried about, the 10 of us that have left. And frankly, we've just gotten some wonderful support today from 2 of the top investors on the planet.

I'm just so humbled, is a key concept when we're having these questions today is this. Contracts are either an asset or a liability of a company. And that's what when I woke up at 3, and I know a bunch of Fermi people are listening, they know that's true. Contracts are either an asset or a liability. And it's exponentially true for huge complex contracts that Fermi has and must enter into in order to fulfill its mission. And it's exponentially true when you weigh Fermi's balance sheet against the size of the contracts that it must enter into. And as I worried about this all night, the #1 contract that came to my mind is EPC contract. The EPC contract that Fermi enters into is either a wonderful asset for the company or a huge potential liability.

And I almost feel bad in Jacobo, that we announced the Primoris contract. Go back one. This is either an asset or a liability. But to say that the Primoris contract is a Fermi 2.0 contract, that was not -- is not the case when I was there. And so obviously, I promised [ Melissa ], everybody that wouldn't go into greater detail, but these are the things that I'm worried about. And I hope for sure that the Board -- and hopefully, it's a new contract with the refunds that were promised and the new wage rates, et cetera, were included in that.

Another example is a gas contract. The supply of gas for Fermi is either a wonderful asset of Fermi or it's a potential liability. Another example is our grid connect. That is either a wonderful asset -- let me be clear, I'll give you a little biased on this one. Our grid contract is a wonderful asset and our grid relationship is and -- or it's a liability. And for some people, it will be a liability. And then there's just the dozens of other contracts that affect execution, and they're either an asset or a liability of Fermi. And frankly, these contracts, whether they're assets or liability are only as good as the people stewarding over these contracts. These people are either an asset of Fermi or they're a liability. And what I hear all the time is a tenant, tenant and a tenant.

A contract with a tenant is an exponential asymmetrical asset or liability. And what I did when I killed Fermi 1.0 was I looked at in December, these types of contracts and determined that they were an asymmetrical liability for the company. And all I'm wanting to do -- and when you look at the penalties associated with these contracts, if you execute these contracts with these tenants, these are some of the most highly economic contracts on the planet. I believed we could do that. But if you fail to perform these contracts, and there are some wonderful examples. I don't know, I don't want to say names, but anyone can look at the landscapes of failed contracts. I mentioned many times the [ Stargate ] ones on the roadshow. So the important thing is to have the right team of contract and stewards to guarantee that we are asymmetrically successful and aren't exposed to the liability.

I'm going to quickly go through some of the slides like quickly. I was on the phone yesterday with one of our largest new shareholders. And I realized we've had such turnover in the shareholder base that not everybody even understood what I was asking for. And I just want to state an obvious key concept, competitive tension, my lawyers had to say, I had to say could. Everyone here knows, could create substantially greater value for the shareholders. That's what I want. And I want to go straight to the -- who I believe tenant #1 is, who may be on the call. You know how the family feels about you. You know we'd help you be successful for free. If staying away is the best thing for you, we're great with that.

So this presentation isn't directed at you because we -- as I wrote in a letter, we have nothing but great affinity for you and wished we were announcing a deal together today. Having said that is this is the decision. This contract is the decision for the shareholders of Fermi, and that's who we need to stay focused on. And what we've just asked for is to make sure that we're dealing with real issues through a proper Board governance of our leasing pricing risk, the financing risk in terms of the cost of capital associated with this, the dilution risk and as I've just talked about, the execution risk. For those -- like I said, I talked to one of our largest shareholders yesterday who didn't understand that we were for all offers. I am not interested in coming back. I've got my new company purpose.

And I'm -- the entire 10 of us that were Fermi 2.0 have gone and we're not trying to come back. And all we wanted to do is have an independent committee with a real Board governance, not the many committees that currently exist. We want a banker-led market test, and we are the one who appointed Broadhaven. And they absolutely serve a purpose, but they're not -- they don't have the broad relationships with all of the potential deals. It's been all the potential people who are interested in Fermi. We've been for a dual track process. We love tenant #1, who we think is tenant #1. Let's put the tenant #1 we left with. But we also know this is too big of a decision. And we just want evidence-based decision-making.

Quickly, I'm not going through all of these. The last one was 33. I cut it down to 8. I don't believe that the Board -- and I literally before -- I know Marius, I got a call from one of our most important stakeholders saying he reached out -- I mean, I get calls from serious, serious people and serious investment banks all the time saying that you will not entertain any other offer. That is not in your fiduciary duty. And this has happened between 3 major investment banks who I just got a call from literally, I guess you heard I was having this. And this is someone who has been a massive investor, massive supporter into Fermi. And they're so far along on the due diligence, they're asking my questions like what's the salinity of the water at the site. And we're turning these people away. I just want an open process.

And again, I'm going to get quickly because this is all about -- all of us know we sit on peak, probably highest concentration of permittable gigawatts in the world in -- at least the Western world on a great lease with tons of water, and we control -- no one controls more available electron generation capacity than we do. No need. You all heard me brag about Fermi enough. I think everybody is tired of that. I'm almost tired of hearing myself. Okay?

Our thesis for the strategic go-to-market, again, I wouldn't be reviewing these slides. I did it on May 21, is it's the 3 Cs, okay? My background is energy and these 3 Cs applied in my entire career, capital. The natural steward of Fermi has the lowest cost of capital or a low cost of capital. The natural steward of Fermi is either a customer or has customer. The natural steward of Fermi is excellent at construction because as you all heard me say the last time I was on this webinar is, I absolutely, if my kids will have children, intend to be there at 2035 with the grandkids, showing them what we started in '25 and '26. Next one, I'm trying to go through here so we can get to the questions quickly.

I think these are it. I know my adviser has called the company up. We have hyperscalers. I thought the oil and gas majors were going to be in. I was so disappointed Chevron didn't do us and did the Microsoft deal, but they're going to be natural players into this. The data center developers with the infrastructure, the sovereign wealth funds, those guys are very interested. Obviously, we have Neo clouds very interested as well. One of the most preeminent ones has reached out and the chip makers need us. And I actually think when you look at who the natural thing is, we showed this chart to you all last time, and it just shows you those who have the -- this is a big fight over that AI pie. And Fermi is so well positioned to grab a bunch of it. And some of these other players who already have a big piece, it makes incredible sense for them to grab up Fermi so that they can maintain their big, big piece of the pie.

I don't -- [ Nate ], let's see what else we have. Obviously, you guys know the multiples better than us. These may even be dated. But the point is there are people that trade at multiples of what we are that gobbling up us as a piece of the pie, expands their piece of the pie and allows their pie to grow faster. Again, I want to get to the questions. Hey, this whole rumor out that Toby is just trying to get a 20% premium or 30% premium and take his money off, why would I do that? I didn't work so hard with this team to gobble up all of the critical components to basically control the supply of the pie growth to give it away for a 20% premium over a ridiculous share price. And I'm not opening up options. Again, love tenant, who I believe tenant #1 is, I hope is that group and everybody else, my goal is to maximize value for all of the shareholders.

This also is about governance. And this is the last thing I'll do. I'll put the slides away and get ready for the questions, is this is a joke, okay? And what is sad, Governor, is -- Miles, I bet you're on, is we actually started what is this Texas Renaissance and the Texas Stock Exchange at my ranch. I think the Governor was in 2014, and we brought the DTCC, the Fed, the head of the FDIC, everybody came to Barefoot. And what we -- and they just had Hurricane Sandy and we said, hey, at least your stock certificates, if they're safely in Dallas, won't be flooded out. And here we are on the cusp and why, what's going on at Fermi has huge implication for governance from SpaceX to all of the other companies looking at coming to Texas. Is this the Wild West? Or is this a place where shareholders and Board members can come together in a serious way, not to second-guess business decisions, but to govern and steward over the nation's largest companies.

And so this is way bigger than Toby. This is way bigger than, frankly, this is a really historic situation. The judge in Dallas fully recognizes it. The federal judge also recognizes it that's not a tactic that what happens here has huge implications for capitalism in America. With that, Cathy or whoever, I wanted everyone to have the opportunity to get the tough questions. I had the world's largest investor questioning me today that [ might ] going on here. Did -- I'm obviously getting to do a bunch of one-on-ones. I had hoped that the Governor would join, and then I offered Jacobo who was there at the beginning, the opportunity to join, but that didn't happen, but I am happy to take all of the tough questions so that every shareholder has the most informed view of what's the best path for Fermi moving forward.

[Operator Instructions] Our first analyst with questions today is Stephen Gengaro from Stifel.

I think my first question is really -- it's probably twofold, but it's around your time at Fermi and then your departure from Fermi. And when we think about the amount of demand out there right now, what we struggle with is why an agreement or a contract hasn't been reached? And then maybe as part of that, post your departure, Fermi had noted that the interest from customers had picked up. So I'm just kind of curious if you could kind of address those 2 issues.

Well, obviously, that question revolves around tenant #1. And the stories around tenant #1 are just not accurate at all. As you all remember, December 12 is when we had a big webinar after tenant #1 had dismissed the KAYAK. Literally, while we were having that call, I was still texting and negotiating with tenant #1. We had no less than 10 meetings through into February with tenant #1. And the reason we did not get there with tenant #1, as I have said and as it's fixing to be in the record for everybody to see, tenant #1 absolutely used the fact that we had a 185% -- a shareholder representing 185% of our float come into the market in November when we were negotiating this transaction. And again, the text will show all of that, that will be in the record very soon.

And they used that to dramatically -- yes, the rent was part of it, but that wasn't the part that scared me. The part that scared me was they dramatically increased the penalties if we failed. And everyone on the deal team that was in that city in the Northwest that day, just the bad feeling that, wow, we need to go look underneath the hood. So we didn't say like they say, it was the lease tension, they walked me to the car, okay? I needed to go back and look underneath the hood and see exactly where we were with the contracts that I've discussed with my letters the last few weeks. And I am so glad that we did not sign that day and commit.

And we kept working throughout the holiday into January. And Anna knows she was the last people in the room with tenant #1 for the last week with the other negotiator. At the same time, we had 2 other tenants because our exclusivity. So that happened on the 5th. Our exclusivity was up on the 7th. The bad call that we all had, not my best day was the 12th, the Friday after the 5th. And what we came to the conclusion was is that the other tenants which would have been 2 offered much better SLA and LD terms with more money. And so I don't buy this argument at all. And what I know is if it is all of these other customers, why are we still focused on the customers that we intended to announce today?

I've been honest about Oracle. That meeting did not go well if they wanted us to be the star of their show of their annual report, wasted a bunch of our time. And everything I told Oracle, the call that I know Marius is very upset about, every one of those things came true. But I'm not aware, and I definitely know a bunch of people are. So if there's a bunch of new tenants, it feels like we're just dealing with the tenants that we had. And if anything, my understanding is we lost 1 of the 2. But the point is the tenant we had, the tenant we hope to announce today is a great tenant. Their partners are great partners. And there is no doubt that Marius has a close personal relationship with this group, which to me begs even more for him to make sure that everyone had an opportunity to participate. But I know through our own process with our own bankers, I'm unaware of anyone other than Oracle, that's a hard no in working with us bluntly.

Great. And the other question I had was simply as you think about the next couple of years, like what would -- from your seat, what would you like Fermi to look like 24 months from now?

I think I want Fermi and what I've always wanted is we're the world's best expert at building a private utility. Diversity of loads is critical, and I don't see who's advocating for that at Fermi today. Fermi was never about hooking up some gensets to some buildings, okay? Fermi was about creating one of the world's largest or largest private utility that could handle a diversified loads where you've got economies of scale where 1 plus 1 on gensets nameplate production capacity equals 2.5 to 3.5. That's what I envisioned Fermi to be. And I think that's what this market needs. And that's what I got up every morning and my colleagues that left with me, we got up every morning to create that.

And your next analyst to ask questions will be [ Jeremy Schoikkett ] from [ Rand Capital ].

I appreciate you sharing all your thoughts. Yes, I just wanted to understand from a tactical standpoint, if it doesn't make more sense to just kind of wait if the company is already near completion with like an initial kind of signing of the tenant, why not just kind of wait and then go with the governance after? Because I agree governance is very important. But I just wonder if all the noise doesn't create some challenges if they're -- let's say, they're at the finish line with the current tenant, why not have that? And then wouldn't that be a stronger place to start with any kind of strategic alternatives position as having an existing tenant?

Well, the answer is, it's like, do you have my house bugged because this is what me and the boys are talking about all the time. And the answer is you're right, but maybe you're wrong. There is a very strong argument again, since we like tenant #1 and if the economics are good, it's the other contracts that bother us too, is if we had a high degree of confidence on not just the contract with tenant #1, but all of the contracts that are required to execute on tenant #1, we would overwhelmingly be in your court. I definitely think that we've at least and if we haven't, then we've got the wrong team negotiating, have added competitive tension to this negotiation that didn't exist before.

But I hear you. We have the most scarce -- one of the most scarce assets in the world, and that is power gen that can come on quickly and that value diminishes quickly and the terms of that contract, the ROFR associated with that power. I mean, the Primoris thing did not make my day today. You will see in the next 2 weeks when these -- this was a mess. And so I do not want to disrupt the baby. I want the baby to grow strong. I want it to grow fast. I want it to be everything it can possibly be. I don't understand how at least 7, probably 8 companies who've already done due diligence on the company, having the right to submit offers immediately harms that.

But your point is well taken. I read your material this morning. And welcome to the conundrum, I feel. I want what is best, but I am concerned about the process. And if I had a crystal ball, I just don't understand what was a big deal about letting all 7 companies who had already done due diligence put forth the proposal at the same time. Did I answer your question?

Yes. No, appreciate it.

And I believe we'll be taking further questions at this time.

Yes, with no further questions from Jeremy or Stephen, we do have a few questions provided by people on the phone today, Toby, that are on the webinar.

So the first one is from Taylor. They say, it's all about the tenant. If you had a tenant, the stock would have been higher. Just why not sign a deal at slightly worse economics and you wouldn't be in this situation.

Well, I shouldn't say it. I had no intention of being a crusader, okay? And I believe signing a tenant is not the hard part. I believe executing on a tenant and being able to honor the contracts, which is why I started with the contracts is the right answer. And I absolutely -- when I was in the Northwest on December 5, where they were throwing the stock price had gone down 56%, even though we had nothing but positive news in this, I knew I was taking the hit, but I knew I was creating a long-term company -- wanted to sign contracts that I knew we could excel at and be successful at it because the asset is so great, it deserved execution so great.

And you know what, look at me, I lost my job over it, not really, but let's call it that. And I still have no regrets at all and neither do the 9 other people who left. It was the right call. And so we are in for the long haul. And I almost wish that the stock would pop for the tenant and then we that want to stay in for the long haul can make the long-term right decisions for Fermi. So I hear you, is the point. I'm just letting you know, Taylor, how I thought about it.

Another question from Nick. If you lose the proxy contest, will you do what's best for shareholders and allow the company to become REIT compliant or make it difficult for the company to obtain REIT status?

I've been crystal clear, Nick. I don't know if this is our friend, Nick from Evercore. I have zero interest in not making the company REIT compliant and have proposed a solution to all of the shareholders. We were incredibly -- blah, blah, blah, sorry, too much Red Bull. We're incredibly blessed at Fermi. And I have set up, I think, 4 foundations already that are ready to receive these shares with independent boards. And I think the securities accounts are already open.

So I don't -- I'd like to see how all this goes, but we're 100% have already taken actions to make sure that we -- I look back and I'm paying a heavy price for making it a REIT. I definitely still think it was the right decision. But boy, it's been a thorn in my side today. But I also don't intend to lose the -- we've had a really, really good day with 2 of the highest profile investors.

A question from Simon. Do you expect any dilution to raise more financing for the project?

Yes, that's what scares me. That's what the presentation was about. And when I look at why the tenant deal matters, is it will require, I think, potential dilution. And that's why I talk about the 3 Cs a lot.

Question by [ Manadep ]. Why do you give the market the impression that Fermi's management is incapable or doesn't have Fermi's best interest at heart?

I believe that Fermi management has its best interest at heart. What I have said all along is Fermi lost not me, but 9 other critical people that were, I would call the leadership behind Fermi 2.0. And as I said in the most sincere way, I'm so concerned about it that I propose John Sellers and Cody Campbell to move into leadership positions because what we need are people that can execute large energy projects at scale. And I don't -- this is not a character attack a little bit in that I think the leadership knows they're missing it.

And I think it's time for them to be completely honest and let's get a CEO, let's replace the 9 critical people we lost and let's march forward. So that we can ensure, again, everyone needs to understand these contracts have real penalties in them and with real consequences. And that's what kept me up, not up. That's what got me up at 3:00 a.m. every morning was to make sure that we can execute.

So if I'm coming across that I think there's bad intention, I apologize for that. That's not it. I have been with these men, and I know exactly that they're fully -- and well, the women have left, but with these gentlemen and that's why I invited Jacobo to come. Happy to discuss this with Jacobo in person in front of all of you.

A question from Jack. You were terminated. The company cited misrepresentations to the Board and conduct that violated company policy. During your tenure, the stock fell roughly 82% from its high, and Fermi lost at least one $150 million tenant deal with the company on record saying your conduct damage relationships with business counterparts. Given all of that, why should shareholders trust your judgment over the current Board's on what is best for this company?

Well, let's go through the 80%. 56% of the stock share price came because [ Minister Meisel ], Penncross Energy, he's close friends with the Governor Perry's son, magically shares became available to sell within 30 days after the IPO. That represented a 185% increase in float in 30 days. The record is going to show that, that absolutely influenced the negotiations with tenant #1. I chose not to accept tenant # 1. And again, you'll see it in the record soon.

And again, I'm not blaming them, tenant #1, for using what they had to tough trade us. I chose to take the additional share price hit so that we could put ourselves in a position to be successful long term. The week I was terminated that Monday through Thursday because the market realized that we were going to get tenants, and we were going to get partners. You've heard me talk about the stake and adding the lobster, adding dramatically to the scope that we were going to perform, the stock was up 36%.

As it relates to these issues of conduct, this is the funny thing. There will be not a text. There will not be an e-mail, and there will not be a Board meeting minute where any of these accusations were brought to my attention. If you work at McDonald's and you're doing something wrong, your manager is required to be there. Cathy, you're on the phone. You were there the last conversation I had with Marius, and he made none of these accusations. He just said basically the guns as a Texas Tech term, as I've already alluded to.

And so all of these nonsense things are going to be revealed in the next 21 days. And there will not be a text, there will not be an e-mail. There will not be a Board minute where I was a participant in that says anything related to these matters. And we'll deal with those accordingly after we get a tenant or after we get a sale.

Ben asks, what has surprised you most in shareholder conversations since launching the campaign? And are holders more focused on governance, sale value, dilution risk or execution risk?

I think the most surprising thing has been the misinformation that I somehow want to take a 20% to 30% profit and run. And anybody who knows me knows that's just not who I am as a human being. So -- but it's been interesting. The company has done a really good job perpetuating that. I think the second thing is that's come across that I'm anti-tenant when no one benefits more from something that transforms the share price more than me. And my love for this company and for what we accomplished and my appreciation for the value of what had happened is higher than anyone else's.

So that caught me off guard. I have gotten in with -- obviously, I spend my time on one-on-ones. Interesting, the dilution hasn't come up as much as I'm worried about, which surprised me. The vote count, I think, comes up. Are we going to back a winner and 70-30. I will just tell you where I am on that. I think this judge -- I don't know if I'm allowed to say this, but 2 of their law firms have already left the case. I think the judge thinks we deserve a fair hearing. I'm not going to read into -- everybody can read the transcripts. They're out. The -- and that's it is why are we voting on the 70 -- why are you asking us to vote before the 70-30 is decided?

And that's something, Cathy, that I'm questioning myself. Do we just go get the ruling on the 21st or the 23rd and let everybody vote knowing the full facts? Maybe that is the answer. That's been where I have gotten a lot of questions in that. But having said that, I've had a great day. As you know, [ Angela Matiesteph ] just got her voting card yesterday. You just got yours Friday. I think it's real early to get all of these decisions in.

Perfect. I know we're coming to a close here for you to make your closing remarks. So I'm just trying to see if there's any last question that we can bring on before that. Maybe this is a good one. A.J. has asked, if the proxy vote is not successful, how do you think the situation plays out from here? What do you see as the likely next steps? That almost kind of goes to your closing anyway. Toby?

Yes. Here's the deal. What I have said is that I hear so much about this project. And we were so blessed as a family to get to be a part of birthing this and really love our first year of stewardship. I am concerned about the overhang. And it's not me, I am concerned about the Perry overhang. I know the effect of the [ Meisel ] overhang, having personally lived through it. I know people on this call from Fermi would constantly complain to me, every time we do something good, Stephen sells. And so I hate that. It's a really big buzzkill in terms of the leadership. My prayer, if I lose the proxy, is that the company would find a leadership team that is very experienced at executing large-scale energy projects. And that is it. And you're right, Cathy, that's probably -- we've gone even over here.

But the point I would close with is this. I want you all to make the right decision for yourself. I do not want to come back to the company. Our family literally has completely moved on. Even when I suggested on the John and Cody deal that 9 of the guys go back at Cody and John's discretion, there were no takers. There were no takers. I think everybody on that is. So that is not -- I have no economic or personal incentive to do anything, but hope that the company is incredibly successful. The only thing I would add to that, Cathy, as I've had conversations today, as you know, with some of the biggest investors on the planet and you and I's own personal experience is I am going to extend the proxy -- and I haven't even told my lawyers who are on the phone, we have to extend this after the judge rules. And no one wants to have a proxy fight over America's 250th birthday.

Cathy, you and I know what we wanted to do on America's 250th birthday with the Koreans and the NRC announced our groundbreaking on our nuclear reactors, which absolutely could have occurred. And so my deal is to be constructive. My deal is to maximize value. I really want you all to cogitate on why I started with the key concepts of these contracts. And I -- the only thing I would add that makes news today is I didn't send out mailers like the company did this week because who wants to deal with the Fermi proxy fight on America's 250th birthday. Everyone knows I'm a patriot and my family is very patriotic. And so what we're going to suggest doing is moving the voting until after the judge rules.

And that way, every investor will have the opportunity to read the facts and understand what really has past, present and future of Fermi. So with that, I wish all of you a -- it feels so -- I don't know, let's pick up the pace in our patriotism and celebrating our 250th birthday. And I hope each and one of you enjoy your families. Thank you.

Toby, we had one last question as a follow-up. Just because of your overhang comment there, you keep saying that you're the one aligned with shareholders. This was the follow-up. Is that because you haven't sold and you said you hadn't sold post-IPO, and then they said you sold, but it was pre-IPO? Can you just clear that one up, please?

Yes. Pre-IPO, we're going into the ownership. I think I owned 41% or 42%, okay? And it was hard not to create an overhang issue going into the IPO if my family owned almost the 5/50 rule in and of itself. I mean, only left 8. Miles calculated, I think at one time, we were like pre-IPO like 67% under our 5/50 rule, it was like a really high number. I took the advice of investment bankers, even though at the same time, I was arguing for -- you obviously know where I thought the valuation should be, a much higher valuation. I agreed to sell to what I thought were investors who are going to support the company in its IPO moving forward and giving them a toehold investment with a sell-down by my family. I look back now and we should have even done that in light of what all has happened, but I did it with the best intentions.

Thank you for that clarity. Thanks, everyone, for joining today's call. I know it took a good hour of your time, and we appreciate your interest in...

Especially this week, I feel bad bothering people on their 4th of July week. You can see we're getting ready to celebrate.

We appreciate everyone's support of Project Matador and joining us today. And with that, the call is now over. Thank you. Have a great day.

Good afternoon. Thank you for standing by, and welcome to the Neugebauer Fermi Shareholder Update Call. [Operator Instructions] Legal disclaimers for this call are at the start of the presentation for you to review shortly.

I'd now like to turn the call over to Toby Neugebauer, the Co-Founder and largest shareholder of Fermi America.

I intended to join this call, this webinar by video today, but I've had an allergic reaction and my face is swollen like Will Smith in the movie, Hitch. This side of my face may hurt the stock price as the rumor will be that the proxy fight has turned physical. But seriously, I wanted to have this webinar because I think communicating through press releases and reporters is not the best way for the shareholders and other stakeholders to make the best decisions for Fermi.

There has been a lot written about me, my motivations and my state of mind. Well, I want to be able to tell you directly where I am, is in a state of deep pride of what Fermi accomplished in the last 15 months. It's just too hard to take the joy of the accomplishment away. Obviously, I am disappointed that I will not lead it. But again, I'm so proud of what we accomplished, and it is the driver of my thoughts on what should happen next.

I want to take my grandkids in 2035 to Amarillo and show them America's largest energy campus, the largest platform for generating AI compute. So my view is the next steward of this amazing project brings together the 3 Cs. And what I mean by that is the natural owner of the asset will be someone with a low cost of capital. This will be one of the most capital-intensive projects in the world. The second, natural owner of the asset is someone with strong construction capability. We bring a really good power construction team, but I think we want -- the natural owner will be great at the constructing of data centers.

The third one, it's either a customer or it's someone who has customers. I just do want to set the record straight. We were not looking for customers at our departure on April 17. We were working on delivering on expanded ask by customer routes. My sons hate it when I say this, the way I looked at it is, we set out to sell steak and the market loved our steak so much they wanted just to add lobster. And we were out looking for the lobster, and in the data center world, that was the cooling, the MEP we talked about at the earnings call.

Well, when I originally put together this presentation, I was hoping you'd be able to hear a diversity of voices, but unfortunately, compliance requires that it just be me. What I want to do with the purpose of this presentation is to explain to you why we are calling a special shareholder meeting to elect a new Board majority. The thing that we believe is critical is that Fermi must explore every option and the shareholders must have a strong voice in that decision.

As I've said over and over, we cannot be more proud of what we've built at Project Matador. It is a uniquely rare asset. But we are entering into a new set of risk as we transition from laying the initial ground infrastructure into the actual construction of both the power generation and the data centers themselves.

As we see where the business lies today, I think we see 4 major risks that warrant an evaluation of all the options. Leasing price risk, I think this is one of the things that concerns our family the most. It's not just good enough to get a tenant. We need a tenant deal that sets a precedent for the terminal value of the campus for the next 11 years. And I know there's a general thought that, hey, you can get a better deal on the next deal. I don't know I believe that as much in my conversations, I'm picking a name, Microsoft doesn't want to subsidize Alpha. Meta doesn't want to subsidize Amazon. And the terms will be pretty transparent.

The other issue is the financing risk. And whether we like it or not, it's changed our cost of capital. And it probably -- what got me to realize the asset needed a strategic review is I do believe our cost of capital and the intensity of the capital associated with potentially needing the money for the MEP has gone up at the same time, which gets us to dilution risk. And Fermi 2.0, really, to me, this is Fermi 3.0. We started Fermi 2.0 in December as we prepared for this next phase of execution. But the bottom line is the capital intensity, combined with our increased cost of capital, has made the risk for dilution to the existing shareholders very, very high.

Counterparty risk amongst -- across our customers, our contractors and vendors. Our remedy is an independent dual-track process that evaluates every market outcome before irreversible value and market opportunity is lost. It involves an independent committee led by leading bankers. It is not taking away the company's desire to go look for and enter into contracts with tenants. And we just want an evidence-based decision. We want a Board that hasn't made a conceived determination on what the outcome to be. We want a Board that wants to evaluate all of the options so that we can maximize value. How did we get here? There are five reasons. Again, the Board refused to run a process and the shareholders, I think, deserve one.

The second problem with our company, and you're going to see it in the chart later on, is the stock overhang caused by the Pencross showing their interest in October and November had led to a severe stock overhang issue so that even while we execute, we don't get the benefit of the execution as we're going to show you on the chart later on.

And then when you add the drama associated with our family's position, you've just made an overhang issue even more dramatic. Time to power is an asset. Any delay that we get in this process. erodes the premium that the buyer will pay. The bottom line, to quote Goose from Top Gun, "I feel the need, the need for speed." The reason we feel all feel the need for speed is because it will determine the market premium that we get.

The beautiful part of the dual-track process is it gets the people focused on just leasing it the pressure of knowing that they're competing against people who want to buy it. And the same thing happens is the people who want to buy it have to be competitive with the economics that we could get from a lease agreement.

So the Neugebauer family has 240 million reasons to want to get the best terminal value for this thing, period. As I said, I'm not seeking the CEO role. I think it is not because of my view of the job that occurred. I think it is the cost of capital problem. This is not a one-outcome solution. When we sought new Board members, only thing we ask for them is just tell us what you think the best outcome is for this company. We understand our period of stewardship over this asset is over. But what now we want to do is in that stewardship by making sure every shareholder gets the maximum value and get. And it's not just the maximum value, the maximum risk-adjusted outcome.

We do have an extraordinary thing that we've built. We've tied up the one of the most valuable pieces of real estate on the planet. We have 50 full-time employees with expertise in developing power assets, which I think is going to be a really competitive advantage. As you know, we've secured 2-plus gigawatts of generation capacity that is secure. We've got more coming on the way. We've got water. We've got the clean air permit. Obviously, we were highly successful in financing facilities. We installed the gas pipeline, the water pipeline in record time. And then our leadership on coal is pretty much what everyone in the world is adopting the Fermi nuclear strategy.

So what makes this valuable is that our source is -- our platform is difficult to replicate at speed. So we have 5 connected assets, each valuable independency a world-class platform. And if you talk to anyone in this business right now, it's all about speed to token. And there's no other place on the planet, you can get to speed to token at scale over the next 5 years than Project Matador. As you can see what we did on the construction side, this isn't a PowerPoint. This is a reality. And again, I can't be more proud of the speed at which we were able to execute.

So again, many of you all have been to the site. I don't know how many helicopter tours -- I think they said we did 150 helicopter tours. People just were blown away. You want to talk about the key to getting customers? It's not a charm, even though, Noah, my son, who was in charge of our interactions with our customers, is incredibly charming. It's about execution. These are huge projects. They have experienced delays in almost all of their other projects. And so when you want to get a customer, what they really want to know is, are you going to do what you said you're going to do when you're going to do it? And what they saw from Fermi is something they had not witnessed in any of their other projects in the world.

Unfortunately, the execution, and I'm going to start with the execution, is as you look at the story of the stock, not reflective of what really has happened at the company in terms of execution. We'll talk about the tenant delay here in a minute. Absent the tenant delay, we did everything we said we were going to do essentially when we said we were going to do it on the road show. But what we were coming up against as you all remember, there was a -- the original IPO was 35 million shares through a series of unfortunate events. There was a shareholder, frankly, I thought who had nonvoting shares, so I wasn't worried about his lockup, who had 56 million shares of stock.

He has partners, office partners with Griffin Perry, and they begin exploring liquidity when the stock was at the higher levels, both in Europe and in New York. Originally, we had hoped that, that would occur through a strategic sale to someone accretive, but they began showing the block into the open market, and I was forced to [ led ] his shares on October 30, 31. At that time, the stock was at right under $30 a share and even with the good news with the KAYAK and all of the positive things, I have 3, the water being approved, the KAYAK with tenant #1 being approved, the stock declined by 46% before the announcement of postpone.

And again, that first announcement was a postponement of the negotiations with tenant #1. Those continued on into February. But you can see we had already lost 46% of the value. And so you've got a block being shopped that's huge. And then you have the bad news around the KAYAK being terminated, and it just put us in a tough position with the stock. Then we go into January and February, we had an awesome February where we got the Siemens units delivered, we got the MFUG bank facility done, we've got the $100 million Keystone equipment loan, we got the Clean Air Permit approved. And every one of those days, we would get like 5% to 6% but then we just get crushed with people -- it was kind of like whack-a-mole, we would get success and get a pop, then whack-a-mole down.

So that is where we saw a Pencross doing another sale. And again, I view these events in the 6, 7 to 8, 9, when Pencross is out there in that market. It's just really hard for us to get momentum on the stock. Then what we then had coming into the earnings lockup was things were going really good. The week I was terminated, the stock was up 38%. And I think we would have had even more than that. We were coming up with the -- when you think about that was -- Griffin said he was selling and then we had the lockup expiration for all of the pre-IPO investors. So we're really feeling the momentum go our way. And then obviously, when they terminated me, we had a pretty bad day.

You take out the drama outside of the execution. So let's definitely -- we'll own the KAYAK termination. But you take out the drama, you have a 46% drop from the Pencross block sale. You have another 6% drop from the Pencross drop sales. That gets us to 52%. Then you have another 13% with Griffin's sale and then you take another 22% from the termination of me, you can see this isn't an execution story. This is an external story.

And the point is kind of what I said before, there's no need to cry over the spilled milk. I think this has impaired the stocks, cost of capital moving forward. So that's just what we want to do is going about making sure we make the best decisions just in light of the fact that now there's another 240 million share overhang on the stock, and let's just figure it all out together.

Our thesis for our go-to-market transaction, we have been working, looking at strategic options for our block, obviously. And so we have had engagement with investment bankers and have really good feel for 1 independent process. The new independent Board would evaluate credible structures within both paths of the same framework, a change of control transaction, credible structures. Was it cash, stock, mix, controlling stake, full acquisitions? We're indifferent. The new slate of directors, I told them I bring no preconceived notion on what it looks like.

So in order -- again, in order to deal with our increased cost of capital that's just embedded into our shares today, what we're proposing is a dual track process, the new Board pursues the M&A transaction and the management team continues its tenant strategy. I can tell you on the new board, our view is we are open to anything. I'm like I really don't care and bring no preconceived notion to the table. I want the best risk-adjusted outcome for the shareholders. Obviously, we are the largest.

And as it relates to the management team, to continue its tenant strategy, go get them. No one's rooting you on more than us. But what we are is we're very cautious about it's not just the price, the headline price, that matters but it's also the terms and specifically around the performance penalties and all of those things. These are big contracts, they're complicated contracts and we just want to make sure that all of those risks are embedded into our decision-making.

So when we think about the buyers, okay, is 2 kinds. You've got that what I call the bottleneck strategics. These are people that must have power. So that includes your chip makers, that's your hyperscalers, that's your developers. If you were around me on a daily basis, you'd be, what's he talking about. I'm saying the word 3 Cs nonstop all the time and it's really how I think about who's the natural steward for this asset.

And first of all, it's cost of capital. This will be, I believe, one of the most capital-intensive projects in the world. And we're showing $70 billion for Phase 1 through 4, that depends on if we're providing the lobster, i.e., the MEP. These numbers could get even higher. So one of the big things I've learned being in the energy business for a long time is cost of capital matters because it's your most expensive cost.

The second is a customer. I think of it, this asset belongs to someone who has customers or is a customer. And so -- and then finally, construction. As we have great continency at Fermi around the energy construction component, being able to take it from the energy construction component to AI compute ready, we're going to -- the group that's naturally going to navigate or go towards this asset is going to have a great path towards construction.

So when I look at that, I got to 6 categories of buyers. The hyperscalers are rapidly becoming leaders in the construction of their own projects. The oil and gas majors, I think, longer term, it may be too soon today for them, but they have the cost of capital and they had the construction credibility. The data center developers understand that the grid power game is over. And so they know they're going to need to get into the business of developing the power. What Fermi offers them as a plug-and-play team ready to get that started today.

Obviously, we're getting interest from the infrastructures and the PE sovereign wealth funds, especially your infrastructure funds. They're used to large-scale energy projects so it's something they can -- a lot of these were big energy people that then gravitated into the data center development based on their being able to manage and finance large-scale projects. Some of these neo clouds, the word neo doesn't even feel appropriate for a $1 trillion new company. These people are trying to lock up their path to growth. Their companies are being valued on very high growth rates. So they are a natural. Some of these would be companies I would really like to have shares in.

So when I look through this list, which one a cash from and which one I want stock. I probably could spend the rest of the afternoon philosophizing with you all on that. And then I think the natural people that need to buy this are the chip companies. I think they're quickly realizing they can't sell more chips than there is power to provide those. And there is no place that they can bring their customers to Project Matador and show them a clear path to significant amount of AI token production.

What we've been looking at is we're numbers people at our shop and is, what does the value of 1 gigawatt get to each buyer type. So a data center developer, we would expect them to make about $990 million off of the 1 gigawatt of power at our site. And then you start looking at the hyperscaler because they're closer to that token compute, they can make a $5.6 billion per gigawatt annual EBITDA. But then I get to the chip companies, and I know one right now is just hot to trot for it that is more than capable of buying it. And the reason they're hot to trot is we estimate with our bankers that they could make a $10.5 billion annual EBITDA of providing the chips to that business.

So you can see that we have an asset that really can move the needle for these companies. So when you look at the multiples, and you all on this call know these multiples better than I do. But if you look at the data center developers, they're trading at about 20 times. The hyperscalers are trading at 15, but really, their growth businesses are really trading higher and their more legacy businesses are trading lower. So I argue that the forward multiple for the hyperscalers for the AI compute business is actually higher and that the more mature businesses is lower. And then the chip and semiconductor businesses are 22.

So you take those numbers of estimated EBITDA and then you look at the forward multiples and you can see why we're believing that this Board must take a hard look at a strategic transaction. Now I think one of my favorite ideas and almost didn't -- I almost did the nuclear separate to begin with. And I believe our nuclear business is way more diverse than just the AP1000s. Having said that, I believe the AP1000s are going to get built. I think the smart heads are going to prevail in Washington. I think the Koreans remain committed to it. But we also have other types. We have other SMR companies that are interested in at this site. And we have some of the derivative companies that are going to provide services in and around the nuclear industry that are very interested in the site.

And what's great about our nuclear business as we have 2 of the top executives in the world when you've got in Mesut, who's our domestic partner leader. And then you have Dr. Choi in Korea, whose really expertise in this is unmatched. So I have absolutely advocated and almost to this day regret not bringing the nuclear business out. So we're thinking of everything.

I think we've had a lot of drama in the press. And right out of the gate, I wrote a very positive press release. As I said already in this call, I believe Fermi's days are brighter ahead. And I did call for a review of all the possible transactions to maximize value for all shareholders. The company within 24 hours, said that it was not interested, the word on the street is that a couple of bankers have reached out to them, gave them very specific wonderful names that were interested in a strategic transaction and the Board made it clear it was not interested and engaging.

If I'm going to not make it a personal thing about them and do the right thing for the company, I would just ask them to consider us doing the right thing and evaluating all of our options. Kind of in the 27 days, the Board has been incredibly aggressive. I think everybody has read the release. Bottom line is I have never received a negative view, a letter of how we're running the business wrong ever. I have sent multiple letters to this Board starting in January, outlining concerns I've had with the governance and things happening at the Board level, and not here to defend it.

Bottom line, all we're asking for is a vote. The latest stat is just devastating. This new Texas equity capital markets we're trying to create here, when you basically raised the threshold for decisions in the middle of a dispute. So I said they wanted to do that in January or at the beginning. But changing the rules in the middle of the game, analogy we use for it as we're playing basketball and they took away the rim on our side because they were afraid we were going to hit the goal. And that's not a way to treat people. It's not the way to treat shareholders. Bottom line, they came up with their number based on what they thought the insiders have about 22.5% of the shares.

So what we want to do is my -- I know you're tired of the movie analogies, but we had the horse racing season and my favorite one is Seabiscuit, where we won a match race. We just want to vote, and we want -- and it's not a predetermined vote on whether it's a strategic sale. It's not a predetermined vote whether it's a tenant deal. It's a post new Board vote on what's in the best interest of our company, and that's all we're out to do.

Now I want to talk about the people that I brought in for our Board slate. I have no prior relationship with anybody here except Toby Neugebauer. I take that back. I've known 1 peripherally for a while. But David Daglio is the former CIO of Mellon Investments, a very qualified person. Charles Elson is one of the top corporate governance advisers in the country. John, I loved because he's been doing big projects for BP around the world. So he can help us evaluate our construction risk relative to an outright sale.

Janet is a dynamo, and I hope to be involved with her longer term. She's a significant energy background, and I think you all will be more than impressed as you get to know her. Juan is the former Vice Chairman, PwC Global Advisory, you've led it, and then he's been one of the key directors at Wells Fargo. So in terms of how to run the radio to use a Texas phrase, one background is second one. Sheila is the same way. She's been doing this at the highest levels for a long time. So again, but what I really went out to do was to just go find the best people that I thought would give an honest assessment and add to the governance of the company.

Right now, the company has essentially been hijacked into a kind of a 3-person committee and we've had governance issues going on for a while. And we need to get back to traditional, what I call, Texas-style which is the golden rule governance with this company.

The engagement is already underway. Everyone already knows about Fermi, right? There's been 4 rounds of institutional investors. The hyperscalers have been engaged. Obviously, the hyperscalers, almost all have been there, most of them have been there multiple times. They've all been in the data rooms. So what's great about it is we're not introducing a new concept. And I think we can have a -- by June 30, we will know exactly across those 6 buyer categories, there's about 30 really legitimate buyers, and that's what's great about it.

This isn't like we got to get 3 buyers. I mean, we have 30 legitimate across 6 buyer categories, and our banker shortlist is complete. I think we can have the process almost I think if we -- to get the meeting done by June 30, I don't see any reason that we don't know who the -- I mean who the owner is by August 1. Again, I don't think this is going to take a long period of time. So we think start to finish from today, it's a kind of a 75-day process.

I hate to be this part of company's claim versus facts. It feels a little defensive. I was hoping somebody else would be able to do this. But I've talked about the stock decline. We had a 35 million share IPO. Mr. Perry and Mr. Mizell office together and have been communicating their intent and to provide -- to dispose of those shares in the market since October and it's just been incredibly hard for me to -- it's like every time we get some momentum, we get -- basically, what was going in at the company is the management team was feeling like they were only working for Steven Mizell. So that every time they created a success that it was being absorbed in the stock through the stock overhang. It has been my #1 issue at the company and the letter I wrote to the Board. This overhang issue was critical.

Intent, it is not an ill-advised attempt for immediate sale. My heart is completely in the right place. As I said, I intend to be out grandkids on that site in 2035, and I would do nothing to jeopardize not seeing that happen. I am unaware of the cause after a careful comprehensive process. We'll be pushing back pretty hard on that. I think the market has -- the article in the Wall Street Journal, there has been significant differences between Governor Perry and myself. That is an accurate report. But there's not a text or an e-mail saying, I think you should do this better or that better. I was caught off guard on that one.

Execution is, I don't even -- I'm not even -- the proof is out there. The execution, I will put what this team accomplished in the last 15 months of any startup and that we can't transact. I mean you go look at the volume of transaction from the I mean just the sheer number of deals we had to make to get this company in this place. And on the execution side, I was in the process, the real Fermi 2.0, you can ask any member of the management team started in December as I prepared this company to have better contracting, better accountability on the cost at the site in preparation for deploying billions of dollars.

And on the -- we lost 7 really great people as a result of this event. And frankly, I think they would have lost more if it hasn't been my encouragement, encouraging people that the days ahead are great for Fermi, and they are going to get to build the world's largest energy complex and just hold on.

I hear the public valuation. I think we talked about the overhang problem, the near term liquidity. What we did every day is from 3 to 4. And we did liquidity as the senior leadership team, and I'm talking about 20 people, we would do liquidity management. In terms of I had gotten some very favorable refunds coming. I'm afraid those are the people who complain to the Board about me the most were the people I was demanding some refunds from overbilling.

Tenant negotiations, I said it in our May 30 earnings call that the tenants had bought the steak, they wanted lobster, and we were going out to procure the lobster and to be able to finance it, i.e., the cooling.

So bottom line, this is about shareholders should decide the future of Fermi. This is about achieving maximum value for everybody. As I said, this is a shareholder democracy issue for me and this shouldn't even be this hard. This should be -- we shouldn't be spending any money in legal, which we're spending way too much on, to do what's the right thing for everybody, and that's to let the shareholders decide.

Another thing I would point out as we close out here is in my conversations with the people the most knowledgeable, stakeholders in the business, they are all for a dual-track process. And again, these are people from key vendors and suppliers to large shareholders and echoing our point of view.

And finally, as we close this call out, I want to say to my former colleagues. I want to say to the City of Amarillo and all the Fermi stakeholders, I am certain that Project Matador's best days are ahead of it. And as I started the call with, I cannot wait to take Melissa and my grandkids to Amarillo in 2035 to show them what our family had the privilege to conceive and launch.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Fermi America's First Quarter 2026 Earnings Call.

[Operator Instructions]

Please note that today's event is being recorded.

I'd now like to turn the call over to Rodrigo Acuna, from a Director of Investor Relations. Rodrigo, the floor is yours.

Good morning, and thank you for joining Fermi America's First Quarter 2026 Earnings Conference Call. With me today are our Chairman of the Board, Marius Haas, Co-President of the newly established Office of the CEO, Jacobo Ortiz Blanes and Anna Bofa, and our Interim Chief Financial Officer, Rob Masson.

Today's call contains forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. For a detailed discussion of the risk -- please refer to our most recent annual report on Form 10-K and our recent reports on Form 8-K. Any non-GAAP measures discussed today are intended to provide supplemental perspectives on the company's ongoing operations.

I will now turn the call over to Marius.

Thank you, Rodrigo. Good morning, everyone, and thanks for joining us today. We're at a meaningful inflection point in Fermi America's development. With Fermi 2.0, we're moving forward from the entrepreneurial foundation that built this company to the institutional framework required to scale it. Fermi was built on delivering reliable private grid power at scale to the hyperscale compute infrastructure that the AI economy requires. That hasn't changed. And market conditions continue to validate our approach and value proposition, forecasts for AI-driven power demand buried but the central tendency has moved meaningfully upward over the past year.

In the near term, the picture is one in which power availability, not capital and not demand appears to be the biggest constraint. It's clear that delays are being reported across announced projects globally. And those delays are being driven by great interconnection timelines and equipment availability. What's important for you to know is that our strategy is oriented towards addressing that specific gap. And it's why we believe our project is advantaged.

Our mandate today is to execute with the governance, commercial relationships and operational discipline that our investors rightly demand and expect. On today's call, we'll cover several important topics. First, I'll address the leadership changes and the steps we've taken to strengthen governance, commercial execution and financial discipline. Second, Anna will cover commercial progress, including tenant engagement, regulatory and nuclear. Third, Jacobo will provide an operational update on Project Matador, including recent site progress across procurement and construction. And finally, Rob will review first quarter results and liquidity.

To begin, I want to take a moment to directly address the recent changes in leadership. Last month, the Board removed Toby Neugebauer from the position of President, Chief Executive Officer and Director. He was terminated for cause. The Board's decision was deliberate. It was unanimous among the directors involved and it was the result of a careful and comprehensive process that included guidance of an independent counsel.

Importantly, the Board firmly believes the move was in the long-term interest of this company and its shareholders. While Toby played a critical role in building something genuinely ambitious, the Board recognized that over the next 18 months, Fermi needs to operate differently. We need to execute multibillion-dollar contracts with investment-grade counterparties while continuing to evolve as a public company advancing towards commercial operations. This evolution is what Fermi 2.0 is all about and executing it will require changes at the top.

These include 3 significant actions. First, we have strengthened our governance structure. I have assumed the role of Chairman of the Board, bringing experience from Dell Technologies and the enterprise technology sector. We expanded the Board from 5 to 7 directors, adding Myles Everson, Larry Kellermann and Jeffrey Steve. As our former CFO, Myles knows the company inside and out. Larry currently serves as our Head of Power and has more than 40 years of experience building multibillion-dollar power generation asset portfolios. Jeffrey is a seasoned Chief Executive and Chairman with deep experience scaling industrial enterprises into public company caliber organizations.

We have engaged Heidrick & Struggles, a respected executive recruiting firm to lead the search for our next CEO. That process is underway, and we have a preliminary slate of highly qualified candidates already in hand. We're focused on identifying the right person, a seasoned leader with experience leading large, complex companies, relationships with hyperscalers and fluency in project financing to take firming to commercial operations and beyond. Additionally, we have hired Rob Masson as our interim Chief Financial Officer. Rob has more than 20 years of public company financial leadership. His track record of driving growth and enterprise value across multiple industries is exactly what this company requires as we scale Project Matador and cultivate institutional relationships.

Second, we have formalized our operational presence. We've established a new corporate headquarters in Dallas in addition to our permanent on-site presence in Amarillo. Dallas positions us close to key stakeholders and deep talent while Amarillo keeps our team embedded in Project Matador's build out.

And third, we have actively rebuilt and expanded our commercial relationships. Since the leadership changes in April, our commercial momentum has strengthened. Tenant conversations that had previously stalled have been reinitiated, and new prospective tenants have entered our data room.

The market's response to the structural changes we've made have been constructive, and we're increasingly confident that this evolution positions Fermi to accelerate the execution of our first binding tenant agreements. And I will provide more color in a moment.

At this point, I want to quickly touch on a few topics that are top of mind. I'll start with liquidity. Rob will discuss this in more detail shortly, but here is the main takeaway; we have multiple levers we can pull, and we're managing this company so that capital decisions are driven by strategy and not by pressure.

Next, our former CEO's ill advised call for an immediate sale of the company. The Board has carefully considered that view and rejected it outright. Our fourth sale at this moment is not in the best interest of the long-term shareholders, especially with anchor tenant negotiations advancing and our financing structure intact. As any responsible public company should be, we're always open to value-creating opportunities, but we're not going to be stampeded into a short-sighted decision.

Lastly, I'd like to talk plainly about what has not changed. The assets and fundamental value of our business have not changed. We have a campus on the path to 17 gigawatts of private power with a 6-gigawatt clean air permit in hand and an additional 5 gigawatt applications filed. We have more than 2 gigawatts of long lead time gas generation, either on-site or under a firm contract. We have great partners, including Texas Tech University, which has reaffirmed its support. Our mission has also not changed. The country is in a generational race for AI compute and that raises bottlenecked by power.

As I mentioned earlier, behind the meter gigawatt scale redundant private power that is delivered on the necessary timeline is not a nice to have, with the hyperscalers and frontier model developers. It is the constraint. Fermi was purpose-built to relieve that constraint. If anything, the macro thesis that served as the basis for our highly successful IPO is sharper today than it was then.

And perhaps most importantly, the fantastic team executing on our vision has not changed. The engineers and project managers who pour the foundations handle supply chain logistics, manage EPC contractors and run permitting are here, remain focused and are moving forward.

I will now turn the call over to Anna for a commercial and regulatory update.

Thanks, Marius. I'll cover 3 areas today: commercial progress, regulatory advancements and the continued derisking of our nuclear program. I'll start on the commercial side. The most important message is that the market has not walked away from this asset. If anything, recent engagement has reinforced the strength of Project Matador and the urgency of the customer need we are addressing.

The underlying customer need has not changed. If anything, it has intensified across hyperscalers, neo cloud providers and enterprise compute operators, the same constraint keeps coming up. access to large-scale, reliable power on a timeline that matches AI demand. That is the commercial opening for us at Fermi.

Fermi 2.0 is about making the company easier to work with, creating a more streamlined commercial interface for customers and partners who want to move quickly and confidently. That means faster decision-making, tighter commercial coordination and a more direct path from diligence to binding agreements.

Over the past 2 weeks, we've hosted multiple prospective tenants and strategic partners at our site. The feedback has been highly constructive. Customers and partners continue to view Project Matador as one of the most advanced and customer-ready large-scale power campuses they have evaluated. That matters. Because customers are not looking for conceptual capacity. They're looking for credible near-term power, real infrastructure, secured equipment, permitting progress, land control and a team that can execute.

The conversations we're having are increasingly specific. Customers are working with us on capacity planning, delivery sequencing, power availability, reliability, operating structure and the commercial frameworks required to move from interest to execution. Importantly, these conversations are continuing under the office of the CEO structure. Customers are not waiting for a permanent CEO appointment to engage. Their need is immediate and they are working with us now to match capacity requirements and potential delivery paths.

We are also evaluating strategic partnerships with established and respected data center operators and infrastructure partners. We view those partnerships as potential accelerators, a way to expand our execution capacity, increase customer confidence and serve a broader set of tenants while maintaining commercial discipline.

So the commercial message is straightforward. Demand remains strong. The asset is being validated directly by the market and Fermi 2.0 is giving the structure to convert that demand into binding agreements with the right counterparties at the right economics and on time lines, we believe we can execute.

We will announce binding agreements when they are signed and when disclosure is appropriate. We are encouraged by the progress, and we believe the changes we've made have strengthened and accelerated our ability to transact. On the regulatory front, the most significant milestone of the quarter happened in February with the receipt of our clean air permit for 6 gigawatts. This represents the second largest permit of its kind in the U.S. This is not just a regulatory milestone, it is a commercial milestone. The approval is a key enabler of our commercial program. It provides prospective tenants with the regulatory certainty they need to commit capital to long-term agreements at this scale.

In late March, we filed for an incremental 5 gigawatt gas permit, giving us additional flexibility as we build towards the broader campus vision. We have also filed for foreign trade zone subzone designation for our imported generation assets. Once that's received, it will deliver meaningful tariff relief and duty deferrals, which has a quantifiable benefit to our balance sheet.

Finally, on nuclear, this work is about strengthening the long-term commercial value of Project Matador. We have a front-end engineering and design agreement with Hyundai Engineering and construction that cover site layout and civil cost estimating.

Doosan Enerbility has also commenced preparation of forging dies for our reactor pressure vessels. It's worth noting that we're the first private company to be admitted to the NRC's accelerated National Environmental Policy Act pilot program. This work in combination with the DOE financing track significantly derisks the long-dated portions of the campus buildout and underscores the national strategic priority assigned to this project.

I will now turn the call over to Jacobo for an operational update.

Thank you, Anna, and good morning, everyone. Construction of Project Matador continued to advance during the quarter. Our team is focused on consistent strategic execution. We have continued to build our team and strengthen our systems and processes. We have now installed more than 11 miles of perimeter fencing, nearly 5 miles of high-pressure gas pipeline, 7 miles of water distribution lines, providing 2.5 million gallons a day. And we have built a 2 million-gallon water storage tank and secured additional water rights for the site. We have also brought 86 megawatts of power from Xcel to the site.

Looking at our power generation assets, 3 GE 6B Frame turbines are currently undergoing refurbishment in Houston, and we expect them to be completed by the middle of next month. The foundation for these turbines have already been poured. Our Siemens SGT-800 generator sets have arrived in Houston and cleared customs. The foundation for these gensets have been prepped at the site and are almost ready to be board.

Lastly, the F-Class turbines representing 1.1 gigawatts of combined cycle capacity are scheduled for delivery in the third quarter of this year. With an additional 6 Siemens SGT-800 turbines, which are secured and scheduled for delivery in 2028, our total natural gas generation equipment is roughly 2.2 gigawatts.

With this significant milestone and the conclusion of Phase 0, we post additional site development as it was always planned until a tenant is signed. Future capital deployment will remain disciplined and aligned with commercial progress. Through our $1.4 billion investment in balance sheet assets, we have established a speed to power advantage that we believe is unmatched and highly compelling for customers facing rapidly growing compute demand.

Bottom line, we're in a great position to mobilize immediately upon lease execution. Our supply chain is secured, our EPC contractor relationships are intact and stronger than ever. and we're highly confident in the availability of labor in the region.

Finally, Fermi 2.0 is focused on stabilizing and scaling what will become a generational opportunity through disciplined execution operational clarity to transparent leadership and long-term shareholder value.

I will now turn the call over to Rob for the financial review.

Thank you, Jacobo. For the quarter, we reported a net loss of $189 million. About 70% of that was noncash. It was driven primarily by share-based compensation associated with our broad employee equity program. We also incurred a $25 million loss on the retirement of the Macquarie term loan. Cash used in operating activities totaled approximately $7 million for the quarter. It benefited from $29 million of accounts payable and accrued liabilities growth, partially offset by $7 million of cash used on prepaid expenses and other assets. This resulted in $22 million of net working capital benefit. Without this benefit, we used approximately $29 million of cash. We are committed to managing corporate overhead as we invest in bringing Project Matador to life. We invested $441 million in property, plant and equipment during the quarter. That brings our cumulative investment in Project Matador to more than $1.4 billion.

The primary allocation was to natural gas power generation, including turbine procurement across our Siemens and GE fleets. The remainder was deployed to site infrastructure, substation equipment, electrical interconnection and early nuclear predevelopment.

With regards to liquidity, we ended our quarter with $243 million in total cash. Notably, this quarter, we fully repaid the Macquarie term loan. By doing so, we replaced approximately $150 million of high-cost debt with more favorable equipment financing. We have $785 million of new equipment financing facilities, anchored by $500 million from MUFG, one of the world's leading infrastructure lenders. This debt is structured as nonrecourse to the parent company secured by the underlying generation equipment. In late March, we also secured more than $156 million of financing with Yorkville, which will support general corporate expenditures. This agreement provides additional flexibility at the parent level while our equipment level facilities fund our long lead time power generation assets. To date, we have not drawn on this facility.

In total, we've now secured nearly $1 billion in financing commitments as we scale up Project Matador. Importantly, moving forward, we will be disciplined with our deployment of capital by more closely matching cash outlays with capital inflows that arise from tenant agreements and the transition to project level finance.

Taken together, we believe our sources of capital and disciplined deployment provide funding for our near-term development activities. Looking beyond our existing sources, we expect to fund the next phase of Project Matador through a combination of tenant prepayments, additional nonrecourse equipment financing project level, nonrecourse debt and taking advantage of government programs, including the DOE Office of Energy Dominance financing.

I will now turn the call back to Marius for closing remarks.

Fermi 2.0 is defined by the convergence of 2 things: The tangible asset base we have already constructed and the institutional capability we are now deploying to realize its full value. We have converted investor capital into more than $1.4 billion of infrastructure at a site that few, if any, competitors can replicate on a comparable time line.

Over the past several weeks, we've seen an exceptional level of receptivity in our strategy and plans from every corner of our ecosystem. Our prospective tenants, existing suppliers and partners, government officials and most importantly, our employees have been deeply engaged, which strengthens our conviction in the path we're on.

Our Fermi 2.0 strategy and execution plans are now in full motion. At the management level, our focus is clear and disciplined, attracting premier tenants who recognize the unique value of our platform, building the best private power grid on the planet in close collaboration with our suppliers and partners. Ensuring sufficient capital to support liquidity needs, accelerating strategic partnerships in both power and data centers and investing in our people and talent pipeline, including key leadership additions.

At the Board level, our mandate is to ensure that the company scales into a truly enterprise class organization by doing the following: Establishing clear strategic and operating priorities designed to enable consistent flawless execution. Conducting a thorough, disciplined process to hire a world-class CEO who can lead this next phase of growth. And proactively addressing outside interference so that leadership can remain focused on running and growing the business.

Above all, we are aligned around a single overarching objective; maximizing long-term shareholder returns. We look forward to updating you on our continued progress as we execute on the Fermi 2.0 vision.

Operator, we're now ready to take questions.

[Operator Instructions]

Your first question is coming from Nick Amicucci from Evercore ISI.

Just wanted to clarify. So in the release, you kind of laid out a 90-day plan that has kind of the 5 points of emphasis. So if we could just kind of define for investors what we should expect to see by the end of that 90-day period? And specifically, if you clarify whether the 90-day objective is a binding lease offtake or a nonbinding or both.

And then is that tenant agreement kind of the gating item for the other 4?

Nick, thank you for your question. I really appreciate it. I want to make sure that the team is fully comprehensive of the fact that we're 100% focused on executing on our plan and that we have just laid out for you. As to the next 90 days, it is our expectation that you should measure us on delivering on these 5 key points: A secured and binding tenant agreement that we maintain capital discipline to support liquidity, that we hire our next CEO that we deliver power at our project site and that we explore strategic partnerships for accelerating data center and power deployment on our site. Those are the 5 commitments and deliverables that we're focused on for the next 90 days without distractions. That's how you should measure us.

Great. Very clear. Then if I could just touch on just kind of the cash component. So operating cash use was kind of limited in part by working capital benefit from accounts payables and accrued liabilities. So we now have -- you have $243 million of cash and restricted cash, $421 million of debt. $441 million of CapEx that -- that was incurred during the first quarter. And now this -- now the $150 million of your fill commitment. So how should we think about kind of the normalized cash burn in 2Q and 3Q prior to a binding agreement? And should we expect any type of meaningful reversal of the 1Q payables or accrued liabilities?

That's good. So yes, let me talk about liquidity. As you said, we have -- we had $243 million of cash and restricted cash at the end of the quarter. It's important to note that we have strong equipment financing in place that covers most of our remaining expenditures on turbines and electrical power equipment, so we have these MUFG and Keystone Equipment secured on nonrecourse debt. Deal Bank, we have $160 million of capacity there for 6 Siemens turbines that will be built and delivered by 2028. So we feel good on that side about our equipment finance. The Yorkville facility is really there for a backstop for general corporate purposes. It gives us flexibility at the parent level. We have not drawn on this facility yet.

As we think going forward, as I said, the equipment financing will cover the power assets ordered. And then the sources of capital and disciplined deployment, we're really changing the way we look forward. It's that discipline Marius talked about looking at our payments and matching them to new tenant agreements and so forth. So you would see a disciplined approach going forward with capital.

Your next question is coming from Nick Lawson from Ocean Wall.

It's Max Taylor here from Ocean Wall. Just stepping in for Nick. It'd be great if we could get a bit more color on the 5 gigawatt Air Permit that you filed in March. Just around sort of what are the expected time lines for approval? Have there been any sort of early signals from regulators, any early conversations?

And then just sort of the second part, what were the lessons, I guess, from the 6-gigawatt permit approval that give you confidence in the time line for this new application?

Thank you for the question. This is Jacobo Ortiz. I'll start with the latter. The 6 gigawatt Air Permit is in place, EPA is supporting it, and we're moving forward with it. And as we have already communicated, it's the second largest Air Permit ever granted in the U.S. Based on that feedback and all of the studies that we did, we have space to increase it by an additional 5 gigawatts, which was filed recently as reported, and we fully expect it to be completed successfully by the fourth quarter of this year. So we remain confident in our approach. We learned that by being transparent, clear with our studies and what we were doing, we got the first one, and we expect the second one to be granted as well.

I think, Max, just to add to it. I think the comments we received from the first 6 gigawatts was why didn't you ask for more? And that triggered us going ahead with the application for the next 5 gigawatts as part of that process.

Your next question is coming from Vikram Malhotra from Mizuho.

Maybe just first, you put out -- in the 90-day plan sort of securing a tenant agreement. I just guess one, why sort of put a shot clock in terms of specific 90 days? Is there something about conversations or tenant types or where you're progressing to be that specific sort of given the history of the last year. So maybe just give us a bit more flavor on like what gives you confidence to sort of highlight over the next 90 days, you can secure a tell agreement?

Yes, happy to take that. So I think what gives us the confidence that we've been able to identify kind of what was holding customers back from engaging with us. And that was really the fact that they wanted to feel that they could trust us that they could build a long-term relationship with us. As you know, these agreements are 15 to 20 years. And so the counterparty is looking for assurance that who they're partnering with is somebody that is going to be able to support them over the long haul.

And so for us, that was why we made the changes that we made to ensure that we were a relationship company and that we could step in to support these folks over the long haul. So part of our confidence is about that.

The other piece of our confidence is around the kind of state of our site. As mentioned earlier, we've had numerous partners to the site and folks have really let us know that the site is the most customer ready that they have seen in the country. And then the third piece of it is just the demand. The demand has not gone away. Everyone is looking for capacity, and we're one of the few projects that has capacity for the next couple of years at the scale that we have it.

So those things give us the confidence. It's the relationship building and trust we've been able to do over the last several weeks it's also grounded in the readiness of the site. And then the last point I'll make on this is that so many of these customers have also been focused on figuring out how they can engage with us from a transaction standpoint. And so we've really tried to align our commercial activities to be much more streamlined. So it's much more clear how our process works on both sides so that they can engage with us confidently.

I'd just add one final statement is that over the last 3 weeks, our pipeline has increased exponentially, much more so than we ever expected.

Okay. That's good to hear. So I guess the second question, just 2 parts to it. On this tenant potential signing, are you able to give us some color on high level as we've -- what we previously modeled in terms of potential revenue and more so the CapEx to build out this first lease, whether it's -- no matter what size we had thought we had sort of said first gig would probably be around $4 billion to $5 billion and the first gig would generate a certain amount of NOI. So can you give us any high-level color on what it would cost to build this out?

And then just related to that, are you on a short talk with Texas Tech as well? Just maybe update us on, is there a stipulation still that you need to sign a lease by a certain date?

Yes. So what we're looking at right now is maybe an evolution, we'll call it, is we thought there's now multiple structures that we can pursue that deliver the same economic value opportunity to these projects. And so we talked a little bit about our pursuit of potential partnerships with data center partners, power partners, infrastructure partners. We continue to engage directly with hyperscalers and -- but we've realized that there is multiple paths to be able to achieve our financial goals with these projects. And so while we can't say specifics, of course, around the numbers of the deals that we're currently trading can say that we feel very confident that the deals that we have at hand provide the same kind of economic opportunity that we've always set out to achieve.

I'll add just a little bit, Vikram. One of the strategic priorities we laid out for the next 90 days is to explore partnerships to accelerate our data center and power deployment capabilities. That has a very interesting opportunities around additional capital infusion into the business that would come from our partnerships. So that's extremely helpful.

And on the Texas Tech question you had, let me reassure you that we have a very, very strong relationship with Texas Tech. We have met with the Board of Regions Chair. We met with the Board of Regions Special Committee overseeing the relationship with Fermi. I personally met with the Chance for twice in the last 3 weeks. We are both extremely motivated to ensure the long-term success of Fermi as it's a highly visible project for both of us.

Your next question is coming from Skye Landon from Rothchild & Company.

I know it might be early days, but just wondering if you can elaborate on the idea of exploring strategic partnerships for the power and the data centers. What does this potentially mean? Does it mean bringing in a more experienced operator for the power generation sets and things like that?

Secondly, just checking on the power plan that you've shown within the slides. Is the option of XL providing an increased level of power up to 200 megawatts still on the table? And just wondering why that isn't part of the 2026 and 2027 power plan? And then still on the power plan, does this include the turbines kind of running in single cycle? Presumably at some point, these would need to move to a combined cycle? And just wondering when and how you would look to do that and if that's part of the air quality per conditions?

Yes, I'll start with the data center question, and then I'll turn it over to the others for the rest of your questions. So on the pursuit of partnerships, particularly on the data center side, this is really a direct reflection of the conversations that we had with hyperscalers.

And what we're seeing is that, again, their demand is so high that they're needing to pursue pads with partners to have additional capacity. And so we realized that by also pursuing those data center partnerships that there's a way to kind of meet them where they're at. The space has changed tremendously in the last 6 months. And so as mentioned before, realized that there's multiple structures to be able to serve these customers. And so we want to ensure that we are meeting them where they're at and also pursuing the things that they're looking for to stay up to date on their needs. And so that's what we're doing.

The goal on the exploration of power partnerships is also a reflection of this need. One thing we're looking at is how do we kind of look at additional capacity to serve more customers. As Marius noted, the demand that we've seen over the last couple of weeks is so strong that we're now in a position where we're thinking about how do we kind of bring more capacity to our site quicker. That we can serve additional customers. So those are the 2 reasons why we have pursued these partnership opportunities.

And I'll turn it over to Jacobo and Marius for your questions.

Yes. I'll add very briefly. Obviously, those partnership conversations are bounded by confidentiality agreements. So therefore, at this point in time, we can't provide more information. But rest assured, these are the names in the industry that are coming to for me and wanting to partner with us to deliver the best-in-class service and product to our customers.

The last thing I want to add is that our generation equipment position is strong. It's something that is unique to Fermi versus the rest of the market. And if I go power block by power block, our GE 6Bbe turbines are refurbished, we're ready. Our F-Class units from Siemens, our brand new units, it's again, 1.1 gigs. They're finished in Germany and will be shipped over the summer to the U.S. Our SGT-800s as we have reported are in the Port of Houston, awaiting to come to the site.

So from that perspective, again, we have been very deliberate in getting our power ready. We have 2.2 gigawatts of available power on hand, 1.5 of that, which we can execute by the end of '27, provided we have a tenant and project finance. We're going to be deliberate in how we execute our plan. And then last but not least, we have, as we reported, 200 megawatts from Xcel, 86 of that time is already at the site and an incremental 114 megawatts will come in the first part of '27. So we're ready to serve customers.

Great. And one more, if I may. Just on the EPC partners. Clearly, time lines are somewhat changing and are still pretty dependent on when you're able to secure a tenant, so just wondering if you could kind of elaborate on the EPC market. Are you still looking to use the same partners that you're originally looking to use how flexible are these partners in terms of the time slots that they can do the work to install the power equipment that you need? And any additional color you could give there would be great.

Sure. Thank you for the question. Absolutely. I mean we are in lockstep with our strategic partners. Our GE 6Bs are being installed from the very beginning with a company out of Houston called Relevant Power Systems. They're aligned with us, exactly the same situation with Primoris on our GE 6Bs. On the F-class, we just completed an RFP. We're not ready to announce who it is. But again, everyone in the industry, our strategic partners are completely aligned with us, including the Shield, our high-voltage equipment partner. And they're all aligned and ready to execute alongside us. So the relationships are strong, and we're moving forward.

Your next question is coming from John Hodulik from UBS.

Maybe 2 quick follow-ups. First, and that might have just been answered, but the scale of the tenant conversations or the potential contracts you guys are talking about, is that in the sort of gigawatt scale that we have been sort of originally talking about? Or are we thinking about signing contracts in sort of smaller chunks to begin with?

And then as a follow-up on the strategic partnerships, especially with the existing data center companies, are you guys envisioning a potential deal where you work with an established provider like a DLR or one of the private guys to take down space on a wholesale basis or just work with them to approach tenants together? Or just anything that you could do to elaborate on a potential agreement of that sort would be great.

Yes. So we are looking at, again, multiple deal opportunities, and each one of those has a different structure in terms of the size. So in some cases, it's smaller chunks. In some cases, it's a give or higher. But we're essentially in the position where we can kind of pick and choose how do we can ensure that we can serve multiple partners over the long haul. So I can't, of course, for confidentiality reasons, say the exact sizes, what we do have at hand is, again, in some cases, it's a couple of hundred megawatts.

In some cases, it's a gig or more, and we're going to ensure that we move forward with the best possible partner with a time line that meets that specific partner. On the kind of question around the partners, the way that we think of it is, again, how we can serve the customer on their time line. So as you're kind of negotiating these deals, of course, you're looking at the amount of capacity that they're looking for, but you're also looking at the time line that they need. And so what we found is that different data center partners have different time lines available to meet the data center needs, the MEP needs. And so we're in constant communication, trying to align their capacity availability with the customers' time line and the capacity that they're looking for.

So it's a bit of a dance, as you guys know, with these deals. But what's nice again is that we've got multiple options on the table and have the ability to move forward with the best possible deal for us right now.

I would just add that on the data center partner side, they have significant demand that they have signed up for, for power their availability of power is obviously scarce. So they're proactively coming to us with ideas as to how we can engage together to satisfy the demand that they've already signed up for. So not only does it bring a tremendous amount of expertise, wherewithal financing commitments, but it also comes with tenants. So that's why it's so interesting for us to engage those in those conversations and strengthen our position holistically.

Your next question is coming from [ Greg Rollins ] from [ Gateway Capital ].

My first question is, could Mr. Neugebauer with his 40% shareholding blocker capital raise for whatever reason he may deem fit.

The second is an observation. You've spent quite a bit of time and effort talking about the financing and the provision of power. But what about the financing and the building of the actual structures that are going to house the data centers.

And ancillary to that, I'd like to talk about 2 models. The Digital Realty provides the buildings and the associated infrastructure that been a cooling systems. And for example, whereas Equinix also, in many cases, facilitates the financing of the tenant's own equipment, which gives them a strong strategic advantage. Which model would you be following.

And then finally, just on an accounting matter, you will be -- unlike other data centers, you will be providing the power, which you would have to charge them. I would assume that this is not rental income. And to that effect, you could be running into problems of your revenue for the power delivery exceeds more than 25% of your rental income. Have you thought about that? Thank you.

So I think we'll start with -- there's a couple of questions in there. We'll start with the -- I'll take your question around kind of financing structures for these kind of deals at hand. So as you know, the way that this works is you are constantly talking to lenders about the deal structure to ensure that you have the financing available to complete the deal.

So we have really strong relationships with a number of project finance lenders in this space and they are actively involved in conversations with us and on all of the different deals that we have at hand that we're currently negotiating. So we feel really confident on again, in being able to project enhance those deals.

And of course, we wouldn't pursue anything that we didn't feel had financeable actability and so that's part of our filter, again, is ensuring we can finance those deal structures. Also had a question around was it a Toby's share, the 40%.

Greg, yes, I'll address that really quickly. As of right now, there is no shareholder meeting set. Just to be clear, there is none. And then secondly, you might have noticed last night, we filed an 8-K where the Board has made modifications to the company's bylaws in those modifications that would say that any changes to the Board composition will require a 70% vote of the shares outstanding, right?

So you have to have a significant threshold here in order to make big modifications to the construct of the Board, all with the intent of protecting our shareholders, all with the intent of driving consistency and stabilization of the organization. We believe we're in a great position to take advantage of the demand that's out in the market for the assets and the services and the products we have. It's our job to now execute flawlessly for our shareholders to deliver on that opportunity.

And I can talk about the revenue recognition and accounting policy. We do intend to elect week status, and we are structuring our revenue recognition and all accounting so that we do meet those. So we do have that considered. And thank you for the question.

Your next question is coming from Derrick Whitfield from Texas Capital.

I have 2 questions. Perhaps starting with Slide 9. Could you offer color on the amount of aggregate power capacity you see in the market at year-end 2027 relative to the gross demand for data center power. The point being is if you compare your offering at year-end 2027, could you qualify how unique that capacity would be in the market versus what's being built.

Sure. I'll take a stab at that. What we've said before is we currently possess on our balance sheet control of 2.2 gigawatts of gas generation equipment. And what we're saying based on having a lease and the project finance, we are able to deliver 1.5 gigs of installed power by the end of '27 in simple cycle. That's the way you should read it.

Great. And maybe perhaps shifting over to Anna. In your prepared remarks, you noted a more streamlined commercial interface for customers and partners who want to advance discussions -- maybe could you elaborate on how the interface has changed and the degree it may have been an impediment in past client discussions?

Absolutely. So again, I think one of the key things about the change that we made was recognizing that at every point in a business' journey, you move from kind of the vision that's driving and building the momentum of the company towards a more, I would say, commercial-oriented structure to ensure that you can meet the opportunity from an economic standpoint. And so what we realized was that we were kind of at that inflection point. And so when you're dealing with large companies, there is kind of a way of working, we'll call it, that they're used to. And we wanted to ensure that we were building the team, the structure, the process to be able to make it easier to work with us.

So part of that means being very clear on what our capacity and availability is being really clear about how people can engage with us and speak with us being really thoughtful about how we build relationships. As mentioned earlier, relationships is everything in this industry. The tech community is very small. It is -- if they know one person, they probably know something that knows you. And so we really just understood that what was most important for our process was to kind of professionalize and ensure that it was very clear how to engage with us. And that when you engage with us, it was positive and it was constructive and it was geared towards a shared goal of trying to get a deal together.

Your next question is coming from Paul Golding from Macquarie.

Just wanted to ask a quick one combining a couple of the prior questions around the potential size of an initial deal and the project financing discussions is the ongoing discussion with lenders informing at all or influencing at all how you're filtering or thinking about the size of the initial definitive lease across that landscape that you described as being smaller versus gigawatt scale.

Does that influence your thought process around building the structures and being able to energize as you look at these potential counterparties and the conversations you're having with lenders?

Yes, absolutely. So we're again in a fortunate position where we don't have to pick one structure over another. But no matter the deal size of the kind of things we have on the table, we feel very confident that we can get the project financing for those. And again, we're actively involved with our lenders as part of those kind of conversations. So if the deal is 1 gigawatt, we feel like confident that we can get the project financing for it. If it's 200 gigawatts, we feel confident we can get the project financing for it. And that also, of course, relates to who the offtaker is and their bankability. So that is kind of our focus, again, is looking at all of our options on the table. But of course, all of those options, we feel very confident are financeable.

And maybe just as a housekeeping question on the back of that, Anna. Wondering if the project financing landscape is generally amenable to the whole spectrum of counterparty creditworthiness that you're seeing in terms of your inbound interest or if there is skewed towards high investment grade just in terms of where you are in your road map relative to the off-taker.

Yes. So obviously, creditworthiness is the key item at hand when you're engaging on these deals. So again, if we have a scenario where there's a customer who maybe isn't as credit worthy, we have to, of course, find an additional partner who's willing to step in and support that customer to be able to get the financing done.

So there are multiple ways that, of course, we can do this. And again, as I've stated multiple times, we have several options, several structures on the table. But the key thing to take away is that all of those structures, we feel are financeable because of the way that we've laid out the opportunity.

That concludes our Q&A session. I'll now hand the conference back to Marius Haas for closing remarks. Please go ahead.

Thank you, operator. Thanks for participating in our call today. We know there's a lot of noise in the system. But as you've heard this morning, our leadership team is 100% focused on executing on our plan to create long-term shareholder value. As indicated, and I'll just repeat it one more time, over the next 90 days, you can expect us to deliver on these 5 key priorities: securing a binding tenant agreement, maintaining capital discipline to support liquidity to hire our next CEO to deliver power at our project site and to explore strategic partnerships for accelerating data center and power deployment.

We appreciate your interest and support as we work to build the power platform for the AI era. Thank you again for joining us this morning. Very much appreciate it.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Ladies and gentlemen, thank you for standing by, and welcome to Fermi America's Earnings Conference Call. Today's call will be conducted by Rodrigo Acuna, Fermi America's Director of Investor Relations.

Before I turn the call over to Mr. Acuna, I'd like to read the company's abbreviated safe harbor statements. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships and any other statements that may be construed as predictions of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such statements.

Any non-GAAP measures that may be discussed on the call are supplemental to GAAP results and are intended to provide additional perspective on the company's ongoing operations. With that said, Mr. Acuna, the floor is yours.

Thank you, operator, and good morning, everyone. Welcome to Fermi America's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Toby Neugebauer, our Co-Founder and CEO; and Miles Everson, our CFO.

Before we begin, I want to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed discussion of these risks, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2025, which will be filed with the SEC later today.

Today's call will be structured in 2 parts. First, Toby and Miles will walk you through an operational update on Project Matador. Then Miles will cover our financial results. We will open it for questions after that.

And with that, I'll hand it over to Toby.

Good morning. Thank you for taking the time to join us. This past Saturday, we had our Board meeting where we reviewed all of the accomplishments of the team over the past 100 days. And it's the first time in 30 years of business that I witnessed multiple rounds of applause. In my opinion, the response to the team's accomplishments were well deserved. Obviously, Fermi heard loud and clear from the market, go get a tenant. Unfortunately, getting the tenant is the easy part. As our shareholders, what you need Fermi to do is to earn the trust of investment-grade counterparties and the investors that provide the financing to fund multibillion dollars per gigawatt construction projects. That requires excellence from engineering to accounting.

At Fermi, we're creating a private community powered by a private grid to be the leader in powering artificial intelligence that will shape tomorrow. But it all starts and ends with our tenants trusting us with their business, but just as importantly, their balance sheet to execute on the enormous undertaking in an environment where many are failing.

At Fermi, we believe the best way to earn this trust is to do, to execute. I invite and almost plead with you all to come to the site. When tenants come to our site, they are blown away with the scale and the speed of which we are executing, 450 million cubic feet of gas pipeline in, 10 million gallons of water pipeline in, grid connect in, substation for an 800-megawatt, 60% to 70% completed, foundations for our gensets either completed or on the verge of completions. But what really turned our shoppers into buyers was the air permit.

When we got the air permit is when the C-suites of our customers got very, very serious about buying. As you know now, we have the 6 gigawatt air permit. On Friday, we filed for an additional 5, which we qualify for and that I have a high expectation for us executing. But first, I just want you all to understand the expectation at Fermi is tenants. We need multiple tenants to maximize the use of our power gensets. I think you have to have multiple tenants because we need diversity of demand to achieve the proper efficiency of what we're creating with this private grid.

Second, the Board is very concerned about disclosure that in any way impacts the negotiations on transactions that are multiparty and involve tens of billions of dollars. So while we are signing new LOIs, we are in the mode of coffee as for closers. We are not serving coffee until we have a complete close. It's clear that there have been issues with the stock. And as many of my friends and family and all of you all entrusted your capital and being a steward for your capital, I can't overstate how seriously I take it. I also can't be too focused on the day-to-day fluctuations. We are building a consequential company to solve a critical need for our customers to protect consumers and to serve our country.

I'm now going to hand it off to Miles Everson, our Chief Financial Officer.

Thanks, Toby. This is our first Form 10-K as a public company, covering the period from our inception on January 10, 2025, through December 31, 2025. It's approximately 11.5 months. In that time, we moved from formation to IPO and substantially completed the initial phase of Project Matador. I want to frame the financials the way we manage the business internally. A traditional income statement does not fully capture the economics of this company at this stage. We are pre-revenue and in full-scale construction. While our GAAP net loss is significant, it is overwhelmingly noncash. The more meaningful story is reflected in the balance sheet and cash flow statement, specifically how nearly $570 million of investor capital has been deployed into physical infrastructure at Matador.

Let's talk about the balance sheet. As of December 31, 2025, total assets were approximately $1.4 billion. Property, plant and equipment totaled $935 million, nearly all of which is construction in progress as no assets have been yet placed into service. Cash and cash equivalents were $409 million at the end of the year. On the liability side, accounts payable and accrued liabilities were $177 million, reflecting the pace of construction and vendor activity. Total stockholders' equity was $1.1 billion. As of March 2026, we had approximately 630 million common shares outstanding.

If we turn our eye to the income statement and operating activities, for the full year, the net loss was $486 million. Importantly, approximately $445 million of that was noncash. General and administrative expenses totaled $178 million, of which $133 million was noncash share-based compensation tied to equity incentive arrangements established at formation and in connection with the IPO. Cash used for G&A was approximately $45 million, including $12 million in personnel costs for a lean team of roughly 35 employees, $22 million in professional services and $11 million in other corporate expenses such as recruiting, travel and marketing.

Other expenses net was $312 million was almost entirely noncash. The primary components were $174 million related to charitable contribution of Class B units prior to the IPO, $61 million of fair value losses on Series B convertible notes $46 million of losses on embedded derivatives associated with preferred unit financing; and finally, $24 million related to preferred unit issuances. From a cash perspective, operating cash use for the year was $34 million. That represents our true operating cash burn while executing formation, completing the IPO, securing a 99-year ground lease, building the organization and advancing Phase 0 construction, we view this as strong demonstration of capital discipline.

When we look at investing activities, which is the core of our financial story and the deployment of our investors' capital, what we see is net cash used in these activities was $570 million, with virtually all of that invested directly into property, plant and equipment at Project Matador and recorded as construction in progress. More than half of this capital was deployed to natural gas power generation, including turbine procurement across Siemens F-Class and SGT-800s as well as GE6B fleets, along with mobile generation and balance of plant equipment. The remainder was deployed across data center infrastructure, substation and electrical interconnection, general construction, land and water development and early-stage nuclear predevelopment.

Now let's look at our financing activities. Cash provided by financing activities totaled approximately $1 billion. This included $746 million of net proceeds from our IPO, $108 million of preferred units, $100 million from a Macquarie term loan, $76 million from Series A convertible notes and $26 million from seed convertible notes. Subsequent to year-end, we executed 3 equipment financing facilities, a $500 million MUFG nonrecourse turbine warehouse to support Siemens F-Class procurement, which also fully refinanced a Macquarie term loan and a $120 million facility with Keystone National Group expandable to $220 million for high-voltage equipment, including transformers and switchgear.

And finally, the third one this week for $165 million with Yellowstone to finance additional Siemens SGT-800s. Those facilities, combined with our existing cash, give us the liquidity to satisfy our financial obligations for at least 12 months, but we are being deliberate about what comes next. The next phase of capital deployment at Project Matador will be timed to 2 milestones: First, the execution of a definitive tenant agreement; and second, the closing of project financing. Those are the gates. Until both are in place, we will not commit significant capital to the next phase of construction. That is how we deliver shareholder value. We are advancing both work streams in parallel.

On the tenant side, we have potential tenants competing for initial power. We are in active negotiations with multiple counterparties. But as of today, we've not executed a definitive lease agreement. Tenant revenues are expected to commence in 2027, but even when they do, they will not be sufficient to fund our full operating capital requirements until Matador is built out and operating at scale.

On the financing side, we are in active discussions with multiple lenders and progressing technical diligence now so that we are positioned to move quickly once definitive lease agreements are executed. The project level financing is underwritten to the future cash flows that a tenant commitment unlocks. We expect both Phase 0 and Phase 1 of Project Matador will exceed $3 billion in total aggregate capital deployment. The path forward depends on our ability to execute tenant leases, raise project level debt and bring in strategic equity where necessary. We believe this is achievable. However, these financings are not certain to occur. If capital is not available in the amounts, timing or terms we need, we could be forced to delay investments, amend purchase commitments or potentially surrender collateral to preserve liquidity.

We're telling you that directly because it's the reality of building a multibillion-dollar infrastructure platform from a standing start. And because we believe investors deserve to hear it, not just read it in a risk factor. The bottom line, we have the liquidity to meet our obligations. We are being strategic in how and when we deploy capital. The next phase of capital deployment at Project Matador will be sequenced with the execution of definitive tenant agreements and the related project financing that follows. There is more work to do, and we are doing it every day.

I want to touch on the REIT election. As we've previously disclosed, we intend to elect REIT status for U.S. federal income tax purposes beginning with our short taxable year ended December 31, 2025. We believe this structure aligns well with the long-duration infrastructure-oriented real estate assets we are developing. Given the level of expected noncash depreciation, we do not anticipate generating material REIT taxable income in the near term. And therefore, we do not expect to pay dividends until such time as taxable income requires it. Finally, I want to highlight for those pre-IPO investors that were subject to a lockup agreement that lockup agreement expires today. Thanks.

Operator, we're ready for questions.

Our first question is coming from Paul Golding with Macquarie.

Congrats on all the progress on the site. I wanted to ask 2 near-term questions. One being what the key discussion points are with prospective tenants that are being negotiated as you try to work to a definitive agreement. And secondly, more specifically on the near-term energization milestones. As you look to the SGT-800 frames that you've received in Houston, now that you have the equipment on hand, how is the time line coming together for deployment of those assets and how that might relate to your negotiations with prospects?

Thanks, Paul. The #1 issue, the #2 issue and the #3 issue with our tenants is they want all of our power, and they want it all forever. But for our model to work, we need to have multiple tenants so that you deal with the differences in loads. So that really is the issue. And so from -- when they get out there to the site, they're blown away by the site and they realize this is a place you can generate a significant amount of power, and they want it all.

In terms of the SGT-800s, we've had quite a bit of luck. So when -- and I'm going to come back to tenant. The units came, as you're aware of, to Houston. We kept them in a free trade zone in hoping maybe we could get a break while we were waiting for our environmental permit. And literally, the second, the Supreme Court had a ruling on the tariffs. We checked them into the country. We saved ourselves probably $27 million to $30 million.

And we make -- I'll have them put the pictures. You can see the SGT-800 foundations are ready to pour. But on the tenant side, because I know that's what everybody is focused on. What we can share is that we're in the contracting phase with multiple new potential tenants. But everyone needs to understand these transactions are complex. They're multiparty. And Macquarie, as you know better than anybody, they involve billions of dollars.

Yes, hey Paul, it's Miles here. I would just add that -- and we've said this all along, the other thing is it's not a tension point, but it's one of our things we're holding firm on is we want investment-grade wraps. That's why Toby earlier referred to the fact that this is really companies saying, are they going to put their balance sheet up? And when we say companies, we're talking about investment-grade companies that wrap these things.

So then the second thing I would add is that it's not just what we do and what we control, but the ultimate offtakers also or development partners need to look at this and say, can they get their side of the equation up? In other words, all their MEP and the racks, et cetera. And so we're doing more, I'll say, reverse due diligence than I expected we were going to have to do to make sure that they can have their stuff up in time to take our power because our power is ahead of most people's ability to get the other stuff in place. That has been one of the bigger surprises is if you'd say, bear me in the fall was worried whether, yes, convincing people that we could have the power. We now want to be convinced they have the MEP because we do have the power and we need to put it to work.

Miles, if I could just sneak one more in then on the back of the discussion seeming to be pretty robust around demand. Is pricing -- are you able to give any color on pricing directionally relative to where you expect it to be when you first started considering sort of the financial approach to the first gigawatt of power?

We're at the same. And we'll try to bid for more, but we're definitely ready to say we're at the same.

Our next question is coming from Vikram Malhotra with Mizuho.

Congrats on your full fiscal year. I guess I just want to dig deeper, if you can, on kind of the tenant discussions. And I'm wondering if there are different sticking points for sort of Fermi as a landlord versus your potential tenants and kind of how those sticking points may result in, I guess, delays in signings. I think you cited 12 months in your share -- over the next 12 months. And I just want to get a better understanding on the sticking points from either side. And from a time line perspective, should we think over 12 months? Or could it be sooner?

Again, I know it comes across [indiscernible]. Once they get to the site, it really is they want the power and they're trying to lock in all of our power at a price today because I think our tenants really appreciate the scarcity of the gensets and that the price of energy for them will be increasing. So they are rightfully focused on locking in as much power at today's prices as possible. That really is it. And it's -- like I said, we're in the contracting phase of this process.

In terms of providing guidance on the time, the Board, the coaching, I've got a really great -- Fermi has a really great Board [indiscernible] look at it. Their point is we'll -- when we provide guidance on timing or expectations, that changes the dynamics of the negotiations to Fermi's disadvantage. And so the Board was pretty firm with me on Saturday that we're not going to discuss the timing because what we're doing is it changes the dynamics of -- these aren't $1 billion transactions. These are multibillion-dollar transactions, and I just want to keep the dynamics as flat as possible.

Okay. And then just 2 things to clarify. One, the -- I guess, the shareholder letter mentioned sort of term sheets and various agreements. I just want to clarify, one, is there an actual LOI in place with any of these 5, 6, 7 tenants that you're negotiating? Or is that sort of the next step? And number two, if you could just clarify any of the near-term financings like from MUFG. Is there a stipulation in any of these financings that you must have a lease signed by XYZ period?

I think our comment on -- that we're comfortable with is signing new LOIs, it will be a normal course of our business, and we won't be commenting on them. Post that, I think it's kind of one of the lessons that we've learned so far is we do not want to change the negotiating dynamics. I'm -- each one of these financings is separate. And I'm sure we've disclosed it. Miles, I just don't want to comment on the...

Yes. We don't have any tenant signing covenants, if you will, Vikram, on our financing arrangements. And the other thing to remember that these financings are nonrecourse to parent which I think is really important when you think of the overall public company. And then the thing that hasn't changed is that we do have an agreement with Texas Tech that will have a tenant by the end of 2026.

That remains the same, and we're working collaboratively with them to advance that. So that's probably what's most important right now is to understand that we're still full on, and we feel really good about where we're at, to be candid.

Yes, that's only a 200-megawatt tenant. I don't want to call that -- I don't want to demean it, but that should be [indiscernible]. That's not close to expectation. We look at it this way. We don't have a tenant that wants 200 megawatts. That's not our problem.

They want more.

Yes. If we had to have a call, you only could have a 200-megawatt tenant, we would -- that would be a problem for us. The problem is they want gigawatts.

Our next question is coming from Ryan Gravett with UBS.

Miles, you touched on this earlier, but what additional development at the site are you planning at this point before a first tenant lease is signed and you secure project financing? Is there anything you can share in terms of more precise CapEx spending or cash burn that you're expecting this year?

Yes. So we are going to be very diligent about matching our development with the signing of a project financing as well and our tenant leases. The -- but as far as we'll go -- and look, these things change. This is a long-term project, not a 30-day project. But what we'll do is have the site ready to receive our power generation equipment. It's largely there today. There's a little incremental work that needs to be done so that we can place those generation assets into service as soon as we see that we've got tenant agreements to line up with the timing of that installation.

Yes. I think what we were talking about, Fermi become not skeptical, but we definitely want to see that the timing of our development matches the MEP that our tenants can acquire. And if you say, is there a change in how we as a company have viewed it as we've become -- where I would say, last year, we were focused on people being able to do great due diligence on us. We have pivoted and actually made hires. We picked up a really great person from Meta that helps us do diligence on the pace of execution of our potential tenants.

Our next question is coming from Stephen Gengaro with Stifel.

I apologize if there's any noise, I'm in an airport. So when we think about like your tenants need for power and sort of the various tenants and the timing of kind of when their data centers are up and running and when they need power, what's -- like when you're talking to the customers, how far out are they thinking about securing power relative to when the data center becomes fully operational?

First of all, that differs between each tenant. And it's the #1 -- not the #1, but it's in the top 3 diligence items we have or how we prioritize tenants is obviously, are you financeable, i.e., are you investment grade is number one. But the #2 thing is we actually, unlike most companies in the world are sitting on a whole heck of a lot of power generation that we are very anxious to put to work. And so it is -- that is -- there's no one answer to it.

But when you think about how we're running the business and prioritizing people that we would contract, that's probably our #2 thing. How fast we're not -- we can have the power because of all the work we did in at the site to date. We can have the power, what we now realize probably faster than some of them can have the MEP. So that becomes how we prioritize who we contract with.

And the follow-up is like -- just kind of going back to the first potential tenant and the negotiations that were terminated or at least maybe terminated but delayed at least, like when did they actually need power? Because I'm just sort of thinking if there's a lack of power, what are they doing for power if they're not doing it with you?

What I look back, and again, I don't believe that I hope that the first tenant is a tenant. So I just want to convey that. When we look at when they need power, it definitely brought to our attention is we have to really make sure that these tenants have the MEP. I think it's a bigger bottleneck than we originally anticipated.

Miles, I mean, you were involved in that...

Yes. Look, so they originally were looking at they would have power that they could deploy and make revenue themselves off of in 2027, okay? But I think there's 2 parts to your overall question, which is when do off-takers need power. And if you look at their planned portfolios, most of them are into '27, '28 where they need to consume the power. However, and this is an important point, -- you can read it in the newspapers. There's other sites that are not capable of delivering on the power that they've committed to these. So we do expect and we've seen some potential reallocations of where they're going to get their power that they thought they already had and they actually don't have.

We are in a special spot because we have a lot of power and the world recognizes it.

Our next question is coming from Nick Amicucci with Evercore ISI.

Just wanted to touch upon something. So I guess just given kind of multiple new LOIs in process in addition to the original one, I just wanted to kind of get some sense, has there been any kind of potential -- has the potential scope of those tenants increased, meaning like different types of tenants? Or is it still more or less those hyperscalers? Obviously, investment grade, but just kind of trying to see if those horizons broadened a little bit.

I think the only thing that I would say is significant engagement by chip makers, not some directly, not directly, I think they are getting really concerned that they -- those chips are only worth the power behind them. So in terms of scope, that would be the only change I would highlight. Miles?

That's how I would describe it as well. The chip makers are more directly engaged in where is the power going to come from? And frankly, where the whole consumption of their chips going to come from is really what they're focused on.

I think you all are off the markets where that the leading chip makers are now realizing they're getting behind a number of companies. And so that changes the dynamic so it does broaden it. For us, it's -- the key thing is, and you know this as well as anybody, we do need a diversity of load to maximize the efficiency of our gensets. So I think what you're seeing us do is a little more math, not a little more, a lot more math. We are better off with a more diversified load base to maximize the efficiency of this private grid that we're building.

Yes. Nick, the other thing I would just add in terms of market dynamics, what's happening is increasingly on the MEP side, the emergence, if you will, of modular MEP, which if you think of it as a chip maker, what you're really concerned about is speed to token. And so you look through the whole value chain and you say, where do I have places to speed up? There's opportunities to speed up the timing of MEP. And so you see more modular players coming in to help make that happen, which is a huge positive for us because we got the power.

Yes. That is another thing that we've become hyper focused on. And one of the great things that we've had exposure to from the oil and gas business is modularization. And again, in terms of hiring, we are bringing people in that can help us diligence and engage on our clients' supply chain for MEP. That have been a real focus for us the last month.

Great. And then, Miles, you had mentioned, obviously, today, kind of the locked -- IPO lockup expires and the intention is still to file as a REIT for 2025. Just want to see, are there any specific management sales that either need to occur that we should be on the lookout for to satisfy that status?

Yes. So there's not a management sale necessarily required for the -- at the time of this expiration of the lockup. However, to meet the REIT 550 rules, there will be, what I would say, an orderly sell-down that we're working to make that happen. And then that we have a few months to make that happen. And we're in -- we got an adviser we've retained to help with that. And so I fully expect that, that will be done in an orderly fashion, Nick. But that's been there from day 1. And now is the time that we're focusing on getting that executed.

Obviously, I'm the -- my family is the problem. Today, we own about 38% of the company. What I would hope to achieve, can't promise, that if our family has to sell down, it needs to be to an accretive buyer. And what I mean by that is I want 1 plus 1 on the sell-down to equal 3 or 4. And that's why we've hired an adviser to help us find which acquirer of a block. And frankly, I don't want to sell down hardly anything at all, especially at these levels.

But if we're going to do it, I want it to be something that adds something to the brand of Fermi. So that is our goal there. And we did -- I don't know if that we signed it, but we definitely verbally agreed to hire an adviser to run a process that, again, becomes an accretive transaction that you all are all excited about versus a dilutive sell-down of my family's position.

Our next question is coming from Skye Landon with Rothschild & Company.

Coming back to the tenant questions. Clearly, a few months ago, we were talking about kind of one client taking the full first gigawatt. It now seems like you're potentially balancing trying to keep multiple parties happy. So just wondering if that first gigawatt maybe splits into multiple tenants taking smaller kind of megawatt numbers or not or kind of what you see the base case from here?

And then secondly, you mentioned that pricing was remaining in the same ballpark as previously, but just wondering if the structure of rental revenues kind of ahead of operational shells is still going to be the same structure as previously or if various different conversations with new potential tenants is potentially changing this?

My strong -- first of all, there's no one that wants less than 200 megawatts. I mean we're trying to talk them down. We'd rather do 5 200-megawatt deals if you ask us when we run our calculations, that is the right -- that's great -- and the problem -- not problem, the opportunity we've got is we've got 2.3 gigawatts with the F-Class units on their way. Our team was in Germany the other day, and they were -- 2 of them were in the loading dock. So hey, our goal is -- I don't think we get away with 3 tenants for the first 2 would be victory, and I think we only get away with 2. But...

Yes. I would say -- Skye, it's Miles. I would just -- I would put it this way. We will likely only do deals 500 plus, and we can do that. So it's allocation -- if we can allocate the initial commitments, right, over that 2-plus gigawatts that Toby referred to. The real question for me in these discussions is -- they all want ROFRs on future quantum of energy. And you got to not just look at the initial allocation, but also how are you allocating the ROFR so that you comply with any ROFR that we will commit to.

And in terms of the pricing, it's the same as we said. I think we're getting more involved in the MEP -- I'm not saying we're getting into MEP business, but we are wanting to make sure we're solving all of our clients' problems. So not a change in strategy, but enhancing the services that we provide to our customer.

Our next question is coming from Eric Whitfield with Texas Capital.

Congrats on your progress to date. With respect to your prospective tenant list, could you -- could you perhaps add color on how this list has evolved since your air permit was finalized?

I didn't hear the last part. I heard airport permit. That's my favorite word. [ I didn't interest at all ].

Yes. No, just could you speak to how the tenant list has evolved since your air permit has been finalized?

The tenant list didn't change. The engagement changed dramatically. And basically, the best way I can describe it is shoppers became buyers. I mean it is one of the largest air permits ever. I think the largest gas gen project is in Florida. It's only 3.5 gigs. We're at 6. I think, as you all know, we filed for an additional 5. I mean we're looking at being the place where you can have the largest gas generation set on the planet. And I think the C-suites across all of our customers immediately got concerned is, hey, we better get while they're getting is good to use our West Texas freight.

Great. And then for my follow-up, with regard to the emergence of modular MEP development, what is the base unit in general on this modular operations? And to what degree can they accelerate time to power?

I went to the Schlumberger factory in Shreveport, gosh, Fermi. 6 weeks doesn't sound like that long ago, but at Fermi it's 6 weeks, it's 6 years at most companies. But I think it's game changing. And I think it's going to dramatically dramatic -- I don't believe we're going to be talking stick building MEP in a year. I really, really don't. It's just such a transformational way and a much more cost-effective way to build MEP. We're going to plug and play MEP into powered shells. That's what the business is going to go to. I encourage you all, I'm sure to let you go see their factory, and I know there's a couple of other companies. But I mean it took us 1 minute to realize, wow. We're trying to get Schlumberger to build a factory next to us.

Our next question is coming from Joe Brent with Liberum.

Two questions, if I may. Firstly, you talked earlier about cash burn, and I understand there are different scenarios. But can you just give us the parameters of what the cash burn might be in FY '26? And secondly, related to that, I think you've got $885 million of equipment financing facility, which I understand is currently nonrecourse. Could you indicate at what point, if ever, that comes on to the balance sheet? And then related to both those, remind us of the funding structure.

Well, first of all, on the cash burn, I like to tell people that I'm an aggressive personality but a financial [ CISI ]. And I -- we do have a standing call every day at 4:00 Eastern 3:00 Central where we review the cash position on a daily basis on the recourse. And I focus on it pre-tenant, meaning I'm, again, aggressive personality, financial [ CISI ]. Miles, I don't -- I'm not aware that any of it comes on to the balance sheet.

It doesn't come on to the holdco balance sheet. And then on the cash burn, we're running what does it look like cash burn from a pre-tenant signing perspective, and we got plenty of cash from that perspective. And then once we have the tenant, we'll do the project financing. And obviously, at that point, there's plenty of cash to finance the first tenant contract and finish out the deployment and commissioning of the gensets.

Our next question is coming from Rich Anderson with Cantor Fitzgerald.

So Miles, on the -- early on in the call, you addressed potential for asset relinquishment to preserve cash flow. Can you provide a little bit more color on how that might play out, assets that are sort of on that list? Anything more you can add to that topic?

Yes. Let's be clear, Rich. That is not our intention whatsoever, and we don't see that happening. But when you think through all potential scenarios, right, you say, well, what are the levers I have to pull, that would be one lever if we had to. But right now, we don't have any plans to do it. But it would -- if you had to do it, you would do it with a genset or 2 because there's plenty of demand. I mean we get lots of inbound calls as to whether or not we would move our equipment to somebody else. We have no interest in doing that.

I only mentioned it because -- well, and it's only prudent to say what are the levers if you got to pull levers, what do I have? So I would not want anyone to think that, that's on our list of things to do at this juncture given what we see on the tenant front and the timing of everything. But I don't even like talking about it. These gensets are incredibly valuable. And I would auction off my 2 boys first before I would let one of these gensets go. And probably the dumbest thing I've ever done is even before we got the tech lease, my family basically committed to buy those SGT-800s. So I did basically auction off my children's future for that. So it's a worst thing -- like I said, my boys will be auctioned off first, and then we'll look at the gensets.

Well, that's love. Okay, and then...

Please check where they stand.

Okay. Second question is on the land lease -- ground lease. What must be in place by this date or that date from a power resource perspective or tenant or whatever it is that satisfies any sort of requirements around maintaining your position?

Is a notice to proceed to begin construction. So we don't have to have anything built, which means we're further ahead. But yes, we don't have to have an actual data center. We have to have a tenant and an agreement with that tenant, and it has to be 200 megawatts. And I'm not going to diminish that. It would be hard to get 200-megawatt deal because no one wants that little of power.

And to be clear, that's by 12/31/26.

Yes.

Our final question today is coming from Andrew Fisher with Berenberg.

A few has already been answered, but I just had one follow-up just on the sort of pre-tenant cash or investment requirements. Could you maybe just give a little bit more color of, let's say, the turbines that you already have in your possession where you've already got the foundation being installed. Could you give us a rough idea about what remaining CapEx is needed just to get those installed to sort of get you there ready for the first tenant? Or if you can't give an absolute number, maybe an idea of the sort of percentage of the overall capital cost of those projects? I assume most of the heavy lifting has already been done, but it would just be good to get an idea, please.

Okay. We're working on the actual calculations on the foundations for the F-Class units. Again, 2 of them is a wonderful picture. I hope -- let's put it on the website so people can see the F-Class units. I want to get those foundations installed. The site is cleared, the geotech is done. There are only 1,300 square feet per generator. I don't have the numbers for those. We have those out for bid literally right now.

And if you're over here after this call, we're going to be debating how much money those -- the foundation we need to complete is the SGT-800s. And let me be clear, I don't think it should cost more than $10 million. But I would put that one in a source of consternation and debate at Fermi America. I'd like to get those SGT-800s instead of having them sitting in Houston, they need to come home to Amarillo, and it makes no sense to have those class units sitting in an expensive storage facility. I'm really zoned in on the foundations. We've got an additional extension on our deal with Excel that I think is kind of $8 million or $10 million-ish. I think it should cost $4 million. I think you're going to get a theme that the CEO says everything should cost half of what is currently being quoted.

Ladies and gentlemen, this does conclude today's Q&A session and will also conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.