Oklo Inc. (OKLO) FY 2025 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2025 and 2024, should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs, and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Special Note Regarding Forward-Looking Statements.”

Overview

For an overview of the Company, see the information above presented under the section labeled “Item 1. Business,” which is in Part I of this Annual Report.

Impact of Macroeconomic Conditions

The macroeconomic environment both in the U.S. and globally has the potential to impact our business and financial performance. More specifically, factors such as trade agreements, tariffs, interest rates, tax law, labor trends, and fiscal policy could impact the cost to construct and operate our powerhouses, and even impact the future profitability of our operations.

Supply chain vulnerabilities represent a critical area of macroeconomic risk for our business. Global disruptions—whether from geopolitical tensions, natural disasters, or public health crises—can severely impact the availability and cost of essential components for energy infrastructure. These disruptions can lead to extended lead times for specialized equipment, shortages of critical materials, and unexpected cost escalations that complicate project planning and execution. Our reliance on supply networks for turbine components, electrical systems, and construction materials creates exposure to these global supply chain risks.

Inflation remains a significant concern, particularly as it affects construction materials, specialized equipment, and labor costs throughout our project development cycle. These inflationary pressures can erode project margins and complicate long-term capital planning efforts.

Economic growth and recession cycles directly correlate with energy demand across industrial, commercial, and residential sectors. During economic downturns, we typically experience reduced consumption patterns, while periods of growth drive increased energy needs, affecting our revenue projections and expansion strategies.

Demand for energy in the U.S. is currently being driven by the explosive growth in the data center industry, particularly as AI deployment, cloud computing adoption, and digital transformation initiatives accelerate across sectors. Should power demand growth in the AI data center market slow, customer demand for our baseload low-carbon power could be negatively impacted.

Key Components of Results of Operations

Operating Expenses

Our operating expenses consist of research and development and general and administrative expenses.

Research and Development

Research and development (“R&D”) expenses represent costs incurred to develop our technologies. These costs consist of personnel costs, including salaries, employee benefit costs, bonuses, and stock-based compensation expenses, software costs, computing costs, hardware and experimental supplies, and expenses for outside engineering contractors for analytical work and consulting costs. We expense all R&D costs in the periods in which they are incurred; however, occasionally, reimbursements could be received in the following period.

We have several recycling technology projects awarded as R&D cost-share projects (the “cost-share projects”) through the DOE’s Advanced Research Projects Agency – Energy (“ARPA-E”) and the DOE Technology Commercialization Fund (“TCF”). The ARPA-E and TCF projects involve cost-sharing of project costs as well as reimbursement of certain

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qualifying expenditures to us. A budget was initially approved for each of these cost-share projects, and as certain expenses and capital expenditures for equipment are incurred, such expenses or capital expenditures are reported to ARPA-E, and then a pre-determined percentage of such expenses or capital expenditures are reimbursed by ARPA-E back to us. The expenses are categorized as R&D expenses, which are then partially reimbursed.

General and Administrative

Our general and administrative (“G&A”) expenses primarily comprise various components not related to R&D, such as personnel costs, regulatory fees, promotion expenses, costs associated with maintaining and filing intellectual property, meals and entertainment expenses, travel expenses, and other expenditures related to external professional services including legal, engineering, marketing, human resources, procurement, audit, finance, and accounting services. Personnel costs include salaries, benefits, and stock-based compensation expenses. As we continue to grow and expand our workforce and operations, and in light of the increased costs associated with operating as a public company, we anticipate that our G&A expenses will rise for the foreseeable future.

Other Income (Loss)

Other income (loss) consists of interest and dividend income on our portfolio of marketable debt securities and the remeasurement losses related to simple agreements for future equity.

Income Taxes

Income taxes consist of income taxes in jurisdictions in which we conduct business. We have a full valuation allowance for deferred tax assets, including net operating loss carryforwards and tax credits related primarily to R&D. Prior to the Recapitalization, income taxes have been minimal. After the Recapitalization, as a result of our interest and dividend income from our investments, federal and state income taxes may be incurred, after available tax deductions, including tax attribute carryovers.

Results of Operations

The following tables set forth our consolidated results of operations for the years indicated. The year-over-year comparison of financial results is not necessarily indicative of future results.

Comparison of the Years Ended December 31, 2025 and 2024

The following table sets forth our consolidated financial results for the years indicated, and the changes between years:

Percentage changes that are considered not meaningful are denoted with “NM.”

Research and Development

R&D expenses increased by $32.1 million from 2024 to 2025, primarily driven by increases in employee compensation expenses of $16.0 million, and professional services of $8.5 million. The increase in employee compensation expenses was primarily driven by an increase headcount of approximately 68 employees from the prior year comparable period, and an increase in stock-based compensation costs of $4.5 million. The increase in professional services was primarily driven by an increase in costs from third-party service providers.

General and Administrative

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G&A expenses increased by $54.4 million from 2024 to 2025, primarily driven by increases in employee compensation expenses of $10.6 million and professional services of $11.7 million. The increase in employee compensation expenses was primarily driven by an increase headcount of approximately 53 employees from the prior year comparable period, and an increase in stock-based compensation costs of $24.9 million. The increase in professional services was primarily driven by an increase in costs for professional services.

Other Income (Loss)

Interest and dividend income increased by $21.4 million from 2024 to 2025, primarily driven by an increase in our cash, cash equivalents and marketable debt securities balances from the prior year period as a result of equity issuances during 2025.

Liquidity and Capital Resources

As of December 31, 2025, our cash, cash equivalents, and marketable debt securities were $1,412.5 million. We continue to incur significant operating losses. For the year ended December 31, 2025, we had a net loss of $105.7 million, loss from operations of $139.3 million, and net cash used in operating activities of $82.2 million. As of December 31, 2025, we had an accumulated deficit of $240.8 million. Management expects that significant ongoing operating expenditures will be necessary to successfully implement our business plan, develop our powerhouses, acquire fuel for those powerhouses, develop our fuel fabrication and recycling facilities, and expand our radioisotope business.

We will utilize our existing cash, cash equivalents, and marketable debt securities to fund construction of our powerhouses, fuel fabrication, and recycling facilities, as well as our radioisotopes business, business operations, and growth plans, and we believe that our existing cash, cash equivalents, and marketable debt securities will be sufficient to fund our operations for the one-year period following the issuance date of the accompanying consolidated financial statements as of and for the year ended December 31, 2025.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2025.

Commitments and Contractual Obligations

We did not have any material commitments or contractual obligations as of December 31, 2025.

Cash Flows Comparison

The following table sets forth our cash flows for the period indicated.

Comparison for the Years Ended December 31, 2025 and 2024

Operating Activities

Net cash used in operating activities was $82.2 million in 2025, compared to $38.4 million in 2024. The $43.8 million increase in net cash used in operating activities from 2024 to 2025 was primarily driven by operating expenses as we continue to scale our operations, consisting of $37.2 million cash used for payroll and employee benefits of personnel and $70.6 million in other costs, primarily consisting of professional services for consulting on research and development activities, and legal and accounting fees on general and administrative activities. These increases were partially offset by

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$25.6 million in higher cash interest and dividend income, resulting from our increased balance of cash, cash equivalents and marketable debt securities.

Investing Activities

Net cash used in investing activities was $489.7 million in 2025 compared to $175.8 million in 2024. The increase in net cash used in investing activities of $313.9 million from 2024 to 2025 was primarily from cash used for the purchase of marketable debt securities, offset from proceeds from redemptions, netting $443.5 million, capital expenditures related to deployment of our planned facilities of $33.2 million and purchases of other investments of $12.1 million.

Financing Activities

Net cash provided by financing activities was $1,263.2 million in 2025 compared to $301.4 million in 2024. The increase in net cash provided by financing activities of $961.8 million from 2024 to 2025 was primarily from proceeds from the issuance and sale of shares of our common stock in connection with our underwritten public offerings and ATM programs of $1,263.6 million.

Critical Accounting Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. In the preparation of these consolidated financial statements, we are required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the consolidated financial statements. See Note 2—Summary of Significant Accounting Policies, in our accompanying consolidated financial statements for a description of our significant accounting policies.

Accordingly, these are the policies and estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations:

Determination of fair value for the acquisition of a business

The determination of fair value for the acquisition of a business in business combination requires the allocation of the purchase price to the various assets acquired and liabilities assumed at their respective fair values. The determination of fair value requires the use of significant estimates and assumptions, and in making these determinations, management uses all available information. If necessary, we have up to one year after the acquisition closing date to finalize these fair value determinations under the applicable U.S. GAAP. For tangible and identifiable intangible assets acquired in a business combination, the determination of fair value utilizes several valuation methodologies including discounted cash flows which has assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. The assumptions made in performing these valuations include, but are not limited to, discount rates, future revenues and operating costs, projections of capital costs, and other assumptions believed to be consistent with those used by principal market participants. Due to the specialized nature of these calculations, we engage third-party specialists to assist management in evaluating our assumptions as well as appropriately measuring the fair value of assets acquired and liabilities assumed.

Goodwill and our indefinite-lived intangible assets related to in-process research and development (IPR&D), are tested for impairment annually or more frequently if events or changes in circumstances indicate potential impairment. The fair value determination involves significant judgment, including assumptions about future cash flows, discount rates, and market conditions. Because these assumptions are inherently uncertain and subject to change, they may vary based on changes in facts and circumstances. A change in any of these assumptions could materially affect the estimated fair value of goodwill and intangible assets and result in an impairment charge. Potential events that could negatively affect these assumptions include regulatory delays, adverse market conditions, and operational challenges.

Emerging Growth Company Status

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The Company is classified as an emerging growth company (“EGC”), as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Therefore, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. We will retain EGC status until December 31, 2026.

Further, Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs, but any such election to opt out is irrevocable. We intend to take advantage of the benefits of this extended transition period.

Recent Accounting Pronouncements

See Note 2—Summary of Significant Accounting Policies of our consolidated financial statements included in Part II, Item 8 of this Annual Report for a discussion about Recently Issued and Adopted Accounting Standards Recently Issued and Not Adopted Accounting Standards as of the date of this Annual Report.