Real-time Form 4 intelligence. Smarter insider tracking.
YoY shift: Lean -
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.27pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
-0.27pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Risk Factors (Item 1A)
21,336 words
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this report on Form 10-K, you should carefully consider the risk factors discussed below when considering an investment in our common stock and any risk factors that may be set forth in any applicable prospectus supplement, any related free writing prospectus, as well as the other information contained in this Form 10-K, any prospectus, any applicable prospectus supplement, and any related free writing prospectus. If any of the following risks occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you could lose some or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
Summary of Risk Factors
• The market for DBD is not yet established and may not develop on the timeline we expect or at all.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
• Our projections for the growth of the total addressable market for nuclear waste disposal are based on a number of assumptions and estimates, some or all of which may prove to be inaccurate or, even if accurate, may not result in the projected results. If demand for our nuclear waste storage and disposal solutions fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieveprofitability.
• We are subject to extensive laws and regulations relating to various aspects of our business. The nature of our business also requires us to interact with various governmental entities, subjecting us to the policies, priorities,
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regulations, mandates, and funding levels of such governmental entities, and we may be negatively or positively impacted by any change thereto.
• We are an early-stage company with a history of financial losses, and we expect to continue to incur financial losses for the foreseeable future. We cannot assure you that we can or will be able to operate profitably.
• We have not yet entered into any binding contract with any customer to temporarily store or permanently dispose of nuclear waste through the implementation of our DBD solutions, and there is no guarantee that we will be able to do so in the future, or even if we do, that our operations will be successful.
• Our expected timeline for the commercialization of our technologies is subject to a number of assumptions, estimates and milestones that may prove to be inaccurate or incorrect or may not be achieved. As part of our commercialization strategy, we are pursuing a multi-phase, multi-year initiative to complete a non-radioactive, full-scale, at-depth demonstration of the deployment of our UCS canisters and our DBD solution. Delays or failures in our demonstration initiative may adversely impact our commercialization strategy and timeline, and
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thus our business and operations, and even if successfully completed on time, may not result in our business being successful in the foreseeable future.
• We operate in an emerging industry, which makes it difficult to evaluate our prospects and the risks and challenges we may encounter.
• We have limited experience commercializing our products at a large scale and may not be able to do so efficiently, effectively or to nuclear-grade levels of quality assurance.
• We believe that the likelihood of successfully commercializing our products would be enhanced by a successful completion of our non-radioactive, full-scale, at-depth demonstration facility and a delay in or failure to do so may adversely impact our business and operations. Furthermore, no assurances can be given that, even if successfully completed, our demonstration facility will lead to our business being successful.
• If we fail to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows.
• Substantially all of our revenue to date is comprised of government grants and contract awards.
• Our future revenue plans rely on partnering with governmental entities and strategic partners.
• Our preferred government contracting model may not be compatible with public-sector procurement, transparency or state-aid rules applicable to many of our target customers.
• If the U.S. Department of Energy does not accept our UCS under the Amended Standard Contract, our ability to commercialize our integrated storage, transportation and disposal solution in the United States could be materially impaired.
• A prolonged United States federal government shutdown could materially and adversely affect our business and operations.
• Our commercialization strategy relies heavily on our relationship with NAC International and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate.
• Our current and future patent applications may not result in issued patents, which would hinder our ability to protect certain of our intellectual property.
• If we cannot protect, maintain and, if necessary, enforce our intellectual property rights, our ability to develop and commercialize products will be adversely impacted.
• Our operating and financial projections rely on management assumptions and analyses. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.
• We may need to defend ourselves against intellectual property infringementclaims, which may be time-consuming and could cause us to incur substantial fees and costs.
• The benefits to customers of our products could be supplanted by other technologies or solutions or competitors’ products that utilize similar technology to ours in a more effective way.
• We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us.
• Accidents involving nuclear power facilities, including, but not limited to, events similar to the Three Mile Island, Chernobyl and Fukushima Daiichi nuclear accidents, or terrorist acts or other high-profile events nvolving radioactive materials, could materially and adversely affect nuclear power producers and the markets for nuclear power and nuclear waste disposal, and increase regulatory requirements and costs that could materially and adversely affect our business.
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• Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or contain terms unfavorable to us or our investors.
• Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by domestic and international financial institutions or transactional counterparties, could adversely affect our business, financial condition, and results of operations.
• Any acquisitions, partnerships, or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.
• Our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that our management’s decisions will result in successfulachievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects.
• We depend on a limited number of key personnel with specialized expertise, and the loss of such individuals could materially harm our business.
• Some of our executive officers and key advisors have outside management or directorship positions with other companies and may allocate part of their time to these other businesses.
• We may be unable to adequately control the costs associated with our operations.
• Security breaches and other disruptions could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer.
• Current and future geopolitical and macroeconomic events outside of our control could adversely impact our business, results of operations, cash flows, financial condition and liquidity.
• Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, financial condition, results of operations, and cash flows.
• Our ability to rely on global supply chains for source components and/or raw materials may be impacted by tariffs, trade disputes, or other changes in trade policy or trade regulation.
• The direct and indirect impact on us and our value chain from severe weather and other effects of climate change could adversely affect our financial condition, operating results, and cash flows.
• Litigation or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management’s time and attention, and damage our reputation.
• We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business, prospects, financial condition and operating results.
• Being a public company can be administratively burdensome and will significantly increase our legal and financial compliance costs.
• Our management as a group has limited experience in operating a publicly traded company.
• The shares of our common stock being offered in our recently filed prospectus represent a substantial percentage of the outstanding shares of our common stock, and the sales of such shares, or the perception that these sales could occur, could cause the market price of the common stock to decline significantly.
• The shares of common stock issued in the Merger and the Private Placement are “restricted securities” and, as such, may not be sold except in limited circumstances.
• There is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of our common stock at times and prices that you believe are appropriate.
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• Our common stock may not be eligible for listing or quotation on any securities exchange or over-the-counter trading system.
• The market price and trading volume of our common stock may be volatile and could decline significantly following any listing or quotation, if any.
• The designation of our common stock as “penny stock” would limit the liquidity of our common stock.
• FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock.
• Because we became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.
• Because the Merger was a reverse merger, the registration statement we file with respect to the shares of common stock received by investors in the Merger might be subject to heightened scrutiny by the SEC, and we may not be able to attract the attention of major brokerage firms.
• As a result of the consummation of the Merger, we are now obligated to develop and maintain proper and effective internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of material misstatement of the consolidated financial statements.
• We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors.
• We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards.
• Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
• We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
• If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.
Risks Related to Our Business and Industry
The market for DBD is not yet established and may not develop on the timeline we expect or at all.
The market for DBD has not yet been established. The development of the market is subject to a number of factors, many of which are outside of our control. Challenges that could impact our expectations for the timeline and costs of market development might arise from obtaining federal, state, and local permits and approvals, transportation, threatenedlitigation, political or host community opposition to proposed DBD repository sites, access to and availability of raw materials, lack of requisite legislative changes where applicable and lack of support or opposition from governmental entities. As a result, the market for DBD and demand for our products and services may not develop on the timeline we expect or at all, which could cause our business and operations to suffer.
In particular, the market for DBD in the United States may never develop due to the current regulatory framework governing the permanent disposal of many types of nuclear waste. Currently, such laws and regulations authorize the U.S. Department of Energy (“DOE”) to oversee the siting, construction and operation of one deep geologic repository for HLW and SNF: the Yucca Mountain site designated pursuant to the Nuclear Waste Policy Act of 1982, as amended (the “NWPA”). Additionally, certain provisions of the NWPA prohibit the DOE from conducting site-specific activities at a repository site other than Yucca Mountain unless authorized by Congress. Congressional enactment of an alternative waste management plan through amendment of the NWPA is central to our ability to conduct permanent disposal activities in the U.S. in the future. If Congressional action is not taken to amend the NPWA, we will be unable to obtain the necessary
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permits and licenses to provide our DBD solutions to customers in the United States, which would have a material adverse effect on our business, results of operations and financial condition.
Our projections for the growth of the total addressable market for nuclear waste disposal are based on a number of assumptions and estimates, some or all of which may prove to be inaccurate or, even if accurate, may not result in the projected results. If demand for our nuclear waste storage and disposal solutions fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieveprofitability.
Our projections for the growth of the total addressable market over time are based on a number of internal and third-party assumptions and estimates, including, but not limited to, our potential contracted revenue, the number of current and potential customers who have expressed interest in our products and services, assumed nuclear power and nuclear waste generation levels, estimates of prices and production costs for our UCS canisters and the various components of our DBD solution, our ability to leverage our current sales pipeline into implementation contracts, and general market conditions. They are also dependent upon obtaining safety and feasibility validations of our solution and regulatory approvals. See Item 1, “ Business—Total Addressable Market for Nuclear Waste Disposal. ”
Additionally, some of our assumptions and estimates are based on the positive outlook for certain industries that will use more energy and require more power generation, including, but not limited to, investments in and increased use of AI, the continued development of datacenters, and the growing global interest in nuclear power generation. However, our assumptions and the data underlying our estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
As a result, our projections for the total addressable market may prove to be materially incorrect. Additionally, even if the estimates and assumptions underlying our projections are accurate, the actual total addressable market for nuclear waste disposal may be materially different from the market projected. If demand for our storage and disposal solutions fails to develop sufficiently, our business, operations and reputation could suffer materially, and we would be unable to achieveprofitability.
We are subject to extensive laws and regulations relating to various aspects of our business. The nature of our business also requires us to interact with various governmental entities, subjecting us to the policies, priorities, regulations, mandates, and funding levels of such governmental entities, and we may be negatively or positively impacted by any change thereto.
We are, or in the future will be, subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to the possession and disposal of radioactive materials; design, manufacture, operations, marketing and export of nuclear technologies; employment and labor; tax; data security of the operational and information technology we use; health and safety; and zoning and environmental issues. Laws and regulations at the foreign, federal, state and local levels may change and may be interpreted in different ways, especially in relation to new and emerging industries, and we cannot always reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes. We cannot guarantee that our measures to monitor these developments and the time and resources we spend to comply with these laws, regulations and guidelines will be satisfactory to regulators or other third parties, such as our customers, who may also be subject to extensive governmental regulation.
While our DBD solution is designed to meet internationally recognized safety principles for deep geological disposal, much of the existing international regulatory guidance and standards—such as those issued or referenced by the IAEA— have historically been developed with mined repository concepts in mind rather than borehole-based disposal. As a result, regulators in some jurisdictions may lack clear, established guidance for licensing, reviewing or approving DBD facilities.
We may need to expend substantial efforts to comply with any new and evolving laws and regulations applicable to our business, which may result in increased general and administrative expenses and a diversion of management time and attention. Moreover, changes in laws, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows and financial condition, and lead to regulatory delays that could impact our ability to obtain licenses, certificates, authorizations, permits, and other types of regulatory approvals. Similarly, changes in the priorities, mandates and funding levels of the governmental entities with which we interact could impact our relationships with such entities or their attitudes toward or level of support for nuclear power generation and nuclear waste disposal; reduce the amount of funding available for government grants; reduce the number of staff available to review and issue the requisite regulatory approvals, permits and licenses; influence the public’s perception of our company and our industry; and influence decisions by clients, governmental agencies or other industry participants with whom we do business. Any such change thus carries the possibility of reducing demand for our services or increasing our costs of
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operations, which could have a negative impact on our financial position, results of operations or cash flows, but we cannot reasonably or reliably estimate whether such changes will occur, when they will occur or if they will impact us.
Failure to comply with these laws applicable to our business and operations, now or in the future, may result in civil and criminalpenalties or private lawsuits, or the suspension or revocation of regulatory approvals, which would prevent us from operating our business. With respect to domestic repository sites, we require regulatory approvals, licenses and permits from the NRC and DOE to site, construct and operate these facilities, and we will require similar approvals, licenses and permits from analogous foreign, state and local government entities. Regulatory approval processes may be subject to change, can be technically challenging to address, may result in the imposition of conditions that impact the financial viability of our facilities, and may also provide opportunities for third parties to lodge objections or file petitions against the licensing of our facilities. Failure to comply with these laws, obtain the required regulatory approvals, receive exemptions from such regulations, as needed, or defendagainst any third-party challenges to such approvals could result in regulatory enforcement, violations, fines, penalties, or the inability to operate our commercial deployments. Any delays in regulatory approvals could also adversely affect our ability to meet commercialization timelines and thereby affect our financial performance and future growth objectives.
Further, as described above and under Item 1. “Business – Regulatory,” we will not be able to seek NRC or DOE approval and licensing of repository sites in the U.S. unless and until Congress amends existing law to authorize the use of alternative nuclear waste management practices other than the mined repository site at Yucca Mountain. There can be no assurance that Congress will take any such action. On an international level, if international regulatory guidance does not evolve, or evolves more slowly than we expect, to explicitly address borehole disposal concepts, national regulators may take a more cautious or extended approach to reviewing DBD proposals, impose additional information requirements or decline to authorize deployment. Such outcomes could delay or prevent international commercialization of our technologies, increase costs, reduce customer confidence or materially and adversely affect our business, results of operations and financial condition.
We must also comply with extensive government laws and regulations related to, among other things, health, safety and the environment. We may be unable to meet the compliance standards of such laws and regulations, and our inability to do so may cause us to lose prospective business and adversely affect our financial condition and results of operations. Further, environmental, health and safety laws change frequently, and we may not be able to anticipate such changes or the impact of such changes. There is no assurance that we can avoid significant costs, liabilities and penalties imposed as a result of such governmental regulation in the future.
Our business could be subject to stringent U.S. export control laws and regulations as well. Unfavorable changes in these laws and regulations or U.S. government licensing policies, our failure to comply with or secure timely U.S. government authorizations under these laws and regulations could have a material adverse effect on us and our ability to expand and thereby affect our business prospects, financial condition, results of operations and cash flows. Moreover, the inability to secure and maintain required export licenses or authorizations could negatively impact our ability to compete successfully or market our UCS canisters and DBD solutions outside the United States. For example, if we were unable to obtain or maintain licenses to export nuclear technology or certain hardware to a particular country, we would be effectively prohibited from exporting our technologies to or operating DBD repository sites in that country, which would limit the number of customers to those in the United States and in countries where we are able to secure licenses (or where licenses are not required). Similarly, if export control laws and regulations prevent us from sharing certain export controlled information with suppliers we intend to partner with to operate our business or develop and produce our technologies or repositories, we may not be able to work with our preferred suppliers, which may impact our finances, business plans, and the competitiveness of our product offerings. Failure to comply with export control laws and regulations could expose us to civil or criminalpenalties, fines, investigations, more onerous compliance requirements, loss of export privileges, debarment from government contracts or limitations on our ability to enter into contracts with the U.S. government. Any changes in export control regulations or U.S. government licensing policy, such as that necessary to implement U.S. government commitments to multilateral control regimes, may restrict our market size.
We are an early-stage company with a history of financial losses, and we expect to continue to incur financial losses for the foreseeable future. We cannot assure you that we can or will be able to operate profitably.
We are an early-stage company that is not yet profitable, and we expect to continue incurring operating losses in the near-term. During the year ended December 31, 2025 an d the years ended December 31, 2024 and 2023, we generated approximately $6.1 million, $7.1 million and $5.4 million in revenue, respectively, and incurred net losses of approximately $(5.3 million), $(1.0 million) and $(3.6 million), respectively, on a consolidated basis. There can be no assurance that we will not continue to incur net losses in the future. We may not succeed in expanding our customer base or entering into implementation contracts, and market acceptance of our UCS canisters or our waste storage and disposal services may never occur. Even if we are successful in generating a broader customer base or promoting market acceptance
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of our technologies, we may never generate revenue that is significant enough to achieveprofitability. Even if we do achieveprofitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Furthermore, we may not be able to control overhead expenses even if our operations successfully expand. Our failure to become and remain profitable would depress our value and could impair our ability to raise capital, expand our business, diversify our product offerings, or even continue our operations.
We have not yet entered into any binding contract with any customer to temporarily store or permanently dispose of nuclear waste through the implementation of our DBD solutions, and there is no guarantee that we will be able to do so in the future, or even if we do, that our operations will be successful.
Our ability to successfully commercialize our DBD solutions hinges on our ability to reach binding agreements with customers for the implementation of our proprietary nuclear waste disposal technologies. We intend to execute our business plan through our phased sales pipeline approach, which is comprised of four distinct stages of customer engagement: (i) pre-sales, (ii) familiarization, (iii) confidence-building and (iv) product adoption. In a general sense, the first three stages are focused on identifying and then engaging and collaborating with potential customers to introduce them to our solutions and understand each customer’s unique needs. The final stage, product adoption, involves contracting with customers for one or more of our three distinct products and services, which are: (x) strategic appraisal, which involves analysis of the costs and benefits of our DBD solution as compared with other disposal solutions, such as mined repositories, (y) operational planning, which involves the completion of a comprehensive feasibility assessment, including the preparation of a generic design for our deep borehole repositories, an International Atomic Energy Agency (“IAEA”)-compliant economic and strategic business case and a Generic Safety Case, a commercial model for implementation and a roadmap for all work needed to commission and implement our solutions; and (z) implementation, which includes the deployment of an IAEA-compliant disposal or storage system (depending on the customer’s needs) and consultancy services for siting, licensing, construction, hot and cold commissioning, operations, closure, post-closure monitoring and stakeholder engagement. See Item 1, “ Business—Company Overview ” for a more fulsome discussion of the three products and services the Company provides.
To date, we have entered into strategic appraisal contracts with various customers and one operational planning contract with one customer. We have not, however, entered into any implementation contract (including as to any storage or disposal). Ultimately, if demonstrations of our DBD technology, safety testing and feasibility assessments are successful, and appropriate regulatory approvals are obtained, we anticipate entering into implementation contracts with many of these customers in the future; however, these existing customer relationships may not result in binding implementation agreements. If we are unable to enter into implementation contracts with potential customers in the near- or medium-term, our planned commercialization of our nuclear waste disposal technologies could be significantly delayed. Such delays would result in delays in revenue generation and could hinder our ability to gain market traction with other potential customers. This could have a material adverse effect on our business, results of operations and financial condition.
Our expected timeline for the commercialization of our technologies is subject to a number of assumptions, estimates and milestones that may prove to be inaccurate or incorrect or may not be achieved. As part of our commercialization strategy, we are pursuing a multi-phase, multi-year initiative to complete a non-radioactive, full-scale, at-depth demonstration of the deployment of our UCS canisters and our DBD solution. Delays or failures in our demonstration initiative may adversely impact our commercialization strategy and timeline, and thus our business and operations, and even if successfully completed on time, may not result in our business being successful in the foreseeable future.
The expected timeline to scale-up and deploy the necessary technological processes for the commercialization of our DBD technologies is also based upon various assumptions and estimates regarding our technology and general market conditions. However, our DBD technologies have not been proven at scale, and our assumptions and estimates, and the data underlying them, may not be correct. Further, the conditions supporting our assumptions or estimates might change at any time, reducing the accuracy of these underlying assumptions. If our assumptions and estimates supporting our expected commercialization timeline prove to be inaccurate or incorrect, we would be delayed in achieving broad market adoption of our technologies, which would harm our business and financial condition.
Among other factors that could affect our commercialization timeline would be delays or failures in our demonstration initiative. Specifically, we believe that a non-radioactive, full-scale, at-depth demonstration of the deployment of our UCS canisters and our DBD solution will be important to our commercialization strategy and, thus, our commercialization timeline. See “ Description of Business—Deep Isolation’s Solution .” Accordingly, we are pursuing a phased, multi-year plan for such a demonstration and will be using proceeds from the Private Placement that followed immediately after the Merger to fund that initiative. See Item 7 “ Management’s Discussion And Analysis Of Financial Condition And Results Of Operations ,” “— The Private Placement ” and “ —Next Steps .” No assurances can be given, however, that even if such a demonstration is completed successfully that our commercialization strategy will be successfully implemented.
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We operate in an emerging industry, which makes it difficult to evaluate our prospects and the risks and challenges we may encounter.
We operate in an emerging industry, which carries related risks. As a result of the evolving nature of the industry and markets in which we operate, including emerging demand for our products and services, it is difficult to predict customer demand or adoption rates for our products or the future growth of the markets we expect to target.
The world’s current nuclear waste management model is limited to two options, above-ground interim storage and geologic repository disposal in the form of mined repositories, each of which are extremely costly and limited in ability to provide a viable, long-term solution to the global nuclear waste disposal problem. Currently, there are no operational mined repository facilities for the disposal of HLW or SNF, although certain countries are in various stages of the development and construction of mined repositories for permanent disposal of their respective nation’s nuclear waste. Thus, above-ground interim storage, which does not provide a permanent disposal solution, effectively is the only current waste management solution for HLW and SNF. While DBD technologies would offer a distinctly different geological repository approach to mined repositories, we are not aware of any other company developing or offering a DBD end-to-end or partial solution and our DBD technology has not been, and may not be, validated or approved for disposal of HLW or SNF.
Additionally, we have encountered and expect to continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly evolving industries, and we may experience expenses, difficulties, complications, delays and other effects caused by known and unknown factors. Thus, our ability to forecast our future results of operations and plan for and model our future growth is limited and subject to a number of uncertainties. Accordingly, we may be unable to prepare accurate internal financial forecasts or replace anticipated revenue that we do not ultimately receive as a result of unforeseendelays, changed circumstances, or changed market conditions, and our results of operations in future reporting periods may be below the expectations of investors or analysts. If we do not address these risks successfully, our results of operations could differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our common stock price to decline.
We have limited experience commercializing our products at a large scale and may not be able to do so efficiently, effectively or to nuclear-grade levels of quality assurance.
We have limited experience commercializing our products and services at a large scale and may not be able to do so efficiently or effectively. A key element of our long-term business strategy is the success of our phased product offering in facilitating adoption of our solutions, including demonstration of the feasibility of DBD, continued testing of our technologies, engagement with key stakeholders and collaboration with leaders in the nuclear energy industry. Commercialization of our operations will also require growth in sales, marketing, training, customer relations and maintenance and servicing operations, including hiring select personnel with the necessary experience and expertise. Managing and maintaining these operations is expensive and time consuming, and an inability to leverage such an organization effectively or at all could inhibit potential sales or subscriptions and the penetration and adoption of our products into new markets. In addition, certain decisions we make regarding staffing in these areas in our efforts to maintain an adequate spending level could have unintendednegative effects on our revenues, such as by weakening the sales, marketing and maintenance and servicing infrastructures or lowering the quality of customer service.
In addition, large-scale commercialization of nuclear waste disposal solutions typically requires the establishment and maintenance of nuclear-grade quality assurance (“QA”) programs, documentation systems and accreditation that meet the expectations of regulators, customers and supply-chain partners. While we work with supply-chain partners that do have such nuclear-grade QA frameworks or accreditations in place, including those commonly expected for the design, manufacture and deployment of nuclear safety-related systems, we have not yet implemented such systems within Deep Isolation. There is no assurance that we will be able to design, implement, maintain or scale nuclear-grade QA systems within Deep Isolation on a timeline, scope or cost profile acceptable to regulators, customers or commercial partners, or that reliance on partner QA systems will be sufficient or acceptable to regulators or customers for all phases of project delivery. If we fail to establish or integrate QA frameworks that meet applicable nuclear industry expectations, customer procurement requirements or regulatory licensing standards, potential customers may decline to enter into implementation contracts, regulators may impose additional conditions or delays on approvals, and delivery partners may limit or withdraw participation in large-scale projects. Any such outcome could delay or prevent commercialization of our technologies, increase costs, expose us to contractual disputes or performance claims, reduce customer confidence in our ability to act as a prime contractor or system integrator and materially and adversely affect our business, results of operations and financial condition.
We believe that the likelihood of successfully commercializing our products would be enhanced by a successful completion of our non-radioactive, full-scale, at-depth demonstration facility and a delay in or failure to do so may
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adversely impact our business and operations. Furthermore, no assurances can be given that, even if successfully completed, our demonstration facility will lead to our business being successful.
We believe that the likelihood of successfully commercializing our products would be enhanced by a successful completion of our non-radioactive, full-scale, at-depth demonstration facility and a delay in or failure to do so may adversely impact our business and operations. Furthermore, no assurances can be given that, even if successfully completed, our demonstration facility will lead to our business being successful. As noted elsewhere in this Form 10-K, we plan to demonstrate the feasibility of DBD and continue testing and proving our technologies in order to increase the sales of our products. If the demonstration were to fail, were to take longer than previously expected, construction setbacks were to arise, or any other various problems that could delay our non-radioactive, full-scale, at-depth demonstration were to arise, then the success of our commercialization strategy could be negatively impacted. This could lead to material adverse effects to our business, prospects, financial condition and operations. No assurances can be given, however, that, even if the demonstration is successfully completed on time, our commercialization strategy will be successful in the foreseeable future.
If we fail to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows.
We intend to grow into a company capable of supporting large-scale commercial activities, and we intend to invest significantly in order to do so. Any failure to manage our growth effectively could materially and adversely affect our business, prospects, financial condition and operating results. We expect our expansion to include:
● scaling from a technology development and advisory-focused organization into a company capable of acting as a prime contractor or system integrator for complex, multi-year nuclear waste storage and disposal projects;
● launching commercialization of our products and services;
● forecasting production and revenue;
● completing the testing, licensing and production of our UCS canisters and DBD technologies;
● developing the supply chain necessary to supply components for our UCS canisters and components of our DBD solution;
● developing nuclear-grade delivery capabilities, including program management, quality assurance integration, systems engineering, supply-chain coordination and interference management across multiple contractors and regulatory bodies;
● entering into relationships with multiple government entities and strategic partners to expand our customer base and facilitate market adoption of our products and services;
● controlling expenses and investments in anticipation of expanded operations;
● carrying out acquisitions and entering into collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships;
● conducting demonstrations;
● hiring and training new personnel; and
● expanding and enhancing administrative infrastructure, systems, and processes.
If our operations continue to grow, of which there can be no assurance, we will need to continue to expand our sales and marketing, research and development, commercial strategy, permitting and licensing, products and services, manufacturing, supply and operations functions. These efforts will require us to invest significant financial and other resources. There is no guarantee that we will be able to scale our business as currently planned or within the planned timeframe. The continued
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expansion of our business may in the future require additional operational facilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations for such facilities if needed.
Our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring and training employees, delays in production, challenges in scaling-up operations, and difficulty sourcing adequate raw materials. These difficulties may divert the attention of management and key employees and impact our future financial and operational results. If we are unable to drive commensurate growth, these costs could result in decreased margins, which could have a material adverse effect on our business, financial condition, and results of operations.
Substantially all of our revenue to date is comprised of government grants and contract awards.
To date, substantially all of our revenue is comprised of government grants and contract awards from government entities in the U.S. and abroad. If we were to fail to secure additional government grants, contracts or other funding in the future, it would have a material adverse effect on our revenue, cash on hand, and profitability.
Our future revenue plans rely on partnering with governmental entities and strategic partners.
Our largest stream of projected revenue comes from maximizing adoption of our DBD solution for the permanent disposal of nuclear waste by government entities and strategic partners both domestically and abroad. We may be unable to maximize utilization due to a variety of reasons, including a lack of product acceptance in the nuclear waste management industry, political or host community opposition to the siting and construction of DBD repository sites, failure to obtain necessary regulatory approvals and permits, failure to deliver a commercial grade product on a large scale, and the absence of requisite regulatory change in the United States. Our financial projections also anticipate generating revenues from the use of our services and UCS canisters for temporary waste storage and from licensing agreements with commercial operators and government entities for the use of our intellectual property. Our canisters and DBD services are new solutions in the industry and as such, represent an unproven model. If we are unable to realize these sales, our business model and go-to-market strategy will be jeopardized, which could in turn materially adversely affect our future financial and operating results.
Our preferred government contracting model may not be compatible with public-sector procurement, transparency or state-aid rules applicable to many of our target customers.
Our preferred commercial approach is to provide governments and other public-sector entities with a turnkey solution for the storage, transportation and disposal of nuclear waste, including the licensing of proprietary technologies and the integration of multiple delivery partners under a single contractual framework where permitted by applicable law and procurement rules. However, many of our target customers are subject to public-procurement laws, transparency requirements, competitive-bidding obligations, cost-justification standards and, in some jurisdictions, state-aid or subsidy controls.
Although we may seek, where appropriate, to contract on a sole-source or integrated basis, we are also prepared to participate in traditional competitive procurement processes. Nevertheless, applicable procurement and regulatory frameworks may limit the ability of government customers to enter into contracts on the commercial terms we anticipate, including with respect to intellectual property licensing, pricing structure, profit margins, risk allocation among contractors or the scope of integration we are permitted to provide. In some cases, procurement rules may require contract structures or competitive processes that increase complexity, extend timelines or reduce the economic attractiveness of projects.
If we are unable to structure commercial agreements that comply with applicable public-sector procurement and regulatory requirements while remaining economically viable for us, potential customers may delay, restructure or decline to proceed with projects. Procurement constraints may also require us to adapt our preferred commercial model on a jurisdiction-by-jurisdiction basis, incur higher bid and compliance costs, accept lower margins or assume additional execution risk. Any of these outcomes could limit market adoption of our solutions, reduce anticipated revenues and materially and adversely affect our business, results of operations and financial condition.
If the U.S. Department of Energy does not accept our UCS under the Amended Standard Contract, our ability to commercialize our integrated storage, transportation and disposal solution in the United States could be materially impaired.
The commercialization of our technologies in the United States relies in part on the ability of nuclear waste owners to use our UCS for the storage, transportation and eventual disposal of SNF and HLW within the existing contractual framework
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between utilities and the DOE. Under the DOE’s Amended Standard Contract (“ASC”), utilities are required to use DOE-approved canister systems in order to obtain certain services and cost recovery related to SNF management.
While we believe the UCS offers lifecycle advantages relative to existing canister systems, no waste packaging of any kind (including the UCS) has yet been accepted by the DOE for use under the ASC and no process for applying for such acceptance has yet been announced by the DOE. If the DOE does not approve or accept the UCS under the ASC, utilities may be unable or unwilling to adopt the UCS for storage or transportation purposes, regardless of its technical merits. Failure to obtain DOE acceptance of the UCS under the ASC could materially limit the addressable U.S. market for our integrated storage–transport–disposal offering, reduce customer demand, complicate commercial negotiations, delay or prevent the execution of implementation contracts and adversely affect our revenue prospects, results of operations and financial condition. Even if DOE acceptance is ultimately obtained, the timing, conditions or scope of such acceptance may not align with our commercialization timeline or business model assumptions which in turn could materially and adversely affect our future financial and operating results.
A prolonged United States federal government shutdown could materially and adversely affect our business and operations.
Any disruption in the operations of the U.S. federal government, including as a result of the recent prolongedshutdown or any future temporary or prolongedshutdowns resulting from the failure of Congress and the President to enact appropriations bills, raise the federal debt ceiling or otherwise, could materially and adversely affect our business, operations and financial condition. Recently, from January 31, 2026 to February 3, 2026, the U.S. federal government partially shut down. Additionally, from October 1, 2025 to November 12, 2025, the U.S. federal government shut down, during which time certain regulatory agencies, such as the SEC, furloughed large numbers of employees and stopped routine activities and operations. Additionally, on October 10, 2025, the U.S. federal government implemented substantial layoffs and workforce reductions in connection with the federal government shutdown, which resulted in the suspension or delay of various government-funded programs. Although the recent shutdowns have ended, such shutdowns have resulted, and may continue for a period of time to result, in reduced availability of government services and suspension or delay of activities by key agencies that regulate, provide services to or otherwise interact with our business, including the SEC. As a result, review and approval of our filings could be delayed, and we may be unable to access or rely upon certain government data or systems.
In addition, any future federal government shutdown or prolonged budget negotiation uncertainty may adversely affect the broader U.S. economy, investor confidence and the capital markets. Accordingly, the recent and any future federal government shutdowns, lapse in federal funding or protracted budget impasse could materially and adversely affect our business, prospects, financial condition and operating results.
Our commercialization strategy relies heavily on our relationship with NAC International and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate.
Our business model depends on the coordinated performance of multiple third-party partners and suppliers across drilling, engineering, canister manufacturing, transport, surface systems, quality assurance and regulatory support. As a result, successful project delivery depends not only on the individual performance of our partners, but also on our ability to integrate their systems, processes, schedules, pricing structures and quality programs into a single, coherent delivery framework acceptable to customers and regulators.
We rely heavily upon our relationship with NAC International and our relationships with other of our investors and strategic partners to commercialize our technologies. As described more fully herein, we have entered into a long-term commercial partnership with NAC International and have granted them certain rights with respect to the development and commercialization of our UCS canisters and related technology, including certain rights with respect to the design, licensing approval, manufacture and supply of such canisters and related technologies. Similarly, as described further herein, we have entered into certain agreements with SIMCO, a subsidiary of Bechtel, for mentoring services in connection with our provision of scopes of work at the WIPP (as defined herein); with Navarro to jointly demonstrate the feasibility of our solutions for disposal of nuclear waste domestically and abroad; with the Nuclear Advanced Manufacturing Research Centre (the “Nuclear AMRC”) for certain development, manufacturing, testing and support activities related to our UCS canisters; with Amentum for collaboration on the commercialization of our waste disposal technologies; and with Dominion Engineering for certain services in the sales, development and deployment of our technologies.
If we are unable to effectively integrate our partners’ activities, interfaces and responsibilities, projects may experience cost overruns, schedule delays, quality issues or regulatory complications, even if each partner performs adequately within its own scope. In addition, failure to demonstrate effective integration and pricing transparency across our supply chain could
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make it more difficult to justify sole-source procurement or other contracting approaches commonly required by government customers.
Our strategic partners may have interests that diverge from our interests, which may hinder the success of our partnerships and the realization of the benefits of such partnerships. If we lose our agreements with strategic partners or fail to maintain relationships with them, we may need to engage new contractors and partners who may have less experience in the development and commercialization of nuclear waste disposal solutions. Replacing or onboarding new partners could require significant time, expense and management attention, and may require requalification of suppliers, renegotiation of contracts, or reassessment by regulators or customers. Any failure to manage these integration challenges could delay or prevent project execution, reduce customer confidence and materially and adversely affect our business, financial condition and results of operations. This could substantially hinder our ability to expand acceptance of our technologies and could affect our business and our prospects.
We may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further our business. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. Our strategic partnerships allow us to draw from the extensive industry knowledge and expertise of our partners; however, there can be no assurance that our partnerships will continue on favorable or acceptable terms in the future or that they will result in the successful development and deployment of our nuclear waste disposal solutions and other expected benefits.
Our current and future patent applications may not result in issued patents, which would hinder our ability to protect certain of our intellectual property.
Our ability to obtain and enforce patent protection for our proprietary technologies is critical to our business. We have an extensive portfolio of intellectual property, including 91 patents issued to date and 48 additional patents for which our applications are pending. Our current applications and any future applications may not result in issued patents, given the complexity of questions around patentability and the large number of patents and patent applications in related fields. Failure to obtain additional patent protection in connection with currently pending or future patent applications may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
If we cannot protect, maintain and, if necessary, enforce our intellectual property rights, our ability to develop and commercialize products will be adversely impacted.
Our success, in large part, depends on our ability to protect and maintain the proprietary nature of our technology. We rely upon a combination of the intellectual property protections afforded by patents, trademarks/service marks and trade secret laws in the United States and other jurisdictions, as well as commercial agreements, such as confidentiality agreements, assignment agreements and license agreements to establish, maintain and enforce rights associated with our proprietary technologies.
Our existing, issued patents may be contested, challenged, circumvented, invalidated or limited in scope in the future. The rights granted under our issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement as compared to the United States. In addition, the claims of our existing patents and any patents that issue from our currently pending or any future patent applications may be narrowed in scope during prosecution, challenged as invalid, or may simply not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours (for example, if competitors can “design around” our patents). The Company cannot assure you that its means of protecting its proprietary rights will suffice in affording the desired protection.
We also rely upon unpatented trade secret protection, unpatented know-how and continuing technological innovation to develop our business and competitive position. We may not be able to prevent the unauthorized disclosure or use of our trade secrets, know-how or information that we consider to be confidential by our contractual counterparties, despite our efforts. If any of the suppliers, subcontractors, venture partners, employees or consultants, or other third parties with whom we do business or otherwise collaboratebreach or violate the terms of any of our agreements, we may not have adequate remedies for any such breach or violation, and we could lose the protections afforded by our trade secrets as a result. It is also possible that our trade secrets, know-how or other proprietary information could be obtained by third parties as a result of breaches of our physical or electronic security systems. Even where remedies are available, enforcing a claim that a party illegallydisclosed or misappropriated our trade secrets is expensive and time consuming, and the outcome is unpredictable. Courts outside the United States are sometimes less willing to protect trade secrets. Additionally, our trade secrets could become known or be independently discovered by potential or existing competitors. If any of our trade secrets
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were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them, or those with whom they communicate, from using that technology or information to compete with us.
We do not have worldwide patent rights for our proprietary technologies because worldwide patent or “international patent rights” currently do not exist. We also do not have worldwide trademark protection for our brand for similar reasons. Accordingly, we may not be able to protect our intellectual property rights in certain jurisdictions and their legal systems. Our competitors may operate in countries where we do not have patent protection and can freely use our technologies and discoveries in such countries to the extent such technologies and discoveries are publicly known or disclosed in countries where we do have patent protection.
Our operating and financial projections rely on management assumptions and analyses. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.
We are a nuclear waste management company, with limited experience commercializing our products and services. The projected financial and operating information appearing elsewhere in this Form 10-K reflects estimates of future performance and is based on multiple financial, technical, and operational assumptions, including the level of demand for our nuclear waste disposal solutions, the performance of our UCS canisters and DBD repositories, the useable life of the UCS canisters, cost of manufacturing, cost of components and availability of adequate supply, the nature and length of the sales cycle, and the costs of maintaining and operating DBD repositories. However, given our limited commercial experience and the fact that many of the factors on which these assumptions are based are outside of our control, it is possible that many of these assumptions will prove incorrect. The projections are forward-looking statements that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. See Item 7 , “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “ Forward-Looking Statements. ” Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in our forecast depends on a number of other factors, many of which are outside our control, including, but not limited to:
● whether we can obtain sufficient capital to sustain and grow our business;
● our ability to manage our growth;
● the contractual terms of our agreements with strategic partners and customers;
● whether we can manage relationships with key suppliers and partners;
● the timing and costs of the required marketing and promotional efforts;
● whether countries with existing or planned nuclear power generation will adopt our technologies for the permanent disposal their nuclear waste inventories;
● the success of pre-commercialization testing of our technology;
● our ability to support large-scale commercial operations;
● competition, including from future competitors;
● our ability to retain existing key management, to attract additional leaders as needed, to attract, retain and motivate qualified personnel;
● the overall strength and stability of domestic and international economies;
● demand for nuclear power;
● regulatory, legislative, and political changes; and
● customer requirements and preferences.
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Unfavorable changes in any of these or other factors, most of which are beyond our control, could cause us to fail to meet our operating and financial projections and could materially and adversely affect our business, prospects, financial condition and operating results.
We may need to defend ourselves against intellectual property infringementclaims, which may be time-consuming and could cause us to incur substantial fees and costs.
Companies, organizations or individuals, including any existing and potential competitors, may hold or obtain patents, trademarks/service marks or other intellectual property rights that would prevent, limit or interfere with our ability to develop our intellectual property and make, use, develop, import, offer or sell our DBD solutions, UCS canisters and related equipment, which could make it more difficult for us to operate our company. From time to time, we may receive inquiries from holders of patents or trademarks/service marks inquiring whether we are infringing their proprietary rights. Companies, organizations or individuals, including any existing and future competitors, may also seek court declarations that they do not infringe our intellectual property rights. Companies holding patents or other intellectual property rights similar to our technology may bring proceedings alleginginfringement of such rights or otherwise asserting their rights and seeking licenses. In addition, if it is determined that we have infringed a third party’s intellectual property rights, we may be required to do, among other things, one or more of the following: (i) cease making, using, offering to sell, selling or importing our products and services that incorporate the challenged intellectual property; (ii) pay substantial damages; (iii) pay for and obtain a license from the holder of the infringed intellectual property right, which may not be available on reasonable terms or at all; or (iv) redesign part or all of our technology. In the event of a successful claim of infringementagainst us and our failure or inability to obtain a license to the infringed technology, our business, prospects, operating results, and financial condition could be materially adversely affected. In addition, any litigation, or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s focus and attention.
We also license the patents and intellectual property of third parties and anticipate continuing to do so in the future, and we may face claims that the use of this intellectual property infringes the rights of other third parties. Our rights to indemnification or damages under our license contracts may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation and other factors.
Additionally, our confidentiality and intellectual property assignment agreements with our employees, consultants and contractors generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive intellectual property. Those agreements may not be honored and obligations to assign intellectual property may be challenged or breached. Moreover, there may be some circumstances where we are unable to negotiate for such ownership rights or where others misappropriate those rights.
We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an owner, a joint owner, a licensee, an inventor or a co-inventor. In the latter two cases, the failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our patented technology or as a result of questions regarding co-ownership of potential joint inventions. Litigation may be necessary to resolve these and other claimschallenging inventorship and ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may loseexclusive ownership of, or right to use or license valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defendingagainst such claims, litigation could result in substantial costs and be a distraction to management and other employees.
The benefits to customers of our products could be supplanted by other technologies or solutions or competitors’ products that utilize similar technology to ours in a more effective way.
The benefits to customers of our products could be supplanted by other technologies or solutions or potential competitors’ products that address the need for permanent nuclear waste disposal in a more effective way. We cannot be sure that alternative technologies or improvements to nuclear waste management solutions will not match or exceed the benefits of or be more cost effective than our products and services.
In addition, as awareness of and interest in DBD grows, governments, waste management organizations, national laboratories or state-owned enterprises may seek to develop or deploy DBD solutions independently, including through
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internally developed programs or through engagement with new market entrants. Such “do-it-yourself” approaches or alternative DBD implementations could reduce demand for our proprietary solutions, give rise to disputes or claims regarding the scope, validity or infringement of our intellectual property, diminish our ability to capture the commercial value of our early technical leadership, and erode the competitive advantage associated with our first-mover position.
The development of any alternative technology that can compete with or supplant our products and services may materially and adversely affect our business, prospects, financial condition and operating results, including in ways we do not currently anticipate. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and result in the loss of competitiveness of our product offerings, decreased revenue and a loss of actual or projected market share.
Because our business strategy involves significant upfront investment in demonstration, safety case development, regulatory engagement and market education, competitors or government entities may be able to benefit from the maturation of the DBD concept without bearing comparable costs. If we are unable to convert our technical leadership and intellectual property into defensible commercial positions and binding implementation contracts, our long-term growth prospects and returns on investment could be materially and adversely affected.
We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us.
The risks associated with radioactive materials and the public perception of those risks can affect our business. Opposition by third parties can delay or prevent the construction of new nuclear power plants and can limit the operation of nuclear reactors, which could in turn reduce the amount of nuclear waste generated and the demand for nuclear waste management solutions. Thus, adverse public reaction to developments in the use of nuclear power could directly affect our customers and our business. In the past, adverse public reaction, increased regulatory scrutiny and litigation have contributed to extended construction periods for new nuclear reactors, sometimes delaying construction schedules by decades or more or even shutting down operations. For example, anti-nuclear groups in Germany successfully lobbied for the adoption of the Nuclear Exit Law in 2002, under which all remaining nuclear power plants in Germany were shut down in April 2023, and in the U.S., the development of the Yucca Mountain disposal site has been effectively abandoned due to negative public perception and political opposition. Adverse public reaction could also lead to increased regulation or limitations on the activities of nuclear power producers, more onerous operating requirements or other conditions that could materially reduce the generation of nuclear power, thereby reducing demand for our services and materially adversely impacting our business.
Accidents involving nuclear power facilities, including, but not limited to, events similar to the Three Mile Island, Chernobyl and Fukushima Daiichi nuclear accidents, or terrorist acts or other high-profile events involving radioactive materials, could materially and adversely affect nuclear power producers and the markets for nuclear power and nuclear waste disposal, and increase regulatory requirements and costs that could materially and adversely affect our business.
Our future prospects are dependent upon a certain level of public support for nuclear power. Nuclear power faces strongopposition from certain competitive energy sources, individuals and organizations. The accident that occurred at the Fukushima nuclear power plant in Japan in 2011 increased public opposition to nuclear power in some countries, resulting in a slowdown in, or, in some cases, a complete halt to new construction of nuclear power plants, an early shut down of existing power plants or a dampening of the favorable regulatory climate needed to introduce new nuclear technologies, all of which could negatively impact our business and prospects. As a result of the Fukushima accident, some countries that were considering launching new domestic nuclear power programs delayed or cancelled the preparatory activities they were planning to undertake as part of such programs. If accidents similar to the Fukushima disaster or other events, such as terrorist attacks involving nuclear facilities, occur, public opposition to nuclear power may increase, regulatory requirements and costs could become more onerous and expected demand for our technologies could suffer, which could materially and adversely affect our business and operations.
Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or contain terms unfavorable to us or our investors.
We will require significant capital to operate our business and fund our capital expenditures for the next several years. The level and timing of future expenditures will depend on a number of factors, many of which are outside our control. We expect that we will need to raise additional capital to fund our business, including to finance ongoing research and development costs, manufacturing, any significant unplanned or accelerated expenses, and new strategic alliances or acquisitions. The fact that we have limited experience commercializing our technologies on a large scale, coupled with the fact that our products represent a new product category in the nuclear waste management market, means we have limited
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historical data on the demand for our products and services. In addition, we expect that our level of capital expenditures will be significantly affected by customer demand for our proprietary solutions. As a result, our future capital requirements may be uncertain and actual capital requirements may be different from those we currently anticipate. We may need to seek equity or debt financing to finance all or a portion of our capital expenditures. Such financing might not be available to us in a timely manner or on terms that are acceptable, or at all, or that such funds, if raised, would be sufficient.
Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business model. These factors may make the timing, amount, terms, and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct business as projected, both of which could mean that we would be forced to curtail or discontinue our operations. In addition, our future capital needs and other business reasons could require us to sell additional equity or debt securities or incur indebtedness. Even if we complete such financings, they may result in dilution to our existing investors and include additional rights or terms that may be unfavorable to our existing shareholders. These circumstances could materially and adversely affect our future financial results and impair our ability to achieve our business objectives. Additionally, we may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions (including terms that require us to maintain specified liquidity or other ratios) that would otherwise be in the best interests of our shareholders. The sale of additional equity or equity-linked securities could dilute our stockholders. The incurrence of indebtedness would result in debt service obligations and could result in operating and financing covenants that would restrict our operations. If we cannot raise additional funds when we need or want them, we may be forced to curtail or abandon our growth plans, which could adversely impact the Company, its business, development, financial condition, operating results or prospects.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by domestic and international financial institutions or transactional counterparties, could adversely affect our business, financial condition, and results of operations.
Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect domestic and international financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems. Investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, or result in breaches of our financial and/or contractual obligations. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.
Any acquisitions, partnerships, or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.
From time to time, we may evaluate potential strategic acquisitions of businesses, including partnerships or joint ventures with third parties. We may not be successful in identifying candidates for acquisitions, strategic partnerships and joint ventures. In addition, we may not be able to continue the operational success of such businesses or successfully finance or integrate any businesses that we acquire or with which we form a partnership or joint venture. We may have potential write-offs of acquired assets and/or an impairment of any goodwill recorded as a result of acquisitions. Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business. Any acquisition, partnership or joint venture may not be successful or otherwise generate the financial results we expect, may reduce our cash reserves, may negatively affect our earnings and financial performance and, to the extent financed with the proceeds of debt, may increase our indebtedness. Further, depending on market conditions, investor perceptions of us and other factors, we might not be able to obtain financing on acceptable terms, or at all, to implement any such transaction. We cannot ensure that any acquisition, partnership, or joint venture we make will not have a material adverse effect on our business, financial condition, and results of operations.
Our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that our management’s decisions will result in successfulachievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects.
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Our management will have broad discretion in making strategic decisions to execute our growth plans and may devote time and company resources to new or expanded products or services, potential acquisitions, prospective customers or other initiatives that do not necessarily improve our operating results or contribute to our growth. Management’s failure to make strategic decisions that are ultimately accretive to our growth may result in unfavorable returns and uncertainty about our prospects, each of which could cause the price of the common stock to decline.
We depend on a limited number of key personnel with specialized expertise, and the loss of such individuals could materially harm our business.
Our success depends to a significant extent on the continued service and performance of a limited number of key employees, including senior management and other personnel with specialized expertise in nuclear waste management, regulatory engagement, safety case development, engineering integration and project execution. These individuals possess highly specialized skills, experience and institutional knowledge that are difficult to replace, particularly given the technical, regulatory and first-of-a-kind nature of our business.
Competition for experienced personnel in the nuclear, energy and advanced technology sectors is intense, and we may be unable to retain our key employees or attract suitable replacements on acceptable terms or within acceptable timeframes. In addition, much of our progress depends on tacit knowledge, external relationships and continuity of leadership that may not be fully documented or transferable.
If one or more of our key personnel were to depart, become unavailable or be unable to continue in their current roles, and we are unable to replace them or transition responsibilities effectively, we could experience delays in execution, loss of strategic momentum, reduced credibility with customers, regulators and partners, and disruption to critical programs. Any of these outcomes could materially and adversely affect our business, results of operations and financial condition.
Some of our executive officers and key advisors have outside management or directorship positions with other companies and may allocate part of their time to these other businesses.
Some of our executive officers have outside management or directorship positions with other companies and may allocate part of their time to these other businesses. For example, Chris Parker, who serves as the Company’s Chief Commercialization Officer and the Managing Director of the Company’s wholly owned subsidiary, Deep Isolation EMEA Limited (“Deep Isolation EMEA”) on a full-time basis, also serves as a director of CS Transform Limited (“CST”), a small, private company domiciled in the UK that in May 2021 transferred all of its employees, including Mr. Parker, to Deep Isolation EMEA. During fiscal year 2025, Mr. Parker spent an aggregate of approximately 44.75 hours supporting CST. Our CFO, Joseph Nelson (Director: MYSE) and CLO, Paula Whitten-Doolin (Director: VUZI), are each independent directors of other publicly traded companies, as referenced. Additionally, Elizabeth Muller, who serves as the Chair of our board of directors and a part-time Executive Advisor, also serves as the CEO of Deep Fission, Inc. (“Deep Fission”), which is a nuclear energy company and a customer of Deep Isolation. Also, Leslie Goldman Tepper and Jonathon Angell, both members of our board of directors, are directors of Deep Fission. See Item 13 , “ Certain Relationships and Related Party Transactions—Related Party Transactions with Deep Fission ” in this Form 10-K.
These individuals, and others who may in the future have outside management or directorship positions with other companies, may allocate their time between the affairs of the Company and the affairs of other companies. This situation presents the potential for conflicts of interest in determining the respective percentages of their time to be devoted to the Company and other companies. If the responsibilities of our executive officers and key advisors or employees to other companies require members of our management team to devote more substantial amounts of time to the affairs of other companies in the future, it would limit their ability to devote sufficient time to the Company and could have a negative impact on our business.
We may be unable to adequately control the costs associated with our operations.
We will require significant capital to develop and grow our business, including developing and producing our UCS canisters, research and development, production, operations and maintenance of temporary waste storage sites or DBD repositories and building our brand and partnerships. We have incurred and expect to continue incurring significant expenses which will impact our profitability, including research and development expenses, procurement costs, business development, operation expenses, and general and administrative expenses as we scale our operations, identify and commit resources to investigate new areas of demand and incur costs as a public company. In addition, we may incur significant costs for the siting, construction, operation and maintenance of temporary storage and permanent disposal sites. Our ability to become profitable in the future will not only depend on our ability to complete the design and development of our products and services to meet projected performance metrics and regulatory requirements and to achieve market acceptance
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of our solutions, but also to sell, whether outright or through licensing agreements, our products at prices needed to achieve our expected margins and control our costs. If we are unable to efficiently design, develop, manufacture, market, deploy, distribute and operate our solutions in a cost-effective manner, our margins, profitability and prospects would be materially and adversely affected.
Security breaches and other disruptions could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer.
We maintain various information technology systems and procedures to protect our trade secrets, technical know-how, and other unpatented proprietary information relating to our product development and operating activities, and to restrict unauthorized access to the dissemination of our proprietary information. However, internal and external data security threats cannot be mitigated entirely. For example, current, departing or former employees or third parties could attempt to improperly use or access our computer systems and networks to copy, obtain or misappropriate our proprietary information or otherwise interrupt our business. Additionally, members of our management team work remotely, which could have the effect of increasing the likelihood of cybersecurity breaches. Like others, we are also subject to significant system or network disruptions from numerous causes, including computer viruses and other cyber-attacks, facility access issues, new system implementations, and energy blackouts.
Security breaches, computer malware, phishing, spoofing, and other cyber-attacks have become more prevalent and sophisticated in recent years. While we defendagainst these threats daily, we do not believe that such attacks have caused us any material damage to date. Because the techniques used by computer hackers and others to access or sabotage networks constantly evolve and generally are not recognized until launched against a target, we may be unable to anticipate, counter or ameliorate all these techniques. As a result, our and our customers’ proprietary information may be misappropriated, and we cannot predict the impact of any future incident. Any loss of such information could harm our competitive position, result in a loss of customer confidence in the adequacy of our threat mitigation and detection processes and procedures, cause us to incur significant costs to remedy the damages caused by the incident, and divert management and other resources. We routinely implement improvements to our network security safeguards, and we believe that we devote appropriate resources to the security of our information technology systems. However, we cannot assure you that our efforts will be sufficient to prevent or limit the damage from any future cyber-attack or network disruptions.
In addition, our operations could be disrupted by events unrelated to malicious activity, including failures of third-party service providers, cloud-based systems outages, natural disasters, pandemics or other public-health emergencies, geopolitical events or the loss of access to critical facilities, data or personnel. Because we rely on a relatively small organization and a distributed operating model, such disruptions could have a disproportionate impact on our ability to operate effectively.
The costs related to cyber-attacks or other security threats or computer systems disruptions typically would not be fully insured or indemnified by others. As a result, the occurrence of any of the events described above could result in the loss of competitive advantages derived from our intellectual property. Moreover, these events may result in the diversion of the attention of management and critical information technology and other resources, or otherwise adversely affect our internal operations and reputation or degrade our financial results and stock price. If we are unable to recover systems, data or operations in a timely manner following a disruption, we may experience extended delays in execution, missed milestones, loss of customer or partner confidence or reputational harm. Any such prolongedinterruption could materially and adversely affect our business, results of operations and financial condition.
Current and future geopolitical and macroeconomic events outside of our control could adversely impact our business, results of operations, cash flows, financial condition and liquidity.
We face risks related to geopolitical events, international hostility, epidemics, outbreaks and other macroeconomic events that are outside of our control. The occurrence of certain geopolitical events, including those arising from terrorist activity, international hostility, public health crises and the economic impact of global trade tensions, could significantly disrupt our business and operational plans and adversely affect our results of operations, cash flows, financial condition and liquidity. For instance, the ongoing conflicts in the Middle East and between Russia and Ukraine have and may continue to cause geopolitical instability and adverse effects on the global economy, supply chains and specific markets and industries. Although we are not able to enumerate all potential risks to our business resulting from these and other similar events, we believe that such risks include, but are not limited to, the following:
● disruption to our supply chain for materials essential to our business, including restrictions on importing and exporting products;
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● customers, suppliers and other third parties asserting that their non-performance under our contracts with them is permitted as a result of force majeure or other reasons;
● cybersecurity attacks, particularly as digital technologies may become more vulnerable and experience a higher rate of cyberattacks in the current environment of remote connectivity;
● any reductions of our workforce to adjust to market conditions, including severance payments, retention issues and possible inability to hire employees when market conditions improve;
● logistical challenges, including those resulting from border closures and travel restrictions, as well as the possibility that our ability to achieve commercialization of our operations may be interrupted, limited or curtailed;
● economic, political and regulatory conditions domestically and internationally, including imposition of tariffs or other tax incentives or disincentives;
● effects of sanctions and other penalties imposed on foreign countries by the U.S., the European Union and other countries; and
● the possibility of a structural shift in the global economy and the demand for nuclear power due to any widespread changes in attitudes toward climate change or in connection with a global recession or depression.
We cannot reasonably estimate the period of time that these conditions will persist; the full extent of the impact they will have on our business, results of operations, cash flows, financial condition and liquidity; or the pace or extent of any subsequent recovery.
Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, financial condition, results of operations, and cash flows.
Our results of operations could be materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, fluctuations in interest rates, fluctuations in exchange rates, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions.
Our business model is dependent on government entities and companies around the world adopting and entering into contracts for the implementation for our technologies and services. Adverse national and international economic conditions may reduce the future availability of funding counterparties have to spend on our services, which would negatively impact our revenues and our ability to commercialize our operations. Such conditions could also make it difficult or impossible for us to secure financing on acceptable terms or at all, and could materially increase the cost of our operations. Our cost estimates and assumptions are also sensitive to macroeconomic factors, and their accuracy could likely be impacted by unanticipated changes in such factors. It is not possible to accurately predict all of the potential adverse impacts on the Company, if any, of current and future economic conditions on its financial condition, operating results and cash flow; however, any of these macroeconomic conditions could negatively impact our strategic partners, suppliers, customers and the industry as a whole, which could materially affect our business, financial condition, and results of operations.
Our ability to rely on global supply chains for source components and/or raw materials may be impacted by tariffs, trade disputes, or other changes in trade policy or trade regulation.
We plan to rely on global supply chains to source components and materials essential for our business, including for our UCS canisters, casings used to line our deep borehole repositories and other related equipment. The imposition of new or increased tariffs, trade restrictions, or other changes in trade policy by the United States or other countries could increase our costs of materials and components, require us to find additional or alternative suppliers, or force adjustments to our pricing structure and capital budget. These changes could reduce our profit margins, may impact our licenses or may require additional regulatory approval, or could otherwise disrupt our business operations. In particular, recent global trade tensions and policy shifts have created an unpredictable environment for businesses operating across international borders. Changes in trade agreements, sanctions, export controls, and customs regulations may limit our ability to source materials from certain countries or entities, potentially forcing rapid and costly adjustments to our supply chain. Trade policies can change with limited notice, making long-term planning difficult and increasing operational costs. Any significant
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disruption to our supply chain resulting from tariffs or trade policy changes could have a material adverse effect on our business, financial condition, and ability to meet projected deadlines and milestones.
The direct and indirect impact on us and our value chain from severe weather and other effects of climate change could adversely affect our financial condition, operating results, and cash flows.
Our operations, and those of our value chain, may in the future be adversely impacted by flooding, wildfires, high winds, drought and other natural disasters and catastrophic events. Climate change is expected to increase the frequency and intensity of certain such events, as well as contribute to chronic changes (such as in weather patterns or water levels) that may result in various adverse impacts. Even if these events do not directly impact us or our value chain, they may indirectly impact us and our value chain through increased insurance, energy, or other costs. In addition, although the ongoing transition to non-carbon-based energy is creating significant opportunities for us and parts of our value chain, the transition also presents certain risks, including macroeconomic risks related to higher energy costs and energy shortages, among other things. These direct and indirect impacts from climate change could adversely affect our financial condition, operating results, supply chain and cash flows.
Litigation or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management’s time and attention, and damage our reputation.
We may, from time to time, be a party to various litigationclaims and legal proceedings. We will evaluate these claims and proceedings to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses. Claims made or threatened by our suppliers, customers, competitors, or current or former employees could adversely affect our relationships, damage our reputation or otherwise adversely affect our business, financial condition, or results of operations. The costs associated with defending legal claims and paying damages could be substantial. Our reputation could also be adversely affected by such claims, whether or not successful.
We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business, prospects, financial condition and operating results.
We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and other anti-corruption, anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, business partners, third-party intermediaries, representatives, and agents from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to government officials, political candidates, political parties, or commercial partners for the purpose of obtaining or retaining business or securing an improper business advantage.
We have direct and indirect interactions with foreign officials, including in furtherance of sales to governmental entities in foreign countries. We sometimes leverage third parties to conduct our business abroad, and our third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of our employees or these third-parties, even if we do not explicitly authorize or have actual knowledge of such activities. The FCPA and other applicable laws and regulations also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. While we have policies and procedures to address compliance with such laws, there can be no assurance that all of our employees, business partners, third-party intermediaries, representatives and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
Any violations of the laws and regulations described above may result in whistleblower complaints, adverse media coverage, investigations, substantial civil and criminalfines and penalties, damages, settlements, prosecution, enforcement actions, imprisonment, the loss of export or import privileges, suspension or debarment from government contracts, tax reassessments, breach of contract and fraudlitigation, reputational harm and other consequences, any of which could adversely affect our business, prospects, financial condition and operating results. In addition, responding to any investigation or action will likely result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Being a public company can be administratively burdensome and will significantly increase our legal and financial compliance costs.
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As a public reporting company, we are subject to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations related thereto, including compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). In addition, the listing requirements of any national securities exchange or other exchange and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will significantly increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Among other things, we are required to:
● maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;
● maintain policies relating to disclosure controls and procedures;
● prepare and distribute periodic reports in compliance with our obligations under federal securities laws;
● institute a more comprehensive compliance function, including with respect to corporate governance; and
● involve, to a greater degree, our outside legal counsel and accountants in the above activities.
The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders is expensive and much greater than that of a privately-held company, and compliance with these rules and regulations will require us to hire additional financial reporting, internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the attention of our board of directors and management. In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage. These factors could also make it more difficult for us to attract and retain qualified executives and members of our board of directors.
Our management as a group has limited experience in operating a publicly traded company.
Our management team may not successfully or effectively manage operating as a public company subject to significant regulatory oversight and reporting obligations under U.S. securities laws. Our executive officers as a group have limited experience in the management of a publicly traded company. Their limited experience in dealing with the increasingly complex laws applicable to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities, which will result in less time being devoted to the management and growth of our company. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies. Any failure by us to effectively and efficiently meet our obligations as a publicly traded company could have a material adverse effect on our business, prospects, financial condition and operating results and/or result in legal liability or other negative consequences.
Risks Related to Ownership of Our Common Stock
The shares of our common stock being offered in our recently filed prospectus represent a substantial percentage of the outstanding shares of our common stock, and the sales of such shares, or the perception that these sales could occur, could cause the market price of the common stock to decline significantly.
Under the resale prospectus first filed on August 18, 2025 and subsequently amended, the selling stockholders can resell up to 58,506,213 shares of the Company’s common stock, assuming full exercises of the Placement Agent Warrants (as defined herein). The securities being offered pursuant to that prospectus represent approximately 84.5% of the Company’s fully diluted common stock outstanding as of February 3, 2026, after giving effect to the exercise of the Placement Agent Warrants, all outstanding Assumed Options (as defined herein) and options available for issuance pursuant to our 2025 EIP (as defined herein). The sale of such securities in the public market by the selling security holders, or the expected or potential resale, of all or a substantial number of shares of our common stock in the public market could increase the
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volatility and/or adversely affect the market price for our common stock and make it more difficult for other shareholders to sell their holdings at times and prices that they determine are appropriate. Furthermore, we expect that, because all of the outstanding shares of our common stock are being registered pursuant to the registration statement of which that prospectus forms a part, the selling security holders thereunder will continue to offer the securities covered thereby for a significant period of time, the precise duration of which cannot be predicted. Accordingly, because an active trading market for the Company’s securities does not currently exist and may not develop for a significant period after the effectiveness of this registration statement, if at all, the adverse market and price pressures resulting from an offering pursuant to this registration statement may continue for an extended period of time. A decline in the market price of our securities could both adversely affect security holders’ ability to sell securities and the Company’s ability to issue additional securities to raise additional capital. However, we are unable to predict the actual effect that such sales will have on the prevailing market price of the Company’s common stock.
The shares of common stock issued in the Merger and the Private Placement are “restricted securities” and, as such, may not be sold except in limited circumstances.
As of the closing of the Merger and the Private Placement, no shares of common stock have been registered under the Securities Act or registered or qualified under any state securities laws. The offer and sale of the shares of common stock issued in the Merger and the Private Placement was made in reliance on exemptions contained in and under those laws. Accordingly, such shares of common stock are “restricted securities” as defined in Rule 144 promulgated under the Securities Act and must, therefore, be held indefinitely unless their offer and sale is registered under applicable federal and state securities laws, or an exemption is available from the registration requirements of those laws. The book-entry accounts representing the shares of common stock issued in the Merger and the Private Placement reflect their restricted status.
While we are registering the resale of the shares of common stock issued in the Merger and the Private Placement, in this registration statement, there can be no assurance, however, that the SEC will declare this registration statement effective, thereby enabling the shares of common stock issued in the Merger or the Private Placement to be freely tradable. The failure to obtain such effectiveness may also require us to pay liquidateddamages under the terms of a Registration Rights Agreement. See Item 1A, “ Risk Factors—If the Registration Statement is not effective before March 31, 2026, we would be required to pay liquidateddamages, which would reduce the amount that we would have to invest in our operations ” and “ Shares Eligible for Future Sale—Registration Rights .”
In addition, Rule 144 under the Securities Act, which permits the resale, subject to various terms and conditions, of limited amounts of restricted securities after they have been held for six months, will not immediately apply to our common stock because we were at one time designated as a “shell company” under SEC regulations. Pursuant to Rule 144(i), securities issued by a current or former shell company that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the date on which the issuer filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it ceased being a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the issuer has satisfied certain reporting requirements under the Exchange Act. We believe this requirement to file Form 10 information has been satisfied by the filing of our “Super 8-K” on July 28, 2025. Because, as a former shell company, the reporting requirements of Rule 144(i) will apply regardless of holding period, the restrictive legends on the book-entry accounts representing the shares of common stock issued in the Merger and the Private Placement cannot be removed except in connection with an actual sale that is subject to an effective registration statement under, or an applicable exemption from the registration requirements of, the Securities Act.
If the Registration Statement is not effective before March 31, 2026, we would be required to pay liquidateddamages, which would reduce the amount that we would have to invest in our operations.
The Company is subject to a Registration Rights Agreement requiring the effectiveness of a registration statement within a specified period. The Agreement requires the Company to pay certain liquidateddamages to existing shareholders if the Registration Statement is not declared effective within 120 days after filing the Company’s Super 8-K (this penalty, a “Registration Event” under the Agreement). The Company did not meet that effectiveness deadline, and a Registration Event occurred. However, a majority of the existing shareholders may waive that penalty by providing a written consent, and as of March 15, 2026, 58.6% of the shareholders (a majority) have consented to waive such damages through at least March 31, 2026. There is no guarantee that a majority of shareholders would agree to extend the waiver for an additional period.
There is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of our common stock at times and prices that you believe are appropriate.
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Our common stock is not listed on a national securities exchange or any other exchange, or quoted on an over-the-counter market. Therefore, there is no trading market, active or otherwise, for our common stock and our common stock may never be included for trading on any stock exchange, automated quotation system or any over-the-counter market. Accordingly, our common stock is highly illiquid and you will likely experience difficulty in re-selling such shares at times and prices that you may desire.
Our common stock may not be eligible for listing or quotation on any securities exchange or over-the-counter trading system.
We do not currently meet the initial quantitative listing standards of any national securities exchange or over-the-counter trading system. We cannot assure you that we will be able to meet the initial listing standards of any national securities exchange, or, if we do meet such initial listing standards, that we will be able to maintain any such listing. Further, the national securities exchanges are adopting so-called “seasoning” rules that will require that we meet certain requirements, including prescribed periods of time trading over-the-counter and minimum filings of periodic reports with the SEC, before we are eligible to apply for listing on such national securities exchanges. We intend to contact an authorized market maker for an over-the-counter quotation system for sponsorship of our common stock, but we cannot guarantee that such sponsorship will be approved and our common stock listed and quoted for sale. Even if our common stock is quoted for sale on an over-the-counter quotation system, buyers may be insufficient in numbers to allow for a robust market and it may prove impossible to sell your shares. In addition, an investor may find it difficult to obtain accurate quotations as to the market value of our common stock. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.
The market price and trading volume of our common stock may be volatile and could decline significantly following any listing or quotation, if any.
The quotation systems, including the OTCQB, or stock exchanges, including Nasdaq, on which our common stock may be quoted or on which our common stock may be listed in the future have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for our common stock following the Merger, the market price of our common stock may be volatile and could decline significantly. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above the market price of our common stock as of the date of the consummation of the Merger. We cannot assure you that the market price of common stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:
● the realization of any of the risk factors presented in this Form 10-K;
● actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, results of operations, level of indebtedness, liquidity or financial condition;
● additions and departures of key personnel;
● failure to comply with the requirements of the OTCQB market, if we are admitted for quotation, or following any potential listing on Nasdaq;
● failure to comply with the Sarbanes-Oxley Act or other laws or regulations;
● future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our common stock;
● publication of research reports about us, or our industry;
● the performance and market valuations of other similar companies;
● broad disruptions in the financial markets, including sudden disruptions in the credit markets;
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● speculation in the press or investment community;
● actual, potential or perceived control, accounting or reporting problems; and
● changes in accounting principles, policies and guidelines.
In addition, as a company operating in the nuclear energy and nuclear waste management sector, our stock price and market capitalization may be particularly sensitive to changes in sector-wide investor sentiment, regardless of our actual operating performance or progress. Such sentiment may be influenced by factors beyond our control, including nuclear incidents or accidents anywhere in the world, shifts in public or political attitudes toward nuclear technologies, negative developments affecting other nuclear or advanced-energy companies, or broader market dislocations affecting early-stage or pre-commercial technology companies. Market volatility or negative sentiment affecting the nuclear sector or comparable companies could reduce liquidity in our shares, depress our stock price, increase our cost of capital, or impair our ability to raise additional funds on acceptable terms, even if our business fundamentals, technical progress or long-term prospects remain unchanged. Any such effects could materially and adversely affect our financial condition and strategic flexibility.
In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.
The designation of our common stock as “penny stock” would limit the liquidity of our common stock.
Our common stock may be deemed a “penny stock” (as that term is defined under Rule 3a51-1 of the Exchange Act) in any market that may develop in the future. Generally, a “penny stock” is a common stock that is not listed on a securities exchange and trades for less than $5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stock in start-up companies is among the riskiest equity investments. Broker-dealers who sell penny stock must provide purchasers with a standardized risk-disclosure document prepared by the SEC. The document provides information about penny stock and the nature and level of risks involved in investing in the penny stock market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson compensation and make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser’s written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. If our common stock is deemed “penny stock,” because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the future and stockholders are likely to have difficulty selling their shares.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock.
The Financial Industry Regulatory Authority, or FINRA, has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.
Because we became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.
Because we did not become a reporting company by conducting an underwritten initial public offering of our common stock, and because we will not be listed on a national securities exchange, security analysts of brokerage firms may not provide coverage of our Company. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with our Company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development. The failure to receive research coverage or support in the market for our shares will have an adverse effect on our ability to develop a liquid market for our common stock.
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Because the Merger was a reverse merger, the registration statement we file with respect to the shares of common stock received by investors in the Merger might be subject to heightened scrutiny by the SEC, and we may not be able to attract the attention of major brokerage firms.
Additional risks may exist as a result of our becoming a public reporting company through a “reverse merger.” Certain SEC rules are more restrictive when applied to reverse merger companies, such as the ability of stockholders to re-sell their shares of common stock pursuant to Rule 144, and the SEC may subject the registration statement we file with respect to the shares of common stock received by investors in the Merger and the Private Placement to heightened scrutiny. In addition, securities analysts of major brokerage firms may not provide coverage of our capital stock or business. Because we became a public reporting operating company through a reverse merger, there is no incentive to brokerage firms to recommend the purchase of our common stock. We cannot assure you that brokerage firms will want to provide analyst coverage of our capital stock or business in the future.
As a result of the consummation of the Merger, we are now obligated to develop and maintain proper and effective internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of material misstatement of the consolidated financial statements.
Following the consummation of the Merger, we became a public company and are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting on our annual report on Form 10-K. Effective internal control over financial reporting is necessary for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet its reporting obligations. Ineffective internal controls could also cause investors to lose confidence in reported financial information, which could have a negative effect on the trading price of our common stock.
The report by management will need to include disclosure of any material weaknesses identified in internal control over financial reporting. However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. Management’s assessment of internal controls, when implemented, could detect problems with internal controls, and an independent assessment of the effectiveness of internal controls by our auditors could detect further problems that management’s assessment might not, and could result in the identification of material weaknesses that were not otherwise identified. Undetected material weaknesses in internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We are required to disclose changes made in internal controls and procedures on a quarterly basis. To comply with the public company requirements, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.
We are in the early stages of developing the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to complete its evaluation, testing, and any required remediation in a timely fashion. During the evaluation and testing process, if we identify material weaknesses in internal control over financial reporting, we will be unable to assert that internal control over financial reporting is effective.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of its internal control, including as a result of the material weaknesses described above, we could lose investor confidence in the accuracy and completeness of financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC. In addition, if we are unable to continue to meet these requirements, we may not be able to remain quoted on any over-the-counter trading system, or following any potential listing, listed on any securities exchange.
We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including:
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● exemption from the requirement that our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;
● reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and
● exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company for up to five years following the completion of the Merger. Our status as an emerging growth company will end as soon as any of the following takes place:
● the last day of the fiscal year in which we have more than $1.235 billion in annual revenues;
● the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;
● the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or
● the last day of the fiscal year ending after the fifth anniversary of the completion of this Merger.
We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock, to the extent that such a market develops, and the market price of our common stock may be more volatile.
Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a “smaller reporting company” even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenues is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards.
We may in the future become subject to claims and litigationallegingviolations of the securities laws or other related claims, which could harm our business and require us to incur significant costs. Significant litigation costs could impact our ability to comply with certain financial covenants under our credit agreement. We are generally obliged, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits. Regardless of the outcome, litigation may require significant attention from management and could result in significant legal expenses, settlement costs or damage awards that could have a material impact on our financial position, results of operations and cash flows.
Our restated certificate of incorporation and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
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Our restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, and to the fullest extent permitted by law and subject to applicable jurisdictional requirements, the Court of Chancery of the State of Delaware (the “Court of Chancery”) will be the sole and exclusive forum for: (a) any derivative action or proceeding as to which the Delaware General Corporation Law (the “DGCL”) confers jurisdiction upon the Court of Chancery; (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders in such capacity; (c) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the DGCL or the restated certificate of incorporation or the Company’s restated bylaws (as each may be amended from time to time); or (d) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of clauses (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten (10) days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. However, such forum selection provisions will not apply to actions, suits or proceedings brought to enforce any liability or duty created by the Securities Act, nor will such provisions apply to actions, suits or proceedings brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our restated certificate of incorporation provides that certain claims must be brought in the Court of Chancery, to the extent the subject matter of such claims is within the scope of clauses (a)-(d) enumerated above; however, our restated certificate of incorporation does not mandate that other types of claims, including Securities Act claims, be brought in the Court of Chancery or in state or federal courts located within the State of Delaware.
Furthermore, while the exclusive forum provision does not apply to suits brought to enforce any duty or liability created by the Exchange Act, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court, although our restated certificate of incorporation does not mandate that such actions be brought in a federal court located within the State of Delaware. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our restated certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability, or make it more costly, to bring a claim of the type enumerated in clauses (a)-(d) above in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Our restated certificate of incorporation and our restated bylaws that became effective upon completion of the Merger contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors who are not nominated by current members of our board of directors or take other corporate actions, including effecting changes in our management. These provisions:
● establish a classified board of directors so that not all members of our board are elected at one time;
● permit only the board of directors to establish the number of directors and fill vacancies on the board;
● provide that directors may only be removed “for cause” and only with the approval of a majority of our stockholders;
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● require majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;
● authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan;
● eliminate the ability of our stockholders to call special meetings of stockholders;
● prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
● prohibit cumulative voting; and
● establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
In addition, Section 203 of the DGCL may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations and other transactions between us and holders of 15% or more of our common stock.
We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.
Our stock price and trading volume following our quotation on the OTCQB, if any, or following our potential listing on a securities exchange, if any, will be heavily influenced by the way analysts and investors interpret our financial information and other disclosures. Securities and industry analysts do not currently, and may never, publish research on our business. If few securities or industry analysts commence coverage of us, our stock price could be negatively affected. If securities or industry analysts downgrade our common stock, or publish negative reports about our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price to decline and could decrease the trading volume of our common stock.
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MD&A (Item 7)
5,236 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the audited financial statements for the year ended December 31, 2025 and 2024 and the related notes thereto, included elsewhere in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements involving risks and uncertainties as described under the heading “Forward-Looking Statements” elsewhere in this Form 10-K. You should review “Risk Factors” in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements and could otherwise affect our intended plans of operations. The financial information included herein is shown in thousands (000s) unless otherwise indicated.
Overview
The Merger
On July 23, 2025, the Company, Acquisition Sub and Deep Isolation entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on the Closing Date, Acquisition Sub merged with and into Deep Isolation, with Deep Isolation continuing as the surviving corporation. As a result of the Merger, Deep Isolation became our wholly owned subsidiary and will continue its existing business operations. Additionally, we changed our name to Deep Isolation Nuclear, Inc. and will continue to be a public reporting company.
Immediately prior to the time the certificate of merger effectuating the Merger was filed with the Secretary of State of the State of Delaware (the “Effective Time”), we issued 44,247,429 shares of our common stock to existing holders of Deep Isolation Capital Stock (including to holders of 2018 EIP Options who elected to exercise their options before the Effective Time of the Merger). We also assumed the Assumed Options and reserved a total of 10,888,601 shares of our common stock under the 2025 EIP, of which 5,752,566 of such shares of our common stock are issuable upon the valid exercise of the Assumed Options, with the remainder are available for future issuances of awards under the 2025 EIP. Aspen’s existing stockholders continued to hold an aggregate of 2,166,667 Retained Pre-Merger Shares, and on the Closing Date we also issued 83,333 Advisor Shares to Mr. Kashani in consideration for services rendered in connection with the Merger.
The Private Placement
Immediately following the Effective Time of the Merger, we sold 11,012,387 shares of our common stock at a price of $3.00 per share in the Private Placement. In connection with the Private Placement, we also issued to (i) each of the Placement Agents A Warrants to purchase an aggregate of 829,730 shares of our common stock at an exercise price of $3.00 per share and (ii) certain of the Placement Agents B Warrants to purchase an aggregate of $500,000 worth of shares of our common stock at an exercise price of $0.0001 per share.
The table directly below presents a fully-diluted capitalization table immediately after giving effect to the Merger, the Private Placement, and adoption of the 2025 EIP, and related transactions:
Pro Forma Ownership
Shares
Fully
Diluted %
Deep Isolation Stockholders
Private Placement Investors
Deep Isolation Investors (1)
Retained Pre-Merger Shares
Advisor Shares
Placement Agent A Warrants
Placement Agent B Warrants
2025 EIP Option Shares Reserved But Unissued (2)
Total shares outstanding or unissued but reserved for issuance
(1) Existing officers, directors and stockholders of Deep Isolation and their respective friends and family who participated in the Private Placement are referred to herein as the “Deep Isolation Investors.”
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(2) Includes 5,752,566 shares of common stock issuable upon the exercise of the Assumed Options.
Accounting Considerations
The historical financial statements and related footnotes included herein hereto include descriptions of Deep Isolation’s previously outstanding Capital Stock; however, in connection with the Merger, all shares of Deep Isolation’s Capital Stock, including all shares of Deep Isolation’s Preferred Stock, were converted into shares of our common stock. See “The Merger and Related Transactions ” above for detailed information regarding the Transactions and the related conversion of the shares of Deep Isolation’s Capital Stock.
For financial reporting purposes, the Merger was treated as a recapitalization and reverse acquisition. Deep Isolation is considered the acquirer for accounting purposes, meaning that the historical financial results of Deep Isolation prior to the Merger are considered our historical financial results under applicable accounting principles. See “Note 1. Nature of Operations—Merger Transaction” in the Notes to the Consolidated Financial Statements. Thus, a discussion of the past financial results of Aspen is not pertinent.
Background
Global demand for reliable, clean energy is growing rapidly, fueled by increased power demand, (including from AI and data centers) climate change and extreme weather events, recent geopolitical events, and increased load forecasts. Nuclear energy is, as the Company believes it should be, a critical contributor to the energy future. One of the biggest challenges to the adoption and deployment of nuclear energy solutions has been managing the disposal of nuclear waste.
Deep Isolation’s mission is to revolutionize the disposal of nuclear waste through the development of innovative solutions for temporary storage and transportation of HLW and SNF, and for permanent disposal of HLW via deep underground boreholes. The world’s current nuclear waste management model is limited to two options: above-ground interim storage and geologic disposal via mined repositories. Both options are extremely costly and, to date, neither has presented a viable, long-term solution to the global nuclear waste disposal problem. There are currently no operational mined repository facilities for the disposal of HLW or SNF; above-ground interim storage, which does not provide a permanent disposal solution, currently is the only waste management solution for HLW and SNF being practiced worldwide.
Following years of research and technical due diligence, Deep Isolation developed a solution for the permanent disposal of nuclear waste by packing the waste into patent-protected, corrosion-resistant canisters and then employing directional drilling to isolate the canisters in deep boreholes drilled into suitable rock formations deep underground. This technology will allow nuclear waste to be stored much deeper below the Earth’s surface than waste stored in mined repositories, increasing the safety of nuclear waste storage. The Company’s patented canisters can also be used for above-ground interim storage with no repackaging (or minimal repackaging where alternative canisters have been used for interim storage purposes). Deep Isolation believes its solutions will offer viable nuclear waste disposal solutions, reducing both human exposure to radioactive isotopes and the overall cost of nuclear waste disposal.
To date and for the foreseeable future, we will pursue grants, contracts, and awards from the U.S. federal government and certain foreign governments and NGOs to support research and development efforts geared toward studying and demonstrating the feasibility of our technologies and the use of DBD generally. We have also entered into strategic appraisal and operational planning contracts with customers; however, we have not yet entered into a binding implementation agreement with any customer to temporarily store or permanently dispose of nuclear waste through the implementation of our solutions, and there is no guarantee that we will be able to do so in the future.
Deep Isolation’s wholly owned subsidiary, Freestone, is an environmental and water resources consulting firm to federal, state, municipal and private clients. We believe its array of services is complimentary to Deep Isolation’s core disposal solution business. The Company receives cash flows from Freestone’s operations that are supplemental to cash flows produced by the Company’s core business, which reduces the Company’s consolidated use of cash and results in lower fundraising needs.
Our leadership team has extensive direct experience with nuclear solutions and engineering, government and community engagement and global strategy development. Our advisory board includes preeminent experts and Nobel laureates in nuclear science, technology and policy, as well as business leaders and entrepreneurs. We believe that the depth of our
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expertise and our technology solutions uniquely position us to become the market leader in the nuclear waste storage and disposal industry.
Our Current Business
The Company currently offers the following products and services, in addition to the services offered by Freestone: (i) strategic appraisal, which involves analysis of the costs and benefits of our DBD solution as compared with other disposal solutions; and (ii) operational planning, which involves the completion of a comprehensive feasibility assessment, including the preparation of a generic design for our deep borehole repositories, an IAEA-compliant economic and strategic business case and a Generic Safety Case, a commercial model for implementation and a roadmap for all work needed to commission and implement our solutions. The Company also offers implementation services, which includes the deployment of an IAEA-compliant disposal or storage system (depending on the customer’s needs) and consultancy services for siting, licensing, construction, hot and cold commissioning, operations, closure, post-closure monitoring and stakeholder engagement. Over the next twelve months, we anticipate that we will continue to provide these services to existing and new customers as we also work to advance the necessary preparations for our non-radioactive, full-scale, at-depth demonstration .
We also plan to continue engaging with domestic and foreign lawmakers to advocate for the legal and regulatory changes necessary to allow for the commercialization of DBD and to update regulatory guidance on nuclear waste disposal methods. We expect that our operations in the near term will be funded by additional government grants, contract awards and strategic appraisal and operational planning contracts. To the extent additional funding is needed and subject to market and other conditions, the Company may also pursue offerings of its debt and equity securities from time to time to support operations and capital expenditures.
Next Steps
The Company also offers implementation services, which includes the deployment of an IAEA-compliant disposal or storage system (depending on the customer’s needs) and consultancy services for siting, licensing, construction, hot and cold commissioning, operations, closure, post-closure monitoring and stakeholder engagement. To date, we have not yet entered into any implementation contracts with customers. While implementation contracts could be executed and related consultancy services could begin on a small scale prior to the completion of the non-radioactive, full-scale, at-depth demonstration in anticipation of the successful completion of such demonstration and related safety testing, demand for and commercial adoption of our DBD solution likely will not occur until such demonstration and testing is complete. We expect that a successful non-radioactive, full-scale, at-depth demonstration of our DBD solution, if successful, will spur demand for our implementation services in the coming years.
Net of expenses incurred, we received approximately $28.8 million in net proceeds from the Private Placement that we expect to use to execute the next step in our business plan, which has the following significant elements:
• Non-Radioactive, Full-Scale, At-Depth Demonstration — we expect to use the net proceeds from the Private Placement primarily to fund a non-radioactive, full-scale, at-depth demonstration of our DBD technologies. We have begun the process of developing a demonstration facility in Texas to facilitate such demonstration, which involves constructing a new well at the facility that will be used for non-radioactive, full-scale, at-depth demonstrations and related safety testing. We expect that construction, preparation and initial demonstration will take approximately two years to complete. We expect to incur demonstration costs, including construction, canister manufacturing, casing, surface handling, emplacement and retrieval testing, general and administrative, travel and other related costs, of approximately $8.1 million and $7.4 million in 2026 and 2027, respectively, of the project. We believe that non-radioactive, full-scale, at-depth demonstrations of our DBD technologies will validate the safety and feasibility of our solution and foster enhanced engagement and support both from potential clients identified in our pre-sales engagement stage and current clients who have engaged us for strategic appraisal and operational planning services.
• Increased Client Engagement — we expect that such validation of our DBD technologies through non-radioactive, full-scale, at-depth demonstrations will further support the execution of our sales pipeline, including active proposals for commercial contracts and additional governmental subsidies. We believe such demonstrations will also foster enhanced client engagement generally and facilitate advancement of clients through the familiarization, confidence-building and product adoption stages of our client engagement process.
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• Product Adoption — ultimately, our goal is to be the leading provider of permanent HLW and SNF disposal services globally. We believe that the broader client engagement expected to result from non-radioactive, full-scale, at-depth demonstrations of our DBD technologies will result in additional strategic appraisal and operational planning contracts, which are in turn expected to result in implementation contracts.
However, we anticipate that we will continue to experience operating losses in 2026 and 2027 as we seek to implement our long-term strategic plan. Additionally, the adoption of our technologies in the United States will require Congressional action in the form of legislative changes, which we cannot guarantee will occur or, even if they do occur, be favorable to our objectives and business plan. As a result, we may not achieve the growth potential we expect or may grow more slowly than expected, and it is difficult to project the success of our business model and operations. See Item 1, “ Description of Business—Government Regulations ” above for further discussion of current regulatory limitations on our operations. Our ability to promote and facilitate the adoption of our technologies, as well as our future success and financial performance, is dependent upon numerous factors, including those discussed in Item 1A, “ Risk Factors .”
Components of Results of Operations
Revenue
The Company derives its revenue primarily from environmental remediation supporting services, consulting services, licensing fees, and technology development grants related to nuclear waste disposal services globally. Revenue is recognized when the Company satisfies its performance obligations to its customers, which generally occurs at a set delivery of the deliverables as specified in its customer contracts, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company reports any tax assessed by a governmental authority that the Company collects from its customers that is both imposed on and concurrent with its revenue-producing activities (such as sales, use, value-added and excise taxes) on a net basis (meaning the Company does not recognize these taxes in either its revenues or its costs and expenses).
Operating Expenses
Cost of services includes all direct costs incurred in delivering the Company’s nuclear waste disposal solutions and services. These costs are primarily comprised of salaries, subcontractor fees, and direct costs which are directly attributable to the provision of the services described above.
Depreciation and amortization expenses include depreciation of property, plant and equipment and amortization of intangible assets. Depreciation is based on the estimated useful lives of the assets using the straight-line method. All intangible assets are amortized on a straight-line basis over their respective estimated useful lives.
Selling, general and administrative expenses primarily consist of costs associated with administrative staff salaries, facilities, utilities, insurance, marketing & advertising, stock-based compensation, legal fees and other office expenses related to the Company’s business functions.
Research and development expenses consists primarily of costs incurred to design, develop, test, and validate the Company’s technologies and services for the deep borehole disposal of nuclear waste. Research and development expenses are expensed as incurred and may vary based on the timing and scope of engineering programs, demonstration activities, and regulatory support efforts.
Other Income (Expense), Net
Other income (expense) consists primarily of interest income, interest expenses, foreign currency exchange gain (loss), and other miscellaneous expenses.
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Comparison of the Years Ended December 31, 2025, and 2024
The following table sets forth our historical consolidated statements of operations data for the periods indicated (in thousands):
Years Ended December 31,
$ Change
% Change
Revenue
Cost of services (exclusive of depreciation shown separately below)
Gross profit
Operating Expenses:
Selling, general and administrative expenses
Research and development
Depreciation and amortization expense
Total operating expenses
Loss from operations
Other income, net
Net loss before income taxes
Provision for income taxes
Net loss
Other comprehensive loss:
Foreign currency translation adjustments
Total other comprehensive loss (income)
Net loss and other comprehensive loss
Revenue
Revenue decreased by approximately $917 thousand, or 13%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in revenue was primarily attributable to a decrease in the hydrogeologic characterization work scope related to Freestone’s contracts and an increase in the number of fixed-price contracts as compared to variable-price contracts during the period. This was partially offset by a slight increase in Deep Isolation’s revenues from existing contracts owing to an increase in deliverables and associated revenues toward the end of the projects.
Operating Expenses
Cost of services decreased by approximately $1.0 million, or 28%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in cost of services was primarily attributable to a decrease in the hydrogeologic characterization work scope related to Freestone’s contracts during the period. The decrease in Freestone’s scopes of work resulted fewer billable hours for existing employees and a reduced need for subcontractors, and thus a reduction in overall cost of services.
Depreciation and amortization expense remained relatively constant for the year ended December 31, 2025, compared to the year ended December 31, 2024. Depreciation and amortization expense includes depreciation of property, plant and equipment and amortization of intangible assets.
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Selling, general and administrative expenses increased by approximately $4.6 million, or 111%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in selling, general and administrative expenses was primarily attributable to higher accounting, audit, legal and travel expenses associated with the Merger.
Research and development
Research and development expense increased by $202 thousand, or 100%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in research and development expenses was primarily attributable to the Company’s non-radioactive, full-scale, at-depth demonstration costs.
Other Income (Expense), Net
Other income (expense), net increased by approximately $362 thousand, or 496%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to higher interest income following the investment of the proceeds from the private placement.
Net Loss
Net loss increased by $4.3 million, or 437%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to the fluctuations described above under “Revenue,” “Operating Expenses,” and “Other Income (Expense), Net.”
Liquidity and Capital Resources
Since inception, we have financed our operations primarily through the issuance and sale of our equity and debt securities. Our primary sources of liquidity have been cash on hand and proceeds from equity financings. Our primary requirements for liquidity and capital are to finance working capital and capital expenditures associated with operating and managing the Company, as well as for general corporate purposes.
As of December 31, 2025, our principal source of liquidity was our cash balance of $27.4 million. Since inception, we have generated significant operating losses, as reflected in our accumulated deficit of $32.5 million as of December 31, 2025, and have experienced negative cash flows from operations of $3.9 million for the year ended December 31, 2025.
Net cash used in operating activities was $3.9 million for the year ended December 31, 2025, primarily due to our net loss offset by changes in working capital. Net cash used in investing activities was immaterial. Net cash provided by financing activities primarily consisted of proceeds from the Merger and Private Placement.
We expect that our investments and operating expenses will be approximately $15.1 million over the next twelve months, comprised of approximately $8.1 million in research and development expenses related to the development of the non-radioactive, full-scale, at-depth demonstration program in Texas and approximately $7.0 million in operating costs. In the twelve months thereafter, we anticipate research and development expenses of approximately $7.4 million, along with a comparable level of operating costs.
We believe our existing cash will be sufficient to meet our operating, working capital and research and development needs for at least the next twelve months. However, our future capital requirements will depend on many factors, including the progress of our development activities and the timing and extent of expenditures to support our growth strategy. There can be no assurance that additional capital will be available on acceptable terms, or at all, if needed.. See Item 1A. “Risk Factors - Our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that our management’s decisions will result in successfulachievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects.”
Cash Flows
Years Ended December 31, 2025, and 2024
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As of December 31, 2025, our cash and cash equivalents were $1 million. The following table shows a summary of our cash flows for the periods presented (in thousands):
Years Ended December 31,
Change
Change %
Net cash used in operating activities
Net cash used in investing activities
Net cash provided by financing activities
Net increase (decrease) in cash
Effect of exchange rate on cash
Cash, beginning of period
Cash, end of period
Operating Activities
Net cash used in operating activities increased by $2.7 million, or 227%, to $3.9 million for the year ended December 31, 2025 compared to the net cash used in operating activities of $1.2 million for the year ended December 31, 2024. The increase in operating cash outflow was primarily attributable to the increase in net loss of $4.3 million offset by favorable changes in working capital, including accounts receivable as well as an increase in stock based compensation expense.
Investing Activities
Net cash used in investing activities decreased by $98 thousand, or 100%, to $98 thousand for the year ended December 31, 2025 compared to $0 in net cash used in investing activities for the year ended December 31, 2024. There were no additions to the Company’s property, plant and equipment in the year ended December 31, 2025 compared to the prior period.
Financing Activities
Net cash provided by financing activities increased by $28.6 million, or 4,710%, to $29.2 million for the year ended December 31, 2025 compared to the net cash provided by financing activities of $607 thousand for the year ended December 31, 2024. The increase in net cash provided by financing activities was primarily attributable to the Merger and Private Placement in July 2025 offset by offering costs related to the Merger and Private Placement.
Indebtedness
The Company did not have indebtedness for any of the periods presented.
Contractual Obligations and Commitments
From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. The Company is not a party to any litigation or proceeding, including any governmental proceeding, which our management believes could result in any judgments or finesagainst us that would have a material adverse effect on our financial position, liquidity or results of future operations.
Off-Balance Sheet Transactions
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Estimates
Our consolidated financial statements and the related notes thereto included in this Form 10-K are prepared in accordance with United States generally accepted accounting principles. The preparation of consolidated financial statements also
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requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operation, and cash flows will be affected. We believe that the accounting policies described below involve a greater degree of judgment and complexity. Accordingly, these are the estimates we believe are most critical to aid in fully understanding and evaluating our consolidated financial condition, results of operations and future performance. We have described our significant accounting policies within Note 2 to our audited consolidated financial statements.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical information for its stock. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expenses could be materially different for future awards.
Emerging Growth Company and Smaller Reporting Company Status
As an “emerging growth company,” under the JOBS Act, we are permitted to take advantage of an extended transition period for complying with new or revised accounting standards. We may elect to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either irrevocably elect to opt out of such extended transition period or no longer qualify as an emerging growth company. We may choose to adopt any new or revised accounting standards early whenever such early adoption is permitted for private companies.
Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we choose to rely on available exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under Dodd-Frank, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the consolidated financial statements (auditor discussion and analysis), or (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. We will remain an emerging growth company until the earliest to occur of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of its first sale of common equity securities pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.24 billion; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act.
We are also a “smaller reporting company,” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be permitted to do so for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
As of the Effective Time, Grassi & Co., CPAs, P.C. (“Grassi”), was dismissed as the independent registered public accounting firm of the Company. Effective as of July 23, 2025, the Company’s board of directors approved the appointment of CBIZ CPAs P.C. (“CBIZ CPAs”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025, subject to CBIZ CPAs’ completion of its standard client acceptance procedures.
During the two fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through July 23, 2025, there were no disagreements with Grassi on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grassi, would have caused it to make reference to the subject matter thereof in connection with its report, nor did its report contain an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or accounting principle.
During the two fiscal years ended December 31, 2025 and 2024, neither the Company nor anyone acting on its behalf has consulted with CBIZ CPAs with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that CBIZ CPAs concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; (ii) any matter that was the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereof; or (iii) a reportable event as described in Item 304(a)(1)(v) of Regulation S-K and the related instructions thereof.
