FISN 10-K & 10-Q changes, risk factors and insider trading
Deep Fission, Inc. · Nasdaq · Electric Services · CIK 1918102 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors discussed below, together with all of the other information contained in this Annual Report. The risk factors set forth below are not the only risks we face; we may also face risk factors not presently known to us or that we currently believe to be immaterial. If any of the following risk factors or any other risk factors actually occur, our business, prospects, results of operations, and financial condition could be materially adversely affected. In such event, the trading price of our common stock could decline, and you might lose all or part of your investment.”
New heading “Risks Related to Our Business and Industry”
New heading “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.”
New heading “We are an early-stage company with a history of operating losses and expect to incur losses for the foreseeable future.”
New heading “Our auditor has issued a “going concern” opinion with respect to our financial statements.”
New heading “Our business plans require substantial additional capital, and we may not be able to obtain financing on acceptable terms or at all.”
New heading “Our technology depends on the successful drilling and long-term stability of deep vertical boreholes, which presents significant technical, engineering, regulatory and operational risks.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “Our future revenue plans depend in part on strategic partners and government entities.”
New heading “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.”
New heading “Delays or failures in obtaining grid interconnection approvals could delay or prevent deployment of our reactors.”
New heading “Our development timelines, cost projections, and financial forecasts are subject to significant uncertainty.”
New heading “Manufacturing or construction issues could increase costs or delay deployment of our reactors.”
New heading “We may be unable to obtain sufficient quantities of nuclear fuel and fuel cycle services required to operate our reactors.”
New heading “Our reactors will depend on specialized components and suppliers, and disruptions in the supply chain could delay development, interrupt operations or increase costs.”
New heading “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.”
New heading “Our insurance coverage and any available indemnification may not be sufficient to cover all potential liabilities associated with our operations.”
New heading “The costs associated with the storage and disposal of used nuclear fuel could be significant.”
New heading “Changes in government incentives related to nuclear power may adversely affect our business.”
New heading “Risks Related to Our Regulatory Environment”
New heading “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.”
New heading “The DOE’s authorization under our OTA could be terminated or overturned, which could prevent or delay commercialization of our technology.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “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.”
New heading “Nuclear incidents anywhere in the world could increase regulatory requirements, reduce public acceptance of nuclear power, and adversely affect demand for our technology.”
New heading “Environmental laws and regulations could increase costs for us or our customers and adversely affect demand for our technology.”
New heading “Risks Related to Our Intellectual Property”
New heading “If we are unable to obtain, maintain, protect, or enforce our intellectual property rights, our competitive position could be adversely affected.”
New heading “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.”
New heading “Disputes regarding inventorship or ownership of our intellectual property could arise.”
New heading “General Risks Associated with Our Company”
New heading “Macroeconomic, geopolitical, and trade policy developments could adversely affect our access to capital and liquidity, business and our supply chain.”
New heading “Any acquisitions, partnerships, or joint ventures we enter into could disrupt our business and may not achieve the expected benefits.”
New heading “We may be unable to adequately control the costs associated with developing and operating our business.”
New heading “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.”
New heading “Our use of artificial intelligence technologies, including those provided by third parties, could adversely affect our business.”
New heading “Natural disasters and severe weather events could disrupt our operations and supply chain.”
New heading “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.”
New heading “We may be subject to litigation, investigations, claims or other legal proceedings that could be costly to defend and could adversely affect our business.”
New heading “Operating as a public company increases our administrative burden and costs.”
New heading “Risks Related to Ownership of Our Common Stock”
New heading “There is currently no public trading market for our common stock, and one may not develop.”
New heading “We may not be able to list our common stock or maintain a listing on a national securities exchange.”
New heading “We have not voluntarily implemented various corporate governance measures, in the absence of which, our stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.”
New heading “If a trading market develops, the market price of our common stock may be volatile.”
New heading “Future sales of our common stock could cause our stock price to decline.”
New heading “Our executive officers, directors and principal stockholders collectively hold a significant percentage of the voting power of our company.”
New heading “We are an emerging growth company and a smaller reporting company.”
New heading “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.”
New heading “Our amended and restated certificate of incorporation designates certain courts as the exclusive forum for certain stockholder disputes.”
New heading “We do not intend to pay dividends in the foreseeable future.”
New heading “If our common stock becomes publicly traded and securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.”
Largest changes
“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. …”see in full comparison
“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.”see in full comparison
“Although management did not conduct a formal assessment of internal control over financial reporting in accordance with Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Corporation Finance Interpretations, as a result of the errors described above and the related restatement, the Company identified material weaknesses in its internal control over financial reporting, which caused our management to conclude that we did not maintain effective internal control over financial reporting as of December 31, 2024 and 2025 due to lack of formal controls and standardized …”see in full comparison
“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 …”see in full comparison
“We may be subject to litigation, investigations, claims or other legal proceedings that could be costly to defend and could adversely affect our business.”see in full comparison
“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.”see in full comparison
Full comparison: every changed paragraph (221)
Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors discussed below, together with all of the other information contained in this Annual Report. The risk factors set forth below are not the only risks we face; we may also face risk factors not presently known to us or that we currently believe to be immaterial. If any of the following risk factors or any other risk factors actually occur, our business, prospects, results of operations, and financial condition could be materially adversely affected. In such event, the trading price of our common stock could decline, and you might lose all or part of your investment.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties, including the following:
Risks Related to Our Business and Industry
Our Gravity Reactor is unproven, and our design, borehole development activities, planned pilot reactor, and future commercial applications may fail, progress more slowly than projected, or encounter delays or changes that increase costs and capital requirements.
Our Gravity Reactor is in the development stage and has not been proven in a real-world operating environment. We are currently advancing the design of the Gravity Reactor and conducting site development, borehole test drilling, engineering, and validation activities, and we plan to construct and operate a pilot reactor under the DOE Reactor Pilot Program. These efforts involve significant technical and engineering challenges, including subsurface deployment and integration of reactor and borehole systems, and may require design changes, additional engineering and validation work, and result in delays or increased costs.
Our development pathway also depends on the timing of required regulatory approvals and licenses. The planned pilot reactor would operate under DOE authorization, which does not permit commercial operation and does not replace the need for NRC licensing. Delays in DOE authorization, challenges in pilot reactor development, or difficulties in obtaining or maintaining NRC approvals could delay or prevent commercialization.
If our design, borehole development activities, or planned pilot reactor do not perform as expected, or if regulatory requirements materially delay or constrain our development and licensing pathway, our technology may prove infeasible or more costly to deploy than anticipated, which could materially adversely affect our business, prospects, results of operations, and financial condition.
We are an early-stage company with a history of operating losses and expect to incur losses for the foreseeable future.
Legacy Deep Fission was formed in 2023 and has not generated revenue from commercial operations. During the years ended December 31, 2025 and 2024, we incurred net losses of $61.0 million and $5.7 million, respectively.
We expect to continue to incur significant expenses as we continue to develop our technology, pursue regulatory approvals, build our organization, and prepare for potential commercialization. These activities may require substantial capital and may not result in commercially viable products or revenue-generating operations.
Even if we successfully commercialize our technology, we may not achieve or sustain profitability. Our ability to generate revenue will depend on a number of factors, including obtaining regulatory approvals, customer adoption of our technology, successful development and deployment of our reactors, and access to sufficient capital.
Our auditor has issued a “going concern” opinion with respect to our financial statements.
Our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements for the year ended December 31, 2025 indicating that there is substantial doubt about our ability to continue as a going concern. During the years ended December 31, 2025 and 2024, we generated no revenue and incurred net losses of $61.0 million and $5.7 million, respectively, and as of December 31, 2025 and 2024 we had an accumulated deficit of $66.7 million and $5.7 million, respectively. As of December 31, 2025, our cash and cash equivalents were $23.7 million. In February 2026, we raised approximately $76.0 million in net proceeds from a private placement; however, we expect that these funds, together with our existing cash, will not be sufficient to operate our business for the next twelve months.
Based on our recurring losses from operations, our expectation of continued operating losses for the foreseeable future, and our current cash position, our existing cash and cash equivalents will not be sufficient to fund our operating and capital requirements for the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern.
To continue operating our business, we will need to raise substantial additional capital. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all.
Our business plans require substantial additional capital, and we may not be able to obtain financing on acceptable terms or at all.
Our business will require significant capital to fund the continued development of our Gravity Reactor, obtain regulatory approvals, construct and deploy reactor facilities, and support our operations. We estimate that the total capital required to complete our pilot reactor program under the DOE Reactor Pilot Program and to obtain NRC licensing for commercial deployment will be substantial, and there is significant uncertainty regarding the exact amount of our ultimate capital requirements due to the early stage of our technology development, the novel nature of our regulatory pathway, and the unpredictability of construction and deployment costs. We expect to incur operating losses for the foreseeable future and will require significant additional financing to execute our business plan. Our planned pilot reactor and subsequent development activities are not fully funded and will require substantial additional capital. If we are unable to obtain such funding, our development timelines may be delayed, and we may be required to reduce or terminate portions of our development programs.
The timing and amount of our future capital requirements will depend on a number of factors, including the progress of our technology development, regulatory approvals and processes, commercialization efforts, customer demand, supply chain conditions, and general economic and capital market conditions. Because our technology is in an early stage of development and represents a new category of nuclear energy solutions, we have limited historical data upon which to estimate our capital needs.
We expect that we will need to raise additional capital through equity issuances, debt financings, strategic partnerships, government programs, or other financing arrangements. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all.
If we are unable to obtain sufficient funding, we may be required to delay, reduce, or terminate all or portions of our development programs or other operations, which could materially adversely affect our business, prospects, results of operations, and financial condition. In addition, to the extent that we raise additional capital through the issuance of equity or convertible securities, the ownership interests of our existing stockholders will be diluted, potentially significantly. Given the magnitude of our anticipated capital requirements, future equity financings could result in substantial dilution to existing stockholders. Moreover, the terms of such securities or any other financing may include preferences or other rights that adversely affect the value of, or rights of holders of, our common stock. Debt financing, if available, could result in additional debt service obligations, and debt financings or other financings may involve covenants that restrict our operations or financial flexibility.
If we are unable to obtain sufficient funding or otherwise manage our capital resources effectively, we may not be able to continue operations.
Our technology depends on the successful drilling and long-term stability of deep vertical boreholes, which presents significant technical, engineering, regulatory and operational risks.
Our Gravity Reactors require the drilling and long-term operation of deep vertical boreholes designed to house nuclear reactor systems at significant depths below the surface. Deep vertical borehole drilling and subsurface engineering involve complex technical challenges, including maintaining borehole stability, managing subsurface pressures and temperatures, ensuring the integrity of well casings and seals, and preventing subsurface fluid migration.
Our staged borehole development program (including non-nuclear and prototype wells) may not successfully validate drilling methods, installation procedures, or subsurface performance assumptions necessary for reactor deployment.
Engineering studies and modeling activities are ongoing to refine borehole diameter requirements, drilling techniques, casing systems, and installation procedures as part of the continuing development of the Gravity Reactor. While conducting such studies and activities, we may encounter unforeseen engineering challenges.
Any such engineering challenges may be exacerbated by unpredictable geological conditions, equipment limitations, drilling errors, or failures in subsurface materials or infrastructure. Unexpected subsurface conditions may require changes in drilling design, additional engineering work, or abandonment of drilling operations at particular sites. Additionally, long-term operation of a reactor in a deep vertical borehole environment may involve risks that we do not currently expect.
In addition, the drilling and construction of deep vertical boreholes are subject to federal, state, and local permitting and regulatory requirements, including environmental reviews, groundwater protection standards, and well construction regulations. These requirements vary by jurisdiction, may change from time to time and have generally become more stringent over time, and may be subject to evolving interpretations. Obtaining and maintaining necessary permits may be time-consuming, costly, and uncertain, and may require modifications to drilling plans or site selection.
If we are unable to successfully drill, permit, construct, and maintain boreholes suitable for reactor deployment, or if borehole integrity cannot be maintained or regulatory requirements materially delay or constrain our drilling activities, our technology may prove infeasible or significantly more costly to deploy than anticipated. Any such failure or delay could materially adversely affect our development timelines, costs, and ability to commercialize our technology.
We may be unable to identify, acquire, lease, or otherwise secure access to suitable sites with the geological characteristics necessary to deploy our Gravity Reactor.
The successful deployment of our Gravity Reactor depends on our ability to identify and secure sites with geological characteristics capable of supporting deep vertical borehole drilling and long-term structural stability of deep vertical boreholes. These characteristics may include stable subsurface formations, appropriate thermal and hydrological conditions, sufficient depth, and the ability to safely construct and maintain a borehole reactor facility.
Suitable sites may be difficult to locate, may not be available on commercially acceptable terms, or may be subject to competing land uses, ownership disputes, or conflicting mineral, drilling, or surface rights. In addition, site acquisition may require negotiation with private landowners, governmental entities, non-governmental organizations, or other stakeholders, and may involve obtaining easements, mineral rights, drilling rights, or other property interests. These processes can be time-consuming, uncertain, and costly.
Even if a potential site is identified, geological conditions may ultimately prove unsuitable for reactor deployment following additional subsurface analysis, drilling activities, or regulatory review. For example, we are currently conducting geological analysis at the Kansas Site, which we intend to use for our pilot reactor program. There can be no assurance that the Kansas Site will ultimately prove to be a suitable site for reactor deployment following further testing. Furthermore, local zoning requirements, environmental regulations, permitting requirements, or opposition from host communities could delay or prevent the development of otherwise suitable sites.
If we are unable to identify or secure suitable sites with the required geological characteristics on commercially reasonable terms, or if such sites become unavailable due to regulatory, environmental, or community considerations or otherwise prove unsuitable, our ability to deploy our technology and execute our business plan could be materially adversely affected.
We have no experience operating nuclear power facilities, and our lack of operational experience may create additional risks as we develop and deploy our technology.
The safe and reliable operation of nuclear reactors requires highly specialized technical capabilities, operational procedures, safety culture, regulatory compliance systems, and experienced personnel. We have not yet constructed or operated a nuclear power facility, commercial or otherwise.
As we work toward demonstration and potential commercial deployment of our Gravity Reactor, we will need to develop operational capabilities, establish safety and compliance programs, recruit and train qualified operating personnel, and implement systems necessary to safely operate nuclear facilities. These efforts may require significant time, expense, and organizational development.
If we are unable to, on a timely basis, successfully develop these operational capabilities, establish safety and compliance programs, recruit and retain appropriately qualified personnel, or establish the operational infrastructure necessary to safely operate our reactors, we may experience operational failures, safety incidents, regulatory enforcement actions, delays in commercialization, or increased operating costs. Any such developments could materially adversely affect our business, prospects, results of operations, and financial condition.
The market for our Gravity Reactor is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected. If demand for our technology fails to develop sufficiently, our business and operations would suffer, and we would be unable to achieve or maintain profitability.
The market for Gravity Reactors has not yet been established. Projections we may provide from time to time for the total addressable market are based on a number of internal and third-party estimates, including, but not limited to, levels of demand for clean energy, including nuclear power, the number of potential customers who have expressed interest in our products and services, estimates of prices and production costs for our Gravity Reactors and the various components of our Gravity Reactor, our anticipated project development, deployment, and operating model, and general market conditions. However, our assumptions and the data underlying our estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, estimates we may provide from time to time of the annual total addressable market for our technology and related offerings, as well as the expected growth rate for the total addressable market for our technology and related offerings may prove to be incorrect.
Challenges that could impact our expectations for the timeline and costs of market development might arise from obtaining federal, state, and local permits and approvals, transportation, actual or 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 PPAs, with hyperscale data centers and other large power users, as well as utilities, industrial operators, and government or defense installations. These agreements are typically required to support project financing and provide revenue certainty for power generation assets. We have not yet entered into any PPAs or other binding commercial arrangements.
Negotiating PPAs can be complex and time-consuming, and potential customers may be reluctant to enter into long-term commitments with a company developing a novel technology that has not yet been commercially deployed. In addition, potential counterparties may require extensive technical validation, regulatory approvals, operational track records, or other assurances before entering into such agreements.
Even if we are able to negotiate potential commercial arrangements, such agreements may be subject to regulatory approvals, financing conditions, or other contingencies that could delay or prevent their execution. If we are unable to enter into PPAs or similar agreements on commercially reasonable terms, or at all, our ability to deploy reactors, generate revenue, and execute our business plan could be materially adversely affected.
Our future revenue plans depend in part on strategic partners and government entities.
Our business model contemplates the deployment of our Gravity Reactor in collaboration with hyperscale data centers and other large power users, as well as utilities, industrial operators, government or defense installations, and other strategic partners. These relationships may involve joint development arrangements, licensing agreements, project development partnerships, or other commercial structures.
There can be no assurance that we will successfully establish or maintain such partnerships on commercially acceptable terms. Potential partners may require additional validation of our technology, regulatory approvals, operational track records, or other assurances before committing to collaboration.
If we are unable to establish strategic partnerships or if such partnerships fail to achieve the expected level of deployment or utilization of our technology, our business model and commercialization strategy could be materially adversely affected.
Electricity generated by our Gravity Reactors may not be cost-competitive with other energy generation technologies, and competing energy solutions could reduce demand for our reactors and related services.
The markets for electricity generation and clean energy technologies are highly competitive and rapidly evolving. Our Gravity Reactor will compete with a wide range of existing and emerging energy generation technologies, including renewable energy sources such as solar, wind, and geothermal power, natural gas-fired generation, large-scale nuclear power plants, energy storage technologies, and other emerging low-carbon energy solutions.
Many competing technologies benefit from established supply chains, existing regulatory frameworks, government incentives, or declining capital costs. In some markets, renewable energy technologies benefit from subsidies, tax incentives, or regulatory mandates that increase their competitiveness relative to nuclear power. In addition, new or improved technologies, including advances in energy storage, carbon capture, or alternative generation technologies, may provide comparable or superior performance, reliability, or cost advantages relative to our Gravity Reactor.
If the levelized cost of electricity generated by our Gravity Reactor is not competitive with other sources of electricity generation, or if alternative technologies become more cost-effective or widely adopted, commercialization and demand for our reactors and related services could be reduced or fail to materialize. In addition, even if we are able to commercialize our reactor and related services, if we are unable to continue developing and improving our technology to remain competitive, we may lose market share. Any such developments could materially adversely affect our business, prospects, financial condition, and results of operations.
Delays or failures in obtaining grid interconnection approvals could delay or prevent deployment of our reactors.
The commercial deployment of our reactors will require interconnection to regional electricity transmission systems. Obtaining grid interconnection approvals typically involves complex technical studies, regulatory review, coordination with utilities, transmission providers, and, in some cases, regional transmission organizations or independent system operators, and potentially significant infrastructure upgrades.
Interconnection processes in many regions are subject to substantial backlogs and may take several years to complete. In addition, the cost of required transmission upgrades or system modifications may be significant and could affect the economic viability of a proposed reactor project. Interconnection approvals may also be subject to regulatory or operational conditions that affect project timing or feasibility.
If we are unable to obtain grid interconnection approvals on acceptable timelines or terms, or if required transmission infrastructure upgrades prove too costly or technically impractical, our ability to deploy reactors and deliver electricity to customers could be delayed or prevented. Any such delays could materially adversely affect our development plans, financial condition, and results of operations.
Our development timelines, cost projections, and financial forecasts are subject to significant uncertainty.
From time to time we may provide development or commercialization timelines, cost projections, and financial forecasts, which are based on estimates, including regarding the timing of reactor development, testing, licensing, construction, and commercialization, as well as projections regarding the potential costs associated with developing and deploying our technology.
These estimates are based on numerous assumptions, including assumptions regarding regulatory approvals, engineering performance, supply chain availability, financing conditions, market demand, and the availability of suitable deployment sites.
Management's Discussion & Analysis (MD&A)
New heading “The Private Placement”
New heading “Accounting Considerations”
New heading “Our Intended Business”
New heading “Components of Results of Operations”
New heading “Operating Expenses”
New heading “Other Non-Operating Income (Expense)”
New heading “Restatement of Prior Period Financial Statements”
New heading “Comparison of the Year Ended December 31, 2025 and 2024”
New heading “Operating Expenses”
New heading “Other Non-Operating Income (Expense)”
New heading “Year ended December 31, 2025 and 2024”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
New heading “Contractual Obligations and Commitments”
New heading “Stock-Based Compensation”
Removed heading “Emerging Growth Company”
Largest changes
“We believe we will be able to meet these costs through use of funds to be loaned by or invested in us by our stockholders, management or other investors. There are no assurances that such funds will be advanced or that the Company will be able to secure any additional funding as needed. As of December 31, 2024 and 2023, the Company had cash of $3,464 and $774, respectively. …”see in full comparison
“On December 10, 2021, the Company issued a promissory note (the “Note”) to the majority stockholder of the Company, Mark Tompkins, a stockholder and director of the Company, pursuant to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance to the Company on or before the date that the Company consummates a business combination with a private company or reverse takeover transaction or other transaction after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). …”see in full comparison
“As of December 31, 2024, the Company had $3,464 of cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal to approximately $45,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the Company’s Exchange Act filing requirements. …”see in full comparison
“As of December 31, 2024, the Company had $3,464 in cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal to approximately $45,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the Company’s Exchange Act filing requirements. …”see in full comparison
“Restatement of Prior Period Financial Statements”see in full comparison
“The Company anticipates that the selection of a business combination will be complex and extremely risky. While the Company is in a competitive market with a small number of business opportunities, through information obtained from industry professionals including attorneys, investment bankers, and other consultants with experience in the reverse merger industry, our management believes that there are opportunities for a business combination with firms seeking the perceived benefits of becoming a publicly traded corporation. …”see in full comparison
Full comparison: every changed paragraph (91)
You should read the following discussion in conjunction with the consolidated financial statements and the notes to those statements included elsewhere in this Annual Report. Certain statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements that involve risks and uncertainties as described under the heading “Cautionary Note on Forward-Looking Statements” and Item 1A, “Risk Factors”. The forward-looking statements are not historical facts, but rather are based on management’s current expectations, estimates, forecasts, projections, beliefs and assumptions and on information available to us as of the date of this Annual Report about our industry and business. Our actual results could differ materially from the results contemplated by these forward-looking statements.
Overview of our Business
We are a nuclear energy technology company developing a SMR based on established PWR technology, with novel emplacement in deep boreholes approximately one mile below the Earth’s surface. Our reactor, which we refer to as the Gravity Reactor, will leverage subsurface conditions to support key containment and operating functions, including the use of hydrostatic pressure from a water column within the borehole to support reactor operating pressure and cooling, and the surrounding geological formation to provide structural confinement and shielding. This approach is intended to reduce reliance on large surface containment structures and other safety-related infrastructure associated with conventional nuclear power plants, support faster deployment timelines, improve security, enhance safety, and enable lower capital and operating costs relative to conventional nuclear facilities, while reducing exposure to environmental and other surface-level hazards.
Each Gravity Reactor is targeted to produce up to 15 MWe. Individual reactors may be deployed as standalone installations or grouped in clusters of boreholes at a single site, which may enable longer refueling cycles through coordinated fuel management, staggered refueling schedules and more efficient utilization of shared infrastructure, and support larger installations capable of supplying hundreds and potentially thousands of MWe of generation capacity.
The Company’s commercialization strategy is based on a phased deployment plan designed to move toward commercialization in the next three years. Given that reactor criticality using established PWR technology is well understood, the Company is prioritizing validation of the hardest and most differentiated parts of our system, to reduce risk earlier and move more directly toward a commercialization outcome. Specifically, the tests that we want to focus on are drilling to depth at commercial scale, installing and integrating a nuclear system a mile underground, and operating as part of a complete energy ecosystem. We also want to prove that we can do this in time to meet the AI-driven surge in demand for energy. The Company is currently participating in the DOE Reactor Pilot Program, and we expect to demonstrate our system as part of the DOE Reactor Pilot Program.
The first phase of the Company’s phased deployment plan involves engineering validation and proof of concept wells. The Company has a long-term lease for approximately 100 acres located within the Kansas Site and has commenced initial field development activities at the site. As part of this, the Company already drilled its first data acquisition well to gather real-world data up to 6,000 feet deep. Next, the Company will demonstrate its ability to drill a commercial-scale borehole and safely deploy a prototype reactor. The Company continues to advance its reactor design in parallel with these activities, including planning additional drilling activities and conducting related engineering and emplacement work, and is targeting completion of these activities in the coming months. The balance of this year and into early 2027 will be focused on delivery of key components for full-system installation, including well casing, our reactor canister, and heat exchanger, as well as LEU fabrication and loading.
The second phase of the Company’s phased deployment plan involves DOE authorization and one or more commercial pilot wells. Specifically, subject to DOE authorization, the Company intends to demonstrate the Gravity Reactor, and to apply for a commercial license with the NRC in the first half of 2027, converting the same pilot reactor to commercial operation. We are working closely with both the DOE and the NRC to align demonstration and licensing, as we are aiming to move these efforts forward together rather than advancing them in sequence.
The third and final phase of the Company’s phased deployment plan involves the construction of surface facilities and seeking high-volume commercial licensing for deployment of multiple reactors at a single site through clustered boreholes, and subsequently, at multiple sites. We are targeting as early as 2027 to seek such high-volume commercial licensing with the NRC.
The Company’s approach to subsurface reactor deployment is supported by its intellectual property portfolio, which includes issued patents and pending patent applications relating to reactor configuration, deep subsurface emplacement, drilling and casing techniques, thermal-hydraulic performance, instrumentation and monitoring, and other technologies supporting the deployment of underground nuclear reactors. The Company believes that its intellectual property, together with its engineering expertise and ongoing development activities, supports its competitive position.
Legacy Deep Fission was incorporated in July 2023 and remains in the development stage. The Gravity Reactor remains in conceptual and early engineering stages, and the Company has not constructed or operated a commercial reactor or generated revenue. Current activities include reactor development, geological evaluation, large-diameter borehole drilling research and development, geothermal testing, safety analysis, regulatory engagement, site development, and commercialization planning.
The Merger
On the Merger Closing Date, Surfside completed the Merger with Legacy Deep Fission, pursuant to which a wholly owned subsidiary of Surfside merged with and into Legacy Deep Fission, with Legacy Deep Fission continuing as the surviving corporation and becoming a wholly owned subsidiary of Surfside. In connection with the transaction, Surfside changed its name to Deep Fission, Inc.
On the Merger Closing Date, we issued 38,538,922 shares of our common stock to existing holders of Legacy Deep Fission common stock and 85,000 shares of our common stock (the “Advisor Shares”) to an accredited investor in consideration for services rendered in connection with the Merger, while Surfside’s existing stockholders continued to hold an aggregate of 2,166,667 shares of our common stock (the “Retained Pre-Merger Shares”). We also reserved a total of 9,500,884 shares of our common stock under the 2025 Equity Incentive Plan (“2025 EIP”) for future issuances of equity awards at the discretion of our board of directors to officers, employees, consultants and directors and reserved 1,000,000 shares of our common stock under the 2025 Employee Stock Purchase Plan (“2025 ESPP”) for future purchase by employees.
The Private Placement
Concurrently with the consummation of the Merger, the Company also issued and sold 10,000,000 shares of our common stock in a private placement to certain accredited and institutional investors at a purchase price of $3.00 per share (the “Private Placement”, and together with the Merger, the “Transactions”).
Accounting Considerations
The historical financial statements and related footnotes included in this Annual Report include descriptions of Legacy Deep Fission’s previously outstanding common stock; however, in connection with the Merger, all shares of Legacy Deep Fission common stock were converted into the right to receive shares of our common stock. See “The Merger” and “The Private Placement” above for detailed information regarding the Transactions and the related conversion of the shares of Legacy Deep Fission’s common stock.
For financial reporting purposes, the Merger was treated as a recapitalization and reverse acquisition. Legacy Deep Fission is considered the acquirer for accounting purposes, meaning that the historical financial results of Legacy Deep Fission prior to the Merger are considered our historical financial results under applicable accounting principles. Accordingly, the historical financial statements included in this Annual Report and discussed in this section, for all periods prior to the Merger, are those of Legacy Deep Fission and not Surfside.
Our Intended Business
As described under “Business Model and Revenue Streams” in Item 1, “Business,” our business model is designed to generate revenue from (i) project-level equity participation, including indirect participation in project-level cash flows from electricity sales, (ii) one-time upfront revenue, generally expected to be associated with Gravity Reactor deployment and related upfront project development services and (iii) recurring revenue, generally expected to be associated with technology licensing and operations and maintenance services of Gravity Reactor installations. Because we have not yet commercialized a Gravity Reactor, none of these revenue streams have begun to materialize and are not reflected in our historical results.
Components of Results of Operations
Operating Expenses
General and administrative expenses primarily consist of costs associated with administrative staff salaries, facilities, utilities, insurance, marketing and advertising, stock-based compensation, legal fees and other office expenses related to our business functions.
Research and development (“R&D”) expenses primarily represent costs incurred to develop our technology. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all R&D costs in the periods in which they are incurred.
Other Non-Operating Income (Expense)
Other non-operating income (expense) consists primarily of change in fair value of SAFE Notes (as defined below), interest income, interest expenses, and other miscellaneous expenses.
Restatement of Prior Period Financial Statements
As previously discussed under the heading “Explanatory Note,” we are restating our previously issued consolidated financial statements and related notes for the year ended December 31, 2024 and the unaudited condensed consolidated financial information for the periods ended June 30, 2024, September 30, 2024, June 30, 2025, and September 30, 2025. Refer to Note 2 in the notes to the consolidated financial statements in this Annual Report for additional information. The impact of the restatement is reflected in the “Results of Operations” section within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Comparison of the Year Ended December 31, 2025 and 2024
The following table sets forth our summarized financial information for the periods indicated:
Operating Expenses
General and administrative expenses increased by $11.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in general and administrative expenses was primarily attributable to an increase in the number of employees, which resulted in increase in salary and stock-based compensation expense, as well as increased legal, benefits, and marketing costs.
Research and development expenses increased by $6.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in research and development expenses was primarily attributable to the progression of the Company’s operating plans and the increase in salary and benefits corresponding with our increase in headcount, as well as increased consulting fees paid to our research and development advisors.
Other Non-Operating Income (Expense)
Other non-operating expense increased by $38.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, largely due to the approximately $39.8 million loss the Company recorded from the change in fair value on the date of conversion of the Company’s previously issued SAFE Notes, which converted into common stock as a result of the Merger.
Surfside Acquisition Inc. was incorporated in
the State of Delaware on December 10, 2021. Since inception, the Company has been engaged in organizational efforts and obtaining initial
financing. The Company was formed as a vehicle to pursue a business combination and has focused its efforts to identify a possible business
combination. No revenue has been generated by the Company since inception. It is unlikely the Company will have any revenues unless it
is able to effect an acquisition or merger with an operating company, of which there can be no assurance. The Company’s plan of
operation for the remainder of the fiscal year shall be to continue its efforts to locate suitable acquisition candidates. Our principal
business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with
a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific
business, industry or geographical location and, thus, may acquire any type of business.
The Company is currently considered to be a “blank
check” company. The SEC defines those companies as “any development stage company that is issuing a penny stock, within the
meaning of Section 3(a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business
plan is to merge with an unidentified company or companies.” Many states have enacted statutes, rules and regulations limiting the
sale of securities of “blank check” companies in their respective jurisdictions. The Company is also a “shell company,”
defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. Management
does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully
concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long
as we are subject to those requirements.
In addition, the Company is an “emerging
growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that
are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being
required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements
of Sections 14A(a) and (b) of the Exchange Act to hold a nonbinding advisory vote of stockholders on executive compensation and any golden
parachute payments not previously approved.
The Company has also elected to use the extended
transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows
us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until
those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies
that comply with public company effective dates.
We will remain an “emerging growth
company” until the earliest of (1) the last day of the fiscal year during which our revenues exceed $1.235 billion, (2) the
date on which we issue more than $1 billion in non-convertible debt in a three- year period, (3) the last day of the fiscal year
following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration
statement filed pursuant to the Securities Act, or (4) when the market value of our common stock that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. To the extent that we
continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act,
after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may
continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor
attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the
requirement to provide only two years of audited financial statements, instead of three years.
The Company has not conducted any
active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated
by the Company since inception. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or
merger with an operating company, of which there can be no assurance. The Company’s plan of operation for the remainder of the
fiscal year shall be to continue its efforts to locate suitable acquisition candidates. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than
immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in any business
activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such
time will be paid with funds to be loaned to or invested in us by our stockholders, management or other investors.
During the next twelve months, we anticipate incurring
costs related to:
We believe we will be able to meet these costs
through use of funds to be loaned by or invested in us by our stockholders, management or other investors. There are no assurances that
such funds will be advanced or that the Company will be able to secure any additional funding as needed. As of December 31, 2024 and 2023,
the Company had cash of $3,464 and $774, respectively. On December 10, 2021, in connection with advances made in connection with costs
incurred by the Company, the Company issued a promissory note to Mark Tompkins, a stockholder and director of the Company, pursuant to
which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance to the Company on or before
the date that the Company consummates a business combination with a private company or reverse takeover transaction or other transaction
after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act). The Company has used the
proceeds from the note to cover its expenses. Although Mr. Tompkins has no obligation to advance funds to the Company under the terms
of the note, it is anticipated that he may advance funds to the Company as fees and expenses are incurred in the future. As a result,
the Company issued the note in anticipation of such advances. Interest shall not accrue on the outstanding principal amount of the note
except if an Event of Default (as defined in the note) has occurred. In the event of an Event of Default, the entire note shall automatically
become due and payable (the “Default Date”) and starting from five (5) days after the Default Date, the interest rate on the
note shall accrue at the rate of eighteen percent (18%) per annum. As of December 31, 2024, the total amount due under the note was $147,025.
The note is filed herewith as Exhibit 10.1. Except as disclosed herein, we currently have no other agreements or specific arrangements
in place with our stockholders, management or other investors.
Our ability to continue as a going concern is
dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and
repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also dependent
on our ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes
obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances, however there is no
assurance of additional funding being available.
As of December 31, 2024, the Company had
$3,464 of cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal to
approximately $45,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the
Company’s Exchange Act filing requirements. The costs related to the acquisition of a business combination target company vary
widely and are dependent on a variety of factors including, but not limited to, the amount of time it takes to complete a business
combination, the location of the target company, the size and complexity of the business of the target company, whether stockholders
of the Company prior to the transaction will retain equity in the Company, the scope of the due diligence investigation required,
the involvement of the Company’s auditors in the transaction, possible changes in the Company’s capital structure in
connection with the transaction, and whether funds may be raised contemporaneously with the transaction. Therefore, we believe such
costs are unascertainable until the Company identifies a business combination target. These conditions raise substantial doubt about
our ability to continue as a going concern. The Company is currently devoting its efforts to locating merger candidates. The
Company’s ability to continue as a going concern is dependent upon our ability to develop additional sources of capital,
locate and complete a merger with another company, and ultimately, achieve profitable operations.
The Company may consider acquiring a business,
which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties
and is in need of additional capital. Our management believes that the public company status that results from a combination with the
Company will provide such company greater access to the capital markets, increase its visibility in the investment community, and offer
the opportunity to utilize its stock to make acquisitions. There is no assurance that we will in fact have access to additional capital
or financing as a public company. In the alternative, a business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding,
among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
Any target business we select for a potential
business combination may be a financially unstable company or an entity in its early stages of development or growth, including entities
without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations
of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with
an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent
in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that it will likely
be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective
stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business
in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture against gains from another.
The Company anticipates that the selection of
a business combination will be complex and extremely risky. While the Company is in a competitive market with a small number of business
opportunities, through information obtained from industry professionals including attorneys, investment bankers, and other consultants
with experience in the reverse merger industry, our management believes that there are opportunities for a business combination with firms
seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation
include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees,
and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available
business combinations may occur in many different industries and at various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities extremely difficult and complex.
We do not currently intend to retain any entity
to act as a “finder” to identify and analyze the merits of potential target businesses. However, we contemplate that Montrose
Capital may introduce business combination opportunities to us. There are currently no agreements or preliminary agreements between us
and Montrose Capital.
We have not established a specific timeline, nor
have we created a specific plan to identify an acquisition target and consummate a business combination. We expect that our management
and the Company, through its various contacts and affiliations with other entities, including Montrose Capital, will locate a business
combination target. We expect that funds in the amount of approximately $45,000 will be required in order for the Company to satisfy its
Exchange Act reporting requirements during the next 12 months, in addition to any other funds that will be required in order to complete
a business combination. Such funds can only be estimated upon identifying a business combination target. Our management and stockholders
have indicated an intent to advance funds on behalf of the Company as needed in order to accomplish its business plan and comply with
its Exchange Act reporting requirements, however, there are no agreements in effect between the Company and our management or stockholders
specifically requiring they provide any funds to the Company. Therefore, there are no assurances that the Company will be able to obtain
the required financing as needed in order to consummate a business combination transaction.
As of the date of this Form 10-K, the Company
has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business
combination candidates regarding business opportunities for the Company.
Since our inception, we have financed our operations primarily through the issuance and sale of our equity securities. Our primary requirements for liquidity and capital are to finance working capital and capital expenditures associated with operating and managing the Company, as well as for general corporate purposes. As of December 31, 2025, our principal source of liquidity was our cash and cash equivalents of $23.7 million. On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock (the “Shares”) at a purchase price of $15.00 per share, to certain accredited and institutional investors pursuant to the subscription agreements for an aggregate purchase price of $80.0 million. The aggregate net proceeds to the Company from the offering was approximately $76.0 million, after deducting fees to the placement agents and expenses payable by the Company. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $66.7 million as of December 31, 2025. We generated a positive cash flow of $17.0 million for the year ended December 31, 2025 due to financing activities.
We expect to use our proceeds from the 2026 Private Placement for general working capital and corporate purposes, including towards the engineering, research and development of our first pilot nuclear reactor and related technologies. A portion of the net proceeds from the 2026 Private Placement will also be used to cover management, overhead, legal and accounting fees and expenses relating to the Merger and the 2026 Private Placement and could include potential acquisitions of complementary businesses or assets (though none is currently contemplated). Based on our expectation of continued operating losses for at least the near term, we anticipate our existing cash and cash equivalents, together with net proceeds from the 2026 Private Placement, will not be sufficient to operate our business for the next twelve months. Accordingly, we determined that there is substantial doubt about our ability to continue as a going concern. In order to continue to operate our business beyond that time, we will need to raise substantial additional capital. Our independent registered public accounting firm included an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern in its report on our financial statements for the year ended December 31, 2025.
In addition to our cash and cash equivalents currently available to support these activities, which was approximately $80 million as of April 15, 2026, we estimate that we will require $200 million of additional capital to complete development of, and license and commercially deploy, our first commercial reactor, but we expect we can complete the development and begin operation of an initial test reactor with approximately half that amount of additional capital. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. However, there can be no assurance that such financing will be available on acceptable terms, on a timely basis, or at all. To the extent that we raise additional capital through the issuance of equity or convertible securities, the ownership interests of our existing stockholders will be diluted. Moreover, the terms of such securities or any other financing may include preferences or other rights that adversely affect the value of, or rights of holders of, our common stock. Debt financing, if available, could result in additional debt service obligations, and debt financings or other financings may involve covenants that restrict our operations or financial flexibility. However, our management team will have broad discretion in making strategic decisions to execute our growth plans, and there can be no assurance that management’s decisions will result in 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
Year ended December 31, 2025 and 2024
As of December 31, 2025, our cash and cash equivalents were $23.7 million. The following table shows a summary of our cash flows for the periods presented:
Operating Activities
What changed in the latest 10-Q
Risk Factors
Our business, results of operations, financial condition and stock price can be materially and adversely affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of our Annual Report on Form 10-K under the heading “Risk Factors.” There have been no material changes to the Company’s risk factors disclosed in such Annual Report.
Full comparison: every changed paragraph (1)
Our business, results of operations, financial condition and stock price can be materially and adversely affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of our Annual Report on Form 10-K under the heading “Risk Factors.” There have been no material changes to the Company’s risk factors disclosed in thesuch Annual Report.
Management's Discussion & Analysis (MD&A)
New heading “Initial Public Offering”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “Operating Expenses”
New heading “Other Non-Operating Income (Expense)”
Largest changes
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 ofsee in full comparisonMarchJune31,30, 2026, our principal source of liquidity was our cash and cash equivalents of$84.8$93.0 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 was approximately $75.1 million, after deducting fees to the placement agents and expenses payable by the Company. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $88.1 million as of March 31, 2026. We generated a positive cash flow of $61.0 million for the period ended March 31, 2026 due to financing activities.
“We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $119.1 million as of June 30, 2026. We generated a positive cash flow of $111.8 million for the six months ended June 30, 2026 due to financing activities.”see in full comparison
Full comparison: every changed paragraph (42)
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 the Annual Report.Report on Form 10-K. 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.
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.
The Company’sOur commercialization strategy is based on a phased deployment plan designed to move toward commercialization in the next three years. Given that reactor criticality using established PWR technology is well understood, thewe Company isare prioritizing validation of the hardest and most differentiated parts of our system, to reduce risk earlier and move more directly toward a commercialization outcome. Specifically,Our thekey testsdemonstration thatobjectives we want to focus on areinclude drilling to depth at commercial scale, installing and integrating a nuclear system a mile underground, and operating as part of a complete energy ecosystem. WeCritically, alsowe wantaim to prove that weeach of these milestones can dobe thisachieved inon timea timeline sufficient to meet the AI-driven surge in demand for energy. TheWe Company isare currently participating in the U.S. Department of Energy (“DOE”) Reactor Pilot Program,Program and we expect to demonstrate our system as part of thethat DOE Reactor Pilot Program.program.
The first phase of the Company’sour phased deployment plan involves engineering validation and proof of concept wells. TheWe Company hashave a long-term lease for approximately 100 acres located within the Great Plains Industrial Park in Parsons, Kansas (the “Kansas Site”) and hashave commenced initial field development activities at the site. As part of this,this thephase, Companywe alreadyhave drilledcompleted its firstour data acquisition well to gather real-world data up to 6,000 feet deep. Next,We theare Companycurrently willadvancing demonstrateour itssecond, abilitynear full-scale proof-of-concept well, which is intended to drillfurther avalidate commercial-scaleour boreholedrilling and safelyemplacement deployapproach. aWe prototype reactor. The Company continuescontinue to advance itsour reactor design in parallel with these activities, including planning additional drilling activities and conducting related engineering and emplacementsafety work,analysis, and iswe are targeting completion of these activities inby the comingend months.of the year. The balance of this year and into early 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 LEUdesign fabrication and loading.completion.
The second phase of the Company’sour phased deployment plan involves DOE authorization and one or more commercial pilot wells. Specifically, subjectSubsequent to quarter end, the DOE conditionally 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, thewe Company intendsintend to demonstrate the Gravity Reactor, and to 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 the Company’sour 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.NRC, and anticipate at least a one-year lag between the start of construction and revenue recognition.
The Company’sOur approach to subsurface reactor deployment is supported by itsour 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. TheWe Company believesbelieve that itsour intellectual property, together with itsour engineering expertise and ongoing development activities, supports itsour competitive position.
Legacy Deep Fission was incorporated in July 2023 and remains in the development stage. The Gravity Reactor remains in conceptual and early engineering stages, and thewe Company hashave not constructed or operated a commercial reactor or generated revenue. Current activities include reactor development, geological evaluation, large-diameter borehole drilling research and development, geothermal testing, safety analysis, regulatory engagement, site development, and commercialization planning.
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$80.0 million.million (the “February 2026 Private Placement”). The Company incurred offering costs of $4,850,668$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 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).
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 payable 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. Subsequent to June 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.
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 transactionsTransactions 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.
Comparison of the threeThree monthsMonths endedEnded MarchJune 31,30, 2026 and 2025
General and administrative expenses increased by $12.9$12.1 million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase in general and administrative expenses was primarily attributable to a $10.4$5.8 million increase in non-cash stock-based compensation expense, as well as increased legal and compliance costs, marketing costs, and salary and benefit costs due to an increase in the number of employees year over year, and marketing costs.year.
Research and development expenses increased by $7.2$17.4 million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to the advancement of the Company’s operating plans and progression of first phase of the Company’s phased deployment plan, as well as higher salary, non-cash stock-based compensation expense, and benefit costs associated with increased headcount, and increased consulting fees supporting research and development activities.
Other non-operating income increased by $1.9$2.3 million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 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 prior to MarchJune 31,30, 2026. Interest income for the three months ended MarchJune 31,30, 2026 consisted primarily of interest earned on the February 2026 Private Placement funds.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table sets forth our summarized financial information for the periods indicated:
Operating Expenses
General and administrative expenses increased by $25.0 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase in general and administrative expenses was primarily attributable to a $15.3 million increase in non-cash stock-based compensation expense, as well as increased legal and compliance costs, marketing costs, and salary and benefit costs due to an increase in the number of employees year over year.
Research and development expenses increased by $24.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to the advancement of the Company’s operating plans and progression of first phase of the Company’s phased deployment plan, as well as higher salary, non-cash stock-based compensation expense, and benefit costs associated with increased headcount, and increased consulting fees supporting research and development activities.
Other Non-Operating Income (Expense)
Other non-operating income increased by $4.2 million for the six months ended June 30, 2026, compared to the six months ended June 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 prior to June 30, 2026. Interest income for the six months ended June 30, 2026 consisted primarily of interest earned on the February 2026 Private Placement funds.
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 MarchJune 31,30, 2026, our principal source of liquidity was our cash and cash equivalents of $84.8$93.0 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 was approximately $75.1 million, after deducting fees to the placement agents and expenses payable by the Company. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $88.1 million as of March 31, 2026. We generated a positive cash flow of $61.0 million for the period ended March 31, 2026 due to financing activities.
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 was approximately $75.1 million, after deducting fees to the placement agents and expenses paid by the Company.
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 anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments. Since our inception, we have generated significant operating losses as reflected in our accumulated deficit of $119.1 million as of June 30, 2026. We generated a positive cash flow of $111.8 million for the six months ended June 30, 2026 due to financing activities.
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 relating to the Merger and the February 2026 Private Placement and could include potential acquisitions of complementary businesses or assets (though none is currently contemplated). Based on our expectation of continued operating losses for at least the near term,term and our current operating plan, we anticipate our existing cash and cash equivalents, together with net proceeds from the February 2026 Private Placement,Placement and IPO, will not be sufficient to operatefund our businessoperations for the next twelve months.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.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.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 $200 million ofsubstantial additional capital to complete development of, and license and commercially deploy, our first commercial reactor, but we expect we can complete the development and begin operation of an initial test reactor with approximately half that amount of additional capital.reactor. We are actively evaluating potential financing sources, including equity issuances, debt financing, strategic partnerships, and other capital raising transactions. 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.
ThreeSix monthsMonths endedEnded MarchJune 31,30, 2026 and 2025
As of MarchJune 31,30, 2026, our cash and cash equivalents were $84.8$93.0 million. The following table shows a summary of our cash flows for the periods presented:
Net cash used in operating activities increased by $12.4$38.8 million, to $14.0$42.5 million for the threesix months ended MarchJune 31,30, 2026, compared to the net cash used in operating activities of $1.6$3.6 million for the six months ended MarchJune 31,30, 2025. The increase in net cash used in operating activities was primarily attributable to increased net losses, changes in working capital, including prepaids and accounts payable, and other current liabilities.
Net cash used in investing activities increased by $38.3$49.0 thousand, to $53.4$78.0 thousand for the six months ended MarchJune 31,30, 2026, compared to the net cash used in investing activities of $15.2$29.0 thousand for the threesix months ended MarchJune 31,30, 2025. The increase was immaterial and driven by additions by the Company to property and equipment.
Net cash provided by financing activities increased by $74.3$110.1 million, to $75.1$111.8 million for the threesix months ended MarchJune 31,30, 2026, compared to the net cash provided by financing activities of $860.8$1.7 thousandmillion for the threesix months ended MarchJune 31,30, 2025. The increase in net cash provided by financing activities was primarily attributable to proceeds from the February 2026 Private Placement.Placement and the IPO, net of offering and underwriting costs.
During the threesix months ended MarchJune 31,30, 2026, the Company entered into ana uncancelablenoncancelable commitment with a supplier to purchase low-enriched uranium fuel at a cost of approximately $9.2 million.million and made the required payment in accordance with the terms of the agreement.
The Company also entered into a purchase commitment of approximately $4.1 million for the procurement of borehole casing to support its operations.
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”), with a noncancelable lease term of approximately two years. The Company has commenced initial site development activities intended to inform borehole design, drilling techniques, and site suitability for future reactor deployment. The lease agreement includes renewal options, as well as a mandatory purchase option for a purchase price of approximately $5 million if the Company is granted a license for commercial operation of the future reactor by the NRC at the Kansas Site; however, these options have not been included in the lease term as the Company is not reasonably certain to exercise them at this time.
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,Hedging”, and presented them as long-term liabilities in the accompanying consolidated balance sheets. The determination of fair value for the Company’s SAFE Notes required significant judgment and the use of estimates. We have described the valuation of the SAFE Notes in Note 54 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
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.
FISN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding FISN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 110,000 | $1.2M | 0.0% | New position |