Fermi Inc., the Texas company building the Project Matador AI data-center campus, paid amendment fees totalling $25 million to remove a loan covenant that required it to sign a lease or offtake arrangement for 400 MW on the site by November 10, 2026, according to an 8-K filed on October 16.
Its latest quarterly report, the 10-Q for the quarter to June 30, 2026, says its resources measured against forecast disbursements “are not sufficient to satisfy the Company’s financial obligations as they become due within one year”, which raised substantial doubt about its ability to continue as a going concern, and that management concluded its plans make it probable that doubt is mitigated. Fermi has not yet filed its third-quarter 10-Q.
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The key insight: Fermi paid $25 million in amendment fees to remove a MUFG loan covenant that required a 400 MW lease or offtake on Project Matador by November 10, 2026, and its latest 10-Q says its resources alone were not sufficient for the next twelve months before management’s plans.
The covenant sat in Fermi’s turbine warehouse loan with MUFG Bank, a facility of up to $500 million that had $444.9 million outstanding at June 30 and matures on August 10, 2027. Under the original terms, the minimum quarterly principal payment from the nine-month anniversary was 10% of the balance, reduced to 5% if a lease or offtake for at least 400 MW of the first phase had been signed.
The 10-Q says that if no such agreement was signed by that date, the lender’s agent “may begin marketing the equipment to potential buyers”, though it could not sell or foreclose without an event of default.
The October 16 amendment eliminates that covenant and the higher amortization tied to it. Fermi said it believes this removes potential required principal payments of about $22 million in the fourth quarter of 2026, about $19 million in the first quarter of 2027 and about $15 million in the second quarter of 2027. MUFG remains administrative agent for a new syndicate of lenders.
Fermi Inc.’s debt at June 30, 2026 by facility, with the effective interest rates its 10-Q gives, and its first-half 2026 operating and investing cash outflows. Each bar is its own total. The $682.2 million sum is our arithmetic.
The Cash Position
Fermi had cash and cash equivalents of $62.5 million and restricted cash of $29.2 million at June 30, down from $408.5 million of cash at December 31, 2025. It had not generated any revenue. In the first half it used $56.0 million in operating activities and $626.2 million in investing activities, and reported a net loss of $214.5 million.
On July 14 it issued $431.3 million of 5.00% convertible senior notes due 2031, for net proceeds of about $416.8 million, and spent about $34.5 million of that on capped call transactions.
Total debt was $536.9 million at June 30. The 10-Q gives effective interest rates of 12.2% on the MUFG turbine facility, 14.1% on a $77.3 million high-voltage equipment facility and 17.0% on a $14.7 million second turbine facility. Unconditional purchase obligations for long-lead equipment were $142.6 million, of which about $128.1 million is to be funded by draws on the equipment facilities.
How Fermi Says It Will Cover the Gap
The 10-Q lists the measures management relies on: undrawn committed capacity under its equipment financing facilities, the option to sell some of its power-generation and other equipment, and sequencing capital spending to match signed tenant agreements and project financing.
It says some near-term commitments, including collateral and credit support for certain commercial arrangements, arise only if Fermi elects to proceed, and that because its equipment loans are secured by equipment worth more than the debt, it could satisfy them through the pledged equipment itself.
The Tenant
On August 9 Fermi signed a 15-year lease with TensorWave for a 222 MW build-to-suit data center at Project Matador, which it expects to bring about $6.5 billion in contracted revenue over the initial term. The tenant has an option to expand to 650 MW in total, with the extra buildings to be energized by December 31, 2028. Fermi targets commercial operations for 2027. AMD signed a credit support agreement for the lease in October (our piece).
The TensorWave lease covers 222 MW, below the 400 MW the MUFG covenant named.
The Board Vote and the Inquiries
At Fermi’s annual meeting on October 30, neither director nominee, Rick Perry nor Jeffrey Stein, received a majority of the shares outstanding, as Fermi’s bylaws require, so neither was elected; both continue to serve until a successor is elected, the company said in an 8-K filed on November 4.
Fermi said it believes investors affiliated with former chief executive Toby Neugebauer voted against Perry in breach of a director nomination agreement. Those investors, through counsel, dispute that the agreement required them to vote for Perry, the filing says.
The 10-Q also says Fermi received a subpoena from the Eastern District of New York on July 30 and a voluntary document request from the SEC on August 3 relating to Project Matador, the company and certain former members of management. It says “neither contains any allegation of wrongdoing” and that it is cooperating.
The Wider Financing Picture
CoreWeave, which reports third-quarter results on November 10, had $15.0 billion of debt due by the end of 2028 against about $42.5 billion of backlog expected as revenue by June 2028, by our arithmetic from its 10-Q (our piece).
American Compute’s tracker puts GPU-backed loans at $48.4 billion so far in 2026, 47% of the AI debt it tracks (our piece), and recent AI cloud deals have been quoted at $20 million to $40 million of contract value per MW (our piece).
Our Numbers
By our arithmetic, the principal Fermi says it no longer has to pay early adds up to about $56 million across three quarters, against the $25 million in amendment fees.
Also by our arithmetic, June 30 cash of $62.5 million plus the July note proceeds net of the capped calls, about $382.3 million, comes to about $444.8 million. Fermi’s first-half operating and investing outflows were $682.2 million, about $113.7 million a month, so that sum covers about 3.9 months at the first-half pace. That excludes restricted cash, undrawn equipment financing and any re-sequencing of capital spending, which the 10-Q cites.
The Structural Read
As we read the filings, the waiver trades a known cost, $25 million in fees, for about $56 million of principal Fermi says it no longer has to pay early over three quarters (our arithmetic).
As we read it, the covenant and the lease are measured in the same unit: the MUFG loan named 400 MW, and the signed TensorWave lease covers 222 MW.
By our arithmetic, June 30 cash plus the July note proceeds net of capped calls covers about 3.9 months of first-half outflows, before undrawn equipment financing and re-sequenced spending, which the 10-Q cites.
Fermi Inc., Form 10-Q, quarter ended June 30, 2026
“these resources are not sufficient to satisfy the Company’s financial obligations as they become due within one year”
Three Implications
FOR LENDERS The October 16 amendment keeps MUFG as administrative agent for a new syndicate of lenders on the turbine facility, which matures on August 10, 2027.
FOR THE TENANT The 10-Q says the TensorWave lease’s effectiveness is subject to closing conditions, including the landlord obtaining project-level financing.
FOR SHAREHOLDERS Neither director nominee received a majority of shares outstanding at the October 30 meeting; both continue to serve, and Fermi says investors affiliated with Toby Neugebauer breached a nomination agreement, which they dispute.
The framework says: “Companies that solve the power equation will dominate the AI era; those that don’t will watch their chips sit idle.”
As we read it, Fermi is building its own power for an AI campus, and its filings show the financing side of that bet: equipment loans at 12% to 17% effective rates and a tenant lease that depends on project-level financing. The framework does not discuss Fermi.
What Is Not Established
Fermi has not filed its third-quarter 10-Q, so its cash, debt and spending after June 30 are not public in a quarterly report. The filings do not give the undrawn amount available under its equipment facilities as of today, or whether the TensorWave lease’s closing conditions, including project-level financing, have been met; the 10-Q said closing was expected on or before September 30, 2026, subject to extension. This piece makes no forecast.
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Fermi paid $25 million in fees to remove a covenant tied to a 400 MW lease on Project Matador by November 10, a lease its 222 MW TensorWave deal did not reach. Its latest 10-Q says its resources alone were not sufficient for the next twelve months and that management’s plans make it probable the doubt is mitigated.
A note on sourcing. Figures and quotes are from Fermi Inc.’s Form 10-Q for the quarter ended June 30, 2026 and its Forms 8-K of October 16 and November 4, 2026, read on SEC EDGAR. The sums, the monthly pace and the 3.9-month figure are our arithmetic. This is not investment advice.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
