X-Energy, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS

Company Overview

X-Energy Reactor Company, LLC (“X-energy” or the “Company”) is a Delaware limited liability company formed on December 14, 2018, and is the successor for financial reporting purposes of X-energy, LLC, a Maryland limited liability company founded in 2009. The Company is headquartered in Rockville, Maryland. The Company is a developer of advanced small modular nuclear reactors and fuel technology for clean energy generation. X-energy is the predecessor for financial reporting purposes of X-Energy, Inc., as further described below.

Initial Public Offering (“IPO”)

On April 27, 2026, subsequent to the period covered by these condensed consolidated financial statements, X-Energy, Inc., a Delaware corporation, successfully closed an IPO of its Class A common stock. In connection with the IPO and related Reorganization Transactions (as defined in Note 18 —Subsequent Events), X-Energy, Inc. became the parent holding company and sole managing member of the Company. Following the IPO and Reorganization Transactions, X-Energy, Inc. controls the business and affairs of the Company and consolidates the Company’s financial results. Refer to Note 18 —Subsequent Eventsfor additional information regarding the IPO and Reorganization Transactions.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Basis of Presentation

The condensed consolidated financial statements for X-Energy Reactor Company, LLC as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, include the accounts of the Company’s wholly owned and consolidated subsidiaries. The condensed consolidated financial statements are unaudited and have been prepared pursuant to the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The interim results reported herein are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2025 included in the Company’s prospectus dated April 23, 2026, filed with the SEC on April 27, 2026.

Certain Significant Risks and Uncertainties

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, and short and long-term investments. By their nature, all such financial instruments involve risks, including the credit risk of nonperformance by counterparties. The Company generally does not require collateral to support the obligations of the counterparties and cash levels held at banks may be in excess of federally insured limits. The Company limits its exposure to credit loss by maintaining its cash and cash equivalents and investments at highly rated financial institutions and investing in U.S. Government securities and high credit quality issuers. Further, the Company’s revenue and credit relationships are primarily concentrated within the United States Government which represents a concentration risk but a low credit risk.

For the three months ended March 31, 2026, two customers, the U.S. Government and the DOW Chemical Company (“Dow”) accounted for 92% and 4%, respectively, of the Company’s total revenue and grant income. For the three months ended March 31, 2025, the United States Government and Dow accounted for 82% and 10%, respectively, of the Company’s total revenue and grant income. Refer to Note 3 —Revenue Recognition for further disaggregation of revenue and grant income by customer for the three months ended March 31, 2026 and 2025.

The Company’s receivable balances related to services revenue and government grants with the United States Department of Energy (“DOE”) and United States Department of War are as follows (in thousands):

Refer to Note 14 —Related Party Transactions for further information on receivable balances with Dow.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist primarily of cash deposits, cash held in financial institutions and short-term investments purchased with an original maturity of three months or less. The carrying value of cash equivalents approximates fair value because of the short-term nature of these investments. The Company maintains its cash in bank deposit accounts with high credit quality financial institutions which, at times, may exceed the federally insured limit. The Company does not believe it is exposed to any significant credit risk regarding these deposits.

Restricted cash consists of refundable security deposits held under certain of the Company’s lease agreements.

The components of cash, cash equivalents, and restricted cash are as follows (in thousands):

Prepaid Costs and Other Current and Long-Term Assets

Included in Prepaid costs and other current assets and Other long-term assets are amounts primarily related to deposits for long-lead materials, prepaid costs, and deferred transaction costs.

Deposits for Long-Lead Materials

The Company makes deposits to vendors for long-lead materials. The Company had$53.4 million and$17.0 million as of March 31, 2026 and December 31, 2025, respectively, in deposits related to long-lead materials, of which$47.6 million is included in Other long-term assets and$5.8 million is included in Prepaid and other current assets as of March 31, 2026 on the condensed consolidated balance sheets. As of December 31, 2025, the entirety of the balance is included in Other long-term assets.

Prepaid Costs

Prepaid costs, primarily consisting of prepaid service fees, software, and other general prepayments, amounted to$9.1 million and$7.5 million as of March 31, 2026 and December 31, 2025, respectively.

Transaction Costs

The Company records transaction costs incurred in conjunction with the issuance of preferred units as a reduction of Mezzanine equity on the condensed consolidated balance sheets. For the three months ended March 31, 2025, the Company incurred$2.5 million in issuance costs associated with the issuance of the Series C-1 Preferred Units.

The Company capitalizes qualified legal, accounting, and other direct and incremental costs related to the public offering transaction. These costs were$8.5 million and$3.9 million as of March 31, 2026 and December 31, 2025, respectively, and are included in Prepaid and other current assets on the condensed consolidated balance sheets.

Other Income (Expense), Net

Other income (expense), net consists of the following (in thousands):

(1)

Refer to Note 7—Debt

(2)

Refer to Note 13 —Fair Value Measurements

Other Comprehensive Income (Loss)

Other comprehensive income (loss) refers to revenues, expenses, gains, and losses that under U.S. GAAP are included in comprehensive income but excluded from net income. The components of the Company’s other comprehensive income (loss) consist of foreign currency translation adjustments and the change in fair value of financial liabilities accounted for pursuant to the fair value option attributable to changes in instrument-specific credit risk.

The components of accumulated other comprehensive income (loss) for thethree months ended March 31, 2026 and 2025 are as follows (in thousands):

Accounting Standards Recently Adopted

In March 2024, the FASB issued ASU No. 2024-01, Compensation—Stock Compensation: Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), which clarifies the scope application for profits interest awards and similar awards and provides illustrative examples intended to reduce diversity in practice in determining whether such awards should be accounted for under Topic 718. For public business entities, ASU 2024-01 is effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2024; for all other entities, the ASU is effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2025; early adoption is permitted for all entities. The company adopted ASU 2024-01 on January 1, 2026, and it did not have an impact on the condensed consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, CECL Practical Expedient for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provides an optional practical expedient for estimating expected credit losses on certain current accounts receivable and contract assets arising from revenue transactions accounted for under Topic 606. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual periods. The

Company adopted ASU 2025-05 on January 1, 2026 and elected the practical expedient. The adoption did not have an impact on the condensed consolidated financial statements and related disclosures.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 for public business entities on a prospective basis and early adoption is permitted. For entities other than public business entities, the standard is effective for annual periods beginning after December 15, 2025. The Company will adopt for the annual period beginning January 1, 2026 as an emerging growth company and is currently evaluating the impact of this standard on its disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 requires public business entities to provide enhanced disclosures about certain categories of expenses in the notes to the financial statements. The guidance is intended to improve the transparency and decision usefulness of expense information provided to financial statement users. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.

In May 2025, the FASB issued ASU No. 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). ASU 2025-04 refines key aspects of the guidance, including the definition of performance condition as well as the measurement requirements and the treatment of forfeitures. ASU 2025-04 is effective for annual periods beginning after December 15, 2026 on either a modified retrospective or a retrospective basis and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software costs to better align the recognition guidance with current software development practices, including iterative and agile methodologies. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods, on either a prospective, modified, or retrospective transition approach, and early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), which establishes comprehensive guidance for the recognition, measurement, and disclosure of government grants received by business entities. The ASU addresses both monetary and certain nonmonetary government grants and introduces new annual disclosure requirements regarding the nature, terms, and accounting policies related to such grants. For public business entities, ASU 2025-10 is effective for annual periods beginning after December 15, 2028 on either a modified prospective approach, modified retrospective approach, or retrospective approach and early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements and related disclosures.

NOTE 3 — REVENUE AND GRANT INCOME RECOGNITION

The Company recognizes revenue under contracts with customers to provide nuclear reactor and fuel design engineering services in the areas of research and development, systems engineering, and technology development. The Company’s revenues are generally derived from contract services predominantly performed for the U.S. Government and commercial entities. All revenues for the three months ended March 31, 2026 and 2025 were recognized over time.

There are three main types of contracts: cost-based contracts, cost-plus fixed fee contracts, and time and materials. Under cost-based and cost-plus fixed fee contracts, the total consideration in the Company’s contracts is paid in the form of incremental incurred cost reimbursements over time upon submission of invoices. Under time-and-materials contracts, the total consideration is based on contractually agreed upon labor rates for hours worked, plus reimbursement of materials and other costs incurred.

The allowability of certain costs under government contracts is subject to audit by the government. Certain indirect costs are charged to contracts using provisional or estimated indirect rates, which are subject to later revision based on actual costs incurred and subject to government audits of those costs. Refer to Note 15 —Commitments and Contingencies for further discussion of these cost audits.

Advanced Reactor Demonstration Program (“ARDP”)

During the year ended December 31, 2021, the Company was named an awardee under the Department of Energy’s ARDP. The objective of the ARDP is to accelerate the development and demonstration of advanced nuclear reactor technologies, pursuant to which the DOE will fund a portion of the direct and indirect costs incurred for the research and development costs to develop the intellectual property (“IP”) and the costs of developing and constructing both the TRISO-X fuel facility (“TX-1”) and Xe-100 commercial demonstration plant in Seadrift, Texas. Dow has been named a subawardee under the ARDP in connection with their involvement with the development and construction of the demonstrator reactor. The Company is constructing and will own TX-1.

Under the Company’s separate agreement with Dow, certain costs incurred by Dow related to the demonstrator reactor are funded by the Company using funds obtained through the ARDP. The Company has recognized the funds received from the DOE and the costs incurred by Dow on a gross basis as grant income and direct costs, respectively. The Company has recognized$3.2 million and$1.3 million as grant income and$2.7 million and$1.1 million as direct costs during the three months ended March 31, 2026 and 2025, respectively, related to costs incurred by Dow for the demonstration plant. The Company also earns revenue from Dow as a customer for certain site specific engineering, permitting, and other services related to the development of the Xe-100 plant. Refer to Note 14 —Related Party Transactionsfor additional information on transactions with Dow and other related parties.

Disaggregated Revenues and Grant Income

A summary of revenues and grant income by customer type is as follows (in thousands):

A summary of revenues and grant income by contract type is as follows (in thousands):

Revenues and Grant Income by Geographic Location

The Company has revenues and grant income in the following geographic locations (in thousands):

Contract Balances

The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (amounts billable where the right to consideration is unconditional), contract assets (for which certain conditions must be satisfied before the right to bill is obtained), and contract liabilities (customer advances and deposits) on the condensed consolidated balance sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in unbilled receivables. However, the Company sometimes receives advances or deposits from its customers, or bills customers where it has an unconditional right to consideration before revenue is recognized, resulting in contract liabilities. These liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

Contract liabilities as of March 31, 2026, and December 31, 2025 include deferred revenue. As of March 31, 2026, the Company has deferred revenue of$21.9 million, of which$18.0 million is recorded in Long-term deferred revenue and$3.9 million is recorded within Accrued liabilities.$2.3 million of the Long-term deferred revenue is attributable to related parties. During the three months ended March 31, 2026, no revenue was recognized that had previously been deferred. As of December 31, 2025, the Company has deferred revenue of$15.3 million, of which$15.2 million is recorded within Long-term deferred revenue and$0.1 million is recorded in Accrued liabilities.$2.4 million of the Long-term deferred revenue is attributable to related parties. During the three months ended March 31, 2025,$1.1 million of revenue was recognized that had previously been deferred.

Contract assets represent revenue recognized that exceeds the amount billed to the customer and excludes amounts billable where the right to consideration is solely subject to the passage of time. As of March 31, 2026, the Company has contract assets of$1.0 million, all of which is recorded within Unbilled receivables and contract assets and is not associated with related parties. As of December 31, 2025, the Company has contract assets of$7.5 million, all of which is recorded within Unbilled receivables and contract assets and is not associated with related parties.

NOTE 4 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following (in thousands):

(1)

Net of reimbursement from the United States Government.

All of the Company’s property and equipment is located within the United States.

NOTE 5 — GOVERNMENT GRANTS FOR PROPERTY AND EQUIPMENT

During the three months ended March 31, 2026 and 2025, the Company received reimbursements from the DOE under the ARDP related to construction of its nuclear fuel fabrication and reactor testing facilities. The Company recognizes the grant from the DOE at the time in which the costs are incurred in compliance with the conditions of the grant, which were$33.1 million and$9.4 million for the three months ended March 31, 2026 and 2025, respectively.

NOTE 6 — ACCRUED LIABILITIES

The following table sets forth the components of accrued liabilities (in thousands):

NOTE 7 — DEBT

The Company hasno debt outstanding as of March 31, 2026 and December 31, 2025.

Live Oak Credit Facility

On June 14, 2021, the Company and one of its subsidiaries entered into a revolving credit facility with Live Oak Bank (the “Live Oak Credit Facility”) with maximum borrowings of up to $15.0 million, subject to an asset-based borrowing base based on eligible accounts receivable, net of lender reserves. The Company didnot have any borrowings, payments, or interest payments on the Live Oak Credit Facility during thethree months ended March 31, 2025. The facility matured on December 1, 2025 withno outstanding borrowings.

C-2 Convertible Notes

In 2022 and 2023, the Company issued convertible notes payable in an aggregate principal amount of $113.0 million (“C-2 Notes”), of which $70.0 million was issued to related parties. The C-2 Notes were due on September 30, 2025 and accrued 10.0% of payable-in-kind interest annually. The C-2 Notes provided holders with conversion rights into equity securities under certain conditions, including upon an IPO or at the holder’s election after August 4, 2023.

The Series C-2 Convertible Notes contained embedded derivatives which, absent the election of the fair value option, would have been bifurcated and accounted for at fair value. Accordingly, the fair value option was elected. The Company classified the C-2 Notes as a liability at fair value and remeasured the C-2 Notes to their fair value at each reporting period, with the portion of the change in fair value attributable to instrument-specific credit risk recorded within other comprehensive income (loss), and the remaining change in fair value recorded within Other income (expense), net. As the fair value option was elected, issuance costs associated with the C-2 Notes were expensed in the period incurred. Refer to Note 13 —Fair Value Measurements for further information on the remeasurement of the C-2 Notes.

On October 11, 2024, certain of the C-2 Notes with an aggregate principal balance of $98.0 million converted into approximately 17.0 million Series C Preferred Units, which was accounted for as a debt extinguishment.

On September 30, 2025, the remaining outstanding principal and unpaid accrued interest on the C-2 Notes were converted into approximately 2.9 million Series C Preferred Units, which was accounted for as a debt extinguishment.

NOTE 8 — LEASES

The Company leases office spaces, which have initial operating lease terms ofthree totwelve years. Some leases have options to extend the lease term, ranging fromsix months tofive years. Certain leases have early termination options, which the Company is not reasonably certain to exercise.

During the three months ended March 31, 2026, the Company entered into a new lease with a 27‑month term and modified certain existing leases, including changes that extended lease terms by approximatelytwo tothree months and expanded the leased premises. The Company also early terminatedone lease during thethree months ended March 31, 2026.

Lease balances are as follows (in thousands):

(1)

The current portion of operating lease liabilities is reflected within Accrued liabilities on the condensed consolidated balance sheets.

Operating lease costs totaled$2.5 million and$0.9 million for the three months ended March 31, 2026 and 2025, respectively, and were recognized on a straight-line basis over the lease term. Variable lease expenses and short-term lease expenses were immaterial for the three months ended March 31, 2026 and 2025.

Future minimum lease payments under operating leases as of March 31, 2026 are as follows (in thousands):

Supplemental cash flow information relating to the Company’s leases is as follows (in thousands):

The weighted average remaining lease term and discount rates for operating leases are as follows:

NOTE 9 — PROFIT SHARING PLAN

The Company maintains a defined contribution profit sharing plan (the “Plan”), which includes a salary deferral arrangement, under the provisions of Section 401(k) of the Internal Revenue Code. Employees are eligible to participate in the Plan on the date of employment. Company matches 100% of employees’ contributions up to 5% of annual compensation. The Company contributed$1.4 million and$0.7 million to the Plan during the three months ended March 31, 2026 and 2025, respectively.

NOTE 10 — INCOME TAX

The Company is a limited liability company which is classified as a partnership for U.S. federal and state income tax purposes. Accordingly, the Company’s U.S. operations are not subject to income taxes in the U.S. The Company’s owners separately account for their pro rata share of the Company’s income, deductions, losses, and credits annually. The Company’s foreign operations are subject to income taxes in the foreign jurisdictions in which they operate. Income tax expense and benefit were immaterial for the three months ended March 31, 2026 and 2025.

NOTE 11 — MEMBER UNITS AND PREFERRED UNITS

The units described below reflect the Company’s capital structure prior to the IPO and Reorganization Transactions completed in April 2026. In connection with the IPO and Reorganization Transactions completed in April 2026, all outstanding Preferred Units and certain Common Units were recapitalized into a single class of Common Units of X-Energy Reactor Company, LLC. Refer to Note 18 —Subsequent Events for additional information regarding the IPO and related changes to the Company’s capital structure and Unit holder rights.

Common Units

The holders of Class A Common Units are entitled to one vote for each unit of Class A Common Units held at all meetings of stockholders. The voting, dividend, and liquidation rights of the holders of Class A Common Units are subject to and qualified by the rights, powers, and privileges of the holders of Preferred Units set forth in the original or amended Certificate of Incorporation. The Class A Common Units have been classified as mezzanine equity as they are redeemable for cash upon the occurrence of certain events that are considered outside of the Company’s control.

The Class B Common Units have the same rights and preferences as the Class A Common Units; provided, however, that the Class B Common Units shall not have voting rights and are subject to a profits interest threshold as may be set forth in grant agreements under the Company’s unit-based compensation plan discussed in Note 12 —Unit-Based Compensation Expense.

The Class B Common Units are classified as Mezzanine equity as they are redeemable for cash upon the occurrence of certain events that are considered outside of the Company’s control.

Series A Preferred Units

The Series A Preferred Units were issued to a related party in 2023 in conjunction with the Series A Preferred financing. The units were recognized at fair market value on the issuance date.

Series A-1 Preferred Units

The Series A-1 Preferred Units were issued in 2023 together with the Series C Preferred Units and certain Series B Common Units in exchange for a cash investment of $50.0 million. The Series A-1 Preferred Units were initially recognized at their relative fair market value.

Series B Preferred Units

The Series B Preferred Units were issued prior to 2023. The Series B Preferred Units were initially recognized at fair market value.

Series C Preferred Units

During 2023, the Company issued 16.3 million Series C Preferred Units through a financing transaction, a related-party investment (resulting in a loss on issuance), and the conversion of C-1 outstanding notes.

During 2024,20.8 million Series C Preferred Units were issued in connection with the conversion of the C-1 notes, the C-2 Note Conversion, and the exercise of the October 2022 warrants. The Series C Preferred Units issued as a result of these transactions were recognized at fair market value.

On September 30, 2025, the Company’s C-2 Note was converted into 2.9 million Series C Preferred Units. The Series C Preferred Units issued as a result of this transaction were recognized at fair market value.

Series C-1 Preferred Units

During 2024, the Company completed a financing round of Series C-1 Preferred Units which resulted in the receipt of gross cash proceeds of approximately $626.5 million from various investors. As a result of this financing round, the Company issued 99.7 million Series C-1 Preferred Units. The Series C-1 Preferred Units issued through these transactions were recorded at fair value.

In connection with the issuance of the Series C-1 Preferred Units, one investor and potential future customer was issued a warrant on Series C-1 Preferred Units (the “2024 Warrant”) for no additional consideration. The 2024 Warrant was required to be classified as a liability and measured at fair value on an ongoing basis pursuant to ASC 480 since the underlying Series C-1 Preferred Units are redeemable for cash upon the occurrence of certain events that are considered outside of the Company’s control. The 2024 Warrant could be exercised by the holder at any time from the issuance date until the 18-month anniversary of the issuance date and entitled the holder to purchase up to 40.2 million Series C-1 Preferred Units at an exercise price of approximately $7.46 per unit. As the 2024 Warrant was issued for no additional consideration and did not meet the criteria for capitalization of a contract asset, the issuance date fair value of the 2024 Warrant of $55.3 million was expensed upon its issuance. Additionally, in March 2026, the Company amended the 2024 Warrant to permit the holder to elect a cashless exercise of the 2024 Warrant at an earlier date than provided by the 2024 Warrant’s original terms. The warrant holder exercised the warrant on March 18, 2026 and received 19.6 million Series C-1 Preferred Units, which were recorded at fair value. The Company recognized a mark-to-market loss of $101.8 million in Other income (expense), net during thethree months ended March 31, 2026, as a result of remeasuring the warrant liability to fair value prior to exercise.

On January 24, 2025, the Company completed additional financing rounds of Series C-1 Preferred Units, issuing 8.2 million Series C-1 Preferred Units and receiving gross cash proceeds of approximately $53.4 million from various investors. On October 3, 2025, the Company issued a warrant to a related party customer to purchase up to 14.1 million Series C-1 Preferred Units at an exercise price of $6.4870 per unit (the “2025 Warrant”). See Note 14—Related Party Transactions for details of the 2025 Warrant.

The Series C-1 Preferred Units issued through these transactions were recorded at fair value.

Series D Preferred Units

On November 21, 2025, the Company completed a financing round of Series D Preferred Units, issuing 48.2 million Series D Preferred Units and receiving gross cash proceeds of approximately $700.0 million. The Series D Preferred Units issued through these transactions were recorded at fair market value.

Preferred Units

Together, the Series A Preferred Units, the Series A-1 Preferred Units, the Series B Preferred Units, the Series C Preferred Units, the Series C-1 Preferred Units, and the Series D Preferred Units shall be referred to as the “Preferred Units” for the purpose of this Note. Preferred Units have been issued in one or more series, each of such series consisting of such number of units and to have such terms, rights, powers and preferences, and the qualifications and limitation with respect thereto, as stated or expressed in the original or amended Certificate of Incorporation. Specifics regarding the conversion features and voting rights associated with, and the balance sheet classification of, the Preferred Units outstanding are as follows:

Optional Conversion Feature

Each Preferred Unit is convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into an equal number of Class A Common Units as is determined by dividing the Original Issue Price, for the series of preferred units by the conversion price, initially equal to the applicable original issue price per unit, of such series of Preferred Units in effect at the time of conversion. Conversion may be effected at any time at the sole discretion of the holder. As of March 31, 2026 and December 31, 2025, the outstanding Preferred Units are therefore convertible into the following quantities of Class A Common Units (in thousands, except prices):

Automatic Conversion Feature

In the event of (i) a Qualified IPO, with the exception of the Series D Preferred Units as discussed below, or (ii) the approval of the requisite holders, the Preferred Units will automatically be converted into an equal number of Class A Common Units at the applicable conversion ratio.

For Series D Preferred Units specifically, if the Company undertakes a Qualified IPO, the conversion price of the Series D Preferred Units will be adjusted, if necessary, to be equal to the lesser of: (a) seventy-five percent (75%) of the price per Class A Common Unit, or the price per the equivalent common share of (i) the Company’s corporate successor following a conversion of the Company to a C corporation or (ii) the Company’s newly formed corporation member, in either scenario offered to the public in such Qualified IPO; or (b) the then-current conversion price of the Series D Preferred Units prior to such adjustment.

Voting Rights

Each of the holders of Class A Common Units, Series A Preferred Units, Series B Preferred Units, Series C Preferred Units, Series C-1 Preferred Units, and Series D Preferred Units are entitled to vote for members of the Board of Directors in whatever manner necessary to ensure that the size of the Board of Directors of the Company is set and remains at nine directors who serve as the managers of the Company. The Series A-1 Preferred Units and Class B Common Units do not vote on the Board of Directors.

Cumulative Preferred Return

The Preferred Units have an annual 3% cumulative preferred return on the original issuance price, beginning on the date such Preferred Units were issued. As of March 31, 2026, the accumulated preferred return not reflected in the condensed consolidated balance sheet for Series A, A-1, B, C, C-1, and D Preferred Units was$7.3 million,$4.7 million,$14.9 million,$16.4 million,$29.7 million, and$7.5 million, respectively. As of December 31, 2025, the accumulated preferred return not reflected in the condensed consolidated balance sheet for Series A, A-1, B, C, C-1, and D Preferred Units was$7.0 million,$4.2 million,$14.1 million,$14.2 million,$24.4 million, and$2.3 million, respectively. In the event of a deemed liquidation, the cumulative preferred return is payable solely for the Series B Preferred Units and therefore has been incorporated into the Series B Preferred Units liquidation preference amount presented on the balance sheet. The cumulative preferred return on the remaining units is subject to the discretion of the Board of Directors.

Liquidation Preference

In the event of any liquidation, dissolution, or winding up of the Company, or a deemed liquidation event, including a merger or consolidation, or a sale or other disposition of all or substantially all of the Company’s assets, the holders shall receive distributions in an amount up to their liquidation preference. See the condensed consolidated balance sheet for the liquidation preference amounts. The preference of distributions is first to both Series D Preferred Unit and Series C-1 Preferred Unit holders pari passu, second to Series C Preferred Unit holders, third to Series B Preferred Units holders, fourth to Series A and Series A-1 Preferred Units holders, and fifth to Class B-1 Profits Interest Units, until members have received cumulative distributions equal to approximately $9.5 million. After the payment of the full liquidation preference of the redeemable convertible preferred stock and profits interests, the Company’s remaining assets legally available for distribution, if any, would be distributed ratably to the holders of Class A and Class B Common Units.

Classification

A redeemable equity security is to be classified as temporary or mezzanine equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer.

The Preferred Units and Common Units are redeemable for cash upon the occurrence of a deemed liquidation event. As of March 31, 2026 and December 31, 2025, a deemed liquidation event is not considered probable, and the occurrence of such an event is considered to be outside of the Company’s control. Accordingly, the Preferred Units and Common Units are considered conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer and, therefore, the Company has classified the Preferred Units and Common Units as mezzanine equity in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025. The mezzanine equity amount related to Common Units issued as unit-based compensation is the grant date redemption value, or the modification date redemption value, as applicable. The difference between the grant date fair value and the redemption value for vested awards is presented in permanent equity. As of March 31, 2026 and December 31, 2025,$75.1 million and$74.9 million, respectively, has been presented within mezzanine equity, and the excess of grant date redemption value over grant date fair value for vested awards has been recorded within Additional paid in capital and Accumulated deficit for those periods, respectively.

NOTE 12 — UNIT-BASED COMPENSATION EXPENSE

For the three months ended March 31, 2026, unit-based compensation expense related to Class B-1 and Class B-2 Profits Interest Units (“PIUs”) of$2.8 million was classified as Selling, general, and administrative expense,$1.4 million was classified as Direct costs, and$0.3 million was capitalized into Property and equipment as part of the Company’s construction projects. The total fair value of units that vested during the three months ended March 31, 2026 was$4.5 million. As of March 31, 2026, the Company had$27.8 million of unrecognized unit-based compensation that is expected to be recognized over a weighted average period of 2.1 years. For the three months ended March 31, 2025, unit-based compensation expense and the total fair value of PIUs that vested were both immaterial. See Note 18 —Subsequent Events for information regarding equity awards granted in connection with the IPO in April 2026.

NOTE 13 — FAIR VALUE MEASUREMENTS

The liabilities recorded at fair value and measured on a recurring basis are all Level 3 measurements as of March 31, 2026 and December 31, 2025.

Rollforward of Level 3 Measurements

A roll forward of the Level 3 measurements is as follows (in thousands):

(1)

As the fair value option was elected for the C-2 Notes, the change in fair value attributable to instrument-specific credit risk associated with each instrument is recorded within Other comprehensive income (loss), and the remaining change in fair value is recorded within Other income (expense), net on the condensed consolidated statements of operations and comprehensive loss. The change in instrument specific credit risk is estimated based on the option adjusted spread of comparable companies and the option adjusted spread of the U.S. high yield index for companies with similar credit ratings.

Valuation Techniques and Significant Unobservable Inputs

A significant increase or decrease in any of the significant unobservable inputs used in the fair value measurement of the warrant liabilities or C-2 Notes could result in a significantly higher or lower fair value measurement. The quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of March 31, 2026 and 2025 are summarized below:

2024 Warrants

The fair value of the 2024 Warrants is based on an option pricing method of allocation. The 2024 Warrants were exercised on March 18, 2026. The significant inputs, including significant unobservable inputs, used in the recurring Level 3 fair value measurements of the 2024 Warrants are as follows:

June 2022 Warrants

In conjunction with a guarantee to the Bank of New York Credit Facility, the Company issued $10.0 million of warrants (the “June 2022 Warrants”) to Ghaffarian Enterprises, a related party, on June 30, 2022. The fair value of the June 2022 Warrants is based on an option pricing method of allocation. The significant inputs, including significant unobservable inputs, used in the recurring Level 3 fair value measurements of the June 2022 Warrants are as follows:

December 2022 Warrants

On December 5, 2022, the Company issued 444,444 warrants (the “December 2022 Warrants”) to purchase common units of the Company. The December 2022 Warrants had an exercise price of $0.01 per unit, were not exercisable until 36 months following the issuance of the C-2 Notes, subject to the achievement of certain business requirements, and were liability classified. As of December 31, 2025, the December 2022 Warrants expired as business requirements of the holder were not met.

The fair value was determined based on an option pricing method of allocation using the contractual strike price per the warrant agreement, and an estimate of the per unit value of the warrants. The significant inputs, including significant unobservable inputs, used in the recurring Level 3 fair value measurements of the December 2022 Warrants were as follows:

C-2 Notes

As of December 31, 2025, all C-2 Notes had converted into Series C Preferred Units. Refer to Note 7—Debt for further information.

The fair value of the C-2 Notes was based on the binomial lattice model, which is considered to be a Level 3 fair value measurement. The significant inputs, including significant unobservable inputs, used in the recurring Level 3 fair value measurements of the C-2 Notes were as follows:

Held-to-Maturity Securities—Amortized Cost and Fair Value

The estimated fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands):

The following table summarizes the carrying values and fair values of the Company’s financial instruments that were not carried at fair value on the condensed consolidated balance sheets (in thousands):

The amortized cost and estimated fair value of held to maturity securities by contractual maturity are shown below (in thousands):

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

NOTE 14 — RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company enters into transactions with various related parties.

Related Party Warrants

On October 3, 2025, agreements with a related party customer were modified through the issuance of the 2025 Warrant and the Company accounted for such modification in accordance with ASC 606. The 2025 Warrant may be exercised by the holder when all of the Xe-100 units associated with the customer agreements are considered fully operational (the “Vesting Event”) and entitles the holderto purchase up to 14.1 million Series C-1 Preferred Units at an exercise price of $6.4870 per unit. The exercise period ends at the earlier of (i)one year from the Vesting Event, (ii) event of non-compliance and (iii) a consummation of a change of control or a listing event of the Company, to the extent it occurs after vesting. The Vesting Event is considered a performance condition in accordance with ASC 718, as the Vesting Event is a performance target defined solely by reference to the Company’s own operations. As the 2025 Warrant was issued to a customer and not in exchange for a distinct good or service that the customer transfers to the Company, the Company accounts for the 2025 Warrant as consideration payable to a customer under ASC 606, and will recognize the Warrant as a decrease to the transaction price, measured based on the grant date fair value when the performance condition is deemed probable. The grant date fair value was determined to be $162.7 million.

Moreover, the Company determined that the 2025 Warrant will be classified as an equity award based on the criteria of ASC 480 and ASC 718. When the performance condition is deemed probable, the Company will recognize the 2025 Warrant as a temporary equity classified instrument on the condensed consolidated balance sheet measured based on its grant date redemption value. Upon the performance condition becoming probable of occurring, any difference between the 2025 Warrant’s grant date fair value and its grant date redemption value shall be presented in permanent equity.

As of March 31, 2026, and December 31, 2025, the 2025 Warrant was not deemed probable of vesting, and thus, the Company did not recognize any amount related to the 2025 Warrant. The Company will assess whether it is probable that the 2025 Warrant will vest at the end of every reporting period.

In connection with the issuance of the Series C-1 Preferred Units, one investor and potential future customer was issued the 2024 Warrant for no additional consideration. The 2024 Warrant was required to be classified as a liability and measured at fair value on an ongoing basis pursuant to ASC 480 since the underlying Series C-1 Preferred Units are redeemable for cash upon the occurrence of certain events that are considered outside of the Company’s control. The 2024 Warrant could be exercised by the holder at any time from the issuance date until the 18-month anniversary of the issuance date and entitled the holder to purchase up to 40.2 million Series C-1 Preferred Units at an exercise price of approximately $7.46 per unit. As the 2024 Warrant was issued for no additional consideration, and did not meet the criteria for capitalization of a contract asset, the issuance date fair value of the 2024 Warrant of $55.3 million was expensed upon its issuance. Additionally, in March 2026, the Company amended the 2024 Warrant to permit the holder to elect a cashless exercise of the 2024 Warrant at an earlier date than provided by the 2024 Warrant’s original terms. The warrant holder exercised the 2024 Warrant on March 18, 2026 and received 19.6 million Series C-1 Preferred Units.

Related Party Revenue

Dow is a unitholder and warrant holder of X-Energy. During the year ended December 31, 2025, the Company entered into the Master Project Development Agreement (“MPDA”) with Dow, which is a continuation of the project under the previously existing joint development agreement with Dow entered into during the year ended December 31, 2023, whereby the MPDA and joint development agreement together are considered the “Dow Agreements.”

The table below summarizes related party revenues that are reflected within Services revenue in the condensed consolidated statements of operations and comprehensive loss (in thousands):

Related Party Expenses

The Company enters into various arrangements with related party vendors. These arrangements primarily include subcontracting services with a related party investor, and general and administrative services with an affiliate of the Chairman of the Board of Directors of the Company.

The subcontracting services primarily pertain to support services related to ARDP, and the general and administrative services include rent for office space, consulting services, and other general and administrative services. The table below summarizes the expenses with related parties that are reflected in the condensed consolidated statements of operations and comprehensive loss (in thousands):

(1)

Expenses relating to subcontracting services are reflected within Direct costs in the condensed consolidated statements of operations and comprehensive loss.

(2)

Expenses related to general and administrative services are reflected within Selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.

Due to/from Related Parties and Long-Term Deferred Revenue

The following balances were recorded within Due from and Due to related parties and Long-term deferred revenue (in thousands):

(1)

As of March 31, 2026 and December 31, 2025,$4.1 million and$4.5 million, respectively, is related to Dow, of which$3.5 million and$0.7 million, respectively, is unbilled.

Refer to Note 7 —Debt for disclosures related to debt from related parties.

Upon closing of Series D Preferred Units and resulting change in capital ownership, the Company reevaluated its related parties. Accordingly, certain entities were previously considered related party entities that the Company has historically conducted business with are no longer considered related parties as defined in ASC 850 beginning on November 21, 2025. The Company has disclosed transactions occurring prior to November 21, 2025 with these entities as related party transactions.

NOTE 15 — COMMITMENTS AND CONTINGENCIES

Incurred Cost Audits

The Company’s costs incurred on contracts with the DOE are subject to final incurred cost audits prior to the close out of the award as specified in such contracts. Billings under these contracts are based on provisional rates that permit recovery of allowable overhead, and general and administrative expenses not exceeding certain limits. These rates are subject to review by the government on an annual basis. When final determination and approval of the allowable rates have been made, billings may be adjusted.

The periods beginning January 1, 2020 onward are currently subject to audit. As of March 31, 2026 and December 31, 2025, the Company has$1.1 million in contract-related reserves for its estimate of potential refunds to customers recorded in Accrued liabilities on the condensed consolidated balance sheets.

Investigations and Litigation

From time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. The Company is not, to the best of its knowledge, presently a party to any legal proceedings that, if determined adverse to the Company, would individually or taken together have a material adverse effect on its business, operating results, financial condition, or cash flows.

Unconditional Purchase Obligations

The Company has entered into certain agreements in which the Company is committed to purchase goods or services, primarily related to supply agreements for graphite components. Those commitments are as follows (in thousands):

NOTE 16 — SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow disclosures are as follows (in thousands):

NOTE 17 — SEGMENTS

Under the guidelines of ASC 280, which require companies to present financial information about their operating segments, products and services, geographic regions, and significant customers, the Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”). The CODM evaluates financial performance, allocates resources, and makes strategic decisions based on the consolidated results of the Company, rather than evaluating discrete lines of business. Accordingly, management has determined that the Company comprises a single reportable segment.

In making resource allocation decisions and assessing operational outcomes, the CODM relies on overall net income (loss) as the primary metric both, during the annual planning process and for evaluating results on a quarterly basis. The primary expenses presented to the CODM and incorporated in segment performance are related to operating expenses and non-operating expenses. Operating expenses consist of Direct costs; Selling, general and administrative costs; and Research and development costs. Non-operating expenses consist of Interest expense, Interest income, and Other income (expense). The condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 present these significant segment expenses for the Company’s single operating segment. The condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 likewise display the assets and liabilities attributable to this single segment.

NOTE 18 — SUBSEQUENT EVENTS

In preparing these condensed consolidated financial statements, the Company has evaluated subsequent events to determine if any require recognition or disclosure.

IPO and Reorganization Transactions

On April 27, 2026, X-Energy, Inc., the holding company and sole manager of the Company, successfully closed an IPO in which X-Energy, Inc. issued and sold 50,892,857 shares of its Class A common stock for net proceeds aggregating approximately $1.1 billion, net of underwriting discounts of $67.3 million that were incurred by the Company.

In connection with such IPO, the Company and X-Energy Inc. completed a series of organizational transactions (collectively, the “Reorganization Transactions”), which are described below:

•

XERC amended and restated its existing limited liability company agreement to, among other things, (i) effect a recapitalization in which all existing ownership interests in XERC were converted into one class of Common Units and (ii) appoint X-Energy, Inc. as the sole managing member of XERC.

•

X-Energy, Inc. amended and restated its certificate of formation to, among other things, authorize Class A and Class B common stock, with each share of either class entitling its holder to one vote per share on all matters presented to stockholders.

•

X-Energy, Inc. acquired Common Units of XERC held by the Blocker Companies (as defined below) pursuant to the Blocker Mergers (as defined below), in which the Blocker Companies merged with and into X-Energy, Inc., with X-Energy, Inc. as the surviving entity. Pursuant to such mergers, shareholders of the Blocker Companies received shares of Class A common stock as consideration. Blocker Companies are entities that were owners of Common Units in XERC prior to the Reorganization Transactions and are taxable as corporations for U.S. federal income tax purposes. Meanwhile, the Blocker Mergers represents the merger of each of the Blocker Companies with X-Energy, Inc. as part of the Reorganization Transactions, pursuant to which the shareholders of the Blocker Companies, which represents the owners of the Blocker Companies prior to the Reorganization Transactions, who exchanged their interests in the Blocker Companies for shares of our Class A common stock in connection with the consummation of the Blocker Mergers, receive shares of Class A common stock as consideration for the applicable Blocker Merger.

•

X-Energy, Inc. acquired (i) all of the Common Units of XERC held by the former equity owners (“Former Equity Owners”), which refers to those Original Equity Owners other than the Blocker Companies and the Continuing Equity Owners except for X-Energy Management LLC (“Management LLC”), who is addressed below, and (ii) a portion of the Common Units held by the Continuing Equity Owners, in each case in exchange for an equal number of shares of Class A common stock. Continuing Equity Owners collectively refer to those Original Equity Owners (which refers to the direct and certain indirect owners of XERC, including ACIP Investments Pooling LLC — Series 31, Ares X-Energy Co-Invest LP, Ares X-Energy Holdings LP, GM Enterprises, LLC, IBX Opportunity GP, Inc, X-Energy Holdings, LLC, Jane Street Global Trading, LLC and certain of their affiliates, but excluding Management LLC) that will own Common Units in XERC and our Class B common stock after the Reorganization Transactions and who may, following the consummation of our initial public offering, redeem their Common Units for shares of X-Energy, Inc.’s Class A common stock or cash, at X-Energy, Inc.’s election.

•

Management, LLC, a Delaware limited liability company, amended and restated its limited liability company agreement to, among other things, effect a recapitalization in which all existing ownership interests in Management LLC were converted into one class of Common Units. Subsequently, Management LLC contributed all of its Common Units of XERC to X-Energy, Inc. in exchange for an equal number of shares of Class A common stock, which shares remain subject to the same vesting conditions applicable to the corresponding Common Units immediately prior to such contribution.

•

X-Energy, Inc. issued to the Continuing Equity Owners shares of Class B common stock equal to the number of Common Units of XERC held by the Continuing Equity Owners in exchange for nominal consideration from the Continuing Equity Owners, resulting in a combined company organized in an umbrella partnership-C corporation (“Up-C”) structure, in which substantially all of the assets and the business of the company are held by XERC.

Following the Reorganization Transactions and IPO, X-Energy, Inc. is a public holding company and its principal asset is a controlling equity interest in XERC. As the sole managing member of XERC, X-Energy, Inc. will operate and control all of the business and affairs of XERC and its subsidiaries. As a result, X-Energy, Inc. will consolidate XERC’s financial results and report a non-controlling interest related to the Common Units of XERC not owned by X-Energy, Inc.

The Reorganization Transactions are considered transactions between entities under common control. As a result, the condensed consolidated financial statements for periods prior to the IPO and the Reorganization Transactions are the condensed consolidated financial statements of XERC as the predecessor to X-Energy, Inc. for accounting and reporting purposes.

Tax Receivable Agreement (“TRA”)

In connection with the IPO and related transactions, X-Energy, Inc. entered into a TRA with XERC and certain equity owners of XERC prior to the IPO (“TRA Holders”) that will provide for the payment by X-Energy, Inc. to the TRA Holders of 85% of the amount of cash tax savings, if any, that X-Energy, Inc. is deemed to realize (calculated using certain assumptions) as a result of certain tax basis adjustments.

Registration Rights Agreement

In connection with the IPO, X-Energy, Inc. entered into a Fourth Amended and Restated Registration Rights Agreement with certain holders of Common Units of XERC who received shares of Class A common stock or who hold rights to exchange Common Units for Class A common stock. The agreement provides these holders and certain of their affiliates with demand and piggyback registration rights, allowing them to require X-Energy, Inc. to register their shares for public sale under certain circumstances. X-Energy, Inc. will bear the registration expenses associated with these registrations.

IPO Equity Awards

In connection with the X-Energy, Inc. initial public offering, X-Energy, Inc. adopted the 2026 Equity Incentive Plan (“2026 Plan”), in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of the Company and employees and consultants or certain of our affiliates and to enable X-Energy, Inc. and its subsidiaries and certain of its affiliates to obtain and retain services of these individuals, which is essential to its long-term success.

X-Energy, Inc.’s board of directors approved the conversion of existing PIUs that ultimately entitled them to restricted stock awards subject to the same provisions with respect to vesting, forfeiture, and transfer restrictions as the existing PIUs and the additional grant of stock options pursuant to the 2026 Plan to certain employees, including the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Chief of Global Operations, and non-employee directors, which grants became effective in connection with the consummation of the offering (“IPO Equity Awards”). The IPO Equity Awards were granted only to current employees and non-employee directors who previously held PIUs.

The IPO Equity Awards granted to the named executive officers were comprised of stock options that cover approximately 3.5 million shares of X-Energy, Inc.’s Common Stock, respectively based on the initial public offering price of $23.00 per share of Class A common stock. In addition, certain of X-Energy, Inc.’s directors who previously held PIUs received stock options, which cover an aggregate of approximately 0.1 million shares of Common Stock based on the initial public offering price of $23.00 per share of Class A common stock.

Each stock option granted to named executive officers and directors will vest and become exercisable in substantially equal annual installments pursuant to the same vesting schedule as the grantee’s PIUs.

The IPO Equity Awards granted to non-employee directors were composed of restricted stock awards with an aggregate grant date value of $0.9 million.