NuScale(SMR) - 2025 Q1 - Quarterly Report

Part I - Financial Information This section presents the company's financial statements, management's analysis, market risk disclosures, and internal control assessments Item 1. Financial Statements This section presents the company's consolidated financial statements, highlighting significant revenue growth, a narrowed net loss, and a strengthened liquidity position for the first quarter of 2025 Financial Metrics | Financial Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $491.4 million | $401.6 million | | Total Assets | $618.1 million | $544.7 million | | Total Liabilities | $88.6 million | $91.6 million | | Total Stockholders' Equity | $529.5 million | $453.1 million | Income Statement (in thousands) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $13,375 | $1,379 | | Gross Margin | $7,002 | $644 | | Loss From Operations | ($35,327) | ($43,973) | | Net Loss | ($30,395) | ($48,080) | | Net Loss Attributable to Class A Common Stockholders | ($14,005) | ($16,572) | | Basic and Diluted Loss per Share | ($0.11) | ($0.21) | Cash Flow Statement (in thousands) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($22,786) | ($33,489) | | Net Cash Provided by Investing Activities | $9,933 | $0 | | Net Cash Provided by Financing Activities | $102,719 | $45,214 | - The company is commercializing a 77 megawatt (gross) Small Modular Reactor (SMR) and expects to receive Standard Design Approval (SDA) from the U.S. Nuclear Regulatory Commission (NRC) by July 2025[34] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the drivers behind the company's financial performance, including revenue growth from the RoPower project, changes in operating expenses, and the company's strong liquidity position - The increase in revenue and cost of sales was primarily due to engineering and licensing fees and services supporting the RoPower project to deploy a NuScale 6-module power plant in Romania[112] - Research and development expenses decreased by $4.0 million YoY due to cost optimization measures, while General and Administrative expenses increased by $3.9 million due to higher business development costs and legal/accounting fees[113][114] - As of March 31, 2025, the company had a strong liquidity position with $491.4 million in cash and cash equivalents, $30.0 million in short-term investments, and no debt[121] - During Q1 2025, the company raised $99.8 million in net proceeds from its ATM Program by selling 4.5 million shares of Class A common stock[120] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reported no material changes to its market risk disclosures from those presented in its 2024 Annual Report on Form 10-K - There have been no material changes from the discussion of the Company's market risk in its 2024 Annual Report on Form 10-K[132] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, with a remediation plan underway - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective at a reasonable assurance level[134] - A material weakness was identified in the design and implementation of IT general controls and internal controls across key financial reporting processes, attributed to an insufficient complement of personnel with necessary technical accounting and IT support[137][138] - The company has a remediation plan which includes hiring additional qualified personnel, engaging expert SOX consultants, conducting training, and implementing additional ITGCs[140][142] Part II - Other Information This section provides updates on legal proceedings, identifies key risk factors, and details other significant corporate developments, including strategic partnerships and exhibit filings Item 1. Legal Proceedings This section provides updates on various legal matters, including the resolution of a lawsuit, ongoing shareholder class actions, and the conclusion of an SEC inquiry without enforcement action - A lawsuit filed by former members of NuScale LLC was resolved, and the complaint was dismissed with prejudice on February 13, 2025[144] - Multiple shareholder class action lawsuits are pending, alleging the company made materially false or misleading statements, for which the company does not believe a loss is probable and has not recorded any liability[145] - On March 13, 2025, the SEC staff concluded its investigation related to the company's employment, severance, and confidentiality agreements and does not intend to recommend an enforcement action[147] Item 1A. Risk Factors This section outlines key risks, including heavy reliance on strategic partnerships and the potential impact of changes in U.S. trade policy and tariffs on component costs - The company's commercialization strategy heavily relies on its relationships with ENTRA1 (exclusive global strategic partner) and Fluor (largest stockholder), whose interests may diverge from NuScale's[149] - The termination of key strategic agreements could substantially hinder the company's ability to expand production and installation of its power plants[150] - Changes in U.S. trade policy, including tariffs, could materially impact the business by increasing costs for long-lead time components manufactured overseas[151][152] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is reported as not applicable for the period - This section is marked as "Not applicable"[154][155] Item 5. Other Information This section details a significant amended strategic alliance agreement with ENTRA1 and the implementation of sell-to-cover trading arrangements for employee RSU tax obligations - On May 7, 2025, NuScale LLC entered into an amended and restated Strategic Alliance Agreement with ENTRA1, making ENTRA1 its exclusive global strategic partner for 20 years[155] - The company proposed sell-to-cover trading arrangements for employees, including officers, to automatically sell shares to cover tax withholding obligations upon the vesting of RSUs[157] Item 6. Exhibits This section provides a comprehensive list of all exhibits filed with the report, including key agreements and required certifications - A list of exhibits filed with the report is provided, including the Strategic Alliance Agreement (Exhibit 10.1) and CEO/CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2)[160]