{"url_path":"/sec/frmi/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Legal Proceedings","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2071778/0002071778-26-000032-index.html","accession_number":"0002071778-26-000032","cik":"0002071778","ticker":"FRMI","issuer_name":"Fermi Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2071778/0002071778-26-000032-index.html","primary_entity_key":"0002071778","primary_entity_name":"Fermi Inc."},"word_count":1348,"has_tables":true,"body_markdown":"Item 1. Legal Proceedings\n\nWe are involved in, and may in the future become involved in, legal proceedings, claims, and governmental or regulatory investigations arising in the ordinary course of business. These matters may relate to, among other things, commercial matters and contracts, intellectual property, labor and employment, discrimination, regulatory matters, competition, tax, consumer protection, torts, real estate, privacy and data protection, and securities.\n\nThe matters described below are those that we believe are material:\n\nPutative Securities Class Action\n\nOn January 5, 2026, a putative securities class action complaint was filed in the U.S. District Court for the Southern District of New York captioned Lupia v. Fermi Inc., et al., Case No. 1:26-cv-00050. The complaint names the Company, certain of our directors and officers, and certain underwriters of our initial public offering as defendants. The complaint purports to be brought on behalf of a class of persons and entities that purchased or otherwise acquired (i) our common stock pursuant and/or traceable to the registration statement and prospectus issued in connection with our initial public offering and/or (ii) our securities between October 1, 2025 and December 11, 2025, inclusive.\n\nThe complaint alleges that defendants made materially false and misleading statements and omissions in the registration statement and prospectus issued in connection with our initial public offering and in other public statements during the alleged class period, including statements and disclosures relating to, among other things, tenant demand and funding arrangements for Project Matador and the risk of termination of a prospective tenant’s funding commitment. The complaint asserts claims under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities\n\n36\n\n[Table of Contents](#id354ade5ec2b4fa6b9ca4faa344251c2_7)\n\nExchange Act of 1934, as well as Rule 10b-5 promulgated thereunder, and seeks unspecified damages and other relief (including attorneys’ fees and costs).\n\nWe intend to vigorously defend against the action. At this time, we are unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter.\n\nFirebird Litigation\n\nOn January 27, 2026, a petition captioned 340 Energy, LLC v. Firebird LNG, LLC, et al. was filed in the District Court of Harris County, Texas, and subsequently removed to the Business Court of Texas, Eleventh Division (Cause No. 26-BC11B-0016). The complaint names as defendants Firebird LNG, LLC, MAD Energy LP, Firebird Equipment Holdco, LLC, Fermi Equipment Holdco, LLC, the Company, and George Wentz. The plaintiff, as assignee of XO Energy Worldwide LLP, alleges that the defendants engaged in a scheme to evade payment of a brokerage commission allegedly owed in connection with the sale of a contract for six natural gas turbines, including through a Delaware divisive merger that allocated the turbine contract to a newly formed entity acquired by an affiliate of the Company for consideration in excess of $165 million, while purportedly leaving the commission obligation behind in an entity without assets to satisfy it.\n\nThe petition asserts claims for, among other things, violations of the Texas Uniform Fraudulent Transfer Act (and, in the alternative, the Delaware Uniform Voidable Transfers Act), money had and received, tortious interference, civil conspiracy, breach of contract, and quantum meruit, and seeks compensatory damages of not less than $5.985 million, exemplary damages, avoidance of the challenged transfers, the imposition of a constructive trust and other equitable relief, pre- and post-judgment interest, and attorneys' fees and costs. On March 31, 2026, the Company, Fermi Equipment Holdco, LLC, and Firebird Equipment Holdco, LLC filed a motion to dismiss under Texas Rule of Civil Procedure 91a. On April 16, 2026, plaintiff responded by filing a First Amended Petition, which, among other things, dismissed the money had and received claim as to the Company and its affiliates.\n\nThe Company, Fermi Equipment Holdco, LLC, and Firebird Equipment Holdco, LLC intend to move to dismiss the First Amended Petition, with a hearing on the anticipated motion set for June 22, 2026. Trial is currently scheduled to commence on May 24, 2027. As the petition notes, in connection with the transaction, MAD Energy agreed to indemnify the Company and its affiliates against any claims arising out of the engagement of XO Energy, Stephen Murphy, or their affiliates as a broker or finder.\n\nWe intend to vigorously defend against the action. At this time, we are unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter.\n\nPetition and Temporary Restraining Order and Temporary Injunction\n\nOn May 1, 2026, our former Chief Executive Officer, Toby Neugebauer, filed a verified petition and application for temporary restraining order and temporary injunction in the Business Court of the State of Texas, First Division, captioned Neugebauer v. Fermi Inc., et al., Cause No. 26-BC01B-0034. The petition names the Company and certain of our directors—Marius Haas, Lee McIntire, and Cordel Robbin-Coker—as defendants.\n\nThe petition arises out of the termination of Mr. Neugebauer's employment for Cause on April 30, 2026, pursuant to his October 6, 2025 employment agreement, and his resulting automatic removal from our Board of Directors under the terms of that agreement. The petition asserts claims for ultra vires conduct under Section 20.002 of the Texas Business Organizations Code (the “TBOC”), declaratory relief regarding the validity of the April 30, 2026 termination and removal under TBOC Section 21.914, and access to corporate books and records under TBOC Section 3.152. Mr. Neugebauer alleges, among other things, that his removal from the Board contravenes Texas law and our governing documents, which he claims vest the exclusive authority to remove directors in our shareholders, and that a committee of the Board lacked authority to terminate his employment. The petition seeks declaratory and injunctive relief, including an order declaring the April 30, 2026 termination and Board removal invalid, restraining the Company from filling the resulting Board vacancy, requiring the production of specified books and records, and restraining the Company from amending its bylaws or implementing a shareholder rights plan, together with attorneys' fees and costs. The petition does not seek a specified amount of monetary damages.\n\nAlso on April 30, 2026, Mr. Neugebauer filed two verified petitions seeking pre-suit discovery under Texas Rule of Civil Procedure 202 in the District Court of Dallas County. The first petition, captioned Neugebauer v. Perry, et al., Cause No. DC-26-07894, names Rick Perry, a member of our Board of Directors, and four other individuals as respondents and seeks their depositions to investigate potential claims including fraud, breach of contract, tortious interference, and conspiracy. The second petition, captioned Neugebauer v. Haas, et al., Cause No. DC-26-07931, names three of our directors—Marius Haas, Lee McIntire, and Anna Bofa—and Jacobo Ortiz, a Company officer, as respondents and seeks their depositions to\n\n37\n\n[Table of Contents](#id354ade5ec2b4fa6b9ca4faa344251c2_7)\n\ninvestigate potential claims arising from their conduct in their respective capacities at the Company. Neither petition asserts specific causes of action or seeks monetary damages.\n\nOn May 4, 2026, the parties entered into a Rule 11 Agreement under which Mr. Neugebauer agreed to withdraw his application for a temporary restraining order and temporary injunction with respect to Counts I, II, and III of the petition, subject to the Board's consideration of the nomination of Larry Kellerman to fill the Board vacancy. The Rule 11 Agreement reserves all rights of the parties with respect to the remaining issues in the petition, including Mr. Neugebauer's books and records claim, and with respect to claims and defenses arising from his employment, the termination thereof, or his employment agreement. The Rule 202 petitions also remain pending.\n\nWe intend to vigorously defend against these actions. At this time, we are unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter.\n\nWe are not currently a party to any other legal proceedings that we believe are material. Regardless of the outcome, litigation can be costly and time-consuming and can divert management’s attention and resources. For additional information, see Part I, Item 1A. “Risk Factors” and “Commitments and Contingencies” in the notes to our consolidated financial statements included in the Annual Report on Form 10-K for the period from January 10, 2025 (Inception) through December 31, 2025."}