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 -0.47pp 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
-0.47pp
Lean -
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)
13,725 words
ITEM 1A. Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors discussed below, together with all of the other information contained in this Annual Report. The risk factors set forth below are not the only risks we face; we may also face risk factors not presently known to us or that we currently believe to be immaterial. If any of the following risk factors or any other risk factors actually occur, our business, prospects, results of operations, and financial condition could be materially adversely affected. In such event, the trading price of our common stock could decline, and you might lose all or part of your investment.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties, including the following:
our Gravity Reactor is unproven and may not perform as expected or be commercially viable
we are an early-stage company with no revenue, a history of losses, and a “going ” opinion from our auditors
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
we require substantial additional capital and may be unable to obtain financing on acceptable terms or at all
our technology depends on successful deep vertical borehole drilling and subsurface engineering, which involve significant technical and regulatory risks
we may be unable to identify, acquire, lease, or otherwise secure access to suitable sites with geological characteristics necessary to deploy our Gravity Reactor
we have no experience operating nuclear facilities and may be unable to develop necessary operational capabilities
the market for our technology is not established and may not develop as expected
commercialization depends on our ability to enter into long-term commercial arrangements, including power purchase agreements, ability to establish strategic partnerships, and ability to obtain grid interconnection approvals
our technology may not be cost competitive with other energy sources
our development timelines, cost projections, and financial forecasts are subject to significant uncertainty
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we are subject to significant supply chain risks, including access to nuclear fuel and specialized components and specialized fuel cycle services
our development activities and operations involve inherent safety risks and potential liability for nuclear incidents and environmental contamination
our business is subject to extensive government regulation, and we may be unable to obtain required approvals, including from the NRC
our reliance on DOE authorization under our OTA involves legal and regulatory uncertainty and does not replace the requirement for NRC licensing
we are involved in litigation relating to the NRC’s licensing framework, which may adversely affect our regulatory pathway
changes in government policy, including government incentives, public perception of nuclear energy, or environmental laws could adversely affect our business
we are subject to government export control, economic sanctions, import, anti-corruption, anti-bribery, anti-money laundering and other laws and regulations that may affect our ability to compete successfully outside of the United States
we may be unable to adequately protect our intellectual property or may be subject to infringementclaims
we face general risks related to cybersecurity, macroeconomic conditions, supply chains, natural disasters and severe weather events, and loss of key personnel
we may be subject to litigation, investigations, claims or other legal proceedings that could be costly to defend
we have restated in this Annual Report certain previously issued consolidated financial statements to correct certain errors and have identified material weaknesses in our internal control over financial reporting that caused our management to conclude that we did not maintain effective internal control over financial reporting and disclosure controls and procedures
there is currently no public trading market for our common stock, and even if one develops, the market price of our common stock may be volatile
Risks Related to Our Business and Industry
Our Gravity Reactor is unproven, and our design, borehole development activities, planned pilot reactor, and future commercial applications may fail, progress more slowly than projected, or encounter delays or changes that increase costs and capital requirements.
Our Gravity Reactor is in the development stage and has not been proven in a real-world operating environment. We are currently advancing the design of the Gravity Reactor and conducting site development, borehole test drilling, engineering, and validation activities, and we plan to construct and operate a pilot reactor under the DOE Reactor Pilot Program. These efforts involve significant technical and engineering challenges, including subsurface deployment and integration of reactor and borehole systems, and may require design changes, additional engineering and validation work, and result in delays or increased costs.
Our development pathway also depends on the timing of required regulatory approvals and licenses. The planned pilot reactor would operate under DOE authorization, which does not permit commercial operation and does not replace the need for NRC licensing. Delays in DOE authorization, challenges in pilot reactor development, or difficulties in obtaining or maintaining NRC approvals could delay or prevent commercialization.
If our design, borehole development activities, or planned pilot reactor do not perform as expected, or if regulatory requirements materially delay or constrain our development and licensing pathway, our technology may prove infeasible or more costly to deploy than anticipated, which could materially adversely affect our business, prospects, results of operations, and financial condition.
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We are an early-stage company with a history of operating losses and expect to incur losses for the foreseeable future.
Legacy Deep Fission was formed in 2023 and has not generated revenue from commercial operations. During the years ended December 31, 2025 and 2024, we incurred net losses of $61.0 million and $5.7 million, respectively.
We expect to continue to incur significant expenses as we continue to develop our technology, pursue regulatory approvals, build our organization, and prepare for potential commercialization. These activities may require substantial capital and may not result in commercially viable products or revenue-generating operations.
Even if we successfully commercialize our technology, we may not achieve or sustain profitability. Our ability to generate revenue will depend on a number of factors, including obtaining regulatory approvals, customer adoption of our technology, successful development and deployment of our reactors, and access to sufficient capital.
Our auditor has issued a “going concern” opinion with respect to our financial statements.
Our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements for the year ended December 31, 2025 indicating that there is substantial doubt about our ability to continue as a going concern. During the years ended December 31, 2025 and 2024, we generated no revenue and incurred net losses of $61.0 million and $5.7 million, respectively, and as of December 31, 2025 and 2024 we had an accumulated deficit of $66.7 million and $5.7 million, respectively. As of December 31, 2025, our cash and cash equivalents were $23.7 million. In February 2026, we raised approximately $76.0 million in net proceeds from a private placement; however, we expect that these funds, together with our existing cash, will not be sufficient to operate our business for the next twelve months.
Based on our recurring losses from operations, our expectation of continued operating losses for the foreseeable future, and our current cash position, our existing cash and cash equivalents will not be sufficient to fund our operating and capital requirements for the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern.
To continue operating our business, we will need to raise substantial additional capital. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all.
Our business plans require substantial additional capital, and we may not be able to obtain financing on acceptable terms or at all.
Our business will require significant capital to fund the continued development of our Gravity Reactor, obtain regulatory approvals, construct and deploy reactor facilities, and support our operations. We estimate that the total capital required to complete our pilot reactor program under the DOE Reactor Pilot Program and to obtain NRC licensing for commercial deployment will be substantial, and there is significant uncertainty regarding the exact amount of our ultimate capital requirements due to the early stage of our technology development, the novel nature of our regulatory pathway, and the unpredictability of construction and deployment costs. We expect to incur operating losses for the foreseeable future and will require significant additional financing to execute our business plan. Our planned pilot reactor and subsequent development activities are not fully funded and will require substantial additional capital. If we are unable to obtain such funding, our development timelines may be delayed, and we may be required to reduce or terminate portions of our development programs.
The timing and amount of our future capital requirements will depend on a number of factors, including the progress of our technology development, regulatory approvals and processes, commercialization efforts, customer demand, supply chain conditions, and general economic and capital market conditions. Because our technology is in an early stage of development and represents a new category of nuclear energy solutions, we have limited historical data upon which to estimate our capital needs.
We expect that we will need to raise additional capital through equity issuances, debt financings, strategic partnerships, government programs, or other financing arrangements. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all.
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If we are unable to obtain sufficient funding, we may be required to delay, reduce, or terminate all or portions of our development programs or other operations, which could materially adversely affect our business, prospects, results of operations, and financial condition. In addition, to the extent that we raise additional capital through the issuance of equity or convertible securities, the ownership interests of our existing stockholders will be diluted, potentially significantly. Given the magnitude of our anticipated capital requirements, future equity financings could result in substantial dilution to existing stockholders. Moreover, the terms of such securities or any other financing may include preferences or other rights that adversely affect the value of, or rights of holders of, our common stock. Debt financing, if available, could result in additional debt service obligations, and debt financings or other financings may involve covenants that restrict our operations or financial flexibility.
If we are unable to obtain sufficient funding or otherwise manage our capital resources effectively, we may not be able to continue operations.
Our technology depends on the successful drilling and long-term stability of deep vertical boreholes, which presents significant technical, engineering, regulatory and operational risks.
Our Gravity Reactors require the drilling and long-term operation of deep vertical boreholes designed to house nuclear reactor systems at significant depths below the surface. Deep vertical borehole drilling and subsurface engineering involve complex technical challenges, including maintaining borehole stability, managing subsurface pressures and temperatures, ensuring the integrity of well casings and seals, and preventing subsurface fluid migration.
Our staged borehole development program (including non-nuclear and prototype wells) may not successfully validate drilling methods, installation procedures, or subsurface performance assumptions necessary for reactor deployment.
Engineering studies and modeling activities are ongoing to refine borehole diameter requirements, drilling techniques, casing systems, and installation procedures as part of the continuing development of the Gravity Reactor. While conducting such studies and activities, we may encounter unforeseen engineering challenges.
Any such engineering challenges may be exacerbated by unpredictable geological conditions, equipment limitations, drilling errors, or failures in subsurface materials or infrastructure. Unexpected subsurface conditions may require changes in drilling design, additional engineering work, or abandonment of drilling operations at particular sites. Additionally, long-term operation of a reactor in a deep vertical borehole environment may involve risks that we do not currently expect.
In addition, the drilling and construction of deep vertical boreholes are subject to federal, state, and local permitting and regulatory requirements, including environmental reviews, groundwater protection standards, and well construction regulations. These requirements vary by jurisdiction, may change from time to time and have generally become more stringent over time, and may be subject to evolving interpretations. Obtaining and maintaining necessary permits may be time-consuming, costly, and uncertain, and may require modifications to drilling plans or site selection.
If we are unable to successfully drill, permit, construct, and maintain boreholes suitable for reactor deployment, or if borehole integrity cannot be maintained or regulatory requirements materially delay or constrain our drilling activities, our technology may prove infeasible or significantly more costly to deploy than anticipated. Any such failure or delay could materially adversely affect our development timelines, costs, and ability to commercialize our technology.
We may be unable to identify, acquire, lease, or otherwise secure access to suitable sites with the geological characteristics necessary to deploy our Gravity Reactor.
The successful deployment of our Gravity Reactor depends on our ability to identify and secure sites with geological characteristics capable of supporting deep vertical borehole drilling and long-term structural stability of deep vertical boreholes. These characteristics may include stable subsurface formations, appropriate thermal and hydrological conditions, sufficient depth, and the ability to safely construct and maintain a borehole reactor facility.
Suitable sites may be difficult to locate, may not be available on commercially acceptable terms, or may be subject to competing land uses, ownership disputes, or conflicting mineral, drilling, or surface rights. In addition, site acquisition may require negotiation with private landowners, governmental entities, non-governmental organizations, or other stakeholders, and may involve obtaining easements, mineral rights, drilling rights, or other property interests. These processes can be time-consuming, uncertain, and costly.
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Even if a potential site is identified, geological conditions may ultimately prove unsuitable for reactor deployment following additional subsurface analysis, drilling activities, or regulatory review. For example, we are currently conducting geological analysis at the Kansas Site, which we intend to use for our pilot reactor program. There can be no assurance that the Kansas Site will ultimately prove to be a suitable site for reactor deployment following further testing. Furthermore, local zoning requirements, environmental regulations, permitting requirements, or opposition from host communities could delay or prevent the development of otherwise suitable sites.
If we are unable to identify or secure suitable sites with the required geological characteristics on commercially reasonable terms, or if such sites become unavailable due to regulatory, environmental, or community considerations or otherwise prove unsuitable, our ability to deploy our technology and execute our business plan could be materially adversely affected.
We have no experience operating nuclear power facilities, and our lack of operational experience may create additional risks as we develop and deploy our technology.
The safe and reliable operation of nuclear reactors requires highly specialized technical capabilities, operational procedures, safety culture, regulatory compliance systems, and experienced personnel. We have not yet constructed or operated a nuclear power facility, commercial or otherwise.
As we work toward demonstration and potential commercial deployment of our Gravity Reactor, we will need to develop operational capabilities, establish safety and compliance programs, recruit and train qualified operating personnel, and implement systems necessary to safely operate nuclear facilities. These efforts may require significant time, expense, and organizational development.
If we are unable to, on a timely basis, successfully develop these operational capabilities, establish safety and compliance programs, recruit and retain appropriately qualified personnel, or establish the operational infrastructure necessary to safely operate our reactors, we may experience operational failures, safety incidents, regulatory enforcement actions, delays in commercialization, or increased operating costs. Any such developments could materially adversely affect our business, prospects, results of operations, and financial condition.
The market for our Gravity Reactor is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected. If demand for our technology fails to develop sufficiently, our business and operations would suffer, and we would be unable to achieve or maintain profitability.
The market for Gravity Reactors has not yet been established. Projections we may provide from time to time for the total addressable market are based on a number of internal and third-party estimates, including, but not limited to, levels of demand for clean energy, including nuclear power, the number of potential customers who have expressed interest in our products and services, estimates of prices and production costs for our Gravity Reactors and the various components of our Gravity Reactor, our anticipated project development, deployment, and operating model, and general market conditions. 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, estimates we may provide from time to time of the annual total addressable market for our technology and related offerings, as well as the expected growth rate for the total addressable market for our technology and related offerings may prove to be incorrect.
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, actual or threatenedlitigation, political, host community or other opposition to our technology or proposed Gravity Reactor sites, access to and availability of raw materials on cost-effective terms, lack of support or opposition from governmental entities, our ability to raise capital on attractive terms, as well as other factors. The timeline to scale-up and deploy the necessary technological processes for the commercialization of Gravity Reactors is also based upon assumptions regarding our technology and general market conditions. However, our Gravity Reactor has not been proven at scale and market conditions are volatile and difficult to predict, and our assumptions and the data underlying these estimates may not be correct, and the conditions supporting our assumptions or estimates might change at any time, reducing the accuracy of these underlying assumptions. As a result, the market for the Gravity Reactor may not develop on the timeline we expect or at all, and we may not realize the financial performance we have projected.
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Our ability to deploy reactors commercially will depend on our ability to enter into long-term power purchase agreements or other commercial arrangements with customers.
The successful commercialization of our reactors will depend on our ability to enter into commercial arrangements, including PPAs, with hyperscale data centers and other large power users, as well as utilities, industrial operators, and government or defense installations. These agreements are typically required to support project financing and provide revenue certainty for power generation assets. We have not yet entered into any PPAs or other binding commercial arrangements.
Negotiating PPAs can be complex and time-consuming, and potential customers may be reluctant to enter into long-term commitments with a company developing a novel technology that has not yet been commercially deployed. In addition, potential counterparties may require extensive technical validation, regulatory approvals, operational track records, or other assurances before entering into such agreements.
Even if we are able to negotiate potential commercial arrangements, such agreements may be subject to regulatory approvals, financing conditions, or other contingencies that could delay or prevent their execution. If we are unable to enter into PPAs or similar agreements on commercially reasonable terms, or at all, our ability to deploy reactors, generate revenue, and execute our business plan could be materially adversely affected.
Our future revenue plans depend in part on strategic partners and government entities .
Our business model contemplates the deployment of our Gravity Reactor in collaboration with hyperscale data centers and other large power users, as well as utilities, industrial operators, government or defense installations, and other strategic partners. These relationships may involve joint development arrangements, licensing agreements, project development partnerships, or other commercial structures.
There can be no assurance that we will successfully establish or maintain such partnerships on commercially acceptable terms. Potential partners may require additional validation of our technology, regulatory approvals, operational track records, or other assurances before committing to collaboration.
If we are unable to establish strategic partnerships or if such partnerships fail to achieve the expected level of deployment or utilization of our technology, our business model and commercialization strategy could be materially adversely affected.
Electricity generated by our Gravity Reactors may not be cost-competitive with other energy generation technologies, and competing energy solutions could reduce demand for our reactors and related services .
The markets for electricity generation and clean energy technologies are highly competitive and rapidly evolving. Our Gravity Reactor will compete with a wide range of existing and emerging energy generation technologies, including renewable energy sources such as solar, wind, and geothermal power, natural gas-fired generation, large-scale nuclear power plants, energy storage technologies, and other emerging low-carbon energy solutions.
Many competing technologies benefit from established supply chains, existing regulatory frameworks, government incentives, or declining capital costs. In some markets, renewable energy technologies benefit from subsidies, tax incentives, or regulatory mandates that increase their competitiveness relative to nuclear power. In addition, new or improved technologies, including advances in energy storage, carbon capture, or alternative generation technologies, may provide comparable or superior performance, reliability, or cost advantages relative to our Gravity Reactor.
If the levelized cost of electricity generated by our Gravity Reactor is not competitive with other sources of electricity generation, or if alternative technologies become more cost-effective or widely adopted, commercialization and demand for our reactors and related services could be reduced or fail to materialize. In addition, even if we are able to commercialize our reactor and related services, if we are unable to continue developing and improving our technology to remain competitive, we may lose market share. Any such developments could materially adversely affect our business, prospects, financial condition, and results of operations.
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Delays or failures in obtaining grid interconnection approvals could delay or prevent deployment of our reactors.
The commercial deployment of our reactors will require interconnection to regional electricity transmission systems. Obtaining grid interconnection approvals typically involves complex technical studies, regulatory review, coordination with utilities, transmission providers, and, in some cases, regional transmission organizations or independent system operators, and potentially significant infrastructure upgrades.
Interconnection processes in many regions are subject to substantial backlogs and may take several years to complete. In addition, the cost of required transmission upgrades or system modifications may be significant and could affect the economic viability of a proposed reactor project. Interconnection approvals may also be subject to regulatory or operational conditions that affect project timing or feasibility.
If we are unable to obtain grid interconnection approvals on acceptable timelines or terms, or if required transmission infrastructure upgrades prove too costly or technically impractical, our ability to deploy reactors and deliver electricity to customers could be delayed or prevented. Any such delays could materially adversely affect our development plans, financial condition, and results of operations.
Our development timelines, cost projections, and financial forecasts are subject to significant uncertainty.
From time to time we may provide development or commercialization timelines, cost projections, and financial forecasts, which are based on estimates, including regarding the timing of reactor development, testing, licensing, construction, and commercialization, as well as projections regarding the potential costs associated with developing and deploying our technology.
These estimates are based on numerous assumptions, including assumptions regarding regulatory approvals, engineering performance, supply chain availability, financing conditions, market demand, and the availability of suitable deployment sites.
Because our technology is in an early stage of development and has not yet been commercially deployed, there is limited historical data on which to base these estimates. Actual results may differ materially from our expectations due to a variety of factors, including technical challenges, regulatory delays, supply chain disruptions, changes in market conditions, or the need for additional engineering work or safety modifications.
If our development timelines are delayed or if our costs are materially higher or energy demand is materially lower than we anticipate, our ability to commercialize our technology, obtain financing, or enter into commercial arrangements with customers could be materially adversely affected.
Manufacturing or construction issues could increase costs or delay deployment of our reactors.
Our Gravity Reactor design is still under development, and aspects of the design may evolve as engineering work, validation activities, and regulatory engagement progress. Although we intend to actively manage our design process through design reviews, validation activities, engagement with external partners, and application of industry lessons learned, latent manufacturing, construction, or safety issues may not be identified on a timely basis.
If such issues are discovered after design finalization, long-lead component procurement, module fabrication, or construction activities have begun, addressing them could require design modifications, additional engineering work, replacement of components, or changes to construction procedures. These developments could increase project costs, delay construction schedules, or affect the performance of our reactors.
Any significant delays or cost increases resulting from latent manufacturing, construction, or safety challenges could materially adversely affect our development timelines, business, prospects, results of operations, and financial condition.
We may be unable to obtain sufficient quantities of nuclear fuel and fuel cycle services required to operate our reactors.
While we have entered into an agreement to procure LEU for certain demonstration and initial operations, we have not secured sufficient fuel supply or fuel cycle service arrangements to support ongoing or large-scale commercial deployment of our reactors.
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The nuclear fuel supply chain is subject to capacity constraints, regulatory requirements, and geopolitical risks. Global enrichment and fuel fabrication capacity is concentrated among a limited number of suppliers, including in jurisdictions that have been subject to geopolitical tensions, trade restrictions, or sanctions, including Russia.
We have not entered into binding agreements for long-term or large-scale fuel supply or fuel cycle service arrangements, and there can be no assurance that we will be able to obtain such agreements on acceptable terms, or at all. If sufficient quantities of nuclear fuel or fuel cycle services are not available, our ability to develop, deploy, and operate our reactors could be materially adversely affected.
Our reactors will depend on specialized components and suppliers, and disruptions in the supply chain could delay development , interrupt operations or increase costs.
The development and deployment of our reactors will require specialized components, materials, and services, including nuclear-grade fuel and other materials, fuel cycle services, precision-engineered reactor components, drilling equipment, heat exchange systems, control systems, long-lead manufactured components, and other specialized infrastructure. In many cases, these components must meet stringent regulatory and quality standards and may be available from a limited number of suppliers.
Disruptions in the supply of these components, materials or services may occur due to manufacturing delays, supplier financial distress, quality issues, geopolitical developments, trade restrictions or other regulatory changes, labor shortages, transportation constraints, or other supply chain disruptions. In addition, certain suppliers may have limited capacity to produce nuclear-grade or similarly specialized components or services, and may prioritize larger or more established customers.
If we are unable to secure reliable suppliers for critical components, materials or services on acceptable terms and timelines, the development, deployment, and operation of our reactors could be delayed, interrupted or become significantly more expensive. Any such delays or cost increases could materially adversely affect our business, prospects, results of operations, financial condition, and ability to commercialize our technology.
Construction, drilling, installation procedures and development activities associated with our reactor facilities involve inherent safety risks and could result in workplace accidents, injuries, or fatalities.
The development and deployment of our Gravity Reactor will require drilling deep vertical boreholes, constructing specialized reactor facilities, transporting heavy equipment, installing and emplacing the reactor module, handling, transportation and disposal of radioactive and hazardous materials, and performing complex engineering and construction activities, each of which remains subject to ongoing engineering analysis and development, safety evaluations and regulatory review. These activities involve inherent safety risks, including the potential for workplace accidents, equipment failures, structural incidents, exposure to radioactive and hazardous materials, or other operational hazards.
Accidents involving our employees, contractors, or third-party personnel could result in seriousinjury or loss of life. Such incidents could lead to project delays, regulatory investigations, litigation, reputational harm, increased insurance costs, or other liabilities. In addition, workplace safety incidents could result in work stoppages, delays in construction schedules, or additional compliance obligations.
Although we intend to implement safety programs and operational controls designed to reduce these risks, we cannot eliminate the possibility of accidents or safety incidents. Any such event could materially adversely affect our development timelines, business, prospects, financial condition, and results of operations.
Our Gravity Reactor could experience a nuclear incident or otherwise cause environmental contamination, personal injuries or property damage, and reputational harm or losses not covered by indemnification or insurance could materially adversely affect our business.
Accidents and other unforeseenproblems at nuclear facilities have occurred in the United States and elsewhere. Our Gravity Reactor is a novel design, and full analysis of its performance and safety characteristics is ongoing. As a result, there may be risks associated with the operation of our technology that are not yet fully understood. The subsurface emplacement of our reactor creates unique risk considerations, including the potential for groundwater contamination in the event of a breach of containment systems, challenges associated with accessing or retrieving the reactor module in an emergency, and the interaction of reactor systems with subsurface geological and hydrological conditions over extended operating periods.
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Our OTA with the DOE provides certain indemnification protections for damage resulting from a nuclear incident, generally defined as occurrences involving bodily injury, sickness, disease, death, or property damage arising from the hazardous properties of nuclear material. For any future commercial operations licensed by the NRC, we would be subject to the liability and indemnification framework established under the Price-Anderson Nuclear Industries Indemnity Act, which provides a system of private insurance and government indemnification for nuclear incidents, subject to statutory limits and certain exclusions. However, coverage under Price-Anderson may not apply to all types of incidents, may be subject to aggregate limits that could be exhausted in the event of a major nuclear incident at any covered facility, and may not fully compensate us for all losses.
However, in the event of such damage, the availability of such indemnification protections may be subject to limitations, conditions, or legal challenges. The indemnification could be withdrawn if the OTA is canceled, may not apply if the OTA is invalidated or overturned as the result of litigation, or may not apply if the test reactor is determined to fall under the regulatory jurisdiction of the NRC rather than the DOE.
In addition, we may be subject to liability under environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) and similar state-level legislation. Such environmental laws may impose liability on a strict, joint and several basis. As a result, we may incur liabilities relating to remediation of environmental contamination of property currently or formerly owned, leased or operated by us or of property contaminated by hazardous substances we generated, handled, arranged for the disposal of, or released. If a nuclear incident or other environmental event were to occur, or environmental contamination for which we are alleged to be responsible is identified and indemnification and insurance protections are unavailable or insufficient, we could be exposed to significant liability, which could materially adversely affect our business, prospects, financial condition, and results of operations. Even if indemnification or insurance protections were available, we still may be subject to reputational harm, which could materially adversely affect our business, prospects, financial condition, and results of operations.
Our insurance coverage and any available indemnification may not be sufficient to cover all potential liabilities associated with our operations.
The development, construction, and operation of nuclear reactor facilities involve significant risks, including risks of nuclear incidents, environmental contamination, property damage, personal injury, and other losses. Although costs relating to certain nuclear incidents may be subject to indemnification by the federal government under applicable federal programs, including indemnification provided by the DOE under our OTA, such indemnification may not apply in all circumstances.
In addition, our operations may require us to obtain various forms of insurance coverage, including coverage related to construction activities, general liability, environmental liability, workers’ compensation, and other operational risks. Insurance coverage for nuclear-related activities may be limited in scope, subject to significant exclusions, prohibitively expensive or otherwise unavailable on commercially reasonable terms.
Even where coverage is available, the limits of such insurance policies may be insufficient to cover the full extent of potential liabilities. Nuclear-specific insurance products, such as those offered through Nuclear Electric Insurance Limited (NEIL) or other nuclear insurance pools, may be expensive, limited in scope, or unavailable to us on acceptable terms given our early-stage status and unproven technology. If a nuclear incident, environmental event, construction accident, or other contingencies resulting in significant liability were to occur and were not fully covered by indemnification or insurance, we could be exposed to substantial financial losses, which could materially adversely affect our business, prospects, results of operations, and financial condition. Even if indemnification or insurance protections were sufficient to cover the full extent of potential liabilities, we may still be subject to reputational harm, which could materially adversely affect our business, prospects, financial condition, and results of operations.
The costs associated with the storage and disposal of used nuclear fuel could be significant.
The operation of our reactors will generate used nuclear fuel that must be stored and ultimately disposed of in accordance with applicable legal and regulatory requirements. The costs associated with storing and managing used nuclear fuel may be significant and could increase over time.
The DOE does not currently have an operating long-term disposal facility for used commercial nuclear fuel in the United States, and the timing for the operation of any such facility remains uncertain. As a result, operators of nuclear facilities may be required to store used nuclear fuel on site for extended periods relying on interim storage solutions, which requires compliance with evolving legal and regulatory requirements and could involve significant costs.
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If the costs associated with used nuclear fuel management are higher than anticipated, or if storage or disposal options remain unavailable or subject to more burdensome legal and regulatory requirements, our business, prospects, financial condition, and results of operations could be materially adversely affected.
In addition, if we obtain DOE authorization and/or an NRC license for commercial operation, we may be required to provide financial assurance for the eventual decommissioning of our reactor facilities, which may include funding mechanisms such as prepayment, external sinking funds, surety bonds, or guarantees. Decommissioning costs for nuclear facilities can be substantial and may exceed initial estimates due to unforeseen technical challenges, changes in regulatory requirements, or inflation. Our novel subsurface deployment model may present unique decommissioning challenges, including the potential need to retrieve reactor components from deep underground and remediate subsurface contamination. Any issues in the decommissioning, or any unexpected costs or other liabilities, could materially adversely affect our business, prospects, financial condition, and results of operations.
Changes in government incentives related to nuclear power may adversely affect our business.
Our business and financial model contemplates, in part, the potential monetization of available tax credits and other government incentives, including investment tax credits that may be available for qualifying clean energy projects. We are not currently receiving any such tax credit subsidies, and the availability, timing, and applicability of such incentives to our future projects remain uncertain.
These incentives are subject to change, reduction, elimination, or unavailability due to political, budgetary, or other factors, and may be modified through future legislation, regulatory action, or administrative interpretation. In addition, the ability to monetize such incentives may depend on the availability of tax equity or other financing structures, which may be limited or subject to market conditions.
To the extent that our future commercial deployments depend on the availability of such incentives, any change, reduction, elimination, or unavailability of such incentives could adversely affect the economic viability of our projects, which could materially adversely affect our business, prospects, results of operations, and financial condition.
Risks Related to Our Regulatory Environment
Our business is subject to extensive government regulation, including licensing by the U.S. Nuclear Regulatory Commission, and delays or failures in obtaining required approvals could prevent or delay commercialization of our technology.
The development, construction, and operation of nuclear reactor facilities are subject to extensive federal, state, and local regulation. In the United States, we will be required to obtain and maintain licenses, permits, and other regulatory approvals from the NRC, the DOE, and other governmental authorities before we can construct and operate reactor facilities. Regulatory approval processes for nuclear technologies are complex, time-consuming, and uncertain, and the timeline from initial application to final license issuance can span several years or longer. The NRC and other regulatory authorities may impose conditions on licenses or approvals that increase costs, require design modifications, delay project timelines, or otherwise affect the economic viability of our projects. Regulatory review processes may also allow third parties to challenge or oppose our applications, which could result in lengthy administrative proceedings or litigation. The NRC has limited experience licensing novel reactor designs for deep subsurface emplacement, and regulatory staff may require additional time, resources, or information to evaluate our technology, potentially extending review timelines beyond our current estimates.
In addition, laws and regulations applicable to nuclear technologies, environmental protection, workplace safety, export controls, and other areas tend to evolve and become more stringent over time, and new regulatory requirements could increase our costs or delay our development activities. We cannot predict the timing or outcome of regulatory reviews or whether required approvals will be granted. Furthermore, we may be required to obtain state and local permits, approvals, or authorizations in addition to federal licenses, including permits related to construction, environmental compliance, water use, emissions, effluents, and land use. Such state and local requirements vary by jurisdiction and may involve public hearings, environmental reviews, solicitation and resolution of public comments, or community approval processes that could delay, limit or prevent project development.
If we are unable to obtain or maintain required licenses, permits, or other regulatory approvals, or if such approvals are delayed or granted subject to burdensome conditions, our ability to develop, deploy, and commercialize our Gravity Reactor could be materially adversely affected.
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The DOE’s authorization under our OTA could be terminated or overturned, which could prevent or delay commercialization of our technology.
The DOE’s ability to authorize privately-owned nuclear test facilities on private land under our OTA is a novel application of that authority. Litigation arising under or relating to the AEA and the Energy Reorganization Act of 1974, or a change in policy made by a future administration, could result in this authority being revoked, overturned, limited, modified, or abandoned.
Our current strategy relies on the OTA to support development, demonstration, and testing activities for the Gravity Reactor in preparation for potential commercialization. The OTA does not authorize commercial operation and does not eliminate the need to obtain licenses for commercial deployment. If the OTA is revoked, overturned, limited, modified, or abandoned, it could result in regulatory enforcement actions, a loss or limitation of nuclear indemnification coverage, or other legal or regulatory constraints, any of which could materially adversely affect our ability to develop, test, and advance our technology toward commercialization.
We do not currently have NRC authorization for the commercial operation of any reactor. Even if we are able to conduct testing activities under DOE authorization, delays in obtaining NRC licenses or additional regulatory requirements imposed as part of the NRC licensing process could delay or prevent commercialization of our technology.
Our applications to the NRC may not be approved, and any rework necessary to address NRC concerns could significantly delay the commercialization of our products.
The commercial operation of our Gravity Reactor in the United States will require a license from the NRC. There is no assurance that any applications we submit will be approved, or approved within our anticipated timelines, including due to potential federal staffing constraints or future reductions in government personnel. In addition, during its review process the NRC may require revisions, supplemental information, or other actions or submissions to address concerns it identifies. Our Gravity Reactor’s novel deep borehole emplacement design has not previously been licensed by the NRC, and, even if approved by the NRC, the NRC may require us to modify fundamental aspects of our reactor design, safety systems, or deployment methodology as a condition of licensing. Any such modifications could be time-consuming and costly, could require us to revisit engineering and other work already completed, and could significantly delay the commercialization of our products, which may have a material adverse effect on our business, prospects, results of operations, and financial condition.
Government shutdowns, federal budget delays, federal debt ceiling limitations, or reductions in government spending could adversely impact government spending on U.S. government programs related to our products or services.
Federal government spending reductions or lapses in Congressional appropriations could adversely impact U.S. government programs related to our products or services, including the DOE Reactor Pilot Program. While we believe our products and services do not conflict with the U.S. government’s strategic priorities, government spending on these programs can be subject to negative publicity, political factors and public scrutiny. The risk of future government shutdowns, budget delays or reductions is uncertain, and it is possible that spending cuts may be applied to U.S. government programs across the board, regardless of how programs align with those priorities. Reductions in federal government spending on U.S. government programs related to our services and products, including the DOE Reactor Pilot Program, could materially adversely affect our ability to develop, deploy, and commercialize our Gravity Reactor and affect our business, prospects, results of operations, and financial condition.
Our participation in ongoing litigationchallenging aspects of the NRC’s licensing framework exposes us to regulatory uncertainty, increased scrutiny, and potential delays or adverse outcomes in connection with required NRC approvals.
In April 2025, we joined as a plaintiff in a federal lawsuit, State of Texas et al. v. U.S. Nuclear Regulatory Commission (Case No. 6:24-cv-00507), pending in the U.S. District Court for the Eastern District of Texas. The lawsuit challenges the NRC’s interpretation and application of certain licensing regulations under the Atomic Energy Act, including the NRC’s definition of “utilization facility,” and seeks declaratory and injunctive relief requiring the NRC to revise its licensing framework and undertake new rulemaking under the Administrative Procedure Act (the “APA”). The litigation remains pending and is subject to significant uncertainty, including the possibility of adverse rulings, expanded claims, appeals, or changes in regulatory interpretation or enforcement during its pendency. See Item 3, “Legal Proceedings” for more information.
Depending on the outcome of this litigation, we may face heightened regulatory scrutiny or increased administrative burden in our engagement with the NRC. The outcome may also affect how the NRC processes or evaluates our applications, including any standard design approval applications, combined operating license applications, construction permits, exemptions, or other NRC authorizations we may seek. Any adverse developments in the litigation or related regulatory actions could delay, complicate, or impair our ability to obtain the approvals and permits necessary to design, construct, or commercialize our Gravity Reactors or other technologies, which could materially adversely affect our business, prospects, results of operations, and financial condition.
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We are required to comply with governmental export control, economic sanctions, import and other laws and regulations. Our failure to comply with these laws and regulations could have an adverse effect on our business, prospects, financial condition, and results of operations.
Our business is subject to stringent laws and regulations, including U.S. export control, economic sanctions and import laws and regulations. Unfavorable changes in these laws and regulations or U.S. government licensing policies, or 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, results of operations, financial condition, 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 Gravity Reactor 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 Gravity Reactor 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. 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 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 subject to anti-corruption, anti-bribery, and anti-money laundering laws and regulations, and violations of these laws could result in significant penalties and reputational harm.
We are subject to various anti-corruption, anti-bribery, and anti-money laundering laws and regulations, including the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and similar laws in jurisdictions in which we conduct business.
These laws generally prohibit companies and their employees, agents, and business partners from offering, promising, authorizing, or providing improper payments or anything of value to government officials or other parties to obtain or retain business or secure an improperadvantage. These laws also require companies to maintain accurate books and records and adequate internal controls.
Although we have adopted policies and procedures designed to promote compliance with these laws, there can be no assurance that our employees, contractors, or third-party partners will not take actions in violation of our policies or applicable law. Violations of these laws could result in investigations, substantial civil or criminalpenalties, reputational harm, and the diversion of management attention and resources, any of which could materially adversely affect our business, prospects, results of operations, and financial condition.
Nuclear incidents anywhere in the world could increase regulatory requirements, reduce public acceptance of nuclear power, and adversely affect demand for our technology.
The nuclear energy industry is subject to heightened public scrutiny, political sensitivity and regulatory oversight. Public concerns regarding nuclear safety, waste disposal, environmental impacts, or prior nuclear accidents have in the past and may in the future negatively influence governmental policy, regulatory decisions, and the willingness of utilities, investors, and communities to support nuclear energy projects. Any actual or perceived safety issues at our facilities, or potentially those of our customers, may result in reputational harm to our business and could result in enforcement proceedings brought by governmental regulators, tort liabilities, enhanced maintenance costs, or increased safety infrastructure requirements and associated costs.
Moreover, in the nuclear industry, an accident or incident at any facility in the world can impact all other nuclear facilities in terms of public perceptions, political pressures, and regulatory scrutiny. Accordingly, major nuclear incidents anywhere in the world, including events similar to the accidents at Three Mile Island, Chernobyl, or Fukushima Daiichi, could significantly affect public perception of nuclear power and influence governmental policies regarding nuclear energy, and may result in reputational harm to our business even if not directly related to our operations.
Following the Fukushima accident in 2011, for example, several countries delayed or canceled nuclear development programs, imposed stricter regulatory requirements, or accelerated the shutdown of existing nuclear power plants. Similar events in the future could result in increased regulatory requirements, delays in licensing processes, or reduced governmental and public support for nuclear power.
In addition, terrorist acts or other high-profile incidents involving nuclear facilities or radioactive materials could lead to increased security requirements, additional regulatory scrutiny, or greateropposition to nuclear energy projects.
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Adverse public sentiment toward nuclear power could result in increased regulatory requirements, delays in obtaining approvals, legal challenges, or opposition to the siting or construction of reactor facilities. Any such developments could increase our costs, delay the deployment of our reactors, reduce demand for our technology, or otherwise materially adversely affect our business, prospects, results of operations, and financial condition.
Environmental laws and regulations could increase costs for us or our customers and adversely affect demand for our technology.
Our operations and those of our customers are subject to a variety of federal, state, local, and foreign environmental, health, and safety laws and regulations governing, among other things, air emissions; stormwater discharges; wastewater discharges; land and water use (including drilling and groundwater protection-related regulations); workplace safety; the management, transportation, use, handling, and disposal of hazardous and radioactive materials and waste; and the remediation of releases of hazardous materials. In addition, domestic and international environmental laws and regulations tend to evolve and become more stringent over time, including regulations relating to human health and environmental protection. Relevant governmental authorities may also shift their interpretations of existing laws. Relatedly, we cannot guarantee that our measures to monitor these developments—and the time and resources we spend to comply with applicable laws, regulations and guidelines—will satisfy regulators or other third parties, such as our customers, who may also be subject to extensive government regulation. Any such developments could increase the costs associated with deploying or operating our technology or reduce demand for our products, which could materially adversely affect our business, prospects, financial condition, and results of operations.
Compliance with environmental requirements may require us to incur significant capital expenditures, cooperate with federal, state and international agencies with respect to the preparation and evaluation of environmental impact studies or assessments, obtain and maintain permits or other regulatory approvals, conduct or fund environmental remediation, install pollution control equipment, or implement other operational controls. Failure to comply with such requirements could result in substantial fines, enforcement actions, litigation, or orders or delays restricting or suspending our operations. In particular, any delays, including as a result of any unanticipated regulatory action or inaction, affecting our ability to obtain any necessary environmental or other governmental permits or approvals may increase our costs or delay or complicate the deployment or operation of our reactors. The regulatory approval process can be technically challenging and may result in permit or approval conditions that may impact the financial viability of our business and may provide opportunities for third parties to lodge objections or seek more stringent requirements for our operations. Even if obtained, relevant governmental permits or approvals may be subject to revocation, modification, legal challenge or may not be renewed.
Risks Related to Our Intellectual Property
If we are unable to obtain, maintain, protect, or enforce our intellectual property rights, our competitive position could be adversely affected.
Our success depends in part on our ability to protect the proprietary technologies underlying our Gravity Reactor. We rely on a combination of intellectual property protections afforded by patents (including pending patents), trademarks, and trade secret laws in the United States and other jurisdictions, as well as contractual protections such as confidentiality agreements, assignment agreements, and license agreements to establish and protect our proprietary rights. Despite these measures, our intellectual property rights may still not be protected in a meaningful manner, challenges to contractual rights could arise or third parties could copy or otherwise obtain and use our intellectual property without authorization. The occurrence of any of these events could impede our ability to effectively compete against competitors with similar products and services, any of which could materially adversely affect our business, prospects, results of operations, and financial condition.
Our patent applications may not result in issued patents, and issued patents may be challenged, invalidated, circumvented, or limited in scope. In addition, patent protection may not be available in all jurisdictions where our technology could be used.
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 not have patent protection. Even where patents are issued, competitors may develop technologies that achieve similar results without infringing our patents, including by designing around our patent claims.
We also rely on trade secrets, proprietary know-how, and continuing technological innovation to maintain our competitive position. If our employees, consultants, contractors, suppliers, or other third parties disclose or improperly use our confidential information, or if
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our physical or electronic security measures are breached, we may losevaluable trade secret protection. If we are unable to adequately protect our intellectual property rights, our ability to maintain a competitive advantage could be materially adversely affected.
We may be subject to intellectual property claims that could be costly to defend and could limit our ability to develop or commercialize our technology, and we may be required to enforce intellectual property rights that could be costly to protect.
Third parties may assert that our technologies infringe their patents, trademarks, or other intellectual property rights. From time to time we may receive inquiries or claims from intellectual property holders regarding whether our technologies infringe their proprietary rights.
If a third party successfully asserts an intellectual property claim against us, we could be required to cease making, using, selling, or importing technologies that incorporate the challenged intellectual property, pay substantial damages, obtain licenses from the holders of the infringed rights, or redesign portions of our technology. Such licenses may not be available on commercially reasonable terms or at all.
In addition, defendingagainst intellectual property claims could require significant financial resources and divert management’s attention from our business. Even claims that lack merit could result in substantial legal costs and operational disruption. Any such claims or litigation could materially adversely affect our business, prospects, results of operations, and financial condition.
Litigation may also be necessary to enforce our intellectual property rights or protect our trade secrets. Any litigation of this nature could require significant financial resources and divert management’s attention from our business. Even claims that lack merit could result in substantial legal costs and operational disruption. Any such claims or litigation could materially adversely affect our business, prospects, results of operations, and financial condition.
Disputes regarding inventorship or ownership of our intellectual property could arise.
Our confidentiality and invention-assignment agreements with our employees, consultants and contractors generally provide that those inventions conceived by the party while rendering services to us will be our exclusive intellectual property. While we require our employees, consultants, and contractors to assign such intellectual property to us, if the intellectual property is not automatically assigned (e.g., as work made for hire), 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 and/or others misappropriate those rights in the process.
We may also be subject to claims that former employees, collaborators, contractors, or other third parties have an ownership interest in our patents or other intellectual property. Disputes may arise regarding inventorship, ownership, or licensing rights, particularly where multiple parties have contributed to the development of technologies.
Failure to name the proper inventors on a patent application can render issued patents unenforceable, and inventorship disputes may arise from differing views regarding the contributions of individuals involved in developing our technologies. These disputes may also arise from contractual obligations of third parties or the involvement of foreign nationals in research or development activities.
If we are unable to successfullydefendagainst such claims, we could loseexclusive ownership of valuable intellectual property or be required to grant licenses to third parties. Even if we are successful in defendingagainst such claims, resolving such disputes could result in substantial legal costs and divert management attention from our business.
General Risks Associated with Our Company
Macroeconomic, geopolitical, and trade policy developments could adversely affect our access to capital and liquidity, business and our supply chain.
Our business may be affected by macroeconomic and geopolitical developments outside of our control, including inflation, changes in interest rates, fluctuations in currency exchange rates, adverse developments affecting financial institutions or the financial services industry, global trade tensions, armed conflicts (including the ongoing conflict in Ukraine and the Middle East), public health crises, terrorism, power loss and other disruptions to global markets.
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Such events may disrupt supply chains, increase the cost of materials and components, limit access to financing or result in less favorable financing terms, or affect the ability of our customers, suppliers, and partners to fulfill contractual obligations. Changes in trade policies, tariffs, export controls, or sanctions may also affect our ability to source materials or components from international suppliers.
Any such developments could limit our access to capital, increase our costs, delay our operations, disrupt our supply chain, or adversely affect demand for our technology, which could materially adversely affect our business, prospects, results of operations, and financial condition.
Any acquisitions, partnerships, or joint ventures we enter into could disrupt our business and may not achieve the expected benefits.
From time to time, we may evaluate potential acquisitions, strategic partnerships, or joint ventures. Such transactions involve risks, including difficulties identifying suitable opportunities, financing transactions, integrating acquired businesses, managing joint operations, or realizing anticipated benefits.
These transactions could divert management attention from our core business, increase our expenses, reduce our cash reserves, or result in the impairment of acquired assets. In addition, if financed with debt or equity, such transactions could increase our indebtedness or dilute our existing stockholders.
If we are unable to successfully complete or integrate acquisitions or partnerships, or if such transactions fail to achieve their expected benefits, our business, prospects, results of operations, and financial condition could be materially adversely affected.
We may be unable to adequately control the costs associated with developing and operating our business.
We expect to incur significant expenses as we continue developing our Gravity Reactor, pursue regulatory approvals, scale operations, build partnerships, and operate as a public company. These expenses include research and development costs, procurement and manufacturing expenses, business development activities, operational expenses, and general and administrative costs.
We may also incur significant costs associated with siting, constructing, operating, and maintaining reactor sites. If we are unable to manage these costs effectively, or if our expenses increase faster than anticipated, our margins, profitability, and financial condition could be materially adversely affected.
If we fail to manage our growth effectively, we may be unable to execute our business plan.
We expect to invest significant resources to expand our business from an early-stage company to an organization capable of supporting commercial operations. This expansion may include developing our technology, establishing supply chains, hiring and training personnel, building regulatory and commercial infrastructure, and entering into relationships with strategic partners and government entities.
Rapid growth could place significant strain on our managerial, operational, financial, and other resources. We may encounter difficulties in hiring and retaining qualified personnel, managing suppliers and partners, scaling operations, controlling costs, and maintaining effective internal systems and processes.
If we are unable to manage our growth effectively, our ability to develop and deploy our technology, execute our business plan, and achieve our strategic objectives could be materially adversely affected.
Security breaches, cyber-attacks, or other disruptions to information technology systems, including those of our third-party service providers, could compromise our proprietary information and harm our business.
We rely on information technology systems and third-party service providers to support our operations and protect proprietary information, including trade secrets and technical know-how related to our reactor technologies. Despite our efforts to implement security safeguards, we have experienced incidents, and our systems and those of our third-party providers may be vulnerable to additional cyber-attacks, unauthorized access, computer viruses, malware, ransomware, phishing or other social engineering attacks, or other disruptions.
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Cybersecurity threats have become increasingly sophisticated, and techniques used by attackers evolve rapidly. In addition, certain cybersecurity risks may arise from human error or system misconfigurations. Security breaches or system disruptions could result in the loss or misappropriation of proprietary information, operational disruptions, reputational harm, or increased costs associated with responding to and remediating such incidents, as well as potential regulatory or legal consequences, and could disrupt our business operations or divert management’s attention.
Our use of artificial intelligence technologies, including those provided by third parties, could adversely affect our business.
We incorporate artificial intelligence (“AI”) technologies into certain aspects of our business and may rely on AI tools developed by third parties. The use of AI presents risks and challenges, including the potential for inaccurate or biased outputs, unintended disclosure of confidential or proprietary information, and infringement of third-party intellectual property rights.
The legal and regulatory environment relating to AI is rapidly evolving and may require changes to our use of AI technologies, increase compliance costs, and create risks of regulatory enforcement or liability. In addition, to the extent we rely on third-party AI tools, we are dependent on the practices of those providers, including the data used to train their models and the controls implemented to mitigate associated risks, which may be outside of our control.
Any failure to appropriately develop, implement, or govern the use of AI technologies could result in operational, legal, or reputational harm and could materially adversely affect our business, prospects, results of operations, and financial condition.
Natural disasters and severe weather events could disrupt our operations and supply chain.
Our operations and those of our suppliers and partners may be adversely affected by severe natural disasters, such as earthquakes and other seismic activity, and severe weather events, such as floods, wildfires, high winds, droughts, or storms. Severe weather conditions are expected to be exacerbated in terms of intensity and frequency by climate change. Relatedly, climate change is also expected to contribute to changes to weather patterns, and water availability, among other impacts.
These events and impacts could disrupt our, or our customers’, operations or supply chains, increase insurance or energy costs, or delay the development or deployment of our reactor projects. These events can also result in damage to our properties. Any such disruptions could materially adversely affect our business, prospects, results of operations, and financial condition.
We depend on the continued services of our key personnel, and the loss of one or more members of our management team could adversely affect our business.
Our success depends in significant part on the continued services, experience, and expertise of our founders, senior management, and other key personnel. Our team possesses specialized knowledge related to nuclear engineering, reactor design, subsurface engineering, regulatory engagement, and commercialization of advanced energy technologies.
Competition for highly skilled personnel in the nuclear energy, engineering, and advanced technology sectors is intense. If we are unable to attract, retain, and motivate qualified personnel, or if we lose the services of one or more members of our management team or technical staff, our ability to execute our business plan and advance the development and commercialization of our technology could be adversely affected.
The loss of key personnel could also result in delays in development programs, disruptions to our operations, loss of institutional knowledge, or difficulties in maintaining relationships with regulators, partners, and potential customers, any of which could materially adversely affect our business, prospects, results of operations, and financial condition.
We may be subject to litigation, investigations, claims or other legal proceedings that could be costly to defend and could adversely affect our business.
From time to time, we may become involved in litigation, investigations, claims and other legal proceedings, including those arising in the ordinary course of business. Such matters may involve claims by suppliers, customers, competitors, current or former employees, communities impacted by our operations, governmental or regulatory authorities, or other third parties. We are not currently aware of any material litigation, investigations, claims or other legal proceedings other than those described under Item 3, “Legal Proceedings.”
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Litigation, investigations, claims and other legal proceedings are subject to inherent uncertainties, may be time-consuming and expensive to defend, and may divert management’s attention from our business. Even if we are successful in defendingagainstlitigation, investigations, claims and other legal proceedings, the costs associated with legal defense and the diversion of management attention could adversely affect our business.
In addition, if we are found liable, or if we settle, in any litigation, investigations, claims or other legal proceedings, we could be required to pay substantial damages or penalties, or to modify our business practices. In addition, any litigation, investigations, claims or other legal proceedings could damage our reputation or adversely affect our relationships with customers, partners, or regulators.
Operating as a public company increases our administrative burden and costs.
As a public company, we are subject to the reporting and regulatory requirements of the Securities Act, the Exchange Act, and other federal securities laws and regulations, including compliance with the Sarbanes-Oxley Act of 2002 and related rules adopted by the SEC and the Public Company Accounting Oversight Board. These requirements increase our legal, accounting, and administrative costs and require significant management attention.
In order to comply with these requirements, we must maintain effective disclosure controls and procedures, establish and maintain internal control over financial reporting, prepare and file periodic reports with the SEC, and comply with corporate governance requirements. These obligations require us to devote substantial resources to compliance efforts and may increase our legal, accounting, and advisory expenses. In addition, operating as a public company may make it more difficult and expensive for us to obtain director and officer liability insurance and to attract and retain qualified directors and executive officers.
We have restated in this Annual Report certain previously issued consolidated financial statements to correct certain errors and have identified material weaknesses in our internal control over financial reporting that caused our management to conclude that we did not maintain effective internal control over financial reporting as of December 31, 2024 and 2025, and which could, if not remediated, result in additional material misstatements in our consolidated interim and annual financial statements. We also determined that our disclosure controls and procedures were ineffective as of June 30, 2024, September 30, 2024, December 31, 2024, June 30, 2025, September 30, 2025, and December 31, 2025 due to the material weaknesses in internal control over financial reporting. A failure to maintain effective internal control over financial reporting or disclosure controls and procedures could impact our ability to accurately and timely report our financial results and other material disclosures or otherwise cause us to fail to meet our reporting obligations, which could have a material adverse effect on our operations and investor confidence in our business.
Subsequent to the issuance of our unaudited interim condensed consolidated financial statements as of and for the fiscal quarter ended September 30, 2025, we identified errors related to valuations of SAFE Notes and stock-based compensation expense and determined that (i) our previously issued audited consolidated financial statements for the fiscal year ended December 31, 2024 and for the period from July 17, 2023 (inception) through December 31, 2023, and the unaudited condensed consolidated financial statements for the quarters ended June 30, 2024, September 30, 2024, June 30, 2025, and September 30, 2025 should no longer be relied upon and (ii) our previously issued audited consolidated financial statements for the fiscal year ended December 31, 2024 and the unaudited condensed consolidated financial statements for the quarters ended June 30, 2024, September 30, 2024, June 30, 2025, and September 30, 2025 should be restated. As a result of the aforementioned error and restatement of these filings, we are subject to additional risks and uncertainties, including unanticipated legal and accounting costs, litigation, governmental proceedings or investigations and loss of investor confidence or reputational harm to our business.
Although management did not conduct a formal assessment of internal control over financial reporting in accordance with Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Corporation Finance Interpretations, as a result of the errors described above and the related restatement, the Company identified material weaknesses in its internal control over financial reporting, which caused our management to conclude that we did not maintain effective internal control over financial reporting as of December 31, 2024 and 2025 due to lack of formal controls and standardized procedures related to financial reporting and historical equity accounting processes. We also determined that our disclosure controls and procedures were not effective as of June 30, 2024, September 30, 2024, December 31, 2024, June 30, 2025, September 30, 2025, and December 31, 2025 for the same reason. See Item 9A, “Controls and Procedures” for further details of the material weaknesses and remediation efforts.
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A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s consolidated interim or annual financial statements will not be prevented or detected on a timely basis. As such, if we do not remediate these material weaknesses in a timely manner, or if additional material weaknesses in our internal control over financial reporting are discovered, they may adversely affect our ability to record, process, summarize and report financial information timely and accurately and, as a result, our consolidated interim or annual financial statements may contain material misstatements or omissions. Additionally, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Risks Related to Ownership of Our Common Stock
There is currently no public trading market for our common stock, and one may not develop.
There is currently no public trading market for our common stock. Although we have applied for quotation of our common stock on the OTCQB market, there can be no assurance that our application will be approved or that our common stock will become quoted on the OTCQB or any other over-the-counter trading system.
Because there is currently no trading market for our common stock, stockholders have no ability to sell their shares publicly. Even if our common stock becomes listed on a national securities exchange in the future, trading may be limited, sporadic, or highly volatile. As a result, stockholders may find it difficult or impossible to sell their shares at times and prices that they consider appropriate, or at all. The absence of an active trading market could also impair our ability to raise additional capital through future equity issuances and may make it more difficult for us to use our equity as consideration for acquisitions or to attract and retain employees through equity compensation.
We may not be able to list our common stock or maintain a listing on a national securities exchange.
We currently do not meet the listing requirements of any national securities exchange and may not be able to satisfy those requirements in the future.
National securities exchanges have both quantitative and qualitative listing standards, including requirements relating to stock price, market capitalization, stockholder equity, corporate governance, number of stockholders, and trading history. Even if we are able to satisfy the applicable listing standards when we apply in the future, there can be no assurance that our application will be approved or that we may be able to continue meeting the applicable listing standards.
If our common stock is not listed on a national securities exchange, trading in our shares may be limited to over-the-counter markets, which are generally less liquid, more volatile, and subject to greater price fluctuations than securities listed on a national securities exchange. However, even if our common stock is listed on a national securities exchange, we cannot assure you that an active trading market for shares of our common stock will develop.
We have not voluntarily implemented various corporate governance measures, in the absence of which, our stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.
Because our common stock is not yet listed on a national securities exchange, we are not required to adopt the corporate governance measures required under the rules of any national securities exchange. These measures address matters such as board independence, audit committee oversight, and adoption of certain policies. We have not yet adopted the full suite of corporate governance measures required by any national securities exchange. Accordingly, you may not have the same protections afforded to stockholders of companies whose securities are listed on a national securities exchange.
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If a trading market develops, the market price of our common stock may be volatile.
If a trading market for our common stock develops, the market price of our common stock may fluctuate significantly. The market prices of securities of early-stage companies in emerging industries are often highly volatile.
Factors that could cause the market price of our common stock to fluctuate include, among others:
developments relating to our technology, products, or commercialization plans;
changes in law relating to or delays in regulatory approvals or licensing;
changes in our operating results or financial condition;
announcements by us or our competitors;
changes in market conditions for nuclear energy or clean energy technologies;
additions or departures of key personnel;
commencement of, or involvement in, litigation involving us; and
general economic and market conditions.
In addition, the stock markets in general have experienced significant volatility that has often been unrelated to the operating performance of individual companies. These market fluctuations could adversely affect the trading price of our common stock if a trading market for our common stock develops.
Future sales of our common stock could cause our stock price to decline.
We have filed registration statements with respect to 56,207,422 shares of common stock held by certain of our existing stockholders and 716,084 shares of common stock issuable upon exercise of outstanding warrants held by warrant holders to facilitate the public resale of such securities. We have also granted registration rights to such existing stockholders and warrant holders with respect to shares of our common stock they may acquire in the future, and may grant similar rights in connection with other financing activity in the future. Sales can also be made by stockholders without registration, in accordance with available exemptions under securities laws. If a trading market develops for our common stock, future sales of our common stock by our stockholders (including our executive officers, directors and principal stockholders, which hold a significant portion of our common stock, as described below), or the perception that such sales may occur, could adversely affect the trading price of our common stock.
In addition, to continue operating our business, we will need to raise substantial additional capital, and we are actively evaluating potential financing sources, including equity issuances. We may also issue additional equity and equity-linked instruments in the future, including in connection with the exercise of warrants and options and the vesting and settlement of outstanding RSUs, as well as in connection with financings, strategic transactions, acquisitions, or equity incentive programs. As of the date of this Annual Report, there were warrants outstanding to purchase an aggregate of 716,084 shares of our common stock. The issuance of additional shares will dilute existing stockholders’ ownership percentages and, if a trading market develops for our common stock, any such issuance or the perception that any issuance may occur may adversely affect the trading price of our common stock.
Our executive officers, directors and principal stockholders collectively hold a significant percentage of the voting power of our company.
Our executive officers, directors and holders of more than 5% of our common stock beneficially own collectively approximately 48.93% of the voting power of our outstanding common stock as of March 31, 2026. As a result, these stockholders may be able to influence or control matters requiring stockholder approval, including the election of directors, approval of mergers or other business combinations, and other significant corporate transactions. The interests of these stockholders may conflict with your interests. This concentration of ownership may limit the ability of other stockholders to influence corporate matters and may discourage or delay potential changes in control of the company.
We are an emerging growth company and a smaller reporting company.
We qualify as an “emerging growth company” under the JOBS Act and as a “smaller reporting company” under SEC rules. As a result, we are permitted to rely on certain exemptions from disclosure and other requirements applicable to other public companies.
For example, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act for as long as we remain an emerging growth company.
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In addition, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards and intend to rely on certain reduced disclosure requirements available to emerging growth companies and smaller reporting companies. As a result, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies or smaller reporting companies, which may make comparison of our financial statements with those of other public companies more difficult. In addition, the information that we provide in this Annual Report may be different from the information investors may receive from other public companies in which they hold equity interests.
Investors may find our common stock less attractive if we rely on these exemptions, which could result in a less active trading market for our common stock.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult and may discourage takeover attempts that stockholders may consider favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent a change in control of our company without the approval of our board of directors. These provisions could make it more difficult for stockholders to elect directors who are not nominated by our current board of directors or to take other corporate actions.
These provisions include, among others:
a classified (staggered) board of directors, under which directors are elected for staggered terms and only a portion of the board of directors is elected each year;
provisions that permit the board of directors to determine the size of the board of directors and fill vacancies;
provisions that limit the ability of stockholders to remove directors except for cause;
advance notice requirements for stockholder nominations of directors and proposals for consideration at stockholder meetings; and
authorization for the issuance of “blank check” preferred stock, which could be used by the board of directors to discourage takeover attempts.
In addition, we are subject to Section 203 of the Delaware General Corporation Law, which restricts certain business combinations with stockholders who own 15% or more of our outstanding voting stock unless certain conditions are satisfied.
These provisions may discourage potential takeover attempts or other transactions that stockholders may consider favorable and may reduce the price that investors might be willing to pay for shares of our common stock.
Our amended and restated certificate of incorporation designates certain courts as the exclusive forum for certain stockholder disputes.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, certain legal actions and substantially all disputes between us and our stockholders must be brought in the Delaware Court of Chancery or federal courts of the United States. This, however, shall not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.
These provisions may limit a stockholder’s ability to bring claims in a forum of their choosing and may discourage lawsuits against us and our directors or officers.
We do not intend to pay dividends in the foreseeable future.
We have never declared or paid dividends on our capital stock and currently intend to retain any future earnings to finance the growth and development of our business. As a result, investors may only realize a return on their investment through appreciation in the price of our common stock, which may never occur .
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If our common stock becomes publicly traded and securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.
If a trading market for our common stock develops, such market will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more analysts were to cover us and downgrade our stock or our industries, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, or if our operating results did not meet their expectations, the price of our common stock could decline. If one or more analysts were to initiate and then cease coverage of us or fail to publish reports on us regularly, our visibility in the market could decline or disappear, which in turn could cause our stock price or trading volume to decline.
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MD&A (Item 7)
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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with the consolidated financial statements and the notes to those statements included elsewhere in this Annual Report. Certain statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements that involve risks and uncertainties as described under the heading “Cautionary Note on Forward-Looking Statements” and Item 1A, “Risk Factors”. The forward-looking statements are not historical facts, but rather are based on management’s current expectations, estimates, forecasts, projections, beliefs and assumptions and on information available to us as of the date of this Annual Report about our industry and business. Our actual results could differ materially from the results contemplated by these forward-looking statements.
Overview
We are a nuclear energy technology company developing a SMR based on established PWR technology, with novel emplacement in deep boreholes approximately one mile below the Earth’s surface. Our reactor, which we refer to as the Gravity Reactor, will leverage subsurface conditions to support key containment and operating functions, including the use of hydrostatic pressure from a water column within the borehole to support reactor operating pressure and cooling, and the surrounding geological formation to provide structural confinement and shielding. This approach is intended to reduce reliance on large surface containment structures and other safety-related infrastructure associated with conventional nuclear power plants, support faster deployment timelines, improve security, enhance safety, and enable lower capital and operating costs relative to conventional nuclear facilities, while reducing exposure to environmental and other surface-level hazards.
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Each Gravity Reactor is targeted to produce up to 15 MWe. Individual reactors may be deployed as standalone installations or grouped in clusters of boreholes at a single site, which may enable longer refueling cycles through coordinated fuel management, staggered refueling schedules and more efficient utilization of shared infrastructure, and support larger installations capable of supplying hundreds and potentially thousands of MWe of generation capacity.
The Company’s commercialization strategy is based on a phased deployment plan designed to move toward commercialization in the next three years. Given that reactor criticality using established PWR technology is well understood, the Company is prioritizing validation of the hardest and most differentiated parts of our system, to reduce risk earlier and move more directly toward a commercialization outcome. Specifically, the tests that we want to focus on are drilling to depth at commercial scale, installing and integrating a nuclear system a mile underground, and operating as part of a complete energy ecosystem. We also want to prove that we can do this in time to meet the AI-driven surge in demand for energy. The Company is currently participating in the DOE Reactor Pilot Program, and we expect to demonstrate our system as part of the DOE Reactor Pilot Program.
The first phase of the Company’s phased deployment plan involves engineering validation and proof of concept wells. The Company has a long-term lease for approximately 100 acres located within the Kansas Site and has commenced initial field development activities at the site. As part of this, the Company already drilled its first data acquisition well to gather real-world data up to 6,000 feet deep. Next, the Company will demonstrate its ability to drill a commercial-scale borehole and safely deploy a prototype reactor. The Company continues to advance its reactor design in parallel with these activities, including planning additional drilling activities and conducting related engineering and emplacement work, and is targeting completion of these activities in the coming months. The balance of this year and into early 2027 will be focused on delivery of key components for full-system installation, including well casing, our reactor canister, and heat exchanger, as well as LEU fabrication and loading.
The second phase of the Company’s phased deployment plan involves DOE authorization and one or more commercial pilot wells. Specifically, subject to DOE authorization, the Company intends to demonstrate the Gravity Reactor, and to apply for a commercial license with the NRC in the first half of 2027, converting the same pilot reactor to commercial operation. We are working closely with both the DOE and the NRC to align demonstration and licensing, as we are aiming to move these efforts forward together rather than advancing them in sequence.
The third and final phase of the Company’s phased deployment plan involves the construction of surface facilities and seeking high-volume commercial licensing for deployment of multiple reactors at a single site through clustered boreholes, and subsequently, at multiple sites. We are targeting as early as 2027 to seek such high-volume commercial licensing with the NRC.
The Company’s approach to subsurface reactor deployment is supported by its intellectual property portfolio, which includes issued patents and pending patent applications relating to reactor configuration, deep subsurface emplacement, drilling and casing techniques, thermal-hydraulic performance, instrumentation and monitoring, and other technologies supporting the deployment of underground nuclear reactors. The Company believes that its intellectual property, together with its engineering expertise and ongoing development activities, supports its competitive position.
Legacy Deep Fission was incorporated in July 2023 and remains in the development stage. The Gravity Reactor remains in conceptual and early engineering stages, and the Company has not constructed or operated a commercial reactor or generated revenue. Current activities include reactor development, geological evaluation, large-diameter borehole drilling research and development, geothermal testing, safety analysis, regulatory engagement, site development, and commercialization planning.
The Merger
On the Merger Closing Date, Surfside completed the Merger with Legacy Deep Fission, pursuant to which a wholly owned subsidiary of Surfside merged with and into Legacy Deep Fission, with Legacy Deep Fission continuing as the surviving corporation and becoming a wholly owned subsidiary of Surfside. In connection with the transaction, Surfside changed its name to Deep Fission, Inc.
On the Merger Closing Date, we issued 38,538,922 shares of our common stock to existing holders of Legacy Deep Fission common stock and 85,000 shares of our common stock (the “Advisor Shares”) to an accredited investor in consideration for services rendered in connection with the Merger, while Surfside’s existing stockholders continued to hold an aggregate of 2,166,667 shares of our common stock (the “Retained Pre-Merger Shares”). We also reserved a total of 9,500,884 shares of our common stock under the 2025 Equity Incentive Plan (“2025 EIP”) for future issuances of equity awards at the discretion of our board of directors to officers, employees, consultants and directors and reserved 1,000,000 shares of our common stock under the 2025 Employee Stock Purchase Plan (“2025 ESPP”) for future purchase by employees.
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The Private Placement
Concurrently with the consummation of the Merger, the Company also issued and sold 10,000,000 shares of our common stock in a private placement to certain accredited and institutional investors at a purchase price of $3.00 per share (the “Private Placement”, and together with the Merger, the “Transactions”).
Accounting Considerations
The historical financial statements and related footnotes included in this Annual Report include descriptions of Legacy Deep Fission’s previously outstanding common stock; however, in connection with the Merger, all shares of Legacy Deep Fission common stock were converted into the right to receive shares of our common stock. See “ The Merger” and “ The Private Placement ” above for detailed information regarding the Transactions and the related conversion of the shares of Legacy Deep Fission’s common stock.
For financial reporting purposes, the Merger was treated as a recapitalization and reverse acquisition. Legacy Deep Fission is considered the acquirer for accounting purposes, meaning that the historical financial results of Legacy Deep Fission prior to the Merger are considered our historical financial results under applicable accounting principles. Accordingly, the historical financial statements included in this Annual Report and discussed in this section, for all periods prior to the Merger, are those of Legacy Deep Fission and not Surfside.
Our Intended Business
As described under “Business Model and Revenue Streams” in Item 1, “Business,” our business model is designed to generate revenue from (i) project-level equity participation, including indirect participation in project-level cash flows from electricity sales, (ii) one-time upfront revenue, generally expected to be associated with Gravity Reactor deployment and related upfront project development services and (iii) recurring revenue, generally expected to be associated with technology licensing and operations and maintenance services of Gravity Reactor installations. Because we have not yet commercialized a Gravity Reactor, none of these revenue streams have begun to materialize and are not reflected in our historical results.
Components of Results of Operations
Operating Expenses
General and administrative expenses primarily consist of costs associated with administrative staff salaries, facilities, utilities, insurance, marketing and advertising, stock-based compensation, legal fees and other office expenses related to our business functions.
Research and development (“R&D”) expenses primarily represent costs incurred to develop our technology. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all R&D costs in the periods in which they are incurred.
Other Non-Operating Income (Expense)
Other non-operating income (expense) consists primarily of change in fair value of SAFE Notes (as defined below), interest income, interest expenses, and other miscellaneous expenses.
Restatement of Prior Period Financial Statements
As previously discussed under the heading “Explanatory Note,” we are restating our previously issued consolidated financial statements and related notes for the year ended December 31, 2024 and the unaudited condensed consolidated financial information for the periods ended June 30, 2024, September 30, 2024, June 30, 2025, and September 30, 2025. Refer to Note 2 in the notes to the consolidated financial statements in this Annual Report for additional information. The impact of the restatement is reflected in the “Results of Operations” section within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
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Results of Operations
Comparison of the Year Ended December 31, 2025 and 2024
The following table sets forth our summarized financial information for the periods indicated:
For the Years Ended December 31,
$ Variance
% Variance
(As Restated)
Operating expenses
General and administrative expenses
Research and development expenses
Operating expenses
Operating loss
Other non-operating income (expense)
Interest income
Change in fair value of SAFE Notes
Other income
Total non-operating income (expense)
Net loss
Operating Expenses
General and administrative expenses increased by $11.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in general and administrative expenses was primarily attributable to an increase in the number of employees, which resulted in increase in salary and stock-based compensation expense, as well as increased legal, benefits, and marketing costs.
Research and development expenses increased by $6.0 million 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 progression of the Company’s operating plans and the increase in salary and benefits corresponding with our increase in headcount, as well as increased consulting fees paid to our research and development advisors.
Other Non-Operating Income (Expense)
Other non-operating expense increased by $38.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, largely due to the approximately $39.8 million loss the Company recorded from the change in fair value on the date of conversion of the Company’s previously issued SAFE Notes, which converted into common stock as a result of the Merger.
Liquidity and Capital Resources
Since our inception, we have financed our operations primarily through the issuance and sale of our equity securities. 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 and cash equivalents of $23.7 million. On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock (the “Shares”) at a purchase price of $15.00 per share, to certain accredited and institutional investors pursuant to the subscription agreements for an aggregate purchase price of $80.0 million. The aggregate net proceeds to the Company from the offering was approximately $76.0 million, after deducting fees to the placement agents and expenses payable by the Company. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $66.7 million as of December 31, 2025. We generated a positive cash flow of $17.0 million for the year ended December 31, 2025 due to financing activities.
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We expect to use our proceeds from the 2026 Private Placement for general working capital and corporate purposes, including towards the engineering, research and development of our first pilot nuclear reactor and related technologies. A portion of the net proceeds from the 2026 Private Placement will also be used to cover management, overhead, legal and accounting fees and expenses relating to the Merger and the 2026 Private Placement and could include potential acquisitions of complementary businesses or assets (though none is currently contemplated). Based on our expectation of continued operating losses for at least the near term, we anticipate our existing cash and cash equivalents, together with net proceeds from the 2026 Private Placement, will not be sufficient to operate our business for the next twelve months. Accordingly, we determined that there is substantial doubt about our ability to continue as a going concern. In order to continue to operate our business beyond that time, we will need to raise substantial additional capital. Our independent registered public accounting firm included an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern in its report on our financial statements for the year ended December 31, 2025.
In addition to our cash and cash equivalents currently available to support these activities, which was approximately $80 million as of April 15, 2026, we estimate that we will require $200 million of additional capital to complete development of, and license and commercially deploy, our first commercial reactor, but we expect we can complete the development and begin operation of an initial test reactor with approximately half that amount of additional capital. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all. To the extent that we raise additional capital through the issuance of equity or convertible securities, the ownership interests of our existing stockholders will be diluted. Moreover, the terms of such securities or any other financing may include preferences or other rights that adversely affect the value of, or rights of holders of, our common stock. Debt financing, if available, could result in additional debt service obligations, and debt financings or other financings may involve covenants that restrict our operations or financial flexibility. However, our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that management’s decisions will result in successfulachievement of our business objectives. In addition, our estimate as to the sufficiency of our current cash, cash equivalents and short-term investments and our current operating plan as discussed above are based on assumptions that may prove to be , and we could our capital resources sooner than we currently anticipate.
Cash Flows
Year ended December 31, 2025 and 2024
As of December 31, 2025, our cash and cash equivalents were $23.7 million. The following table shows a summary of our cash flows for the periods presented:
Year Ended
December 31, 2025
December 31, 2024
$ Change
(As Restated)
Net cash used in operating activities
Net cash used in investing activities
Net cash provided by financing activities
Net increase (decrease) in cash
Cash, beginning of period
Cash, end of period
Operating Activities
Net cash used in operating activities increased by $10.3 million, to $13.1 million for the year ended December 31, 2025, compared to the net cash used in operating activities of $2.8 million for the year ended December 31, 2024. The increase in net cash used in operating activities was primarily attributable to increased net losses, changes in working capital, including prepaids and accounts payable, and other current liabilities.
Investing Activities
Net cash used in investing activities increased by $40.8 thousand, to $43.4 thousand for the year ended December 31, 2025, compared to the net cash used in investing activities of $2.7 thousand for the year ended December 31, 2024. The increase was driven by additions by the Company to property and equipment.
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Financing Activities
Net cash provided by financing activities increased by $21.5 million, to $30.1 million for the year ended December 31, 2025, compared to the net cash provided by financing activities of $8.6 million for the year ended December 31, 2024. The increase in net cash provided by financing activities was primarily attributable to proceeds from the Private Placement and additional issuances of SAFE Notes.
Contractual Obligations and Commitments
As of December 31, 2025 and December 31, 2024, we did not have any material contractual obligations or commitments.
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 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 Policies and Estimates
Our financial statements and the related notes thereto included in this Annual Report are prepared in accordance with United States generally accepted accounting principles. The preparation of financial statements also 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 operations, 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 financial condition, results of operations and future performance. We have described our significant accounting policies within Note 3 to our financial statements included in this Annual Report.
SAFE Notes
In 2024 and 2025, the Company issued SAFE Notes in exchange for cash financing. The Safe Notes converted into our common stock in connection with the Merger, and are no longer outstanding. The Company accounted for its SAFE Notes as derivatives under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging , and presented them as long-term liabilities in the accompanying consolidated balance sheets. The determination of fair value for the Company’s SAFE Notes required significant judgment and the use of estimates. We have described the valuation of the SAFE Notes in Note 5 to our financial statements included in this Annual Report.
Stock-Based Compensation
We account for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. We measure all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognize 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. We have historically been a private company and lack company-specific historical information for our 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.
Recent Accounting Pronouncements
A discussion of recently issued accounting pronouncements and recently adopted accounting pronouncements is included in Note 3 to our financial statements included in this Annual Report under the heading “Summary of Significant Accounting Policies.”
