GridAI Technologies Corp. (GRDX) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the three months ended March 31, 2026. GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.) operates through two segments: a legacy gastrointestinal (GI) biopharmaceutical business and an AI-driven energy technology business acquired via the Grid AI Corp. acquisition in September 2025. The Company previously rescinded its acquisition of ImmunogenX (IMGX) on December 31, 2025, removing those assets and liabilities from its consolidated results.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $38,208 | $0 |
| Net Loss | $(3,438,702) | $(1,259,620) |
| Loss Per Share (Basic/Diluted) | $(0.82) | $(0.84) |
| Cash and Cash Equivalents (Ending) | $385,542 | $66,357 |
| Operating Cash Flow | $(1,786,751) | $(818,635) |
| Total Debt (Current) | $8,605,416 | N/A |
| Accumulated Deficit | $(212,105,618) | $(203,647,628) |
Note: Total Debt includes $6,250,000 in deferred consideration and $2,355,416 in notes payable.
Material Changes vs. Prior Period
- Revenue Generation: The Company recognized $38,208 in revenue in Q1 2026, entirely from the AI Segment (Grid AI Corp.), compared to zero revenue in Q1 2025.
- Expense Increase: Operating expenses surged to $3.0 million from $0.8 million year-over-year. This increase is driven by the integration of the Grid AI business, higher professional fees, and increased R&D costs for AI platform development ($627,756 in AI R&D vs. $3,624 in GI R&D).
- Discontinued Operations: Q1 2025 included a loss of $311,515 from discontinued operations (IMGX). Q1 2026 had no discontinued operations following the IMGX rescission.
- Income Tax Benefit: The Company recorded an income tax benefit of $297,629 in Q1 2026, primarily due to foreign deferred tax assets and R&D tax credits, compared to none in Q1 2025.
Outlook, Risks, and Contingencies
- Going Concern: Management has concluded that substantial doubt exists regarding the Company's ability to continue as a going concern for one year from the filing date due to recurring losses, negative cash flows, and an accumulated deficit of over $212 million. The Company is dependent on raising additional capital.
- Debt Settlements (Subsequent Events):
- Revolving Loan: On May 14, 2026, the Company settled a defaulted $700,000 revolving loan by paying $800,000 cash and issuing 71,482 shares of common stock.
- Legal Settlement: On May 12, 2026, the Company settled litigation with Ellenoff Grossman & Schole LLP for $360,000 (initial $100k paid, remainder in installments).
- Financing Activity: In May 2026, the Company closed private placements raising approximately $7.79 million in gross proceeds through the sale of common stock, pre-funded warrants, and common warrants.
- Internal Controls: The Company disclosed a material weakness in internal controls over financial reporting related to the integration of Grid AI Corp., citing insufficient accounting resources.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $385,542 cash balance against the $13.6 million working capital deficit and ongoing burn rate.
- Debt Obligations: Confirm the status of the $6.25 million deferred consideration payable to Grid AI sellers and the terms of remaining promissory notes.
- Dilution Impact: Assess the dilution from the May 2026 financing ($7.79M raised) and the issuance of shares to settle the revolving loan and legal fees.
- Revenue Sustainability: Evaluate the scalability of the $38k revenue stream from the AI segment and the timeline for commercialization.
- Going Concern Mitigation: Review the effectiveness of the May 2026 capital raises in alleviating the substantial doubt about the Company's ability to continue operations.