DEEP FISSION, INC.
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
FISN$1.85+23.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001104659-25-112717
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001104659-26-057835
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 68 current paragraphs.
24 unchanged; 17 reworded; 26 added; 26 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
We are a nuclear energy technology company developing a small modular reactor (“SMR”) based on established pressurized water reactor (“PWR”) technology, with novel emplacement in deep boreholes approximately one mile below the Earth’s surface. Our reactor, which we refer to as the Gravity Reactor, 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.
Current report
Each 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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
The September 2025 Private Placement
Current report
The February 2026 Private Placement
Current report
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 million. The Company incurred offering costs of $4,850,668 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.
Current report
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).
Current report
considered our historical financial results under applicable accounting principles. Accordingly, the 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.
Current report
As described under “Business Model and Revenue Streams” in Item 1, “Business,” of the Annual Report on Form 10-K for the year ended December 31, 2025, our business model is designed to generate revenue from (i) project-level equity participation, including indirect participation in project-level cash flows from electricity sales, (ii) one-time upfront revenue, generally expected to be associated with Gravity Reactor deployment and related upfront project development services and (iii) recurring revenue, generally expected to be associated with technology licensing and operations and maintenance services of Gravity Reactor installations. Because we have not yet commercialized a Gravity Reactor, none of these revenue streams have begun to materialize and are not reflected in our historical results.
Current report
Components of Results of Operations
Current report
The following table sets forth our summarized financial information for the periods indicated:
Current report
Research and development expenses increased by $7.2 million for the three months ended March 31, 2026, compared to the three months ended March 31, 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.
Current report
Other non-operating income increased by $1.9 million for the three months ended March 31, 2026, compared to the three months ended March 31, 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 March 31, 2026. Interest income for the three months ended March 31, 2026 consisted primarily of interest earned on the February 2026 Private Placement funds.
Current report
We expect to use our proceeds from the February 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 February 2026 Private Placement 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, we anticipate our existing cash and cash equivalents, together with net proceeds from the February 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.
Current report
In addition to our cash and cash equivalents currently available to support these activities, 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. 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
Current report
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.
Current report
During the three months ended March 31, 2026, the Company entered into an uncancelable commitment with a supplier to purchase low-enriched uranium fuel at a cost of approximately $9.2 million.
Current report
Off-Balance Sheet Transactions
Current report
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with entities or financial partnerships, such as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Current report
Our unaudited condensed consolidated financial statements and the related notes thereto included in this Quarterly Report are prepared in accordance with United States generally accepted accounting principles. The preparation of unaudited condensed consolidated financial statements also requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made
Current report
by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the accounting policies described below involve a greater degree of judgment and complexity. Accordingly, these are the estimates we believe are most critical to aid in fully understanding and evaluating our financial condition, results of operations and future performance. We have described our significant accounting policies within Note 2 to our unaudited condensed consolidated financial statements included herein.
Removed paragraphs (26)
Previous report
Deep Fission’s pioneering design combines proven PWR technology with novel emplacement - 1-mile below the Earth’s surface. Our reactor, the “Deep Fission Reactor” uses the Earth’s deep subsurface as a natural containment system—eliminating the need for expensive surface shielding. The natural pressure from the column of water above the reactor provides the pressure required, reducing the need for complex and expensive pressure systems. The borehole water can also serve as a source of cooling for the reactor. These features of the Deep Fission Reactor significantly reduce plant costs compared to other PWR designs. Unlike traditional builds that require massive amounts of concrete and steel, Deep Fission Reactors leverage natural gravity and geology to provide containment and safety.
Previous report
The Deep Fission Reactor system is designed to scale modularly: individual units produce 15 MWe, and by clustering boreholes, we can deliver power installations of 1.5 GW or more for hyperscale data centers and other customers. This makes the platform uniquely suited to meet the explosive demand for power from AI workloads, energy-intense manufacturing, and energy-constrained regions. With site flexibility and no above-ground reactor visibility, Deep Fission Reactors overcome many of the siting and public acceptance challenges facing traditional nuclear power solutions. This innovation is expected to enable grid-scale nuclear deployments in just six months, turning what was once a multi-year construction process into a repeatable infrastructure product.
Previous report
The Private Placement
Previous report
Background
Previous report
We were established to provide a first-of-its-kind solution of developing a Deep Fission Reactor placed one mile underground to deliver clean, secure, and low-cost electricity. We are focused on developing, demonstrating and deploying our Deep Fission Reactor technology and have made progress in achieving milestones toward eventual commercialization of our Deep Fission Reactor, the most significant of which was selection by the DOE in August 2025 for participation in the nuclear Reactor Pilot Program. That pilot program anticipates deployment of our first test Deep Fission Reactor by July 2026.
Previous report
To date our activities have consisted of developing our Deep Fission Reactor technology. We have also established a network of strategic supply chain partnerships to support the development and commercialization of Deep Fission’s advanced nuclear technologies. In addition, we have engaged in discussions with hyper-scalers, large data center operators, industrial sites, and utilities – and have signed multiple letters of intent relating to potential commercial agreements and strategic partnerships. We have not yet entered into a binding agreement with any customer, and there is no guarantee that we will be able to do so in the future.
Previous report
Our activities are subject to significant risks and uncertainties, including the possibility that we may be unable to secure sufficient funding to sustain operations until our SDA applications are approved by the NRC, commercialization is achieved, and customers are secured.
Previous report
Our leadership team has a combined 100+ years of direct experience with nuclear solutions and engineering, government and community engagement and global strategy development. Our advisory board includes preeminent experts and Nobel laureates in nuclear science, technology and policy, as well as business leaders and entrepreneurs. We believe that the depth of our expertise and our technology solutions uniquely position us to deliver a safer, faster and low-cost alternative to convention nuclear energy.
Previous report
Our growth strategy in the near term focuses on being a technology provider and strategic partner, enabling our customers and development partners to lead project financing, permitting, and construction. This approach allows us to scale quickly without tying up significant capital in project ownership.
Previous report
We intend to generate upfront and one-time revenue from:
Previous report
We intend to generate recurring and long-term revenue from:
Previous report
This blended model captures both upfront value and predictable, long-term revenue streams, while leaving capital-intensive project ownership and financing to our partners.
Previous report
Components of Our Results of Operations
Previous report
Research and development expenses increased by $1.9 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase in research and development expenses was primarily attributable to the increase in salary and benefits corresponding with our increase in headcount, as well as increased consulting fees paid to our advisors.
Previous report
Other non-operating income (expense) increased by $30.3 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, largely due to the increase in the fair value of SAFE Notes, which converted into common stock as a result of the Merger.
Previous report
Operating Expenses
Previous report
Research and development expenses increased by $2.5 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase in research and development expenses was primarily attributable to the increase in salary and benefits corresponding with our increase in headcount, as well as increased consulting fees paid to our advisors.
Previous report
Other Non-Operating Income (Expense)
Previous report
Other non-operating income (expense) increased by $32.7 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, largely due to the increase in the fair value of SAFE Notes, which converted into common stock as a result of the Merger.
Previous report
Sources of Liquidity
Previous report
As of September 30, 2025 and December 31, 2024, we did not have any material contractual obligations or commitments.
Previous report
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in Note 2 to our audited financial statements included in Form 8-K filed with the SEC on September 11, 2025, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Previous report
Emerging Growth Company Status
Previous report
In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
Previous report
In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
Previous report
We may take advantage of these exemptions until such time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission ( “SEC”). We may choose to take advantage of some but not all of these exemptions.
Reworded paragraphs (17)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements and Other Information Contained in this Report” elsewhere in this Quarterly Report. Accordingly, you should review the disclosure under the heading “Risk Factors” in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our 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. 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.
Previous wording
On September 5, 2025 (the “Closing Date”), Surfside, Acquisition Sub and Legacy Deep Fission entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, on the Closing Date, Acquisition Sub merged with and into Legacy Deep Fission, with Legacy Deep Fission continuing as the surviving corporation. As a result of the Merger, Legacy Deep Fission became our wholly owned subsidiary and will continue its existing business operations. Additionally, we changed our name to Deep Fission, Inc. and will continue to be a public reporting company.
Current wording
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.
Previous wording
As a result of the Merger, each of 2,224,930 shares of capital stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive 38,538,922 shares of common stock (the “Common Share Conversion Ratio”). We also reserved a total of 9,500,882 shares of our common stock under the 2025 EIP for future issuances of equity awards at the discretion of our Board to officers, employees, consultants and directors and reserved 1,000,000 shares of our common stock under the 2025 ESPP for future purchase by employees. Upon consummation of the Merger, Surfside’s existing stockholders continued to hold an aggregate of 2,166,667 Retained Pre-Merger Shares, and on the Closing Date we also issued 85,000 Advisor Shares to an accredited investor in consideration for services rendered in connection with the Merger.
Current wording
On the Merger Closing Date, we issued 38,538,922 shares of our common stock to existing holders of Legacy Deep Fission common stock and 85,000 shares of our common stock (the “Advisor Shares”) to an accredited investor in consideration for services rendered in connection with the Merger, while Surfside’s existing stockholders continued to hold an aggregate of 2,166,667 shares of our common stock (the “Retained Pre-Merger Shares”). We also reserved a total of 9,500,884 shares of our common stock under the 2025 Plan for future issuances of equity awards at the discretion of our board of directors to officers, employees, consultants and directors and reserved 1,000,000 shares of our common stock under the 2025 Employee Stock Purchase Plan (“2025 ESPP”) for future purchase by employees.
Previous wording
The historical financial statements and related footnotes included in this Quarterly Report for Deep Fission, Inc. 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 shares of our common stock, which is to retroactively adjust the Legacy Deep Fission’s (accounting acquirer) legal capital to reflect the legal capital of the Legacy Surfside (accounting acquiree). 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.
Current wording
The 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 transactions and the related conversion of the shares of Legacy Deep Fission’s common stock.
Previous wording
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. Thus, a discussion of the past financial results of Surfside is not pertinent.
Current wording
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
Previous wording
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.
Current wording
Research and development expenses primarily represent costs incurred to develop our technology. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all research and development costs in the periods in which they are incurred.
Previous wording
Other non-operating income (expense) consists primarily of change in fair value of SAFE Notes, interest income, interest expenses, and other miscellaneous expenses.
Current wording
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.
Previous wording
General and administrative expenses increased by $6.2 million for the three months ended September 30, 2025, compared to the three months ended September 30, 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.
Current wording
General and administrative expenses increased by $12.9 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in general and administrative expenses was primarily attributable to a $10.4 million increase in non-cash stock-based compensation expense, as well as increased legal costs, salary and benefit costs due to an increase in the number of employees year over year, and marketing costs.
Previous wording
Since inception, we have financed our operations primarily through the issuance and sale of our debt and equity securities. Our primary requirements for liquidity and capital are to finance working capital and capital expenditures associated with operating and managing the company, as well as for general corporate purposes. As of September 30, 2025, our principal source of liquidity was our cash balance of $30.2 million, and 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 $56.2 million as of September 30, 2025. We also generated a positive cash flow of $23.5 million for the nine months ended September 30, 2025 as a result of raising capital from the private placement.
Current wording
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 March 31, 2026, our principal source of liquidity was our cash and cash equivalents of $84.8 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.
Previous wording
The following table shows a summary of our cash flows for the periods indicated:
Current wording
As of March 31, 2026, our cash and cash equivalents were $84.8 million. The following table shows a summary of our cash flows for the periods presented:
Previous wording
Net cash used in operating activities increased by $5.1 million, to $6.5 million for the nine months ended September 30, 2025 compared to the net cash used in operating activities of $1.4 million for the nine months ended September 30, 2024. The increase in net cash used in operating activities was primarily attributable to increased net losses, changes in working capital, including accounts payable, and other current liabilities.
Current wording
Net cash used in operating activities increased by $12.4 million, to $14.0 million for the three months ended March 31, 2026, compared to the net cash used in operating activities of $1.6 million for the months ended March 31, 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.
Previous wording
Net cash used in investing activities increased by $26 thousand, to $29 thousand for the nine months ended September 30, 2025 compared to net cash provided by investing activities of $3 thousand for the nine months ended September 30, 2024. The increase was driven by additions by the Company to property and equipment.
Current wording
Net cash used in investing activities increased by $38.3 thousand, to $53.4 thousand for the months ended March 31, 2026, compared to the net cash used in investing activities of $15.2 thousand for the three months ended March 31, 2025. The increase was driven by additions by the Company to property and equipment.
Previous wording
Net cash provided by financing activities increased by $25.6 million, to $30.0 million for the nine months ended September 30, 2025 compared to the net cash provided by financing activities of $4.5 million for the nine months ended September 30, 2024. The increase in net cash provided by financing activities was primarily attributable to the private placement of $30.0 million and additional issuances of SAFE Notes.
Current wording
Net cash provided by financing activities increased by $74.3 million, to $75.1 million for the three months ended March 31, 2026, compared to the net cash provided by financing activities of $860.8 thousand for the three months ended March 31, 2025. The increase in net cash provided by financing activities was primarily attributable to proceeds from the February 2026 Private Placement.
Previous wording
The Company has issued SAFE Notes in exchange for cash financing. The Company has accounted for its SAFE Notes as derivatives under the FASB ASC 815-40 and ASC 815-10 and presented them as long-term liabilities in the accompanying condensed consolidated balance sheets. If any changes in the fair value of the SAFEs occur, the Company will record such changes through earnings.
Current wording
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 FASB ASC 815,Derivatives and Hedging, and presented them as long-term liabilities in the accompanying consolidated balance sheets. The determination of fair value for the Company’s SAFE Notes required significant judgment and the use of estimates. We have described the valuation of the SAFE Notes in Note 5 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
Previous wording
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 recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award.
Current wording
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.
Previous wording
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. We have historically been a private company and lacks company-specific historical information for its stock. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expenses could be materially different for future awards.
Current wording
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. We have historically been a private company and lack company-specific historical information for our stock. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expenses could be materially different for future awards.
Previous wording
A discussion of recently issued accounting pronouncements and recently adopted accounting pronouncements is included in Note 2 to our financial statements under the heading “Summary of Significant Accounting Policies.”
Current wording
A discussion of recently issued accounting pronouncements and recently adopted accounting pronouncements is included in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report under the heading “Summary of Significant Accounting Policies.”
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Three months ended March 31, 2026 and 2025
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
General and administrative expenses increased by $8.2 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 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.