NuScale Power Corporation — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a quarterly filing. NuScale develops small modular nuclear reactors and related plant designs and services. Its May 2, 2022 business combination with Spring Valley was accounted for as a reverse recapitalization; the statements continue NuScale LLC’s operations.
Financial results and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $11.8 million | $2.9 million |
| Cost of sales | $7.3 million | $1.8 million |
| Gross profit / margin | $4.5 million / 38% | $1.1 million / 38% |
| Research and development | $123.4 million | $93.1 million |
| General and administrative | $63.1 million | $45.2 million |
| Other expenses | $48.0 million | $37.0 million |
| Operating loss | $230.0 million | $174.3 million |
| DOE cost-share funding recognized | $72.3 million | $73.5 million |
| Net loss | $141.6 million | $102.5 million |
| Net loss attributable to Class A holders | $25.9 million; $0.51 per share | Not presented on a comparable basis |
Revenue rose about 312% year over year, primarily from CFPP-related engineering and licensing work and consulting. NuScale had not generated material revenue from module sales and said meaningful revenue depends on commercialization. FY 2022 revenue included $8.6 million from Fluor, or 72.4% of total revenue.
Net cash used in operations was $148.6 million, versus $99.2 million in 2021. Investing used $52.3 million, including a $50.0 million short-term investment; financing provided $368.1 million, principally from the business combination. Cash and cash equivalents were $217.7 million at year-end, with $50.0 million in short-term investments and $26.5 million in restricted cash. Current assets were $284.4 million and current liabilities $38.6 million. The company reported no debt at year-end; $14.0 million of 2021 debt was converted to equity in the transaction. Accumulated deficit was $182.1 million.
Management stated that available resources were expected to cover operating and R&D needs for the next 12 months, but noted that future funding may be needed. The company remains loss-making and expects losses and negative operating cash flow to increase as it develops and commercializes its technology. Financial statements were audited by Ernst & Young, which issued an unqualified opinion; the auditor did not attest to internal-control effectiveness.
Material changes and business developments
- The May 2022 transaction brought in $341.5 million of net cash, including $235.0 million of PIPE proceeds. NuScale also received $28.7 million from warrant and option exercises during 2022.
- Operating loss widened by $55.7 million year over year. R&D expense increased $30.3 million, including $25.9 million of professional fees related to standard plant design and higher staffing costs. G&A and other expenses also increased.
- NuScale completed its generic Standard Plant Design in December 2022. It had more than 120 customer opportunities and 17 signed, non-binding MOUs, but disclosed no binding customer contract to deliver NPMs.
- The NRC’s final rule certifying NuScale’s previously approved 50 MWe module design became effective in February 2023. Applications for a VOYGR-6 design and an increase to 77 MWe per module were submitted in late 2022; NRC review had begun, with approval expected by the company in 2024.
Outlook, risks, contingencies and unusual items
- NuScale targets module delivery readiness by 2028 and expects the first UAMPS/CFPP plant to begin operating in 2029, with the remaining modules expected in 2030. These are plans, not assured outcomes. A Romania FEED contract was signed in December 2022, with deployment targeted as early as 2029.
- The CFPP’s December 2022 economic competitiveness test exceeded the then-applicable $58/MWh target. UAMPS informed NuScale on March 1, 2023 that sufficient project participants would continue development despite the test failure. A subsequent test is expected with a Class 2 project cost estimate.
- Under amendments effective February 28, 2023, CFPP reimbursement exposure depends on project milestones and performance criteria; the filing describes potential restricted-cash needs of up to $81 million by year-end 2023. The company held $26.5 million of restricted cash at December 31, 2022 to collateralize a $26.0 million letter of credit. These funds are unavailable for general operations.
- The CFPP project also depends on future DOE funding and congressional appropriations. NuScale and CFPP requested $418 million in FY 2024 appropriations for advanced SMR R&D; funding, timing and conditions are uncertain. The company cited $225 million collected under its current DOE award through 2022 and said DOE awards are subject to appropriations.
- Principal risks include lack of commercial module deliveries or binding module-sale contracts; regulatory and site-approval delays; cost competitiveness, inflation and supply-chain constraints; reliance on Fluor and other partners; customer adoption; and the need for future funding. The design’s 77 MWe output and VOYGR-6 configuration remained subject to NRC approval.
- Warrants are recorded as liabilities and remeasured at fair value. A $12.1 million non-cash gain from the decrease in warrant liabilities reduced the reported 2022 loss before tax.
- A putative class action filed by former NuScale LLC members challenges merger-related operating-agreement amendments. NuScale said a loss was not probable and recorded no liability, while acknowledging the outcome is uncertain.
- NuScale is majority-owned by Fluor and qualifies as a controlled company and emerging growth company. Its tax receivable agreement requires payment to certain legacy holders of 85% of specified tax savings; an implied $54.7 million obligation was calculated for exchanges through year-end, but no liability was recorded because of a full valuation allowance.
Key facts for investors to verify
- Whether NuScale and UAMPS/CFPP execute binding module-supply and EPC agreements, and whether the CFPP project retains sufficient subscriptions.
- Updated CFPP cost estimates, the next economic competitiveness test, reimbursement terms and the resulting restricted-cash and letter-of-credit requirements.
- NRC decisions and timing for the 77 MWe module and VOYGR-6 applications, plus congressional appropriations and DOE cost-share availability.
- Cash burn, remaining unrestricted liquidity, prospective financing needs and progress toward recurring commercial revenue.
- Customer-pipeline conversion, revenue concentration in Fluor, commercialization timelines and any changes to project cost or schedule.
- Potential dilution from registered resales, exchanges of Class B interests, options and warrants; and developments in the member lawsuit and tax receivable agreement exposure.