Deep Isolation Nuclear, Inc. (DBHL) Q1 2026 Earnings Call Transcript

Good morning, and welcome to the Deep Isolation Nuclear Inc. First Quarter 2026 conference call. As a reminder, today's call is being recorded, and at this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. I would now like to turn the call over to our General Counsel, Paula Witten-Doolan. Please go ahead.

Good morning, and thank you for joining Deep Isolation Nuclear's Q1 2026 conference call. With me on our call today are Rod Balzer, Deep Isolation CEO, Joseph Nelson, CFO, and Chris Parker, Chief Commercialization Officer. We will begin prepared remarks momentarily and will hold a question and answer session following those remarks. First, I will review the Safe Harbor Disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risk and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risk and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. Deep Isolation Nuclear assumes no obligation to publicly update or revise any forward-looking statements. I'd now like to turn the call over to Deep Isolation CEO, Rod Balzer.

Good morning, and thank you to everyone for joining us today as we hold our first earnings call as a publicly reporting company. As many of you know, we've been in process on approval for public listing of our shares for a while, and we have now finally been declared effective by the SEC. We're working to finalize our listing on the OTC market, and we'll provide an update when that is completed, and our shares are tradable. This first earnings call is a huge milestone for us at an exciting time for the entire nuclear industry. The AI revolution is driving demand for clean, scalable, baseload power like never before, and everyone, the hyperscalers, policymakers, and market investors, knows that nuclear is the solution. Our oversubscribed go public transaction last summer shows that the market also knows that a solution is needed for the radioactive waste that is an inevitable byproduct of nuclear fission. So I'd like to start with a big thank you to everyone who made this milestone possible, to early angel investors who shared our vision right from the start when we launched 10 years ago, to our engineering partner, NAC International, who led our Series A round in 2020 and expanded their investment in 2025, to our partners at the U.S. Department of Energy and ARPA-E for their confidence in our technology and business for their $6 million in grant support to date and for their announcement last month that they have selected Deep Isolation for a grant of up to $20 million as part of the Scale-Up Ready program, to all the other investors who are backing our vision for a safe, permanent solution to the world's nuclear waste, and the biggest thank you to our employees, without whom none of our success would be possible. Today, we want to look back on the great progress in 2025 and forward to what the remainder of 2026 has in store. But first, I think it's helpful to start with a reminder of the problem deep isolation exists to solve. Since the beginning of nuclear power in the 1950s, the world has never implemented a permanent solution for the disposal of spent nuclear fuel. As a result, roughly 400,000 metric tons of spent nuclear fuel have accumulated in ad hoc temporary storage sites globally. Every country with nuclear power is managing this material safely through interim above-ground storage facilities, but none has solved the problem of permanent disposal. The consequences of that failure are profound. Just look at the position here in the U.S. We have no functioning disposal program. U.S. taxpayers are exposed to well over $150 billion in total liability for spent nuclear fuel. Those liabilities are increasing by billions of dollars every year, and court judgments alone are costing roughly $2 million per day. This is the problem deep isolation was created to solve. To bring innovation and private capital to bear on a problem which governments around the world have struggled to solve for decades. Since our launch in 2016, the need has become even greater. Nuclear energy is uniquely positioned to strengthen energy security, to deliver clean and reliable electricity, and to support accelerating power demand from data centers and AI-driven economic growth. That is why the world's governments have committed to tripling nuclear power generation by 2050, and it's why the current U.S. administration has made nuclear a strategic national priority with bipartisan support. But without a permanent, scalable solution for spent fuel disposal, that nuclear expansion will be constrained, constrained politically, constrained financially, and constrained socially. So what is our solution? The founding insight behind deep isolation was that the waste problem is solvable and that the technologies to solve it already exist. The oil and gas industry has proven over decades that directional drilling can reliably place materials deep underground in long, horizontal, or slanted wells with precision and control. We believe these same techniques can be applied to nuclear waste, reinventing geologic disposal in a fundamental way. It would eliminate the need for huge, costly, complex civil engineering projects that require humans underground, and it would involve only proven drilling and automated emplacement technologies that are used on a daily basis by the oil and gas sector. Since our founding, our sole focus has been on turning that insight into a practical, defensible, scalable, commercial solution. We started by establishing three priorities that have formed the core of our business ever since. Safety, safety, and safety. For a decade now, we've been investing in the underlying science needed to demonstrate that this technology is inherently safe. Isolation of nuclear waste at kilometer-scale depths and stable rock formations that have been isolated from the biosphere for millions of years severely limits waste movement. In parallel, we made sure we could protect our intellectual property. We started by establishing patent rights on the core idea of using directional drilling for waste disposal. Then we built a far broader patent portfolio, over 100 patents in total, covering the full life cycle of a borehole disposal repository. We established a compelling business case through cost studies with industry partners and government clients, showing that our technology can reduce disposal costs by as much as 70% compared to conventional mine repositories. We built partnerships across the nuclear and oil and gas supply chains to ensure that what we design can be executed in practice, executed at industrial scale, and executed safely by partners with world-class track records in quality-assured safety management, so that we can ensure safe encasement of the nuclear waste, safe transportation to our repositories, safe handling at the wellhead, and safe emplacement into the ultimate guarantor of safety, a deep isolation borehole isolated under a billion tons of rock. And finally, we ensured our technology is future-proof. Uniquely, our systems are built from the ground up, not just to handle the spent nuclear fuel from the existing fleet of light water reactors, but also the waste streams for the advanced reactor technologies and nuclear recycling technologies that today's next-generation reactor companies are implementing for the future. So this is not an academic concept. It's a practical and safe commercial solution ready for deployment when appropriate customer-specific regulatory licensing is in place. Our technology is ready to begin deployment at exactly the moment when the world most needs a credible, scalable solution for nuclear waste disposal. At the same time, we are a first-of-a-kind solution, and as such, our customers have said they need us to demonstrate our solution as a full end-to-end technology before beginning the licensing process. So, we're working on a full-scale, non-radioactive demonstration of the canister and deep borehole technology in Cameron, Texas. This demonstration will be described later in the call by our Chief Commercialization Officer, Chris Parker. Looking to the future, the potential opportunity for deep isolation is both very significant and very tangible. Based on the spent nuclear fuel that already exists above ground today, we estimate a total addressable market of approximately $155 billion. Based on the International Atomic Energy Agency's projections for new nuclear, the cumulative market for deep isolation solutions reaches approximately $295 billion by 2050. We made important progress toward addressing that market during 2025. And with that, I'd like to turn the call over to our Chief Commercialization Officer, Chris Parker, to walk through our commercial whims over the last year and our approach going forward. Thank you, Rod.

Rod spoke about the foundations we've been building since 2016. The last 12 months have been the year those foundations began to translate into real commercial momentum. I'll focus in particular on three main ways that momentum showed up. First, in the maturation of our technology into deployable products. Second, in the strengthening of our supply chain partnerships. And third, in growing engagement with our technology by governments and international institutions. So let's start with the technology shift from R&D to commercial products. In July 2025 we completed our universal canister system or the UCS which was supported by ARPA-E's Onwards program. The UCS is a unique technology designed to store, transport and ultimately dispose of spent nuclear fuel in either a deep borehole repository or a conventional mined one. Unique first because it is the only commercial canister system developed from the outset to be disposal ready and a repository agnostic without any need for repackaging at any step of the process. And second, because as Rod highlighted, it's engineered not only for the spent nuclear fuel from today's light water reactors, but also the nuclear wastes of tomorrow. Triso pebbles, other Triso waste forms, molten salts spent fuel, the highly radioactive residues that will remain after deployment of advanced recycling technologies being developed by innovators such as our collaborators, Oclo, Curio and Shine Technologies. These will all be physically and radiologically very different from the spent fuel assemblies of today and our universal canister system is ready for them. In July we completed our three-year program supported by almost seven million dollars in grant funding from the US and UK governments to design, engineer, fabricate and test this unique product and to validate the UCS with key global players like Kairos Power, Rolls-Royce SMR and Shine technologies. We know this product works and we know that it could enable multi-billion dollar savings across the back end of the nuclear fuel cycle. Strategically, the UCS gives us two key assets. First, it means deep isolation now has a marketable product for today's spent fuel storage market. Deployable once appropriate customer-specific regulatory approvals are obtained. Second, and even more important in the longer term, it closes what had previously been the one critical engineering gap for deep borehole disposal. Our approach is to integrate existing, mature technologies from the oil and gas sector and the nuclear fuel handling sector. And the UCS is the point at which these two sectors physically come together. So by solving that interface, we have completed the transition of deep borehole disposal from what engineers and regulators call the conceptual design stage to the licensing design stage. In short, we are now ready to work with customers and regulators to deploy our technology. Importantly, as of just a few weeks ago, Deep Isolation was selected for the US Department of Energy's ARPA-E Scale-Up Ready program. This program provides up to $20 million of funding for first-of-a-kind energy technologies that ARPA-E has already supported through their R&D phase and now wants to help scale up to full commercial deployment. Competition for scale-up support is fierce, and success is limited to technologies that ARPA-E believes have potential to radically transform America's energy reality. Deep Isolation is proud to have been selected as the first ever scale-up awardee from the nuclear sector. If the current award negotiation process is successful, the grant would support our full scale field testing of the UCS at Cameron, Texas. Our technical readiness is also very much the hallmark of our second area of progress over the last year, strengthening our supply chain partnerships. Our strategy is not to do everything ourselves, but to build an integrated ecosystem around our IP. Over the past year, that ecosystem got even stronger. We renewed and expanded key relationships with established nuclear services providers, including NAC International and Amentum. We signed an exclusive licensing agreement with Navarro Research and Engineering in Idaho and Tennessee to leverage Navarro's long-standing relationships at U.S. Department of Energy cleanup sites and with those state governments. And finally, we entered into new strategic collaborations with Halliburton, one of the world's leading providers of drilling and well construction services, and with Occlusion, a leader in well emplacement services. Together, these relationships ensure that our disposal solution can be executed worldwide using proven industrial scale capabilities. Our third area of progress in the last year was on the client side, where deep isolation is increasingly recognized as the thought leader and trusted advisor on borehole disposal. In the US, we continue to provide expert technical services in support of the defense cleanup mission at the world's only operational mine repository facility, the Waste Isolation Pilot Plant in Carlsbad, New Mexico, as well as through our Freestone Environmental Services business at former weapons production facilities that are being cleaned up by U.S. Department of Energy. Internationally, we deepened our involvement with organizations such as the OECD Nuclear Energy Agency and with the IAEA. We also benefited from significant diplomatic and financial support from the U.S. government as we engaged directly with international governments. In Bulgaria, for example, we started a 15-month project to develop the safety case, business case, commercial model and implementation roadmap for deployment of our technology across Bulgaria's nuclear waste inventory with funding support from the U.S. Trade and Development Agency. In parallel through the U.S. Department of State's first program we are providing technical advice to help new to nuclear countries develop waste management strategies that are integrated and disposal ready from the outset in summary on multiple fronts technology supply chain and client engagement 2025 saw us shift gears from r d specialist to a disposal solution partner and of course the final piece of progress last year was ensuring that our capital structure now matches the scale of the opportunity ahead of us. In July, we completed our transaction to become a publicly reporting company, which will provide us with access to public capital markets and a broader investor base. We are now effective with the SEC and working to be trading on the OTC. The capitalisation from the transaction means that deep isolation's technology leadership and scientific credibility are now matched by a balance sheet capable of supporting deployment at scale. With that, I'll hand it to Joe Nelson, our CFO, to walk through our financial results.

Thank you, Chris, and good morning, everyone. Our financial focus at deep isolation is straightforward. Strengthen our capital position, enable advancement of commercialization milestones, and manage costs with discipline while continuing to invest in long-term growth. For the first quarter of 2026, consolidated revenue was approximately $1.4 million, a 5% decline from approximately $1.5 million recorded in the first quarter of 2025. Revenue reflected progress on existing contracts and milestone-based work with government agencies, utilities, and strategic partners. The decline in revenues in the first quarter of 2026 relative to the first quarter of 2025 was primarily driven by completion of certain projects at our deep isolation segment during the quarter, offset by the startup of new projects at our freestone segment. As expected at our stage, revenue continues to be driven by contract timing and milestone achievement rather than recurring deployment income. Research and development expenses for the first quarter were approximately $3.5 million and consisted of front-end engineering work and the ordering of long-lead items in connection with our non-radioactive demonstration. SG&A expenses increased to approximately $2.8 million following the addition of four new hires during the quarter, along with additional legal, audit, and consulting expenses as we build the infrastructure required to support commercial growth and public company reporting. Net loss for the quarter was approximately $5.4 million, consistent with our expectations as we continue investing in commercialization. Finally, adjusted EBITDA for the first quarter of 2026, which excludes our research and development expenses and non-recurring legal and accounting costs associated with the preparation and filing a deep isolations registration statement with the SEC was a loss of approximately $1.5 million. For a reconciliation of adjusted EBITDA to our net loss, please refer to the press release issued this morning announcing deep isolation's operational and financial results for the first quarter of 2026. Turning to the balance sheet, we ended the first quarter of 2026 with approximately $22.2 million in cash and cash equivalents. Our net cash used in operations was approximately $5.2 million. We remain focused on maintaining capital discipline and aligning expenditures closely with commercial progress. Based on our current plan, we believe our existing cash provides runway into the third quarter of 2027. However, we can delay certain milestones to extend our runway if required. Looking ahead, our financial priorities for the remainder of 2026 are clear. First, execute on existing contracts and convert pipeline opportunities into additional awards. Second, continue enabling advancement of regulatory and technical milestones that support deployment readiness. And third, maintain disciplined cost management while evaluating strategic funding options that support long-term value creation. In closing, we've made significant progress in recent quarters. We've strengthened our balance sheet, advanced commercial engagement, and continued building the operational foundation necessary for scalable deployment. We remain committed to disciplined financial management as we move toward the next phase of growth. With that, I'll turn it back over to Rod for our outlook on the remainder of 2026.

Thanks, Joe. For the year ahead, we will leverage our strength and balance sheet to build on and accelerate the momentum Chris described from the last 12 months. First and foremost, in 2026, we have already inaugurated the world's first fully operational, non-radioactive demonstration borehole repository in Cameron, Texas. First and placement of UCS canisters at a kilometer or more depth is targeted for Q2 2027. This will bring our technical readiness for licensing to life, and we know this is the number one priority for all our potential customers. As mentioned, we have been selected by the Advanced Research Projects Agency, Energy, for their Scale-Up Ready Award. We applied for their maximum award of $20 million and are now in the process of negotiating technical milestones, loans, establishing project timelines and associated budgets, and negotiating final contracts with the Department of Energy. The finalization of award would pay for parts of the full-scale demonstration and allow us to integrate our UCS with Westinghouse's Avinci Reactor Waste while pursuing NRC licensing for use of our UCS in NAC's MagnaTran and MagnaStor systems for transport and storage of spent fuel. In parallel, we will drive forward regulatory and commercial readiness for our first disposal contract. In 2026, we will commence formal regulatory engagement with the Nuclear Regulatory Commission here in the U.S. and at least one other nuclear regulator. We will document a clear commercial model by which government waste management organizations can award deep isolation and its supply chain partners single-source disposal contracts. These contracts would cover the full lifecycle from siting and design through construction, operation, closure, and eventual post-closure monitoring on a turnkey basis. And finally, we will grow our internal technical, legal, and commercial capabilities to support delivery of that sort of multi-billion dollar contract as a public company. We are greatly assisted in doing so through the three new board members who joined us in the last 12 months, Renee Hornbaker, Krista Steele, and Ralph Hunter, who bring decades of board-level experience successfully steering public companies and through the insights of our advisory board, which brings together experts and a Nobel laureate with preeminent leadership experience in nuclear energy, science, technology, and policy, alongside the top mines in geology and environmental science. In summary, we are incredibly excited for the progress we can make during the remainder of the year and for the opportunity to address one of the most critical constraints on nuclear expansion worldwide with a safe, scalable, licensing-ready disposal solution that today stands alone in its readiness for deployment at industrial scale. Thank you again for joining our inaugural earnings call. Now I'd like to open things up for questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on the telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up a handset before pressing the start. One moment, please, while the poll for questions. The first question comes from the line of Eric Goldstein with Water Tower Research. Please go ahead.

Hey, good morning, guys. Thanks for doing the call. It's been quite a year for you guys, a lot of progress. I just had a couple of questions. One, just as it relates to the Cameron, Texas, full-scale demonstration, what are some milestones that we should be looking for, I guess, over the next 6 to 12 months? And which data points would you consider the most important in terms of proving that technology is commercial-ready?

Thanks, Eric. Appreciate the questions. So, for our full-scale demonstration, this has now been wrapped into the scale-up project. So, as we noted on the call, we've been selected to negotiate the grant and awards and contracts information for the $20 million scale-up award, and so we're in that process. So as you look out at milestones and things, I would expect an award as one of those milestones. We expect we'll kick that off this summer, so we're working toward those kind of deadlines. Meanwhile, we have ordered long-lead items. As those items come in and we establish some of the baselines, we expect we'll be notifying that as well and expect in early 2027 to actually start drilling operations, and so that'll be a major milestone for us as well.

Okay, great. Thank you.

Just the last question. I guess I know I've heard a little bit about the nuclear life cycle innovation campuses and what the Department of Energy is trying to do there. Is deep isolation looking into participating in any of those programs? Thank you.

Yeah. As I understand it from news articles and conference information from DOE officials, they got responses from about 26 states that said they were interested in a discussion on nuclear lifecycle innovation campuses. The request for information basically asked states, you know, are you interested in nuclear? And if so, tell us what you're interested in. But DOE was really looking for a disposition solution is the term they used. And so pairing reactors with reprocessing facilities with boreholes, for example, might be part of that campus. As we understand it, 26 states responded. Several of those states included boreholes in their responses and DOE is in the process of evaluating those at this time. So we do see this as a really good opportunity in the US. It's kind of changed the dynamic in the discussion of what we've seen in D.C., and so we're encouraged by this and applaud the administration for this new initiative that they've got.

Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Rod Balzer, closing comments.

Thank you, everybody, for participating. This was our first earnings call. Appreciate the interest, and we expect to stay in touch, so please let us know if you have any other questions or comments.

Thank you. This concludes our today's teleconference. You may disconnect your lines at this time. Thank you for your participation.