DEEP FISSION, INC.

Notes to the Condensed Consolidated Financial Statements

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

(UNAUDITED)

Note 1: Description of Business and Basis of Presentation

Organization

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

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

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

Operations

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

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

Basis of Presentation

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

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

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

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

Liquidity and Going Concern

As of June 30, 2026, the Company had cash and cash equivalents of $93,016. The Company continues to incur significant operating losses. For the three months ended June 30, 2026, the Company had a net loss of $31,009. For the six months ended June 30, 2026, the Company had a net loss of $52,353 and cash used in operating activities of $42,462. As of June 30, 2026, the Company had an accumulated deficit of $119,080. Management expects that significant ongoing operating expenditures will be necessary to successfully implement the Company’s business plan and develop and market its products and services. During the quarter, the Company completed its initial public offering, resulting in proceeds of$34,291, net of underwriting discounts and commissions and offering costs. While the offering strengthened the Company’s liquidity position, management’s current operating plan indicates that the proceeds from the offering, together with existing cash and cash equivalents, will not be sufficient to fund the Company’s planned operations through the one-year period following the issuance of these interim unaudited condensed consolidated financial statements. Accordingly, these circumstances continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these interim unaudited condensed consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to establish a source of revenue and, in the near term, to raise additional capital to fund its operations.

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

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

Recapitalization

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

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

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

Note 2: Summary of Significant Accounting Policies

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

Segments

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

Use of Estimates

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

Fair Value Measurements

The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. There areno transfers in and out of Levels 1 and 2, andactivity in Level 3 represents fair value measurements.

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

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

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

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

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

The Company’s cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the short-term nature of these assets and liabilities. The Company’s SAFE Notes (see Note 4) and restricted stock unit award (“RSU”) liability (see Note 7) were carried at fair value and classified as Level 3 liabilities.

Upon a modification of the settlement features of the liability-classified RSU award that occurred during the six months ended June 30, 2026, the award was reclassified from liabilities to equity within the accompanying interim unaudited condensed consolidated balance sheets (see Note 7).

Cash and Cash Equivalents

The Company maintains deposits in financial institutions that at times exceed the insured amounts provided by the Federal Deposit Insurance Corporation (“FDIC”). As of June 30, 2026 and December 31, 2025, the amount of cash exceeding the FDIC insurance limit was$92,266 and$23,219, respectively. The Company believes it is not exposed to any significant credit risk to cash. Money market funds and other short-term investments with an original maturity of three months or less are considered cash equivalents.

Property and Equipment

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

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

SAFE Notes

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

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

Research and Development Expenses

Research and development (“R&D”) expenses primarily represent costs incurred to develop the Company’s technology. These costs consist ofpersonnel costs, including salaries, employee benefit costs, bonuses and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors. The Company expenses all R&D costs in the periods in which they are incurred.

Stock-Based Compensation

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

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

Net Loss Per Common Share

The Company calculates basic net loss per common share in accordance with ASC 260, “Earnings Per Share”, based on the weighted-average number of outstanding common shares during the fiscal period. Diluted loss per common share is based on the weighted-average number of outstanding common shares plus the weighted-average number of potential outstanding common shares. Thecalculation of diluted net loss does not consider the effect of the warrants to purchase an aggregate of 704,084 common stock with exercise contingent on future events, unvested restricted common stock of 1,886,427, stock options to purchase an aggregate of 8,099,083 common stock, and unvested RSUs of 688,287, because their inclusion would be anti-dilutive under the treasury stock method. In periods where potentially dilutive securities are anti-dilutive, such amounts are excluded from the calculations of diluted earnings (loss) per share. All potentially dilutive securities are anti-dilutive for the three and six months ended June 30, 2026 and 2025. For the six months ended June 30, 2025, the Company had SAFE Notes, the conversion of which would have been anti-dilutive.

Income Tax (Provision) Benefit

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

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

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

New Accounting Pronouncements

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

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

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

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

Note 3: Property and Equipment

Property and equipment consisted of the following:

Depreciation expense for the three months ended June 30, 2026 and 2025 was $9 and $2, respectively, and $14 and $3 for the six months ended June 30, 2026 and 2025, respectively.

Note 4: SAFE Notes

During the six months ended June 30, 2025, the Company issued SAFE Notes in exchange for an aggregate amount of $1,644. The Company received total cash proceeds during the period of $1,711, consisting of $1,644 of cash from the issuance of SAFE Notes and $67 of cash received from the subscription of a SAFE Note. As of June 30, 2025, the estimated fair value of the SAFE Notes totaled $15,546.

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

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

There wereno issuances of SAFE Notes, nor any subscriptions of SAFE Notes, during the six months ended June 30, 2026.

Note 5: Fair Value Measurements

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

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

The key assumptions used in the Monte Carlo simulation are presented in the table below:

(1)Volatility was based on implied and historical volatility of the share price of peer companies.

(2)Risk-free rate based on the U.S. Treasury yield in effect at the time of SAFE Notes consistent with the expected term.

(3)The simulation considered a 6-month term for an equity event and a 3.5-year term for a liquidity event.

The following table presents a reconciliation of the Company’s SAFE Notes liability measured at fair value on a recurring basis, using Level 3 inputs:

All SAFE Notes were converted into shares of the Company’s Common Stock as part of the Merger in September 2025, and therefore there wereno SAFE Notes outstanding during the six months ended June 30, 2026 and December 31, 2025, respectively.

Note 6: Commitments and Contingencies

During the six months ended June 30, 2026, the Company entered into a noncancelable commitment with a supplier to purchase low-enriched uranium fuel at a cost of approximately$9,200 and made the required payment in accordance with the terms of the agreement.

The Company also entered into a purchase commitment of approximately$4,100 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 approximatelytwo 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 $5,000 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 the normal course of business, the Company may be subject to contingencies, including litigation, investigations, claims and other legal proceedings, including those arising in the ordinary course of business. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter. The Company has not had any litigation, investigations, claims or other legal proceedings for which it should recognize a liability. As such, the Company has not recorded any liability for these in the interim unaudited condensed consolidated financial statements.

Note 7: Stockholders’ Equity

Common Stock

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

The September 5, 2025 Private Placement

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

The February 5, 2026 Private Placement

On February 5, 2026, the Company issued and sold 5,333,333 shares of common stock at a purchase price of$15.00 per share, to certain accredited and institutional investors pursuant to the subscription agreements for an aggregate purchase price of$80,000 (the “February 2026 Private Placement”). The Company incurred offering costs of$4,851 in connection with the February 2026 Private Placement, which are recorded as a reduction of gross proceeds and recognized as a reduction to additional paid-in capital within stockholders’ equity.

Initial Public Offering

On June 22, 2026, the Company completed its initial public offering (the “IPO”) of 2,500,000 shares of its common stock at a public offering price of$16.00 per share. The Company received gross proceeds of approximately$40,000. After deducting underwriting discounts and commissions of$3,200 and offering expenses of$2,509 paid or payable by the Company, net proceeds from the IPO were$34,291. Of the total offering expenses, approximately$2,397 was included in accounts payable and accrued expenses as of June 30, 2026 and was subsequently paid after June 30, 2026.

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

Warrants

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

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

Equity Incentive Plans

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

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

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

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

RSAs, RSUs, and Stock Options

During the six months ended June 30, 2026 and 2025, the Company’s Board approved the issuances of RSAs, RSUs, and Stock Options to employees, officers, directors, and consultants. Stock-based compensation expense is measured based on the fair value of awards in accordance with ASC 718. Equity-classified awards are measured at grant-date fair value and are not subsequently remeasured. Liability-classified awards are remeasured at fair value at each reporting date until settlement, with changes in fair value recognized instock-based compensation expense. The cost of stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the respective award. Grants ranged from immediate vesting to over four years. The determination of fair value required significant judgment and the use of estimates as the Company did not have an observable stock price. Prior to the Company having an observable transaction for the sale of common stock, the Company estimated the fair value of common stock using invested capital multiple and discounted present value to arrive at equity available for common shareholders. Upon the Private Placement described above, the Company estimated the fair value of common stock using the price per share of the Private Placement, with a de-minimis discount for lack of marketability as the Company’s common stock did not trade in an active market. For restricted common stock awards, shares are issued concurrently with the issuance of restricted common stock.

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

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

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

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

The risk-free interest rate is the rate available as of the option date on zero-coupon U.S. government issues with a remaining term equal to the expected term of the option using the simplified approach. The Company currently estimates volatility by using the weighted average implied and historical volatility of the share price of peer companies. The Company has not paid dividends in the past and does not plan to pay any dividends in the foreseeable future.

The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified in thestatement of operations. Total stock-based compensation expense for the three months ended June 30, 2026 and 2025, was$7,340 and$196, respectively and$17,725 and$228 for the six months ended June 30, 2026 and 2025, respectively. During the first quarter of 2026, the Company modified the liability-classified RSU award to remove the ability to settle the award in cash. As a result, the award no longer met the criteria for liability classification and was reclassified to equity. The modification was accounted for in accordance with ASC 718 and resulted in the remeasurement of the award at the fair value of$15.00 per share on the modification date. The RSU liability balance as of the modification date of$2,203 was reclassified to additional paid-in capital. The remeasurement resulted in a total incremental compensation cost of$2,691, which is recognized over the vesting period of the award. As of June 30, 2026, the award remains classified as equity.

As of June 30, 2026, the Company had unrecognized stock-based compensation expense of$67,963, which will be recognized over a weighted average period of 3.29 years.

Preferred Stock

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

Note 8: Income Taxes

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

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

Note 9: Related Party Transactions

The Company is party to a consulting agreement with a related party, Deep Isolation Nuclear, Inc., a company co-founded by Deep Fission’s co-founder and CEO, to develop generic technical and regulatory guidance for management of the Company. Deep Fission’s CEO currently serves as a member of the board of directors of Deep Isolation Nuclear, Inc. The Company has previously paid certain administrative expenses to Deep Isolation Nuclear, Inc. The Company madeno payments to Deep Isolation Nuclear, Inc. during the six months ended June 30, 2026. During the six months ended June 30, 2025, the Company paid$13 to Deep Isolation Nuclear, Inc.

Note 10: Subsequent Events

In connection with the IPO described in Note 7, the Company granted the underwriters a 30-day option to purchase up to an additional 375,000 shares of its common stock at the initial public offering price, less underwriting discounts and commissions. Subsequent to June 30, 2026, the option expired unexercised, andno additional shares were issued by the Company.

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

Note 11: Restatement of Previously Issued Consolidated Financial Statements and Unaudited Interim Financial Information

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