DBHL 10-K & 10-Q changes, risk factors and insider trading

Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this report on Form 10-K, you should carefully consider the risk factors discussed below when considering an investment in our common stock and any risk factors that may be set forth in any applicable prospectus supplement, any related free writing prospectus, as well as the other information contained in this Form 10-K, any prospectus, any applicable prospectus supplement, and any related free writing prospectus. If any of the following risks occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you could lose some or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Summary of Risk Factors

•The market for DBD is not yet established and may not develop on the timeline we expect or at all.

•Our projections for the growth of the total addressable market for nuclear waste disposal are based on a number of assumptions and estimates, some or all of which may prove to be inaccurate or, even if accurate, may not result in the projected results. If demand for our nuclear waste storage and disposal solutions fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieve profitability.

•We are subject to extensive laws and regulations relating to various aspects of our business. The nature of our business also requires us to interact with various governmental entities, subjecting us to the policies, priorities, regulations, mandates, and funding levels of such governmental entities, and we may be negatively or positively impacted by any change thereto.

•We are an early-stage company with a history of financial losses, and we expect to continue to incur financial losses for the foreseeable future. We cannot assure you that we can or will be able to operate profitably.

•We have not yet entered into any binding contract with any customer to temporarily store or permanently dispose of nuclear waste through the implementation of our DBD solutions, and there is no guarantee that we will be able to do so in the future, or even if we do, that our operations will be successful.

•Our expected timeline for the commercialization of our technologies is subject to a number of assumptions, estimates and milestones that may prove to be inaccurate or incorrect or may not be achieved. As part of our commercialization strategy, we are pursuing a multi-phase, multi-year initiative to complete a non-radioactive, full-scale, at-depth demonstration of the deployment of our UCS canisters and our DBD solution. Delays or failures in our demonstration initiative may adversely impact our commercialization strategy and timeline, and thus our business and operations, and even if successfully completed on time, may not result in our business being successful in the foreseeable future.

•We operate in an emerging industry, which makes it difficult to evaluate our prospects and the risks and challenges we may encounter.

•We have limited experience commercializing our products at a large scale and may not be able to do so efficiently, effectively or to nuclear-grade levels of quality assurance.

•We believe that the likelihood of successfully commercializing our products would be enhanced by a successful completion of our non-radioactive, full-scale, at-depth demonstration facility and a delay in or failure to do so may adversely impact our business and operations. Furthermore, no assurances can be given that, even if successfully completed, our demonstration facility will lead to our business being successful.

•If we fail to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows.

•Substantially all of our revenue to date is comprised of government grants and contract awards.

•Our future revenue plans rely on partnering with governmental entities and strategic partners.

•Our preferred government contracting model may not be compatible with public-sector procurement, transparency or state-aid rules applicable to many of our target customers.

•If the U.S. Department of Energy does not accept our UCS under the Amended Standard Contract, our ability to commercialize our integrated storage, transportation and disposal solution in the United States could be materially impaired.

•A prolonged United States federal government shutdown could materially and adversely affect our business and operations.

•Our commercialization strategy relies heavily on our relationship with NAC International and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate.

•Our current and future patent applications may not result in issued patents, which would hinder our ability to protect certain of our intellectual property.

•If we cannot protect, maintain and, if necessary, enforce our intellectual property rights, our ability to develop and commercialize products will be adversely impacted.

•Our operating and financial projections rely on management assumptions and analyses. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.

•We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial fees and costs.

•The benefits to customers of our products could be supplanted by other technologies or solutions or competitors’ products that utilize similar technology to ours in a more effective way.

•We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us.

•Accidents involving nuclear power facilities, including, but not limited to, events similar to the Three Mile Island, Chernobyl and Fukushima Daiichi nuclear accidents, or terrorist acts or other high-profile events nvolving radioactive materials, could materially and adversely affect nuclear power producers and the markets for nuclear power and nuclear waste disposal, and increase regulatory requirements and costs that could materially and adversely affect our business.

•Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or contain terms unfavorable to us or our investors.

•Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by domestic and international financial institutions or transactional counterparties, could adversely affect our business, financial condition, and results of operations.

•Any acquisitions, partnerships, or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations.

•Our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that our management’s decisions will result in successful achievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects.

•We depend on a limited number of key personnel with specialized expertise, and the loss of such individuals could materially harm our business.

•Some of our executive officers and key advisors have outside management or directorship positions with other companies and may allocate part of their time to these other businesses.

•We may be unable to adequately control the costs associated with our operations.

•Security breaches and other disruptions could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer.

•Current and future geopolitical and macroeconomic events outside of our control could adversely impact our business, results of operations, cash flows, financial condition and liquidity.

•Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, financial condition, results of operations, and cash flows.

•Our ability to rely on global supply chains for source components and/or raw materials may be impacted by tariffs, trade disputes, or other changes in trade policy or trade regulation.

•The direct and indirect impact on us and our value chain from severe weather and other effects of climate change could adversely affect our financial condition, operating results, and cash flows.

•Litigation or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management’s time and attention, and damage our reputation.

•We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business, prospects, financial condition and operating results.

•Being a public company can be administratively burdensome and will significantly increase our legal and financial compliance costs.

•Our management as a group has limited experience in operating a publicly traded company.

•The shares of our common stock being offered in our recently filed prospectus represent a substantial percentage of the outstanding shares of our common stock, and the sales of such shares, or the perception that these sales could occur, could cause the market price of the common stock to decline significantly.

•The shares of common stock issued in the Merger and the Private Placement are “restricted securities” and, as such, may not be sold except in limited circumstances.

•There is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of our common stock at times and prices that you believe are appropriate.

•Our common stock may not be eligible for listing or quotation on any securities exchange or over-the-counter trading system.

•The market price and trading volume of our common stock may be volatile and could decline significantly following any listing or quotation, if any.

•The designation of our common stock as “penny stock” would limit the liquidity of our common stock.

•FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock.

•Because we became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may not be able to attract the attention of research analysts at major brokerage firms.

•Because the Merger was a reverse merger, the registration statement we file with respect to the shares of common stock received by investors in the Merger might be subject to heightened scrutiny by the SEC, and we may not be able to attract the attention of major brokerage firms.

•As a result of the consummation of the Merger, we are now obligated to develop and maintain proper and effective internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of material misstatement of the consolidated financial statements.

•We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors.

•We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards.

•Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

•We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

•If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.

Risks Related to Our Business and Industry

The market for DBD is not yet established and may not develop on the timeline we expect or at all.

The market for DBD has not yet been established. The development of the market is subject to a number of factors, many of which are outside of our control. Challenges that could impact our expectations for the timeline and costs of market development might arise from obtaining federal, state, and local permits and approvals, transportation, threatened litigation, political or host community opposition to proposed DBD repository sites, access to and availability of raw materials, lack of requisite legislative changes where applicable and lack of support or opposition from governmental entities. As a result, the market for DBD and demand for our products and services may not develop on the timeline we expect or at all, which could cause our business and operations to suffer.

In particular, the market for DBD in the United States may never develop due to the current regulatory framework governing the permanent disposal of many types of nuclear waste. Currently, such laws and regulations authorize the U.S. Department of Energy (“DOE”) to oversee the siting, construction and operation of one deep geologic repository for HLW and SNF: the Yucca Mountain site designated pursuant to the Nuclear Waste Policy Act of 1982, as amended (the “NWPA”). Additionally, certain provisions of the NWPA prohibit the DOE from conducting site-specific activities at a repository site other than Yucca Mountain unless authorized by Congress. Congressional enactment of an alternative waste management plan through amendment of the NWPA is central to our ability to conduct permanent disposal activities in the U.S. in the future. If Congressional action is not taken to amend the NPWA, we will be unable to obtain the necessary permits and licenses to provide our DBD solutions to customers in the United States, which would have a material adverse effect on our business, results of operations and financial condition.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the audited financial statements for the year ended December 31, 2025 and 2024 and the related notes thereto, included elsewhere in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements involving risks and uncertainties as described under the heading “Forward-Looking Statements” elsewhere in this Form 10-K. You should review “Risk Factors” in this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements and could otherwise affect our intended plans of operations. The financial information included herein is shown in thousands (000s) unless otherwise indicated.

Overview

The Merger

On July 23, 2025, the Company, Acquisition Sub and Deep Isolation entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on the Closing Date, Acquisition Sub merged with and into Deep Isolation, with Deep Isolation continuing as the surviving corporation. As a result of the Merger, Deep Isolation became our wholly owned subsidiary and will continue its existing business operations. Additionally, we changed our name to Deep Isolation Nuclear, Inc. and will continue to be a public reporting company.

Immediately prior to the time the certificate of merger effectuating the Merger was filed with the Secretary of State of the State of Delaware (the “Effective Time”), we issued 44,247,429 shares of our common stock to existing holders of Deep Isolation Capital Stock (including to holders of 2018 EIP Options who elected to exercise their options before the Effective Time of the Merger). We also assumed the Assumed Options and reserved a total of 10,888,601 shares of our common stock under the 2025 EIP, of which 5,752,566 of such shares of our common stock are issuable upon the valid exercise of the Assumed Options, with the remainder are available for future issuances of awards under the 2025 EIP. Aspen’s existing stockholders continued to hold an aggregate of 2,166,667 Retained Pre-Merger Shares, and on the Closing Date we also issued 83,333 Advisor Shares to Mr. Kashani in consideration for services rendered in connection with the Merger.

The Private Placement

Immediately following the Effective Time of the Merger, we sold 11,012,387 shares of our common stock at a price of $3.00 per share in the Private Placement. In connection with the Private Placement, we also issued to (i) each of the Placement Agents A Warrants to purchase an aggregate of 829,730 shares of our common stock at an exercise price of $3.00 per share and (ii) certain of the Placement Agents B Warrants to purchase an aggregate of $500,000 worth of shares of our common stock at an exercise price of $0.0001 per share.

The table directly below presents a fully-diluted capitalization table immediately after giving effect to the Merger, the Private Placement, and adoption of the 2025 EIP, and related transactions:

(1)Existing officers, directors and stockholders of Deep Isolation and their respective friends and family who participated in the Private Placement are referred to herein as the “Deep Isolation Investors.”

(2)Includes 5,752,566 shares of common stock issuable upon the exercise of the Assumed Options.

Accounting Considerations

The historical financial statements and related footnotes included herein hereto include descriptions of Deep Isolation’s previously outstanding Capital Stock; however, in connection with the Merger, all shares of Deep Isolation’s Capital Stock, including all shares of Deep Isolation’s Preferred Stock, were converted into shares of our common stock. See “The Merger and Related Transactions” above for detailed information regarding the Transactions and the related conversion of the shares of Deep Isolation’s Capital Stock.

For financial reporting purposes, the Merger was treated as a recapitalization and reverse acquisition. Deep Isolation is considered the acquirer for accounting purposes, meaning that the historical financial results of Deep Isolation prior to the Merger are considered our historical financial results under applicable accounting principles. See “Note 1. Nature of Operations—Merger Transaction” in the Notes to the Consolidated Financial Statements. Thus, a discussion of the past financial results of Aspen is not pertinent.

Background

Global demand for reliable, clean energy is growing rapidly, fueled by increased power demand, (including from AI and data centers) climate change and extreme weather events, recent geopolitical events, and increased load forecasts. Nuclear energy is, as the Company believes it should be, a critical contributor to the energy future. One of the biggest challenges to the adoption and deployment of nuclear energy solutions has been managing the disposal of nuclear waste.

Deep Isolation’s mission is to revolutionize the disposal of nuclear waste through the development of innovative solutions for temporary storage and transportation of HLW and SNF, and for permanent disposal of HLW via deep underground boreholes. The world’s current nuclear waste management model is limited to two options: above-ground interim storage and geologic disposal via mined repositories. Both options are extremely costly and, to date, neither has presented a viable, long-term solution to the global nuclear waste disposal problem. There are currently no operational mined repository facilities for the disposal of HLW or SNF; above-ground interim storage, which does not provide a permanent disposal solution, currently is the only waste management solution for HLW and SNF being practiced worldwide.

Following years of research and technical due diligence, Deep Isolation developed a solution for the permanent disposal of nuclear waste by packing the waste into patent-protected, corrosion-resistant canisters and then employing directional drilling to isolate the canisters in deep boreholes drilled into suitable rock formations deep underground. This technology will allow nuclear waste to be stored much deeper below the Earth’s surface than waste stored in mined repositories, increasing the safety of nuclear waste storage. The Company’s patented canisters can also be used for above-ground interim storage with no repackaging (or minimal repackaging where alternative canisters have been used for interim storage purposes). Deep Isolation believes its solutions will offer viable nuclear waste disposal solutions, reducing both human exposure to radioactive isotopes and the overall cost of nuclear waste disposal.

To date and for the foreseeable future, we will pursue grants, contracts, and awards from the U.S. federal government and certain foreign governments and NGOs to support research and development efforts geared toward studying and demonstrating the feasibility of our technologies and the use of DBD generally. We have also entered into strategic appraisal and operational planning contracts with customers; however, we have not yet entered into a binding implementation agreement with any customer to temporarily store or permanently dispose of nuclear waste through the implementation of our solutions, and there is no guarantee that we will be able to do so in the future.

Deep Isolation’s wholly owned subsidiary, Freestone, is an environmental and water resources consulting firm to federal, state, municipal and private clients. We believe its array of services is complimentary to Deep Isolation’s core disposal solution business. The Company receives cash flows from Freestone’s operations that are supplemental to cash flows produced by the Company’s core business, which reduces the Company’s consolidated use of cash and results in lower fundraising needs.

Our leadership team has extensive direct experience with nuclear solutions and engineering, government and community engagement and global strategy development. Our advisory board includes preeminent experts and Nobel laureates in nuclear science, technology and policy, as well as business leaders and entrepreneurs. We believe that the depth of our expertise and our technology solutions uniquely position us to become the market leader in the nuclear waste storage and disposal industry.

The Company currently offers the following products and services, in addition to the services offered by Freestone: (i) strategic appraisal, which involves analysis of the costs and benefits of our DBD solution as compared with other disposal solutions; and (ii) operational planning, which involves the completion of a comprehensive feasibility assessment, including the preparation of a generic design for our deep borehole repositories, an IAEA-compliant economic and strategic business case and a Generic Safety Case, a commercial model for implementation and a roadmap for all work needed to commission and implement our solutions. The Company also offers implementation services, which includes the deployment of an IAEA-compliant disposal or storage system (depending on the customer’s needs) and consultancy services for siting, licensing, construction, hot and cold commissioning, operations, closure, post-closure monitoring and stakeholder engagement. Over the next twelve months, we anticipate that we will continue to provide these services to existing and new customers as we also work to advance the necessary preparations for our non-radioactive, full-scale, at-depth demonstration.

We also plan to continue engaging with domestic and foreign lawmakers to advocate for the legal and regulatory changes necessary to allow for the commercialization of DBD and to update regulatory guidance on nuclear waste disposal methods. We expect that our operations in the near term will be funded by additional government grants, contract awards and strategic appraisal and operational planning contracts. To the extent additional funding is needed and subject to market and other conditions, the Company may also pursue offerings of its debt and equity securities from time to time to support operations and capital expenditures.

Next Steps

The Company also offers implementation services, which includes the deployment of an IAEA-compliant disposal or storage system (depending on the customer’s needs) and consultancy services for siting, licensing, construction, hot and cold commissioning, operations, closure, post-closure monitoring and stakeholder engagement. To date, we have not yet entered into any implementation contracts with customers. While implementation contracts could be executed and related consultancy services could begin on a small scale prior to the completion of the non-radioactive, full-scale, at-depth demonstration in anticipation of the successful completion of such demonstration and related safety testing, demand for and commercial adoption of our DBD solution likely will not occur until such demonstration and testing is complete. We expect that a successful non-radioactive, full-scale, at-depth demonstration of our DBD solution, if successful, will spur demand for our implementation services in the coming years.

Net of expenses incurred, we received approximately $28.8 million in net proceeds from the Private Placement that we expect to use to execute the next step in our business plan, which has the following significant elements:

•Non-Radioactive, Full-Scale, At-Depth Demonstration — we expect to use the net proceeds from the Private Placement primarily to fund a non-radioactive, full-scale, at-depth demonstration of our DBD technologies. We have begun the process of developing a demonstration facility in Texas to facilitate such demonstration, which involves constructing a new well at the facility that will be used for non-radioactive, full-scale, at-depth demonstrations and related safety testing. We expect that construction, preparation and initial demonstration will take approximately two years to complete. We expect to incur demonstration costs, including construction, canister manufacturing, casing, surface handling, emplacement and retrieval testing, general and administrative, travel and other related costs, of approximately $8.1 million and $7.4 million in 2026 and 2027, respectively, of the project. We believe that non-radioactive, full-scale, at-depth demonstrations of our DBD technologies will validate the safety and feasibility of our solution and foster enhanced engagement and support both from potential clients identified in our pre-sales engagement stage and current clients who have engaged us for strategic appraisal and operational planning services.

•Increased Client Engagement — we expect that such validation of our DBD technologies through non-radioactive, full-scale, at-depth demonstrations will further support the execution of our sales pipeline, including active proposals for commercial contracts and additional governmental subsidies. We believe such demonstrations will also foster enhanced client engagement generally and facilitate advancement of clients through the familiarization, confidence-building and product adoption stages of our client engagement process.

•Product Adoption — ultimately, our goal is to be the leading provider of permanent HLW and SNF disposal services globally. We believe that the broader client engagement expected to result from non-radioactive, full-scale, at-depth demonstrations of our DBD technologies will result in additional strategic appraisal and operational planning contracts, which are in turn expected to result in implementation contracts.

However, we anticipate that we will continue to experience operating losses in 2026 and 2027 as we seek to implement our long-term strategic plan. Additionally, the adoption of our technologies in the United States will require Congressional action in the form of legislative changes, which we cannot guarantee will occur or, even if they do occur, be favorable to our objectives and business plan. As a result, we may not achieve the growth potential we expect or may grow more slowly than expected, and it is difficult to project the success of our business model and operations. See Item 1, “Description of Business—Government Regulations” above for further discussion of current regulatory limitations on our operations. Our ability to promote and facilitate the adoption of our technologies, as well as our future success and financial performance, is dependent upon numerous factors, including those discussed in Item 1A, “Risk Factors.”

Components of Results of Operations

Revenue

The Company derives its revenue primarily from environmental remediation supporting services, consulting services, licensing fees, and technology development grants related to nuclear waste disposal services globally. Revenue is recognized when the Company satisfies its performance obligations to its customers, which generally occurs at a set delivery of the deliverables as specified in its customer contracts, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company reports any tax assessed by a governmental authority that the Company collects from its customers that is both imposed on and concurrent with its revenue-producing activities (such as sales, use, value-added and excise taxes) on a net basis (meaning the Company does not recognize these taxes in either its revenues or its costs and expenses).

Operating Expenses

Cost of services includes all direct costs incurred in delivering the Company’s nuclear waste disposal solutions and services. These costs are primarily comprised of salaries, subcontractor fees, and direct costs which are directly attributable to the provision of the services described above.

Depreciation and amortization expenses include depreciation of property, plant and equipment and amortization of intangible assets. Depreciation is based on the estimated useful lives of the assets using the straight-line method. All intangible assets are amortized on a straight-line basis over their respective estimated useful lives.

Selling, general and administrative expenses primarily consist of costs associated with administrative staff salaries, facilities, utilities, insurance, marketing & advertising, stock-based compensation, legal fees and other office expenses related to the Company’s business functions.

Research and development expenses consists primarily of costs incurred to design, develop, test, and validate the Company’s technologies and services for the deep borehole disposal of nuclear waste. Research and development expenses are expensed as incurred and may vary based on the timing and scope of engineering programs, demonstration activities, and regulatory support efforts.

Other Income (Expense), Net

Other income (expense) consists primarily of interest income, interest expenses, foreign currency exchange gain (loss), and other miscellaneous expenses.

Comparison of the Years Ended December 31, 2025, and 2024

The following table sets forth our historical consolidated statements of operations data for the periods indicated (in thousands):

Revenue

Revenue decreased by approximately $917 thousand, or 13%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in revenue was primarily attributable to a decrease in the hydrogeologic characterization work scope related to Freestone’s contracts and an increase in the number of fixed-price contracts as compared to variable-price contracts during the period. This was partially offset by a slight increase in Deep Isolation’s revenues from existing contracts owing to an increase in deliverables and associated revenues toward the end of the projects.

Operating Expenses

Cost of services decreased by approximately $1.0 million, or 28%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in cost of services was primarily attributable to a decrease in the hydrogeologic characterization work scope related to Freestone’s contracts during the period. The decrease in Freestone’s scopes of work resulted fewer billable hours for existing employees and a reduced need for subcontractors, and thus a reduction in overall cost of services.

Depreciation and amortization expense remained relatively constant for the year ended December 31, 2025, compared to the year ended December 31, 2024. Depreciation and amortization expense includes depreciation of property, plant and equipment and amortization of intangible assets.

Selling, general and administrative expenses increased by approximately $4.6 million, or 111%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in selling, general and administrative expenses was primarily attributable to higher accounting, audit, legal and travel expenses associated with the Merger.

Research and development

Research and development expense increased by $202 thousand, or 100%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in research and development expenses was primarily attributable to the Company’s non-radioactive, full-scale, at-depth demonstration costs.

Other Income (Expense), Net

Other income (expense), net increased by approximately $362 thousand, or 496%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to higher interest income following the investment of the proceeds from the private placement.

Net Loss

Net loss increased by $4.3 million, or 437%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to the fluctuations described above under “Revenue,” “Operating Expenses,” and “Other Income (Expense), Net.”

In addition, the following risk factors included in Part I Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 30, 2026 are no longer applicable to the Company because the Company’s shares of common stock were quoted for trading on OTCQB in July 2026:

–There is currently no market for our common stock and there can be no assurance that any market will ever develop. You may therefore be unable to re-sell shares of our common stock at times and prices that you believe are appropriate;

–Our common stock may not be eligible for listing or quotation on any securities exchange or over-the-counter trading system;

–The market price and trading volume of our common stock may be volatile and could decline significantly following any listing or quotation, if any.

Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our security holders to resell their common stock

The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current 'bids' and 'asks' as well as volume information. Trading in securities quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a national stock exchange. These factors may result in investors having difficulty reselling any shares of our common stock.

We may be unable to maintain OTCQB Compliance

There can be no assurance that we will be able to maintain compliance with the continued listing requirements for the OTCQB Venture Market. If we fail to maintain compliance with any such continued listing requirement, there can also be no assurance that we will be able to regain compliance with any such continued listing requirement in the future.

The market price and trading volume of our common stock may be volatile and could decline significantly following any listing or quotation, if any.

The quotation systems, including the OTCQB, or stock exchanges, including Nasdaq, on which our common stock is currently quoted, or on which our common stock may be listed in the future have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for our common stock following our recent quotation on OTCQB, the market price of our common stock may be volatile and could decline significantly. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above the market price of our common stock as of the date of the consummation of the Merger. We cannot assure you that the market price of common stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

● the realization of any of the risk factors presented in our periodic reports and other filings with the SEC;

● actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, results of operations, level of indebtedness, liquidity or financial condition;

● additions and departures of key personnel;

● failure to comply with the requirements of the OTCQB market, or following any potential listing on Nasdaq;

● failure to comply with the Sarbanes-Oxley Act or other laws or regulations;

● future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our common stock;

● publication of research reports about us, or our industry;

● the performance and market valuations of other similar companies;

● broad disruptions in the financial markets, including sudden disruptions in the credit markets;

● speculation in the press or investment community;

● actual, potential or perceived control, accounting or reporting problems; and

● changes in accounting principles, policies and guidelines.

In addition, as a company operating in the nuclear energy and nuclear waste management sector, our stock price and market capitalization may be particularly sensitive to changes in sector-wide investor sentiment, regardless of our actual operating performance or progress. Such sentiment may be influenced by factors beyond our control, including nuclear incidents or accidents anywhere in the world, shifts in public or political attitudes toward nuclear technologies, negative developments affecting other nuclear or advanced-energy companies, or broader market dislocations affecting early-stage or pre-commercial technology companies. Market volatility or negative sentiment affecting the nuclear sector or comparable companies could reduce liquidity in our shares, depress our stock price, increase our cost of capital, or impair our ability to raise additional funds on acceptable terms, even if our business fundamentals, technical progress or long-term prospects remain unchanged. Any such effects could materially and adversely affect our financial condition and strategic flexibility.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.

OTCQB Quotation

In July 2026, the Company’s common stock was approved to trade on the OTCQB market under the symbol DBHL.

Project GENESIS program

On July 23, 2026, the Company was selected as the sole industrial partner on three competitive federal grants awarded through the U.S. Department of Energy’s (DOE) Project GENESIS program. Two initiatives are led by Lawrence Berkeley National Laboratory (LBNL) and one is led by the University of South Carolina and aim to advance artificial intelligence-enabled repository site screening, design and performance analysis for nuclear waste disposal.

Directors and Officers Appointments

Effective as of February 24, 2026, Joseph Nelson was appointed Chief Financial Officer and Treasurer of the Company, though Mr. Baltzer, the Company’s President and Chief Executive Officer acted as the principal financial officer until April 2026 when Mr. Nelson becomes fully familiar with the Company’s systems and processes.

Effective February 24, 2026, Paula Whitten-Doolin was appointed General Counsel and Corporate Secretary of the Company.

On June 16, 2026, at 2026 Annual Meeting of the Stockholders of the Company the stockholders of the Company elected three (3) Class A directors, Rod Baltzer, Christa Steele, Renee Hornbaker, to serve until the 2029 Annual Meeting of Stockholders or until their respective successors have been duly elected and qualified.

Depreciation and amortization expense decreased by $5 thousand, or 17%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in depreciation and amortization expense is primarily related to lower depreciation and amortization expense at Freestone due to a vehicle reaching the end of its depreciable life in 2025. Depreciation and amortization expense includes depreciation of property, plant and equipment and amortization of intangible assets.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table sets forth our summarized consolidated financial information for the periods indicated (in thousands):

Revenue

Revenue decreased by approximately $388 thousand, or 12%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease in revenue was primarily attributable to lower revenues at Deep Isolation following the completion of certain projects during 2025.

Operating Expenses

Cost of services decreased by approximately $125 thousand, or 9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease in cost of services was primarily attributable to a decrease in subcontractor costs.

Selling, General and Administrative expenses increased by approximately $2.4 million, or 74%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase in selling, general and administrative expenses was primarily attributable to higher accounting, audit, legal and insurance expenses along with addition of 7 new employees, including the Chief Financial Officer and General Counsel.

Research and development expense increased by approximately $4.7 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase in research and development expense was attributed to the ordering of long-lead items and front-end engineering work related to the Company's non-radioactive, full-scale, at-depth demonstration of its DBD technologies.

Depreciation and amortization expense decreased by $9 thousand, or 15%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in depreciation and amortization expense is primarily related to lower depreciation and amortization expense at Freestone due to a vehicle reaching the end of its depreciable life in 2025. Depreciation and amortization expense includes depreciation of property, plant and equipment and amortization of intangible assets.

Other Income, Net

Other income, net increased by approximately $350 thousand for six months ended June 30, 2026, compared to the six months ended June 30, 2025, due to interest income received from the investment of the Merger proceeds.

Net Loss

Net loss increased by $6.9 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, due to the fluctuations described above under “Revenue,” “Operating Expenses,” and “Other Income (Expense), Net.”