10-Q/A: Boost Run Inc. Files Q1 2026 Amendment, Reports Net Loss

Boost Run Inc. has filed an amendment to its Q1 2026 Form 10-Q, detailing a net loss of $4.12 million and highlighting ongoing material weaknesses in internal controls.

Summary

• Boost Run Inc. filed an amendment (10-Q/A) to its quarterly report for the period ended March 31, 2026.
• The amendment primarily addresses Part I, Item 4 (Controls and Procedures) and includes updated certifications.
• The company reported a net loss of $4.12 million for the three months ended March 31, 2026, a significant change from a net income of $0.02 million in the prior year period.
• Revenue increased by 165% to $10.96 million for the quarter, driven by higher GPU utilization and expanded customer contracts.
• However, operating costs and expenses increased by 273% to $13.63 million, leading to an operating loss of $2.67 million.
• The company continues to address material weaknesses in its internal control over financial reporting, including IT general controls, segregation of duties, and personnel expertise.
• The merger with Willow Lane Acquisition Corp. was completed on May 8, 2026, resulting in Boost Run Inc. becoming a publicly traded company.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the significant net loss reported and the ongoing material weaknesses in internal controls, despite the recent merger completion.

Positives

• Revenue increased by 165% to $10.96 million for the three months ended March 31, 2026, compared to $4.14 million in the prior year period.
• Gross profit margin improved to 85.6% from 83.0% in the prior year period, indicating operational efficiencies.
• Capital expenditure on GPU acquisitions significantly increased by 1,211% to $8.93 million, indicating investment in future growth.
• The company completed its merger and became publicly traded on the Nasdaq Stock Market LLC on May 8, 2026, strengthening its liquidity position with approximately $95.38 million in net cash proceeds.

Negatives

• The company reported a net loss of $4.12 million for the three months ended March 31, 2026, a substantial shift from a net income of $0.02 million in the prior year period.
• Total operating costs and expenses increased by 273% to $13.63 million, significantly outpacing revenue growth.
• Selling, general and administrative expenses increased by 243% to $2.66 million, driven by increased payroll, legal, contract labor, and software expenses.
• Depreciation and amortization expenses rose by 244% to $4.72 million, largely due to equipment additions and new finance leases.
• Colocation lease costs increased by 476% to $4.67 million, attributed to the commencement of operations in three new facilities.
• Material weaknesses in internal control over financial reporting persist, including issues with IT general controls, segregation of duties, and personnel expertise.

Risks

• The company is subject to ongoing material weaknesses in internal control over financial reporting, which could lead to misstatements in financial reporting.
• The company's performance is dependent on worldwide economic and geopolitical conditions, which could adversely affect sales, growth, and profitability.
• Component supply constraints, power availability, and changes in data-center energy regulation could impact the ability to scale operations or maintain pricing.
• Fluctuations in interest rates and macroeconomic slowdowns may affect customer spending patterns and project timing, potentially impacting billings, revenue, and costs.
• The company's ability to hire qualified sales, support, and engineering employees is critical for its growth.
• The success of the business combination and future stock performance are subject to earnout provisions tied to stock price targets.

Future Outlook

The company expects continued growth in demand for GPU-based computing and AI-driven infrastructure. However, it anticipates that component supply constraints, power availability, and changes in data-center energy regulation could influence its ability to scale operations or maintain current pricing levels. Fluctuations in interest rates or macroeconomic slowdowns may also affect customer spending patterns and project timing. The company believes it has sufficient liquidity to fund planned operations for at least the next twelve months post-merger.

Management Comments

• Management believes that, based on its current cash balances, proceeds from the Mergers, and anticipated cash flows from operations, the Company has sufficient liquidity to meet its obligations as they become due for at least one year from the date these interim condensed consolidated financial statements are issued.
• Management has concluded that the unaudited condensed consolidated financial statements included in the Original Filing present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. GAAP, notwithstanding material weaknesses in internal controls.

Industry Context

StockSavvy.ai notes that Boost Run Inc. operates in the rapidly growing GPU computing and AI infrastructure market. The significant increase in revenue and capital expenditure on GPU acquisitions reflects strong demand. However, the substantial increase in operating costs and the net loss highlight the challenges of scaling operations and managing expenses in this capital-intensive sector. The company's focus on bare metal GPU servers for AI workloads positions it within a competitive but high-demand segment.

Comparison to Industry Standards

• The company's gross profit margin of 85.6% for Q1 2026 is strong, suggesting efficient operations relative to its cost of revenue. This is higher than many cloud infrastructure providers who typically operate with lower gross margins due to broader service offerings and higher overhead.
• The significant increase in capital expenditure on GPU acquisitions ($8.93 million in Q1 2026 vs. $0.68 million in Q1 2025) indicates aggressive investment in capacity, aligning with industry trends of rapid expansion to meet AI demand. Competitors like NVIDIA and AMD are also heavily investing in GPU manufacturing and R&D.
• The net loss of $4.12 million in Q1 2026, despite revenue growth, is a concern. Many companies in the AI infrastructure space, especially those in earlier stages of scaling, experience net losses as they invest heavily in infrastructure and R&D. However, sustained losses without a clear path to profitability can be a red flag.
• The company's focus on bare metal GPU servers offers a potentially more cost-effective solution for specific AI workloads compared to hyperscale cloud providers (e.g., AWS, Azure, GCP), which may appeal to certain enterprise customers seeking dedicated resources and control.

Corporate Governance

Legal Proceedings

• As of March 31, 2026, the company was not aware of any pending or threatened legal actions that would require accrual or disclosure.

Related Party Transactions

• Boost Run Holdings LLC incurred audit fees directly to the Company's independent registered public accounting firm on behalf of Boost Run Inc. A related party payable of $52,000 was recorded as of March 31, 2026.
• A related party loan of $1.43 million was borrowed from CEO Andrew Karos on November 25, 2025, and was repaid in full subsequent to March 31, 2026.

Stakeholder Impact

• Shareholders: The completion of the merger makes Boost Run Inc. a publicly traded company, with potential for future value appreciation or depreciation based on performance and market conditions. Earnout provisions may impact future share count.
• Creditors: Bridge loans and related party loans were repaid upon the closing of the merger, reducing debt obligations.
• Employees: The company is hiring additional accounting, finance, and operations resources, indicating growth and potential for new employment opportunities. Unit-based compensation is provided to key employees.
• Customers: The company continues to provide GPU rental services, with increased investment in infrastructure potentially leading to enhanced service offerings.

Next Steps

• Continue implementing remediation measures to address material weaknesses in internal control over financial reporting through 2026.
• Expand IT General Controls framework and implement processes to manage segregation of duties risks.
• Continue to expand accounting, finance, and operations resources with appropriate expertise.
• Utilize proceeds from the merger to support the expansion of its GPU infrastructure platform and general working capital needs.
• Monitor stock price performance for potential earnout share issuances.

Key Dates

Recommendation

While the merger completion and revenue growth are positive, the significant net loss, increasing operating expenses, and persistent material weaknesses in internal controls warrant caution. The company is in a high-growth but capital-intensive industry, and its path to profitability needs to be closely monitored. The 'hold' recommendation reflects a balance between the growth potential and the current financial and control challenges.

Keywords

GPU servers, AI models, Large Language Models, High-performance computing, Data centers, Cloud computing, Blockchain rewards, Merger