10-K: Axe Compute Pivots to AI, Digital Assets Amidst Losses

Axe Compute Inc. reports a significant net loss for 2025 driven by digital asset volatility, while aggressively pursuing an AI compute and Aethir token treasury strategy.

Summary

• Axe Compute Inc. (formerly Predictive Oncology Inc.) completed a strategic pivot in late 2025, renaming the company and focusing on a Compute Services and Treasury Management segment.
• The new strategy centers on providing GPU compute capacity for AI workloads through the decentralized Aethir network and managing a digital asset treasury primarily focused on the Aethir token (ATH).
• The company reported a substantial net loss of $233,095,203 for the year ended December 31, 2025, significantly higher than the $12,664,388 loss in 2024.
• This loss was primarily driven by a $152,490,550 loss on digital assets and a $52,735,000 loss on derivative instruments related to the Crypto PIPE.
• Revenue from continuing operations increased to $125,284 in 2025 from $84,812 in 2024, primarily from the Drug Discovery Services business.
• The company successfully raised approximately $343.5 million through two private investment in public equity (PIPE) transactions in October 2025, comprising $50.8 million in cash and $173.3 million in discounted value of in-kind ATH contributions.
• As of December 31, 2025, the company held approximately 2.837 billion unlocked ATH tokens with a fair market value of $24.4 million, and rights to receive 3.511 billion locked ATH tokens with a fair market value of $15.5 million.
• The legacy Drug Discovery Services business is exploring strategic alternatives, including a potential sale, partnership, or licensing arrangement, but no specific course of action has been committed to.
• The company regained compliance with Nasdaq's minimum stockholders' equity requirement and minimum bid price requirement in late 2025, but is subject to a one-year mandatory panel monitor.
• Raymond F. Vennare was terminated as CEO and Chairman, effective February 9, 2026, and Christopher Miglino was appointed as the new CEO and a Board member.
• The company had $10,790,850 in cash and cash equivalents as of December 31, 2025, and an accumulated deficit of $413,521,474.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a high-risk, high-reward scenario. While the strategic pivot to AI compute and significant capital raise are positive, the substantial net loss driven by digital asset volatility and the inherent risks of a concentrated digital asset strategy warrant a cautious outlook.

Positives

• Successfully raised approximately $343.5 million through PIPE transactions, significantly bolstering capital for the new digital asset treasury strategy.
• Regained compliance with Nasdaq's minimum stockholders' equity and minimum bid price requirements, ensuring continued listing on the Nasdaq Capital Market.
• Strategic pivot to the AI compute market aligns with a rapidly growing commercial opportunity, estimated at over $1 trillion in 2026 with high annual growth rates.
• The company's Compute Services segment operates on an asset-light model, allowing scalable GPU capacity without material capital expenditure.
• Integration of ATH token settlement creates a differentiated economic incentive structure, earning an additional 20% revenue in ATH when purchasing new tokens on the open market.
• The company's distributed network model provides geographic diversity and access to compute resources across multiple regions, mitigating single-supplier and single-facility concentration risk.

Negatives

• Reported a significant net loss of $233,095,203 for the year ended December 31, 2025, a substantial increase from $12,664,388 in 2024.
• Incurred a $152,490,550 loss on digital assets and a $52,735,000 loss on derivative instruments, primarily due to the volatility and depreciation in the value of ATH tokens.
• Accumulated deficit reached $413,521,474 as of December 31, 2025, indicating a history of unprofitability.
• Experienced negative cash flows from continuing operating activities of $9,876,039 in 2025.
• Assets are highly concentrated in a single digital asset (ATH), making the company disproportionately vulnerable to adverse developments specific to ATH, its protocol, or network.
• The price of ATH has experienced significant volatility, declining from a high of $0.067072 on September 17, 2025, to $0.004919 on February 6, 2026.
• The sale process for the Legacy Business (oncology drug discovery) has no assurance of resulting in any transaction or favorable terms, potentially diverting management attention and financial resources.

Risks

• Continued negative operating cash flows and substantial capital needs, with future financing potentially being highly dilutive and onerous.
• Risks related to recent and future acquisitions, including integration challenges, unforeseen difficulties, and failure to realize anticipated benefits.
• The success of the digital asset treasury strategy is uncertain, requiring specialized employee skillsets, operational infrastructure, and internal security processes.
• High volatility and unpredictability in the price of ATH, which directly affects reported financial results and could lead to substantial non-cash losses.
• Limited liquidity of ATH, which could impair the ability to sell holdings at favorable prices, especially for locked tokens subject to vesting and transfer restrictions.
• Correlation of ATH price with broader cryptocurrency market conditions and macroeconomic factors, amplifying exposure to market-wide risks.
• Potential disruption or unanticipated difficulties in the Aethir network, impacting transaction processing, transferability, and the value of ATH.
• Significant legal, commercial, regulatory, and technical uncertainty surrounding ATH and other digital assets, including potential new laws or interpretations that could adversely affect ATH price or the company's ability to operate.
• Exposure to risks and technical vulnerabilities from interacting with smart contracts on the Aethir network, potentially leading to loss or theft of digital assets.
• Advances in AI model efficiency could reduce demand for GPU compute, adversely affecting the Aethir network and the value of the compute business.
• Geopolitical tensions and trade restrictions, particularly between the United States and China, could disrupt GPU supply chains and limit the addressable market.
• Energy and environmental demands of data centers and GPU compute infrastructure may constrain market growth and result in increased regulatory costs or operational limitations.
• Demand for GPU compute is highly concentrated among a small number of large technology companies and governments, making the business vulnerable to reductions in their expenditures.
• Changes in regulatory interpretations could require registration as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns.
• The sale of the Legacy Business may not be completed on favorable terms, or at all, potentially creating liabilities, indemnification obligations, or transition costs.
• Potential delisting from the Nasdaq Capital Market if future listing requirements are not met, impairing stock liquidity and analyst coverage.
• Future equity offerings may result in substantial dilution for existing stockholders.
• The exercise of outstanding warrants and issuance of equity awards may have a dilutive effect on stock and negatively impact its price.
• Business disruptions from political/civil unrest, acts of war, epidemics, or natural disasters could harm operations and increase costs.
• Inability to attract and retain qualified technical, sales, marketing, and management personnel.
• Limitations on the ability to use net operating loss and tax credit carryforwards due to Internal Revenue Code provisions and prior/future stock offerings.
• Security breaches, loss of data, and other disruptions to business or third-party service providers could compromise sensitive information and expose the company to liability.

Future Outlook

Management expects operating losses to continue in the near term as the company scales its compute services and Treasury Strategy. There is no assurance that the strategic review process for the Legacy Business will result in any transaction. The company intends to continue acquiring additional ATH in the open market and earn yield on its ATH treasury holdings through staking and other activities. Future cash requirements and the adequacy of available funds depend on generating income from compute services and the Treasury Strategy, and the availability of future financing.

Management Comments

• The company embarked upon this direction because the global compute market represents a significant and rapidly growing commercial opportunity.
• The company believes this supply-demand imbalance creates a significant opportunity for its GPU compute business, which operates through the Aethir network.
• The company's management is focusing its resources on the Treasury Strategy, and a significant portion of the company's balance sheet will be allocated to holding ATH.
• The company believes its sources of liquidity will be sufficient to allow the company to fund its planned operations for at least the next twelve months from the date of this Annual Report on Form 10-K.
• Management notes that a significant portion of the company's liquidity is held in ATH, a digital asset, the market price of which has exhibited substantial volatility over the trailing 3-, 6-, and 9-month periods.

Industry Context

StockSavvy.ai notes that Axe Compute's strategic pivot into AI compute infrastructure and digital asset treasury management aligns with a booming global compute market, projected to exceed $1 trillion in 2026 with significant growth rates, particularly in AI-related computing. The company's focus on distributed GPU capacity through the Aethir network addresses the current supply-demand imbalance, characterized by record-low data center vacancy rates (1.6% in North America) and extended GPU procurement lead times (36-52 weeks). This positions Axe Compute to capitalize on the unprecedented investment in AI infrastructure, estimated at $6.7 trillion globally between 2025 and 2030, with 65.7% being GPU-related. The company's asset-light model and ATH token integration offer a differentiated approach compared to traditional hyperscale cloud providers.

Comparison to Industry Standards

• The global compute market is estimated at over $1 trillion in 2026 (Research and Markets), with AI-related computing services growing over 30% annually and expected to exceed $1 trillion by 2034 (Cognitive Market Research; Statifacts, 2025). Axe Compute's entry into this market positions it in a high-growth sector.
• McKinsey & Company estimated in 2025 that over 50% of all data center capacity was already dedicated to AI workloads, expected to grow 3.5 times by 2030, with approximately $6.7 trillion spent on data centers globally between 2025 and 2030, 65.7% of which will be GPU-related. Axe Compute's focus on GPU compute directly targets this expanding demand.
• Gartner estimates worldwide AI spending will total $2.5 trillion in 2026, indicating a massive market that Axe Compute aims to serve.
• North American data center vacancy rates reached a record low of 1.6% in early 2026, and data center demand increased 24% in 2025, with average lead times for data center GPUs at 36 to 52 weeks (CBRE Investment Management, 2026). This severe supply-demand imbalance provides a strong market opportunity for Axe Compute's distributed GPU compute model.
• Axe Compute's asset-light model, which avoids owning physical data centers, contrasts with capital-intensive traditional data center operators and hyperscale cloud providers, potentially allowing for more agile scaling and lower capital expenditure.

Management Changes

Corporate Governance

Legal Proceedings

• Renovaro filed a lawsuit in Delaware Chancery Court on May 8, 2025, claiming breaches by the company of a binding letter of intent (LOI) and an extension agreement, seeking to compel a merger. The company believes the lawsuit lacks merit and is contesting it vigorously.

Related Party Transactions

• On October 7, 2025, the company entered into a Strategic Advisor Agreement with DNA Holdings Venture Inc. (DNA) to provide financial advisory services related to digital asset strategies and business development initiatives. As compensation, the company issued five-year Strategic Advisor Warrants to DNA to purchase up to 1,348,906 shares of common stock at an exercise price of $11.6265 per share, with a grant date fair value of $15.4 million.
• The company also engaged DNA under a 10-year Asset Management Agreement to act as its asset manager for digital assets. DNA is entitled to a 1.00% per annum asset-based management fee, plus an incentive fee equal to 25% of profits earned on managed assets over 7%. Total fees paid to DNA under this agreement were $722,390 during 2025.
• Shawn Matthews, who served as Chief Executive Officer of DNA, was appointed to the company's Board of Directors on October 7, 2025, and resigned on January 15, 2026.
• Thomas McLaughlin, who served as Chief Investment Officer of DNA, was engaged as the company's Chief Investment Officer on October 7, 2025, and resigned on January 19, 2026.

Stakeholder Impact

• Shareholders face significant dilution from recent and potential future equity offerings, including the PIPE transactions and ATM facility, and are exposed to high volatility in the value of ATH tokens.
• Shareholders may benefit from the company's strategic pivot into the high-growth AI compute market and potential yield generation from ATH staking, but this is offset by substantial financial losses and operational risks.
• Employees are impacted by the strategic shift, management changes (new CEO, Chairman, and directors), and the ongoing exploration of strategic alternatives for the Legacy Business, which could affect job security or roles within that segment.
• Customers of the new Compute Services segment are offered on-demand access to high-performance GPU compute infrastructure, potentially benefiting from competitive pricing and rapid provisioning.
• Customers of the Legacy Drug Discovery Services business may experience uncertainty due to the ongoing strategic review process for that segment.
• Creditors and investors are exposed to the company's significant accumulated deficit and continued operating losses, although recent capital raises have improved short-term liquidity.

Next Steps

• Continue acquiring additional ATH in the open market to support the Treasury Strategy.
• Earn yield on ATH treasury holdings by engaging in ATH staking and other activities.
• Scale compute services to enterprise customers, AI developers, and large-scale workload operators.
• Explore strategic alternatives for the Legacy Business (oncology drug discovery solutions), which may include a potential sale, partnership, licensing arrangement, or joint venture.
• Monitor compliance with Nasdaq listing rules, as the company is under a one-year mandatory panel monitor for the stockholders' equity requirement.

Key Dates

Recommendation

The company has undergone a significant strategic pivot into the high-growth AI compute and digital asset space, backed by a substantial capital raise. While this shift presents considerable upside potential in a booming market, the company's current financial performance shows a massive net loss, primarily due to digital asset volatility. The concentration of assets in ATH, coupled with regulatory uncertainties and operational risks inherent in the crypto space, makes this a high-risk investment. The recent management changes and the ongoing strategic review of the legacy business add further layers of uncertainty. A 'hold' recommendation is appropriate for seasoned investors to observe the execution of the new strategy, the stabilization of digital asset valuations, and the outcome of the legacy business divestiture before committing further capital or exiting positions.

Keywords

AI compute, Aethir token, ATH, GPU capacity, digital asset treasury, decentralized physical infrastructure network, cryptocurrency, oncology drug discovery, biotech, SEC filing, Nasdaq compliance, capital raise, stock volatility, corporate governance, cybersecurity