Nuclear startup Deep Fission says it’s going public again, and I have questions

One of the news headlines this week had a whiff of déjà vu on the subject. Nuclear energy startup Deep Fission has gone public, hoping to garner investor support to build underground reactors to power artificial intelligence data centers.

Wait, didn’t I already write that story? I could have sworn I did it.

Oh right, I did. Last September, Deep Fission said it had become a public company through a reverse merger with Surfside Acquisition, a Delaware shell company, a deal in which a private company takes over an existing publicly listed entity to gain a stock market listing — raising $30 million in a simultaneous private placement at $3 a share. It is now seeking $157 million in an initial public offering on the Nasdaq at a price of $24 to $26 per share. You can see my confusion.

Turns out the previous public list was public in name only. The reverse merger with Surfside was completed, making Deep Fission a reporting company with SEC liabilities, but whose shares were never actually traded. The company said it intends to list on the OTCQB, a market for growing companies that do not meet the listing requirements of major stock exchanges such as the New York Stock Exchange or Nasdaq. But searches for Deep Fission on the OTCQB returned no results, and the company denied, in its S-1 filing, that its shares were ever publicly traded.

In response to TechCrunch’s questions, Deep Fission declined to comment, citing the quiet period leading up to its IPO.

Deep Fission’s new public offering on the Nasdaq follows a more traditional IPO path, with an offering that would value the company at up to $1.66 billion. That’s a big number for a company that just a year ago was struggling to raise a $15 million funding round.

What is strange is that the picture drawn in… The S-1 was filed on May 20 It is arguably more bleak than the one shown in December deposit With the SEC. The schedule for commissioning its first reactor has been delayed. Moreover, last December, it had hoped to achieve criticality — the point at which a nuclear chain reaction becomes self-sustaining — by July 2026. Now, it will not provide an estimate.

Deep Fission indicates that it is drilling a test well. I also lost a lot of money.

One thing hasn’t changed: The new S-1 statement contains the same “continuity” warning as in December. If Deep Fission doesn’t complete its IPO, it could run out of money in the next 12 months.

In fact, the startup’s financial situation has deteriorated in recent months. As of March, the deficit had risen to $88.1 million from $56.2 million. In the past month and a half, the company’s cash and cash equivalents decreased by $6.4 million, or about 7%.

On the technical front, Deep Fission says it now prioritizes drilling, perhaps a tacit admission that making holes in the ground isn’t as easy as it seems.

The company says it has begun drilling the first of three test wells In March. The well will be used to collect data “down to 6,000 feet deep.” It has a diameter of eight inches, which is slightly smaller than what is needed on a commercial scale.

The challenges in moving from test well to commercial scale are likely to be significant. Deep Fission says it will need to drill wells between 30 and 50 inches in diameter and a mile deep, though it has not settled on specific dimensions yet. Even at the low end, their wells will be larger than what is typically used In the oil and gas industry. Until Deep Fission knows how big a hole it can drill, it will have difficulty finalizing its reactor design.

So what has changed since December that would spur a larger offering at a nine-figure valuation? The company secured an $80 million equity investment, including $20 million from data center developer Blue Owl, which also signed a non-binding memorandum of understanding for future power plants. However, that wasn’t enough to ward off the continuity warning. It’s possible that Deep Fission is sitting on some positive information that it omitted from its S-1, although that’s hard to believe given what’s happening with the IPO.

The company and its backers are likely seeking to capitalize on investor enthusiasm about fission energy. Just last month, nuclear fission startup X-energy went public in Oversized IPO. But unlike deep fission, Energy Much further along in the Nuclear Regulatory Commission’s licensing process — a contradiction that serves as a useful reminder that in a sector where enthusiasm can far outpace technical and regulatory reality, evaluation and progress are not the same thing.

It’s not entirely clear what factors are pushing Deep Fission toward an IPO, but technological or business progress doesn’t appear to be among them.