November 4, 2026 - 10-Q: Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 001-43317

Deep Fission, Inc.

(Exact name of registrant as specified in its charter)



Delaware		87-4265302
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2001 Addison St., Suite 300
Berkeley, California 94704

(Address of principal executive offices)

(707) 400-0778

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class:		Trading Symbol(s):		Name of Each Exchange on Which Registered:
Common Stock, par value $0.0001 per share		FISN		The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2026, there were 58,909,588 shares of common stock issued and outstanding.

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DEEP FISSION, INC. AND SUBSIDIARIES

Fiscal Quarter Ended September 30, 2026

Index to Form 10-Q



CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS			3

PART I - FINANCIAL INFORMATION			6

	Item 1:	Financial Statements	6

		Condensed Consolidated Balance Sheets	6

		Condensed Consolidated Statements of Operations	7

		Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	8

		Condensed Consolidated Statements of Cash Flows	10

		Notes to Condensed Consolidated Financial Statements	11

	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

	Item 3:	Quantitative and Qualitative Disclosures About Market Risk	31

	Item 4:	Controls and Procedures	31

PART II - OTHER INFORMATION			32

	Item 1.	Legal Proceedings	32

	Item 1A.	Risk Factors	32

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54

	Item 3.	Defaults Upon Senior Securities	54

	Item 4.	Mine Safety Disclosures	54

	Item 5.	Other Information	55

	Item 6.	Exhibits	56

SIGNATURES			57

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CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report other than statements of historical fact are forward-looking statements.

Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “target,” “potential,” “continue,” “could,” “will,” “would,” or similar expressions, or the negative of these terms or similar expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding:

●

our future results of operations and financial condition;

●

our business strategy, including our commercialization strategy and our ability to generate revenue and the expected function and benefits of our Gravity Nuclear Reactor (“Gravity Reactor”) design and related boreholes;

●

our plans, objectives, and expectations for our business; including those related to the Company’s collaboration with Youngquist (as defined herein);

●

our ability to maintain the listing of our common stock on Nasdaq;

●

our phased deployment plan, including our targeted or expected timelines;

●

our operations and technology, including the development of our technology according to our expectations;

●

the targeted electrical generation capacity and safety expectations of our reactors;

●

our expectations regarding experiences and efficiencies gained through deployments and the impact on later deployments;

●

the requirement to, and ability to obtain, regulatory approvals, including licensing with the NRC (as defined herein);

●

our expectations regarding our potential customer group;

●

our expectations regarding our intellectual property protection, including securing or maintaining any patents;

●

the period over which we anticipate our existing cash will be sufficient to operate our business;

●

our expected costs and the timeline for those costs, including the amount of additional capital required to complete development of, and license and commercially deploy, our first commercial reactor, and the availability of potential financings to obtain such additional capital; and

●

the assumptions underlying or relating to any of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements in this Quarterly Report include, among other things, the factors summarized below:

●

our status as a pre-revenue company, our ability to continue as a going concern, and our ability to achieve or sustain profitability;

●

our ability to raise substantial additional capital through equity, debt or other financing transactions on acceptable terms, or at all, to fund our operations, technology development, regulatory activities, construction, testing and commercialization;

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●

our ability to design, develop, test, validate, license, construct, deploy and operate our Gravity Reactor and related technologies, including the feasibility of our subsurface deployment model and our ability to drill, construct and maintain boreholes and related infrastructure to the required depth, width and technical specifications;

●

our ability to identify, acquire, lease or otherwise obtain access to suitable sites for the construction and operation of our facilities, including sites with appropriate geologic characteristics and regulatory approvals for drilling and nuclear activities;

●

our ability to build, commission and successfully operate test reactors, demonstration facilities or commercial reactors, including under the DOE’s (as defined herein) Reactor Pilot Program or other government programs;

●

our ability to obtain, maintain and renew required licenses, permits and approvals from the NRC, the DOE and other federal, state, local or foreign governmental and regulatory authorities, and the timing and outcome of such regulatory processes;

●

the availability, timing, adequacy and cost of nuclear fuel necessary to operate our reactors, including low-enriched uranium (“LEU”) or other fuels, and our ability to secure fuel supply arrangements on commercially reasonable terms, or at all;

●

the cost, availability and performance of key materials, components and services, including specialized nuclear, drilling and industrial equipment and services, and our reliance on third-party suppliers, contractors and strategic partners;

●

our ability to manage operating expenses, capital expenditures and construction costs, including the risk that development or deployment costs may be higher than anticipated;

●

our ability to meet development, construction, testing, regulatory and commercialization timelines;

●

the willingness of customers, investors, strategic partners and regulators to adopt or support our technology, particularly given our limited operating history and the fact that our technology has not yet been proven at commercial scale;

●

our ability to identify customers for our electricity or related services and to negotiate and enter into power purchase agreements or other long-term commercial arrangements on acceptable terms, or at all;

●

our ability to obtain timely and cost-effective interconnection to electric transmission systems and access to sufficient transmission capacity to deliver electricity generated by our facilities to customers;

●

our ability to attract and retain qualified personnel, including our executive officers, technical leadership and other key employees;

●

our ability to obtain, maintain, protect and enforce our intellectual property rights and to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others;

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our ability to maintain our listing on Nasdaq, and the risk that an active or liquid trading market may not be sustained;

●

the liquidity and potential volatility of the market price of our common stock;

●

the impact of domestic and international economic, financial, political and legal developments on our operations, including changes in interest rates, inflation, taxes, tariffs, trade policies, commodity costs, labor costs and capital markets conditions;

●

changes in laws, regulations, policies, mandates, interpretations, enforcement priorities and funding levels applicable to nuclear energy, environmental protection, drilling, construction and other aspects of our business;

●

the risk of accidents, safety incidents, operational failures, construction incidents or other catastrophic events associated with nuclear facilities or related infrastructure, including risks of personal injury, illness, death, environmental contamination, property damage and associated liability;

●

our potential exposure to environmental liabilities, including under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and other environmental, health and safety laws and regulations;

●

the costs associated with the handling, storage, transportation and disposal of spent nuclear fuel and other radioactive or hazardous materials;

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●

cybersecurity risks affecting our systems, infrastructure, facilities or third-party partners;

●

the outcome of litigation, investigations, regulatory proceedings or other legal matters;

●

risks relating to negative public or political perception of us or the nuclear energy industry generally; and

●

the risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report.

The foregoing does not represent an exhaustive list of factors that could impact the forward-looking statements contained herein or the risk factors that we are faced with. Moreover, we operate in a highly regulated, capital-intensive and evolving industry, and new risks and uncertainties may emerge from time to time that could affect our business, prospects, results of operations, or financial condition.

Forward-looking statements in this Quarterly Report 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 Quarterly Report. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. Forward-looking statements are inherently subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, that could cause our actual results, performance, developments or achievements to differ materially from those expressed in or implied by the forward-looking statements.

Accordingly, you should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

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PART I - FINANCIAL INFORMATION

ITEM 1: Financial Statements

DEEP FISSION, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)



		September 30,			December 31,
		2026			2025
ASSETS
Current Assets
Cash and cash equivalents		$	63,433		$	23,719
Investments in available-for-sale securities			8,282			—
Prepaid expenses and other current assets			21,239			713
Total current assets			92,954			24,432

Property and equipment, net			173			37
Operating lease right-of-use assets			44			—
Long-term prepaid expenses and other non-current assets			1,169			221

Total assets		$	94,340		$	24,690

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable		$	6,172		$	538
Accrued expenses			822			184
Operating lease liabilities - current			36			—
Accrued compensation			3,498			25
RSU liability award			—			1,656
Total current liabilities			10,528			2,403

Operating lease liabilities - non-current			16			—

Total liabilities			10,544			2,403

Commitments and contingencies (Note 7)

Stockholders’ equity (deficit)
Common stock, par value $0.0001 and $0.0001 per share, 300,000,000 shares authorized, 59,779,233 and 51,099,089 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively			6			5
Additional paid-in capital			223,793			89,009
Accumulated deficit			(140,009)			(66,727)
Accumulated other comprehensive income			6			—

Total stockholders’ equity			83,796			22,287

Total liabilities and stockholders’ equity		$	94,340		$	24,690

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

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DEEP FISSION, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)


		For the Three Months Ended						For the Nine Months Ended
		September 30,						September 30,
		2026			2025			2026			2025
Operating expenses
General and administrative expenses		$	10,171		$	6,794		$	37,426		$	9,063
Research and development expenses			11,437			1,920			37,606			3,470
Operating expenses			21,608			8,714			75,032			12,533
Operating loss			(21,608)			(8,714)			(75,032)			(12,533)

Other non-operating income (expense)
Interest income			676			14			1,743			14
Change in fair value of SAFE Notes			—			(36,715)			—			(39,834)
Other income			3			1			7			2
Total non-operating income (expense)			679			(36,700)			1,750			(39,818)

Net loss		$	(20,929)		$	(45,414)		$	(73,282)		$	(52,351)

Other comprehensive loss:
Unrealized gain on investments in available-for-sale securities			6			—			6			—
Total comprehensive loss		$	(20,923)		$	(45,414)		$	(73,276)		$	(52,351)

Basic and diluted weighted average shares outstanding of common stock			58,036,934			23,434,266			55,082,270			17,391,203

Basic and diluted net loss per share of common stock		$	(0.36)		$	(1.94)		$	(1.33)		$	(3.01)

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

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DEEP FISSION, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)


	For the Three and Nine Months Ended September 30, 2025
				Additional				Total
	Common Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance at December 31, 2024	16,320,839	$	2	$	1,641	$	(5,725)	$	(4,082)
Stock-based compensation	—		—		32		—		32
Issuance of restricted stock awards	14,411		—		—		—		—
Net loss	—		—		—		(3,137)		(3,137)
Balance at March 31, 2025	16,335,250		2		1,673		(8,862)		(7,187)
Stock-based compensation	—		—		196		—		196
Cancellation/forfeiture of restricted stock awards	(77,946)		—		—		—		—
Net loss	—		—		—		(3,799)		(3,799)
Balance at June 30, 2025	16,257,304		2		1,869		(12,661)		(10,790)
Stock-based compensation	—		—		5,436		—		5,436
Issuance of restricted stock awards, net of cancellations	2,848,936		—		1		—		1
Issuance of common stock upon conversion of SAFE Notes	19,601,182		2		53,509		—		53,511
Issuance of common stock to PIPE investors	10,000,000		1		29,999		—		30,000
Offering costs	—		—		(2,936)		—		(2,936)
Issuance of placement agent warrants (equity component)	—		—		949		—		949
Issuance costs – placement agent warrants (non-cash)	—		—		(949)		—		(949)
Issuance of common stock to new shareholders upon merger	2,166,667		—		—		—		—
Net loss	—		—		—		(45,414)		(45,414)
Balance at September 30, 2025	50,874,089	$	5	$	87,878	$	(58,075)	$	29,808

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

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DEEP FISSION, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)



	For the Three and Nine Months Ended September 30, 2026
				Additional				Accumulated other		Total
	Common Stock			Paid-In		Accumulated		comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		income (loss)		Equity (Deficit)
Balance at December 31, 2025	51,099,089	$	5	$	89,009	$	(66,727)	$	—	$	22,287
Stock-based compensation	—		—		9,838		—		—		9,838
Modification of RSU liability award	—		—		2,203		—		—		2,203
Vesting of restricted stock units	185,000		—		—		—		—		—
Issuance of private placement common stock	5,333,333		1		79,999		—		—		80,000
Offering costs	—		—		(4,851)		—		—		(4,851)
Issuance of placement agent warrants (equity component)	—		—		1,239		—		—		1,239
Issuance costs – placement agent warrants (non-cash)	—		—		(1,239)		—		—		(1,239)
Net loss	—		—		—		(21,344)		—		(21,344)
Balance at March 31, 2026	56,617,422		6		176,198		(88,071)		—		88,133
Stock-based compensation	—		—		7,340		—		—		7,340
Vesting of restricted stock units	430,000		—		—		—		—		—
Issuance of initial public offering common stock	2,500,000		—		40,000		—		—		40,000
Underwriting discounts and offering costs related to the initial public offering	—		—		(5,709)		—		—		(5,709)
Issuance of common stock for cashless exercise of equity component warrants	9,815		—		—		—		—		—
Issuance of common stock to former SAFE note holders	188,701		—		—		—		—		—
Net loss	—		—		—		(31,009)		—		(31,009)
Balance at June 30, 2026	59,745,938		6		217,829		(119,080)		—		98,755
Stock-based compensation	—		—		5,981		—		—		5,981
Vesting of restricted stock units, net of tax withholding	33,295		—		(17)		—		—		(17)
Change in unrealized gain on investments in available-for-sale securities	—		—		—		—		6		6
Net loss	—		—		—		(20,929)		—		(20,929)
Balance at September 30, 2026	59,779,233	$	6	$	223,793	$	(140,009)	$	6	$	83,796

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

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DEEP FISSION, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



		For the Nine Months Ended
		September 30,
		2026			2025
Cash flows from operating activities:
Net loss		$	(73,282)		$	(52,351)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			34			5
Change in fair value of SAFE notes			—			39,834
Stock-based compensation			23,706			5,664
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			(20,526)			(225)
Long-term prepaid expenses and other non-current assets			(948)			—
Accounts payable			5,634			257
Accrued expenses			638			344
Accrued compensation			3,473			(18)
Net cash used in operating activities			(61,271)			(6,490)

Cash flows from investing activities:
Purchases of property and equipment			(162)			(28)
Investments in available-for-sale securities			(8,276)			—
Net cash used in investing activities			(8,438)			(28)

Cash flows from financing activities:
Proceeds from exercise of restricted stock awards			—			1
Proceeds from convertible SAFE notes			—			2,966
Proceeds from private placement			80,000			30,000
Offering costs paid related to private placement			(4,851)			(2,936)
Proceeds from initial public offering, net of underwriting discounts and commissions			36,800			—
Offering costs paid related to initial public offering			(2,509)			—
Payments of employee tax withholding on net share settlement of restricted stock units			(17)			—
Net cash provided by financing activities			109,423			30,031

Net increase in cash and cash equivalents			39,714			23,513

Cash and cash equivalents, beginning of the year			23,719			6,729
Cash and cash equivalents, end of the period		$	63,433		$	30,242

Supplemental cash flow information:
Right-of-use assets acquired through operating leases		$	44			—
Conversion of SAFE Notes into common stock			—		$	53,511

The accompanying notes are an integral part of these interim unaudited condensed consolidated financial statements.

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DEEP FISSION, INC.

Notes to the Condensed Consolidated Financial Statements

(In thousands, except share, per share, and percentage data)

(UNAUDITED)

Note 1: Description of Business and Basis of Presentation

Organization

Deep Fission, Inc. (“Deep Fission” or the “Company”) was incorporated on July 17, 2023, under the laws of the state of Delaware.

Surfside Acquisition Inc. (“Surfside”) was incorporated in the State of Delaware on December 10, 2021. Prior to the Merger (as defined below), Surfside was a “shell company” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). On September 5, 2025 (the “Merger Closing Date”), Surfside completed a merger (the “Merger”) with Deep Fission Nuclear, Inc. (formerly known as Deep Fission, Inc.), a private Delaware corporation (“Legacy Deep Fission”), pursuant to an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), under 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. For financial reporting purposes, the transaction was treated as a recapitalization and reverse acquisition, with Legacy Deep Fission considered the accounting acquirer. See below, Recapitalization, for the accounting of the Merger.

Following the consummation of the Merger, the business previously conducted by Legacy Deep Fission became the business conducted by the Company. The Company’s headquarters are located in Berkeley, California.

Operations

The Company is a nuclear energy technology company developing a small modular reactor based on established pressurized water reactor technology, with novel emplacement in deep boreholes approximately one mile below the Earth’s surface. The Company is participating in the U.S. Department of Energy (“DOE”) Reactor Pilot Program, and the Company expects to demonstrate its system as part of the DOE Reactor Pilot Program.

Deep Fission’s current activities include test borehole construction, reactor design, safety analysis, thermal-hydraulic modeling, regulatory engagement with the DOE and the NRC, and supply chain development for reactor components and drilling operations.

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations applicable to interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying interim unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Financial information as of December 31, 2025 has been derived from the Company’s audited financial statements and notes thereto as of that date.

For accounting purposes, the Merger was treated as a reverse recapitalization outside the scope of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations” (see Organization above and Recapitalization below), with Legacy Deep Fission considered the accounting acquirer and the Company (formerly Surfside Acquisition Inc.) considered the legal acquirer. Accordingly, these interim unaudited condensed consolidated financial statements represent a continuation of the financial statements of Legacy Deep Fission, with the Merger reflected as the equivalent of Legacy Deep Fission issuing shares for the net assets of Surfside, accompanied by a recapitalization.

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All periods prior to the Merger reflect the historical financial position, results of operations, and cash flows of Legacy Deep Fission. The interim unaudited condensed consolidated financial statements are presented in the name of the legal parent; however, they represent the historical operations of Legacy Deep Fission.

The number of shares and corresponding capital amounts and earnings per share, where applicable, have been retroactively restated to reflect the Common Share Conversion Ratio (as defined below) established in connection with the Merger. No goodwill or other intangible assets were recorded as a result of the transaction.

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on total current assets and total assets.

Liquidity and Going Concern

As of September 30, 2026, the Company had cash and cash equivalents of $63,433 and investments in highly liquid available-for-sale securities of $8,282. The Company continues to incur significant operating losses. For the three months ended September 30, 2026, the Company had a net loss of $20,929. For the nine months ended September 30, 2026, the Company had a net loss of $73,282 and cash used in operating activities of $61,271. As of September 30, 2026, the Company had an accumulated deficit of $140,009. Management expects that significant ongoing operating expenditures will be necessary to successfully implement the Company’s business plan and develop and market its products and services. On June 22, 2026, the Company completed its initial public offering, resulting in proceeds of $34,291, net of underwriting discounts and commissions and offering costs. While the offering strengthened the Company’s liquidity position, management’s current operating plan indicates that the proceeds from the offering, together with existing cash and cash equivalents, will not be sufficient to fund the Company’s planned operations through the one-year period following the issuance of these interim unaudited condensed consolidated financial statements. Accordingly, these circumstances continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these interim unaudited condensed consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to establish a source of revenue and, in the near term, to raise additional capital to fund its operations.

The Company plans to access capital resources through possible public or private equity issuances, debt financings, corporate collaborations, and other means. The Company has historically been able to raise capital through equity and equity-linked instruments, such as Simple Agreements for Future Equity (“SAFE Notes”), private placements of its securities, and public equity issuances. However, no assurance can be provided that it will continue to be successful in raising capital in the future. While the Company believes that it has a reasonable basis for its expectation that it will be able to raise additional funds, there is no assurance that the Company will be able to complete additional financing on acceptable terms, on a timely basis, or at all.

The interim unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern due to the inability to obtain adequate financing in the future.

Recapitalization

As described above, Legacy Deep Fission continued as the surviving corporation and became the Company’s wholly owned subsidiary following the Merger. The Merger was accounted for as a reverse recapitalization and Legacy Deep Fission was considered the accounting acquirer for financial reporting purposes. This determination was based on the facts that, immediately following the Merger:

●

the assets of Legacy Deep Fission represented a significant majority of the assets of the combined company;

●

Legacy Deep Fission stockholders have a majority of the voting power of the combined company;

●

Legacy Deep Fission designated the entire governing body of the combined company;

●

the executive officers of the combined company immediately after the closing of the Merger are the same individuals as those of Legacy Deep Fission immediately prior to the closing of the Merger; and

●

Legacy Deep Fission’s operations comprise the ongoing operations of the combined company.

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At the effective time of the Merger, each outstanding share of Legacy Deep Fission capital stock (after giving effect to the conversion of all SAFE Notes of Legacy Deep Fission into shares of Legacy Deep Fission common stock) was converted into the right to receive 17.32141 shares of the Company’s common stock, rounded to the nearest whole share (“Common Share Conversion Ratio”). Accordingly, all share and per share amounts for all periods presented in the accompanying interim unaudited condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Common Share Conversion Ratio. There was no effect on the number of shares of common stock or preferred stock authorized for issuance under the Company’s amended and restated certificate of incorporation or the par value of such securities. On September 5, 2025, the Company issued 85,000 shares of its common stock to an accredited investor (the “Advisor”) in consideration for services rendered in connection with the Merger.

On September 5, 2025, the Company issued an aggregate of 10,000,000 shares of its common stock at a purchase price of $3.00 per share in a private placement (the “Private Placement”) to certain accredited and institutional investors for aggregate gross consideration of $30,000. The Company also issued warrants to each of the U.S. registered broker-dealers acting as placement agents in connection with the Private Placement representing the right to acquire, on the terms set forth therein, 586,666 shares of its common stock.



Total Legacy Deep Fission shares outstanding prior to Merger		38,538,922
Shares issued to Legacy Surfside shareholders		2,166,667
Shares issued to advisor		85,000
Shares issued to PIPE investors		10,000,000
Total shares outstanding immediately following the Merger		50,790,589

Note 2: Summary of Significant Accounting Policies

The accompanying interim unaudited condensed consolidated financial statements reflect the application of the accounting policies described in this note.

Segments

In accordance with criteria under ASC 280, “Segment Reporting”, which establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer (“CEO”). The Company’s CODM reviews results to assess performance, make decisions, and allocate operating and capital resources of the Company as a whole. The CODM makes decisions and assesses performance at the Company level as one segment. The CODM does not distinguish its principal business activities for the purpose of internal reporting and uses net loss and available capital resources to allocate resources in the annual budgeting and forecasting process, along with using that measure as a basis for evaluating financial performance quarterly by comparing the actual results with historical budgets.

Use of Estimates

The preparation of the accompanying interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the interim unaudited condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results may differ from these estimates.

Fair Value Measurements

The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. There are no transfers in and out of Levels 1 and 2, and activity in Level 3 represents fair value measurements.

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Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company is able to access.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs, other than quoted prices included in Level 1, are observable either directly or indirectly. These inputs may include (a) quoted prices for similar assets in active markets, (b) quoted prices for identical or similar assets in markets that are not active, (c) inputs other than quoted prices that are observable for the asset, or (d) inputs derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Valuations based on inputs that are unobservable and significant to the entire fair value measurement.

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

The Company’s cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term nature of these assets and liabilities. Investments in available-for-sale securities are carried at fair value and classified as Level 1 assets.



					Fair Value Measurements as of September 30, 2026
		Fair Value Total			Level 1			Level 2			Level 3
Investments in available-for-sale securities		$	8,282		$	8,282		$	—		$	—

The Company’s restricted stock unit award (“RSU”) liability (see Note 8) was carried at fair value and classified as Level 3 liabilities.



			Fair Value Measurements as of December 31, 2025
	Fair Value Total		Level 1		Level 2		Level 3
RSU liability award	$	1,656	$	—	$	—	$	1,656

Upon a modification of the settlement features of the liability-classified RSU award that occurred during the nine months ended September 30, 2026, the award was reclassified from liabilities to equity within the accompanying interim unaudited condensed consolidated balance sheets.

Cash and Cash Equivalents

The Company maintains deposits in financial institutions that at times exceed the insured amounts provided by the Federal Deposit Insurance Corporation (“FDIC”). As of September 30, 2026 and December 31, 2025, the amount of cash exceeding the FDIC insurance limit was $61,741 and $23,219, respectively. The Company believes it is not exposed to any significant credit risk to cash. Money market funds and other short-term investments with an original maturity of three months or less are considered cash equivalents.

Investments in Available-For-Sale Securities

The Company has invested a portion of its cash in highly liquid investments classified as available-for-sale debt securities, which are carried at estimated fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income. Investments in available - for - sale securities are made up of high grade, short duration United States (“U.S.”) government and agency debt securities, such as U.S. Treasury notes and U.S. Treasury Bills, denominated in U.S. dollars and with short term original maturities of one year or less. Investments with maturities of less than one year or where the Company’s intent is to use the investments to fund current operations are classified as short-term. Investments with maturities of greater than one year are classified as long-term. Management determines the appropriate classification of its investment in debt securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company reviews its investments for impairment and adjusts these investments to fair value through earnings, as required. As of September 30, 2026, the Company only held available-for-sale debt securities.

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Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance which do not extend the useful lives of the assets are charged to operations as incurred.

The Company reviews its long-lived assets periodically to determine potential impairment by comparing the carrying value of those assets with the estimated future undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future undiscounted cash flows be less than the carrying value, the Company would recognize an impairment loss at that time. No impairment loss was recognized during the three and nine months ended September 30, 2026 and 2025, respectively. The estimated useful lives of the Company’s property and equipment are as follows:



		Useful Life
Equipment		3 years
Furniture & Fixtures		7 years

SAFE Notes

The Company previously issued SAFE Notes in exchange for cash financing. The Company accounted for its SAFE Notes as derivatives under the FASB ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s own Equity”, and ASC 815-10, “Derivatives and Hedging—Overall” and presented them as long-term liabilities in the accompanying interim unaudited condensed consolidated balance sheets. Changes in the fair value of the SAFE Notes were recorded in earnings.

Immediately upon the effectiveness of the Merger on September 5, 2025, the SAFE Notes were converted into shares of the Company’s common stock (see Note 4).

Research and Development Expenses

Research and development (“R&D”) expenses primarily represent costs incurred to develop the Company’s 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. The Company expenses all R&D costs in the periods in which they are incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation.” The Company classifies awards granted to employees, directors and non-employee consultants as either equity-classified or liability-classified based on the terms of the award. Equity-classified awards are measured at the grant-date fair value and recognized as compensation expense over the requisite service period, which is generally the vesting period. Equity-classified awards are not subsequently remeasured. Liability-classified awards are measured at fair value at each reporting date until settlement, with changes in fair value recognized as compensation expense in the period of change. Compensation cost for liability-classified awards is recognized over the requisite service period based on the fair value of the award at each reporting date.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified.

Net Loss Per Common Share

The Company calculates basic net loss per common share in accordance with ASC 260, “Earnings Per Share”, based on the weighted-average number of outstanding common shares during the fiscal period. Diluted loss per common share is based on the weighted-average number of outstanding common shares plus the weighted-average number of potential outstanding common shares. The calculation of diluted net loss does not consider the effect of the warrants to purchase an aggregate of 704,084 shares of common stock with exercise contingent on future events, unvested restricted common stock of 1,555,508, stock options to purchase an aggregate of 8,255,383 shares of common stock, and unvested RSUs of 1,727,166, because their inclusion would be anti-dilutive under the treasury stock method. In periods where potentially dilutive securities are anti-dilutive, such amounts are excluded from the calculations of diluted earnings (loss) per share. All potentially dilutive securities are anti-dilutive for the three and nine months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2025, the Company had SAFE Notes, the conversion of which would have been anti-dilutive.

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Income Tax (Provision) Benefit

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which those temporary differences are expected to reverse.

The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, the Company considers all available positive and negative evidence, including historical operating results, future taxable income, and the reversal of existing taxable temporary differences.

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained upon examination by the relevant taxing authorities. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.

New Accounting Pronouncements

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements”, to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB ASC with the SEC’s regulations. The amendments in ASU 2023-06 will become effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. The Company is currently evaluating the impact of ASU 2023-06 on its interim unaudited condensed consolidated financial statements. Adoption is not expected to have a material impact on the Company’s interim unaudited condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures” as an update to ASC Topic 220-40, which will be effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 was issued to improve the disclosures about a public business entity’s expenses and address requests from investors for more disaggregated disclosures about the types of expenses (including employee compensation, depreciation, and amortization) in commonly presented expense captions (such as general and administrative expenses). In January 2025, the FASB also issued ASU 2025-01 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” to clarify the effective date provisions of ASU 2024-03 related to expense disaggregation disclosures. The guidance can either be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2024-03 and ASU 2025-01 on its interim unaudited condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow Scope Improvements”. The amendments clarify the applicability of the interim reporting guidance in Topic 270, improve the navigability of the interim reporting requirements, and provide a more comprehensive framework for interim disclosures, including a principle that entities disclose events and changes since the last annual reporting period that have a material effect on the entity. ASU 2025-11 is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027, and for all other entities for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted. The guidance can either be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2025-11 on its interim unaudited condensed consolidated financial statements and related disclosures.

The Company does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

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Note 3: Balance Sheet Components

Prepaid Expenses and Other Current Assets and Long-Term Prepaid Expenses and Other Non-Current Assets:

Prepaid expenses and other current assets and long-term prepaid expenses and other non-current assets consisted of the following:



		As of September 30,			As of December 31,
		2026			2025
Prepaid expenses and other current assets:
Prepaid expenses		$	21,195		$	713
Accrued interest receivable			44			—
Total prepaid expenses and other current assets		$	21,239		$	713

Long-term prepaid expenses and other non-current assets:
Long-term prepaid expenses		$	214		$	221
Other			955			—
Total long-term prepaid expenses and other non-current assets		$	1,169		$	221

Prepaid expenses and other current assets and long-term prepaid expenses and other non-current assets primarily consist of advance payments for enriched uranium fuel, casing and other construction materials, and engineering services to support the Company’s research and development activities; prepaid insurance, software subscriptions, and other operating expenses; and a deposit securing a surety bond associated with future well abandonment and remediation obligations. Prepaid expenses expected to be realized within twelve months are classified as current assets, while amounts expected to be realized thereafter are classified as long-term prepaid expenses within non-current assets.

Advance payments for research and development materials and services are recorded as assets until the related goods are delivered or services are performed, at which time the costs are recognized as research and development expense, unless the related assets qualify for continued capitalization. Costs of qualifying capitalized assets are subsequently recognized in research and development expense or general and administrative expense as the assets are consumed, depreciated, or amortized. Other prepaid expenses are recognized over the periods benefited. The surety bond deposit is classified as a long-term asset and will remain recorded as an asset until refunded or otherwise applied in accordance with the underlying agreement.

Property and Equipment, net

Property and equipment, net consisted of the following:



		As of September 30,			As of December 31,
		2026			2025
Property and equipment		$	208		$	46
Less: accumulated depreciation			(35)			(9)
Property and equipment, net		$	173		$	37

Depreciation expense for the three months ended September 30, 2026 and 2025 was $12 and $3, respectively, and $26 and $5 for the nine months ended September 30, 2026 and 2025, respectively.

Note 4: SAFE Notes

During the nine months ended September 30, 2025, the Company issued SAFE Notes in exchange for an aggregate amount of $2,894. The Company received total cash proceeds during the period of $2,966, consisting of $2,894 of cash from the issuance of SAFE Notes and $72 of cash received from the subscription of a SAFE Note.

Prior to completion of the Merger, each SAFE Note holder gave consent to convert into shares of the Company’s common stock at the valuation cap reflected in each SAFE Note. In connection with the Merger, all SAFE Notes converted into 19,601,182 shares of the Company’s common stock, and the Company recorded a loss from the change in fair value on the date of conversion of approximately $39,834.

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In May 2026, the Company issued 188,701 shares of its common stock to former holders of our previously issued SAFE Notes, as previously agreed upon. The issuance related to the Company’s September 2025 financing activity and, in connection with this issuance, the investors executed settlement agreements releasing the Company from any potential future claims related to the conversion of the SAFE Notes.

There were no issuances of SAFE Notes nor any subscriptions of SAFE Notes during the nine months ended September 30, 2026.

Note 5: Fair Value Measurements

The following is a description of the valuation methodology and significant inputs used for each asset and liability measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset or liability within the fair value hierarchy.

The Company’s SAFE Notes were recorded at fair value on the Company’s historical consolidated balance sheets. The fair value of the Company’s SAFE Notes was based on significant inputs not observable in the market which cause the instrument to be classified as a Level 3 measurement within the fair value hierarchy. The valuation used weighted average probabilities estimated by management considering pay-offs under various scenarios as follows: (i) an equity financing where the SAFE Notes would convert into certain preferred stock; (ii) a liquidity event (change of control or initial public offering) where the SAFE Note holders would have an option to receive either a cash payment equal to the invested amount under such SAFE Note, or a number of shares of preferred stock equal to the invested amount divided by the liquidity price; and (iii) a dissolution event where the SAFE Note holders would have been entitled to receive a portion of the related proceeds equal to the purchase amount. Management estimated that equity financing or liquidity events were the predominant settlement scenarios at each period end. The Company determined the fair value of the SAFE Notes under the Monte Carlo simulation method which was used to estimate the future market value of invested capital (“MVIC”) of the Company at an equity financing event and the expected payment to the SAFE Note holders at each simulated MVIC value. The Company believed these assumptions would be made by a market participant in estimating the valuation of the SAFE Notes. The Company assessed these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates was obtained while the SAFE Notes were outstanding. The determination of fair value for the Company’s SAFE Notes required significant judgment and the use of estimates. Additionally, the valuation scenarios described above reflected the original contractual terms of the SAFE Notes and anticipated early-stage financing structures. However, the Company completed the Merger with a concurrent issuance of common stock, and in connection with the Merger, the Company obtained consent from all holders of the SAFE Notes to convert their SAFE Notes into common stock rather than preferred stock. Changes in the fair value of the SAFE Notes were recognized on the Company’s historical consolidated statements of operations until their conversion to common stock occurred upon the Merger on September 5, 2025.

The following table presents a reconciliation of the Company’s SAFE Notes liability:



		SAFE Notes
As of December 31, 2024		$	10,783
SAFE Notes issued during the period			2,894
Change in fair value during the period			39,834
Conversion of SAFE Notes to common stock			(53,511)
As of September 30, 2025		$	—

All SAFE Notes were converted into shares of the Company’s common stock as part of the Merger in September 2025, and therefore there were no SAFE Notes outstanding as of September 30, 2026 and December 31, 2025, respectively.

Fair value for the Company’s available-for-sale securities is determined using unadjusted quoted market prices in active markets for identical assets, so these investments are classified as Level 1 within the fair value hierarchy. Refer to Note 6 for more information.

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Note 6: Financial Instruments

The Company’s available-for-sale securities consist of U.S. Treasury securities and are carried at fair value on the Company’s interim unaudited condensed consolidated balance sheets. Unrealized gains and losses are recognized in accumulated other comprehensive loss. The following table summarizes the amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair value of the Company’s available-for-sale debt securities as of September 30, 2026:



		Amortized			Allowance for			Total Unrealized			Total Unrealized
		Cost			Credit Losses			Gains			Losses			Fair Value
U.S. Treasury securities		$	8,276		$	—		$	6		$	—		$	8,282
Total available-for-sale securities		$	8,276		$	—		$	6		$	—		$	8,282

Note 7: Commitments and Contingencies

In February 2026, the Company entered into an operating lease, as the lessee, for approximately 100 acres located within the Great Plains Industrial Park in Parsons, Kansas (the “Kansas Site”). The agreement provides for a contractual term of 99 years, with two 25-year renewal options; however, for purposes of ASC 842, the Company determined the lease term to be the two-year minimum noncancelable period, as it is not reasonably certain to continue the lease beyond that period. The lease agreement also includes a mandatory purchase option for a purchase price of approximately $5,000 if the Company is granted a license for commercial operation of the future reactor by the NRC at the Kansas Site. The Company has commenced initial site development activities intended to inform borehole design, drilling techniques, and site suitability for future reactor deployment. In connection with the Kansas Site, the Company will be subject to requirements related to plugging and abandonment once drilling of the non-nuclear demonstration borehole begins. During the three months ended September 30, 2026, the Company purchased a surety bond and deposited funds in the amount of $913 to provide financial assurance for coverage of the future plugging and abandonment costs of the well in conjunction with obtaining the permit to drill. The surety bond is recorded in Other non-current assets on the Company’s interim unaudited condensed consolidated balance sheets.

In the normal course of business, the Company may be subject to contingencies, including litigation, investigations, claims and other legal proceedings, including those arising in the ordinary course of business. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter. The Company has not had any litigation, investigations, claims or other legal proceedings for which it should recognize a liability. As such, the Company has not recorded any liability for these in the interim unaudited condensed consolidated financial statements.

Note 8: Stockholders’ Equity

Common Stock

As of September 30, 2026, the Company had 300,000,000 shares of common stock authorized with a par value of $0.0001.

The September 5, 2025 Private Placement

Concurrently with the consummation of the Merger, the Company also issued and sold 10,000,000 shares of its common stock in the Private Placement to certain accredited and institutional investors at a purchase price of $3.00 per share (the “September 2025 Private Placement”). The Company incurred offering costs of $2,910 in connection with the September 2025 Private Placement, which were recorded as a reduction of the gross proceeds and recognized as a reduction to additional paid-in capital within stockholders’ equity.

The February 5, 2026 Private Placement

On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock 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 $80,000 (the “February 2026 Private Placement”). The Company incurred offering costs of $4,851 in connection with the February 2026 Private Placement, which are recorded as a reduction of gross proceeds and recognized as a reduction to additional paid-in capital within stockholders’ equity.

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Initial Public Offering

On June 22, 2026, the Company completed its initial public offering (the “IPO”) of 2,500,000 shares of its common stock at a public offering price of $16.00 per share. The Company received gross proceeds of approximately $40,000. After deducting underwriting discounts and commissions of $3,200 and offering expenses of $2,509 paid by the Company, net proceeds from the IPO were $34,291. Total offering expenses paid during the quarter ended September 30, 2026, were approximately $2,397.

In connection with the IPO, the Company granted the underwriters a 30-day option to purchase up to an additional 375,000 shares of its common stock at the initial public offering price, less underwriting discounts and commissions. During the quarter ended September 30, 2026, the option expired unexercised, and no additional shares were issued by the Company.

The Company intends to use the net proceeds from this offering for general working capital and corporate purposes, including towards the engineering, research and development, licensing and construction of its first pilot nuclear reactor and supporting the advancement, development, and commercialization of related technologies.

Warrants

As part of the February 2026 Private Placement, the Company issued warrants to purchase an aggregate 129,418 shares of its common stock, subject to customary anti-dilution adjustments for stock splits, stock dividends, and similar events, at an exercise price of $15.00 per share (the “February 2026 Warrants”) to the placement agents. The February 2026 Warrants expire on the earlier of (i) five years after the Merger Closing Date and (ii) three years after the Company’s shares of common stock are listed on a national securities exchange (as defined in the February 2026 Warrants agreement). The February 2026 Warrants are indexed to the Company’s own stock and do not permit net cash settlement under circumstances outside of the Company’s control, and thus were accounted for as equity-classified instruments in accordance with ASC 718 and ASC 815-40. The February 2026 Warrants were measured at their grant-date fair value of $9.58 per warrant share, using a Black-Scholes valuation model. The total fair value of $1,239 was recorded as an equity issuance cost and reflected as a reduction to additional paid-in capital, with a corresponding increase to additional paid-in capital for the warrant equity, resulting in no net impact to total stockholders’ equity.

During the nine months ended September 30, 2026, 12,000 warrants were exercised on a cashless basis pursuant to the terms of the agreement. As a result, the Company issued a net 9,815 shares of its common stock. No cash proceeds were received by the Company in connection with the exercise, and the carrying amount associated with the exercised warrants was reclassified within additional paid-in capital, with no impact on total stockholders’ equity.

Equity Incentive Plans

On August 29, 2025, the board of directors of Legacy Deep Fission approved the 2025 Equity Incentive Plan (the “Pre-Merger Equity Plan”), which permitted the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), RSUs, and other stock awards to employees, directors and consultants of Legacy Deep Fission. Subject to certain capitalization adjustments described in the Pre-Merger Equity Plan, the maximum aggregate number of shares of common stock that was issuable pursuant to the Pre-Merger Equity Plan was 84,351 shares. As of the effective date of the Merger, all outstanding options to purchase shares of Legacy Deep Fission common stock were converted into options to purchase shares of the Company’s common stock. Following the effective date of the Merger, no additional equity awards were permitted to be granted under the Pre-Merger Equity Plan; however, the Pre-Merger Equity Plan will continue to govern the terms and conditions of all outstanding equity awards previously granted under the Pre-Merger Equity Plan.

Awards granted prior to the Pre-Merger Equity Plan were approved by the board of directors and consisted of RSAs, with service-based vesting terms ranging from immediate vesting to four years.

On September 5, 2025, in connection with the Merger, the board of directors (the “Board”) and the stockholders of the Company approved the 2025 Equity Incentive Plan (the “2025 Plan”), which permits the grant of ISOs, NSOs, SARs, RSAs, RSUs, performance awards, and other awards to the Company’s employees, directors and consultants, including employees and consultants of the Company’s affiliates. The Company initially reserved 9,500,884 shares of common stock (the “Share Reserve”) for the issuance of awards under the 2025 Plan. The Share Reserve will automatically increase on January 1 of each year for a period of up to nine years commencing on January 1, 2027 and ending on (and including) January 1, 2035, in an amount equal to five percent (5%) of the total number of shares of common stock outstanding on December 31 of the preceding year; provided, however, that the board of directors may act prior to January 1 of a given year to limit the increase for such year to a lesser number of shares of common stock.

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On July 17, 2026, the Company’s stockholders approved an amendment to the 2025 Plan to increase the number of shares of common stock authorized for issuance under the 2025 Plan by 5,000,000 shares. The amendment did not otherwise materially modify the terms of the 2025 Plan.

In the event of any merger, reorganization, recapitalization, reincorporation, or other such transaction as defined in the 2025 Plan (a “Capitalization Adjustment”), the board of directors is allowed to proportionately adjust the classes and maximum number of shares of common stock subject to the 2025 Plan and the maximum number of shares by which the Share Reserve may annually increase; the classes and maximum number of shares that may be issued pursuant to the exercise of ISOs; and the classes and number of securities and exercise price, strike price or purchase price of common stock subject to outstanding equity awards. No fractional shares or rights for fractional shares of common stock shall be issued under the 2025 Plan.

RSAs, RSUs, and Stock Options

During the nine months ended September 30, 2026 and 2025, the Company’s Board approved the issuances of RSAs, RSUs, and Stock Options to employees, officers, directors, and consultants. Stock-based compensation expense is measured based on the fair value of awards in accordance with ASC 718. Equity-classified awards are measured at grant-date fair value and are not subsequently remeasured. Liability-classified awards are remeasured at fair value at each reporting date until settlement, with changes in fair value recognized in stock-based compensation expense. The cost of stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the respective award. Grants ranged from immediate vesting to over four years. Prior to the Company having an observable transaction for the sale of common stock, the Company estimated the fair value of common stock using invested capital multiple and discounted present value to arrive at equity available for common shareholders. For restricted common stock awards, shares are issued concurrently with the issuance of restricted common stock.

A summary of the restricted common stock award activity during the nine months ended September 30, 2026, is as follows:



		Restricted Common Stock
				Weighted
		Number of		Average
		Shares		Fair Value
Unvested as of December 31, 2025		2,705,423		$	0.76
Granted		—			—
Vested		(1,149,915)			0.75
Forfeited or cancelled		—			—
Unvested as of September 30, 2026		1,555,508		$	0.91

A summary of the RSU activity during the nine months ended September 30, 2026, is as follows:



	RSUs
		Weighted
	Number of	Average
	RSUs	Fair Value
Unvested as of December 31, 2025	669,451	$	7.20
Granted	1,708,131		9.96
Vested	(650,416)		15.00
Forfeited or cancelled	—		—
Unvested as of September 30, 2026	1,727,166	$	7.53

A summary of the stock option activity during the nine months ended September 30, 2026, is as follows:


				Weighted			Weighted
		Number of		Average			Average
		Options		Exercise Price			Fair Value
Outstanding as of December 31, 2025		2,325,059		$	2.87		$	3.03
Granted		6,062,464			15.53			10.48
Exercised		—			—			—
Forfeited or cancelled		(132,140)			5.49			5.46
Outstanding as of September 30, 2026		8,255,383		$	12.13		$	8.47
Exercisable as of September 30, 2026		913,488		$	3.16		$	2.18

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The stock options were valued at the grant date using the Black-Scholes pricing model using the range of inputs as indicated below:



Risk-free interest rate	3.62 - 4.49	%
Expected term (in years)	1.42 - 6.25
Expected volatility	68.59 - 110.58	%
Expected dividend yield	0	%

The risk-free interest rate is the rate available as of the option date on zero-coupon U.S. government issues with a remaining term equal to the expected term of the option using the simplified approach. The Company uses the simplified method to estimate the expected term of stock options because it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The Company currently estimates volatility by using the weighted average implied and historical volatility of the share price of peer companies. The Company has not paid dividends in the past and does not plan to pay any dividends in the foreseeable future.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified in the statement of operations. Total stock-based compensation expense for the three months ended September 30, 2026 and 2025, was $5,981 and $5,436, respectively and $23,706 and $5,664 for the nine months ended September 30, 2026 and 2025, respectively. During the first quarter of 2026, the Company modified the liability-classified RSU award to remove the ability to settle the award in cash. As a result, the award no longer met the criteria for liability classification and was reclassified to equity. The modification was accounted for in accordance with ASC 718 and resulted in the remeasurement of the award at the fair value of $15.00 per share on the modification date. The RSU liability balance as of the modification date of $2,203 was reclassified to additional paid-in capital. The remeasurement resulted in a total incremental compensation cost of $2,691, which is recognized over the vesting period of the award.

As of September 30, 2026, the Company had unrecognized stock-based compensation expense of $70,745, which will be recognized over a weighted average period of 2.96 years.

Preferred Stock

As of September 30, 2026, the Company had 10,000,000 shares of preferred stock authorized at a par value of $0.0001. No preferred stock was issued and outstanding.

Note 9: Income Taxes

Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date ordinary income or loss, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for both the three and nine months ended September 30, 2026 and 2025 was zero. The provision differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax loss primarily due to the change in valuation allowance. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, and permanent differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes. The deferred tax assets are comprised primarily of net operating loss carry forwards. As of September 30, 2026, and December 31, 2025, the deferred tax assets continue to be subject to a full valuation allowance. The Company maintains the valuation allowance based on the analysis of its cumulative loss position.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740 requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company has completed its initial assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025 and concluded that there would be no impact to its effective tax rate.

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Note 10: Related Party Transactions

On August 31, 2026, the Company entered into separate advisory agreements with two related parties: (a) Mark Tompkins, a former director of Surfside and a 5% or greater holder of the Company, and (b) Edward Eisler, who shares voting and dispositive power over shares held by EE Holdings Limited, a 5% or greater holder of the Company. Under the agreements, each advisor will provide certain strategic advisory and consulting services to the Company, including in connection with the Company’s financial strategy, evaluation of financing alternatives, and preparation for potential financing activities. As compensation for the services to be provided under the agreements, the Company granted each advisor 500,000 RSUs under the 2025 Plan, for an aggregate of 1,000,000 RSUs. The RSUs vest over two years, with 50% vesting on the first anniversary of the effective date of the applicable agreement and the remainder vesting monthly over the following 12 months, subject to the applicable advisor’s continued service on each applicable vesting date. The RSUs had a grant date fair value of approximately $6.71 per unit, for a total fair value of approximately $6,710. The advisory agreements and related RSU grants were reviewed and approved by the Audit Committee in accordance with the Company’s Related Person Transaction Policy. Other than the RSUs and reimbursement of out-of-pocket expenses incurred in performing the services, the advisors are not entitled to any other compensation or benefits under the agreements. No expenses were reimbursed during the three and nine months ended September 30, 2026, and no amounts were due to or from either advisor as of September 30, 2026. Refer to Note 8 for information regarding the RSUs and the related stock-based compensation expense.

During the nine months ended September 30, 2025, the Company was party to a consulting agreement with a related party, Deep Isolation Nuclear, Inc., a company co-founded by Deep Fission’s co-founder and CEO, to develop certain technical and regulatory guidance for the Company. Deep Fission’s CEO currently serves as chair of the board of directors of Deep Isolation Nuclear, Inc. During the three and nine months ended September 30, 2025, the Company paid $38 and $50, respectively, to Deep Isolation Nuclear, Inc.

Note 11: Subsequent Events

On October 16, 2026, the Company entered into a Master Energy Purchase Agreement (the “Agreement”) with the Great Plains Development Authority relating to a planned commercial nuclear power project at the Great Plains Industrial Park in Parsons, Kansas. The Agreement is subject to regulatory approvals and other conditions to commercial operation, and electricity purchases will depend on actual tenant demand, with no minimum purchase obligation.

Note 12: Restatement of Previously Issued Consolidated Financial Statements and Unaudited Interim Financial Information

As discussed in Note 2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the Company restated its previously issued consolidated financial statements, including the unaudited condensed consolidated financial statements for the three and nine month periods ended September 30, 2025, to correct errors related to the valuation of certain SAFE Notes and stock-based compensation. The accompanying comparative unaudited condensed consolidated financial statements as of and for the three and nine month periods ended September 30, 2025 reflect those previously restated amounts. Refer to Note 2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding the nature and impact of the restatement.

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ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our interim unaudited condensed consolidated financial statements and the related notes and other financial information included in this Quarterly 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 Part I, Item 1A, “Risk Factors” in this quarterly report. 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 Quarterly Report about our industry and business. Our actual results could differ materially from the results contemplated by these forward-looking statements.

Unless otherwise indicated or the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to “we,” “us,” “our,” the “Company,” and “Deep Fission” refer to Deep Fission, Inc. and its consolidated subsidiaries.

Overview

We are an early-stage nuclear energy technology company developing a small modular reactor (“SMR”) based on established pressurized water reactor (“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, is designed to 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, and is designed to support faster deployment timelines, improve security, enhance safety, and enable lower capital and operating costs relative to conventional nuclear facilities, while potentially reducing exposure to environmental and other surface-level hazards.

Each 3x3 Gravity Reactor is targeted to produce up to 15 megawatts of electric power output (“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.

Our commercialization strategy is based on a phased deployment plan under which we are targeting initial commercial deployment as early as 2027. Given that reactor criticality using established PWR technology is well understood, we are prioritizing validation of the hardest and most differentiated parts of our system, to reduce risk earlier and move more directly toward a commercialization outcome. Our key demonstration objectives include drilling to depth at commercial scale, installing and integrating a nuclear system a mile underground, and operating as part of a complete energy ecosystem. Critically, we aim to prove that each of these milestones can be achieved on a timeline sufficient to meet the AI-driven surge in demand for energy. We are currently participating in the U.S. Department of Energy (“DOE”) Reactor Pilot Program and expect to demonstrate our system as part of that program.

The first phase of our phased deployment plan involves engineering validation and proof of concept wells. We have a long-term lease for approximately 100 acres located within the Great Plains Industrial Park in Parsons, Kansas (the “Kansas Site”) and have commenced initial field development activities at the site. As part of this phase, we have already completed our first data acquisition well to gather real-world data up to 6,000 feet deep. We are currently advancing our second, near full-scale proof-of-concept well, which is intended to further validate our drilling and emplacement approach. We continue to advance our reactor design in parallel with these activities, including planning additional drilling activities and conducting related engineering, safety analysis and emplacement work, and we are targeting completion of these activities in the coming months. In September 2026, the Company entered into a non-binding memorandum of understanding with Youngquist Brothers, LLC (“Youngquist”) to evaluate and test drilling and borehole-construction methods to support the Company’s underground reactor deployment model. Neither party is obligated to enter into a definitive agreement or pursue any project beyond the evaluation and testing contemplated by the memorandum of understanding, and there can be no assurance that the collaboration will result in a commercial agreement, a broader or longer-term commercial relationship, or any future project. In September 2026, we lowered a full-size prototype canister into a 34-inch-wide borehole, aligned it and brought it back to the surface. The balance of this year and into 2027 will be focused on the delivery of key components for full-system installation, including well casing, our reactor canister, and heat exchanger, as well as LEU fabrication and loading.

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The second phase of our phased deployment plan involves DOE authorization and one or more commercial pilot wells. In July 2026, the DOE approved our Nuclear Safety Design Agreement for the Gravity Reactor, allowing us to advance to the next phase of the DOE review process, including submission of a Preliminary Documented Safety Analysis. Subject to further DOE authorization, we intend to demonstrate the Gravity Reactor, and apply for a commercial license with the U.S. Nuclear Regulatory Commission (“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 our 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, and anticipate at least a one-year lag between the start of construction and revenue recognition. We are targeting initial commercial deployment as early as 2027 of up to 5 MWe, which we expect to connect directly to transmission lines. This initial deployment is separate from our Master Energy Purchase Agreement with the Great Plains Development Authority, which covers an initial phase of 150 MW at the Great Plains Industrial Park targeted for commercial operation in September 2028.

Our approach to subsurface reactor deployment is supported by our 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. We believe that our intellectual property, together with our engineering expertise and ongoing development activities, supports our competitive position.

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 Plan 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.

The September 2025 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 February 2026 Private Placement

On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock at a purchase price of $15.00 per share, to certain accredited and institutional investors pursuant to the subscription agreement for an aggregate purchase price of $80.0 million (the “February 2026 Private Placement”). The Company incurred offering costs of $4.9 million in connection with this offering, which are recorded as a reduction of gross proceeds and recognized as a reduction to additional paid-in capital within stockholders’ equity.

Concurrently with this offering, the Company also issued warrants to purchase an aggregate 129,418 shares of its common stock, subject to customary anti-dilution adjustments for stock splits, stock dividends, and similar events, at an exercise price of $15.00 per share (the “February 2026 Warrants”). The February 2026 Warrants expire on the earlier of (i) five years after the Merger closing and (ii) three years after the Company’s shares of common stock are listed on a national securities exchange (as defined in the February 2026 Warrants agreement).

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Initial Public Offering

On June 22, 2026, the Company completed its IPO of 2,500,000 shares of its common stock at a public offering price of $16.00 per share. The gross proceeds to the Company from the public offering were $40.0 million. After deducting underwriting discounts and commissions and offering expenses paid by the Company, net proceeds from the IPO were $34.3 million. As part of the IPO, the Company granted the underwriters a 30-day option to purchase up to an additional 375,000 shares of its common stock at the initial public offering price for any over-allotment, less underwriting discounts and commissions. On July 17, 2026, the option expired unexercised, and no additional shares were issued by the Company.

Accounting Considerations

The interim unaudited condensed consolidated financial statements and related footnotes included in this Quarterly 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 September 2025 Private Placement” above for detailed information regarding the Merger and the September 2025 Private Placement 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 interim unaudited condensed consolidated financial statements included in this Quarterly 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,” of the Annual Report on Form 10-K for the year ended December 31, 2025, 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 personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expense, as well as legal and professional fees, marketing and advertising, business development, insurance, facilities, utilities, and other office expenses related to our business functions.

Research and development 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 expense, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all research and development 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, interest income, interest expenses, and other miscellaneous expenses.

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Results of Operations

Comparison of the Three Months Ended September 30, 2026 and 2025

The following table sets forth our summarized financial information for the periods indicated:


	For the Three Months Ended
	September 30,
	2026		2025		$ Variance		% Variance
(in thousands, except percentage data)
Operating expenses
General and administrative expenses	$	10,171	$	6,794	$	3,377	50	%
Research and development expenses		11,437		1,920		9,517	496	%
Operating expenses		21,608		8,714		12,894	148	%
Operating loss		(21,608)		(8,714)		(12,894)	148	%

Other non-operating income (expense)
Interest income		676		14		662	4,729	%
Change in Fair Value of SAFE Notes		—		(36,715)		36,715	100	%
Other income		3		1		2	200	%
Total non-operating income (expense)		679		(36,700)		37,379	102	%

Net loss	$	(20,929)	$	(45,414)	$	24,485	54	%

Operating Expenses

General and administrative expenses increased by $3.4 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase in general and administrative expenses was primarily attributable to increased legal, accounting, audit, listing and compliance costs, marketing and branding costs, higher insurance costs, and increased personnel costs due to an increase in the number of employees year over year, partially offset by a decrease in non-cash stock-based compensation expense during the quarter.

Research and development expenses increased by $9.5 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was primarily attributable to the advancement of the Company’s operating plans and progression of the first phase of the Company’s phased deployment plan, including increased reactor pilot project manufacturing, construction, design, and pre-operational activities. The increase was also driven by higher personnel costs and non-cash stock-based compensation expense associated with increased headcount year over year.

Other Non-Operating Income (Expense)

Other non-operating income (expense) increased by $37.4 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. This increase was primarily driven by the absence of a loss from the change in fair value of SAFE Notes in the current period, as all SAFE Notes were converted into common stock in connection with the Merger on September 5, 2025. Interest income for the three months ended September 30, 2026 consisted primarily of interest earned on the February 2026 Private Placement and IPO funds.

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Comparison of the Nine Months Ended September 30, 2026 and 2025

The following table sets forth our summarized financial information for the periods indicated:



	For the Nine Months Ended
	September 30,
	2026		2025		$ Variance		% Variance
(in thousands, except percentage data)
Operating expenses
General and administrative expenses	$	37,426	$	9,063	$	28,363	313	%
Research and development expenses		37,606		3,470		34,136	984	%
Operating expenses		75,032		12,533		62,499	499	%
Operating loss		(75,032)		(12,533)		(62,499)	499	%

Other non-operating income (expense)
Interest income		1,743		14		1,729	12,350	%
Change in Fair Value of SAFE Notes		—		(39,834)		39,834	100	%
Other income		7		2		5	250	%
Total non-operating income (expense)		1,750		(39,818)		41,568	104	%

Net loss	$	(73,282)	$	(52,351)	$	(20,931)	40	%

Operating Expenses

General and administrative expenses increased by $28.4 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase in general and administrative expenses was primarily attributable to a $15.1 million increase in non-cash stock-based compensation expense, as well as increased legal and professional fees, accounting, audit, compliance and listing costs, marketing and branding costs, and higher personnel costs due to an increase in the number of employees year over year.

Research and development expenses increased by $34.1 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was primarily attributable to the advancement of the Company’s operating plans and progression of the first phase of the Company’s phased deployment plan, including increased reactor pilot project manufacturing, construction, design, and pre-operational activities. The increase was also driven by higher personnel and non-cash stock-based compensation expense associated with increased headcount year over year.

Other Non-Operating Income (Expense)

Other non-operating income (expense) increased by $41.6 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. This increase was primarily driven by the absence of a loss from the change in fair value of SAFE Notes in the current period, as all SAFE Notes were converted into common stock in connection with the Merger on September 5, 2025. Interest income for the nine months ended September 30, 2026 consisted primarily of interest earned on the February 2026 Private Placement and IPO funds.

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 September 30, 2026, our principal source of liquidity was our cash and cash equivalents of $63.4 million and investments in highly liquid available-for-sale securities of $8.3 million.

On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock 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 were approximately $75.1 million, after deducting fees to the placement agents and expenses paid by the Company.

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On June 22, 2026, the Company completed its IPO and issued and sold 2,500,000 shares of common stock at $16.00 per share. The Company received net proceeds of approximately $34.3 million from the IPO, after deducting underwriting discounts and commissions and offering expenses.

We expect to use our proceeds from the February 2026 Private Placement and IPO 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 February 2026 Private Placement and IPO will also be used to cover management, overhead, legal and accounting fees and expenses 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 and our current operating plan, we anticipate our existing cash and cash equivalents, together with net proceeds from the February 2026 Private Placement and IPO, are not likely to be sufficient to fund our operations for the next twelve months, absent additional financing or material changes to our operating plan. Accordingly, we determined that there is substantial doubt about our ability to continue as a going concern for the twelve-month period following the issuance of these financial statements. In order to continue to operate our business beyond that time, we will need to raise substantial additional capital in the near term.

In addition to our cash and cash equivalents currently available to support these activities, we estimate that we will require substantial additional capital to complete development of, and license and commercially deploy, our first commercial reactor. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. The Company has historically been able to raise capital through equity and equity-linked instruments, such as SAFE Notes and private placement equity issuances, and believes that it has a reasonable basis for its expectation that it will be able to raise additional funds. 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 successful achievement 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 wrong, and we could deplete our capital resources sooner than we currently anticipate.

Cash Flows

Nine Months Ended September 30, 2026 and 2025

As of September 30, 2026, our cash and cash equivalents were $63.4 million. The following table shows a summary of our cash flows for the periods presented:



		For the Nine Months Ended
		September 30,
		2026		2025		$ Change
(in thousands)
Net cash (used in) provided by:
Operating activities		$	(61,271)	$	(6,490)	$	(54,781)
Investing activities			(8,438)		(28)		(8,410)
Financing activities			109,423		30,031		79,392
Net increase in cash and cash equivalents		$	39,714	$	23,513	$	16,201

Operating Activities

Net cash used in operating activities increased by $54.8 million, to $61.3 million for the nine months ended September 30, 2026, compared to the net cash used in operating activities of $6.5 million for the nine months ended September 30, 2025. The increase in net cash used in operating activities was primarily attributable to increased net losses, changes in working capital, including prepaids and other assets, partially offset by increases in accounts payable, and accrued liabilities.

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Investing Activities

Net cash used in investing activities increased by $8.4 million, to $8.4 million for the nine months ended September 30, 2026, compared to the net cash used in investing activities of $28 thousand for the nine months ended September 30, 2025. Net cash used in investing activities was primarily attributable to purchases of available-for-sale securities.

Financing Activities

Net cash provided by financing activities increased by $79.4 million, to $109.4 million for the nine months ended September 30, 2026, compared to the net cash provided by financing activities of $30.0 million for the nine months ended September 30, 2025. The increase in net cash provided by financing activities was primarily attributable to proceeds from the February 2026 Private Placement and the IPO, net of offering and underwriting costs.

Contractual Obligations and Commitments

In February 2026, the Company entered into an operating lease, as the lessee, for approximately 100 acres located within the Great Plains Industrial Park in Parsons, Kansas (the “Kansas Site”). The agreement provides for a contractual term of 99 years, with two 25-year renewal options; however, for purposes of ASC 842, the Company determined the lease term to be the two-year minimum noncancelable period, as it is not reasonably certain to continue the lease beyond that period. The lease agreement also includes a mandatory purchase option for a purchase price of approximately $5.0 million if the Company is granted a license for commercial operation of the future reactor by the NRC at the Kansas Site. The Company has commenced initial site development activities intended to inform borehole design, drilling techniques, and site suitability for future reactor deployment. In connection with the Kansas Site, the Company will be subject to requirements related to plugging and abandonment once drilling of the non-nuclear demonstration borehole begins. During the three months ended September 30, 2026, the Company purchased a surety bond and deposited funds in the amount of $0.9 million to provide financial assurance for coverage of the future plugging and abandonment costs of the well in conjunction with obtaining the permit to drill. The surety bond is recorded in Other non-current assets on the Company’s interim unaudited condensed consolidated balance sheets.

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 unaudited condensed consolidated financial statements and the related notes thereto included in this Quarterly Report are prepared in accordance with United States generally accepted accounting principles. The preparation of unaudited condensed consolidated 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 2 to our unaudited condensed consolidated financial statements included herein.

SAFE Notes

In 2025, the Company issued SAFE Notes in exchange for cash financing. The SAFE Notes converted into our common stock in connection with the Merger in September 2025. 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 condensed 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 unaudited condensed consolidated financial statements included in this Quarterly Report.

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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 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report under the heading “Summary of Significant Accounting Policies.”

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

ITEM 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective as of September 30, 2026 due to the material weaknesses in internal control over financial reporting, as previously disclosed in Part II, Item 9A of our Annual Report and continue to exist as of September 30, 2026.

Notwithstanding the identified material weaknesses, management believes that the financial statements and related financial information included in this Quarterly Report fairly present, in all material respects, the financial condition, results of operations and cash flows of the Company as of, and for the periods presented in accordance with U.S. generally accepted accounting principles.

Remediation Update

As previously described in Part II, Item 9A of our Annual Report, the Company began implementing a remediation plan to address the material weaknesses mentioned above, including designing and implementing increased controls along with increasing oversight and review of controls. Specifically, we have taken the following steps to remediate the identified material weaknesses and improve our internal control over financial reporting: (i) we have hired key personnel with relevant financial reporting and controls expertise to strengthen our finance and accounting function, and to address the material weaknesses related to IT general controls and segregation of duties; (ii) we are currently designing and implementing operation of additional controls across several areas, including financial reporting, our procure to pay cycle, equity administration, and IT general controls and segregation of duties; and (iii) we are currently in the implementation phase of a new equity management and reporting system. We continue to evaluate and implement additional remediation initiatives as appropriate.

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Changes in Internal Control over Financial Reporting

Other than with respect to the remediation efforts described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

From time to time, we may become involved in litigation, investigations, claims or legal proceedings arising in the ordinary course of business. Litigation, investigations, claims and other legal proceedings are subject to inherent uncertainties, and an adverse outcome in one or more matters could occur and may have a material adverse effect on our business, prospects, results of operations, and financial condition. Except as described in our Annual Report, we are not aware of any material pending legal proceedings to which we are a party. There have been no material changes to the status of legal proceedings discussed in our Annual Report.

ITEM 1A. Risk Factors

Summary of Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider all information in this Quarterly Report, including our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before purchasing our common stock. These risks and uncertainties include, but are not limited to, the following:

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Our Gravity Reactor is unproven and may not perform as expected or be commercially viable.

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We are an early-stage company with no revenue, a history of losses, and a “going concern” opinion from our auditors.

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We require substantial additional capital and may be unable to obtain financing on acceptable terms or at all.

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Our technology depends on successful deep vertical borehole drilling and subsurface engineering, which involve significant technical and regulatory risks.

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We may be unable to identify, acquire, lease, or otherwise secure access to suitable sites with geological characteristics necessary to deploy our Gravity Reactor.

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We have no experience operating nuclear facilities and may be unable to develop necessary operational capabilities.

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The market for our technology is not established and may not develop as expected.

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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.

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Our technology may not be cost competitive with other energy sources.

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Our development and deployment expectations, financial estimates and financial forecasts, including any underlying assumptions, 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.

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Our development activities and operations involve inherent safety risks and potential liability for nuclear incidents and environmental contamination.

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Our business is subject to extensive government regulation and we may be unable to obtain required approvals, including from the NRC.

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Our reliance on DOE authorization under our Other Transaction Agreement for Reactor Authorization (the “OTA”) involves legal and regulatory uncertainty and does not replace the requirement for NRC licensing.

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We are involved in litigation relating to the NRC’s licensing framework, which may adversely affect our regulatory pathway.

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Changes in government policy, including government incentives, public perception of nuclear energy, or environmental laws could adversely affect our business.

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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.

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We may be unable to adequately protect our intellectual property or may be subject to infringement claims.

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We face general risks related to cybersecurity, macroeconomic conditions, supply chains, natural disasters and severe weather events, and loss of key personnel.

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We may be subject to litigation, investigations, claims or other legal proceedings that could be costly to defend.

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Operating as a public company increases our administrative burden and costs, and we are subject to additional legal requirements as a result of being a public company.

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An active trading market for our common stock may not be sustained, and the market price of our common stock may be volatile.

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We may be unable to satisfy the continued listing requirements of Nasdaq, which could result in delisting of our common stock.

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Investing in our common stock may involve a significant degree of risk.

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Future issuances of our equity securities could result in substantial dilution to our stockholders.

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We have broad discretion in the use of the net proceeds from our IPO, and our use of those proceeds may not yield a favorable return on your investment.

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.

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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.

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 nine months ended September 30, 2026 and the year ended December 31, 2025, we incurred net losses of $73.3 million and $61.0 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.

There is substantial doubt about our ability to continue as a going concern, and 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 nine months ended September 30, 2026 and the year ended December 31, 2025, we generated no revenue and incurred net losses of $73.3 million and $61.0 million, respectively, and as of September 30, 2026 and December 31, 2025, we had an accumulated deficit of $140.0 million and $66.7 million, respectively. As of September 30, 2026, our cash and cash equivalents were $63.4 million and we held investments in available-for-sale securities of $8.3 million. Management’s current operating plan indicates that the net proceeds from our IPO, together with our existing cash and cash equivalents, will not be sufficient to fund our planned operations through the one-year period following the issuance of our interim unaudited condensed consolidated financial statements included in this Quarterly Report, given our recurring losses from operations and our expectation of continued operating losses for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern.

Our ability to continue operating our business depends on the receipt of substantial additional capital, including through future equity issuances, debt financing, strategic partnerships, and other capital raising transactions. However, there can be no assurance that any such additional 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. Specifically, in addition to our cash and cash equivalents and investments in available-for-sale securities currently available to support these activities, which were approximately $63.4 million and $8.3 million, respectively, as of September 30, 2026, we estimate that we will require approximately $90 million of additional capital to complete development of, and license and commercially deploy, our first commercial reactor, in addition to requiring additional capital to fund basic corporate personnel and overhead costs. 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.

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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 in the future 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.

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 additional equity or convertible securities, the ownership interests of our stockholders will be diluted, potentially significantly. Given the magnitude of our anticipated capital requirements, future equity financings could result in substantial dilution to 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.

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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.

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.

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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 threatened litigation, 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.

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 power purchase agreements (“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, including with respect to our non-binding memorandum of understanding with Youngquist. 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.

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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.

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 and deployment expectations, financial estimates and financial forecasts, including any underlying assumptions, are subject to significant uncertainty.

We have described, in this Quarterly Report and in our other filings with the SEC, our current development and deployment expectations for our reactors, and we have previously disclosed certain financial estimates (including per reactor capital costs of deployment, annual cash operating expenses per reactor, annual revenue generation per reactor and annual cash contribution per reactor, in each case, for 2x2 fuel assembly configurations and 3x3 fuel assembly configurations). These expectations and estimates, and any financial forecasts that we may use or disclose from time to time, as well as the underlying assumptions (including timelines and other cost projections), are subject to significant uncertainty.

For example, these financial estimates, and the related development and deployment expectations for our reactors, are based on a range of assumptions, including relating to design life; output levels; operation uptime; demand and PPAs, including pricing; expected development and deployment timelines, including regulatory approval timelines; refueling intervals; continuity of reactor design; and consistency of deployment conditions. These estimates and expectations are also based on numerous additional assumptions, including assumptions regarding regulatory approvals, engineering performance, supply chain (including fuel) availability and pricing, financing conditions, market demand and reactor utilization 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 management can base these estimates, making it even more difficult to source reliable information and formulate reliable assumptions. Actual results may differ materially from those contemplated by these expectations, estimates, forecasts or assumptions. Accordingly, these expectations, estimates, forecasts and assumptions should not be relied upon as being indicative of future results, and investors are cautioned not to place undue reliance on these expectations, estimates, forecasts or assumptions.

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.

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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.

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.

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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, 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 serious injury 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 unforeseen problems 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 in an emergency, and the interaction of reactor systems with subsurface geological and hydrological conditions over extended operating periods.

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.

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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.

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.

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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.

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 Atomic Energy Act (“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.

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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 litigation challenging 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 Part II, Item 1, “Legal Proceedings” in this Quarterly Report and Part I, Item 3, “Legal Proceedings” in the Annual Report 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 criminal penalties, 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 improper advantage. 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 criminal penalties, 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.

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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 greater opposition to nuclear energy projects.

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.

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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 our physical or electronic security measures are breached, we may lose valuable 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, defending against 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 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 successfully defend against such claims, we could lose exclusive ownership of valuable intellectual property or be required to grant licenses to third parties. Even if we are successful in defending against such claims, resolving such disputes could result in substantial legal costs and divert management attention from our business.

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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 conflicts in Ukraine and the Middle East), public health crises, terrorism, power loss and other disruptions to global markets.

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.

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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.

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.

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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 Part II, Item 1, “Legal Proceedings” in this Quarterly Report and Part I, Item 3, “Legal Proceedings” in the Annual Report.

We face heightened litigation risk following the recent publication of a short seller report about us. On September 24, 2026, a short-selling firm published a report containing allegations and opinions regarding, among other things, the cost competitiveness and projected economics of our Gravity Reactor, our capital cost estimates, the feasibility of our anticipated regulatory and deployment timelines and the nature of our customer pipeline and commercial arrangements. The market price of our common stock declined significantly following the publication of the report, and several plaintiffs’ law firms have since issued press releases announcing that they are investigating potential claims on behalf of our stockholders, including under the federal securities laws, and soliciting investors to participate in those claims. Although, as of the date of this Quarterly Report, we are not aware of any lawsuit having been filed against us or any of our officers or directors relating to the matters raised in the report, companies that are the subject of short seller reports are frequently named as defendants in securities class action litigation and stockholder derivative lawsuits. We may become subject to such litigation, as well as to inquiries or investigations by the SEC or other governmental or regulatory authorities, relating to the allegations in the report or the related decline in the market price of our common stock.

Litigation, investigations, claims and other legal proceedings, including any arising from the short seller report, are subject to inherent uncertainties and, regardless of their merit or outcome, may be time-consuming and expensive to defend, require us to devote significant resources to investigating and responding to allegations, and divert the attention of our board of directors and management from our business. If we are found liable in, or settle, any such matter, we could be required to pay substantial damages or penalties or to modify our business practices. Any such matter could also damage our reputation, harm our relationships with customers, partners or regulators, and adversely affect the market price of our common stock and our ability to raise the substantial additional capital we require.

We recently restated 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. Our Chief Executive Officer and Chief Financial Officer also have concluded that our disclosure controls and procedures were not effective as of September 30, 2026 due to 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 errors and restatements, 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.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2026 as a result of the material weaknesses in internal control over financial reporting. Management is implementing changes to strengthen our internal controls and remediate the material weaknesses. See Part I, Item 4, “Controls and Procedures” in this Quarterly Report for additional information related to the material weaknesses in internal control over financial reporting and our related remediation activities.

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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.

Risks Related to Ownership of Our Common Stock

An active trading market for our common stock may not be sustained.

Prior to the completion of our IPO in June 2026, there was no public trading market for our common stock. Although our common stock is listed on The Nasdaq Global Market under the symbol “FISN,” we cannot assure you that an active trading market for shares of our common stock will be sustained. 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.

We may be unable to satisfy the continued listing requirements of Nasdaq.

We are required to satisfy the continued listing requirements of Nasdaq to maintain the listing of our common stock. These requirements include, among other things, minimum stock price, minimum market capitalization, and corporate governance standards. We cannot assure you that we will be able to satisfy these continued listing requirements in the future. If we fail to satisfy the continued listing requirements, Nasdaq may take steps to delist our common stock. A delisting of our common stock could negatively impact us by, among other things, reducing the liquidity and market price of our common stock, reducing the number of investors willing to hold or acquire our common stock, limiting our ability to issue additional securities or obtain additional financing in the future, and decreasing analyst coverage of us. In addition, delisting from Nasdaq may negatively impact our reputation and, as a consequence, our business, prospects, results of operations, and financial condition.

Investing in our common stock may involve a significant degree of risk.

Investing in our common stock involves a high degree of risk. The investments we make in accordance with our strategic objectives may result in a higher amount of risk when compared to alternative investment options and volatility or loss of principal. Our investments may be highly speculative and aggressive, and therefore an investment in our common stock may not be suitable for someone with lower risk tolerance and investors in our common stock may experience losses and volatility.

Furthermore, as described elsewhere in this Quarterly Report, there is substantial doubt about our ability to continue as a going concern, and 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 to that effect. We have incurred significant losses since inception, have no revenue, and expect to continue to incur losses for the foreseeable future. If we are unable to raise sufficient additional capital, we may be forced to curtail or cease our operations, liquidate our assets, or seek bankruptcy protection. In any such event, our common stock could become worthless, and you could lose all or substantially all of your investment. Even if we are able to continue as a going concern, there can be no assurance that the market price of our common stock will ever exceed the price you pay for it, or that you will be able to sell your shares at any price.

Future issuances of our equity securities could result in substantial dilution to our stockholders.

We may 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. If we issue additional equity or equity-linked instruments at a price per share that is less than the price at which you purchased your shares, the value of your common stock will likely be reduced. The issuance of additional equity or equity-linked instruments could dilute existing stockholders and adversely affect the market price of our common stock.

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We are required to comply with the corporate governance requirements of Nasdaq.

As a result of the listing of our common stock on Nasdaq, we are required to comply with the various corporate governance measures required by Nasdaq, which address matters such as board independence, audit committee oversight, and adoption of certain policies. Meeting these requirements has increased, and will continue to increase, our legal, accounting and compliance costs. If we fail to satisfy any Nasdaq corporate governance requirement, Nasdaq could issue a deficiency notice, require us to submit a compliance plan or take steps to delist our common stock.

The market price of our common stock may be volatile.

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;

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additions or departures of key personnel;

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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.

Future sales of our common stock could cause our stock price to decline.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. The shares purchased in our IPO may be resold in the public market immediately, unless such shares are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act. In connection with our IPO, a substantial portion of our outstanding shares are subject to a 180-day lock-up period provided under lock-up agreements executed in connection with the offering and are restricted from immediate resale under the federal securities laws. All of these shares of common stock will, however, be able to be resold after the expiration of the lock-up period, as well as pursuant to customary exceptions thereto or upon the waiver of the lock-up agreement by the representatives on behalf of the underwriters. In addition, as disclosed in this Quarterly Report under Part II, Item 5, “Other Information,” certain of our directors and officers have adopted Rule 10b5-1 trading arrangements providing for the sale of shares of our common stock beginning in March 2027 to satisfy tax obligations upon the vesting and settlement of restricted stock units. We also have registered shares of common stock that we have or may issue under our equity incentive plans. These shares can be freely sold in the public market upon issuance, subject to the lock-up agreements. As restrictions on resale end, the market price of our stock could decline if the holders of currently restricted shares of common stock sell them or are perceived by the market as intending to sell them.

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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 49.2% of the voting power of our outstanding common stock. 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.

Operating as a public company increases our administrative burden and costs, and we are subject to additional legal requirements as a result of being a public company.

As a newly 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.

Any offering of our securities is subject to the U.S. federal securities laws, including Section 5 of the Securities Act, which regulates the way in which we can offer our securities. Compliance with these requirements is complex. As an early-stage company with a novel deployment model, a significant element of our strategy is to increase awareness of our business. We seek to do this in a variety of ways, including by participating in industry conferences and engaging with the media. Although we attempt to conduct these activities in compliance with applicable law, it can be difficult to control the timing and content of media coverage of our company or the industry. There has been media coverage related to the Company, including with respect to our potential plans to raise capital, and there may be additional media coverage related to the Company beyond our control. If our engagement with the media or other efforts to increase awareness of our business were held to violate Section 5 of the Securities Act, we could be required to repurchase the shares sold to purchasers in the applicable offering at the original purchase price for a period of one year following the date of the violation.

We are an emerging growth company and a smaller reporting company.

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 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.

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 our periodic reports 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.

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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 (“Certificate of Incorporation”) and our amended and restated bylaws (“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;

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provisions that limit the ability of stockholders to remove directors except for cause;

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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 Certificate of Incorporation designates certain courts as the exclusive forum for certain stockholder disputes.

Our 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 or the Exchange Act, 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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We have broad discretion in the use of the net proceeds from our IPO, and our use of those proceeds may not yield a favorable return on your investment.

Our management has broad discretion in the application of the net proceeds from our IPO, including for any purpose described in the final prospectus for our IPO under “Use of Proceeds,” and we could utilize such proceeds in ways with which you may not agree. In addition, we might not use the net proceeds from our IPO effectively or in a manner that increases our market value or enhances our profitability. Our failure to apply the net proceeds from our IPO effectively could compromise our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, in our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from our IPO.

If 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.

The trading market for our common stock 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 downgraded our stock or our industries, or the stock of any of our competitors, or published 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.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

On June 22, 2026, the Company completed its IPO of 2,500,000 shares of common stock at a public offering price of $16.00 per share, pursuant to a registration statement on Form S-1 (File No. 333-296043), declared effective by the SEC on June 17, 2026. The Benchmark Company, LLC and Seaport Global Securities LLC acted as representatives of the underwriters. The Company received net proceeds of approximately $34.3 million after deducting underwriting discounts and commissions of $3.2 million and offering expenses of approximately $2.5 million. No offering expenses were paid directly or indirectly to any of the Company’s directors or officers (or their associates), persons owning 10% or more of any class of the Company’s equity securities or any other affiliates. There has been no material change in the planned use of proceeds from the IPO as described in the final prospectus filed with the SEC pursuant to Rule 424(b) on June 18, 2026.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

Not applicable.

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ITEM 5. Other Information

Insider Trading Arrangements and Policies

During the quarter ended September 30, 2026, certain of the Company’s directors and officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted a “Rule 10b5-1 trading arrangement” with respect to the Company’s common stock, as described below, in order to satisfy tax obligations upon the vesting and settlement of restricted stock units. Each arrangement is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and permits transactions to commence only after expiration of the applicable cooling-off period required by Rule 10b5-1. Other than the adoptions described below, no other director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).



		For the Three Months
		Ended
		September 30, 2026
				Total
				Number of		Duration of
Name				Shares to		Trading
(Title)		Date of Adoption		be Sold		Arrangement¹
Elizabeth Muller (CEO)		September 15, 2026		302,199		Up to 1 year
Blake Janover (Director)		September 15, 2026		40,000		Up to 1 year
Leslie Goldman Tepper (Director)		September 15, 2026		40,000		Up to 1 year
Thomas Glanville (Director)		September 15, 2026		40,000		Up to 1 year
Jonathon Angell (Director)		September 15, 2026		55,000		Up to 1 year

¹Sales are scheduled to begin on March 2, 2027. Each trading arrangement will terminate on the earliest to occur of: (a) one (1) year after the date the broker begins executing sales under the arrangement, (b) the execution of all trades contemplated under the arrangement; (c) promptly after the broker receives written notice that the director or officer has filed a petition for bankruptcy or insolvency, or that such a petition has been filed against the director or officer and not dismissed within sixty (60) days of its filing, or of the director’s or officer’s liquidation or dissolution; (d) promptly after the broker receives written notice of the director’s or officer’s death or legal incapacity; (e) at any time upon one day’s prior written notice by the director or officer to the broker; (f) upon a reasonable determination by the broker, or promptly after a reasonable determination by the director or officer and notice to the broker, that the arrangement does not comply with Rule 10b5-1 or other applicable securities laws, that the director or officer or the broker has not complied with the arrangement, Rule 10b5-1 or other applicable securities laws, or that the director or officer has made misstatements in the representations or warranties in the arrangement; (g) the broker’s receipt of written notice from the Company or the director or officer of the filing of a bankruptcy petition by the Company, the public announcement of a merger, recapitalization, acquisition, tender or exchange offer or other business combination or reorganization resulting in the exchange or conversion of the Company’s common stock into shares of another company, or the conversion of the Company’s common stock into rights to receive fixed amounts of cash or into debt securities or preferred stock; (h) immediately upon the director’s or officer’s failure to deliver shares as required under the arrangement; (i) the occurrence of another termination event specified in the arrangement; or (j) immediately after written notification from the Company’s Chief Financial Officer that the arrangement is terminated due to a decision by the Company to net settle the tax and other liabilities that are the reason for the arrangement.

Shelf Registration Statement

Concurrently with the filing of this Quarterly Report, the Company intends to file a shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with the SEC. The Company is filing the Shelf Registration Statement for general corporate housekeeping purposes in order to provide the Company with flexibility to access the capital markets from time to time in the future. The Shelf Registration Statement has not yet been declared effective by the SEC, and securities may not be sold, nor may offers to buy be accepted, prior to the time the Shelf Registration Statement becomes effective. This Quarterly Report shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Non-Affiliate Market Shares and Value

As of October 30, 2026, more than 5% of the Company’s outstanding shares of common stock, its only class of voting securities, were held by stockholders other than its directors, executive officers, holders of 10% or more of its common stock and their respective affiliates, and were not subject to lock-up or other contractual transfer restrictions.

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ITEM 6. Exhibits



Exhibit Number		Description of Document
31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1˄		Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2˄		Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension with Embedded Linkbase Documents.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

*	Filed herewith.

Exhibits 32.1 and 32.2 and the XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	DEEP FISSION, INC.
	(Registrant)

Date: November 4, 2026	By:	/s/ Elizabeth Muller
		Elizabeth Muller
		Title: Chair, President and Chief Executive Officer
		(Principal Executive Officer)

Date: November 4, 2026	By:	/s/ William (Mark) Schmitz
		William (Mark) Schmitz
		Title: Chief Financial Officer
		(Principal Financial and Accounting Officer)